The Orissa government’s intent to reserve jobs for the locals in the industries coming up in the state has put spikes in the way of renewal of MoU with Posco with the South Korean steel major questioning the legal validity of such a move.
The High Level Clearance Authority (HLCA) of the Orissa government headed by chief minister Naveen Patnaik had cleared a proposal to make it mandatory for the private sector setting up shop here to reserve for locals 90 per cent jobs in the unskilled and semi-skilled category, up to 60 per cent in skilled category and 30 per cent for the supervisory and managerial cadre while giving them the option to fill up the post of senor executives from the open market.
“All new MoUs for industrial projects and those which are due for renewal will have a compulsory clause reserving jobs for the locals,” said Orissa’s Industries Minister Raghunath Mohanty in the state assembly recently. “Locals” meant those displaced by a project, followed by people domiciled in Orissa.
However, this employment clause is challenged by Posco, whose application for renewal of MoU for its Rs 54,000 crore mega steel project is pending for approval with the government. The five year term of the Posco MoU has expired since 22nd June 2010.
Though the state government in principle has decided to renew the MoU, sources said, it is dithering to take a final decision as Posco has questioned the validity of its intent to reserve jobs for the locals.
In a letter to the state government, Posco has pointed out that reservation of jobs for certain category of people on geographical basis does not confirm to the constitutional provisions which safeguards the right of citizens to work anywhere in the country.
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While seeking further clarification on the issue, the letter said, the company will agree to incorporate the clause in the MoU if the state government asked it to do so in writing.
The state government is in quandary to respond to the Posco’s query as it is not sure of the legal repercussions of its move.
As the job quota for locals has not yet been drafted into a policy framework, it is also feeling reluctant to ask Posco in writing to fall in line.
The condition to give priority to locals in jobs has been incorporated during the renewal of MoUs with some companies including that of Tata Steel and Jindal Stainless Steel recently. So there is no question of circumventing this clause in case of Posco, said a senior official of state industry department. Otherwise it would set precedence for other mega projects to seek similar concessions and create a public impression that the state government is giving preferential treatment to the South Korean company, he added.
The official argued that Posco has reiterated time and again about working for the development of the local people. So the company now questioning the validity of reserving jobs for the locals only exposes its commitment for its project affected persons, he said.
It may be noted the state has of late been facing tremendous public resentment over recruitment of a large number of non-Oriya people in different projects being set up here. Orissa has attracted investments worth Rs 6 lakh crore in the recent past.