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Blow to Vedanta! Why govt rejected clearance to bauxite project

Last updated on: August 24, 2010 13:19 IST

Blow to Vedanta! Why govt rejected clearance to bauxite project

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In a big blow to Vedanta Resources, the government on Tuesday rejected environment clearance to its $1.7-billion bauxite mining project in Orissa after accepting recommendations of its key panel clearing such ventures.

Giving reasons for the denial of clearance, Environment Minister Jairam Ramesh told reporters that "there has been a very serious violation of Environment Protection Act, Forest Conservation Act and the Forest Rights Act."

"There have been no emotions and no politics and no prejudice involved in this report. I have taken this decision in a proper legal approach," he said.

Read the full Ministry of Environment and Forests report here!

The decision came after the Forest Advisory Committee (FAC) which had submitted the report to Ramesh after reviewing the suggestions given by the N C Saxena panel seeking ban on the mining project in Orissa's Niyamgiri Hills in view of various violations at the site.

The Saxena report has citied many violations of the in-principle environment clearance given to Orissa Mining Corporation in 2008 including non-compliance with the provisions of the Forest Rights Act.

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Image: Environment Minister Jairam Ramesh.

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Blow to Vedanta! Why govt rejected clearance to bauxite project

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"The consent certificate of the gram sabha was fake," the panel said in its report while recommending not to approve the project because of large scale violations.

Stressing that his ministry was not getting into any 'witch-hunt', Ramesh said the Orissa government had violated the Forest Rights Act and Vedanata Resources violated the Environment Protection Act (EPA).

"We are examining what action has to be taken against the project proponents for violation of various laws including the EPA," he said.

Click NEXT to read on the reasons why Ramesh rejected the clearance to the project . . . 



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Blow to Vedanta! Why govt rejected clearance to bauxite project

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Ramesh said:

  • The Stage II forest clearance for the OMC and Sterlite bauxite mining project on the Niyamgiri Hills in Lanjigarh, Kalahandi and Rayagada districts in Orissa cannot be granted. Stage II forest clearance thus stands rejected.
  • Since forest clearance is being rejected, the environmental clearance for this mine is inoperable.
  • It appears that the project proponent is sourcing bauxite from a large number of mines in Jharkhand for the one million tonne alumina refinery that are not in possession of valid environmental clearance. This matter is being examined separately.
  • Further, a show cause notice is being issued by the MoE&F to the project proponent as to why the environmental clearance the one million tonne alumina refinery should not be cancelled.
  • A show cause notice is also being issued to the project proponent as to why the terms of reference (ToR) for the EIA report for the expansion from one million tonne to six million tonne should not be withdrawn. Meanwhile, the ToR and the appraisal process for the expansion stands suspended.

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Image: Vedanta chairman Anil Agarwal.

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Blow to Vedanta! Why govt rejected clearance to bauxite project

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Ramesh said he has no prejudices against the Orissa government as his Ministry has cleared an important irrigation project in the state for which the in-principle approval was accorded yesterday.

"While rejecting this (Vedanta) project, I have also cleared an important irrigation project in the state in which over 1,500 hectares of forest land is involved," the minister said.

With the Ministry for Environment and Forests tightening the screws and taking a tough posture, many high profile projects like that of South Korean Posco and Vedanta have been delayed.

Just last week, after the stop-work order on the Rs 54,000-crore (Rs 540 billion) Posco project, a four-member panel appointed by the Union ministry of environment and forests had dealt a body blow to the London-based Vedanta Resources Ltd.

The committee, chaired by N C Saxena, who is also member of the powerful National Advisory Council, has told MoEF it would be illegal to allow Vedanta-owned Sterlite Industries to conduct bauxite mining operations on the Niyamgiri hills at Kalahandi district in Orissa.

The company says the mining is crucial for its Rs 6,000-crore (Rs 60 billion) alumina refinery project at the foothills, at Lanjigarh; the panel has said the existing clearance for the refinery should also be cancelled. Apart from Saxena, the other panel members were S Parasuraman, Promode Kant and Amita Baviskar.

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Photographs: Reuters
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Blow to Vedanta! Why govt rejected clearance to bauxite project

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Saxena said the ministry's Forest Advisory Committee would give its recommendations based on this report and a final decision would then be taken by the ministry.

The committee gives two main reasons. One, that permitting bauxite mining would deprive two primitive tribal groups, Dongria and Kutia Kondh, of their rights over the proposed mining site in order to benefit a private company and shake the faith of the tribals in the laws of the land.

Two, that Vedanta/Sterlite has consistently violated the Forest Conservation Act (FCA), Forest Rights Act (FRA), Environment Protection Act (EPA) and the Orissa Forest Act, in active collusion with state officials.

The refinery was accorded clearance under the EPA on the condition that no forest land would be used. However, it has been established that the company has occupied 26.1 ha of village forest land within the refinery boundary, said the report.

On the finding that the company had, without waiting for all clearances, been expanding the refinery capacity since 2007, Ramesh said, "I'm surprised to know that expansion has happened and if this is the case, then it is the most blatant violation."

Asked if there was any political influence in the decision, given that Orissa was ruled by a non-Congress state, the minister denied it.

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Photographs: Reuters
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On the basis of oral and documentary evidence, the committee has said the Dongria and Kutia Kondh have had traditional, customary and often formalised access to the surrounding thick forests on the slope to collect various types of forest produce.

Their rights would be extinguished if the area is transferred for mining.

Also, that MoEF cannot grant clearance to use of forest land for non-forest purposes because the legal conditions for this clearance, as laid down in its circular of August 3, 2009, have yet to be met.

The Forest Rights Act, it notes, came into being more than two years ago. As holders of these rights, the communities residing there are empowered to ensure their habitat is preserved from any destruction of their cultural and ecological heritage.

The state government cannot take any action that appropriates a part of their habitat without following the due process of law, it notes.

The report has pointed out that the process of recognition of rights under the Forest Rights Act has not been completed, the consent of the communities concerned has neither been sought nor obtained and the gram sabhas of the area concerned have not certified on both points, as the law requires.



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