Does impact assessment meet stakeholder expectation: case study of POSCO project in Odisha

ABSTRACT

The USD 12 billion steel project of POSCO in Odisha, India, conceived in 2005, was to be one of the largest investments in the country. But the project could not materialize, and in 2017 POSCO withdrew from the project after a lot of controversies. For this classic example of a lose-lose situation, the role of impact assessment (IA) has not been discussed adequately. Using a single case study method, this paper analyzes various dimensions of IA exercises conducted for the project. These IA exercises failed to notice the complex livelihood systems and potential dissent among the people of the area. Stakeholders’ consultations were weak, IA reports did not highlight the negative impacts, and the potential loss of livelihoods was not noticed. Questions have also been raised on the legitimacy and authenticity of the claims made in these IA studies. However, the role of IA was also found be to be limited and the expectation from IA was also low. This negates the role of an ideal IA that should have been a comprehensive one and should have taken note of issues that are detrimental for the society, and particularly for the project.

KEYWORDS:

• Impact assessment
• stakeholders
• POSCO
• India

1. Background

In 2005 the Government of Odisha, a state located in the eastern part of India, signed a memorandum of understanding (MoU) with the Asian steel giant Pohang Iron and Steel Company (POSCO) to build a USD 12 billion steel project in the state. It was slated to be the largest foreign direct investment in India’s history (POSCO 2006). For a relatively backward state,¹ this was no small deal. However, 12 years later, in 2017, the project could not materialize and POSCO has since withdrawn from the project because of several controversies. A lot has been written about the reasons for the failed initiative in which all the parties involved lost substantial resources. Much of the studies have, however, been on the political dimensions, crony capitalism, and the role of government. The role of impact assessment (IA) studies has not been discussed adequately. It is surprising that the IA exercises failed to foresee the obstacles that led to the fiasco. This paper makes an attempt to understand if the IA played any significant role in that process.

POSCO’s Odisha initiative (henceforth POSCO project) raises some very pertinent questions on the practice and the body of knowledge of impact assessment studies. One expects that the IA exercises should have hinted at the problems that project was likely to face during its implementation. But that did not happen and ultimately the project had to be shelved. Who was responsible for this lapse? Did IA lack tools and techniques to understand such problems? Or did the actors overlook such possibilities? Using the environmental justice framework, this paper attempts to critically analyse the role of IA in the context of the POSCO project.

This paper aims to understand the proceedings of POSCO’s Odisha project, particularly those associated with the impact assessment exercises, and to identify its role in meeting the expectations of various stakeholders. The paper follows a single case study method (Yin 2003) and within the case it used environmental justice framework to understand various dynamics that played important roles in the ultimate result. The paper is based on review of documents associated with the project and available in the public domain. For seeking additional information, interviews with key informants were carried out using a semi-structured questionnaire that included questions on the process of stakeholder consultations in POSCO project, role of IA agencies, IA processes in India, and expectations of various stakeholders. In all 11 key informants were consulted during the interviews (IA professionals-2, activists-3, regulatory officials-2, and academicians-4). The key informants were selected based on the snowball method of sampling. Representative of POSCO could not be consulted, and for POSCO’s point of view the paper depended on published sources, this would remain as a limitation of the paper.

The paper has been organized into six sections: this section provides the rationale of the study, the second section provides a conceptual framework for the paper, the third section describes the important events of the POSCO project, the fourth section provides the highlights of IA reports, the fifth section makes a critical analysis of the IA reports and processes vis-à-vis stakeholders’ expectation, and the last section concludes the findings of the study.

