Lafarge Agrees to Pay Up, Resume Chhatak Ops
Monday, 12 April 2010

French multinational Lafarge is expected to pay Rs 600 million to compensate for environmental damage caused by its mining operations in India in order that it may resume raw material supply to its Chhatak cement plant in Bangladesh.

The funds will be spent for re-establishing forest cover denuded by its limestone mining in the north-eastern Indian state of Meghalaya.

It has also agreed to pay approximately Rs 30 crore annually for the two million tonnes of limestone it mines every year from Nongtrai in Meghalaya for development of the area and welfare of local people.

The Indian government submitted the proposal before the Indian Supreme Court that Lafarge pay compensation for the damage caused to the environment of the ecologically fragile area due to its limestone mining as well as for overall development of the region.

As Lafarge readily agreed to the proposal, the country's apex court is expected to give its verdict soon to lift the ban imposed earlier this year on mining and supply of limestone to the Lafarge's plant at Chhatak in the Sunamganj district of Sylhet.

The Supreme Court passed the order on February 5 to temporarily halt limestone mining by Lafarge Umiam Mining Private Limited (LUMPL) at Nongtrai in the East Khasi Hills district of Meghalaya. The LUMPL is a wholly owned subsidiary of Lafarge Surma Cement Limited (LSCL).

The LUMPL had been transporting limestone mined from Nongtrai to the plant of LSCL and Spanish company Cementos Molins at Chhatak on a 17 kilometre long cross-border conveyer belt. The LSCL plant at Chhatak has a capacity of producing 1.5 MT cement every year.

The Indian government had on March 24 told the Supreme Court that the latter's order halting mining and supply of limestone from Meghalaya to Lafarge's cement plant in Bangladesh was "disturbing bilateral relations between the two neighbours". Vahanvati had told the court that the order to halt limestone mining had hit production at the Lafarge's $255 million state-of-the-art plant at Chhatak.

Lafarge too had told the Supreme Court that the Bangladesh government had written to the Indian High Commissioner in Dhaka on March 2 last expressing concern over halting of limestone mining and supply to the cement plant at Chhatak.

The SJAC had alleged that Lafarge had been operating in a destructive way that would have long-term implications on people of Meghalaya and north-eastern India and their control over indigenous lands and right to use the resources in a sustainable way.

The Supreme Court halted mining on a plea from a local pressure group in Meghalaya that exploitation of natural resources by Lafarge at Nongtrai was posing a threat to environment and changing rainfall pattern in the eco-fragile area. Nongtrai is in the vicinity of Cherrapunji, which at one time received the maximum rainfall in the world and had earned the sobriquet 'the wettest place on earth'.

The group, the Shella Joint Action Committee (SJAC), had filed a lawsuit alleging that rainfall in and around Nongtrai had drastically come down due to large-scale denudation of forest caused by Lafarge's limestone mining.

The Indian government had on March 24 told the Supreme Court that the latter's order halting mining and supply of limestone from Meghalaya to Lafarge's cement plant in Bangladesh was "disturbing bilateral relations between the two neighbours". Vahanvati had told the court that the order to halt limestone mining had hit production at the Lafarge's $255 million state-of-the-art plant at Chhatak.

A Forest Bench of the Supreme Court comprising Chief Justice K G Balakrishnan and Justices S H Kapadia and Aftab Alam had last ruled on March 29 that it would not permit the Lafarge to resume limestone mining without getting a fresh Environment Impact Assessment (EIA) done on the basis of new guidelines by the Indian government's Central Empowered Committee. A task force of the Indian ministry of environment and forest carried out the fresh EIA.

"Mining is not having any discernible adverse effect on human health. Samples of water, ambient air quality and stack emissions from crushing units were examined while the mine was in operation and all the parameters were within the prescribed limits," the task force said in its report.

Claiming that the report of the task force has nothing against mining operation by the Lafarge, India's attorney general G E Vahanvati presented the new proposal before the court on April 9.

According to the Indian government's fresh proposal, Lafarge would deposit Rs 55 crore, with added interest calculated at 6 percent per annum from April 1 2007, within four weeks. The total amount, approximately Rs 60 crore, would be used to recreate forest cover and other environmental enhancement activities in Meghalaya, especially in and around the mining affected areas.

Vahanvati said that Lafarge, which had been mining two million tonnes of limestone every year, would also continue to pay Rs 80 for every tonne of the mined mineral and the amount would form part of a special fund, to be used by the state government of Meghalaya for development of the area and welfare of the local community.

The proposal also included certain other conditions to be complied with by the LUMPL for carrying out the mining operations in Nongtrai.

Lafarge's lawyer and senior advocate A M Singhvi said that the company was ready to accept the proposal of the Indian government and the court had posted the matter for hearing on Monday (April 12).

LONG-SOUGHT RESOLUTION

India's ministry of environment and forest in April 2007 first stopped the LUMPL's operation in Nongtrai. The Supreme Court had in an interim order on November 23, 2007 had allowed the company to continue mining.

The Shella Joint Action Committee had alleged at the time that Lafarge had been operating in a destructive way that would have long-term implications on people of Meghalaya and north-eastern India and their control over indigenous lands and right to use the resources in a sustainable way.

The SJAC had pointed out that large-scale denudation of forest had lessened rainfall, and what added to the problem was the fact that rainwater flowed off instead of being retained in the hilly stretch.

The organization had also accused LUMPL of obtaining environmental clearance by misrepresenting to the Indian government that it would carry out mining in "wasteland and non-forest area consisting mainly of barren land, and rocks" although the area had thick forest.

It had also alleged that tribal land had been transferred to the LUMPL by the state government of Meghalaya for mining in violation of laws of the land. The Sixth Schedule of the Indian Constitution prohibits transfer of tribal land to non-tribal individual or entities.

Lafarge in an affidavit filed before the Indian Supreme Court on March 16 this year admitted that it had mortgaged tribal land in Meghalaya to international banks to secure a loan of $153 million to finance its plant in Chhatak.

It, however, claimed that the mortgage of the land as security to offshore lenders was approved by the reserve Bank of India – the central bank – in March 2005.

Source:
bdnews24.com

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