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Rediff.com  » Business » Supreme Court upholds mining ban on Lafarge

Supreme Court upholds mining ban on Lafarge

March 30, 2010 02:23 IST

The Supreme Court on Monday rejected the plea of the central government to allow Lafarge, the French mining giant, to resume limestone mining in Meghalaya. It also ordered a fresh, and fast, environmental impact assessment.

The central government, represented by Attorney General G E Vahanvati, proposed a draft order based on the 'Sterlite model,' which would let the foreign firm continue its mining activities while investing in redevelopment of the area.

The judges, however, insisted there be a new EIA, in view of the allegations that the earlier mining certificate was 'procured' by declaring the area (including Cherrapunji) was 'rocky land.'

Senior counsel Harish Salve, appointed by the court to assist it in this case ('amicus curiae'), called the earlier EIA 'trash, which is not worth the paper it was written on.'

The bench headed by Chief Justice K G Balakrishnan told Vahanvati to notify the public hearing with details, so that the affected tribals knew what it was all about.

The report of the fast-track proceedings, which would also give a hearing to the tribal people affected by the deforestation, is to be taken up on April 9.

The Supreme Court had, on February 5, restrained the French firm from extracting limestone in Meghalaya to manufacture cement at the Lafarge Surma Cement project at Chhatak, Sunamganj, Bangladesh.

According to the proposal presented by the Attorney General, a special purpose vehicle would be set up, as in the case of Sterlite, to redevelop the area by investing Rs 50 crore, to start with. The proposal contained several other clauses which satisfied the French firm but did not find favour with the judges, Salve or the tribal representatives.

Vahanvati had no answer to the question put by Justice S H Kapadia, who was on the Sterlite bench, whether the French company had any assets in India.

The judge wondered what would happen if the foreign firm walked out.  It was for this reason that foreign firm Vedanta was not recognised by the court and its Indian alter ego, Sterlite, had to bear the obligations to the SPV in the Orissa case.

Justice Kapadia also insisted that the French firm should give a bank guarantee and not its Bangla counterpart.

Counsel for the tribal organisation, P S Narasimha, submitted that Lafarge had not been given environmental clearance under law and the issue was pending before the Supreme Court. The company got clearance only from a forest officer, and not from any statutory authority.  However, the company had already started its activities without permission.

He said that unless the environmental clearance was obtained through a transparent process, the company should not be allowed to function in this country.

Senior counsel F S Nariman, who represented the French company, claimed that  the company had  got a valid certificate. He also cautioned the parties that the consequences of the ban would impact the relations between the two countries, India and Bangladesh. On this issue, he echoed the sentiments of the Attorney General who also pointed out that the French firm was operating under an Indo-Bangla treaty of 1974.

The case would not have any impact on the plans of the Indian arm of Lafarge to set up a green field cement plant in the state. At an investment of over Rs1, 000 crore, it is the largest private sector investment in the state.

BS reporter in New Delhi
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