Sterlite in trouble

The Tamil Nadu Pollution Control Board orders the closure of its copper smelter unit in Tuticorin even as the Supreme Court stays a 2010 High Court order to close down the plant.

The Sterlite copper plant in Tuticorin.

STERLITE Industries India Limited (SIIL), the principal subsidiary of the United Kingdom-based mining giant Vedanta Resources plc and India’s largest diversified metals and mining company, is once again in the news for all the wrong reasons.

Operations at its copper smelter unit in Tuticorin, Tamil Nadu, came to a halt on March 30 following an order of the Tamil Nadu Pollution Control Board (TNPCB), which was issued a week after an alleged “high-volume release” of sulphur dioxide from the plant, located in the SIPCOT complex, caused health problems to people residing in and around the port town. Power supply to the company was disconnected.

The People’s Struggle Committee Against Sterlite welcomed the TNPCB order against the “noxious industry” and demanded that it should not be allowed to resume operations. Environmental activists said government’s action was necessary to safeguard the globally significant and ecologically sensitive Gulf of Mannar biosphere reserve in the region.

Even as the demand for the closure of the copper smelter gained momentum, District Collector Ashish Kumar indicated to the media on April 1 that the district administration was contemplating stringent action against the unit.

Sterlite suffered further humiliation when the Supreme Court on April 2 slapped a Rs.100-crore penalty on the company for the damage it caused to the environment between 1997 and 2012 and for running the copper smelter for a fairly long period without a valid renewal permit. The court directed the company to deposit the amount with the Collector within three months. It said the money should be used for improving the environment in the vicinity of the plant.

Although the Supreme Court Bench comprising Justices A.K. Patnaik and H.L. Gokhale set aside the Madras High Court’s 2010 order to close down the plant, it made it clear that its judgment would not come in the way of the TNPCB’s order, including the one directing the closure of the plant to protect the environment in accordance with the law.

While fixing the penalty, the apex court cited the observation made by a Constitution Bench in the M.C. Mehta and Another vs Union of India and others [(1987) 1 SCC 395] case that the “quantum of compensation must be correlated to the magnitude and capacity of the enterprise because it must have a deterrent effect”. In this context, it also referred to the Annual Report-2011 of SIIL, which spoke of the financial performance of its copper project. The report had put the company’s profit before depreciation, interest and taxes for 2010-11 at Rs.1,043 crore, which was 40 per cent higher than the PBDIT of Rs.744 crore earned during 2009-10.

Considering its “magnitude, capacity and prosperity”, “we are of the view the appellant company [Sterlite] should be held liable for a compensation of Rs.100 crore… and according to us, any less amount would not have the desired deterrent effect” on it, the Supreme Court observed.

On April 1, SIIL moved a petition before the National Green Tribunal’s (NGT) Southern Bench challenging the TNPCB’s order. The company said the order to close down the copper smelter and the interruption of power supply were in “gross violation of natural justice” and made “in unseemly haste”. It argued that the Tuticorin plant met more than 55 per cent of India’s requirement of copper and that its workforce would be left without remuneration if the unit remained closed. On April 9, the NGT allowed Marumalarchi Dravida Munnetra Kazhagam (MDMK) general secretary Vaiko, the environmentalist Fatima Babu, and counsel for the National Trust for Clean Environment to implead themselves in the case.

The TNPCB, in its counter-affidavit, made it clear that its direction to close down the unit was made on the basis of more than one instance of emission of sulphur dioxide in excess of the permitted limit. It also submitted that the Sterlite plant was not fit for operation and should not be permitted to resume work in view of numerous incidents of excessive emissions of the toxic gas. “If the plant commences operations, irreparable injury and hardship will be caused to the public, as there is imminent threat and danger of a chemical disaster,” the TNPCB’s Member-Secretary said.

On April 8, a dawn-to-dusk bandh was observed in Tuticorin demanding permanent closure of the Sterlite unit. The protest was sponsored by 60 organisations, including political parties, fishermen’s unions, traders’ associations and non-governmental organisations (NGOs).

