POSCO - INDIACHANDRANSHU GARGElectronics & CommunicationB.Tech II Year

ISSUES SURROUNDING

POSCO-India Pvt. Ltd. is a subsidiary of POSCO, the world’s fourth largest steel producer and one of the most competitive steel companies.

What is this POSCO-India?

POSCO – Pohang Iron & Steel Company based in Pohang, South Korea

Top 10 Steel Companies (mmt - million metric tonnes)

Background …..

POSCO signed a Memorandum of Understanding (MoU) with the Government of Orissa in June 2005, to set up a 12 MTPA  steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of USD 12 billion.

Around Rs. 52, 000 Crore touted as India’s Largest Foreign Direct Investment

POSCO-India says

“India produces 56 million tons steel annually. China approximates that much in a month! Steel goes into infrastructure. We need to produce 110 million tons by 2012 if the India growth story is to chug ahead. POSCO India would be glad to contribute to that story with its plant at Jagatsinghpur. “

INDIA - 56 million tons per annum

CHINA - 500 million tons per annum

WHY INDIA ? (some basic points)

India got a huge market for steel. India – one of the fastest growing

economy. Cheap Man Power in India. India has huge iron ore deposits with

it.

National Steel Policy (NSP), 2005 estimates that India’s steel production of 40 million tons in 2005-06 will rise to 110 million tons by 2019-20. With the changed scenario it is expected that the steel production will need to skyrocket to 200 million tons by 2019-20. The government is actively encouraging steel consumption so that the steel industry will act as the locomotive for economic growth.

200 million tons110 million tons2019-20

Few Details of the Project

Location Jagatsinghpur District of Orissa (near Paradip Port).

Iron Ore Requirement 20 million tons of iron ore per annum, for annual steel

production of 12 million tons over 30 years

Phases for the project

Few More Details of the Project As per the MoU, based on the needs of the

“Steel Project”, the Company will also develop and operate the following infrastructure :

1. Mining Project Mining facilities in the areas allocated by Govt. of Orissa / Govt. of India.

2. Transportation Project Road, rail and port infrastructure, including the dedicated railway line from the mine-belt to Paradip. 3. Integrated Township

4. Water Project Water Supply Infrastructure.

Economic Effects of POSCO-IndiaA Study by NCAER (National Council for Applied Economic Research)

Orissa before POSCO - IndiaGross Output : 111,378 croresState GDP : 53,830 croresEmployment : 143 lakhs (2001 census)Tax : 8170 crores (2005-06)

Projected POSCO – India’s ImpactGross Output : +29,760 croresState GDP : +12,100 croresEmployment : +8.7 lakhsTax : +2620 crores

(absorbs 88% of unemployment)

Now, do we have reasons to smile ?

Have a look on these pics ….

STOP - POSCO

There has been growing opposition to the project in Orissa.

The proposed plant will adversely affect 11 villages and rural settlements in three Gram Panchayats in Jagatsinghpur district, namely – Dhinkia, Nuagaon and Gadakujang.

There were mixed reactions initially, the threat of losing lands in return for nothing soon caught up with the communities.

By July 2005 the three Panchyats that were to be affected came together to oppose the project.

STOP - POSCO

There are three main groups that are opposing the POSCO project :

1. POSCO Pratirodh Sangarsh Samiti (PPSS)

2. Nav Nirman Samiti

3. Bhita Mati Bachao Andolan

Issues Surrounding POSCO - India Total land area that has been sanctioned by the govt. for

this project is 4004 acres. Govt. Land : 3566 acres Pvt. Land : 438 acres

Because of the private land, 471 families would be affected from the three panchayats.

Most of the govt. land out of 3566 acres has been under betel, cashew and other cultivations.

So, around 4000 families and a population of 22,000 will be affected by the project in the area. These include all those persons directly dependent on betel vine cultivation, pisciculture, cashew nut cultivation and fishing.

Issues Surrounding POSCO - IndiaLoss of livelihood, of a self sustained and thriving local economy and of an entire way of life are concerns on which the local resistance to the project is largely based on.

