CENTRAL EMPOWERED COMMITTEE
REPORT IN IA NO. 1324
REGARDING THE ALUMINA REFINERY PLANT BEING SET UP BY M/S VEDANTA ALUMINA
LIMITED AT LANJIGARH IN KALAHANDI DISTRICT, ORISSA
This
report is being filed by the CEC in IA No. 1234 regarding the one million tonne
per annum capacity alumina refinery project together with the 75 MW coal based
captive power plant being set up by M/s Vedanta Alumina Limited (M/s Vedanta)
at an estimated cost of about Rs. 4000 crores at Lanjigarh, District Kalahandi,
Orissa and the associated bauxite mining project at Niyamgiri Hills,
Lanjigarh.
2. The
alumina refinery project will require 3 million tones per annum bauxite which
is proposed to be sourced from the nearby Niyamgiri hills. After completing the preliminary works, M/s
Sterlite Industries (
3. Shri
Biswajit Mohanty of Wildlife Society of Orissa, Shri Prafulla Samantara and
Validity of environmental clearance:
i)
out
of the land requirement of 723.343 ha. for the alumina refinery and 721.323 ha.
for the bauxite mining, 58.943 ha. and
672.018 ha., respectively are forest land. The government revenue land and the
private land also contain thick forest and therefore are eligible for
classification as “forest” as per the
ii)
since
the project involved the use of the forest land for the alumina refinery itself,
the environmental clearance could have been granted by the MoEF only after the
use of the forest land was permitted under the F.C. Act. Similarly, the environmental clearance for
the alumina refinery could not have been accorded without taking a decision on
the mining component which is an integral part of the project;
iii)
M/s
Vedanta has deliberately and consciously concealed the involvement of the
forest land in the project. In the acquisition notice dated 6.6.2002 issued by
the District Collector, Kalahandi it is clearly mentioned that 118 acre of
forest land is included in the project site. In the application made by M/s
Vedanta for the environmental clearance and also during the examination of the
proposal, this vital fact was concealed
so that environmental clearance is not kept pending for want of the F.C. Act
clearance;
iv)
in
violation of the F.C. Act guidelines,
the project has been split into alumina refinery project and bauxite mining
project even though the bauxite mining is an integral part of the refinery
project. Though the MoEF was fully aware
that the use of the forest land for the
mining at Niyamgiri hills is absolutely necessary if the alumina refinery is to
be established at Lanjigarh, the environmental clearance to the alumina refinery
has been accorded by the MoEF by overlooking these facts;
v)
at
the time of the grant of the environmental clearance even the proposal under
the F.C. Act for the use of the forest land for the Niyamgiri bauxite mines had
not been filed with the MoEF;
vi) the construction work of the alumina
refinery was started on the project site much before the environmental
clearance which was accorded on
Importance of Niyamgiri forests :
vii)
Niyamgiri
forests are historically recognized for its rich wildlife population. It was declared a game reserve by the
ex-Maharaja of Kalahandi. It has also
been proposed to notify it as a wildlife sanctuary in the Working Plan for
Kalahandi Forest Division, and which has been approved by the MoEF on
viii)
the
alumina plant and the mining project linked with it will have serious adverse
effect on the flora and fauna due to mining, overburden dumping, construction
of proposed road through the dense forests, liquid and gaseous effluents emissions,
bright illumination, blasting with explosives, drilling and resultant vibration
and dust, operation of heavy loading and unloading equipment, pollution etc.
Improper withdrawal and FC clearance proposal :
ix)
M/s
Vedanta had applied for the diversion of 58.943 ha. of the forest land for the
alumina refinery project. Subsequently
on
x)
the
forest area of 58.63 ha. extends over a number of patches distributed in the
seven villages. These patches have now lost the character of forest. It is not clear how the project can be
implemented without these areas when these are widely spread inside the project
site itself. They are within the
compound walls of the project and can only be left out of the project on paper
but not on site;
xi) though the State Government officials
were fully aware that forest land is involved in the project, the forest
offence report (FOR ), issue of notices to the company etc. for
breaking/encroachment of forest land was initiated by the Forest
Department/Revenue Department as late as 18th December, 2004 which
was only after the matter was brought before the CEC and there was a public
outcry over the violation of the Acts;
Niyamgiri Hills – critical water source
xii)
many
perennial streams originate from the Niyamgiri hill top. It is a permanent
source of water to the entire area including Kalahandi and Rayagada districts;
xiii)
22
water harvesting structures are located in the foothills which provide year
round water supply. Vamsdhara and
Nagvalli are two major rivers of
xiv)
there
is an intimate relationship between the bauxite topped mountains in Orissa and
the perennial flow of water. All flat
topped
Change in source of
water and its impact:
xv) in the EIA it was shown that the water
for the plant would be sourced from the Vamsdhara river. Now the water is being
sourced from Tel river. This river is an
important source of water for irrigation and drinking for the lakhs of people
of Bolangir district downstream. It is
basically a dry river with very little water flow. The temporary flow in Tel river even during
the lean season is because of the fact that the canal system in the command
area of the Indrawati Multipurpose Irrigation Project is yet to be fully developed
and implemented. After completion of the
Indravati Multipurpose Irrigation Project there will be severe shortage of
water. No EIA has been conducted to
assess the likely impacts of water being used from the Tel river;
Forcible eviction and rehabilitation package :
xvi)
the
people have been displaced from their houses through physical eviction by the
district administration. Many were
beaten up by the employees of M/s Vedanta.
The National R&R policy requires that land for land should be given
after due process of consultation, particularly in the case of the
tribals. Contrary to the above cash
compensation was offered to them and which was not acceptable to many. The tribal people living on the plant site
are mainly Kondhs who are illiterate and depend completely on their
agricultural lands and forest for their subsistence. They have deep spiritual and cultural
attachment to their ancestral lands and settlements. The displacement was opposed vehemently by
them despite being offered large cash compensation by M/s Vedanta. In the face of resistance, the District
Collector and the company officials collaborated to coerce and threaten
them. An atmosphere of fear was created through
the hired goons, the police and the administration. Many of the tribals were
badly beaten up by the police and the goons.
After being forcibly removed they were kept under watch and ward by the
armed guards of M/s Vedanta and no outsider was allowed to meet them. They were effectively being kept as
prisoners;
xvii)
apart
from the land acquired by the District administration from the large number of
tribals and the harijans of Bandhagunda and Rengopali villages, land was also
illegally taken over by M/s Vedanta for which neither acquisition notice was
served nor compensation was paid;
xviii)
about
64 households of
Transfer of land –
violation of Samta judgement and MoEF guidelines:
xix)
transfer
of land to the non-adivasis in this area in violation of the judgment of the
Hon’ble Supreme Court in Samta Vs. Andhra Pradesh case. A highly endangered
primitive tribe – the Dongaria Kandha whose population is less than 6000 reside
in the Niyamgiri hills. They are dependent on farming / agroforestry and have
no other source of livelihood. Niyamgiri
Hill is a sacred hill for the Dongaria Kandha tribe. They do not cultivate on the hill top out of
respect and the hill is worshipped as Niyam Raja. The entire tribe with its unique custom and
practice will become extinct if Niyamgiri hills are diverted for mining;
xx)
in
the Guidelines No. 2-1/2003-FC dated 20.10.2003 of the MoEF it has been
specifically stated that the maintenance of good cover is essential for
sustaining the livelihood of tribal population and that in tribal areas only
infrastructure development projects (other than commercial) should be
encouraged. The manufacture of alumina is a commercial project which will only
benefit the promoter company and cannot be described as infrastructure
development project. It will thus be seen that the MoEF in this case has not
followed its own guidelines;
xxi)
the
provisions of the Orissa Scheduled Areas Transfer of Immovable Property (by
Scheduled Tribe Regulation) 1956, the Scheduled Tribe And Scheduled Tribes
(Prevention of Atrocities Act), 1989 have been violated;
Disposal of toxic effluents and mining overburden :
xxii)
Red
Mud Pond and the Ash Pond are being established on the banks of river Vamsdhara
with a part of the river actually covered by the red mud pond. A flashflood in the river can cause a breach
in the pond and which could result in a massive spill in the river of noxious
and poisonous red mud which is a mix of highly toxic alkaline chemicals and
heavy metals including radioactive element all of which could have disastrous
consequences;
xxiii)
the
dangerous heavy metals and the chemicals may leach the ground water and destroy
all the plant life that comes into contact with it. This aspect has been glossed over in the EIA
and ignored by the MoEF;
Other issues:
xxiv)
the
overburden from the mining will flow into the streams and pollute them and in
the process also destroy the unique micro-niches along the streams as well as
the habitat of many of the unique species and the drinking water source for the
wild animals. The streams will dry up in
the summer and no surface flowing water will be available for drinking/agricultural
use. Considering the acute water
scarcity in the Kalahandi district one of the few sources of perennial water
should not be allowed to be destroyed;
xxv)
the
rehabilitation colony has been located too close to the reserve forest which
may have serious adverse effect on the forest; and
xxvi)
rapid
EIA is only a mechanism to initiate the assessment and in the case of small
projects it could cover substantive aspects of the implications. Large projects such as that being implemented
by M/s Vedanta demands a comprehensive EIA. A detailed analysis is therefore
essential to ensure that the eco-systems are not damaged beyond resilience. It
is inappropriate to clear projects of such magnitude based on a study of only
60 days.
