Sponge iron’s dirty growth

Sometime in June 2009, the West Bengal chief minister’s office forwarded a complaint to the state pollution control board (SPCB) about three sponge iron factories in West Medinipur district.

A team was dispatched to Jhargram subdivision. It found a thick layer of grey dust coating trees and pathways, and noted that the factories stored iron ore and waste in the open; these are carried away by the wind. A month later, the state’s Pollution Control Appellate Authority indicted the three units for causing “colossal damage” to the environment and ordered immediate closure of one factory that was a repeat offender; the other two were asked to comply with pollution norms and guidelines. But the repeat offender— Rashmi Cement sponge iron plant—did not shut. Reason: the SPCB suspended the closure order, citing the appellate authority order that allowed the factory to operate once faults are rectified.

India is the biggest producer of sponge iron. Its production is set to jump 10 times in 20 years

On December 18 that year, angry people reportedly set fire to some structures and vehicles at the Rashmi Cement plant. They claimed to be Maoists and said rampant pollution from the plant prompted them to act. The police pinned the incident on the resident who had complained about pollution and on a social activist. Naba Dutta, general secretary of nonprofit Nagarik Mancha of Kolkata, was arrested on August 17, 2010, while visiting the area to attend a sit-in protest organised by tribal people against sponge iron factories.

Dutta is out on bail. Rashmi Cement is still in business and pollution continues unabated.

Pollution fuels protests

The story played out in Jhargram is not unique. It is being repeated in Odisha, Chhattisgarh and Karnataka where people are living in the shadow of sponge iron factories. Whether it is a remote village in Cuttack district of Odisha or a village in Raigarh district of Chhattisgarh, residents are angry over government inaction (see ‘Sponge iron industries are killing fields’, Down To Earth, September 15, 2006). The protests are growing.

In Odisha, 500 women members of the Bonai Vana Suraksha Samiti Mandal, a people’s front in Sundargarh district, marched to the sub-collector’s office in January 2008. They were carrying samples of soil, contaminated water and grains as proof of damage caused by sponge iron factories. These factories have high stack emissions and dump ash and char in open areas. The district administration ordered an inquiry and 12 factories were closed, only to reopen 42 days later.

“Seventeen sponge iron factories are crammed in a five-km radius. We had to put our foot down,” said Ashwini Mohanta, chairperson of the front, which continues to organise protests. Odisha with 108 sponge iron factories— the maximum any state in India has—is witnessing similar protests in Sundargarh, Keonjhar and Sambalpur districts (see map).

Pollution from these coal-based factories is more acute in Chhattisgarh. The state has close to 70 sponge iron factories, clustered mainly in Siltara and Urla in Raipur district and in Raigarh district. An estimated 60 more are operating illegally. The region is also the hub of public protests. In June 2009, about 300 people took to the streets to protest the health effects of pollution from the factories of Siltara and Urla. They complained of respiratory disorders and skin allergies. The authorities issued notices to 45 factories for not installing or using pollution control equipment.

“The Chhattisgarh Environment Conservation Board works under political and industrial pressure. When there are public protests, a notice is issued. What becomes of this notice, no one knows,” said Ganesh Kachhwaha of Zila Bachao Sangharsh Morcha in Raigarh. “These factories follow absolutely no laws. Their licences should be cancelled,” said BJP MLA Devji Bhai Patel from Raipur. A moratorium has now been imposed on new sponge iron factories in Siltara and Urla.

In Andhra Pradesh’s Mehboobnagar district, people moved court when protests and pleas to the government did not work. Initially no action was taken on the petition but later factories in the area were directed to jointly deposit Rs 3 crore with the district authorities as token compensation for farmers. The amount was decided on the basis of Kharif crop lost.

In Karnataka, angry residents attacked the Kundil Sponge Iron factory at Londa in Belgaum in November 2009. This was when the SPCB allowed it to resume operations a month after it was closed on high court orders. Protests are on in Bellary district, too, which has three sponge iron clusters.

These protests are happening because sponge iron is made through a process that is highly polluting and poorly regulated.

