People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 08

February 20, 2011

Subverting Environmental Impact Assessment



Archana Prasad


IN the last few months we have seen that many controversial projects have been granted environmental clearances in order to attract greater foreign direct investment (FDI) into the country. The concern that environmental regulations were coming in the way of greater FDI inflow was expressed by the Reserve Bank of India (RBI) in its Macroeconomic and Monetary Developments Third Quarter Review, 2010-11 released on January 25, 2011. The RBI noted that the net receipts in FDI inflows had declined by 62 per cent in this quarter. They argue that the major reason for the decline in inward FDI is reported to have been the environment sensitive policies pursued, as manifested in the recent episodes in the mining sector, integrated township projects and construction of ports, which appear to have affected the investors’ sentiments (p 17). But this observation is not a new one, and in 2006, too, the Govindrajan committee on disinvestment, had made a similar observation about the need for corporate friendly environmental policies. Almost immediately, the compliant ministry of environment and forests (MoEF) carried out consultations with the industry and formulated a new notification for environmental impact assessment notification. This time too, the pressure of corporate investors has paid off, and the RBIs pronouncements have been almost immediately been followed by clearances to projects to whom the MoEF had earlier withheld clearances.




Of all the clearances granted by the ministry three have received great public attention. The first is the Jaitapur Nuclear Power Plant Complex in Maharashtra which has been proposed by the Nuclear Power Corporation of India (NPCIL) in collaboration with French companies who will sell reactors to the Plant. The second, the much debated POSCO captive minor port and steel cum power plant (Orissa). And the third one concerns the renewal of mining to the Steel Authority of India (SAIL) in Chiria, Jharkhand. In each of these cases the ministry has imposed several conditions and given its own reasons for granting the clearances. In the case of Jaitapur, the minister wrote that he had to balance the “economic and strategic needs” with environmental concerns, and therefore though he was granting clearances, some conditions were also being imposed. He believed that these conditions were going to balance the objectives of “economic growth, fuel mix diversification, global diplomacy and environmental concerns”. Clearly the French connection in the Jaitapur case has had an important role to play in the clearance which was granted on the eve of Sarkozy’s visit. In the case of POSCO too, the final clearance document espouses the “economic, strategic and technological significance of the project” even though 60 conditions have been imposed while granting permission to start work. It is important that the ‘significance’ being referred to is the $ 8 billion investment that is being made by the Korean firm. The clearance granted to it clearly addresses the concerns of the RBI. In doing so the minister has overlooked the objections of the Forest Advisory Committee (FAC), and several other committees set up by him to study the issue. Many of these committees had pointed out that the environmental impact assessment of the POSCO project was based on flawed and manipulated data, and serious violations of the forest rights act and the CRZ regulations.


After POSCO, the advice of the FAC was ignored once again in the case of Chiria Mines in Saranda forests of Singbhum, where the granting of forest clearances has been subject to the pressure by the prime minister and the importance of the mines to the expansion and survival of SAIL. Perhaps this is the only clearance which raises the issue of self-reliance of a public sector company and needs to be distinguished from the other clearances granted. As the order states, the application was not for clearance but for renewal of mining leases. Further the nature of operations involved in the forests are limited in nature, as the mining itself was not taking place on forest lands, which constituted only 3 per cent of the mining area. However the problem posed by the Forest Advisory Committee was one that concerned the interference with the elephant corridor. Here the ministry has made a clear choice to sacrifice the elephant corridor in the interests of the future of a public sector company. Whether the company could have been asked to redraw its expansion plans to accommodate the elephant corridor in a large area with potential reserves is another matter that has been ignored. Perhaps the adverse impacts of SAIL operations can be offset by control of other legal and illegal private operations which are rampant in that area.


However, any attempt at such a balance needs political will, and Jaitapur and POSCO have shown that the ruling classes have no such intent. If Chiria has been made an exception because of the needs of a profit making public sector Maharatna, the same can not be said for the other two cases. In those instances the ministry seems to have invented a ‘public purpose’ for diversion in order to ensure undue benefits to foreign firms at the cost of the interests of local people.




