June 10th, 2011
Bloodshed feared as police move in to evict villages resisting the POSCO steel project in Odisha, India
US investor Warren Buffet among financial backers of controversial steel project
Jagatsinghpur, Odisha, India – June 10, 2011 – After six years of peaceful resistance to a proposed mega-project by Korean steel giant POSCO, villagers in the Indian state of Odisha are facing a dire standoff. The Odisha state government has deployed hundreds of police to surround the villages in Jagatsinghpur district where residents refuse to allow acquisition of their homes, betel-vines and rice fields to make way for the steel project. On Friday, June 10, 2011, police began preparations to move in and forcibly evict the villagers.
“Over 2000 villagers have formed a human barricade and are sitting in front of the Gobindpur village border, day and night,” reported Prashant Paikaray, spokesperson for the grassroots group opposing the project, POSCO Pratirodh Sangram Samiti (PPSS). Paikaray described how the standoff intensified when police tried to advance into the village on the morning of Friday June 11th: “The children formed the outer ring of the human barricade, lying down on the ground, followed by women, then old people and finally the young. The police made several announcements to divide the people and weaken them morally but with no result.”
The police returned to the state capital on Friday afternoon but threats of imminent eviction continue. Residents of the villages fear that the police may resort to violence in order to force the families from their homes. “We squarely hold Naveen Patnaik, Chief Minister of Odisha, responsible for this imminent massacre,” added Paikaray.
Villagers fear bloodshed because of a lethal crackdown in nearby Kalinga Nagar—where a similar standoff against a steel development in 2006 led to fourteen villagers being brutally killed. On Friday, members of Gobindpur and Dhinkia villages in Jagatsingphur appealed to the Indian government and international community to intervene and “prevent another Kalinga Nagar.”
The POSCO project has been a source of controversy since its Memorandum of Understanding (MoU) was signed in 2005 between the Odisha state government and Korea-based company POSCO, the world’s fourth largest steel producer. The project represent’s India’s largest single foreign direct investment to date and involves the construction of a large-scale steel plant, coal-fired thermal power plant, a captive port, and iron-ore mining site that will produce 20 million tons of iron ore per annum, for annual steel production of 12 million tons over 30 years, with 30% of the ore exported to Korea for processing. The plant itself will require acquisition of 4004 acres of land, much of it prime agricultural and forest land that is home to villagers who earn their livelihoods by rice farming, fishing and cultivating betel leaves and nut.
“The government tells us that this is ‘development,’ but we see that it is destruction. How can they simply rob us of our homes and land, to send steel to Korea? We will not leave our homes,” stated a community leader called Ranjan, from his home in the village of Gobindhpur.
Opposition to the project does not only stem from the land acquisition, but also because of alleged corruption associated with the deal. The terms of the MoU itself have also generated controversy, as India agreed to a 30-year lease in which 30% of the iron ore will be exported to Korea for processing.
“With current fine iron ore rates crossing Rs. 8,000/ton [USD $179], it is simple arithmetic to note that POSCO can easily recover its capital investment in less than eight years—and yet the lease is for 30 years,” pointed out Leo Saldanha of the Bangalore-based Environment Protection Group, which recently released a detailed report on corruption involved in the POSCO project. (Report available at: http://www.esgindia.org/resources/reports/resources/tearing-through-water-landscape.html )
“At present, the MoU for the POSCO project has lapsed, but the state is still rampantly going on acquiring land for the project,” explained Mamata Dash, an activist and researcher based in Delhi. “The project is nothing short of a legalized loot of our natural resources,” Dash added.
US financier Warren Buffet, via his investment firm Berkshire Hathaway, is an investor in the POSCO project. In March of this year, Mining Zone People's Solidarity Group, a research group of non-resident Indians based in the US, disclosed that Buffett owns about five per cent of POSCO, making him the single largest owner of the company outside Korea.
Villagers in Dhinkia and Gobindpur are demanding that the Indian government intervene immediately to prevent police violence and to cancel the POSCO project.
"We are very concerned about the safety of the families in Gobindpur and Dhinkia," stated Joanna Levitt, Executive Director of International Accountability Project, a San Francisco-based watchdog group that tracks human rights impact of global project finance. "The international community cannot simply stand by as this kind of violent land-grab is railroaded through in the name of development."
For more information, contact:
Mamata Dash, cell + 91 98668259836
Prashant Paikray, cell + 91 9437571547
Joanna Levitt, cell +1 650-862-6116