Giving a detailed account of the circumstances that necessitated the closure of the Sterlite plant, the Collector told Frontline that the district authorities had received telephone calls from the local residents right from 7 a.m. on March 23 complaining of severe irritation and suffocation. He said he too felt the impact of the emission. It was found that some of the affected persons were treated as outpatients in some private hospitals. Officials, including the Revenue Divisional Officer (RDO), the Deputy Director (Health Services) and the District Environment Engineer of the TNPCB were instructed to visit the affected areas, including Anna Nagar, Bryant Nagar, West Great Cotton Road and the central market area, to gather first-hand information about the toxic emission. The district administration received 12 complaints from the public and three petitions from the associations about the incident.

A team was sent to the copper smelter plant. During the course of its investigation, it was found that one of the sensors located near the Sterlite unit had recorded a high concentration of sulphur dioxide in the ambient air, he said. Though it was found prima facie that Sterlite was the villain of the piece, the Collector called an emergency meeting of the officials concerned to check if the emissions could be from any other source.

The next day, the TNPCB’s Member-Secretary visited the Sterlite plant and carried out a thorough inspection. It was established through the chimney recordings that the sulphur dioxide emission was about 2,950 milligrams per cubic metre against the permitted level of 1,250 mg/c³, Ashish Kumar said. The RDO served notice on Sterlite under Section 133 of the Code of Criminal Procedure (conditional order for removal of nuisance).

Many residents of Tuticorin town and people living in adjacent villages suspected that the emissions were from the Sterlite plant. J. Balakumar (name changed), who runs a petty shop at Pudurpandiapuram, said the release of sulphur dioxide from the plant between 4 a.m. and 6 a.m. every day was a routine affair, but the emission on March 23 was on an unprecedented scale.

Groundwater in villages such as Therku Veerapandiapuram, Kayaloorani, Ayyalurutti, Meelavittan and Pandarampatti located around the smelter plant is highly polluted. Skin diseases and respiratory problems were not uncommon in these villages, Balakumar said. A resident of Pudurpandiapuram for close to 15 years, Balakumar said he now planned to move out of the area with his family.

S. Selvaraj, a resident of Muthammal Colony, said he experienced severe sneezing and coughing, and irritation in the throat and developed rashes.

According to Dr K. Sankaranarayanan, former Resident Medical Officer of the Tuticorin Government Hospital and an ENT specialist, upper respiratory infections due to industrial pollution is common among the residents of the densely populated town. Most of the industrial units handling hazardous chemicals are located close to the town. These units should adopt strict pollution control measures instead of attempting to hoodwink the public and the authorities concerned, he said.

SIIL stand In a bid to absolve itself of the charges, SIIL, through a press release on March 29, clarified that the copper smelter was “under shutdown for maintenance since the early hours of March 21 until around 10 a.m. on March 23”.

“In the morning hours on March 23, 2013, during plant start-up, there were normal emissions within prescribed parameters and since then the plant is functioning normal. A team of government officials have already inspected Sterlite’s copper plant on March 23 and 24, 2013, and has verified the plant status. We understand that the district health officials have confirmed that no case of illness was reported due to alleged gas leakage…,” it said.

On March 30, SIIL came out with another release asserting that it had been “operating its copper smelter at Tuticorin for the last 17 years with requisite approvals and consents issued by regulatory authorities”.

Reiterating that the smelter adhered to “the highest standards of environment, health and safety practices benchmarked to international standards”, it said the plant had undergone “continuous upgradation of technology over the years, including the implementation of numerous environmental upgradation measures based on recommendations of the TNPCB, NEERI [National Environmental Engineering Institute] and CPCB [Central Pollution Control Board] in the last two years”.

Referring to the “preliminary inspection” conducted by the TNPCB in the wake of public complaints of emission, SIIL’s “updated release” said: “We provided to the TNPCB all the technical details of the operations, which confirmed that all parameters and key readings of the particular period of March 23 were well within the permissible range.”

“Since all parameters were found within permissible levels and there were no cases of illness, we believe that this should have been the subject matter of detailed technical evaluation by TNPCB,” it said.

Referring to the closure of the unit, the Sterlite release said, “We will engage with the TNPCB to explain the factual position and are committed to cooperate fully with the authorities in this regard, in order to be able to restart operations.”

