'Sterlite model' may be applied in Lafarge's Meghalaya project

Formula devised by SC mooted for limestone mining by the French firm.

A formula devised by the Supreme Court in the Vedanta-Sterlite judgment to ensure the welfare of tribals in Orissa may be applied in the controversial Lafarge mining project in Meghalaya too.

The idea was mooted today by the senior counsel appointed by the court in the forest cases, Harish Salve. Attorney General G E Vahanvati found the suggestion “reasonable” when the court heard the arguments for and against the mining operations of the French company.

A Bench headed by Chief Justice K G Balakrishnan had restrained Lafarge from extracting limestone in Meghalaya to manufacture cement at the Lafarge Surma Cement project at Chhatak in Sunamganj, Bangladesh. A tribal organisation has challenged the sanction granted to the company for transfer of tribal land to the Lafarge group for exploitation of forest land. The organisation had approached the Gauhati High Court under the Meghalaya Transfer of Land (Regulation) Act 1971.

While the company wanted relaxation of the February order, the tribal organisation opposed any such move and wanted the case to be transferred to the Supreme Court.

The Attorney General submitted that, if the restriction stayed, “the whole image of the country would suffer” as the mining was allowed long ago in an agreement between former Prime Minister Indira Gandhi and her then Bangladeshi counterpart, President Mujibur Rehman. The company was the largest listed corporation in Bangladesh, he added. A huge amount of foreign direct investment was involved, apart from the role of the Word Bank and other international financial institutions.

Several irregularities
The judges remarked that there were several irregularities in the deals and the payment did not seem to be in accordance with the market value of the raw materials. The photographs of the excavation conducted also showed an unhappy situation.

When arguments from both sides grew intense, Salve, who is appointed by the court to assist it in a large number of forest matters (‘amicus curea’), suggested the 'Sterlite model'. He said the company must “disgorge its profits” for the welfare of the tribal community. They should not be allowed to make money, irrespective of the environmental impact, he added. He asked for time to provide a scheme for the same.

The Supreme Court is scheduled to hear it on Monday.

The Attorney General was also agreeable to the “reasonable suggestion” and promised to look into it if it was produced at the next hearing. He said the Ministry for Commerce and Industry and other arms of the government would consider such a suggestion. The counsel for the tribals submitted that the whole forest area was declared “rocky land” so that it could be exploited for the company’s cement plant in Bangladesh. Full arguments will take place on Monday


The ‘Sterlite model’

The ‘Sterlite model' is based on a Supreme Court judgment of August 8, 2008. The court cleared mining of bauxite in the Niyamgiri Hills located in the Kalahandi district following an undertaking by Sterlite, Orissa Mining Corporation and the state government accepting the rehabilitation package suggested by the court. In order to manage the welfare activities, an SPV– ‘Lanjigarh Scheduled Area Foundation’ – had been formed. Sterlite has been depositing amounts from its profits for the all-round development of the mining belt. However, even the Sterlite model has not escaped criticism.


Business Standard, 27th March 2010
Source: http://www.business-standard.com/india/news/sterlite-model-may-be-applied-in-lafarges-meghalaya-project/21/05/389887/