Out of its pledged investment of $12 billion (Rs47,880 crore),ArcelorMittal will spend an estimated $250 million to resettle Orissa villagers who will be displaced by its planned steel mill.
This represents just over 1% of the estimated cost of the project by the world’s largest steel maker, but Remi Boyer, vice-president of corporate social responsibility, said the ArcelorMittal Foundation will further “intervene and better” what the state government’s resettlement and rehabilitation policy asked it to pay.
Observers say that growing difficulties in acquiring land have forced companies to more strongly demonstrate tangible objectives for community development.
In Orissa, more than a dozen villages, encompassing 7,000 acres, will be affected by the planned mill in Keonjhar district. The government’s socio-economic survey, which will form the basis to decide on compensation packages, has yet to collect data on population size and the number of households that will be affected by the planned mill.
At 4 billion tonnes, Orissa has a quarter of the country’s reserves of iron ore, a key raw material for making steel.
The state’s other major investment — a 12 million tonnes steel plant planned by South Korean steel maker Posco—also has yet to announce its rehabilitation package as a survey on those affected is not yet ready. A section of the affected villagers remain opposed to the project.
“The financial implications to Posco will emerge after the data is ready within 10 days,” said Pramod Kumar Meherda, collector of Jagatsinghpur district, the project location.
Orissa, which announced its resettlement and rehabilitation policy in 2006, requires an investor to provide a house for every displaced person above age 18, a job to each family member, and a compensation award of between Rs1.5 lakh and Rs5 lakh to those who cannot get direct employment.
According to a state government official, ArcelorMittal has so far paid only Rs9 crore out of the total Rs27 crore to the state’s land disbursal agency, Industrial Infrastructure Development Corp. Ltd. Besides that amount, the company has to pay farmers separately for 5,000 acres of private land.
India’s national rehabilitation policy, which the cabinet approved last year and is currently pending Parliament’s approval, will serve as an overarching guide for the relocation of people due to industrialization.
But critics say the policy needs to do much more.
Shekhar Singh, member of advocacy group National Campaign for People’s Right to Information, said: “The policy is weak because it does not make it mandatory for a company to provide jobs and does not provide land for land, which should form an essential part of a financial package.”