A copy of submission dated 5.7.2005
filed by one of the applicant is annexed hereto as ANNEXURE - R 20 to this report alongwith extract of
guidelines issued by the MoEF (Annexure
– R 7), copy of the
Executive Summary of the EIA Report of the Alumina Refinery Project (ANNEXURE – R 3), relevant extract
of the Working Plan for the Kalahandi Division (ANNEXURE - R 21), relevant extract of the publication
titled “Adibasi - A Journal of Anthropological Research” (ANNEXURE - R 22) and photographs of the area (ANNEXURE- R 23).
SUBMISSIONS
MADE BY THE M/S VEDANTA ALUMINA LTD.
4. As per the submissions
made by M/s Vedanta, M/s Sterlite Industries (
5. The submissions made by
M/s Vedanta in favour of the project are summarized as under:
About environment clearance:
i)
the public hearings on the alumina refinery and
mining projects were held on 7.2.2003 and 17.3.2003, which were not attended by
the applicants at all. The objections have now been raised after the project
has reached a critical stage of implementation;
ii)
the MoEF by letter dated 24.3.2004 indicated that
since the functioning of the alumina refinery would be dependent on the
proposal for mining it has been decided to consider the two proposals for
environmental clearance i.e. alumina
refinery and mining together;
iii)
M/s Sterlite by letter dated 25.3.2004 sought
environmental clearance for the alumina refinery on the ground that it would
take three years to build the alumina refinery whereas only one year will be
needed to open the bauxite mines. Thereafter the MoEF granted the environmental
clearance to the refinery on 22.9.2004 inter alia on the condition that the
refinery would be operationlised only after the linked mining component is
permitted;
iv)
the allegation that construction was started by M/s
Vedanta before the grant of environmental clearance by the MoEF is incorrect;
v)
averment that M/s Vedanta did not disclose that
reserve forest area exist within the 10 km. radius of the project site is not
borne out by the records. Full and
accurate disclosure has been made by it including the fact of the proximity of
reserved forest area. In reply to a
query dated 16.9.2004 by the MoEF it had disclosed by a letter of the same date
that the alumina refinery is located at the foothills of the Niyamgiri Hills. The fact that Niyamgiri Hills are reserved forests
has been abundantly disclosed in the EIA report;
vi)
against Item No. 3 (a) of the application filed by
it for environmental clearance it was stated that no forest land was required
for the refinery and the captive power plant.
At the time when the application for environmental clearance was made,
there was no involvement of forest land for the refinery project and therefore
against Item No. 3 (a) of the application it was correctly stated that no
forest land was required (as Gramya Jungle Jogya land could not be perceived as
forest land);
vii)
it is not correct to say that at the time of the
grant of environmental clearance on 22.9.2004, the MoEF was not aware that
forest land is involved in the project because the proposal under the F.C. Act
for the use of 58.943 ha. forest land for the project was pending with the MoEF
since
viii)
after the grant of the environmental clearance on
22.9.2004, the refinery work was started without involving any “Gramya Jungle
Jogya” land. Similarly, the reserve
forest meant for the mine access road and the conveyor belt was not used. The work was started pursuant to the
clearance granted by the MoEF;
ix)
the MoEF vide its letter dated 23.3.2005 instructed
it not to take up any further construction at the project site without
obtaining the forestry clearance for 58.943 ha. of forest land. On account of
business expediency and to ensure that the project is not derailed it took a
conscious decision to specifically inform the concerned authorities that it
will implement the refinery project without involving 28.943 ha. of “Gramya
Jungle Jogya” land. Further since the
proposal for the diversion of 30 ha. was for “mine access road” and “conveyor
corridor” it could also be included in the mining proposal. Meanwhile, it withdrew
the entire 58.943 ha. of forest diversion proposal. On its request, the State of
x)
as is usually practiced, preparation of a
comprehensive EIA will be undertaken during the implementation of the project;
Use of forest land:
xi)
the MoEF guidelines regarding “not starting work on
non-forest land till FC Act clearance is obtained” itself states that starting
of the work on non-forest area does not technically violate the FC Act. The rational of the guidelines is to ensure
that the resources of the public sector undertakings are not wasted if the
proposal is not approved under the FC Act;
xii)
28.93 ha. of “Gramya Jungle Jogya” land within the
alumina refinery is not a forest land since it is still in the custody of the
Revenue Department. It is described in the revenue records only as ‘suitable
for village forest’ and not as forest land. The TATA-AIG study did not perceive
the land as forest land;
xiii)
when an ambiguity arose during the detailed land
acquisition process, by way of abundant precaution, IDCO applied for the FC Act
clearance for 28.93 ha. of the above said land along with 30 ha. reserve forest
for road / conveyor belt. It has only 89
trees. The said proposal was received by
the MoEF during August, 2004;
xiv)
xv)
pursuant to the queries raised by the CEC vide
letter dated 2.3.2005 M/s Vedanta wrote to the MoEF and the Orissa Government
on 24.3.2005 that the alumina refinery project will be carried out without
involving 58.943 ha. forest land for which FC Act clearance proposal was sent
by the Orissa Government to the MoEF on 16.8.2004. Accordingly, the MoEF has
allowed withdrawal of the proposal;
xvi)
M/s Vedanta will not reactivate at a later stage
the proposed diversion of 30 ha. of forest land sought by it for the mine road
and conveyor belt. The OMC is the mining
lessee who would be assessing their requirements for the effectual operation of
any mining lease;
xvii)
the Forest Advisory Committee, which is the
statutory body dealing with the forest diversion proposal, is yet to examine
the proposal for the diversion of the forest land for the Niyamgiri mines;
xviii)
the proposal by the Orissa Government also makes it
clear that the conveyor belt would be necessary only with respect to the mining
proposal. Therefore, the diversion proposal for 30 ha. has been withdrawn with
respect to the alumina refinery project;
xix)
it has committed about Rs. 111 crore towards
various compensatory measure;
xx)
it is only the bauxite mining project which
involves forest diversion. Though this
project is vital to the functioning of refinery, but that by itself does not
make the two projects integrated such that the commencement of the construction
in the alumina refinery project would amount to a violation of guidelines under
the FC Act. In any case, the mines
belong to the OMC and it is going to procure the bauxite from the OMC as per
agreement with it;
Rehabilitation package:
xxi)
the relief and rehabilitation package provided to
approximately 300 project affected persons is the best in the State. There was not a single litigation in the
acquisition process. Over 100 displaced
families have been rehabilitated in the rehabilitation colonies built by M/s
Vedanta Alumina Ltd. Land compensation between Rs. 1.0 lakhs per acre to Rs.
1.5 lakhs per acre has been given;
xxii)
the rehabilitation colony is barricaded and the
existence of revenue land between the rehabilitation colony and the
xxiii)
Dongaria Kandha tribes do not inhabit the area
proposed for the diversion;
Requirement of bauxite for Niyamgiri forest :
xxiv)
the project of alumina refinery in Lanjigarh has
been planned considering the proximity to the Lanjigarh bauxite deposits. A situation of these deposits not being
available to the refinery has never been envisaged;
xxv)
the concept of the mining project being integral to
the alumina refinery project is inaccurate.
In case, the mineral from Lanjigarh mines are not available it would
obtain bauxite from other sources;
xxvi)
the raw material ‘bauxite’ is vital to its
functioning and its availability would be an important consideration in
deciding the location of the refinery.
The proximity of mine would be an important factor for the successful
functioning of the refinery and the production of aluminium at competitive
prices. The mining project is necessary
for the successful functioning of the refinery;
Drawl of water for the project:
xxvii) the water for the project would be drawn
from the Tel river. It would be
negligible namely 0.44% of the average flow of the water in the lean season and
about 2% of the minimum flow during the lean period and therefore would not
have environmental / ecological effect; and
Mining Plan:
xxviii) the Mining Plan and Wildlife Management Plan
will be prepared by the various Expert Bodies and would cover all aspects of preservation
of wildlife and eco-friendly mining practices.
Copies of affidavit dated
16.2.2005 filed by M/s Vedanta is annexed at (ANNEXURE- R 25) together with affidavit dated 28.3.2005 (ANNEXURE- R 26), affidavit dated 28.4.2005 (ANNEXURE- R 27) and affidavit
dated 22.7.2005 (ANNEXURE- R 28) to
this report.
