After POSCO, Chiria, Jindal puts Jairam Ramesh on backfoot

After giving clearance to Chiria mines and Korean giant POSCO’s steel plant s on “developmental” grounds, the environment ministry under Jairam Ramesh has once again been pushed to the backfoot — this time by Congress Member of Parliament Naveen Jindal’s Jindal Steel & Power.

The ministry on Monday announced it was withdrawing its earlier threat to withdraw environmental clearance to Jindal’s Rs25,000 crore steel and power plant in Angul, Orissa.

The ministry had, in November last year, sought cause as to why the clearance may not be withdrawn after it was proven that Jindal had started work on the project before getting forest clearance.

“The ministry, while according the environmental clearance, stipulated the specific condition: “no construction activity shall be initiated till the approval for the 168 hectare forest land is obtained... Serious non-compliance with the stipulated environment conditions reported above mandate commensurate action,” the ministry had said in its November order.

In the new order, the ministry seems to have accepted Jindal’s contention that the ‘no construction’ condition in the clearance was merely a well intentioned ‘advice’ and not a legal requirement.

The firm argued that the condition was there only to make sure that Jindal would not lose money on initial construction if the forest clearance ulitmately failed to come through and the project had to be abandoned.

It argued that “this clause is only intended to prevent the expenditure involved from proving to be infructuous if the diversion of forest land involved is not approved,” pointing to an “office memorandum” of the ministry.

As both stages of forest clearances have been obtained, Jindal Steel & Power pointed out, there is no case of withdrawing its environmental clearance.

The ministry too seemed to accept the ‘office memorandum’ agreement, abandoning its earlier stance that Jindal had violated clearance conditions.

“A circular has been issued by  the Ministry on 6 January 2011 [after the show-cause notice was issued] .. that if a project involves forest as well as non-forest land, it is advisable that work should not be started on non-forest land till approval.. for the release of forest land has been given,” it noted in its final order.

The ministry, however, made no mention of its earlier accusation that the company’s environmental clearance had a specific clause against undertaking any construction before forest land is also cleared.