POSCO in Orissa – A Case of Global Masters against Local Preys

By Saswat Pattanayak

Pohang Steel Company (POSCO) operates two of the world’s leading steel projects–the Pohang and Gwangyang works, and conducts business in over 60 countries around the globe.

Since last couple of years, POSCO has been setting goals for the economically backward and minerals-rich Orissa. If Vedanta promises the biggest university in the world, POSCO promises the largest steel plant, and the biggest foreign direct investment in history (Rs 51,000 crore). After signing a Memorandum of Understanding with POSCO, Orissa-a largely obscured cultural site for Hindu pilgrims, has now found the biggest reserved location on World Exploitation Map.

According to the MoU signed between the state government and the Korean corporate giant, POSCO will build a 3 million tonne capacity steel plant, blast furnace or Finex route, during the first phase in Paradeep, Orissa between 2007 and 2010, and will expand the final production volume to 12 million tons. The investment proposed is to the tune of US$12 billion, including an initial investment of US$ 3 billion during the first phase, making it the largest steel project to take place in India.

The Orissa government will in turn also grant POSCO mining lease rights for 30 years that will ensure a supply of 600 million tons of iron ore to POSCO, besides granting it permission to export another 400 million tons through its mining partner in the project, BHP Billiton of Australia.

The technical catch

Indian politics does not by itself reach heights of fraudulence. It is enriched by its nexus with international military powers, business houses and elite bureaucracy. In case of POSCO, it is a wise combination of three. South Korea’s allegiance to American military-industrial complex is well-known. Indian central government preferring to conduct business worth billions with this camp tells quite a few things about changing preferences on national security issues. In addition, there is no business like selling off one’s own lands. And ironically, this is the area where the national government of India has allowed for 100 percent foreign investment.

It primarily means that apart from the private properties that the rich landlord class of India has harbored, the vast land masses in forest and rural areas managed and cared for by the poor in a country that still “lives in villages” is always open for transactions. For the rich class in India, the Constitution provides for rights to their private properties. For the poor, the same Constitution is used by the cunning ruling class to take away every human rights to the communal properties.

Communal properties, like human emotions, are supposed to be priceless. They are not owned, they are guarded. And those that safeguard the communal properties should logically be most loved and cared for. But in a society oppressed under individualistic norms, neither human values nor communal properties are taken care of in the interest of the humanity. Consequently, every bit of natural splendors is put on sale to the favored bidders of the class of privately propertied. It is the rich parasites of India who crave for not just the protection of their own properties but also for making good in dealing with communal properties that they historically have forced the poor to safeguard.

In the current neoliberal schemes of corporate expansions of profiteering sweatshop sectors, “investment” is the civilized term for feudal gains out of enslaved labors of landless guardians.

To the blind profiteers, it does not matter if the inhabitants refuse to part with their lands. It does not even matter if what they promise to the people in lieu of realizing their fast money-making opportunities is unkept. Not just the promises of compensations, but also promises of business goals themselves are kept aside as long as the loot is achieved in a shorter frame.

POSCO is yet another example of such fraud that satisfies the hunger of the government officials and business houses in the short run, and loses sight of the goals no sooner than the booty is collected in desired proportion.

POSCO has sought to ship 400 million tons of iron ore over a period of 30 years out of a captive iron ore mine capable of supplying 600 million tons of ore. And this unacceptable absurdity prevails even in the face of Indian Bureau of Mines estimates which depicts it as impractical proposition. India’s iron ore reserves stand at 17,712.4 million tons, which include reserves of Hematite iron ore at 12,317.2 million tons and Magnetite iron ore at 5,395.2 million tons. The total production of iron ore in a fiscal year is around 120 million tones. Out of this, the indigenous consumption is about 60 million tones. The rest, which is used for purpose of exports is about 60 million tons.