STAND OF
THE STATE GOVERNMENT
6. The submissions made by
the State of
i)
the alumina refinery and the Lanjigarh mines are
complementary to each other;
ii)
when a major project is set up, some industries do
resort to undertaking parallel activities at their risk and cost. The State
Government has not accorded any express permission to undertake any activity on
non-forest land. At the same time it is
to be appreciated that under the present legal arrangement, there is no scope
for the State Government to stop the work undertaken by the project authorities
on the non-forest land at their own risk;
iii)
in the instant case the MoEF has permitted the
refinery proposal to be split from the mines proposal. The mining lease has been approved in favour
of the Orissa Mining Corporation (OMC) by the Department of Mines, Government
of India on
iv)
after receipt of MoEF’s letter dated 22.9.2004 by
which environmental clearance was accorded for the alumina refinery complex,
the State Government vide letter dated 24.11.2004 has pointed out that the
project involves use of forest land;
v)
different bauxite deposits of the State have been
explored. They have either been under
operation or is being processed for
exploitation as per the prevailing law of the land, hence not considered for
the project;
vi)
58.943 ha. of forest land consisting of 28.94 ha.
“suitable for village forest” and 30 ha. reserve forest, is an integral part of
the alumina refinery project. This land
is required for the development of alumina refinery complex over 26.12 ha. and
construction of the service corridor, conveyor belt and approach road over
32.82 ha.;
vii)
M/s Vedanta is found to have encroached 10.41 acre
of the “Gramya Jungle Jogya” land by way of land breaking and leveling
activities. For this DFO, Kalahandi
South Forest Division has issued show-cause notices to M/s Vedanta on 5.112004,
18.12.2004 and 23.2.2005 for violation of the forest laws and Tehsildar,
Lanjigarh has booked encroachment cases against it under O.P.L.E. Act,
1972. After registering forest offence
case against M/s Vedanta, the prosecution case has been sent to the Court of
S.D.J.M., Bhawaniptana for trial;
viii)
the proposal for the diversion of 58.943 ha. of
forest land for the plant was sent to the Central Government on 16.8.2004. Subsequently, on request from the M/s Vedanta
and the IDCO, the State Government vide letter dated 27.3.2005 recommended for
the withdrawal of the proposal which was accepted by the MoEF vide letter dated
28.3.2005. The proposal for the
diversion of 660.749 ha. of forest land for Bauxite mine in favour of the
Orissa Mining Corporation has been sent to the MoEF vide letter dated
26.2.2005. Earlier, approval under the
MMRD Act for the grant of mining lease has been given by the Department of
Mines, Government of India vide letter dated 13.9.2004 for a period of 30
years;
ix)
in the Working Plan for the Kalahandi Forest
Division for the period from 1997-98 to 2006-07 it is stated that the
composition of the bio-diversity in
x)
the Niyamgiri Hill area is a habitat of wildlife. Elephants, Sambar, Spotted Deer, Leopard,
Barking Deer etc. are noticed in the area.
In order to preserve the flora and the fauna in the locality a scheme
for the conservation and management of the wildlife has been prepared and
approved by the Chief Wildlife Warden involving a financial outlay of Rs. 41.63
crore. This will be implemented as part
of the project cost. A number of
measures have been suggested by the Chief Wildlife Warden to minimize the
adverse impact of noise pollution, use of heavy machineries, illumination at
night in the project area, vehicular traffic etc. on wildlife. These include
selection of eco-friendly equipment with
properly designed silencers, effective equipment maintenance, no blowing of
horns, use of controlled blasting technique and no heavy machinery movement
during night hours etc.;
xi)
from the Niyamgiri Hill forest area, only 383 ha.
is proposed to be utilised for mining.
To mitigate any adverse impact, suitable management plans are under
consideration and the mining activity will start only after these plans are
approved by the Government of India;
xii)
the river Vamsdhara originates about 250 meters
below the plateau top of
xiii)
Dongaria Kandha tribals reside in the Niyamgiri
Hills but not in the areas proposed for diversion by the M/s Vedanta. The mining activities will not affect their
livelihood, custom, practices and their lifestyle;
xiv)
no endangered medicinal species grow in the Niyamgiri Hills. Nagvalli river does not
originate from the Niyamgiri Hills. Some of the minor tributary rivulets of
Vamsdhara and Nagvalli rivers originate from Niyamgiri Hills;
xv)
the construction of 22 pillars for the purpose of
conveyor belt has been taken up by M/s Vedanta in the non-forest land;
xvi)
within a policy of promoting value addition to the
mineral resources of the state, with respect to steel and related industries
the State insist on 25% of the investment before recommendation of mining lease
to Government of India;
xvii)
the guidelines dated 20.10.2003 issued under the FC
Act regarding the stepping up of development project in tribal areas permit
infrastructure development in tribal areas but do not ban undertaking of
commercial projects;
Copies of affidavit dated
16.2.2005 and 28.3.2005 and comments dated 22.7.2005 filed by the State of
REPORT OF THE FACT
FINDING TEAM
7. A
Fact Finding Team (FFT) consisting of Shri S.C. Sharma, Former Additional
Director General of Forests (Wildlife), MoEF and Shri S.K. Chadha, Assistant
Inspector General of Forests (Wildlife), MoEF was deputed by the CEC to carry
out site visit between 18-23th December, 2004. A copy of the report given by the FFT is
enclosed at ANNEXURE – R 8 to
this report. During the visit, the
Fact Finding Team held detailed discussions with the project authorities, State
Government officials, public representatives, NGOs, applicants and other stake
holders and carried out the site visit to the alumina refinery site and other
connected areas. The findings of the FFT
are reproduced below:
“i) the
project authorities have taken up the construction work of the refinery on
non-forest lands without getting the clearance under the
ii)
environmental
clearance of the mining site should either precede or should be linked with the
clearance of the refinery site. By
granting site clearance without linking the project with an approved mining
site an anomalous situation has been created.
The Ministry of Environment and Forests in their letter No.
J-11011/81/2003-IA-II dated 5.2.2004 had specifically mentioned about the
linkage between the clearance of the refinery site and the mining site. Why environmental clearance for the refinery
site has been granted by the Ministry without the clearance of the mining site
is not understood;
iii) the rehabilitation package for the
displaced persons given by the user agency is not in the interest of
sustainable livelihood of the local communities as no land has been given for
grazing purposes, raising agricultural crops and carrying out other income
generating activities, etc. The location of the rehabilitation colony has been
decided totally ignoring the interest of the conservation of forests. It is just a few meters away from the
iv) Niyamgiri
is a very rich forest from biodiversity point of view. A proposal has already been approved in the
working plan to declare this area as a sanctuary. The relevant abstracts are part of the
petition. It was further revealed that
the State Government have made a proposal to include this area in the proposed
new Elephant Reserve. Further, the hills form the origin of Vamsdhara
river. The rivulets coming across these
hills are source of water for the local communities. Any mining in this area is bound to destroy
the biodiversity and affect the availability of water for the local
people. The question of pollution of
Vamsdhara river is also there. Under
these circumstances, alternative sources of ore should be explored for the
project;
v) although
the village forests extending over 58.93 hectares exist in the refinery site
but these have lost their utility for the villagers. The project authorities should acquire
equivalent non forest land for carrying out plantations to meet the biomass
requirement of the villagers and the area be notified as village forests;
vi)
appropriate
action should be taken against the company for clearing the village forest land
in violation of the Forest Conservation Act and clearing the trees in the project
site without the proper sanction of the competent authority;
vii)
the
project authorities should provide free gas connections/electricity to its
rehabilitation colony and labour force working in the project. The parking site for heavy vehicles, particularly
trucks, etc. should be made at a place away from the
viii)
project
authorities should provide funding for the establishment of a Forest Section
Office with the entire infrastructure and the salary of one Forester and four
Forest Guards for safeguarding against illicit felling in Niyamgiri hills;
ix)
the
team observed lot of natural vegetation in the lands classified as Abad Ajogya
Anabadi and Dongers. D.L.C. (District Level Committee) has not
included these areas in the definition of deemed forests. Unregulated felling in these areas is likely
to have severe environmental impact. The
State Government should be asked to consider these areas in the list of deemed forests, wherever the extent
is more than five hectares;
x)
the
present practice of OMC getting into agreement for allotment of the mining
areas, in respect of which clearance under the
xi)
the
area proposed to be given for mining of Bauxite to M/s Sulakhami Mines is too
close to the Karlapat Sanctuary and is part of the proposed elephant
reserve. Environment Impact Assessment
and broad based environment management plans need to be prepared for areas
having bauxite before entertaining applications for setting up of new
industries in the area; and
xii) the Ministry of Environment and Forests
has to set up a mechanism under which close coordination is maintained between
Impact Assessment Division, Forest Conservation Division and Wildlife Division
so that the Ministry is not put in an awkward situation by issuing sanctions on
the basis of information supplied by the project proponents.”
AGREEMENT BETWEEN ORISSA MINING
CORPORATION AND M/S VEDANTA FOR MINING OF BAUXITE
8. An
agreement has been signed between the Orissa Mining Corporation Ltd., a
Government of Orissa Undertaking and M/s Vedanta on
(a)
a
Joint Venture Company (JVC) will be incorporated as a private limited company
with 26% share holding with the Orissa Mining Corporation Limited (OMC) and the
balance 74% with M/s Vedanta;
(b) the shares will be allotted to the OMC
without any payment in consideration of
the services rendered by it for operating the mines. The JVC will have six directors out of which
two will be nominees of the OMC (part time directors, not involved in day to
day operations / running of the JVC) and four of M/s Vedanta. The Chairman and M.D. will be chosen from
amongst the Vedanta nominee directors.