2. Environmental justice framework in addressing stakeholders’ expectations

The focus of the paper is how IA exercises met the stakeholders’ expectations. It may be noted here that stakeholders have varied roles and interests and such differences must be settled before any large project starts. In particular, public participation is an important component of the stakeholder engagement process (Nadeem and Fischer 2011; Hassan, Nahiduzzaman, and Aldosary, 2018). Fairness is one of the principles of public participation. This has been emphasized time and again (Hartley and Wood 2005). However, impact assessment procedures do not always display compliance to natural justice principles (Morrison-Saunders and Early (2008). Given that there are diverse demands from various stakeholders, and this may lead to conflicts, a perception of fairness and justice must prevail in order to take the project ahead. In this context, the environmental justice framework can provide a relevant idea for how stakeholder expectations can be met.

Initially the environmental hazards were considered to be affecting everybody (e.g. the rich as well as the poor) but it was soon realized that there was inequity in getting environmental benefits (Schlosberg 2013). The concept of environmental justice has expanded itself in the recent years ‘from being simply a reflection of social injustice generally to being a statement about the crucial nature of the relationship between environment and the provision of justice itself’ (Schlosberg 2013; p. 51).

While the importance of environmental justice is well understood, a question arises whether adequate tools and techniques are available to ensure this. One way to begin is to assess if the project is going to create inequity particularly in receiving environmental services or being affected negatively. Generally, it has been accepted that environmental justice refers to various aspects such as providing accurate information of the situation, prompt and unbiased hearing, democratic participation, compensation, and solidarity with the victims Capek (1993), fairness in sharing information to all participants, and comprehensive consideration of environmental burden on the residents (Krieg and Faber (2004). However, in the process of reconciling the diverse demands, pluralism builds in and it leads to complexity of environmental assessment, which can be dealt with by identifying and addressing shared values (Cape et al. 2018).

Broadly speaking, the processes of environmental impact assessment (EIA) should be participative and collaborative (Connelly and Richardson (2005). This can be ensured through various mechanisms such as integrating human health into EIA and by engaging the local community, environmental justice can be ensured (Bhatia and Wernham (2008). Thus, two important points come out in this discussion: (i) participation of local community in the IA process and (ii) integrating the various kinds of issues like health and societal aspects with the IA exercise could lead to a better preparedness for environmental justice.

3. Major events of POSCO project

The POSCO Project was formally launched in 2005 when POSCO signed an MoU with the Government of Odisha. It was supposed to be a special economic zone (SEZ) that would primarily focus on export-oriented business. The project was to establish a steel plant that has 12 million ton per annum (MTPA) capacity, a township, a captive port, and captive mines. It was scheduled to be completed in 2010, and it was to use the Finex Process (not the traditionally used blast furnace technology) which was cost-effective (Koo and Davis 2012). But, due to several problems like procedural delays, non-compliance, and protests by communities, land acquisition started only in 2010 when it was supposed to have started operations (POSCO 2013a). The project required about 4000 acres of land, that included forest land and privately owned land. According to a critique of POSCO, by August 2005, several anti-POSCO movement groups and organizations had already been formed (Mandavilli et al. 2010). Several respondents of the study also confirmed that the protests had started from the beginning.

In 2006, the EIA was carried out, and by 2007, public hearing was held and environmental clearances for a minor port and power-cum-steel plant were issued. Clearance for diversion of forest land was granted in December 2009 (MOEF 2011).

In India the process of EIA includes the following steps: first the proposal is moved by the proponent, which includes the basic information of site, locality, and the plants. Then the proponent hires a consultant to conduct the EIA and submits it to the regulatory bodies for environmental clearance. Some of the projects are cleared at state level while others, particularly those having serious environmental implications, are sent to federal government’s Ministry of Environment and Forest (MOEF²). The State Pollution Control Board provides the no-objection certificate if it finds the environmental management plan satisfactory. It also conducts the public hearing and monitors the implementation of environmental management plans.

The process of IA in POSCO project was influenced by the protests. According to a respondent (an activist), none of the teams, including the team conducting EIA, was allowed by the protesters to enter into the core project area (source: personal communication, 12 December 2017). POSCO also admitted that a study on rehabilitation and resettlement, conducted by Tata Institute of Social Sciences (TISS), ‘was interrupted after completed 73% of the investigation due to the residents’ shutting down of the site’ (POSCO 2013a, p. 41).

