The majority of an Indian government panel probing the environmental impact of a 12-billion-dollar South Korean steel plant said Monday that clearances for the project should be scrapped.
Steel giant POSCO wants to build the plant in the eastern state of Orissa, in what would be India’s largest foreign investment project since the country launched market reforms in 1991.
Three of the four-member panel cited “many serious lapses and illegalities” in assessing the plant’s environmental impact, including “serious violations” in the public hearing process with many communities being left out.
“The committee therefore strongly recommends that the Environmental Clearances… be immediately revoked,” their report said.
This raises difficult questions. While the panel might indeed be correct in its intentions, what signals do such decisions send about investing in India (or for that matter, any other country that does a similar act)? It should be noted that POSCO signed an MoU for the plant way back in 2005 and I am sure tens of millions of $ would have been spent by the company so far in making progress. I am not supporting the company, perhaps it can afford such costs, and perhaps it is all good for the environment and the people if the plant were not put up, but the investment questions there will many more questions asked by other foreign investors in India investing in similar sectors.