The management control and control over its day to day operation will
vest solely with M/s Vedanta;
(c)
the
JVC will be the sole raising contractor to explore, exploit, develop, operate
and maintain the mines. The JVC would
exploit the bauxite deposits from Lanjigarh mines exclusively for supplying the
said ore to the alumina refinery. The
mining lease will be operated by the JVC as the raising contractor;
(d)
the
OMC will assist the JVC in obtaining requisite approvals (such as FC Act clearance, environmental clearance, MMRD Act clearance,
clearance from IBM and Director General of Mines Safety etc.) and to
successfully implement the project. The expenditure incurred by the OMC in
obtaining the prospecting licenses / mining lease (s) will be reimbursed by M/s
Vedanta;
(e) the
cost associated with the mining of bauxite from the mines (raising cost) will
be reimbursed to the JVC by the OMC; and
(f) the bauxite raised by the JVC will be
purchased by M/s Vedanta. It will pay to
the OMC raising cost reimbursed by it to the JVC, royalty and other statutory
dues payable to the State Government and an additional amount equivalent to the
royalty / 50% of the royalty (after the alumina smelter becomes
operational). For payments delayed beyond
90 days, interest at prime lending rate will be payable by it to the OMC.
9. From
the above it may be seen that the agreement provides that though the mining
lease will be in the name of the OMC and it will be responsible for complying
with all the statutory and legal requirements, M/s Vedanta through the joint
venture company will be de facto managing the mines and will be the principal
beneficiary on payment of development charges, royalty and other statutory dues
payable to the State Government on the extracted mineral. Thus while on the one hand M/s Vedanta will
be getting all the benefits of captive mines, on the other hand it is free from
obtaining all the onerous statutory clearances because the lease holder is the
OMC.
A copy of the said agreement is
enclosed at ANNEXUR – R 5 to
this report.
10. As
stated earlier, an area of 721.323 ha. at Niyamgiri consisting of 672.018 ha.
of forest land and 49.305 ha. non-forest land is proposed for the mining lease
linked with the alumina refinery project.
The mining lease has been applied for and sanctioned under the MMRD Act
by the Department of Mines, Government of India on 13.9.2004 in favour of the
Orissa Mining Corporation. As per the agreement between M/s Vedanta and the
OMC, a Joint Venture Company with 76% and 24% share holding respectively with
them will be established and which will be solely responsible for the
development of the mines and extraction of the minerals. The cost towards the net present value of
forest land (Rs. 55 crores), compensatory afforestation (Rs. 1.80 crores),
phased reclamation plan (Rs. 0.80 crores), wildlife management scheme (Rs.
41.63 crores) and tribal welfare (Rs. 12.20 crores) totaling to about Rs. 111
crores will be reimbursed by M/s Vedanta.
The mining site on the plateau top does not have any habitation. Mechanized open cast mining will be done with
concurrent back filling and reclamation of mined out areas. The average thickness of bauxite is 12.6
mtrs. The project has a cost benefit
ratio of 1:5.
11. The Orissa Pollution
Control Board has given the No Objection Certificate on 27.5.2005. The site clearance for the bauxite mines has
been given by the MoEF on 12.7.2004. The
proposal seeking the approval under the F.C. Act for use of the forest land for
the mining project has been recommended by the State Government to the MoEF on
26.2.2005 and is pending with the MoEF.
WATER REQUIREMENT FOR THE PROJECT
12. As
per the rapid EIA, initially it was envisaged to draw water from River
Vamsdhara and a dam was to be constructed for this purpose. Subsequently it has been decided to draw
water from River Tel for which about 65 km of underground water pipeline is
being laid. During the construction
phase about 30,000 cum water is required per day. As per the project authorities, the drawl
will not have any environment/ecological effect as the drawl will be only 0.44%
of the average flow of water in the lean season and about 2% of the minimum
flow. On the other hand the applicants are of the view that it will have serious
adverse effect on the water availability and that without proper impact
assessment studies for the proposed drawl of water from River Tel the
Environment Clearance has been granted by the MoEF.
VIEWS OF THE
MINISTRY OF ENVIRONMENT AND FORESTS
13. During the hearing held
on 28.2.2005, the MoEF was requested to forward its views on the following
specific issues pertaining to the validity of the environmental clearance and
the report of the Fact Finding Team:
(i)
environmental clearance to the project was accorded
on the premise that the project does not involve forest land whereas actually
about 58 ha. and 660 ha. of forest land is involved for setting up of the plant
and for mining respectively. Under these
circumstances, how can the environmental clearances remain valid and whether
any action to stop the work has been initiated by the MoEF!
(ii)
the MoEF guidelines prohibit starting of work on
non-forest land pending a decision about use of forest land under the FC Act,
substantial work has been carried out in violation of the said guidelines whether any action in this regard has been
initiated by the MoEF?
(iii)
as per the guidelines issued by the MoEF,
environmental clearance and the FC Act clearance are issued
simultaneously. Since, FC Act clearance
has not been accorded so far, whether environmental clearance is being
withdrawn!
(iv)
action if any proposed to be initiated against the
project authorities for obtaining environmental clearance on wrong premise and
starting the work without obtaining FC Act clearance!
(v)
views of the MoEF on the report of the Fact Finding
Team;
(vi)
views of the MoEF about the origin of the rivers;
and
(vii)
factual position about the 17 reported cases of
illegal mining water in Orissa regularised by granting permission under the FC
Act.
14. The MoEF was also requested that pending
filing of the report on the project by the CEC before the Hon’ble Supreme
Court, the decision on the project under the FC Act may be kept pending. A copy
of the CEC’s letter dated 2.3.2005 on the above is enclosed at ANNEXURE - R 9 to this report.
15. In response, the MoEF
vide affidavit dated 4th April, 2005 informed that the MoEF will
take a decision on the proposal only after filing of the report by the CEC and
direction thereon by the Hon’ble Supreme Court (ANNEXURE- R 10) Subsequently on 14.7.2005 the MoEF filed an
affidavit dealing with the issues raised by the CEC, a copy of which is
enclosed at ANNEXURE – R 11 to
this report. The views / observations of the MoEF are summarized as under:
(i)
in the original application made by M/s Sterlite
Industries (India) Ltd. on 19.3.2003 (Annexure
– R 2) for environmental clearance, it was stated that no forest land
was required for the refinery and the Captive Power Plant and that 828.84 ha.
of forest land was required for the mine.
It was also stated that within a radius of 10 km. of the project site no
National Park, Sanctuary or
(ii)
it was only after CEC’s letter dated
(iii)
after it was brought to the notice of the MoEF that
for the establishment of alumina refinery forest land is involved, the MoEF vide letter dated 23.3.2005 amended
the environmental clearance by stipulating a specific condition that “the
project authorities shall not take up any further construction at the project
site without obtaining the forestry clearance under the Forest (Conservation)
Act, 1980 from the competent authority”;
(iv)
the proposal for the diversion of 58.943 ha. forest
land for the construction of the alumina refinery in favour of M/s Vedanta
Alumina Ltd. was subsequently withdrawn by the State of
(v)
pursuant to the directions given by the MoEF on
5.11.2004 site inspection in respect of the proposal received for 58.943 ha. of
the forest land required for the alumina refinery was carried out by the MoEF’s
Regional Office, Bhubneshwar;
(vi)
the proposal for the diversion of 660.749 ha. of
the forest land for the mining of the bauxite in Lanjigarh bauxite mines was
received by the MoEF on 28.2.2005. As
per the proposal, M/s Orissa Mining Corporation Ltd. (OMC) has signed an
agreement dated 5.10.2004 with M/s Vedanta for the utilization of the bauxite
from the mines in the proposed alumina refinery at Lanjigarh and that the
bauxite will be carried by a conveyor belt from the mine to the refinery;
(vii)
the conveyor belt was proposed to be constructed on
the forest land. The requirement of the forest land for the conveyor belt was
included in the proposal for the diversion of 58.943 ha. for the construction
of alumina refinery, but that has already been withdrawn by the State
Government as stated above.
(viii)
pursuant to the MoEF’s directions dated 3.3.2005, a
site inspection of the area was carried out by the MoEF’s Regional Office. The
Regional Office has suggested that the impact of the project on the various
issues mentioned in the site inspection report be fully examined / assessed by
the Experts / Organisation in the relevant field;
(ix)
the MoEF agrees with the comment of the Fact
Finding Team of the CEC that the starting of the construction work on the
non-forest land by M/s Vedanta Alumina Ltd. is in violation of the guidelines
issued under the FC Act, 1980. It is the
responsibility of the user agency to seek all the statutory clearances
including the environment clearance and the forestry clearance before start of
the work on any project involving forest land;
(x)
the MoEF agrees with the suggestion of the Fact
Finding Team that the detailed Environment Impact Assessment and the broad
based Environmental Management Plans need to be prepared by Impact
Assessment Division of the MoEF for the
better management of the area having bauxite; and
(xi)
as per the procedure being followed now by the
MoEF, in respect of the proposals involving use of the forest land while
granting the environmental clearance, the MoEF stipulates a specific condition
that the project authorities shall not start the construction activity without
obtaining the clearance under the FC Act.