It is extremely doubtful that a 30-year sustainability can be achieved out of such projected statistics for POSCO, even if one ignores the fact that local consumption of 200 million tones for 30 years is way shorter than the real market demands in the country today. At the same time, out of the uncommitted iron ore reserves of 2 billion tones that are estimated to be available in Orissa, 1.7 billion tones would be already consumed if the 36 MoUs signed with the Orissa Government are realized. The various MoUs account for 34 million tons of new steel capacity and eventually they will leave only 300 million tons for the POSCO project. Hence, even on the paper, such deals are blatantly shady. With 300 million tons availability, the state government has signed up to supply 600 million tons for POSCO.

POSCO is imagined to be exchanging 30 per cent of the 600 mt ore with iron ore of higher quality by exporting it. Interestingly enough, the company is not expected to be spending anything, since POSCO will not purchase iron ore from Orissa. POSCO has been given mining lease where it will take away iron ore by just paying royalty. Since the existing market rate for one tonne of iron ore ranges from Rs 2000 to Rs 26,000, and POSCO is supposed to take away additional 400 million tons of iron ore, the company will be taking out of Orissa 1000 million tons of iron ore. Even at the manipulated figure of 600 mt (instead of 1000mt), POSCO is slated to take away iron ore worth more than Rs 10 lakh crore. At the minimum price (@ Rs 2000), POSCO will make Rs 1,20,000 crore, and after extraction costs, the net profit will be at least Rs 96,000 crore.

It’s a quick-rich trumpet that merely blows about the capacity of 12 million tons per annum making the project not only the biggest in India but one of the biggest in the world. But before we embark upon realizing the 30-year dream of POSCO, we need to take into consideration the immediate needs of the millions of poor still languishing in Orissa.

Just as the blueprint for corporate success may be invalidated in view of statistical impossibilities, the promises for social upliftment are also as bogus as they come. Whereas even most mainstream media coverages acknowledge that at least 20,000 houses will have to be displaced, POSCO on its official website claims the following: “Interestingly, the topographic features like the soil and vegetation of Pohang (Korea) and Paradip (Orissa) are very comparable. The Pohang project was successfully able to rehabilitate 67,000 residents from the project site; this tremendous experience will be replicated in Orissa as well. The site near Paradip is sandy like Pohang, Korea. It also has stretches of forest like Pohang; the latest estimate says that about 2,000 people of 400 households have to be relocated from the site for the Orissa project whereas about 67,000 residents were rehabilitated for the project site in Pohang.”

Drawing some grossly (and childishly) ambiguous parallels between Pohang and Paradip, the company lies through its tooth about the number of people going to be affected. First of all, households in the projected sites do not have nuclear families. Secondly, the number 400 is astoundingly rubbish. If the company can lay the foundation of lies on its purported victims, one can imagine the extent of manipulations it can resort to in order to maximize profits.

Even before the project has begun, many people have started fleeing from the area in search of livelihood. In a Times of India report headlined “Clashes over POSCO trigger migration in Orissa” , it is informed even by an organization which supports the plant that, “At least 500 people from the affected villages have migrated over three months either to other states such as Maharashtra, Andhra Pradesh and Punjab or to other districts in Orissa in search of livelihood.” That, a company of such international stature even can afford to ignore the actual number of people who are going to be affected, tells quite much about the things yet to unfold.

And this is not even the beginning of the ordeal for the local poor. Some can of course migrate to other states once they know in advance that the land-grabbers are approaching. But the majority of potential victims are yet clueless. This is because, as of June of 2007, the Korean firm had acquired only 1,135 acres of land out of total 4,000 acres it requires for the project. So whose turn is it going to be next in both the plant site and the mining region? And what options are there for the people? To declare themselves as immigrants in their own lands or just displaced (to homelessness)?

What needs to be debated?

POSCO issue has generated lots of debates. On the face of it most engaged in the discussions are either heartily welcoming of it as a panacea, or are surprised by the manner it has been able to hoodwink the people. Of course those that consider it to be a cure-all, have a stake in the culminated public perception that private capital is after all the way to go.

But what we need to deconstruct are the larger views held by those that oppose POSCO. Why a state government should purchase land for private concerns has surprised many. Bimal Jalan , a current Member of Parliament and formerly Governor of Reserve Bank of India says in an email response: “So far as land acquisition is concerned, it is not desirable for a state government to get directly involved in the purchase of land for a private company-unless there is an overwhelming public interest in doing so.”

