Villagers & Greenpeace vs Essar Energy in India

Tuesday, 15 July, 2014

An article in UK paper The Observer, via Mines and Communities, tells us how the Indian government faces a “crucial” test of its relationship with business over plans to let British-registered Essar Energy cut down a forest and replace it with an open cast coalmine.

Essar and its partner, the Hindalco company, secured permission for the project following a lobbying campaign targeting senior members of India’s previous government, recently ousted in a general election. Their basic argument: the coal is needed to fuel a power station and aluminium smelting unit crucial for the country's economic development. The deal is one of several mining rights agreements that are now the subject of a corruption investigation, which played a part in bringing own the previous government. 

Opposition comes from the many who rely on the forest for their livelihoods, environmental campaigners, and tribal communities with legal rights to use the forest. Greenpeace claims that the mine would mean “the felling of more than five million trees, affecting the livelihoods of as many as 50,000 people, with at least two villages being razed.” 

A similar conflict between Vedanta and villagers in Orissa over bauxite  ended in victory for the villagers; but India’s new government has promised to make it “easier to do business” in India, and a report to newly-elected prime minister Narendra Modi from India's Intelligence Bureau labels Greenpeace as "a threat to national economic security”. So things may be different this time round.

More in the full Observer article here, including:

- History of the original deal
- Detail on the lobbying campaign
- The economic arguments backing it up
- The potential repercussions of allowing the project to go ahead
- “Fait accompli has become far too common in forest and environmental clearances".
- The current dispute and linked allegations of fraud, including faked signatures on local consent forms
- Some detail on recent issues surrounding Essar, including the company’s delisting from the LSE and related controversy concerning alleged undervaluation.