Political Environment

State government is in favour of the project and is trying its level best to
thwart all possible opposition to the project. The party in power, the BJD
has even resorted to unethical means to diffuse the intensity of protests
by using local goons and trying to break the unity protesting groups.
Hundreds of false cases have been registered against those protesting and
some have even been arrested. This had a backlash effect and led to the
protesting groups gaining support from other pockets of Orissa and the

country.
Though the protesting groups are ready to have a dialogue but the
government has not responded to their calls. Instead they are trying other

means to pacify the protests.

Local people are against the project because they have a fear of losing
their land without getting any compensation. While the government
maintains its stand that only 438 acres of the required 4000 acres belongs
to the local people, but the situation on the ground says otherwise. Taking
a look into the history of the place it comes into picture that more than
half of the land is being cultivated by the locals for beetle and cashew for
the last 50 years, but they dont have title claims over the land. This
creates a situation where most of the people being displaced for the
project wont be getting any compensation or rehabilitation. The other
reasons for the protesting groups are damage to the environment and

forest which they want to protect.

Differences between the state and the central government is also a major
hurdle. The stand of the central government is not very clear on the issue
of this project. The party which is in power in the centre is the opposition
party in the state, there is a conflict of interest. The Odisha high court
scrapped the state government's recommendation for grant of a
prospecting licence to the company in 2010. Though the Supreme Court
later upheld the Odisha government's decision, it left the issue to be
decided by the Union mines ministry. The Centre sought various
clarifications on the state's recommendation, which the state was not able
to furnish in time. Before the state could satisfy all of the Centre's queries
on mining licence recommendations, the MMDR Amendment Ordinance, in
January this year, made it mandatory for all entities seeking mining leases
to go through the auction route. Again the new government at the centre

has proposed MMDR Amendment Ordinance, 2015, which prescribes

allotment of mining lease on auction basis.

Inconsistency in policies
On environmental clearance, though POSCO had in 2007 received
necessary clearances for its steel plant and captive port, the permission
was subsequently reviewed and withheld over petitions filed by green
activists. The objections mainly pertained to POSCO getting environmental
clearance for four million tonnes of capacity while it intended to set up a
12-million-tonne steel plant. However, after a divided verdict of a threemember panel sent to the site to study the possible environment impact of
the project, Jairam Ramesh, then the Union environment & forests
minister, gave a conditional clearance in 2011. This was again suspended
by the National Green Tribunal when some activists contested the issue.
However, the tribunal lifted the restrictions after an assurance from the

company that the conditions imposed by the ministry would be fulfilled.

Land acquisition and environmental clearances are among the major
hurdles. There has been internal rift in the ruling party which led to a halt
in the process of land acquisition for nearly seven years. Even the Chief
Minister has refrained from supporting the project in public as a result

government has not pushed through the process of land acquisition.

The MoU is tilted highly in favour of POSCO, both in economic terms as

well as in terms of overlooking environmental issues

Groups opposing the project have political affiliations making things more
complicated. There are three prominent groups which oppose the plant.
First is PPSS, which has the backing of CPI and other left parties. The
second one is Bhita Mati Bachao Andolan, which is dominated by the
Congress party. And the third one is Nav Nirmaan Samiti, spearheaded by
the Rastriya Yuva Sangathan. All the groups have different ideologies and

different political agenda. Which makes the situation more complicated.

Current Scenario
The government in centre has its focus on attracting FDI and various
investor friendly policies have been framed. The measures being taken by
the government to benefit the industry are:
A single e-window
In line with the national e-governance plan, the Government plans to
introduce an easy and transparent system to submit and track the status

of applications for grants of resources or clearances from multiple

governmental agencies through a single access point.
Creation of SPV
Conflicting stakeholder interests are leading to project delays. The
Government plans to set up a new institution that will encourage the
collaboration of various stakeholders to make informed decisions on site
selection for improved implementation of projects.