Such a view assumes, first that it is alright for the state to be a property pimp for private profiteers with certain conditions. Naturally such conditions keep changing based on who decides what is in the public interest. Ironically the most people who decide the “public interest” are the same bunch of state bureaucrats, and hence it is only a matter of their differential preferences over the company to which they intend to hand over the land, than any principled opposition against mass subjugation. Secondly, Jalan’s comments are merely normative and they do not endorse a plan of action, something which none of the political parties are really doing anything about today in India.

The irony of POSCO crisis is that it has been boiled down into a moral concern. Either one is ethically opposed to it with a disdain, or looking forward to it as a magic potion. The reality is this crisis was long time coming and it must be utilized as a historical unfolding that requires critical attention. What is meant by this is that terms such as FDI, SEZ, etc., are merely coinages to grant legitimacy to the intent of the capitalists, than to acknowledge these as tools of the haves-class to wage war against the landless.

Shailesh Gandhi, leading RTI activist while vehemently opposing POSCO offers quite a few sound arguments: “The top priority of India must be provision of livelihood, and if any concessions have to be given, they should be linked to livelihood generation. Instead large businesses are being given great advantages, solely on the ground of large capital and the equity market is the major criterion of health of the economy after GDP.” Here, the assumption is that India is indeed a socialist economy that needs to have its priorities straight to cater to the interest of the “livelihood generation”.

One of the basic problems, then lies with the manner in which we perceive the Indian nation. Most liberal voices indeed still maintain the primary preposition that the state works for the people. Starting from such a hypothesis, they offer various solutions as regards to what subsequently then, the state should do in order to benefit the larger mass.

Absent from the entire equation of romanticized version of state patriotism is the real question of political economy. This is no hidden knowledge that after the departure of the British, the Indian state has consistently worked for the interest of the rich class that in its turn promoted the ruling elites. For more than four decades, the state served the interests of the propertied class in every way possible while etching out half-hearted five-year plans that remained largely devoid of sensible implementations. The stress on agrarian economy as a primary sector was also conducted to maintain the economic disparities, not to industrialize the needs of the people on their own lands. When the time came for state assistance to industrialize sectors, then domestic capitalist classes were given free hand to choose and create industries on their own terms. As a result, the houses of Tatas, Birlas, Dalmiyas, Singhanias, Thappars, Ambanis etc increased their shares on public lands.

In the early 90’s what transpired was nothing groundbreaking, and yet the era of liberalization or “free market” in India was hailed as though it was a break from the tradition. There were celebrations over the end of what one called the “license raj”. Manmohan Singh was hailed as some architect of this new economy. And the non-Congress parties complimented Singh on this bold step that was perceived to be a break from Congress tradition.

The reality is Singh had merely continued the tradition of the ruling class interests of the country. The reason why even the BJP and its likes of right wing interests did not have much issues with liberalization was that they were in fact waiting for this to happen. Indeed, one might say that BJP was a creation of the liberalization process. It was only when the domestic capitalist classes of India decided to expand their business interests globally to earn profits in international currency, that the ‘license raj’ (which was so far maintained to strengthen the private business interest nationally) posed as a stumbling block.

And lo and behold! With the advent of MacMohan (pun intended!) policies, the private business concerns in India went up for celebrations; they were able to plant a bunch of bribe-seeking politicians (as colorfully illustrated by Tehelka, etc.) to do what they were best at doing: sell off the nationalized industries at dirt cheap prices to the capitalistic combines.

And they offered a sophisticated name to manipulate popular confidence in such hideous transactions: Disinvestment (and even established a ministry after such a name). Just as “Foreign Direct Investment” had become an accepted terminology, instead of calling it “Imperialistic Interests”, likewise “Disinvestment” became legitimized which should have been termed “Loot-Raj” for that is exactly what was witnessed following such a political action.

The primary motive behind loot-raj was of course to strengthen the imperialistic interests. In the nicety of “swim together, sink together”, the coalition of capitalistic class members was a necessity to fulfill the works they had set out to perform.

