Struggle against POSCO's $12 Billion US-Owned Steel Plant and Port Heats Up

POSCO: Tribal Dispossession, Environmental Destruction and Imperialism

by Analytical Monthly Review

Orissa is the poorest State with an official estimate of 39.9 per cent of people living below the poverty line, yet in regard to proposed investment it stood at second position after Gujarat. According to Assocham Investment Meter, recorded investment proposals in Orissa reached Rs. 2,00,846 crore in 2009. The cause is the availability of rich mineral resources such as coal and iron ore along with cheap availability of manpower. Steel and power were among the sectors which attracted maximum proposed investments in the state.

The $12 billion POSCO (Pohang Iron and Steel Company) project in Orissa is the largest foreign investment project ever in India.

This project has three components:

So vast a project of necessity strains the nation's less than coherent institutional framework, and in the process illuminates today's ruling forces and the way in which they go about achieving their aims. The elements of the assault are familiar: dispossession of tribal cultivators and the despoiling of the environment.

The parliamentary democracy has made something of a spectacle of the construction of legislation that would appear to strictly regulate, if not prohibit outright, what is today underway in Orissa (the Forest Rights Act, etc.). But statutory language does not interpret itself, and not surprisingly the ministries and judiciary are doing whatever is necessary on behalf of the ruling interests. Thus the tribal cultivators first disappear from the legalreality, before their disappearance from sensous reality itself courtesy of the next "Tribal Hunt" operation of Chidambaram&Co.

POSCO needs some 4004 acres, of which but ten percent belong to the cultivators. The rest of the land required belongs to the government, and this has been recorded as "under forest" in official documentation. Government records do not show that the vast majority of this land has been under cultivation by the people living in these areas for generations. But this is not new. B. K. Roy Burman in his article "What Has Driven the Tribals of Central India to Political Extremism?" (Mainstream, Saturday 17 October 2009) sets out the reality:

[A]s against involuntary displacement, in many predominantly tribal areas the tribal people are deliberately dispossessed of their lands and resources thereon in a meticulously planned manner. This is a serious charge. But this is true.

. . . [T]he Planning Commission's statement submitted to Parliament admits that even in those areas beyond 10 per cent slope that did not attract the provision of the Forest Conservation Act, the rights of the tribal people were not recorded as "the Government of Orissa seems to have avoided even a survey in order to prevent alienation of fragile hill slopes". Here it should be noted that the statement of the Planning Commission is incomplete. On behalf of the Government of Orissa the Deputy Director, Land Records and Survey had submitted a note in which it had been mentioned that the land beyond 10 per cent slope was entered in 'Government Khata'. . . .

We made a field study in Orissa and found that during the land survey and settlement operation carried out in the late 1950s and continuing in the 1980s in some areas of Koraput district, hardly one per cent land in actual possession of the tribal communities was recorded in their favour.

Tribal cultivators are then termed "encroachers", and their eviction from mineral rich forest and hill tracts follows "legally". Much lauded statutory provisions that purport to give protection to indigenous forest dwellers are ignored ("interpreted") by the relevant ministries to achieve the same result.

A recent letter of the POSCO PRATIRODH SANGRAM SAMITI explains:

"Ministry has granted final clearance for diversion of this forest land for the steel plant as of December 30, 2009.

If any such final clearance has been granted, it is in blatant violation of the law, the Ministry's own orders and the assurances repeatedly given by the Ministry and yourself to the press and to Parliament. It would appear that the Ministry is actively colluding with corporate vested interests and lying to Parliament and the people about its commitment to the law.

Please note the following:

POSCO has delinked the mining project from the plant construction in order to get the vast project under way. A license for over 2,500 hectares for the proposed Khandadhar iron ore mines has been recommended by the Orissa State government, despite opposition from other companies and locals. But existing iron ore mining in the region has already severely impacted the water resources of a large region inhabited by many thousands. In the immediate region of the proposed mines the only constant water source are waterfalls that are already contaminated from iron mining and the water is now not safe for drinking.

In the larger surrounding region the Central Underground Water Board has reported that the underground water level in Joda and Barbil river areas has subsided by four metres, that forty percent of the region's 8,000 tube wells no longer function, and that nearly half of the irrigated land can no longer rely on water from the Khandadhar waterfalls.

The POSCO project as a whole requires an immense impact on one of the last forested areas remaining in central India. Particular concern has been voiced over the State government's commitment to "facilitate" the provision to POSCO of 7,000 crore liters of water per year for the plant alone from the very limited water resources of the draught ridden state. This assault on the environment can only be comprehended in the context of a mistaken development paradigm, compounded by the brutalities of the post-1991 "reform" neoliberal regime. For an overview, we recommend to students the website of the Environmental Protection Group, Orissa <>.

But POSCO is not having a smooth run. The anti-POSCO movement is gearing up again against land acquisition. The POSCO struggle has now acquired strategic importance for other industries and corporate groups that face public agitation for destroying forests. This has added an extra dimension to anti-POSCO movement; caging the aspirations of agitators to basic minimum such as maintenance of status-quo or better compensation is profoundly mistaken. The movement against the POSCO project is the frontline of the most critical global struggle of our time; to preserve an environment in which the next generations can thrive, against the primary enemy of humanity, imperialist capitalism.

When South Korean President Lee Myung-bak was the chief guest of India's most recent Republic Day celebrations, POSCO was -- as always -- presented as a "South Korean" company. In fact, it is not. POSCO is owned and controlled from the very center of world capitalism and imperialism in the United States.

The 1997-8 Asian financial crisis (already three financial crises ago) saw a co-ordinated assault on the South Korean currency by Wall Street arbitrageurs, the infamous George Soros and such like. South Korea went to the IMF and was forced to negotiate a "structural reform" cutting its social expenditures, "opening" its financial structures, and limiting its deficit. But this was not enough for Clinton's U.S. Treasury Department, and -- with the U.S. veto over the IMF -- they rejected the agreement reached by the IMF and South Korea.

A "SWAT team" -- in the words of Business Week magazine -- from the U.S. Treasury composed of David Lipton, Larry Summers and Timothy Geithner descended upon South Korea to set out the additional imperial demands: control of South Korea's leading state-nourished industries must be sold to leading U.S. interests at bargain prices. Facing a total financial collapse if dollars were not forthcoming, South Korean leaders gave in. Among the first to go was POSCO.

Today U.S. holders of POSCO stock greatly outnumber the South Korean shareholders. By far the largest block of shares in POSCO are the depositary receipts of Bank of New York Mellon, of which the largest holder is CITIGROUP. POSCO shares acquired for US$10 in 1998 sell for US$110 today. It is important for anti-POSCO activists to be aware, when they confront the various South Korean executives, or Orissa State politicians, or Chidambaram's paramilitary police, that behind them are their masters at CITICORP and the U.S. Treasury.

Chidambaram's murderous attack on resistance by adivasis to their dispossession is, we read, slated now to be extended to Orissa. If so, the POSCO project due to its size and strategic importance shall unavoidably be a spectacular example of the real -- imperialist -- interests involved.

(MRzine, February 25, 2010)