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Did NDA govt help Vedanta's Tuticorin factory?

May 25, 2018 12:37 IST

The environment ministry till May 2014 (still under UPA) ordered that cases like Vedanta’s expansion plans need to consult people. 

But in December 2014, the NDA government reversed this position and in March 2015 the environment ministry extended Vedanta’s environmental clearance till December 2018. 

This it did even while the question of the need for public hearing by projects in different kinds of industrial parks was being contested in the courts. This allowed the company to carry out construction. 

Nitin Sethi reports. 

The controversial expansion of Vedanta's 1,200 tonnes per day copper smelter in Thoothukudi, Tamil Nadu, has been stayed by the high court on May 23 after at least 11 people protesting against the plant were shot dead by state police. The court has ordered that the company consult people before building the plant -- something the company claimed it was legally not required to do. 

Vedanta claims it had legally got an environmental clearance from the Union government to expand the smelter to double the capacity without consulting people. 


A perusal of Union environment ministry’s and several court records show the National Democratic Alliance government made an interpretation to green regulations in December 2014, which helped particularly plants such as that of Vedanta's at Thoothukudi to be built without consulting people of the project-affected area. 

This exception in the environmental safety regulations was made on the request of various industries, show court and government documents reviewed by Business Standard

The exception to the rules was carved out through orders of the then environment minister and called a ‘clarification’. This clarification would in months ahead allow Vedanta and several others to start constructing their plants, such as the one in Thoothukudi, without public consultations. 

This interpretation by the NDA government was fortuitous for companies because the environment ministry under United Progressive Alliance government had insisted in May 2014 that projects such as Vedanta’s in Thoothukudi were required by law to first go through public consultations. 

In 2016 the National Green Tribunal found the December orders of the NDA government, which favoured Vedanta, to be illegal. It had to go to the point of threatening bailable orders against the environment ministry officials in the case to divulge information on the matter. Ministry officials said rescinding the government’s December 2014 orders would adversely impact many projects. 

Eventually, the NGT quashed the December 2014 orders. On the NGT’s instructions, the ministry had to pass fresh orders clearly stating that projects in industrial parks without environmental clearances needed to conduct public hearings. 

But by then, Vedanta had secured an extension of the green clearance to its expansion project in Thoothukudi without the need for a public hearing. 

It is citing this 2016 ruling of the National Green Tribunal and other facts that came to light during the case, that the high court on Wednesday has ordered Vedanta to stop its expansion plans in track and go back to first consult the people. 

The usual green clearance regulations

Almost all large scale industrial projects require a mandatory environmental clearance from the Union environment ministry. The project developer first prepares a report laying out how the industry would impact the people and environment in the vicinity of the project site. It then presents this report to the public for consultations under the supervision of the state government. 

Experts of the Union environment ministry study the results of these consultations and the environmental impact assessment to decide if the project should be given a nod or not. People cannot veto the project during consultations but their concerns have to be addressed by the company and the Union government before the project can take off. 

The environment clearance regulations, dating back to 2006, make exceptions to the need for public hearing in select cases. If a small industry is set up inside a designated industrial park, which itself has an environmental clearance, then the specific industry is allowed to bypass public consultations. 

During the United Progressive Alliance government's tenure in May 2014 questions were raised with the government about this exception. What if the industrial park is established so long ago that it came up before the environmental regulations of 2006 were in place and the industrial park itself has no environmental clearance? Would industries in such cases too not need to consult the project-affected people? 

On May 16, 2014 the environment ministry under the UPA government clarified. It said industries could bypass public consultations only if the industrial parks they were to being built inside had an environmental clearance. If the industrial park had not been assessed for environmental safety and under the 2006 regulations, then the industries coming up inside it would necessarily have to consult the people. 

The logic proffered was that if the overall industrial complex had been assessed for its impact on people and environment, then the individual units within the complex need not go through the entire elaborate clearance process which includes public consultations. 

But, by May 26, the National Democratic Alliance government with Prime Minister Narendra Modi at helm had been sworn in promising ‘Ease of Business’ as one of its mantra. 

Documents show it received missives from several industries on the issue. On December 10, 2014, responding to the industries’ plea, the Union environment ministry put out a 'clarification' in the form of an office memorandum approved by the then environment minister. The clarification said factories inside the designated industrial zones would not need to consult people even if the zones had never got an environment clearance. 

In effect, laid down notified regulations under the law were re-interpreted by a mere executive order in the name of providing a 'clarification' to the industry. 

This came as a bonanza for several industries across the country, including Vedanta. Later, the Confederation of Indian Industries highlighted this changed policy as one of the key reforms the NDA government had done for ease of business within a year of coming to power. 

How Vedanta gained 

Vedanta's original copper smelter was built inside the Tuticorin Industrial Complex of SIPCOT (State Industries Promotion Corporation of Tamilnadu Ltd). The complex came up before the environmental clearance regulations of 2006 were put in place. 

