NEW DELHI — A U.N. panel of experts urged South Korean steel giant POSCO on Tuesday to suspend plans for a $12 billion steel plant over concerns the project threatened the rights and livelihoods of tens of thousands in eastern India.
The call by the U.N. experts follows a June report by rights groups saying that illegal land seizures threatened to displace 22,000 people and deprive thousands more of their means of existence in the state of Orissa.
"People should not be impoverished in the name of development; their rights must take precedence over potential profits," Magdalena Sepulveda, the U.N. special rapporteur on extreme poverty and human rights, said in the statement.
Mineral-rich Orissa has been trying to woo investors, both foreign and Indian, by giving them mining rights, electricity and water at low prices. But the move to acquire farm and forest lands has run into violent protests, with many farmers and forest-dwellers saying the project would leave them without homes, livelihoods and possible access to clean water.
The protests have helped to keep the proposed plant, India's largest-ever foreign investment project, mired in legal hurdles for eight years.
However, as India's economy has slowed over the past year, the government has reduced some barriers to allowing the company to obtain a license to explore for iron ore.
The Orissa project requires about 4,000 acres (1,620 hectares) of land for the plant – expected to produce 13.2 million tons (12 million metric tons) of steel per year – as well as an affiliated power plant, railway line, road, water supply infrastructure and port.
POSCO was given a five-year environmental clearance in 2007, and agreed to conditions issued by the Environment Ministry's in 2011 that the company restrict air emissions, spend 2 percent of its net profits on social welfare, maintain a quarter of the land as green space and reduce its water intake.
The ministry's approval lapsed, however, after the National Green Tribunal – India's courts devoted to environmental cases – asked the ministry to review the project again. That process is pending.
POSCO said in August that the report by the rights groups had used "fallacious criticism, distorted facts and erroneous interpretation." The report, based on a yearlong investigation, was published by the International Human Rights Clinic at New York University's School of Law and the International Network for Economic, Social and Cultural Rights.
In a lengthy reply, POSCO said no one had been displaced from private land, and that the government was clearing only "encroached land and giving due compensation" for removing crops and aquaculture ponds. It said 90 percent of the project area was government owned. "There is no question of any forced eviction."
In July, POSCO pulled out of a proposed $5.3 billion steel plant in the southern state of Karnataka, dealing a blow to government efforts to attract foreign investment. The company said it scrapped the project because of inordinate delays stemming from local opposition to land acquisition for the project.