NEW DELHI, India — India's environment ministry just got tough.
Close on the heels of a decision to block United Kingdom-based Vedanta Resources' massive bauxite mining project in the eastern Indian state of Orissa, the ministry now wants to revoke the clearances for Korean giant Posco's $12 billion steel plant in the same state — which was to have been India's largest project ever funded by foreign direct investment.
Signaling a new assertiveness from a ministry once considered "worse than a rubber stamp," the one-two punch has raised fears that green activists will derail India's development, while also arousing suspicions that Minister of Environment and Forests Jairam Ramesh has found a way to gain political mileage from what used to be a dead letter office.
"There is a change in the ministry's attitude toward big companies. My only concern is that they're more strict with Vedanta than with Posco. The question that comes to my mind — is it about money?" said Climate Action Network's Sanjay Vashist, referring to the size discrepancy between Posco's $12 billion plan and Vedanta's $1.7 billion one.
"They're also highlighting it politically, because Rahul Gandhi tried to take credit for [the blocking of the Vedanta project], and in Orissa they don't have a Congress government," Vashist added. "So that could be a political game behind it, and Jairam Ramesh has given brownie points to Rahul Gandhi and thus stamped his own position within the Congress leadership."
On Tuesday, an environment ministry panel recommended that clearances for Posco's project in Orissa be revoked, citing "many serious lapses and illegalities in the [Environmental Impact Assessment] process." In its report, the panel called for a fresh assessment, which would further delay — and perhaps scuttle — a project that was first approved more than five years ago. Now, the decision rests with Ramesh, who must accept the panel's findings to make them binding.
Whichever way he leans, it could mark a turning point in India's growth story.
In the past, India's environment ministry was "worse than a rubber stamp," said Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers and People. The government body was "an agent for environmental destruction."
The results were grim. India ranked 123 out of 163 countries on Yale's Environmental Performance Index in 2010, in part because it missed targets on emissions and air and water pollution by a wide margin. But the reality of the choking air in industrial hubs like Kanpur, in Uttar Pradesh, and the poisonous water in pesticide-soaked Punjab, defies statistics.
Meanwhile, the country's 3 million small- and medium-sized companies in "polluting industries" are simply too many to control — especially considering that India's total outlay for regulation is just $500 million, one-16th the amount spent by America's federal Environmental Protection Agency. And the big outfits, especially in industries like mining, continue to use strong-arm tactics to take over land — one of the biggest reasons for the ongoing Maoist rebellion across eastern India — following an increase in the clearances granted to mining projects to 216 a year in 1998-2005 from just 19 a year in 1980-1997.
In that context, environmentalists are keen to welcome any kind of crackdown, and Ramesh deserves some credit. In recent months, the environment ministry has not only taken on Vedanta and Posco in Orissa, but also acted against the Navi Mumbai airport project in Maharashtra and a coal-based power plant in Andhra Pradesh — states ruled by Ramesh's Congress party or its allies. And on the same day his ministry's panel issued its recommendations on Posco, Ramesh inaugurated a new "green tribunal" intended to clear the backlog of 5,000 environmental cases winding their way through India's glacial legal system.
But these rulings are merely skimming the surface of the problem, say environmentalists. Despite playing hardball against big name companies and billion dollar projects, for example, the ministry continues to grant permission to projects on the grounds that certain conditions must be met before work begins — when they have neither the will nor the capacity to monitor whether the company follows the rules. Moreover, the ballyhooed green tribunal will be as toothless as the ministry that created it when it comes to forcing compliance and it will give companies a new avenue to appeal if their projects are denied environmental clearance.
"Ramesh has taken some good decisions," said Thakkar, "but he's not made the systemic changes needed to make sure bad decisions don't happen in the future."