How Sterlite‘s Tuticorin plant ran into trouble

Shaheen Mansuri
Moneycontrol.com

Sterlite Industries', Tuticorin copper smelting plant was always mired in controversy even before it came into existence in 1997-98. Sterlite is a subsidiary of London-based Vedanta Group.

Local politicos kept objecting on environmental concerns as the plant site was  little over than 10 km from the Gulf of Manner Marine Biospher Reserve, home to more than 150 species of coral, sea grass beds and rich fisheries. An even stronger point they raised was about health hazards to population in the proximity of the plant.

In 1998, an investigation by the National Environmental Engineering Research Institute (NEERI) into Sterlite's copper smelting plant at Tuticorin recommended immediate closure of the unit.

However, in 2001, the AIADMK government in the state facilitated the reopening of the Sterlite plant in Tuticorin. 

Despite many odds, the plant, which according to the company had all the required environmental clearances, was functioning despite ongoing opposition from various organisations. In 2008, the company's Tuticorin plant was awarded the status of export oriented unit under which it was eligible for tax exemption on raw materials and finished good sold until June 1, 2011

In succeeding years, issues pertaining to functioning of the unit always remained a controversy and on September 28, 2010 The Madras High Court passed an order to close down the Tuticorin Smelter.

Subsequently, the company had filed a Special Leave Petition in the Supreme Court (SC) against the Madras High Court order.

The company was able to get a stay in October 2010 from the Supreme Court against the high court order. The company has been carrying out normal operations at the plant since then.

However, last week, the Tamil Nadu Pollution Control Board  ordered  Sterlite to shut down its Tuticorin plant following a gas leak. The Board had sought an explanation from the company which had responded on March 27. But it found the company's explanation 'unsatisfactory'.

Post the SC giving a clean chit to Sterlite over green issues, the company's lengthy legal battle has finally come to a close. However, it has been penalised with Rs 100 crore as part of a compensation for the damage done to the environment. 

shaheen.mansuri@network18online.com