Meanwhile the anti-POSCO-project agitations had grown significantly. There were allegations of assault on activists (Business and Human Rights Centre, undated) and the MOEF stalled land acquisitions until the project complied with Forest Rights Act (FRA)³ (MoEF 2011). Government of India set up a committee to look into the compliance aspects. It observed that there were regulatory oversights, particularly with regard to clearances that was based on a rapid EIA rather than having a comprehensive EIA (MoEF 2010). Subsequently the Ministry stipulated additional conditions to the original environmental clearance. In 2011, Government of Odisha resumed land acquisition (POSCO 2013a). The environmental activists used every available means to pursue the case. They received phenomenal support from civil society organizations nationally and internationally. They went to various forums including the National Green Tribunal that in 2012 ordered a review of the environmental clearances and suggested that strategic environmental assessment should be conducted (NGT 2012).

In the meantime, the Government of Odisha reduced the size of land allotment to 2700 acres and the capacity of the proposed plant was reduced to 8 MTPA. In 2013, the land acquisition process was resumed and ‘illegal crops within the 2700 acres were removed in July, 2013’ (POSCO 2014, p. 34). While the protests were still going on there was another development; the mines policy of the country changed to auction system. The matter came to a standstill when Government of India’s mining policy [Mines and Mineral (Development and Regulation) Amendment Act, 2016] was amended and POSCO’s position on having a captive mine was modified. POSCO would no longer have captive mines and it would have to go through the auction route for obtaining mining rights. Finally, in 2017 POSCO withdrew from the proposed project. While the protests and land acquisition process were controversial, it cannot be conclusively said that those were the reasons behind POSCO’s withdrawal. The official statements of POSCO indicated that change in mining policy was the final blow because of which it withdrew (POSCO 2016).

4. Impact assessment reports

Two IA reports for the project are available in the public domain:

1. Rapid EIA was conducted by M. N. Dastur & Company (P) Ltd. As mentioned in the report itself, it was based on one season’s data and it was for the first phase of the project i.e. 4 million tonne per annum (MTPA) capacity only.

2. Social Cost Benefit Analysis was undertaken by the National Council of Applied Economic Research (NCAER). This study was not a statutory requirement and the government clearances did not depend on it. (It may be noted here that the term ‘social’ is customarily added to the cost benefit analysis (CBA) in order to accommodate, in addition to the private costs and benefits, social costs and social benefits of the project. Thus, in practice it is nothing but a modified version of economic analysis.)

As the CBA was not a statutory mandate, the EIA became the primary document for any regulatory approval, and thus, the basis of critique in this paper. However, CBA had its own importance as its findings were highlighted by various stakeholders. Apart from the above, reports related to socio-economic assessments (like that of displacement and rehabilitation) were also prepared by Tata Institute of Social Sciences (TISS), Mumbai and Xavier Institute of Management, Bhubaneswar. These were not exactly impact assessment reports as their focus was displacement and rehabilitation. These reports were not available in public domain, hence, limited reference to it has been done in this paper.

4.1. Rapid EIA

This was not a comprehensive EIA. It was called a rapid EIA because it was based on data available for one season only and it did not consider the full impact of the project. The report outlined the probable impacts for the first phase of the steel production unit which was 4 MTPA while the complete project was for 12 MTPA. Appendix I presents the summary of EIA. Some of the contentious findings presented in the report were as follows:

• Upon implementation of the environment management plan (EMP), the project would have a significant positive impact (+3) on the land environment and all the negative impact on water and air quality would be as good as nil. For instance, it was mentioned that work zone air quality would improve from (−3) to zero level and ambient air quality would improve from (−2) to zero level. Here ‘3’ refers to significant impact, ‘2’ refers to moderate impact and ‘1’ refers to marginal impact. ‘+’ and ‘−’ refer to beneficial and adverse impacts respectively (POSCO 2006, p. 6–44). The legend ‘0’ (zero) was not defined but it could be interpreted as no impact.

