Governance Now, Nov 15-30
If big-ticket development projects are getting scrapped by the day, blame it on the flawed policy
Since August 24, the ministry of environment and forests (MoEF) has scrapped three big-ticket hydel projects - NTPC’s Loharinag Pala (Rs 600 crore spent, 40 percent work complete), Pala Maneri and Bhaironghati in Uttarakhand - and stopped two industrial ones - POSCO’s steel plant and Vedanta’s refinery and mining in Orissa. This happened inspite of the fact that all the statutory approvals had been granted in advance, save for the ‘final’ forest clearance for Vedanta’s mining. If that makes you wonder why, the short answer is this: These projects had got their approvals on the basis of half-truths or untruths to begin with.
And that was possible because the very policies governing the process of approval are designed just to approve. There is little scope for rigorous evaluation for suitability and sustainability of a project or discovering better ways to achieve the same goal.
Therefore, the moment a project is challenged, the cookie crumbles. If you are then tempted to assume that more big-ticket projects may tumble, you may be right. Watch out for the Indira Sagar (Polavaram) multipurpose project in Andhra Pradesh and the Lower Subansiri hydel project in Arunachal Pradesh.
Here we examine these policies in detail.
Missing perspective
Once an MoU is signed with the promoter, which is usually a hush-hush affair with little that is made public, a project comes to the public domain when it is presented for environment clearance. At this point, it is a stand-alone project, like a dam for example. There is no way to examine if the same objective - providing water for drinking and irrigation - can be achieved through more cost effective and efficient methods like smaller dams, check dams, water harvesting and watershed management, localised river linking or revival of dead rivers (as Waterman Rajendra Singh has shown in Rajasthan). A power generation component is often added to the dam to tilt the balance, without provoking independent assessment of power needs or options.
The four-stage environment approval process involves screening, scoping, public consultation and appraisal. Screening is aimed at identifying if a project needs an environment impact assessment (EIA) study; scoping sets up the terms of reference (TOR) for EIA, if needed, before a project is presented for public consultation and then it is approved.
All that the EIA Notification of 2006 (which replaced the 1994 one), that governs the EIA study, seeks by way of alternatives is just two innocuous columns in the application form - which asks about alternative “site” and “technology”. These columns don’t matter because by this time the site is already decided and acquired or in the process of being acquired. Resistance to POSCO’s steel plant could have been avoided by shifting the site by a mere three kilometre south, but that never figured. And there is no reason why a developer will provide a technology option other than his own.
In fact, so unifocal is the government’s approach that when the planning commission sat down to prepare an integrated action plan to counter the Maoist menace, it didn’t bother about options but simply increased fund allocations to the existing schemes.
The EIA study is not even designed to do a cost-benefit analysis of a project. It only seeks and gets fact-sheets of costs and supposed benefits.
Missing big picture
The problem is accentuated by the missing big picture. Arunachal Pradesh is saddled with more than 100 hydel projects; the Western Ghats with numerous mining and thermal power projects and river Bhagirathi faces threat from several dams in Uttarakhand. Environment minister Jairam Ramesh has now sought moratorium on projects in the Western Ghats and Arunachal Pradesh and has scrapped three hydel projects in Uttarakhand to save Bhagirathi - Loharinag Pala et al.
In Arunachal Pradesh, 11 hydel projects (8,200 MW) are proposed in the Lohit river basin, six of which are on the Lohit river alone (within a 86 km stretch). Multiple dams on a single river, or in a river basin, may kill the river system, and all those who survive on it. Therefore, it is prudent to do a comprehensive study of the cumulative impact of the dams “in advance”. In fact this is what the National Environment Appellate Authority (NEAA) suggested in 2005.
The MoEF did accept it and ordered such a study in the Lohit river basin but while approving the Demwe Lower hydroelectric project (1,750 MW) on Lohit river in January this year, it said this project “should not be linked with the completion of the basin studies.” The study then becomes meaningless.
Same is the case with the downstream study. It is restricted to 10 km downstream of a dam at present, even though it affects water flow of the entire stretch downstream. Worse, in the case of the Demwe Lower project, downstream impact only on the stretch between the dam and the powerhouse – just 600 metres – was sought.
Similarly, the Aravali hills are devastated by a large number of small mining projects. Iron ore mines in Bellary and bauxite mining in Andhra Pradesh are causing havoc with the environment there. All this is because mines of less than 25 hectares are ‘exempted’ from MoEF clearances. Thermal power plants of less than 500 MW are also exempted.
Self-certification
The problem is further accentuated by the way the EIA is designed. It is essentially a self-certifying exercise. The promoter is expected to get the study done at his own cost – a clear case of conflict of interest. Even in such sensitive issue as introducing genetically modified (GM) food, all toxicity studies, impact on environment and health, have to be conducted by the one pushing for it – Mahyco in the case of Bt brinjal.
The ostensible purpose of the EIA study is to ensure that the “development options are environmentally and socially sound and sustainable” and to address the issues, if any, at the very stage of planning and designing, but the opposite actually happens.
These issues can be easily addressed through independent evaluation. Various expert bodies of the MoEF that clear EIAs work as its extension, endorsing whatever is submitted by a promoter. They add a few conditions to make it seem objective but these are often meaningless or self-defeating, for example, asking for “impact assessment of impounding of water by construction of the dam on the river on aquatic flora and fauna” while approving the Polavaram project in Andhra Pradesh and giving clearance on the “assurance” that the state government will construct 120 km of embankments on two rivers, Sileru and Sabari, to prevent submergence in Orissa and Chhattisgarh.
