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Sterlite’s project may face another setback

Sterlite’s project may face another setback

New Delhi: Sterlite Industries’ bauxite mining project in the Niyamgiri hills in eastern Orissa may face a setback with court documents related to a case involving the plant revealing that there were inconsistencies in the approval process.

If the National Environment Appellate Authority (NEAA) upholds a petition challenging the validity of the environmental clearance given to the project on 28 April, then the controversial project could be delayed or suspended.

The documents, which have been reviewed by Mint, also highlight the inadequacies of the process by which industrial projects are given a so-called environmental clearance.

The documents were made available by NEAA following a Right to Information (RTI) application filed by an environmental activist group in July. The lawyers working for this activist group also represent locals who filed four petitions before NEAA on 27 May, claiming that the clearance for the project given by the ministry of environment and forests was based on a report that was different than the one shared with residents of the area during public hearings.

An executive at Sterlite Industries Ltd’s associate Vedanta Aluminium Ltd admitted that different reports were indeed used, but downplayed the significance of this.

Companies building large plants have to conduct studies on the impact their project will have on the environment and share this with the affected population through public hearings. This is part of the mandated approval process for industrial projects in India.

According to documents reviewed by Mint, two environmental impact assessment reports (EIA) were prepared separately by two consultants for the same project with differing assessments. The first report was done by Tata AIG Risk Management Services Ltd (TARMS) in August 2002 and the second one in March 2005 by Vimta Labs Ltd. Both organizations regularly write EIA reports.

Both reports were the so-called rapid EIA that use three months of environmental data as opposed to the comprehensive EIA, which is based on a year’s analysis of environmental parameters.

While the TARMS report was used for the public hearings in 2003 (7 February and 17 March), the Vimta Labs report was submitted to the ministry of environment and forests on 13 June 2005 for environmental clearance.

The Niyamgiri project involves an open-cast bauxite mining plant (with a capacity of 3 million tonnes per annum, or mtpa), a 1 mtpa aluminium refinery, a smelter plant and a 100MW power plant.

The bauxite mining will be undertaken by Orissa Mining Corp. Ltd (OMC), which formed a joint venture with Sterlite in 2008, but was also always involved in the project because it holds the lease to mine bauxite in the Niyamgiri hills.

The refinery was built by Vedanta Aluminium and is already operational. Both Sterlite and Vedanta Aluminium are wholly-owned subsidiaries of London-based Vedanta Resources Plc, controlled by billionaire Anil Agarwal.

While the TARMS report said that the land needed for the project would entail some displacement of scheduled tribes—it didn’t put a number to this—the Vimta Labs findings said there would be no displacement.

Similarly, the TARMS report said the mining project would require 75 cu. m a day, while Vimta Labs claimed the requirement would be substantially higher at 1,000 cu. m a day.

While TARMS has ceased to exist as a company, an executive at Vimta Labs said the people who could comment on the issue were travelling and were not available to speak to Mint.

Interestingly, the first report, the TARMS one, was submitted to the state pollution control board as basis for a public hearing by Sterlite, and the second, Vimta’s, was submitted to the Union ministry of environment and forests by OMC.

The RTI application was filed by Pramod Kumar, a member of Legal Initiative for Forest and Environment (LIFE), a New Delhi-based environmental activist group. LIFE received the RTI findings in end-August. However, the information hasn’t been shared with the media or the public at large, until now.

LIFE approached Mark Chernaik, a scientist with Environmental Law Alliance Worldwide (E-LAW) and asked him to compare the two reports.

Chernaik told Mint that there are substantial differences between the two reports which need to be brought to the attention of the public.

E-LAW is a US-based environmental activist group that works on environmental cases around the world.

Chernaik added that the public was only provided with opportunity to comment on the TARMS report even though this was not at all the basis for the ministry of environment and forest’s approval.

Vedanta’s Mukesh Kumar said Sterlite had initially given the rapid-EIA work to TARMS. “But while Vimta Labs was collecting data for the aluminium refinery, we saw that there was less than 10km difference between the mines and the refinery. Therefore, the comprehensive report was given to Vimta."

He added that the public hearing was done on the basis of the rapid EIA and the ministry was provided with the comprehensive EIA, dated December 2005.

Interestingly, the environment ministry doesn’t recollect having received any comprehensive EIA report.

The ministry of environment and forests said in its reply to the petitions filed in May that it had given the approval on the basis of a rapid-EIA from Vimta Labs dated 17 March 2005 and that it had not received any other EIA study. OMC submitted its application to the ministry with EIA on 13 June 2005.

NEAA held its last hearing in the case on 21 January, during which it adjourned the appeal and said it would hear the case on 15 February.


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