The deck's being stacked against POSCO. In the biggest blow yet to the South Korean giant's project in Orissa, a key committee of the environment ministry has recommended the withdrawal of forest clearance to the multinational's plan to build an integrated steel plant.

If accepted by environment minister Jairam Ramesh, the recommendation of the forest advisory committee could sound the death knell for the country's biggest FDI project. What adds significance to the FAC's red signal is the fact that it's a statutory body and Ramesh has rarely overturned its recommendations.

The report comes on the back of two adverse reports, with Mr Ramesh citing violations of environmental laws by the Korean promoters of the mega industrial project and the Orissa government.

If the content of the report of the FAC, about to be submitted to the ministry, marks a blow, the timing was hardly propitious either. It came on a day when Congress chief Sonia Gandhi identified environment protection as one of the party's top concerns.

The environment ministry, remarkably proactive under Mr Ramesh, had earlier stayed the clearance for POSCO after the Mr NC Saxena panel had pointed to violations of the Forest Rights Act by the Orissa government while carrying out acquisition of land for the project. The environment ministry awaited the report of the Meena Gupta committee set up specifically to review POSCO for compliance with all green laws.

Three out of the four members of the Gupta committee pointed to grave violations of FRA and other green laws as well as collusion and fabrication by the state government in an attempt to secure the forest clearance.

The report was referred by the ministry to the FAC to take a view on the forest related violations of the project. The brief for the FAC was clear. If it agreed with the Saxena and Gupta panel reports that the Orissa government had not settled rights of forest dwellers under the FRA and evidence for the same was not presented to environment ministry, it would have to withdraw the forest clearance as per the ministry's August 2009 directive.

(Sourced from Times of India)