New Delhi: Granting the final approval to Orissa for diversion of 1,253 hectares of forest land for Posco's steel project, Environment Minister Jairam Ramesh on Monday said the South Korean steel major should not export raw material from the proposed project.

"...In view of the state government's latest communication of April 29, final approval is accorded to the state government for diversion of 1253 hectares of forest land in favour of Posco," the Minister said in a statement.

Ramesh, who gave the clearance to the company in January on certain conditions including ensuring of tribal rights and compensatory afforestation, said, "Posco would also bear the cost of regeneration of an equivalent amount of open, degraded land in a district to be determined and indicated by the state government."

Observing that the MoU signed between Orissa Government and Posco in 2005 had expired last year and "has yet to be renewed," the Minister said, "I would expect that the revised MoU between the state and Posco would be negotiated in such a manner that exports of the raw material are completely avoided."

Clearing the decks for the biggest foreign direct investment in the country, Ramesh noted that the environment and forest clearance for the USD 12-billion Posco project had generated huge interest both in India and abroad.

Maintaining that the laws on environment and forests must be implemented seriously, he said, "In this case, the 60 conditions imposed as part of my decision of January 31, 2011
provide a package of measures to ensure that the project will not be detrimental from an ecological and local livelihoods points of view."

The Minister, who visited Orissa last week and held discussions with Chief Minister Naveen Patnaik on this issue, said he opted to repose trust in what the state government has
so categorically asserted.

"Faith and trust in what the state government says is an essential pillar of cooperative federalism," Ramesh said recalling the state government's argument that the "two supposed palli sabha resolutions" he received were not valid documents in terms of mandatory provisions of law under the Orissa Gram Panchayat Act, 1964 and Forest Rights Act, 2006.

The Minister said he had received two 'palli sabha' (village council) resolutions of Dhinkia dated February 21, 2011 and of Gobindpur dated February 23 from Posco Pratirodha Sangram Samiti, the opponents of the project, and he had referred the matter back to the state government.

In its reply on April 29, the state government informed the Minister that the two "resolutions" were "fake ones" and stringent action for violation of provisions of Orissa Grama Panchayat Act, 1964, would be taken against Sisir Mohaptra, Sarpanch (headman) Dhinkia.

The state government alleged that the sarpanch had "overstepped the jurisdiction vested in him and misutilised his official position" to serve the interest of Posco Pratirodha Sangram Samiti of which he is the secretary.

The Minister said he expects that the Orissa government would "immediately pursue action" against the Sarpanch for what it has categorically said are "fraudulent" acts and "if no action is taken forthwith, I believe that the state government's arguments will be called into serious question.

Orissa to take action

Orissa government on Monday said it would take 'appropriate action' on Posco project after
receiving the order of Union Ministry of Environment and Forest (MoEF) which accorded final approval for forest land diversion for the proposed mage steel unit.

"We are yet to receive the order. We have just learnt from the media that such an order has been passed. When we receive the order, appropriate action will be taken," Chief Minister
Naveen Patnaik said.

Orissa Agriculture Minister Damodar Rout, MLA from the proposed plant site area for about 35 years, welcomed the MoEF order saying it would help in setting up the Rs 52,000 crore
project near Paradip in Jagatsinghpur district.

The Centre accorded the final approval of forest diversion over 1253 hectare (about 2900 acre) of land from among the 4,004 acre of total land demarcated to house the mega steel
plant near Paradip in Jagatsinghpur district.

Ramesh had on April 14 put on hold the forest land diversion proposed of the state government after he received claims by PPSS.