In the context of the above it is important to note that consideration of environmental and social impacts have taken a backseat. The ministry says that it has attempted to balance the demands of ‘development’ with social and environmental concerns by imposing ‘general’ and ‘specific’ conditions’ on these projects. Thus in the case of Jaitapur, thirty five conditions have been specified. Amongst the conditions are the stipulation the NPCIL should take ‘prior clearance from CRZ’ before initiating any work on the coast. In another condition it is stated that the NPCIL would form a monitoring board with non-governmental experts to ensure compliance thus implying that the project implementation agency should do self-regulation. In a third absurd proposition, the clearance states that another Environmental Impact Assessment (EIA) should be prepared after the first two units of the plant are operationalised. It is clear from this that neither AERB nor the ministry have any base line data which can predict the impact of the Plant. In that case the ministry should have completed the task of doing the risk assessment before the clearance was granted. But this has not been done and instead the ministry has succumbed to political pressure and granted clearance, given the political importance of the project.


In the case of POSCO the situation is even more absurd. All the environmental and social aspects that should have been taken care of prior to the clearance have become the ‘conditions’ on which clearance is granted.  In all about sixty conditions have been laid out for the POSCO complex (28 in the case of the port and 32 in the case of the power plant). The document clearly states that forest clearance has been granted on the Orissa government’s assurance that no scheduled tribes and other traditional forest dwellers reside in the area. In the case of the non-tribal forest dwellers, it particularly states that they have not been able prove residence for three generations or 75 years as stipulated under the act. Therefore no rights need to be settled under the Forest Rights Act before the work commences. This assurance not only exposes the weakness of the impact assessment process, but also of the urgent need to amend the forest rights act if it has to protect the interests of those who are being affected by big projects. At a different level, the final document of clearance lays down the need to do several studies on marine ecology etc., as well as develop a marine conservation plan. If such studies were not done as a part of the preparation of the EIA report, then POSCO needs to be penalised and not rewarded for manipulating and violating impact assessment norms.


If we contrast these conditions with those imposed in the case of Chiria mines, the pro-private corporation stance of the impact assessment process. The order to clear mining by SAIL in the Chiria mines has thirteen specific conditions, and most of this concern the way in which SAIL should carry out its day to day operations in the vicinity of the elephant corridor. Here the ministry takes direct responsibility to monitor the land use pattern in the Saranda forests, and asks SAIL to fund the Wildlife Institute of India for doing studies in the region. It also takes upon itself the task of making a multi-disciplinary group to monitor the project. Clearly, the ministry sees the mitigation of environmental impacts as its own responsibility in the SAIL project. But most importantly the ministry advises the SAIL to set up a specialised forest management team under a full time executive director. Thus the SAIL is expected to make higher investments in long term environmental sustainability as compared to POSCO. In the case of the POSCO Project it has been assumed that 1253 hectares of forest land requires no monitoring, and the monitoring of the activities on the shoreline will be done by the Institute of Ocean Management at the Anna University as per their MOU with POSCO.




If we compare the ‘conditions’ imposed in the case of each of these clearances we find that the subversion of the environmental impact assessment procedures is higher in the case of the projects that have more foreign investments involved in them. Thus the terms and conditions imposed on Jaitapur (a public sector enterprise but largely benefiting French nuclear companies) and POSCO (one of the largest FDI investments in India) have less stringent monitoring and compliance conditions than the ones imposed on Chiria mines. At the same time the number of technical conditions imposed on POSCO and Jaitapur also show that the violation of the EIA process in both these cases was probably higher than in the case of Chiria mines where the ‘conditions’ are more operational in nature.  In these cases, especially in POSCO and Jaitapur case, the ministry needs to explain what type of an EIA was done and why it allowed these companies to flout the EIA norms. 


The actions of the ministry in the last few months expose the weakness of the EIA notification 2006. In 2006, when the environmental impact assessment notification was revised, the first UPA government had claimed that it met the standards of all international standards. Even at that time democratic groups had pointed out the inherent weaknesses of the notification. The 2006 Notification (under which environmental clearances are granted today) was not geared towards the effective and continuous monitoring of big projects so that they complied with the conditions under which they had been allowed to proceed with their work. In the wake of this gap, the conditions being imposed by the ministry on these projects are unlikely to be met.


In this context it is pertinent to note that today the ministry is using its discretion to ignore the advice of teams led by eminent scientists who have raised technological, environmental and social concerns with regard to many of these projects. This is particularly true of the Jaitapur and POSCO cases. Thus it is clear that impact assessment has to be democratised to make the ministry and the companies more accountable. And a proper and independent system of doing impact assessment and monitoring compliance needs to be put into place. Thus it is time for reviewing the EIA experience in order to make a comprehensive law that gives more rights to project affected people by involving public representation and consultation at all stages of impact assessment.