Bhushan Steel’s Odisha unit in the dock for illegal expansion

Bhushan Steel Limited (BSL), a Delhi-based conglomerate, has been slapped with a case in a district court in Dhenkanal in Odisha for undertaking expansion without necessary approvals. The district collector has filed the case against BSL for violating provisions of the Environment Protection Act (EPA).

The company is operating a 3.1 million tonnes per annum (MTPA) unit at Meramandali village and has applied for environmental clearance for phase III expansion to 5.6 MTPA. While the clearance for the said expansion is pending with the Union Ministry of Environment and Forests (MoEF), the firm had started its expansion as per media reports.

Earlier in March, an MoEF expert committee had undertaken inspection of the plant. “The committee found the plant is indeed in a very poor state of environment compliance,” said one of the committee members who requested anonymity. “The committee found major violations in the plant with respect to EPA, drawing from reports by Odisha State Pollution Control Board (OSPCB) and their own site inspections,” said A K Swar, senior environment engineer of the board. “The committee also noted that the expansion was being undertaken without clearances. Hence, the committee had asked the state to take legal action against BSL. Consequently, the state environment secretary had directed the district collector to file case against BSL,” says Swar.

The Meramandali unit of BSL has a long track record of non-compliance with the environment norms.  In October last year, OSPCB had served the unit with closure notice. It had also asked BSL to stop construction work on the proposed expansion till all statutory clearances have been obtained, says Sitikantha Sahu, regional officer, Angul office of the board. “Yet BSL paid no heed to the warnings, prompting MoEF to inspect and file case against BSL,” he adds. Prasanna Kumar Behera of non-profit Nature Environment and Wildlife Society in Angul laments: "The local community around BSL is already suffering due to poor environmental management. Majority of the community has also opposed the expansion in the public hearing conducted on October 28, 2010,” he says. Incidentally, Centre for Science and Environment (CSE), a Delhi-based non-profit, had also rated the plant last among 21 plants in the steel sector in the recently concluded Green Rating Project.  

The plant did not participate in the voluntary disclosure initiative and obtained a meagre score of just two marks out of 100. The project brought to light BSL’s track record of non-compliance with environmental pollution norms and heightened concerns of the local community.

Interestingly, even while the several violations and problems of the plant are being reported in MoEF, pollution control board and media agencies, the stock market equity research firms are providing wrong information to the investor community. CSE found that reputed firms such as State Bank of India Capital Markets (SBI CAP) in its June 8, 2012 report and Motilal Oswal in its May 16, 2012 report have concluded that expansion of BSL Meramandali unit to 5.6 MTPA is on track and is expected to be completed by March, 2013. SBI CAP states: “Phase III expansion in its last leg”, and “Phase III is on track and is expected to come on stream by end of Financial Year 2013.” Motilal Oswal states: “Phase III expansion is expected to be commissioned in 4QFY13.” “Clearly, this shows willful ignorance of proper environmental due diligence by equity research organisations and gives a wrong signal to investors as well,” says a senior official of CSE.





   
 

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