Orissa HC blow to Vedanta Aluminium's refinery expansion

In a major setback to Vedanta Aluminium Limited (VAL), the Orissa High Court today upheld the Centre's decision to stall expansion of its refinery plant at Lanjigarh.

The high court, however, has allowed VAL to make a fresh bid to obtain environmental clearance from the Union Ministry of Environment and Forests (MoEF) for expansion of its existing units.

Rejecting the writ petition of VAL and a related PIL, a division bench of Chief Justice V Gopala Gowda and Justice B N Mohapatra said: “The process for environmental clearance for any expansion attempt by the company has to be started de novo.”

Justifying the MoEF order for maintaining ‘status quo’ at the plant site, the high court said the ministry’s decision to withdraw the ToR granted to the company in 2009 was “legal”. The MoEF had stalled the expansion plan of VAL's refinery on October 20 last year.

Reacting to the high court’s verdict, VAL counsel Manoj Mishra said, the company will take its next course of action after studying the full text of the judgment, which is likely to be available in a day or two.

The company is now left with two options-either to challenge the decision of the High Court in Supreme Court or to furnish a fresh proposal to obtain environmental clearance as suggested by MoEF.

VAL, in August 2007, had applied for expansion of its existing refinery capacity from one million tonne per annum (mtpa) to six mtpa and that of its captive power plant from 75 MW to 300 MW.

The company, subsequently, went ahead with construction work for refinery expansion without prior environmental clearances.

While a substantial expansion work was in progress, the ministry invoking its power under the Environment (Protection) Act-1986, had ordered the company to maintain status quo at the plant site and directed the Orissa Government to take legal action against the company for violating the Environment Impact Assessment (EIA) notification of 2006.

Challenging the MoEF order, VAL had moved a writ petition in the high court, urging the court to quash the ministry’s order as it would hamper the socio-economic development of the area. All PILs, barring the one filed by Lanjigarh Anchalika Vikash Parishad were later withdrawn.

Responding to HC notices, MoEF had made it clear before the court that the violations committed by VAL have been referred to the expert appraisal panel and the company on January 11 was asked to submit a fresh proposal for clearance.

The ministry had also informed the company that any fresh proposal shall not be construed as regularisation of its earlier violations by undertaking construction activities without prior permission.