16. The site inspection in
respect of diversion of 58.943 ha. of the forest land for the alumina refinery
plant as well as the diversion of 660.749 ha. of the forest land for the
bauxite mining was carried out by the officials of Regional CCF, Bhubneshwar,
MoEF. The recommendations made by the Regional CCF, Bhubneshwar are summarized
as under:
For 58.943 ha. of forest land – (Annexure – R 12)
(i)
M/s Vedanta Alumina Ltd. has commenced work on the
non-forest land in violation of para 4.4 of the guidelines issued under the
(ii)
the forest land proposed for the diversion is
required for only a few components of projects i.e. refinery, construction of
conveyor belt and mine access road. The
proposal for the diversion of the forest land for the other components like
mine etc. for sourcing major raw material has not been submitted so far. The present proposal is therefore a piecemeal
one and does not fully reflect the extent of the forest land needed for the
project. It will be appropriate that a comprehensive proposal for the diversion
of all the forest land required for the alumina refinery project including the
forest land needed for the mining is submitted for the consideration of the MoEF;
and
(iii)
the requirement of the forest land for some
components of the project should not be viewed separately from the requirement
of the forest land for the other components as all the components of the
project like refinery, mine access road, conveyor belt, ore mine etc. are
interdependent and in case the requirement of the forest land for anyone
component does not receive the permission of the MoEF it will affect the other
components.
With respect to 660.749 ha. for mining – (Annexure – R 13)
(i)
alternative bauxite ore deposits are stated to
exist at Karlapat, Kutrumali, Sasbahumali – Pasangmali and Sijimali. The reasons for not considering the above
deposits ahead of the present proposal has not been stated though the aforesaid
deposits are considered to be the future areas of raw material (refer para 2.0
of the mining plan) for the alumina plant being set up at Lanjigarh;
(ii)
49.305 ha. of area included in the category of
non-forest area in the proposal has very good vegetative cover and therefore
needs to be treated as forest land in accordance with the Hon’ble Supreme
Court’s order dated 12.12.96;
(iii)
forest land required for the construction of the
mine approach road and the conveyor belt needs to be added to the
proposal. The MoEF vide letter dated
28.3.2004 has permitted the State Government to withdraw another proposal for
the diversion of 58.943 ha. of the forest land which included 30 ha. reserve
forest for the construction of the mine approach road and the conveyor belt;
(iv)
soil erosion is the one single factor which
deserves to be studied in depth. Construction of the approach road to the hill
top, excavations likely to be made for the installation of the crusher plant,
vibrations caused by the blasting may result in the loosening of the
surrounding earth permitting accelerated erosion. Exposure of the fresh rock
surface over an extensive area having variation of around 250 meters in
elevation which will then be subjected to action of the wind, rain, heat and
other natural weathering factors which may also result in rapid soil
erosion;
(v)
the area is important from the wildlife point of
view so much so that it was proposed to be made part of a Wildlife
Sanctuary. Endangered and vulnerable
faunal species have been reported from the area. The EIA report mentions of a well-balanced
ecosystem with poised prey-predator relationship which will undoubtedly suffer
due to the proposed mining project. The tree cover is expected to be reduced by
20%, which will result in the migration of the wildlife to the least disturbed
area. The impact of the noise created by the blasting, ripping of the earth,
movement of the heavy machinery, night illumination, shrinkage of the habitat
and its fragmentation may all affect the physical, physiological and
reproductive behaviour of the animals including the avian population. It will be difficult to take corrective
measures later on. Hence,
an additional in-depth study needs to be undertaken by the institutes like the
Wildlife Institute of India to assess the impact and formulate best suited
measures; and
(vi)
the project is located in a drought prone area
where the rainfall is deficient and erratic and drought is normal
occurrence. Thus, any activity that
interferes with the flow of water or is likely to pollute it will be
detrimental. The Niyamgiri Hills and the surrounding areas are the originating
place of two major drainage system – the Vamsdhara and the Nagvalli
rivers. The proposed mining project
covers a major part of the hill top. The
extensive land degradation / disturbance at the plateau in all probability,
will alter the direction and the preferential path of the land water flow as
well as the water system at the plateau and in the surrounding valley and
thereby influence the natural flow of the water to the nallas, streams and
rivers. Interception of the rain water from the surrounding areas through the
peripheral / garland drains and its discharge downhill may further disrupt the
natural water system and can also trigger soil erosion in this erosion prone
area. The impact of the ground vibration on hydro-geological characteristics
including ground porosity and permeability needs also to be studied to assess
the impact of the project on the water system. Thus, extensive studies need to
be undertaken to conclusively establish the impact of the project on the water
system and the river flow in Vamsdhara and Nagvalli rivers and to evolve
measures to minimize the impact.
DELINKING OF
ALUMINA REFINERY WITH MINING PROJECT FOR ENVIRONMENT CLEARANCE
17. Normally environmental
clearance for a project is accorded by the MoEF after considering the
interdependent and integral mining project.
In this case also after the examination of the proposal the MoEF vide
letter dated 24.3.2004 informed M/s Sterlite that the environmental clearance
for the project will be considered together with the linked mining project. In
response M/s Sterlite vide letter dated 25.3.2004 requested the MoEF to
consider the grant of environmental clearance to the alumina refinery project
by delinking it from the mining project on the ground that the alumina refinery
will require about 3 years for establishment whereas the mines can be reopened
within a period of one year. Thereafter, the MoEF accorded the environmental
clearance to the alumina refinery project by delinking it with the mining
project. In case the diversion of the
forest land for the mining project is not approved under the FC Act or the
mining project is not found suitable for environmental clearance, the alumina
refinery, after incurring an expenditure of about Rs. 4000 crore, will be left
without any commercially viable amount of bauxite though the main reason for
selecting the project site was its proximity to the bauxite mine.
USE OF 58.943
HA. OF
18. In the application dated
19.3.2003 (refer Annexure – R 2)
made by the project authorities for seeking the environmental clearance to the
project it is stated that the project does not involve any forest land and
accordingly the proposal for the environmental clearance was examined. Earlier, in the notice dated 6.6.2002 (refer Annexure – R 1) for the land
acquisition issued by the Collector, Kalahandi it is stated that 118 acre of
forest land is involved for which the compensatory afforestation will be
undertaken. During the pendency of the proposal, for the environmental
clearance, neither M/s Vedanta nor the State Government informed the MoEF about
the involvement of the forest land in the project.
19. While the proposal was
pending with the MoEF for environmental clearance, a proposal for seeking
approval under the FC Act for use of 58.943 ha. of forest land for setting up
of the alumina refinery was submitted by the project authorities through the
State Government to the MoEF on 16.8.2004. Though this proposal was pending
with the MoEF, the environmental clearance for the project was accorded by it
on 22.9.2004 (refer Annexure – R 4)
stating that no forest land is involved for the project. Thus, the Environmental Wing of the MoEF did
not appear to know about the pendency of the proposal under the FC Act with the
Forestry Wing. The State Government also does not appear to have brought the
factual position to the notice of the MoEF. The project authorities also did not
disclose in its application filed for environmental clearance about the
involvement of the forest land. If cognizance about the involvement of the
forest land in the project was taken, the MoEF perhaps could not have allowed
the project work to be started pending the FC Act clearance i.e. the
environmental clearance would have become effective only after the FC Act
clearance for use of forest land was received.
20. The proposal received
under the FC Act was referred to the Regional Office of the MoEF at Bhubneshwar
for the site inspection. The Regional
Office of the MoEF inter alia recommended (refer Annexure – R 12) that a
comprehensive proposal involving the mining component should got be prepared as
the examination of individual components of the project in isolation is not
appropriate.
21. Out of the 28.94 ha. of
“Gramya Jungle Jogya” land included in the FC Act proposal, 10.41 acre was
found to have been encroached by M/s Vedanta by land breaking and levelling
activities. For this encroachment cases were filed by Tehsildar, Lanjigarh and
a penalty of Rs. 11471/- was realized. Show-cause notices have been issued by
the Forest Department on 5.11.2004, 18.12.2004 and 23.2.2005 for the violation
of the
22. In the meanwhile, the CEC
vide letter dated
23. After the MoEF directed
M/s Vedanta to stop the work, M/s Vedanta vide letters dated 24.3.2005 and
25.3.2005 informed the MoEF that they have decided to construct the refinery
project without involving 58.943 ha. of forest land and that because of the
above (refer Annexure – R 14 and R
15) the directions given by the MoEF
to stop the work are not applicable to them. The Orissa Industrial Development
Corporation (responsible for acquiring the land for the project) recommended
vide letter dated 25.3.2005 (refer Annexure
– R 16) to the State of
24. On 28.3.2005 itself the
MoEF, also withdrew its letter dated 23.3.2005 by which it was stipulated that
the further work on the project shall be undertaken only after obtaining the FC
Act clearance (refer Annexure – R
19). It may be mentioned that out of 58.943 ha., 30 ha. reserve forest was
sought for the construction of the approach road and the conveyor belt and that
in the non-forest land acquired for the project, pillars for the conveyor belt
have already been partially constructed. While withdrawing the proposal, M/s
Vedanta took a stand that this forest land may be clubbed with the mining lease
proposal.