A blanket of smog envelopes Kuarmunda and Bonai subdivisions of Odisha’s Sundargarh district every morning. Area residents attribute it to emissions from sponge iron factories nearby that switch off their emission control devices—electrostatic precipitators (ESPs)—at night. The reason these factories get away with such offences is weak rules and weaker enforcement.

Govinda Impex in West Bengal has been repeatedly served notices for violations
Notices issued were suspended time and again but the factory still did not rectify faults
Illustrations: Vaibhav Raghunandan

The Central Pollution Control Board (CPCB) has classified sponge iron as red category industry which denotes its high potential to pollute. The classification means the industry needs strict pollution norms and guidelines and should be monitored and inspected regularly. On both these counts, the regulatory framework fails miserably.

Many a slip

The first step to tighten regulations on the industry was taken in 2006 when CPCB released a draft standard. It contained detailed emission and effluent standards, waste management measures and guidelines on locating factories. Two-and-a-half years later, the Union Ministry of Environment and Forests (MoEF) notified a highly diluted version of the draft. A former CPCB officer who helped prepare the draft said MoEF watered down the standards “under pressure from states and the industry lobby”. Most of the guidelines were dropped before notification, he added.

The draft had suggested phasing out factories with less than 100 tonnes per day (TPD) capacity because such units can ill-afford clean technologies. The notification dropped this suggestion. The notification also decreased stack (chimney) height specification. CPCB had proposed a minimum height of 75 metres; the notification reduced it to 30 metres. Higher stacks mean emissions can be dispersed over a larger area, reducing their impact.

Fugitive emission standards, too, were toned down. These emissions, separate from stack emissions, arise from raw material and product handling and disposing of solid waste. It was fixed at 1,000 microgram per cubic metre (μg/m3). The notification relaxed this limit to 3,000 μg/m3 for existing factories, and 2,000 μg/m3 for new ones.

The notification’s biggest weakness is that it is silent on solid waste disposal. The draft had recognised char, kiln waste, scrubber and flue dust as solid waste and had prescribed strict recycling and reuse measures.

The rest of the CPCB recommendations now form a part of the Charter on Corporate Responsibility for Environmental Protection. These are guidelines meant for various industrial sectors and are voluntary in nature.

Even after the diluted standards came into force in May 2008, record for enforcing these standards and their compliance is abysmal. “It is too soon to allege the industry is one of the biggest polluters and no action is taken against them,” said an MoEF official. But reality is different. The Nova Iron Factory in Chhattisgarh’s Bilaspur district, for instance, showed stack suspended particulate matter (SPM) at 2,292 mg/m3, as per an inspection record of June 2009. The limit for stack SPM is 100 mg/m3. (see ‘What standards prescribe’). The main problem in compliance is nonoperation of ESPs, said Subrata Ghosh, chief engineer with West Bengal SPCB. Another factory, Shiv Metallics, in Sundargarh district of Odisha, showed ambient air SPM of 2,025 μg/m3 which is about 20 times the present standard. No action was taken against the two, and the list of such factories is unending.

Another reason for pollution is proximity between sponge iron factories. These usually grow in clusters in the vicinity of areas rich in iron ore deposits and coal. The voluntary guidelines on location of factories are ignored, leading to conflicts between industry owners and residents. The guidelines state the distance between two sponge iron factories should be five km for those with 100 TPD capacity or more. The guidelines also specify a minimum distance of one km between the factories and human settlements. In places like Sundargarh district in Odisha and Raipur district in Chhattisgarh, these factories are right next to residential areas.

Sponge iron factories repeatedly flout environmental norms but are rarely brought to book

When asked about enforcing site guidelines, MoEF officials said they could not do much as land is a state subject. “We provided the basic guidelines so that states can formulate policies accordingly. Compliance with guidelines has to be ensured by SPCBs and the states,” a ministry official said.

Activists say the main reason for rapid growth of the sector is the willingness of states to subsidise inputs, easy access to market and availability of cheap raw material and labour. There are numerous examples of sponge iron factories in the country flouting norms without being brought to book.

