Villagers stand up to joint Indo-Korean business push

Residents of one of the country's poorest states refuse offer of jobs and compensation for their land to make way for Korean steel plant.

Most residents of Dhinkia village and the surrounding Jagatsinghpur district oppose the plan to build a steel plant and port on their land.

BHUBANESHWAR, India // For more than five years, a group of villagers have successfully blocked India's largest ever foreign investment project, but those on the frontline say they are still living under siege.

Despite being in Odisha (formerly Orissa), one of India's poorest states, the sleepy village of Dhinkia does not fit the typical image of rural poverty in eastern India. Its palm trees, riverside location and sandy pathways appear more like a beach resort in Goa than a rural backwater.

The rich fertility of the region helps to explain the deep reluctance of locals in Dhinkia and the surrounding Jagatsinghpur district to give up their land for a US$12 billion (Dh44bn) steel plant and mining project planned by South Korea's Pohang Steel Company (Posco).

The proposed 1,620-hectare site would also include a captive port to export steel, requiring flooding of large portions of the area.

The project was initially agreed with the state government in 2005, with Posco promising large-scale employment and tax revenue to the state. The project also has the personal backing of India's prime minister, Manmohan Singh, who has been keen to develop close ties with South Korea.

But despite offers of compensation, few of the families at the proposed site see the benefit of giving up their homes and destroying acres of rice paddy fields, cashew trees and betel vines, whose leaves are chewed all over India as paan. Their resistance means the project remains dead in the water.

"If this project happens, thousands of people will lose the livelihoods and culture they have enjoyed for many long years," said Shishir Mohapatra, the sarpanch [village head] of Dhinkia. "The waste and pollution will hamper agricultural production in the whole district. Up to 30,000 fishermen will lose their livelihood as well."

Mr Mohapatra is the general secretary of the Posco Pratirodh Sangam Samiti (PPSS), an organisation set up in 2005 to marshal resistance to the project. They claim there is frequent harassment by the authorities.

"There have been 158 false cases filed against us and there are 842 people under arrest warrants," said Prashant Paikray, a PPSS spokesman. "Our chairman Abhay Sahoo spent 10 months in jail on invented charges."

"When people go out to go to the market, they are arrested even if they don't know they have a case against them," added Ranjan Swain, a farmer and leading member of the PPSS. "Most of the time, people are just taken to the police station and then let go. It's just harassment, but it makes us afraid to go out."

In May this year, a protest camp at the edge of the proposed site was forcibly dispersed by police using tear gas and a "lathi charge", referring to the lathi, or baton, wielded by police officers.

The protesters reacted by digging up roads approaching their villages and threatening to confront the police head-on if they attempted to enter the villages.

Some villagers have welcomed Posco's plans and the compensation of approximately of 688,000 rupees (Dh55,700) per hectare of private land. The resulting divisions between villagers are visible in the shape of a transit camp on the edge of the district, which houses around 50 families who supported the project and now fear retaliation from their former neighbours.

Protesters say the company's rehabilitation promises are redundant, since they fail to account for families who work on the land but live elsewhere or lack official tenancy, which is common in India.

The Odisha government denies using undue force against the protesters. Instead, it has accused PPSS members of attacking supporters of the project. In June, the police charged 500 people with burning down a supporter's house and assaulting his family. The PPSS claimed this was further evidence of harassment.

Recent official reports suggest the PPSS is finally being heard. In November, the Forest Advisory Committee stated that the government had violated the rights of forest-dwellers in granting forest land to the project, and the whole process of acquisition had to be restarted.

This came just a fortnight after a damning report by a committee reporting to the Ministry of Environment and Forests (MoEF), which advised the ministry to overturn the environmental clearances it granted in 2007.

It found "serious lapses and illegalities in the EIA [Environmental Impact Assessment] process" and "serious violations in the public hearing process where many communities have been left out".

It disputed government claims that "only about 400 families" would be affected, using the 2001 census to show that at least 3,350 families - about 20,000 people - were dependent on the area for agriculture.

The report also shows how crucial minutes from MoEF meetings were altered shortly before clearances were given, subtly removing more negative comments.

For example, one minute from the 67th meeting of the Expert Advisory Committee in June 2007 initially stated: "certain critical aspects require to be further gone into and even re-cast". This was changed to "certain aspects require attention and re-cast."

Another section related to waste disposal originally stated: "... no plantation can be raised on this area within 15 years. How any plantation can at all be raised in the area where sludge is to be disposed of is not at all clear". This was later changed to read: "... the dump will graduate in stages to a forest in 15 years. Thereafter one needs to know where and how the sludge will be dumped."

The Odisha government dismissed the report as "highly superficial". Priyabrata Patnaik, of the Industrial Development Corporation of Orissa, said: "We require foreign direct investment and free capital for vital sectors which includes steel and power. We are talking of displacement of about 400 families. I'm sure there will be a job for every able-bodied person who is willing to work.

"Posco is providing excellent rehabilitation, including a unique feature for workers who don't own land."

Saroj Mahapatra, a spokesman for Posco-India, said the company had followed every procedure presented by the government for rehabilitating villagers and receiving environmental clearances.

"We trust the government and have followed the government procedures and advice in letter and spirit all through from the beginning.

"The doubts raised by certain quarters even after the final approvals and clearances have been given, would hopefully get resolved soon. We know big dreams take lots of grit and determination to realise. Our stated vision is to build a better tomorrow with steel."

The MoEF could not be reached for comment, despite numerous attempts.