WHETHER THE
MINING FROM NIYAMGIRI HILLS IS CRITICAL FOR THE ALUMINA REFINERY PROJECT
25. In the affidavit dated
16.2.2005 filed by M/s Vedanta it has stated that “project of alumina refinery in Lanjigarh has been planned considering
the proximity to the Lanjigarh bauxite deposits. A situation of the Lanjigarh bauxite deposits
not being available to the refinery has never been envisaged……. and therefore
the suggestion to source bauxite from alternative sources is not
apprehendable…...” (refer internal
page 19 of the affidavit at Annexure – R 25).
26. After the CEC pointed out
that if the mining project was an integral part of the alumina refinery
project, no work could have been allowed till the mining component is cleared
under the FC Act. M/s Vedanta in its affidavit dated
27. The CEC thereafter
pointed out that as per the established principles, the proposal is approved
under the FC Act only if the use of the forest land is absolutely necessary and
no other alternative is feasible. In the present case if the mining project is
not absolutely necessary and the mineral can be obtained from other sources,
the project probably would not be approved by the MoEF under the FC Act.
Thereafter M/s Vedanta in its next affidavit dated 28.4.2005 stated that “first, with regard to paragraph (vi) of
the Affidavit dated 28.3.2005, this Respondent seeks to clarify that while the
refinery project is a separate project, the raw material, ‘bauxite’ is vital to
its functioning and, therefore, availability of the raw material would be an
important consideration in deciding the location of the refinery and the
proximity of mine would be an important factor for the successful functioning
of the refinery and the production of
aluminium at competitive prices. The
mining project, therefore, is necessary for the successful functioning of the
refinery. However, what has basically
been pointed out in Clause (vi) was that while the mining project was necessary
for the successful functioning of the refinery project, should the mining
project of OMC not be approved, the effect would be that this Respondent would
have to source its bauxite from other sources” (refer para 3, internal page
2 of the affidavit at Annexure – R 27).
28. From the above it is seen
that M/s Vedanta has been changing its stand from time to time regarding the
necessity of the mining project with reference to the alumina refinery project.
IMPORTANT CORRESPONDENCE
IN CHRONOLOGICAL ORDER
29. The important
correspondence linked with forestry and environmental clearance for the Alumina
Refinery Project and associated mining component are given below in
chronological order:
|
Date |
Particulars
|
|
6.6.2002 |
Collector, Kalahandi issues notice
for acquiring land for the Alumina Refinery Project. The notice shows that
118 acre of village forest land is involved in the project (Annexure-R 1) |
|
19.3.2003 |
M/s Sterlite (parent company of M/s
Vedanta) applies for environmental clearance to the MoEF. In the application
it is stated that no forest land is involved and that within a radius of 10
kms there is no reserve forest (Annexure-R
2) |
|
24.3.2004 |
MoEF informs M/s Vedanta that
environmental clearance for the Alumina Refinery Project will be dealt with
together with that for the mining project at Niyamgiri Hills and Lanjigarh
because both are interlinked. |
|
24.3.2004 |
M/s Vedanta requests the MoEF to
grant environmental clearance for the Alumina Refinery Plant stating that it
would take three years to construct the refinery plant whereas mines can be
opened up in one year. |
|
16.8.2004 |
M/s Vedanta applies for use of
58.943 ha forest land consisting of 28.943 ha village forest and 30 ha
reserve forest. However, the
application for environmental clearance is not modified and the same is
processed on the premise that no forest land is involved. |
|
22.9.2004 |
Environmental clearance is given
for Alumina Refinery Project by the MoEF by delinking it with mining
project. In the environmental
clearance it is stated that no forest land is involved (Annexure-R 4). |
|
24.11.2004 |
State or Orissa informs the
Environment Wing in the MoEF about involvement of 58.943 ha land in the
project as against “Nil” mentioned in the environmental clearance letter (Annexure-R 6). |
|
5.8.2004 18.12.2004 and 23.2.2005 |
Show cause notices issued by Orissa
Forest Department to M/s Vedanta for encroachment of 10.41 acre forest land
(out of 58.943 ha for which FC clearance proposal was sent) by way of land
breaking and levelling. |
|
16.2.2005 |
State of |
|
28.2.2003 |
During the hearing, the CEC raises
the issue of validity of environmental clearance granted to the alumina
refinery in view of involvement of forest land, whether environmental
clearance is being cancelled, etc. |
|
2.3.2005 |
CEC writes formally to the MoEF
about validity of environmental clearance, for comments on the report of the
Fact Finding Team. MoEF requested not
to grant F.C. Act clearance till the entire issue is examined and report is
filed before the Hon’ble Supreme Court (Annexure
– R 9). |
|
3.3.2005 |
For the first time M/s Vedanta
informs the Environment Wing that forest land is involved in the project |
|
23.3.2005 |
MoEF issues “stop work” order and
directs that further construction of Alumina Refinery Project shall be
undertaken only after obtaining F.C. Act clearance. |
|
24.3.2005 |
M/s Vedanta writes to MoEF that
they will implement the project without use of 58.943 ha forest land and
therefore the “stop work” order is not applicable to them (Annexure – R 14). |
|
25.3.2005 |
M/s Vedanta writes to the MoEF
giving suo moto clarification on its earlier letter (Annexure – R 15). |
|
25.3.2005 |
Orissa Industrial Development
Corporation recommends that the proposal for 58.943 ha sent to the MoEF may
be withdrawn (Annexure – R 16). |
|
27.3.2005 (Sunday) |
State of |
|
28.3.2005 |
MoEF agrees for withdrawal of the
forestry clearance proposal (Annexure
– R 18). |
|
28.3.2005 |
Environment Wing of the MoEF
withdraws the “stop work” order issued on 23.3.1005 (Annexure – R 19). |
|
4.4.2005 |
MoEF files affidavit before the CEC
stating that the F.C. Act clearance proposal will be decided only after
filing of the report by the CEC and direction thereon by the Hon’ble Supreme
Court (Annexure – R 10). |
OBSERVATIONS
AND CONCLUSIONS
30. After considering the
submissions made by the applicants, M/s Vedanta, the State of Orissa, MoEF,
Site Visit report of the MoEF, report of the Fact Finding Team, Site Visit by
the CEC from 14-16th June, 2005 and other relevant documents it is
seen that:
(i)
M/s Vedanta is constructing a one million ton
alumina refinery project at Lanjigarh at an estimated cost of Rs. 4000
crore. The basic raw material ‘bauxite’
is planned to be obtained from the nearby Niyamgiri Hills;
(ii)
in the notice dated 6.6.2002 issued for the land
acquisition for the alumina refinery project by the Collector, Kalahandi (refer
Annexure – R 1), it was mentioned that “lands
for compensatory afforestation shall be provided at other places in lieu of 118
Acres of existing village forest coming inside the project area.” Thus, the
State Government even at an early date was aware about involvement of forest
land in the project;
(iii)
in the application dated 19.3.2003 filed by M/s
Sterlite (parent company of M/s Vedanta) for seeking environmental clearance
for the project (refer Annexure – R 2) against column number 3 it is stated
that “nil” forest land is required for the alumina refinery and that within a
radius of 10 km. of the project site there is no reserve forest, which is
contrary to the facts on record;
(iv)
subsequently, on 16.8.2004 a proposal for allowing
the use of 58.943 ha. forest land, consisting of 28.943 acre of “Gramya Jungle
Jogya” land and 30 ha. of reserve forest,
was moved under the FC Act through the State Government to the MoEF. Out
of the above, 26.123 ha. forest land was required for the refinery, 25.82 ha.
for the mine access road and the balance 7.0 ha. was required for the
construction of the conveyor belt for the transportation of the mineral from
the mine site to the plant.
