India may address South Korea's concerns on Posco

When Prime Minister Manmohan Singh meets South Korean President Lee Myung-bak on the sidelines of the ASEAN Summit in Hanoi on Friday, he is likely to reassure the latter over the problems being faced by the Pohang Steel Company (Posco) in India.

Billed as India's biggest foreign direct investment, the Posco project has been delayed by more than five years due to protests by farmers who are agitating against giving up their fertile agricultural land.

On Thursday, Union Commerce and Industry Minister Anand Sharma, while addressing the media on board the prime minister's aircraft on way to Hanoi from Kuala Lumpur, said that India is appreciative of South Korean investments in car manufacturing, etc, and clearances (that have held the project up) to Posco will be looked into very deeply by the government.

"If the Posco issue comes up for discussion) we will reassure the South Korean government that all these issues will be addressed in a constructive manner," Sharma said referring to the problems that Posco is facing.

...

He also said that India values South Korean investment, notwithstanding the controversy over the Posco project, and Seoul will continue to invest in India.

Posco signed a memorandum of understanding in June 2005 for the plant, which was to be built in three phases by 2016, with production scheduled to begin by the end of 2011 at the completion of the first phase.

In June 2007, the Orissa government sought permission to offer forest land for the project. The ministry granted 'in principle' permission on September 19, 2008, but with 13 conditions to be fulfilled.

On December 3, 2009, the state government submitted a compliance report on these conditions and secured a final approval from the ministry for diversion on December 29, 2009.

...

Many farmers protested against the company in Orissa over the land issue, but faced the wrath of the police. Many were injured and killed in protests over the years.

Local activists have often told the media that villagers cannot be allowed to be refugees in their own land.

The controversy over land acquisition has become a major issue in India, stalling several projects.

Activists say the project is in clear violation of environmental norms at the cost of the livelihood of thousands of farmers.

Demanding a 'white paper' on the Posco project, the Communist Party of India had recently said that although it is billed as India's biggest FDI capable of creating jobs, the government must publish details about Posco's cost in terms of loss of land, minerals, water and its adverse impact on poor people.

...

Meanwhile, CPI leader D Raja, in a letter to the prime minister recently said, "Of the 4,000 acres of land, 3,000 acres to be given for Posco's steel plant is classified as forest land. Under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, many of the people of the area are eligible for right over this land, especially the lands they are cultivating, as they have been living in the area for more than 75 years."

Hundreds of families had been using the forest land for their livelihood. Villagers are opposing government plans to lease 4,000 acres of fertile land to Posco for its three iron mining projects in Kandhahar, Kujanga and Paradip.

After facing land acquisition problems, Posco's port proposal is mired in controversy.

The Rs 5,000-crore (Rs 50 billion) port project at Jatadhari near the Bay of Bengal is in trouble as its jurisdiction clashes with that of Paradip Port, a government facility.

Rejecting Orissa government's formula of excluding 300 acres of private land from the proposed Posco site area near Paradip, the Communist Party of India demanded that the entire site be shifted elsewhere and an official statement be made about its overall impact on the state.

...

Posco insists that the company has always dealt with basic issues with care.  It had stated that the company would bring value addition to the mineral wealth of Orissa, which will lead to significant growth and investment in the country.

The Orissa government had informed the central government that there were no forest dwellers in the designated project area. However, with the agitation intensifying, doubts have been raised over the claims of the Orissa government.

The Union Ministry of Environment and Forests in mid-2010 issued a letter on the steel plant and the captive port of Posco India, which could stop the Orissa government from transferring 1,253 hectares of forest land to the company for non-compliance of conditions laid down in the final approval of land diversion given on December 29, 2009.

Apparently, the government had been stingy with truth when it said no compensation and rehabilitation of the tribals and other forest dwellers was required as none exist on the land to be given for the project.

Posco is the world's fourth largest steel company based in South Korea.