• The project was supposed to have no impact on terrestrial ecology. In fact, on the implementation of the environment management plan it would have a marginally positive (+1) impact. This was an interesting point because the area had substantial vegetation. According to the rapid EIA report it had a vegetative cover of about 4% (of the 4000-odd acre of land required by the project, i.e. about 160 acres). A huge project of this nature not affecting the local ecology is incomprehensible. Generally, steel plant had significant negative impact on the local environment; Meher (2003) discusses the environmental and ecological impact of Rourkela steel plant on the area). The report further said that it would have moderate adverse effect (−2) on aquatic and marine ecology, but it would be brought down to ‘zero impact’ level after the implementation of EMP (POSCO 2006, p. 6–44).

• The report claimed that displacement of human settlements would have significant adverse effect (−3) by the project, but it would be brought down to ‘0’ (nil impact) level after the implementation of EMP (POSCO 2006, p. 6–44).

The Rapid EIA report made only a passing remark on the importance of beetle leaves (paan) as one of the agents of economic utility. Later, the issue of beetle vines became a contentious point and the basis for the activists’ protest against the POSCO Project (Mandavilli et al. 2010; Tata 2014). The EIA was criticized for its failure to indicate the project’s environmental impact such as drawing of river water that would affect water supply to major cities, negative impact on coastal ecology (MOEF 2010; Balaton-Chrimes 2015). The report also failed to notice the possibility of loss of fish ponds, and other livelihood resources (Asher 2009). This lapse was probably because the team preparing the report did not have an adequate presence the actual project site, according to a respondent (activist), because of people’s resistance (Source: Personal Communications, 12 December 2017; 26 April 2018).

Regulatory decisions based on a rapid EIA were also criticized. A rapid EIA has its limitations. MOEF has noted that a rapid EIA only indicates whether a comprehensive EIA is required or not (http://envfor.nic.in/divisions/iass/eia/Chapter1.htm, 2 May 2018). It is obvious that for a huge project of such importance, a comprehensive EIA would have been appropriate. Even the MOEF committee also found this to be surprising that comprehensive EIA was not sought before regulatory clearance (MOEF 2010). However, later comprehensive EIA was prepared and submitted by POSCO; regarding this the committee had a stark remark:

On a clarification sought by one of the committee members (Dr Suresh), the Director of POSCO (Mr. Kim) confirmed that comprehensive EIA both for steel plant and captive port was completed by July, 2007. The Regional office of MoEF, Bhubaneswar as well as the Orissa Government informed that copies of the comprehensive EIA were delivered by hand only in October 2010 after the clarification from the member of this committee. Submitting such a basic and critical report three years after the clearances is only an empty formality (MOEF 2010, p. 40–41).

Why did the regulatory authorities overlook the critical process? It is not clear from any of the reports. However, some respondents (one academician, one official) of this study viewed that POSCO project was considered as very important one and was negotiated at the highest political level, hence, nobody wanted to create obstacles (source: personal communication, 14 March 2018).

4.2. Cost benefit analysis

The report used the least cost method to calculate the economic impact of the project. The basic objective of the study was to see whether it was worth to produce steel using the Finex Process rather than exporting iron ore. The study found that the project would be beneficial and would provide an economic internal rate of return (EIRR) of 16.6 per cent. It also projected that it would generate about 870,000 man-years of employment, tax revenue of INR 1749.70 billion, and contribute 11.5 per cent to Odisha’s state economy (NCAER 2007).