CSE study exposes shortcomings

In 2009, the Centre for Science and Environment (CSE), a Delhi non-profit, studied compliance with environmental norms in the sponge iron sector. It is the biggest sample study in the country so far ; a total of 204 factories were scrutinised on the basis of inspection reports. These were collected from SPCBs of four states where sponge iron industry is dominant—Jharkhand, Chhattisgarh, Odisha and West Bengal. A total of 449 inspection reports, including night inspection reports, were made available for the period 2006-2009. They contained status of pollution control measures, compliance with norms and notices served. In addition to these, 265 stack monitoring reports were made available for the period 2006-2010 for Odisha, Chhattisgarh and West Bengal. Hundred and eighty nine ambient air quality reports were also provided for factories in Odisha and Chhattisgarh.

Monitoring inadequate: Analysis of the data in these reports threw up startling results. For one, it showed how inadequate monitoring is. The SPCBs inspected sponge iron factories once or twice a year; the CPCB guidelines specify they should be monitored every quarter. In Jharkhand, Odisha and Chhattisgarh, most factories were inspected only once a year. In West Bengal, they were inspected at least twice. Enforcement is a problem, conceded a CPCB official. He said neither the CPCB nor the SPCBs have sufficient manpower to monitor each and every factory. So, the effort has to come from the industry. NGOs could also keep a tab on defaulters, he added.

ESPs absent or not used: About 10 per cent of the factories studied were operating without an ESP in the main kiln which is a prerequisite for a factory to start production. This means the SPCBs did not inspect factory premises before production started. In Jharkhand, a fourth of the factories started operating without ESPs; they were later directed by SPCB to install one. In Odisha, 20 per cent factories did not install ESPs before starting production.

The factories have a worse record when it comes to operating ESPs. Data shows, 37 per cent of the factories had non-functional or partially functional ESPs. Even where ESPs were in running condition, leakage of emissions from kilns were recorded in 60 per cent inspection reports. Odisha reports showed leakage in 37 per cent kilns with ESPs. In West Bengal, 92 per cent factories recorded emissions despite ESPs.

Sometimes SPCBs, acting on public complaints regarding increased pollution at night, conduct surprise inspections. The night inspection reports showed higher non-compliance. They showed 73 per cent sponge iron factories operated their ESPs partially at night and 27 per cent did not operate them at all. This means, 100 per cent factories were bypassing ESPs and releasing emissions into the air. A Karnataka SPCB official said sponge iron factories “save electricity by shutting down ESPs at night and as a result compliance with emission standards is minimal at night in sponge iron dominated areas”.

Emissions high: Pollution monitoring from stacks is also infrequent, the data showed. Jharkhand SPCB failed to provide even one stack monitoring report for sponge iron factories. The Odisha SPCB carried out stack monitoring of only half the factories in 2008- 2009. West Bengal SPCB scored better. It monitored 75 per cent factories; some were monitored as many as three times a year. The stack monitoring reports also show 26 per cent factories flouting emission standards. West Bengal topped the list with 52 per cent factories failing to meet emission standards. Chhattisgarh is second in the list with a non-compliance rate of 36 per cent.

Government must phase out smaller factories and prevent new ones of less than 200 TPD capacity

Inspection reports showed 42 per cent factories failed to meet ambient air quality standards. In Chhattisgarh, the highest ambient SPM was recorded near the Kalindi Ispat factory in Bilaspur district— 1,129 μg/m3. The standard for ambient air quality is 100 μg/m3.

The factories also fail to comply with other parameters like fugitive emission norms and disposing and handling solid waste. The waste is supposed to be covered and stored; 80 per cent factories were storing it in the open and many of them were dumping char outside their premises.

If one takes into account all compliance conditions, close to 50 per cent factories were found non-compliant on the day inspections were conducted. But these inspections are infrequent. If the factories are monitored regularly, the non-compliance figure would be much higher. The highest level of non-compliance was found in Chhattisgarh—a whopping 100 per cent. West Bengal, with a non-compliance rate of 41 per cent, is second.