"They are asking us to leave from here... what do they mean? We leave this soil, this wind, this sky and the peace we enjoy here…no we will not leave, this is our motherland…We have many examples of the families who were displaced in Trilochanpur by the IOCL plant. Those families are today in a state of misery. They have spent their compensation money and the women have suffered the most – having to do hard labour all day to support the family".

Issues Surrounding POSCO - India

Project has been granted SEZ (Special Economic Zone) status- Region that has economic laws more liberal than country’s economic laws.

Dr Damodar Raut, MLA clearly raised a concern pointing out that :

“The SEZ (Special Economic Zone) status that has been granted to the project (principle approval has been granted by the Ministry of Commerce) would deprive the government of taxes and pose a threat to security of the country considering the location of the project which has also been highlighted by the Home Ministry."

He said that he was in support of the project without the SEZ status.

Issues Surrounding POSCO - India

Nava Nirman Samiti repeatedly highlights the fact that the project was problematic on the grounds that it is a Foreign Direct Investment where the Multi National Company is clearly interested in capturing the iron ore and minerals on a large scale which will affect the national economy and the local natural resource base.

Issues Surrounding POSCO - India

Extraction of large quantities of water for the project will affect, not only the local communities but would have far reaching impacts – severely affecting the drinking water supply up to Cuttack and irrigation supply of four neighbouring districts.

Issues Surrounding POSCO - India

Several environmental concerns including deforestation and destruction of coastal areas.

Issues Surrounding POSCO - India

The government authorities and the local communities says that the land under betel vine and other cultivation expected to be acquired by the project was under the category of government land – inclusive of revenue land, forest land and also village forests or ‘gramya jungle’, to which people do not have legal titles.

It was found however that the land in question has been in possession of the people for several generations. This is proven by the fact that the people have been paying an illegal occupancy fine to the local revenue administration since time immemorial.

As per the Sub Collector, according to the Orissa Land Reforms Act, 1960, peaceful, continuous, uninterrupted possession of land, if proved, mandate regularization of titles and recording of rights.

VISION : POSCO- India To be most respected and admired

company in India.

To contribute to the rapid economic progress of India and Orissa.

Good Things with POSCO-India

Social Contribution : POSCO-India

Medical Assistance including surgical help - Mobile health camp, Cleft-lip, Palate, Burn-defects surgery etc.

Scholarship for meritorious poor from the area, for higher education

Distribution of educational materials for poor school children

Vocational training for young men and women - Empowering for self employment

Sustainable livelihood support program for the community

- Skill development in scientific farming and animal husbandry

- Entrepreneurial skill development programs for educated unemployed natives

Medical Assistance including surgical help - Mobile health camp, Cleft-lip, Palate, Burn-defects surgery etc.

Scholarship for meritorious poor from the area, for higher education

Distribution of educational materials for poor school children

Vocational training for young men and women - Empowering for self employment

Sustainable livelihood support program for the community

- Skill development in scientific farming and animal husbandry

- Entrepreneurial skill development programs for educated unemployed natives

Rehabilitation & Resettlement : POSCO-India

10 decameter sq. land to each displaced family.House in the rehabilitation colony.Modern civic amenities - road, water & power supply, school, community recreation centre, health care etc.

House for Displaced Family

Training and EmploymentJob to one nominated member of each project affected family engaged in construction work through contractors. Training and employment to one nominated member of each displaced family.Assistance for self-employment or to start own business.

Reasonable compensation for cultivation on Govt. land such as betel vine, fruit bearing trees, prawn ponds etc.Fishing net and motorboats to those who opt self-employmentFinancial assistance to landless labor and betel vine workers for a reasonable period until they get wage employment in the project

Special Package beyond Govt. Policy

Now, what’s the progress of the project ??

References :

www.stoposco.wordpress.com www.posco-india.com REPORT BY THE INDEPENDENT FACT FINDING TEAM ON ISSUES

RELATED TO THE PROPOSED POSCO PROJECT IN JAGATSINGHPUR (ORISSA)

www.wikipedia.org www.business-standard.com www.orissa.net www.facebook.com

THANK YOU