Thus though forest land was
required for the project, the environmental clearance was sought stating that
no forest land was required and during the pendency of the application for the
environmental clearance, a proposal for the use of the forest land for the same
project was submitted for seeking the approval under the FC Act;
(v) though the proposal for the use of the
forest land was pending with the MoEF, the environmental clearance for the
alumina refinery was accorded by it on 22.9.2004 (refer Annexure – R 4) stating that “The project does not involve diversion of forest land”;
(vi) after the grant of the environmental
clearance the State Government vide letter dated 24.11.2004 (refer Annexure – R
6) informed the environmental wing
of the MoEF that “….This communication
refers that area required for the project is 720 ha. and the project does not
involve diversion of forest land. …
The proposal for diversion of 58.943 ha. of forest land in Lanjigarh
Tahsil in Kalahandi district for setting up of Alumina refinery and 75 MW
Captive Power plant by M/s Vedanta Alumina (India) Ltd. has been received. The
total project area is 723.343 ha., which includes 58.943 ha. of forest land
with a status of reserved forest and village forest………..The proposal has been
recommended in F&E Department letter No. 12328/F&E, dated 16.8.04 to
the MoEF, GoI (FC Division). This is for
your information and necessary action towards issuing corrigendum if any”;
(vii) however, the environmental clearance
stipulations were not modified and the work on the project was allowed to be
continued. It may be seen that para 2.3 (iii) of the guidelines laid down by
the MoEF (refer Annexure – R 7) states that “……For
projects requiring clearance from forest as well as environment angles,
separate communications of sanction will
be issued, and the project would be deemed to be cleared only after clearance
from both angles…….” Thus the environmental clearance granted by the MoEF
becomes effective only after the clearance for the use of the forest land under
the FC Act is accorded unless and until both i.e. the FC Act clearance as well
as the environmental clearance had been obtained. No work on the project could
have been started by M/s Vedanta. Had the guidelines issued by the MoEF been
followed, or the environmental wing of the MoEF had taken cognizance about the
involvement of the forest land in the project or if M/s Vedanta had furnished
the correct information in its application for the environmental clearance, the
construction work on the alumina refinery would not have been started at
all;
(viii) normally, the environmental clearance is
accorded by the MoEF after assessing the environmental issues associated with
the linked mining project. In this case
also the MoEF vide letter dated 24.3.2004 (refer page 8 of M/s Vedanta affidavit
dated 16.2.2005 at Annexure – R 25) earlier took the stand that “since the functioning of the alumina
refinery would be dependent on the proposal for mining it had been decided to
consider the two proposals i.e. mining and alumina refinery project together.”
Thereafter, M/s Sterlite vide letter dated 25.3.2004 sought the environmental
clearance for the alumina refinery plant on the ground that it would take three
years to build the refinery whereas the bauxite mines can be opened (made
functional) in one year (refer page 8 of M/s Vedanta affidavit dated 16.2.2005
at Annexure – R 25);
(ix) though normally in all the big projects
varying time periods are required for implementing the different components of
the project the MoEF had granted the environmental clearance for the refinery
project vide letter dated 22.9.2004, thereby in effect delinking the alumina
refinery project from the mining project. Such delinking is objectionable
because the alumina refinery project has been located in Lanjigarh because of
its proximity to the proposed mining site at Niyamgiri Hills, Lanjigarh. In the event, for the mining component the
environmental clearance and / or the forest clearance is rejected, the
expenditure of about Rs. 4000 crore being incurred on the project will become
infructuous;
(x) as per para 4.4 of the guidelines laid
down by the MoEF (refer Annexure – R 7) states that “Some projects involve use of forest land as well as non-forest
land. State Governments / Project
Authorities some times start work on non-forest lands in anticipation of the
approval of the Central Government for release of the forest lands required for
the projects. Though the provisions of
the Act may not have technically been violated by starting of work on
non-forest lands, expenditure incurred on works on non-forest lands may prove
to be infructuous if diversion of forest land involved 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 approval of the Central Government for release of
forest land under the Act has been given”.
The Alumina Refinery construction
work has been started and continued in blatant violation of the above said
guidelines;
(xi) during the hearing held on 28.2.2005, the
CEC raised the issue such as the validity of the environmental clearance
granted to the project, starting of the work in violation of the guidelines
issued by the MoEF, whether environmental clearance is being withdrawn, action
proposed to be initiated against the project authorities for obtaining the
environmental clearance on the basis of misinformation and related issues
(dealt with in detail earlier page 43 under the heading “Views of the Ministry
of Environment and Forests”). As per the affidavit dated 14.7.2005 filed by the
MoEF (refer Annexure – R 11) it is stated “(v)
That, it was only on March, 3, 2005, i.e. after the order was passed by the
Central Empowered Committee (CEC), that M/s Vedanta Alumina Ltd., the successor
company of M/s Sterlite Industries (India) Ltd., had informed the Ministry that
the company had as a matter of abundant precaution moved a proposal to the
Ministry in August, 2004 for the diversion of 58.943 ha. of forest land………..
The applicant company had never brought this fact to the notice of the Impact
Assessment Agency prior to the grant of environmental clearance in September,
2004.” The MoEF vide notice dated 23.3.2005 directed M/s Vedanta that
further construction work on the project shall be undertaken only after getting
the requisite clearance under the FC Act;
(xii) instead of stopping the work, M/s Vedanta
vide letter dated 24th March, 2005 informed the MoEF and the State
Government that they will implement the refinery project without involving the
use of 58.943 ha. of forest land and that since the refinery project does not
involve any forest land, the directions issued by the MoEF to stop the work are
not applicable (refer Annexure – R 14). The State Government vide letter dated
27th March, 2005 which happened to be a Sunday, recommended (refer
Annexure – R 17) that the proposal pending under the FC Act may be allowed to
be withdrawn which was accepted by the FC division of the MoEF on 28th
March, 2005 (refer Annexure – R 18). On
the very same day the environmental wing of the MoEF informed M/s Vedanta that
the Ministry’s letter dated 23.3.2005 stands withdrawn (refer Annexure – R 19);
(xiii) the intentional or otherwise concealment
of the fact about the involvement of the forest land, grant of environmental
clearance by delinking the mining project from the refinery project, no action
taken on the State Government’s letter dated 24.11.2004, violation of the
guidelines issued by the MoEF and later on prompt permission granted to
withdraw the FC Act proposal itself enabled M/s Vedanta to take up the project
construction work without obtaining the FC Act clearance for the plant / mine
site which otherwise would not have been possible;
(xiv) while permitting the withdrawal of the
proposal, the reason for withdrawing the proposal, its effect on environmental
clearance, whether the project could be implemented without the use the of the
forest land, whether the conveyor belt for transporting the bauxite and the
approach road could be constructed without the use of forest land, why the certificate about the absolute
necessity of the forest land for the project was given by the concerned
officials and whether the withdrawal of the proposal is linked with the
stopping of the work by the MoEF and other related issues do not appear to have
been examined or analyzed. It was also not ascertained whether the forest land,
could be retained as ‘forest’ when it is interspersed at various locations
within the other project land and is enclosed by the compound wall of the
alumina refinery plant;
(xv) after the ‘stop work’ order was issued by
the MoEF on 23.3.2005 the proposal for withdrawal was moved by M/s Vedanta
immediately on the following day and then forwarded by the Orissa Industrial
Development Corporation, recommended by the State Government (on a Sunday) and
the decision to allow the withdrawal of the proposal as well as to withdraw the
‘stop work’ order was taken by the MoEF on 28.3.2005 all within a period of
five days. On the other hand it took
months to take cognizance about the involvement of the forest land in the
project and to issue ‘stop work’ order.
It may be seen that the MoEF vide affidavit dated 4.4.2005 (refer
Annexure - R 10) had confirmed that pending filing of the report by the CEC and
directions thereon by the Hon'ble Supreme Court the proposal under the FC Act
for the mining project will be kept in abeyance. If the
forestry clearance proposal itself had not been withdrawn by M/s Vedanta and
the withdrawal not accepted by the MoEF, the work on the alumina refinery would
necessarily have had to be stopped till the entire matter was examined by this
(xvi) in the affidavit dated 16.2.2005 (refer
para 5.1 of the affidavit at Annexure – R 24) the State of
(xvii) inspite of the above, the forestry
clearance proposal for 58.943 ha. of forest land has been allowed to be
withdrawn and thereafter work on the project allowed to be continued. The
withdrawal of the proposal has been justified by M/s Vedanta taking a stand
that “Further since the proposal for
diversion of 30 ha. was for mine access road and conveyor corridor and could
also be included in the mining proposal VAL withdrew the entire 58.943 ha.
forest diversion proposal” (refer para 7 of M/s Vedanta affidavit dated
22.7.2005 at Annexure – R 28) and that “With
regard to the query as to whether withdrawal of the proposed diversion of 30
hectares of forest land sought for by this Respondent for the mine road and
conveyor would not be reactivated at a later stage by this Respondent, it is
stated that this Respondent would not do so.
