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Sterlite Copper case suggests corporate ways to 'legalize' environmental wrongdoings

By Karthik AS* 

On May 22, 2018, 15 civilians were shot dead by the district police protesting against the Vedanta Sterlite Copper plant in Tuticorin that supposedly been disposing off harmful effluent directly into the surrounding. Three years on, still, justice evades the lost lives. Nityanand Jayaraman, an activist and writer, based out of Chennai, who reports on corporate abuses of the environment and effects on human rights, narrates the fight from the community's perspective.
Jayaraman played the lead role in the protest against the Sterlite Copper plant in Tuticorin. He has been raising his voice against the Sterlite Copper plant for 15 years and studying the consequence on the environment.
Sterlite copper plant drew national attention because shutting down the copper plant directly impacted the country's copper demand. The series of events turned India from copper exporter to copper importer.
Copper smelters are polluting in nature. The copper plant produces harmful byproducts like sulfur dioxide, Iron, etc. These products cannot be easily disposed off into the environment since it causes huge damage to the ecosystem. So ideally, Copper manufacturing plants should be located far away from sensitive receptors like populated areas, agricultural land, or water source.
The Sterlite Copper plant was supposed to be located in Ratnagiri, Maharashtra. Vedanta Ltd had invested around Rs 500 crore in the Ratnagiri plant. People in Ratnagiri protested against the plant because of the polluting nature of the copper smelters. A committee headed by Rashmi Mayur reported that the copper plant would impact the Mango plantation and fisheries in that region. So, the Sterlite copper plant had to be relocated to Tuticorin, Tamil Nadu.
Sipcot industrial sector in Tuticorin, Tamil Nadu, was chosen to set up the Vedanta Sterilite copper plant. Sipcot industrial sector was meant for general industries (nonpollution) as per the town planning master plan. Still, the pollution control board granted the copper plant the permit to start operation.
The No Objection Certificate issued by the pollution control board of Tamil Nadu said that the Vedanta Sterlite copper plant had to plant a green belt cover of 200m width. In reality, Nityanand said that there was no cover of the green belt of trees surrounding the copper manufacturing plant.
Narrating the story of Sterlite Copper plant Nityanand said that in 1996, the Sterlite copper plant began its operation. As a first consequence of the plant, 26 women were hospitalized due to a gas leak who worked in the nearby Ramesh flowers cottage industry, which deals with dry flowers.
Following this, in 1998, All India Radio staff falls ill. Up to 2004, the company had managed to expand the copper plant easily. In 2013, there was a gas leak from the plant; the issue was taken up to the National Green Tribunal. It was evident the smokestack detector registered a spike when the gas leak took place, which lasted up to 40 minutes.
The National Green Tribunal (NGT) gave clean chit, and people lost all hopes in the government. In 2018, the simmering anger, descent, helplessness resulted in a 100-day struggle by the people of Tuticorin. It ended on May 22 when protestors went to the collector's office sat down on protest.
When the district collector and the superintend of police were absent at the site, the shooting happened, and 15 people lost their lives. Finally, on May 28, the Tamil Nadu government ordered the copper factory to shut down. Meanwhile, Nityanand said that the soil and groundwater were contaminated surrounding the copper plant. People did not have any support from the government in fighting against the environmental consequence of the Sterlite copper plant.
As per Nityanand, the government should be held accountable. Government should work to uphold the citizen's interests. People's voices need to be heard in a democracy. He said that rich people's voices matter more as they can persuade their opinions through their strength.
Nityanand, while referring to the regulatory infrastructure, said that in India, there is no separation between the pollution control board and the government. The representatives of the pollution control board don't have enough expertise in environmental engineering.
India needs more investment in the regulatory mechanisms so that illegal activities can be easily identified and punished. The regulatory body also needs more independence and accountability. The law should give stringent punishment should be given to the rule-breakers.
Nityanand explained the profit-making nature of the corporates and said that the corporates are losing their conscience as managers don't think of the consequences of the action. Pointing at the loop of Environmental Impact Assessment 2020, Nityanand said that if the corporates violate the law, there are ways to legalize the wrongdoings.
The power of corporates is huge as they have monetary power in ads, etc., but protesters are fighting for their cause on the streets. This shows the government's value system, the amount of preference they give to the environment, people's health, and the nation's economy.
Nityanand expressed his thoughts about the media, which does not have the liberty to speak the truth due to corporate and government influence. Speaking about the current circumstance, Nityanand said that anybody who questions the government is labeled as misled or portrayed with the image of anti-national. The culture has developed where the asking question is criminalized.
Concluding his views on the loopholes in the Indian system, Nityanand said that life on earth would end soon if we don't consider the environmental consequences while making important decisions that affect nature.
Privileged people need to raise their voices against the wrongdoings of both government and the corporates. We need united efforts from all sections of society to sustainably work towards growth and preserve nature for future generations.
---
PGP, Indian Institute of Management-Bangalore 2020-22

Comments

samir sardana said…
THE STERLITE SCAM IS HISTORY ! Part 1

THE NEXT TAKEOVER BY THE INDIAN BANIA BRIGADE IS THE NMP

As usual ,the Indian Media has been purchased or is just inept.I do not blame the Panwari Bania Indian Media.They have no domain expertise and they are cash starved – so they are easily conned and purchased.

