South Korean giant POSCO still keen to build India plant

October 19, 2010 | 14:21

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SEOUL, October 19, 2010 - South Korean steel giant POSCO said Tuesday it still wanted to go ahead with its plans to build a $12-billion steel plant in India despite a rebuff from an Indian environmental panel.

On Monday three out of four members of an Indian government panel probing the environmental impact of the steel plant to be built in Orissa state said that clearances for the project should be scrapped.

"We, of course, want to proceed with this project. We are now watching closely the development. We will withhold any further comment until the environment ministry makes a final decision," a POSCO spokesman told AFP.

The Indian panel had been tasked with reviewing POSCO's compliance with environmental laws and rehabilitation and resettlement provisions for local tribal people.

The panel's report "strongly" recommended that environmental clearances for the project, the largest since India's market reforms in 1991, be "immediately revoked".

It cited "many serious lapses and illegalities" in assessing the plant's environmental impact, including "serious violations" in the public hearing process, with many communities left out.

Environment Minister Jairam Ramesh, who will make the final decision on the plant's future, said the Forest Advisory Committee would meet on October 25 to examine the panel reports and give its recommendations.

The state government of Orissa and POSCO signed a deal in 2005 but construction stalled due to an ongoing dispute with villagers worried about losing their land and livelihoods.

Three months ago the environment ministry ordered Orissa state government to ensure work stopped at the site after a previous study highlighted alleged irregularities in implementing environmental laws.

India's rapid industrial development often comes up against environmental concerns and local tribesmen as vast expanses of mineral wealth lie in parts of the country that are home to indigenous tribes.

(AFP)

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