The Economic Times, Oct 20, 2010
NEW DELHI: In yet another blow to the Anil Agarwal-owned Vedanta Alumina Ltd , the environment ministry has decided to halt the company’s plans of expanding its Rs 4,600-crore Lanjigarh refinery in Orissa. The existing one million tonne Lanjigarh refinery will, however, continue to be in operation.
The ministry has found the Lanjigarh refinery’s expansion to be “unauthorised” and in serious violation of environmental laws. It has decided to revoke the permission given to the company to study the environmental impact of increasing the capacity of the plant from the current one million tonne per annum to six million tonne. A formal order to this effect is expected this week.
The ministry had issued a showcause notice on August 31 for the unauthorised expansion of the refinery. The existing one million tonne refinery, which had been given environmental clearance in September 2004, too had been issued a showcause for not complying with the conditions of the clearance. The ministry is of the view that the violations have been “procedural”, can therefore be corrected.
The showcause was issued in the aftermath of reports by government agencies and the Saxena review panel that Vedanta had undertaken construction without obtaining the required environmental clearance. The expansion project was slated to cost Rs 8,000 crore, of which the company has already spent Rs 3,000 crore.
Issuing of terms of reference for undertaking an environment impact assessment and environmental management plan is the first step in the environment clearance process. The terms of reference are issued by the ministry’s expert appraisal committee after a study of the application for environmental clearance. The withdrawal of the terms of reference would mean that Vedanta would have to begin the process of seeking environmental clearance for expanding its existing 1 million tonne refinery all over again.
When contacted Vedanta spokesperson declined to comment. “As we have not received any communication in this regards, we would not like to comment,” the company spokesperson said. In its reply to the showcause notice, the Anil Agarwal-promoted firm had argued that the ministry was contradicting the Environmental Impact Assessment notification of 2006. It had argued that the notification stated that environmental clearance was not required for capacity expansion if there was no change in "process or technology”.
However, if no clearance was required then the question is why did the company apply for environmental clearance for the expansion project in Aug 2007. Vedanta had made a written submission to the notice on Sept 15, and a personal hearing was given on Sept 30. A senior environment ministry official said that investigations and study of material revealed that there was "clear, unequivocal, and unambiguous" violation of environmental norms by Vedanta. The ministry had also issued a showcause for violations by the 1MT refinery.
Sources said that the violations have been adjudged to be “procedural". This would mean that after the company addresses the issues raised in the showcause, which include the encroachment of forest land, use of illegally mined bauxite, the refinery will be allowed to continue operations.
Following Vedanta Alumina Limited application in August 2007, the expert appraisal committee issued the terms of reference for undertaking a detailed environment impact assessment and environmental management plan in March 2008. Vedanta submitted the final environment impact assessment in June 2009. The expert committee took up the report for consideration in August 2009, when it asked for additional information from the company. It also decided to undertake a site visit to assess the pollution control measures being adopted in the existing refinery and to suggest additional measures in keeping with the higher plant capacity.
On September 1, 2009 the ministry asked for information on the status of land acquisition, the protection of dwellers’ rights on the acquired land, details of the source of bauxite, compliance with environmental clearance for the 1MT refinery, and a copy of the showcause notice issued by the Orissa State Pollution Control Board . In December, the Orissa Pollution Control Board informed the ministry that the company had already begun construction work at Lanjigarh and this was confirmed through a plant inspection undertaken by the ministry’s eastern regional office in May this year.
The report stated that "the unit has carried out substantial construction relating to expansion activities for increasing capacities from 1MTPA to 6MTPA of the alumina refinery for which environmental clearance is yet to be accorded by the ministry." The extensive construction work on the refinery expansion was confirmed by the NC Saxena committee reviewing the Niyamgiri bauxite mining proposal in August.
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