The company welcomed the Supreme Court’s verdict and pledged to “continue to work in close association with the government of Tamil Nadu and other regulatory bodies, towards maintaining highest standards of health, safety and environment”.

Making it clear that SIIL was not averse to improvements, D. Dhanavel, general manager (Projects), Sterlite Copper, said: “We reiterate our commitment to cooperate with them [TNPCB]. We only seek a proper review of the data given by us and consideration of the fact that the parameters were normal… we are very open to discuss, understand and implement.” The company also claimed that it had complied with almost all the 30 directions issued by the TNPCB as part of upgrading its pollution control technology.

Workers of the copper smelter and members of some women’s self-help groups promoted by the company staged demonstrations demanding that the plant be allowed to resume operations.

This is not the first time that SIIL’s copper smelter is in the eye of a storm. Right from its inception in 1997, the plant has had a chequered history. In fact, the Sterlite unit was closed for brief periods in 1998 and 2010.

The company obtained the TNPCB’s no objection certificate in August 1994 to set up the copper smelter at the SIPCOT complex in Meelavittan village. In January 1995, it got a clearance from the Ministry of Environment and Forests (MoEF) subject to certain conditions, including those laid down by the TNPCB and the Tamil Nadu government. Four months later, SIIL got approvals from the State government and the TNPCB under relevant laws.

After its bitter experience in Gujarat, Goa and Maharashtra, where it had allegedly made a vain bid to establish the copper smelter, SIIL probably heaved a sigh of relief when it was granted the approvals and clearances for its Tuticorin project. But its hopes of a smooth sailing were belied.

Various environmental groups and political parties, including the Left and the MDMK, were against the setting up of the plant in Tuticorin under the “guise” of industrialisation of the backward southern district. Fatal accidents at the plant owing to inadequate safety measures and the employment of unskilled labourers added fuel to the protests.

The port town witnessed various forms of protests by farmers, fishermen, traders and workers demanding the closure of the plant. Political parties and environmental groups launched sustained legal battles against the copper major. Writ petitions pleading for action against SIIL were filed before the Madras High Court by the National Trust for Clean Environment in 1996, Vaiko in 1997, and the Centre of Indian Unions (CITU) district secretary K. Kanagaraj in 1998.

Flouting of rules The petitioners pointed to the “flouting” of various rules and norms while granting clearances to the company. The report submitted by NEERI in 1998 had brought this to light. The first and foremost among the violations related to the location of the plant within 25 km from the ecologically sensitive Gulf of Mannar, which has around 3,600 species of fauna and flora in three ecosystems—seagrass, mangroves and coral reefs—and 21 islands running almost parallel to the coastline. At least two of them, Van Tivu and Koswari Tivu, in the Tuticorin group of islands, fall within a 7-km radius from the smelter plant. The second contention was that the MoEF should have fulfilled the mandatory requirement of holding a public hearing before clearing the project, as the investment exceeded Rs.50 crore.

The petitioners also demanded the closure of the plant on the grounds of non-adherence to the condition stipulated by the TNPCB to provide a 250-metre-wide greenbelt around the battery limit of the industry as contemplated under the Environmental Management Plan.

They also cited the NEERI report of 2005, which had recorded the severe pollution caused by the plant. The groundwater samples taken from the area indicated that the proportions of copper, chromium, lead, cadmium and arsenic and chlorides and fluorides were too high when compared with Indian drinking water standards.

The anti-Sterlite campaign scored its first major victory on September 28, 2010, when the Division Bench of the High Court, which heard the writ petitions, directed the company to close down its plant. The court also declared that the employees of the company would be entitled to compensation under Section 25FFF of the Industrial Disputes Act, 1947. It directed the Collector to take all necessary steps immediately to re-employ the workforce in other firms.

Protracted legal battle However, SIIL appealed in the Supreme Court against the order. The apex court passed an interim order on October 1, 2010, staying the judgment of the High Court. The protracted legal battle exposed the inconsistency and failure of the Centre and the State government to take timely administrative and legal measures to conserve the Gulf of Mannar biosphere, environmentalists point out. They say the proposal sent by the Chief Wildlife Warden on April 30, 2003, to the State government to declare the Gulf of Mannar a marine national park under Section 35(4) of the Wildlife Protection Act, 1972, was kept in cold storage for nearly 10 years.