Vedanta first sought an approval of the Union environment ministry for expanding its copper smelter in 2009. The environment ministry, then under UPA, gave a clearance, without requiring public hearings. 

We will abide by the law of land, says Anil Agarwal

Two days after violent protests against Sterlite copper smelter, in which 13 people have been killed and more than 70 injured, Vedanta Resources Executive Chairman Anil Agarwal on Thursday said that the company want to continue with the business, while they are committed for the community and people of Thoothukudi.

Agarwal in his Twitter broadcast said that he was saddened by the unfortunate turn of events at Tuticorin, now renamed as Thoothukudi.

"I am very sad to hear the incident what happened yesterday. This was absolutely unfortunate and my full sympathy with the family," he said.

The plant is closed because of annual shut down and we are waiting for clearance from the Court and from the government to restart the plant, he added.

“We are strictly following the court and the government orders. We always make sure the community and Tuticorin people at large prosperous with us. I am total committed for the community, people at large and with their wish and prosperity and want to continue with this business. We will abide by the law of land,” said Agarwal.

-- T E Narasimhan in Chennai

The clearance was valid for five years. When it lapsed Vedanta, went back to the Union ministry in 2013 to get an extension. The environment ministry in May 2014 (still under UPA) ordered that cases like Vedanta’s expansion plans need to consult people. 

But in December 2014, the NDA government reversed this position and in March 2015 the environment ministry extended Vedanta’s environmental clearance till December 2018. This it did even while the question of the need for public hearing by projects in different kinds of industrial parks was being contested in the courts. This allowed the company to carry out construction. 

With the construction for expansion on the way, news reports say, hundreds of people in Thootukudi began protesting. The protests went on for 100 days. Then, on May 22, the administration imposed restrictions under Section 144 in the area. But protesters swelled into thousands, news reports mention, leading to violence and eventual killing of at least 11 people by the state police. 

We're being victimised, says Sterlite Copper CEO 

How do you react to the past 48 hours’ developments, including the court order to stop work on the phase-II expansion? 

We appeal to the government to ensure the safety of our employees, facilities and the surrounding community. We received the court order just now and have not been given time to respond. We will go through it and decide on what next to do. 

What is Sterlite doing to address the concerns? 

We have been engaging with the local community. Around 70 per cent of the employees are from Tamil Nadu; of that, 70 per cent are locals. We have also done lots of CSR activities, especially related to water, which is a major problem here. We need to step up local connect activities. 

People say the plant is hazardous and not following norms. 

There are myths being propagated by various vested interests, such as cancer due to Sterlite. Fear psychosis is being instilled in the minds of people. We are living half a kilometre from the plant -- we are all living proofs. Several children have grown up there. 

They are alleging effluent is taken out to the sea. Where do we have a pipeline? This plant is zero-liquid discharge. We have asked people, protestors, to visit our plant and said we will provide all the data, explain everything. They have not visited. 

The state government and Pollution Control Board allege Sterlite has not followed the norms. 

The consent to operate for the existing plant has been refused; five conditions were listed. One is that ground water sampling has not been provided. That is something the PCB themselves come and take and get it tested. 

Then, there is some ambient air quality monitoring; the arsenic test has to be carried out through some NABL-accredited laboratory. They had not asked us for this till now. If they want it, we will be able to provide it. 

Then there is hazardous waste authorisation not being submitted. It has been done for four or five years. We have been giving the application and the PCB has not given us any information on this. We expect that if there is a rejection, we should be told so and the reasons, so that we can take remedial action. 

I don’t see any issue at all in complying with all those conditions. 

When the matter comes up before the Appellate Board on June 6, we are confident on getting a favourable order. 

Are you saying you are completely environment-friendly? 

So many committees visited Sterlite over the years and found things to be okay. This is a journey and there might not be things 100 per cent okay. They have given recommendations -- like NEERI suggested 30 recommendations, NGT suggested 15-20 recommendations. All these have been fulfilled. 

We have ourselves established various monitorings, such as a fence-line monitoring system, where any emission which crosses these beams will be recorded. Several things are monitored by the PCB and everything is recorded. People should not get carried away by the canards being floated. 

On the whole, for the environment alone, we have invested Rs 5 billion. 

There are allegations that phase-II of your expansion lacks clearances. 

We have taken the land from SIPCOT (the state investment promotion entity) and have environment clearances. We need to take up the matter in court. 

You don't have the support of the ruling party, opposition party and of local people. Any plan to look at other states? 

Going legally is the only solution. We don't have any plans to expand outside Tamil Nadu. 

What loss have you incurred due to closure? 

Every four years we will shut down for 45 days as part of maintenance. We see this as an extended shutdown. 

-- T E Narasimhan and Gireesh Babu in Thoothukudi

Nitin Sethi
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