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UN red flag for POSCO India project
October 2, 2013, 9:31 am


The South Korean firm is the world’s fourth biggest steel producer by output [Xinhua]

A United Nations panel of experts urged South Korean steel giant POSCO on Tuesday to suspend plans for a $12 billion plant in the eastern Indian state of Odisha.

The UN said the steel project could displace up to 22,000 people, threatening their rights and livelihoods.

“People should not be impoverished in the name of development; their rights must take precedence over potential profits,” Magdalena Sepulveda, the UN Special Rapporteur on extreme poverty and human rights, said in a statement.

The mineral-rich state of Odisha has been trying to attract foreign and Indian investment by giving them mining rights, electricity and water at low prices.

However, the move to acquire farm and forest lands has run into violent protests.

The POSCO project has been mired in legal hurdles for eight years.

India’s top Court in May gave a green signal to POSCO to continue with iron ore mining in Odisha.

The decision overturned an earlier ruling by a lower court to deny mining rights to the multinational firm.

The $12 billion steel plant project in Odisha is touted as India’s biggest single foreign direct investment.

POSCO had in July decided to pull out of a different $5.3 billion steel mill project in India.

“With the given market conditions and significant delay in acquiring the required land in Gadag, we have decided to close our proposed 6-MTPA [million tonnes per annum] steel plant in Karnataka,” POSCO India Chairman and Managing Director Yong Won Yoon said in a statement.

Massive protests in the Southern Indian state of Karnataka resulted in delays in acquiring mining rights and land acquisition by POSCO.

The Odisha project requires about 4,000 acres (1,620 hectares) of land for the plant, expected to produce 13.2 million tons (12 million metric tons) of steel per year, as well as an affiliated power plant, railway line, road, water supply infrastructure and port.

The Indian President Pranab Mukherjee last week approved and signed into law the Land Acquisition Bill, which strives to provide fair compensation to landowners and outlines measures to rehabilitate those affected by land sales.

As the second largest growing economy in the world expands there have been increasing concerns for a rural populace that are being forced to sell their land for industrial and commercial use.

The new legislation will now ensure that buyers pay four times the market value for land earmarked for infrastructure projects in rural areas.

POSCO was given a five-year environmental clearance in 2007, and agreed to conditions issued by the Environment Ministry in 2011 that the company restrict air emissions, spend two per cent of its net profits on social welfare, maintain a quarter of the land as green space and reduce its water intake.

POSCO said in August that reports by rights groups had used “fallacious criticism, distorted facts and erroneous interpretation.” POSCO had also said that, “There is no question of any forced eviction.”

The South Korean firm is the world’s fourth biggest steel producer by output.

With inputs from Agencies