A planning commission’s task force asked the government to set up an “independent and statutory body” to evaluate and give clearances to projects in 2006. The report is gathering dust.
Kanchi Kohli of non-government organisation Kalpavriksh says, “The entire process of environment clearance is designed to approve. The conditions are, therefore, to mitigate or justify the clearance.”
Defective assessment
These shortcomings get amplified through “rapid”, “draft” and partial EIAs which are allowed, instead of insisting on a comprehensive, all-season assessment. The logic to allow rapid EIA, as given in the EIA Notification of 1994, is: “As a Comprehensive EIA report will normally take at least one year for its preparation, project proponents may furnish Rapid EIA report to the IAA (impact assessment agency) based on one season data (other than monsoon), for examination of the project. Comprehensive EIA report may be submitted later, if so asked for by the IAA”.
Taking advantage of this, POSCO presented a single-season environment impact study for one-third of a steel plant (4 MT capacity, instead of 12 MT) and a power plant (400 MW), sidestepping a captive port, a township, a big water pipeline project, and road and rail links involved with the mega project. It said only 471 families would be affected as against more than 4,000 families according to the locals. A separate rapid EIA was submitted for the port. On the basis of such EIAs it got approval in 2005.
The EIA Notification of 2006 does not talk about “rapid” EIA, but the old regime endures because it allows the project promoters to set the terms of reference (TOR) for the EIA study and allows it to be the “final” one if MoEF’s expert appraisal committee (EAC) doesn’t finalise it in 60 days.
The Adani group-promoted Waterfront Development Project in Mundra, Gujarat, which involves four ports and an LNG terminal, was allowed a “rapid” EIA and was cleared in 2008 under the 2006 notification.
Neeraj Vagholikar of Kalpavriksh says the real issue is “not insisting on a comprehensive EIA for the big projects”. But the policy flaw remains.
No public participation
The project clearance process may allow “public consultation” but this isn’t same as “public consent”. Moreover, what they get by way of an EIA study is a “draft” one, as per the EIA Notification of 2006. Affected people have no say in the final stage of approval, to which only the project promoter is invited. It works this way: Vedanta’s refinery in Orissa gets approval on wrong information, starts operations in 2007 and completes 60 percent of six-fold expansion when MoEF “discovers” the truth in August 2010 and stops it.
Secondly, there is also a provision “to skip” this consultation altogether on a flimsy ground - if “it is not possible to conduct the public hearing in a manner which will enable the views of the concerned local persons to be freely expressed,” as per EIA Notification of 2006.
The 73rd and 74th constitutional amendments give wide-ranging powers to local self-government bodies like municipalities and panchayats to plan and approve projects in their respective areas. The Forest Rights Act of 2006 and the Panchayats (Extension to the Scheduled Areas) Act of 1996 give overriding powers to tribals and other forest dwellers. These bodies and laws are not part of the approval process. Both the projects of Vedanta and POSCO in Orissa were stopped because of denial of forest rights to the affected families.
The MoEF’s approval process is also completely delinked from land acquisition process if it doesn’t involve forest land. And in case it does, a separate clearance process is followed and a separate department deals with it. There is a disconnect among various departments. As a result Vedanta’s refinery started working, and expanded, without the mining part getting approval.
Blind alleys
All these shortcomings can be overcome if a large number of expert bodies and agencies of the MoEF, set up to recommend a wide range of projects for approval, work in a transparent manner, independently and apply their mind. Apparently, they don’t and that is because they are not even expected to do so.
Vedanta and POSCO both submitted “rapid” and “partial” EIAs, conducted in the monsoon months which is expressly “banned”. Vedanta even presented one which was different from the one presented to the public. Yet, they got clearances.
Himanshu Thakkar, a prominent environment activist, points out that P Abraham, promoter of the Demwe Lower project, was chairman of the very expert appraisal committee (EAC) that actually approved it! He also points out how the expert bodies giving environment and forest clearances act independent of each other even when dealing with the same project. So, projects often start after one set of clearances while the other is pending.
Further, proceedings of the Central Water Commission (CWC) that gives techno-economic clearances to irrigation projects like Polavaram are not subject to public scrutiny.
Given all these, at least an effective and independent monitoring system should be in place. Even that is missing and hence, fact-finding teams are sent selectively; only when protests grow too loud or there are political interests to serve.
What should be done...
* No piecemeal, stand-alone clearance. Project be considered in totality, taking into account overall plan for the geographical region and human and environment cost
* No para-dropping of projects. Participation and approval of local self-government bodies should be mandatory
* Independent national authority to then evaluate and clear projects
* Mandatory disclosure of all MoUs for projects requiring public or private land and national resources
* No conditional clearances if such conditions or impact studies have the potential to alter the project
* Fact-sheets of cost and benefit be replaced with cost-benefit analysis
* No exemptions from MoEF clearance for smaller mines, dams, thermal power plants
* Mandatory downstream and river basin study
* Mandatory comprehensive and final EIA. No rapid or draft EIAs
* Independent and credible body to prepare EIA studies
* Public “consent” be made mandatory
* Independent body to monitor and check compliance
* Accountability and transparency in approval process
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