Ministry of environment and forests’ silence puts Sterlite in a fix

Anil Agarwal controlled-Sterlite Industries has been awaiting a reply from the ministry of environment and forests (MoEF) for over three months now on whether to continue with its rehabilitation programme in Lanjigarh, Orissa.

Pursuant to the Supreme Court’s order in 2007, the company had to implement a rehabilitation package in Lanjigarh as an imperative measure to mine bauxite from Niyamgiri Hills.

However, with the MoEF’s ban on mining bauxite in Niyamgiri Hills, the company is now in a fix on what it should do with the rehabilitation programme after having committed over `100 crore in investments.

“The company had written a letter to the ministry on December 4, 2010 seeking its opinion about the rehabilitation programme currently underway and there has been no response from them so far,” said a source close to Sterlite. The official spokesperson of Sterlite refused to comment on the issue.

In an order issued on August 8, 2008, the Supreme Court allowed diversion of 660.749 hectares (ha) of forest land from Niyamgiri Hills in Lanjigarh for bauxite mining provided the company implements a rehabilitation package proposed by the court.

“Under our order, we suggest rehabilitation package under which, apart from NPV, Sterlite Industries is also required to deposit 5% of annual profits before tax and interest from Lanjigarh project or Rs10 crore per annum, whichever is higher. The said project covers both mining and refining. The amount is required to be deposited by Sterlite with SPV every year commencing from 01.04.2007,” said the Supreme Court order.

The order also said that going forward, it would be for the MoEF to grant its approval in accordance with the law. As a result, the MoEF, on December 11, 2008, gave in-principal approval for the diversion of forest land on condition of implementation of the rehabilitation project as directed by the court.

Consequently, Sterlite formed a special purpose vehicle (SPV) called Lanjigarh Project Area Development Foundation  and deposited `20 crore as contribution for scheduled area development for the year 2007-08 and 2008-09 to the SPV.

Confirmed sources said that Sterlite had also deposited Rs55 crore towards NPV, Rs50.53 crore towards wild life management, Rs12.20 crore towards tribal development and committing some investments in compensatory afforestation etc.

However, now with the MoEF rejecting the formal forest clearance for the bauxite mining project at Niyamgiri Hills, Sterlite has no clue on what to do with the rehabilitation package. The MoEF could not be contacted on the issue.

“The company had deposited Rs10 crore each with the SPV for the year 2007-08 and 2008-09 but wondering what to do for the year 2009-10 as the mining project is no more in operation,” the source said.

He said the company has also started building several facilities in Lanjigarh which are currently under construction, such as the Lanjigarh Hospital, Lanjigarh water supply system, link road, upgradation of electrical system, land irrigation project, investments in girls’ school and college, malaria eradication scheme etc.