NMP is a privatisation and disinvestment,via an operating and/or financial lease.The purpose is NOT to raise funds – as else,the idle/surplus/loss making assets could have been quarantined, in a SPV and sold off,or a JV partner brought in.The purpose is NOT to improve efficiency,as else the assets could have been transferred to a toll operator on a pure O&M Contract (SO NO LEASE CHARGES),with a bonus for INCREMENTAL EFFICIENCY.

The Purpose of the NMP,is also NOT to cut staff costs,as the GOI is the owner of the asset,and so,the staff cost is a sunk cost – who will remain a burden on the GOI,or take a VRS,or hopefully die over the lease tenor.

The Purpose of the NMP,is NOT to increase bank credit,as banks would lend better to a SPV, which had ownership of the asset.W/o an asset, a bank will lend on Balance sheet and Guarantees of Promoters of the operating lessee – wherein THERE WILL NO MORTAGEABLE SECURITY.Banks cannot possess the GOI ASSET, if the lessee goes bust.Of Course,a new lessee can step in – but if the first lessor could not make a profit on the asset,the reasons for the losses,are beyond redemption.

The lessors will obviously make a neat profit (for the NON-MANUFACTURING AND NON PRODUCTION ASSETS – like Roads,Hydro,Bridges,Stadiums etc.,) with the aid of bank leverage, and on the expiry of the lease period,will buy the asset – after a ICB.By then,the banks would have assessed,tested and appraised the technical and managerial competency of the lessor – and so.the Banks and PEs etc.,will easily fund the acquisition.In the alternate the GOI could takeover over the property and land developments (to collect the rentals etc.or do another lease of the same) by the lessor (after the lease expiry) , and just hand over the core toll asset to a ICB Buyer.

The Manufacturing assets leased under the NMP,(like Thermal Power plants etc.) will become junk in 20 years and also technically obsolete,and so the GOI will have no use in its repossession – except to set up a refurbished plant and sell of the surplus land.In 20 years,the land used for the same manufacturing capacity will fall by at least 50%,and so that surplus land will be windfall to the GOI,and the GOI will be glad to let the lessor acquire the plant and take a bank loan to refurbish it.

The 1st Purpose of the NMP,is to SELL the asset BUT BY NOT CALLING IT A SALE – in law.If they had sold the asset,they would receive a MUGH HIGHER Valuation – but that has a huge POLITICAL COST and the CONTINGENCIES OF TIME.

The 2nd Purpose of the NMP,is to MONETISE THE LAND associated with the asset,w/o SELLING THE LAND,and outsourcing this SCAM,to a private person,so that the GOI is free of the taint and scams in the land monetisation.For example, in a toll road,the jackpot will come in the property development/promotion/adverisement/drive in theatres/malls etc.,on the land on the ROW of the Road,and other areas.If the GOI does it,there will be scams – and so,it is outsourced to the private party – who will make a killing,as his tenor is 25 years,and the GOI is getting a Pay down on Day 1 (with no comparable benchmark).The same applies to GOI stadiums,libraries,buildings,Railway stations…………………The core driver of the monetisation streams is the LAND (even for ports).

The 3rd Purpose of the NMP,is to provide a risk free lending option to Indian Banks,as the Banks are lending to the GOI,VIA THE OPERATING LEASE LESSOR (as the bank will fund a part of the lease payment to the state).If the lessee defaults,some other lessor will step in.

The 4th Purpose of the NMP,is to provide an option to the banks to BLOAT the Bank Balance Sheet,TO REDUCE THE NPA %.dindooohindoo
SAMIR SARDANA said…
The Sterlite scam is History - Part 2

There is a new rip off by the Indian Bania Brigade ! The NMP !

The 5th Purpose of the NMP is to circulate credit across the supply chain of these revived moribund assets – in the hope that some money flows to the NPA entities – so that they repay the loans.

The 6th Purpose of the NMP,is to boost the fiscal revenues of the GOI,as new business streams will be created across the supply chain – but more importantly,the leased assets
were with the GOI,in non taxable units or loss making units.Now with these assets in a lessee entity – the lessee will run the assets to make a profit – and that will be taxed,w/o any tax shelters,as the assets were constructed some time ago.

The 7th Purpose of the NMP is to use 5% of the Cash raised to do a VRS and kick out all the GOI staff on the leased assets – with an option to them,to ne hired by the lessee.

If this Titanic sails,then next will be the surplus Military and CAPF land – which will be worth USD 100 Billion at the minimum

In essence,a road or a port,post operations,can be run better by a private lessee ONLY BY CUTTING COSTS AND IMPROVING OPERATIONAL EFFICIENCIES.But this incremental PROFIT by the lessee cannot JUSTIFY the NMP UPFRONT PREMIUM.The PREMIUM IS justified ONLY by UNLOCKING THE POTENTIAL OF THE LAND COMMERCIALISATION AND PROPERTY DEVELOPMENT OF THE LAND AND PROPERTY USP, EMBEDDED IN THE GOI ASSET.

The GOI may be able to Unlock the embedded land value,on its own – but that will come with scams – and so,it is OUTSOURCED -wherein the netas will pull all the strings – but the axe will fall on the lessee.

Indian Duds do not realise that GOI does not care for GOI jobs,or Quotas in Jobs.There is no money for these fantasies.That India died with the Chaiwala as PM.dindooohindoo

India is the ONLY Nation in the world,which HAS USED COVID as an OPPORTUNITY,to do an NMP,Privatise Ports,and raise GST and ED,on Fuels and Edible oils – for its fiscal management, which would have been UNTHINKABLE,IF COVID were not there !


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