The clearance on Posco, one of the biggest foreign direct investment proposals in the country, is likely to give hope to other high-profile projects blocked for failing to meet environmental and forest laws.
Sending out a positive signal, environment minister Jairam Ramesh said in the final report, “Undoubtedly, projects such as that of POSCO have considerable economic, technological and strategic significance for the country.”
Posco is among several corporations, including Vedanta Resources, to come under scrutiny from Ramesh, putting his ministry in a perceived open conflict with the corporate sector.
The Posco approval is the latest instance where the minister has appeared to go soft on violations and provide an escape route to industry through additional conditions. Earlier, this month, his ministry had said it was ready to consider the proposal of Vedanta Resources for expanding its alluminium refinery.
| JAIRAM’S NEW CONDITIONS |
| * Posco would voluntarily sacrifice water intake in case of water shortage at the Jobra Barrage, for irrigation |
| * The total green area in the plant should be 25 per cent of the total area |
| * Posco will devote 2 per cent of its net profit to develop the region, through corporate social responsibility |
| * Posco will not bring about construction in the high-erosion zone identified by the Institute of Ocean Management |
| * Posco should ensure no industrial activity in the CRZ |
| * Posco should submit a detailed marine environment conservation plan, which should include mangrove regeneration and the conservation of turtles and horse shoe crabs, before commencing construction of the port |
| * Posco should made a detailed assessment of the impacts on fishing communities and the resultant economic losses |
| * The state government should give an assurance under the Forest Rights Act, 2006, on the impact of the project on local people |
That remark came soon after the ministry said it could consider approving Hindustan Construction Co’s ambitious Lavasa project, a planned hill city near Pune.
However, the minister maintained: “Laws on environment and forests must be implemented seriously.”
The latest developments also indicate how the minister has to balance between implementing the laws while looking at foreign investment and economic growth in the face of mounting political pressure.
Ramesh held meetings this month with two leading industry bodies, CII and Ficci, indicating he was willing to hear the corporate sector. After one of the meetings, he had said the environment should not be seen as an impediment for development.
This month, the quarterly macro-economic review by the Reserve Bank of India said there was a perception that environment-sensitive policies are a reason for the decline in FDI inflows.
