POSCO: Ecological Disaster in Coastal Orissa

A 12-million tonne steel plant at the port town, Paradeep, will result in an ecological disaster in the East Coast of Orissa. The MoU signed by the Orissa Government with the South Korean Pohang Steel Company (POSCO) is the largest ever single foreign direct investment in the country. According the MoU signed on 22 June 2005 , the South Korean Company is permitted to export ore with high alumina content from the State. The proposed mega steel plant is estimated to cost around 51,000 crores and to reach full capacity by 2016.

POSCO has promised to install a steel plant with the capacity of 12 million tonnes and the MoU promises that its annual production capacity will increase to 47.7 million tonnes in the future – more than the total steel production of India ! POSCO, the world’s fifth Steel Major will, it is claimed, achieve 110 tonnes per annum by 2020. The Union Steel Minister Ram Vilas Paswan has welcomed this project, and the Union Government is also supposed to monitor the iron ore consumption by POSCO in its plant at Paradip.

What the Governments refuse to spell out is that this mega steel plant will mean disaster for the coastal people and ecosystem, while generating pitifully low employment. POSCO is a 12 million tonne plant (proposed), and it is estimated that it will employ 48000 people, which means 4000 people per tonne steel. Compare that with, say, the Bhilai Steel Plant, which with a capacity of 3.15 million tonnes, employs around 40000 people. Which means nearly 13000 people for making one tonne of steel, more than three times POSCO’s employment.

Paradeep is situated at the mouth of the Mahanadi river, where it joins the Bay of Bengal in the Indian Ocean . The Mahanadi is the biggest river of Orissa , whose catchment area covers 1,25,000 square kilometres. Paradeep falls within the revenue district of Jagatsinghpur, very close to Orissa’s old capital city, Cuttack . Mahanadi ranks among India ’s major rivers along with the Ganga and Brahmaputra . It flows mainly in Orissa though it originates in the Amarkantak plateau of Chhotanagpur in Chhattisgarh. The river culture and systems of Orissa sustain precious ecological and mineral reserves and support demographical as well biological diversity – all of which are part of Orissa’s living historical, cultural and natural heritage. Now industries threaten this rare heritage.

The POSCO plant is bound to destroy the complex system of myriad natural creeks, nalas and waterways, to create a vast backwater of Mahanadi and its associates especially during the rainy season and floods. The POSCO project will occupy large areas of government and private lands. The proposed plant is near the Bhitarakanika Mangrove forests (which has now got the status of a sanctuary). Apart from fears that land for the plant will encroach upon the mangroves, there is also a fear that the plant will draw water from a watershed that also feeds the sanctuary. Mangroves act as natural protection against super cyclones and coastal cyclones, and destroying these forests will leave Orissa’s coastline vulnerable.

POSCO now requires 700 acres of land for the installation if its steel project – including a captive power plant, port as well as its township. This entire area will be raised a few feet above sea level – destroying the natural contours of the land, and depriving rainwater of natural rivulets that flow down to the sea. As a result, water is likely to stagnate within coastal islands where dense human population and cultivation are found. Moreover, more than 500 villages will be displaced, leaving their inhabitants homeless and landless. Can these people, whose livelihood and survival is intimately linked to local ecosystems, the river and sea, as well as land, ever be ‘compensated’ for their loss?

The biodiversity of the Mahanadi estuaries as well as the marine ecosystem of the Bay of Bengal are now at stake. The Paradeep Port , an oil refinery, as well as industries like Paradeep Phosphates ltd. and Oswal Chemicals Ltd has already destroyed vast tracts of mangrove forests and heavily polluted the air and soil of this region. A Branch Office of the CBI is supposed to be investigating this port to bring polluters to book, but it seems to have been silenced by the Port. These industries have grabbed agricultural land, thus increasing the landlessness of the agrarian poor and pushing the poor, who are totally dependent on agriculture and pisiculture, deeper into starvation and destitution. Most mine owners occupy far more land than the surface rights granted to them for their operations, with bureaucracy hand-in-glove with the mine owners. POSCO is all set to cause acute scarcity of water for irrigation, since it alone requires one lakh cubic metres of water for production of one ton of steel. Its total consumption will be 1.2 trillion cubic metres of water annually. Around 400 kg of solid wastes (blast furnace slag and SMS [steel melting shop] slag) is generated for every tonne of crude steel generated. Since these wastes are wet, they can leach into local water bodies and cause environmental problems.

- Nadiya Chand Kanungo