The mining lessee being OMC it is only such party who would be assessing
their requirements for effectual operation of any mining lease” (refer para
6 of M/s Vedanta affidavit dated 28.4.2005 at Annexure – R 27). Apparently, the
proposal for obtaining forest clearance has been withdrawn by M/s Vedanta to
basically circumvent the ‘stop work’ order issued by the MoEF (after CEC
questioned the validity of the environmental clearance) and not because the use
of the forest land was avoidable;
(xviii) the bauxite mining project involves the use
of 672.018 ha. forest land in the Niyamgiri Hills (660.749 ha. forest land for
mining and 11.269 ha. for safety zone). The area is rich in wildlife, has dense
forest cover and has been proposed to be notified as a Wildlife Sanctuary in
the Working Plan of the area duly approved by the MoEF under the FC Act (refer
Annexure – R 21). It is also constituted as an Elephant Reserve by the State of
Orissa vide order dated 20.8.04. The
importance of the area being rich in wildlife has been acknowledged by the
State of Orissa;
(xix) the CEC had deputed a Fact Finding Team
(FFT) to look into the various issues raised about the alumina refinery project
and the associated mining project. The
findings of the FFT, which are dealt with in this report under the heading
“Report of the Fact Finding Team” has made several adverse observations about
taking up of the refinery construction work in violation of the FC Act
guidelines, issue of show-cause notice by the Orissa Forest Department for
encroachment of forest land by way of land breaking and levelling by M/s
Vedanta, necessity of environmental clearance for the mining site before the
refinery site, the rehabilitation package for the displaced persons not being
in the interest of sustainable livelihood of the local communities, Niyamgiri
Hill being a rich forest from the bio-diversity point of view and proposed for
Wildlife Sanctuary and to be included in elephant reserve, Niyamgiri Hills
being origin of Vamsdhara river and other rivulets, likely adverse effect of
mining on bio-diversity and availability of water for the local people, agreement
entered into by the Orissa Mining Corporation for the allotment of the mineral
without first obtaining the clearance under the FC Act being against the spirit
of the FC Act etc. The FFT has recommended that the project authorities should
explore alternative source of bauxite mineral;
(xx) the Regional Office of the MoEF has made
observations about the commencement of the work in violation of the FC Act
guidelines, necessity of submitting a comprehensive proposal for the use of the
forest land for the project including for the mining, linkage of the mining
project with the refinery project, alternative source of bauxite mineral,
importance of the area from the wildlife point of view, likely effect of the
proposed mining on water regime etc. and recommended that the FC Act proposal
for the refinery should not be examined in isolation. It has also recommended
for an in depth study on the following aspects through reputed institutes
before taking a view on the project (a) impact on wildlife; (b) impact on water
regime; and (c) impact on soil erosion (dealt with in this report earlier under
the heading “Site inspection report of the MoEF” page 50);
(xxi) as per the applicants Niyamgiri Hills forms
the source of the Vamsdhara river and a major tributary of the Nagvalli. 36
streams originate from within the mining lease site. Most of these streams are perennial due to
springs originating just below the bauxite escarpment. These are used for
irrigation as well as a source of drinking water by the people living in the
adjoining villages. By mining of bauxite
deposits at the top of Niyamgiri the water retention capacity of the bauxite
deposit will be destroyed. The mining
will lead to the flow of mineral overburden into the streams. In the process it
will destroy the unique micro-niches along the streams (refer submissions dated
5.7.2005 by the applicant at Annexure – R 20). On the other hand the State of
Orissa and M/s Vedanta have taken the stand that the mining will not have any
adverse effect on the water regime in this area;
(xxii)
M/s Vedanta had earlier taken a stand that the
bauxite mines at the Niyamgiri Hills are absolutely necessary for the alumina
refinery project without which it cannot survive. In fact, the location of the alumina plant
was based on the availability of the ‘bauxite’ from the Niyamgiri Hills. After
the issue about the linkage of the project with the mining and the consequent
validity of the environmental clearance was raised, M/s Vedanta took a stand
that the proposed mines at Niyamgiri Hills are not necessary for the alumina
refinery project and that it will make alternative arrangements if the same are
not approved. After it was pointed out
by the CEC that the use of the forest land for the Niyamgiri Hill mines can be
approved under the FC Act only if the use of the forest land is absolutely
necessary and no viable alternative is possible, M/s Vedanta again changed its
stand and stated that the mines are absolutely necessary (dealt with in this
report earlier under the heading “Whether the mining from Niyamgiri Hills is
critical for the Alumina Refinery Project” page 60);
(xxiii) the agreement signed between the Orissa
Mining Corporation (OMC) and M/s Vedanta for establishment of a joint venture
company for bauxite mining from Niyamgiri Hills, Lanjigarh and another mine
provides that though the mining lease will be in the name of the OMC and it
will be responsible for securing and complying with all the statutory approvals
and legal requirements, M/s Vedanta will be de facto managing the mines and
will be the principal beneficiary on payment of development charges, royalty
and other statutory dues. Thus, it will
be getting all the benefits of a captive mine without being responsible for
obtaining onerous statutory clearances (dealt with in detail in this report
under the heading “Agreement between Orissa Mining Corporation and M/s Vedanta
for mining of bauxite” page 38);
(xxiv) serious allegations have been made by the
applicants about the use of force for evacuating the tribals from their land,
non-payment of compensation to the tribals who were traditionally using the
Government land for cultivation etc. (by way of encroachment, for which the
State Government stands committed to regularize), no land for the settlers,
emotional attachment of the tribals with their land etc. This has been refuted
by the State Government as well as the project authorities;
(xxv)
Dongaria Kandha tribe resides in Niyamgiri
Hills. As per the applicants, they have
unique culture, they worship Niyamgiri Hills, are dependent on it for their
survival and that undertaking of mining at Niyamgiri Hills will result in
extinction of the tribe. In support a publication namely “Adibasi – A Journal
of Anthropological Research” published by the Government of Orissa has been relied
upon (refer Annexure – R 22). The project authorities as well as the State
Government have taken a stand that project would not have any adverse effect on
them;
(xxvi) initially, about 30,000 cubic metre water
per annum for the project was proposed to be drawn from Vamsdhara river after
constructing a dam thereon. Now, it has been decided to draw the water from Tel
river. Detailed Impact studies for the
withdrawal of water from Tel river do not appear to have been done;
(xxvii)out
of 58.943 ha. of the forest land for which the FC Act approval was sought, M/s
Vedanta has been found to have encroached 10.41 acre land by way of levelling
and breaking of land. For this offences under the relevant Acts have been
registered by the Forest Department as well as the Revenue Department. Later on, for this very forest land M/s
Vedanta withdrew the proposal earlier filed under the FC Act;
(xxviii)as
per the applicants the location of the pond for the red mud, which is a mix of
highly toxic alkaline chemicals and contains a cocktail of heavy metals
including radioactive elements and the Ash pond on the Vamsdhara river may
cause serious water pollution. The breach of the red mud and the ash pond may
cause severe damages downstream. The
potential of such an occurrence has not been properly assessed. M/s Vedanta has refuted this; and
(xxix) the applicant has pleaded that the present
project is of a mega dimensions and is expected to continue operations for
several decades. Instead of taking a
rapid EIA, a detailed EIA study should have been done before considering the
project in an eco-sensitive area.
31. The CEC is of the view
that though the forest land is required for the alumina refinery project itself
and also for the associated mining component, the environmental clearance has
been granted on the wrong premise that no forest land is involved and by
inappropriately delinking the mining component.
Even after the State of
The project is based on and is
totally dependent on mining of bauxite from Niyamgiri Hills, Lanjigarh, which
is an important wildlife habitat, part of elephant corridor, a proposed
wildlife sanctuary, having dense and virgin forest, residence of an endangered
Dongaria Kandha tribe and source of many rivers/rivulets. But for the grant of environmental clearance
on the wrong premise, violation of the FC Act guidelines and the subsequent
permission given in haste for the withdrawal of the forestry clearance proposal
without proper examination, the alumina refinery construction work could not
have been started / continued.
The Regional office of the MoEF
has made adverse observations against the splitting of the project in two
separate proposals and has recommended in depth study through reputed
institutes on effect of the project on wildlife, water regime and on soil
erosion before taking a view on the proposal.
Though use of 30 ha. of reserved forest is necessary for the project,
presently it is neither part of the refinery project nor that of the mining proposal.
The allegations about the improper
rehabilitation and the forceful eviction needs to be looked into carefully
through an impartial and unbiased agency. The alumina refinery project should
have been allowed to be constructed only after carrying out in depth study
about the effect of the proposed mining from Niyamgiri Hills on water regime,
flora and fauna, soil erosion and on the Dongaria Kandha tribes residing at
Niyamgiri Hills and after careful assessment of the economic gains vis-à-vis
environmental considerations. By delinking the alumina refinery project from
the mining component an undesirable and embarrassing situation has been allowed
to happen (by the MoEF) where in the event of Niyamgiri Hills forest not being
approved under the FC Act for mining lease, the entire expenditure of about Rs.
4000 crore on the alumina refinery project may become infructuous as the
project is unviable in the absence of Niyamgiri Hills mines.
RECOMMENDATIONS
32. The
CEC is of the considered view that the use of the forest land in an ecologically
sensitive area like the Niyamgiri Hills should not be permitted. The casual approach, the lackadaisical manner
and the haste with which the entire issue of forests and environmental
clearance for the alumina refinery project has been dealt with smacks of undue
favour/leniency and does not inspire confidence with regard to the willingness
and resolve of both the State Government and the MoEF to deal with such matters
keeping in view the ultimate goal of national and public interest. In the instant case had a proper study been
conducted before embarking on a project of this nature and magnitude involving
massive investment, the objections to the project from
environmental/ecological/forest angle would have become known in the beginning
itself and in all probability the project would have been abandoned at this
site.
33. Keeping
in view all the facts and circumstances brought out in the preceding paragraphs
it is recommended that this Hon’ble Court may consider revoking the
environmental clearance dated 22.9.2004 granted by the MoEF for setting up of
the Alumina Refinery Plant by M/s Vedanta and directing them to stop further
work on the project. This project may
only be reconsidered after an alternative bauxite mine site is identified.
This
(M.K. Jiwrajka)
Member Secretary
Dated: