Sterlite Industries Limited has set up an alumina refinery at Lanjigarh in the Kalahandi of Orissa. The activity is being carried out in collaboration with the Orissa Mining Corporation. The plant is estimated to produce 3 MTPA (million tonnes per annum) of bauxite. The estimated bauxite reserve in the region is 73 million tonnes. Reported to bring in around Rs.4,500 crores of investment, this is a high stakes project. (1 crore = 10 million)

Presently, three complaints against Sterlite Industries Limited are being heard by the Central Empowered Committee (CEC) of the Supreme Court. The CEC was constituted by the Supreme Court in 2002 with the approval of the Ministry of Environment and Forests (MoEF) and the Solicitor General of India. Its broad mandate is to monitor and ensure the continuing nationwide compliance of the orders of the Supreme Court on forest conservation. (See: Forest cases update, July 2004).

The Supreme Court's Central Empowered Committee has in its report to the apex court recommended against the diversion of forestlands for the Sterlite aluminum project (both refinery and mining).

CEC members
(at the time of its constitution)

1. P.V.Jayakrishnan, Secretary to the Government of India, MoEF
2. N.K.Joshi, Additional Director General of Forests, MoEF
3. Valmik Thapar, Ranthambore Foundation (NGO)
4. Advocate Supreme Court Member (NGO)
5. M.K.Jiwrajka, Inspector General of Forests, MoEF, commitee secretary

Members are on the committee in their individual capacity. P.V.Jayakrishna is currently the Chairman, but is no longer Secretary at the Ministry of Environment.

The petitions were filed towards the end of 2004 by two NGOs -- Wildlife Society of Orissa and Academy for Mountain Environics -- and activist Praffulla Samantara. They deal with environmental violations on a range of issues, including illegal diversion of forest land in a wildlife sanctuary for bauxite mining and on government clearances for setting up the alumina refinery.

Niyamgiri hill where Sterlite proposes to mine has some of the last remaining forests in the whole Kalahandi District. It is a source of the river Bansadhara and is even proposed as an Elephant Reserve. Rivers play an important ecological function in forest areas, and are critical for the survival of the forests. They are integrally connected to the lives of the local people as well, both for drinking water and irrigation. For drought prone Kalahandi, mining could spell disaster.

One of petitioners' contentions -- also addressed in a subsequent CEC team's site visit -- is that the forests of Niyamagiri hills are also the abode of the Dongarias and Kondhs adivasis, who depend upon fruits grown by them in this area. The petitioners have asserted that diversion of the Niyamagiri forests may push the tribes to extinction.

Sterlite Industries is a public limited company manufacturing aluminum and aluminum products. It is controlled/owned by Vedanta Resources Plc, a United Kingdom registered company. Other major Sterlite Group Companies operating in India include Sterlite Optical Technologies Ltd., Bharat Aluminum Company Ltd. (BALCO), and Hindustan Zinc Ltd (HZL).

The Sterlite project has two components, the mining component and the refinery component. While environmental clearance for the mining component is still pending, the company has already received clearance for the refinery component. How valid is this?

The MoEF's clearance letter states that there is no diversion of forest land for refining. The arguments of the petitioners, evidence from the ground and facts from the Environment Impact Assessment Report itself speak a different story. 58 hectares of forest land is being diverted for the non-forest use of the refinery, for which the company has not sought clearance. Furthermore, the District Collector of the area through a notification issued in 2002 has stated that 118 hectares of village forest land is required for the refinery project and necessary steps have also started for its acquisition.

Also, when forest land is involved in any project, forest clearance needs to be sought prior to the environmental clearance itself. This is mandatory under the Forest Conservation Act, 1980, as well as the orders of the Supreme Court in Writ Petition No. 202 of 1995 (T. N Godavarman Thirumulpad Vs Union of India).

Since the central government has given the environmental clearance despite these violations, questions arise on the validity of the clearance itself. This is one of the central contentions of the petitions before the CEC. But Sterlite has commenced construction of the refinery, also in direct violation of the law.

The mining and refinery components of the project are linked to each other and need to operate in tandem. The Environmental Impact Assessment (EIA) Report prepared by Tata AIG Risk Management Services recognizes this. This also been acknowledged in the last CEC hearing on this matter on 28 February 2005. Significantly and despite this linkage, Sterlite has sought separate clearances for mining and the refinery. Why break up the project components when total clearance for both components is legally required?

As mentioned earlier, clearances for the mining component are still pending. Another 680 hectares of forest land would need to be diverted for mining.

Despite this messy status of clearances, the project proponents have started cutting significant portions of the Niyamgiri reserve forests, as well as starting work in non-forest areas. This includes construction of dwelling units, preliminary constructions and excavation. In fact, the forest conservation law expressly bars precisely this sort of ad-hoc approach.

Section 4.4 of the guidelines issued under the Forest (Conservation) Act, 1980 states that:

    “Some Projects involve use of forest land as well as non-forest lands. State Governments/Project Authorities sometimes start work on non-forest lands in the anticipation of the approval of the Central Government for the release of forest land required for the project. Though the provisions of the act may not be technically violated by starting work on the non-forest lands, expenditure incurred on works in the non-forests may prove to be infructuous if diversion of forest land is not approved. It has therefore been decided that if a project involves forest as well as non-forest land, work should not be started on non-forest land till the approval of the Central Government for the release of forest land under the Act has been given.”

This must have been obvious to Sterlite.

In response to the petitioners' complaints, the CEC appointed a two-member fact finding team to conduct a site visit and submit a report. The team comprised of Assistant Inspector General of Forests S. K. Chaddha and former Additional Director General of Forests (Wildlife), Ministry of Environment and Forests S. C. Sharma.

The team visited in December 2004. Their report confirmed several violations pertaining to mining and processing of bauxite. It also pointed out the detrimental impacts of the mining activity on the flora/fauna and the water resources of the region. The report went on to recommend against the diversion of the forestland for entire project (both refinery and mining).

Pressure to ramrod the project has mounted even as it became evident that the Ministry of Environment's clearance is itself very likely to be illegal. The company is already constructing the refinery.

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