A formality called notices: Pollution control agencies have a standard procedure for dealing with factories defying pollution norms. They issue show cause notices; when offences are repeated, closure notices are sent. But are these an effective deterrent? The answer is no. Take the instance of Odisha where the SPCB issued 137 show cause notices over the past five years. Out of 74 factories for which information was made available, 45 per cent (33 factories) were served show cause or closure notices for reasons such as high emissions, defective pollution control devices and improper solid waste disposal. But in spite of the notices, many factories remained repeat offenders.

In West Bengal, the SPCB issued 250 closure notices to 50 factories over the past four years, without any effect. In Jharkhand, 21 show cause notices were issued to 24 sponge iron factories between 2007 and 2008 for not installing or operating ESPs and for flouting other pollution norms. Notices were issued and later withdrawn without achieving any result.

The cycle follows a routine. SPCB inspects a factory and issues show cause notice for not complying with norms. In the next inspection, the factory is again found violating the norms and issued closure notice. The third inspection report states the faults have been rectified and the closure notice is suspended.

A retired CPCB official said issuing notices and withdrawing them is a means to collect bribes from the factories. In some cases, bank guarantees of factories issued closure notices are forfeited. But the guarantee amounts are usually meagre and hardly a deterrent.

If one were to compare steel consumption figures, Indians lag far behind the rest of the world. Against the world average of 215 kg, per person steel consumption in India is just 50 kg a year. This consumption gap is likely to reduce in coming years. With rapid economic growth, steel requirement for housing, infrastructure and industry is poised to grow significantly.

Post liberalisation, steel production in India has grown seven to eight per cent annually. At this rate, which many experts consider sustainable, steel production will jump to 300 million tonnes (MT) in 2030 from 60 MT at present.

Traditionally, steel was manufactured from pig iron using blast furnace. India does not have reserves of coking coal, an important raw material for blast furnace route to make steel, and presently imports about 70 per cent of its coking coal requirement. This pushes up steel prices. Therefore, blast furnace route cannot meet the 300 MT target.

The other way to produce steel is through recycling used steel—the steel scrap route. Currently, about 15 per cent of steel production in India is from scrap. Due to limited scrap availability and ever increasing prices of imported scrap, not more than 10 per cent of steel can be produced from scrap by 2030.

The only option left is production of steel through DRI (sponge iron) route. DRI can be produced using gas but it is expensive and gas availability is not assured. So, the real option is to produce steel using non-coking coal, through DRI. In 2030, more than 60 per cent of the steel produced in India will come from coal-based sponge iron. This means more than 200 MT of sponge iron and hundreds of sponge iron factories. Hence, there is an urgent need to develop an action plan for the sector to contain its environmental impact.

Strengthen enforcement

It is evident that our current system of environmental monitoring and enforcement is not working. The problem with SPCBs is lack of capacity and accountability, non-transparent functioning and corruption. This has happened largely because of neglect and politicization of these institutions. The result is these institutions are incapable of taking strong enforcement actions. Industries pollute as there is no credible deterrence for non-compliance. The charade of issuing show cause and closure notices and imposing small bank guarantee is not going to solve the problem.

What we need is a system that ensures non-compliance is dealt with strictly. Increasing capacity, transparency and accountability of SPCBs is the first step in this direction. We then need to amend the Environment Protection Act to increase penalty amounts and set up a civil-administrative mechanism that can impose penalties without taking recourse to the lengthy legal process.

Bigger factories better

But this will not work unless we tighten technology and emission benchmarks for the sector. ‘Bigger the better’ is the mantra for the sector. Kilns with less than 200 TPD capacity cannot adopt cleaner technologies like an AFBC boiler that burns kiln gas to generate energy. Similarly, a boiler to burn char is not economically viable for smaller factories. These two technologies alone can reduce emissions significantly. It is for this reason that the government must devise a plan to phase out smaller kilns and immediately stop commissioning of kilns with less than 200 TPD capacity.

Material handling is a major source of fugitive dust and needs to be tackled by implementing mandatory technology and management norms. Ultimately, there has to be further technology development in this sector as the current technology, even with all refinements, is still polluting. We need a technology mission for the sponge iron sector.

With inputs from Jyotika Sood