Mandavilli et al. (2010) strongly criticized the report, particularly on its assumptions and use of multipliers and said that the projected economic benefits of the project were exaggerated. Technically, the report could still be accepted as it used established methods of cost-benefit analysis. But the major contention was that there has been no mention of the issues faced in the locality. The loss of livelihoods for the people (for instance, people depending on the cultivation of beetle vines would lose their livelihood) was not mentioned in the report. It was in no way a field based and localized report. At best it could be considered as an output of library research. A point to be noted here is that as it was going to be an SEZ, most of the produces were supposed to be exported. In such case, the positive impact on the domestic economy would be limited. It was not clarified whether the multiplier was adjusted in the CBA for such changes.

Another contention about the report was the non-disclosure of conflict of interest. The projected benefits were highlighted by POSCO as well as Government of Odisha, but it was not disclosed that POSCO sponsored the study (Jebaraj 2010; Mandavilli et al. 2010; Steel News 2010). It was not clear whether this non-disclosure of conflict of interest was intentional or not. ‘Most probably it was not intentional. But when the critics found it as an omission they made it a point’ (source, personal communication, 9 June 2018), said one (academician) respondent. Further, the figures provided were cumulative in nature. The report never said that the project would create 870,000 jobs. It simply said it would create 870,000 man-years of employment throughout its active life. There is a huge difference between the two expressions, but, according to a respondent (activist), these figures were erroneously used interchangeably in political debates (source: personal communication, 18 April 2018). According to Panda et al. (2008) the project would provide direct employment to about 10,000 people.

4.3. Consultation processes

Earlier it was pointed out that during the EIA and other studies, consultation could not be done to the fullest extent because of people’s resistance. The POSCO project was criticized because public consultations were not done rigorously. The public hearing was held in Kujang, located at 20–25 km away from the project site (Livemint 2007). Due to the resistance of the local community, the public hearing could not be held in the locality from where people had to be displaced. Questions were also raised on the method of public hearing. Mandavilli et al. (2010), ii) say that ‘the public hearing process was vitiated by holding the hearing in an area far from the affected villages as well as by heavy deployment of police and the presence of POSCO officials on the dais.’ Mishra (2007) reported the hearing was inconclusive. In the meeting POSCO was requested to relocate the people at a place located 10 km away from the proposed site. However, POSCO refused this option saying it would be unsuitable and would escalate costs.

In India, public hearing is organized by a state agency (State Pollution Control Board) and hence we cannot say that the IA played weak role. But the EIA findings are shared here. The teams conducting IA exercises did not have adequate presence in the locality of the project and hence the IA report was based on no or limited field observations. Had the reports captured the concerns of all the stakeholders, particularly the protesting people, in a concrete manner, it would have done justice to all the stakeholders.

4.4. Regulatory compliance and IA report

How could the IA processes meet the regulatory requirements despite all these problems? It is clear that on 29 December 2009, the MOEF had given forest clearance. But after criticisms, it put a few more conditions in January 2010. This approach was criticized by the government appointed committee (MOEF 2010). The committee, as stated earlier, also criticized the MOEF for providing the approvals based on the rapid EIA. Thus, it can be concluded that although the project received approvals and clearances, there were obviously some oversights in this process.

5. Stakeholder expectations and the IA reports

5.1. Expectations from IA

In such a context, what would the stakeholders expect from the IA reports? There were three major stakeholders who would accrue direct benefits or loss from the project: POSCO (the proponent), local community, and the government. The proponent was to make a huge investment and the government wanted it for the state’s economic progress. But the local community felt that they were being uprooted and stripped of their livelihoods and resources. Each stakeholder would like its concerns are raised in the IA reports. But that did not happen here. Hardly any negative impact of the project was highlighted.

However, the context of POSCO project must be considered before making any remark on the IA processes. According to a respondent (EIA professional), the project was an a priori decision taken by the government, and initially everybody thought that all regulatory approvals were only formalities. ‘You cannot expect the EIA or any other report saying that it would be a bad idea to implement the project’ (source: personal communication, 4 April 2018). At the same time, a concern arises here. If the proponent had properly been informed about the future risks, would it still have gone ahead? It is common knowledge that the region in which the project was going to be located had always been politically active, had the possibility protests been reported in the EIA and other reports, the regulators could have taken a relatively cautious note, and probably reconciliation could have been done (source: personal communication with an academician, 9 June 2018).