It would be extremely naïve at this point or any other to either be hopeful of the Indian state administration or their capitalistic partners, both at home and abroad, to either concede to popular demands or to look after the welfare of the people.

Indeed, it is stupid at the best, and reactionary at the worst to expect that things will change through requests, forums, petitions, and any sort of addressing to the India-POSCO combines. At the best they should be lauded for what they have set out to do, that is, carrying out the task of fulfilling their class interests.

Some friends of the progressive forces have raised the issue of “compensation for rehabilitation of displaced people”. This is again unwarranted because by framing the phrase thus, we tend to really legitimize a few things: we end up assuming that people are truly displaced, that they are really in need of rehabilitation, and that higher compensation should prove useful.

This is an extremely dangerous approach that will merely work to pacify local agitation among people whereas the need is to organize workers movement world over. Private capital such as POSCO’s always begins from a gaining ground. That is to say, on the negotiation table, POSCO will always emerge the winner. There is no telling why they will be in a position to increase the compensation amount for people. Many political parties that are opposing POSCO, chiefly the left parties in India, are demanding higher compensations, than actually opposing the political system that has given rise to such a crisis. In response, POSCO with its massive funds has not only opened local offices in Kujang, it has also created an Oriya website to pacify the people and through its excellent public relations skills it has been able to partially convince the local people that its compensation package is the best.

Compensations are issues of consequences, not of cause. These are consequences within the capitalistic ruling terminology. Just as “charity” is. By such terms it is denoted that the rich can keep the poor pacified by throwing bread crumbs at them and getting rid of their own guilt (if any) or getting absolved of their crimes. A renowned Columbia University Professor of Economics and Law Jagdish Bhagwati suggests that:

“I would encourage the foreign multinationals to add to the benefits that their commercial activity must generally speaking bring to Orissa by also doing what is called Corporate Social Responsibility. It has now become a tradition for a couple of decades for the big firms to do something altruistic for the community in which they are situated. For example, building a playground, giving funds to local primary schools for supplies, aiding the destitute etc. Orissa authorities can surely suggest to the multinationals to do this, allowing them the choice of programs that they would like to support. Many of us individuals do the same, of course, and I call it ISR, Individual Social Responsibility. Thus, speaking for myself, I believe that my life’s work as a Professor has been enormously helpful to the countless students I have trained. But I still do ISR, giving away large sums of money to the local church near Columbia University to support its program on helping the homeless rehabilitate themselves, and to organizations such as CRY in India.”

Such pathological approach to social development has at its roots two assumptions: one, that everything is alright at the level of system status quo, meaning that it is not the political economic system that needs to be the issue, rather the trickling consequences that need to be taken care of, and two, those that are wronged need only to be rehabilitated with charity than be organized to take equal claims.

Of course any charity money such as “ISR” as described by Bhagwati are mere leftover funds and hence they are from the outset not meant to empower the dispossessed. And no empowerment deals with power issues where it is reduced to an economic dependence or slavery. Churches and NGOs do their great bit in caging peoples’ aspirations to the basic minimum and such CSRs or ISRs are the primary factors encouraging such social mishaps.

POSCO has also heeded to calls from the elite intellectuals, the famous NRI propertied classes of professors and scientists in the Europe and the US, who stand to gain from an India modeled after the countries where they currently live and fantasize about capitalism as the solution. The Columbia professor in question should have only looked at the Bronx and Brooklyn poverty and Manhattan and Queens homelessness to offer solutions other than charity in the same city he “trains” countless students in.

The path of neoliberalism is strewn with surreptitious moves in action and words. In action, it aims to allow only a handful members of the rich class to dominate over the mass of landless while colluding with their active collaborators drawn from the sections of people it would declare “upper middle class”. In words, neoliberalism is depicted by fraudulent and cunning lexicon of comforting terms that are projected as unalterable normatives. Little wonder that words such as “charity” are associated with the rich class as a greatly generous act, and words such as beggary or stealing associated with the poor mass are denounced as lowly acts, without deconstructing that if not for formation of a class of charity actors, there would have been no scope for beggars and “thieves”.