The TNPCB, which in its consent order of May 22, 1995, under the Water (Prevention and Control of Pollution) Act, 1974, stipulated that the copper smelter should be located 25 km from ecologically sensitive areas, conveniently removed the stipulation in its consent order of October 14, 1996. The TNPCB’s inconsistency was betrayed when it scaled down the width of the mandatory green belt from 250 m to 25 m, they allege.

Despite the apex court’s order, the anti-Sterlite campaigners appear to be firm in their resolve to carry on with their struggle seeking the closure of the copper smelter. Vaiko said: “We might have lost a battle now but we will continue with our war.”

Fatima Babu said: “Though the verdict is disappointing, it is not scary. With the level of public awareness growing steadily, if people put up a real resistance, I think our struggle will succeed.” She said her optimism stemmed from the pro-people stand taken by Chief Minister Jayalalithaa on various issues such as the laying of a pipeline by Gas Authority of India Limited through farmlands in the Thanjavur delta, attack on fishermen by the Sri Lanka Navy, and retrieval of the Katchativu island from Sri Lanka.

The chambers of industry are of the view that the TNPCB’s closure order would hamper investment in the area. Describing the incident as “unfortunate”, former president of the All India Chamber of Commerce and Industry and secretary of Tuticorin Hub Port Development Council, J.P. Joe Villavarayar, said the TNPCB’s order had come at a time when the State and Central governments were planning to implement projects such as the Madurai-Tuticorin industrial corridor, an outer harbour, a ship-building yard and the expansion of the airport in the region. However, he maintained that the industry should adhere to safety norms and pollution control measures as stipulated by the government.

Company sources say that the copper smelter recorded a phenomenal growth in the past 17 years. It started production with an installed capacity of 60,000 tonnes per annum (TPA) in 1997 and touched the 4,00,000 TPA mark in 2007. The plant’s phosphoric acid production has already reached 2,30,000 TPA. It has a captive power plant with a generation capacity of 160 MW.

According to the sources, the company’s performance graph indicates an increase in turnover from Rs.50 crore in 1997 to the present Rs.18,085 crore. The company contributes 0.18 per cent to the gross domestic product at the national level and 3.3 per cent at the State level. Ten per cent of the total cargo volume handled at the Tuticorin port is supplied by Sterlite, and the company contributes Rs.3,000 crore to the exchequer. It has a workforce of 4,100, including 3,000 contract workers. Besides, it offers indirect employment to 20,000 persons. Claiming that the Tuticorin unit had contributed Rs.200 crore to the local economy, the company said it had plans to increase the amount to Rs.700 crore by 2023.

Environmentalists said that they were not opposed to industrialisation. “We welcome any industry which does not destroy the environment and the ecosystem of the region. Our genuine concern is that Tuticorin should not become another Bhopal,” T. Subash Fernando, secretary of the National Forum for Environmental Protection, said.

M. Jhonson and R. Raj, leaders of the Northern Region Country Craft Fishermen’s Association, said the fisherfolk bore the brunt of the industrial pollution. The district had started losing its traditional trades such as pearl diving, salt production and fishing. The fish catch in the Gulf of Mannar had dwindled owing to pollution, they lamented. Environmental groups maintained that although the Supreme Court’s April 2 order permitted the copper smelter to continue its operation in Tuticorin, it had made two important points. One, it praised the petitioners for taking up the cause of the general public at a time when “very few would venture to litigate for the cause of environment, particularly against the mighty and the resourceful”.

Secondly, it made a significant point relating to the eventuality of relocating the plant in order to safeguard the Gulf of Mannar biosphere reserve. “As and when the Central government issues an order under Rule 5 of the Environment (Protection) Rules, 1986, prohibiting or restricting the location of industries within and around the Gulf of Mannar Marine National Park, then appropriate steps may have to be taken by all concerned for shifting the industry of the appellants [Sterlite Copper] from the SIPCOT industrial complex depending upon the content of the order or notification issued by the Central government under the aforesaid Rule 5 of the Environment (Protection) Rules, 1986, subject to the legal challenge by the industries,” the court pointed out.