Why Sterlite Industries is a disaster for Tuticorin

On March 23, Tuticorin residents woke up to itchy eyes, burning throat and breathing trouble. As they suffered an unusual morning, they first thought it was a gas leak, and then, rumours spread that it was "because of Sterlite".

Sterlite Industries, a part of London-based Vedanta Resources, runs India's biggest copper smelter in the region. The plant had been shut on the night of March 21 for routine maintenance.

It was due to open on the morning of March 23. While the repair work was going on, some people started to complain of breathing trouble and nausea. Within hours, queues at doctors' clinics grew longer, causing others to panic. Soon, people were seen running about the streets of Anna Nagar, Toovipuram, Bryant Nagar and George Road, fearing for their well-being.

The state pollution control board quickly swung into action. The Tamil Nadu Pollution Control Board (TNPCB) accused the factory of releasing noxious gas in the air. It said sulphur-di-oxide levels had gone off the charts on the night of March 23.

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It showed a reading of 2939.55 mg/cubic metre against the prescribed limit of 1250 mg/ cubic metre. It also said that the emission monitor was not connected with the air care centre of TNPCB. The board then issued a closure order for the factory.

Sterlite denies all allegations. The company says it was given a clean chit by the district environmental engineer (DEE) of TNPCB who inspected the factory after allegations of leakage.

The DEE report says what really caused people to panic was a minor aberration in the level of sulphur-di-oxide which lasted a few seconds before being rectified.

Different accounts

In contrast to the TNPCB report, the DEE report said after the repair work was completed, sulphur-di-oxide levels suddenly shot up from 20 ug/cubic metre to 62 ug/cubic metre, though they were still within the tolerable limit of 80 ug/cubic metre. The report adds it was promptly brought down to 10 ug/metre.

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But that was enough to fuel the simmering protest by locals against the factory. Sterlite's Tuticorin smelter has been at the centre of controversy right from its inception.

The legal battles started in 1996 when the National Trust for Clean Environment challenged the clearances granted to it at the Madras High Court. The factory was accused of polluting the environment and causing irreparable health hazards.

The on-and-off protests that have the backing of political parties, such as V Gopalsamy's Marumalarchi Dravida Munnetra Kazhagam and the Centre of Indian Trade Unions, have caused the factory to shut down five times till now.

For Sterlite, the frequent shut-downs have resulted in huge losses. The company loses Rs 50 crore for each day it is not in operation.

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However, it says it will fight it out in the National Green Tribunal, which has called for an independent inspection of the machinery by an expert committee comprising members from the Indian Institute of Technology (Chennai). The committee is expected to submit its report by April 29; until then, the smelter will remain closed.

P Ramnath, CEO, Sterlite Copper, is confident of a favourable resolution. He says the Supreme Court verdict, on April 2, overruling the Madras High Court order to permanently close the factory has come as a shot in the arm. In 1998, a local politician had filed a petition in the Madras High Court seeking closure of the smelter.

The High Court had given an interim order to close the plant in November 1998, but it was opened within a month after Sterlite agreed to put in place measures to stop pollution as suggested by the National Environmental Engineering Research Institute (NEERI).

In 2010, the Madras High Court had ordered the factory be shut permanently. The Supreme Court in its verdict early this month said the plant was a big source of employment, copper and revenue and that it had cleaned up its act.

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Gearing up for the future

The company says it would go ahead with its Rs 3,000-crore plan to double capacity, in spite of the controversies.

"We are very clear that this plant is not only important for the company but for the country's growth, considering it is a major source for infrastructure projects (copper is used in defence, electricity, automobile, construction and infrastructure )," says Ramnath, adding that the experiences so far will come in handy in its next phase of growth.

Sterlite's legal issues are broadly on four major fronts: its location - it is too close to the ecologically sensitive region of the Gulf of Munnar ; it has not created a sufficient green belt around the factory; that public hearings were not held before giving the plant a go-ahead; and pollutants from the factory were seeping into the ground water.

Sterlite stands its ground on all these accusations. It says there is no notification prohibiting the location of a factory in Tuticorin. On the absence of pubic hearing, it says it was granted environmental clearance based on the Environmental Impact Assessment Notification in January 1994, which did not mandate public hearing.

It also says that TNPCB, upon request from the company, had reduced the green zone to 25 mts from 250 mts. On the issue of contaminating the ground water -samples taken from the area showed high level of cadmium, flouride, chrome, lead and arsenic in 2005 -the company says it has taken several measures to ensure waste did not seep into the ground.

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The Supreme Court, too, took note of this while pronouncing its verdict on April 2. It said all the deficiencies pointed out by NEERI have been removed by the company.

".....as the deficiencies in the plant of the appellants (Sterlite) which affected the environment as pointed out by NEERI have now been removed, the impugned order of the High Court directing closure of the plant of the appellants is liable to be set aside," the Court said, while imposing a fine of Rs 100 crore on Sterlite for polluting the water, soil and air around the plant.

But after the gas leak, trouble has hit the company once again. Ramnath says, "According to our company's record, no such incident happened and that no evidence was given by the Board for its allegation." He also says TNPCB acted in great hurry and did not give the company sufficient time to prove its stand before announcing its closure order.

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Sterlite also blames the pollution board of unfair treatment. Ramnath says whenever there is a health scare, Sterlite is pulled up, even though there are 20 more factories in the locality which emit sulphur-di-oxide and ammonia. None of them was checked, he says.

There is clearly a lack of unanimity on the part of the state government officials on the events of March 23. The DEE report and the District Collector, Ashish Kumar, gave Sterlite a clean chit.

The collector in a press statement after the incident had said the sulphur-di-oxide was within the permissible limit. However, he changed his stand after the show-cause notice issued to the company by TNPCB.

In a counter affidavit filed at the Tribunal, Kumar said "the release was to avoid panic in the minds of people so as to avoid a knee-jerk law & order problem".

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Sterlite's counsel, TVR Rajagopalan, however, says the emission could have been from any of the other 20 factories in the region. The matter is now pending with the Green Tribunal.

The expert committee, as recommended by the Tribunal, will comprise two members from the Tribunal and one each from Sterlite and TNPCB. However, the role of the members from Sterlite and TNPCB will be limited to assisting other members on the panel.

Ramnath says, "This is a welcome move. This should have been done right at the start before taking the drastic step of closing the plant."