Instead of conscious efforts to study the genealogy of private properties that inevitably will, shall and should give rise to the crisis of capitalism where poor people are forced to choose between money in charities or jail terms, the sad and effete intellectuals that capitalism produces aplenty are concerned about solving the problems that POSCOs of the world face from the disgruntled masses.

Reuters provide its typical coverage on such an issue. In an article headlined, “Delays raise cost of POSCO’s Orissa steel plant” , it sympathizes with the losses that POSCO has to bear due to people’s unrest in the region. In the typical fashion characteristic of corporate media, the story interviews the POSCO bosses (in this case, POSCO-India’s chairman and managing director Soungsik Cho), not the locals.

The displacement of more than 20,000 people does not become part of the headlines even in the most sensational of media reports. Even the fact that those workers who grow betel vines on state owned forest land would not be eligible for any financial package, does not raise enough eyebrows. Moreover the most necessary debate about financial packages themselves goes amiss from larger discourse.

Cultural Strategies of Class Society

Whereas the urban, upper class culture understands the language of success, achievement, media coverage, celebrity status, Americanization, globalization, or even nationalistic pride, there are uniquely guarded cultural traits among the indigenous peoples everywhere as well. The majority of people dwelling in the forest regions are intelligent, but illiterate, hardworking but unsuccessful, loyal but candidly honest as well. As a result, although they are able to carve out lives in the worst of weather, withstanding the natural onslaughts without regular assistance of the state, build their own homes without qualifying to receive bank loans, they are also almost usually straightforward in their dissent, vocal in protests and possessive when it comes to the rivers, and lands.

The corporate culture of urban India has similar socio-cultural backgrounds as that of their Korean counterparts. It is not surprising that the agony of combating conflicts raised by the lowbrow masses becomes equally intolerable to the capitalist fraternity. The crucial difference that lies between the poor and “backward” rural Orissa population, and the ambitious upper middle class Indians and Koreans is founded on economy, but is consolidated on cultural givens perpetuated by their respective class characters.

The problem would have perhaps been much less or perhaps grown more desirably complicated, had the have-nots class been deciding what would hold good for the haves-class. For example, if the victims of POSCO would have to prescribe what would be better for the development of the world, they could start with advocating for better irrigation projects, small scale village cooperatives, and a ban on high-rises (to prevent unauthorized use of groundwater). There would always be shades of regressive and progressive thoughts when such idea would be entertained. Some villagers would indeed insist on reinforcing superstitions-even as most are merely based on the capitalist-sexist order of a propertied patriarchy.

However, the reality is the voices from the forests are choked by the mainstream media. With the media following their internal rules of thumb when it comes to define the legitimate sources for airing opinions (bureaucrats, business authorities), and they forming the larger framework for what is considered to be commonsense knowledge today, it is but natural that the struggle is entirely lopsided in favor of the educated opportunists.

In POSCO, it is still a ‘Heads I Win, Tails You Lose’ situation for the combine of ruling politicians, parasitical bureaucrats and the greedy capitalists. If the villagers don’t cooperate, they will continue to face the wrath of the state. And now that they have displayed disdain against the local police who serve as custodian of capitalistic interests, the situation is merely going to be worse for the dissenting people. If they succeed at preventing the lands from being exploited, it is they and their family members who must endure the violence on their dignity for generations to come. And if they allow for the state to hoodwink them off their right to land, they will naturally be shoved to obscurity after some bundles of cash are thrown at them.

Those that advocate compensation theory for the displaced naturally assume that money holds greater value in society than human dignity. This is not entirely dramatic, since this holds true for many upper class people. But to conclude that the same notions of cut-throat competitiveness and zeal to walk upon corpses to climb power ladders are inherent with every villager is a dangerous presumption.

And in the maddening race to justify such presumptions as rules that can be generalized on behalf of the humanity, the first casualty/victim of inhuman greed often is the nature herself. Environmental concerns are relegated to backstage entirely by the same consciousness that denies Darwin and Global Warming. As a result, the long standing battle between the people out to protect their land, forest and river and the antagonized business class gets to the next level. Resorting to corruption of mind and morals, the rich class gets the various environmental boards to work for it.

No wonder, the State Pollution Control Board at Bhubaneswar even went ahead and gave clean chit to POSCO, much to the ire of the protesters. The protestors under the banner of a voluntary organization, Navnirmanamiti, had been vehemently opposing the issuance of a No Objection Certificate (NOC). “We are opposing the issuance of the NOC to POSCO by the State Pollution Control Board. We also want to know, on what basis the public hearing on the issue was held, as majority of the people who will be affected by the project were not present during the hearing,” said Akshya Kumar, convener of a voluntary organization to the local media.

Rich get richer as poor state becomes poorer

Amidst the growing presence of POSCO, we must not lose focus of the great progress that people have been making in opposition to the global monster. Protests against POSCO have reached significant scales and it has rendered the state government entirely helpless. Not wanting to repeat the Kalinga Nagar massacres, the government has instead resorted to the trickery that modern day democracies are famous for. Since the people could not be convinced to give up their lands, the Naveen Patnaik regime has offered 3500 acre of government land to POSCO just adjacent to the farm-lands of the threatened cultivators in a bid to compel them to sell away their rights to POSCO, else to face greater crisis. Bigger damages are inevitable since industrial wastes would not let the farmers live in peace in the same locality.

In a micro level study by Dr. M.Mishra, titled, “Health Cost of Industrial Pollution in Angul-Talcher Industrial Area in Orissa, India” , it was found that “economy forces change on the environment, which in turn reacts back forcing unforeseen changes on the economy”, leading to people of Angul-Talcher sustaining a total health damage of Rs.1775.48 millions, per annum on an average.

Although the people bear the brunt of ecological disturbances, POSCO does not even pay its costs. POSCO plant won’t have to worry about electricity or water, because it will be given the facilities by the state. It has already been authorized to produce electricity out of coal mines that it will be provided with; meaning it will not be paying for the coal. Even without a SEZ status, POSCO has been given enough leverages, also on the front of water. No estimates have been conducted as to the amount of water that will be utilized and of its source, in a drought-ridden state. Now that SEZ status is part of the MoU, naturally enough, POSCO will evade all the taxes even while exploiting the natural resources preserved so far by the population it aims to displace.

The Left front has opposed POSCO so far in as symbolic terms as they go. Only after the cat has spilled the milk, the tears have started flowing in. Prakash Karat said to The Hindu that, “We are not against FDI in the mining sector. But the country’s mineral policy is faulty as it allows loot of our mineral wealth by foreign companies. Unless we challenge the country’s mineral policy, we cannot fight the POSCO deal.” So the official Left is not indeed opposed to Imperialism in practice, only that they want it in moderation. Such imbecile logic can only held in jest, not in contempt. The questions being asked in relation to POSCO are still industry-defined, not people-driven.

When it comes to people, questions are being asked related to the number of jobs that will be generated. As misleading the numbers can be, the neoliberal promoters always champion some or the other numerical value to put forward their advocacy. In this case, the talks of annual growth rates will come later perhaps, for now POSCO and Naveen Patnaik administration claim they will be providing direct jobs to 13,000 people, and 35,000 will get indirectly benefited. The quality of jobs are not discussed anywhere, for a state which is identified by its seasonal and disguised unemployment rates. Of course all these numbers include the daily wage laborers, the carpenters and tea-stall boys. Likewise another figure doing the rounds is how the state will gain Rs 22,500 crore in 30 years time and the central government making Rs 89,000 crores in that time period. This amounts to a total Rs 1,11,500 crores for 30 years. Of course this so-called net gain will entirely be used up in the process of granting of SEZ status to POSCO. And all this much ado for nothing is going to be in contrast to the Rs 10,00,000 crores worth of iron ore that Orissa will be giving away to POSCO, not to mention more than 6,000 acres of land, complimentary water, electricity, roads and railways.

Orissa is yet again getting prepared to be massively exploited. But that is just the beginning of the ordeal. What remains to be seen is the extent to which imperialistic designs would continue to make inroads by either taking over, or giving cover to the domestic business partners in areas where the masses are likely to be perished under dual oppression.

(Originally published in Radical Notes)

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