But the question is whether it is the role of the IA agencies to raise such issues like political protests? Can the EIA say that they would report only on the environmental impact of the given task? Why should they look into issues like human rights? According to Morgan (2012, p. 8) EIA practitioners should be sensitive to power relations that influence environmental justice. Marara et al. (2011) says that in order to be effective, an EIA should be contextualized in its social, economic, and political backgrounds. A limited conceptualization of IA’s roles does not gel with the environmental justice framework (Capek 1993) that emphasizes the democratic processes and citizenship rights, human as well as non-human elements of the earth (Scholsberg 2013). Thus, issues like human rights and political influence are well within the scope of assessment by IA agencies. Thus, ideally, the IA reports should have highlighted the concerns of livelihood loss and other negative aspects and could have suggested a way out. It was definitely a lapse on their part to leave the negative issues like loss of livelihoods and protests totally.

5.2. Challenges in meeting stakeholders’ expectation

That said, the challenges behind the problems in POSCO project should also be kept in mind in which the IA was carried out. A lot of things changed between 2006, when the IA exercises were carried out, and 2010, when the land acquisition was halted. One such event was the enactment of the FRA that did not exist when the MoU between POSCO and Government of Odisha was signed. By the time CBA/EIA reports were released, FRA had already been enacted but the detailed rules and protocols of FRA had not yet come out. The FRA brought in a lot of changes in the entitlements of forest dwellers. Earlier, the position of Government of Odisha and POSCO was that the forest lands diverted for the purpose of the industry was owned by the government. However, after the enactment of the FRA, people living in the area could stake claim over the land. Over allegations of regulatory non-compliance, the Government of India appointed a committee, mentioned earlier, to look into the grievances of the people. The committee set up in 2010 criticized the state of affairs at the POSCO Project and asked to relook into the regulatory compliance. If the FRA had not come out, the land acquisition could have been smoother. Thus, the IA exercises and the people conducting had no way to identify the challenges in land acquisition that came out of a regulation that came after they completed their assessment.

A matter of contention was the number of people affected by the POSCO project. The proponent maintained that about 450 families would be evicted, while the protesters put this figure at about 22,000. POSCO refuted such claims ‘According to POSCO’s socio-economic study, if the entire 4,004 Ac(res) of land is taken, about 450 families will be displaced for whom there is the best R&R package from POSCO. It is totally fictitious to say that the project will evict 22,000 people and disrupt the livelihood of another 33,000 people’ (POSCO 2013b). The government appointed committee, however, recognized that the number of evicted families would be higher (718), primarily because of change in population and fragmentation of households. POSCO itself reported that to the committee that 418 people lost 100% of their land and 582 families lost partial land. Further, about 22,000 people resided in the area, hence they would be affected directly or indirectly (MOEF 2010, p. 20). It is obvious that the proponent was not taking the views of changing dynamics and stuck to the initial figures.

Similarly, on the impact of the project on marine ecology the proponent stated that ‘the construction of port will disturb the ecological life is totally incorrect. As per our Marine EIA Report, the construction and the operation of port will not disturb ecological life’ (POSCO 2013b) could be no more than a naïve one. Further, POSCO’s position remained more or less the same during 2006–2013, despite several changes such as enactment of FRA, cost enhancement, as well as change in the people’s expectations. POSCO did not acknowledge these points but remained defensive. Only as late as in 2014 did it officially recognize that the company lacked a proper communication strategy (POSCO 2015). What this means is that there could be questions on how far the proponent (or say any other stakeholder) religiously considers the reports of IA.

