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Indian panel advises scrapping clearance for S.Korean plant

NEW DELHI — The majority of an Indian government panel probing the environmental impact of a 12-billion-dollar South Korean steel plant said Monday that clearances for the project should be scrapped.

Steel giant POSCO wants to build the plant in the eastern state of Orissa, in what would be India’s largest foreign investment project since the country launched market reforms in 1991.

Three of the four-member panel said the environmental clearances “should be cancelled forthwith, because of flaws in the studies, and shortcomings in the clearances granted”, said Meena Gupta, the panel’s head.

The panel, which investigated the company’s compliance with environment laws and rehabilitation and resettlement provisions for local tribal people, issued two separate reports after splitting between Gupta and the other three members.

Environment Minister Jairam Ramesh will make the final decision on the plant’s future.

Three months ago, the environment ministry ordered Orissa state government to ensure work stopped at the site after a previous study highlighted alleged irregularities in implementing environmental laws.

India’s rapid industrial development often comes up against environmental concerns and local tribesman as vast expanses of mineral wealth lie in parts of the country that are home to indigenous tribes.

In August, Ramesh struck down a bauxite mining project by British-based resource giant Vedanta, saying the company had shown “shocking” and “blatant” disregard for protected tribal groups.

Gupta wrote in her report that it was “important to point out that POSCO and Vedanta are very different projects and operate in different environs and circumstances”.

She added that the complex issues involved with the PSOCO proposals meant committee members had “formed very different impressions and came to very different conclusions”.

The state government of Orissa and POSCO signed a deal in 2005 but construction stalled due to an ongoing dispute with villagers who are worried about losing their land and livelihoods.