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Letter to Prime Minister on corruption and POSCO

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18 May 2011
To: The Prime Minister of India

Dear Prime Minister,

In the context of the recent national debates on corruption, we wish to draw your attention to another ongoing case in which both State and Central officials are blatantly favouring a private multinational company – Pohang Steel Corporation (POSCO) – in violation of law. There is enough information in the public domain for us to suspect criminal collusion between this company and government officials.

The proposed POSCO steel project in Orissa is incredibly lucrative – POSCO will make an estimated profit of Rs. 1,95,000 crores over the life of the project (Rs. 6,500 crore per year after all expenses) just on the basis of having captive iron ore mines. The fact that corporates are making super profits from our natural resources is today a national issue; the faith of the public in regulatory institutions is already deeply shaken. We cannot see any difference between the recent handover of 2G spectrum and the seeming collusion in the POSCO case, where it seems that equally valuable resources – iron ore, land, water, a natural harbour – are being sought to be given to a private company “on the cheap” without complying with the law. As such, the public has a right to know what has happened. It is vital that a transparent, public investigation is held into the actions of State and Central officials in this case. A few examples of such actions are as follows:

  • A criminal complaint has been filed by villagers in the proposed steel plant area against the District Collector for repeatedly lying on record. For instance, he claimed on 01.03.2011 that the land had no forest prior to 1930 – when six months earlier an Enquiry Committee had found that the government’s own maps show the villages as surrounded by forests in 1928. The Collector also claims there are no forest dwelling STs when the government’s own public notice showed compensation payments to two STs in July 2010 when a small area of land was illegally taken for the project. The criminal complaint was only filed after repeated representations to all State and Central authorities failed to elicit any action. The Environment Ministry, whose own committee had proved that these statements were false, simply carried on accepting them without a murmur.
  • The behaviour of the Environment Ministry itself is deeply suspect. It is notable that the first environmental clearance for this project was given in May 2007, when A. Raja was the Environment Minister. Since then, and especially after December 2009, the Ministry has adopted a “musical chairs” approach; every time a violation has been exposed, the Ministry has shifted the focus to some other issue, trying to appear “sensitive” while condoning the illegality. Committee after committee reached the same conclusion that the Forest Rights Act had been violated; their findings were simply buried and never referred to again. Every violation of environmental law that was raised was converted into a vague “condition” and left to the company to implement. Such actions show systematic bias and a deep contempt for the law.
  • According to a report in the Telegraph newspaper on April 20th, POSCO-India claims to have spent Rs. 3,000 crores on the project so far – while employing less than 80 people, and without beginning any construction. What has this money been spent on?
  • The majority report of the POSCO Enquiry Committee exposed that minutes of official meetings were being changed to favour the company and that there was pressure from the Finance Ministry during the environment clearance process. This finding too was ignored. After giving his final decision on this project the Environment Minister gave a speech on May 6th in which he declared that he is sometimes “forced to… condone environmental violations.” Meanwhile, the requirement for the consent of the gram sabhas (village assemblies) for diversion of forest land – intended to make the process open and democratic, and the only opportunity for real public control – has been entirely ignored. To ignore democratic processes required by law, while engaging in backdoor manipulation, is a particularly noxious form of corruption.

As citizens of this country we have a right to know how and why our natural resources are being handed over to this company and why these decisions were taken. We therefore call upon the State and Central governments to:

  • grant sanction for prosecution of the District Collector and ensure that the case is investigated by the CBI;
  • initiate a public judicial inquiry into the actions of Central and State agencies and into expenditure by the POSCO company;
  • prosecute those found guilty of criminal offences by the inquiry;
  • Halt all steps to implement this project pending the completion of these processes.


Prashant Bhushan, Campaign for Judicial Accountability and Reform
Arvind Kejriwal, Parivartan India
Swami Agnivesh, President, World Council of Arya Samaj
Aruna Roy, Mazdoor Kisan Shakti Sanghatan and member, National Advisory Council
Vandana Shiva, Navdanya



Written by janjagriti

May 22, 2011 at 1:20 pm

Posted in Articles

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