Interestingly, while there was criticism of the IA process, it was only a marginal point. According to an EIA professional who was a respondent for this study, proponents hardly listen to the EIA report findings. ‘They are influential people’, said an EIA professional (source: personal communication, 18 April 2018). This statement was not made in the context of the POSCO project, but it indicated the mindset in the overall ecosystem. Why nobody blamed the impact assessment exercises? According to one academician, ‘the IA agencies had a limited role. Nobody expected them to do great jobs. EIA is only a routine matter’ (source: personal communication, 14 April 2018).

While the paper focuses on the loopholes and roles of IA in the POSCO project, in practice not many considered that to be an important one. One view blames it on the ‘failure to build local political consensus on the project, dispute on Government record on the land, and compensation’ (Park 2011, p. 28), POSCO never told that it would withdraw because of the conflict with community. In the 2015 report, it stated that it would decide considering the change in government policy on captive mining (POSCO 2016). Satapathy (2017) says that POSCO’s withdrawal was mainly due to the change in mining policy ‘dashing its hopes of getting an iron ore mine on a preferential basis’.

5.3. Need for integrated impact assessment

All stakeholders would like their concerns find a point in IA reports. Given the divergent expectations, it becomes the responsibility of the independent IA exercises to present the pros and cons of the project most professionally. Rather than sticking to the technical aspects of the project impacts, it should conduct comprehensive and neutral assessments. One way could be to undertake integrated impact assessment. According to one EIA professional even in 2005, there were robust methods of impact assessment to capture the complexities of integrated assessments (source: personal communication, 18 April 2018).

There is no dearth of tools and techniques for integrated impact assessment (Bond et al. 2001; Ziller and Phibbs 2003; Mishra and Saxena 2009). Ravetz (2000) suggested a method of integrated assessment for sustainability appraisal. However, integrated impact assessment is easier said that done and they have their own pros and cons. Integration of different methods can sometimes decrease the effectiveness of each impact assessment and it may not provide a balanced view of different aspects (Tajima and Fischer 2013). There have been evidences that environmental concerns could be downplayed in such assessments in favour of economic and social aspects (Morrison-Saunders and Fischer 2006; Kidd and Fischer 2007). Hence, such assessment must be done cautiously. Ordinarily, the apprehension is that socio-economic aspects are used to dilute the negative environmental affects; but in the case of POSCO project the situation was different. Here issues related to livelihoods were not addressed adequately.

Impact assessment of such large projects is very complex, and it has political, social, environmental, and other implications. This aspect must be taken into account if we want IA to play a pivotal role. Exercises like EIA and CBA cannot be undertaken in isolation from the socio-political context. The latter must at least receive equal treatment to that of technical and financial aspects. Issues like livelihoods and environments are often embedded in the society and politics, and it must be considered by the IA practitioners.

6. Discussion and conclusion

In analysing the role of IA in the POSCO project, three major concerns were raised: One, the IA did not delve deeper into the socio-economic issues like the livelihoods of people, ecology of the area, and air and water quality. Two, the consultative processes followed as part of the regulatory compliances were weak. Three, the whole context was dynamic, and in the aftermath of the IA exercises, policy changes on FRA took place, and under such situations, the findings of IA became irrelevant.

From the point of view of environmental justice framework, it can be observed that the process of IA did not meet the two criteria discussed in Section 2, (i) that it should follow a democratic process, thus respecting every stakeholder’s concerns, and (ii) looking at the impacts on all possible aspects. Solidarity with the victim (the local people losing land and livelihoods) was not ensured. Ultimately all the stakeholders lost – POSCO invested a lot of money with no return, the constant struggle of the local community affected their socio-economic life for more than a decade, and the Government of Odisha lost face in industry (The Telegraph 2017).

The major problem with the present approach is the limited role of IA as practice. In this case study it was found that the role of IA agencies (particularly the agency carrying out the EIA) was limited to the role of a consultant, whose role ended with submission of the report based on the terms of reference. The role of EIA should not be limited to preparing a formal report. It must be associated with the approval process and accountability should be fixed here. Why cannot there be an integrated IA that includes the concerns of all the stakeholders and cutting across the various disciplines of knowledge (namely, environmental, social, and economic aspects). It should be carried out in two phases: the first one may be a rapid EIA or preliminary report so that the proponent can make a decision on whether to go ahead with the project or not. This should be followed by a comprehensive assessment, based on extensive field data collection. This report should become the basis for regulatory approvals and public hearing.

This paper is not about the EIA processes in India as it is based on limited observations of a single case study. However, it still has some implications considering a few past experiences of sub-standard EIA processes in the country. Diduck et al. (2007) found that efforts to garner public participation in project planning and implementation of hydropower projects were not carried out properly in Uttarakhand. Mukherjee (2012) described a number of cases in which the EIA reports were plagiarized. A meta-analysis of public hearings of 100 projects from five sectors in Gujarat showed that those were not effective (Sainath and Rajan 2015). Unlike such scandalous reports, in the POSCO project the IA exercises were genuine, and nobody questioned the authenticity of the report. But the findings were too generic to represent the complex situation and had a few lapses. This kind of approach helped neither the proponent nor for the regulator or the community. It is required that professional bodies of impact assessment should make efforts for capacity building to bring in best practices to India so that the reports and the consultation process reflects the reality.

This paper addresses a few practical difficulties. The EIA policies in India should be reframed to capture the concerns of all stakeholders, particularly those who would be affected by the proposed project. It should mandate application of robust impact assessment tools and techniques looking into social, economic, and environmental impacts of the project in a comprehensive manner. The IA studies should be appropriately field based, localized and specific, rather than being generic and based on secondary literature. The regulators should summarily reject such assessments that do not represent the views of all the stakeholders. Involvement and accountability of EIA professionals should be increased.

The proponent of the project should be cautious enough to communicate the findings at the earliest and be observant to the changing needs. It is also desired that the proponent should make a robust appraisal of the project on the probability of resistance by civil society and political forces, particularly from the point of view of compliance of human rights norms.

Acknowledgements

An earlier version of this paper was presented at the 38^th Annual Conference of International Association for Impact Assessment, ‘Environmental Justice in Societies in Transition’, held during 16–19 May 2018 in Durban, South Africa. The author would like to thank Xavier University, Bhubaneswar for sponsoring the visit of the author for the above presentation. Thanks are also due to Mr. P. K. Jayanthan for copy-editing, Prof Satyendranath Mishra and various anonymous reviewers for their inputs. However, the responsibility of any error lies with the author.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. According to the National Human Development Report, 2001, Odisha ranked 11^th in terms of human development index in the list of 14 major states of India (Planning Commission 2002). Further, in 2004–2005, Odisha had a poverty head count ratio of 46.6% (Panda 2008).

2. India is a federal state and Odisha is one of the 29 states of India. Legislative and regulatory powers are shared by Government of Odisha (and other state governments) and the federal government (Government of India).

3. The FRA is officially known as ‘The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006’.

Appendix I.

Summary of Rapid EIA

Table

Environmental Attributes	Impact on Baseline
	Project without EMP	Project with EMP
I. Physico-Chemical
Land environment (after acquisition)	+2	+3
Surface water resource	0	0
Surface water quality	−2	0
Ground water resource	0	0
Ground water quality	0	0
Creek/Sea water quality	−2	0
Work zone air quality	−3	0
Ambient air quality	−2	0
Ambient noise	0	0
Work zone noise	−2	−1
II. Biological
Terrestrial ecology	0	+1
Aquatic ecology	−2	0
Marine ecology	−2	0
III. Human
Displacement of human settlements	−3	0
Infrastructure	+3	+3
Employment generation	+3	+3
Economy	+3	+3
Regional development	+3	+3
Safety	−2	0
Community health	−2	0
Aesthetics	−1	+1

Legend

1 – Marginal; 2 – Moderate; 3 – Significant; (+) ve – Beneficial; (−) ve – Adverse

(Source: POSCO 2006, p. 6–44; table used verbatim)