Sterlite Copper-Should the Plant be Reopened?
| Case Code: BENV051 Case Length: 16 Pages Period: 2000-2018 Pub Date: 2024 Teaching Note: Available |
Price: Rs.400 Organization: Public company Industry: Chemicals Countries: India Themes: Business Ethics, Disclosure and Transparency, Ethical Decision Making |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Sterlite in Tamil Nadu
Sterlite was allotted 500 acres of land in the western Indian state of Maharashtra in 1992 to set up a copper smelter at an investment or Rs.7 billion. Though work on the project began, it had to be suspended in 1993 after locals went on a year-long agitation. The people of Ratnagiri, where the plant was to be located, demonstrated their opposition to the plant citing the sensitive coastal environment in the area. They were concerned about the high sulfur emission and slag which could adversely impact local crops like the Alphonso mango, cashew, and coconut. An expert committee constituted by the Maharashtra government to look into the matter, agreed with the people.
The Problems Begin
Just a few months after the plant started operating, the residents of Toothukodi started facing problems. They complained of health issues like headaches, coughs, choking, etc., due to smoke from the plant. In 1997, several workers in a plant near the factory fainted due to a gas leak from Sterlite. The people lodged complaints with the district administration. But the TNPCB and the district administration defended Sterlite..
Violations Persist
In March 2013, the locals complained that they were experiencing a feeling of suffocation, eye irritation, cough, and other conditions of severe discomfort because of the pollution caused by the Sterlite plant. Sterlite, however, argued that the high levels of pollution could be due to other plants located in the vicinity. But when the pollution measuring equipment at the sulfuric acid plant was checked..
Impact of Unsustainable Growth
The groundwater in several areas around the plant was highly contaminated. The public hand pumps in Kumareddiapuram located 500 meters from the smelter complex yielded water that was yellow in color. Within one year of the smelter’s operations being launched – in 1997 – the complaints of groundwater contamination started pouring in. But no remedial action was taken. The villagers were forced to buy expensive bottled water for drinking. But they still used the groundwater for bathing and washing and that left them exposed to the contamination..
2018 Crisis
In February 2018, Sterlite announced a brownfield expansion of the plant, doubling the annual production capacity to 800,000 tons per year. It had filed an application for obtaining environmental clearance for proposed capacity expansion..
The Aftermath
The government announced a compensation of Rs.1 million for those killed in the protest. This was later increased to Rs.2 million. But this did little to douse the anger of the people. According to a woman whose house was located close to the plant, “If we kill someone from their family and offer them money, will they agree to it?”..
What next?
In May 2018, Sterlite requested the TNPCB to permit the operation of emergency support services and to restore minimum power supply as the tanks that stored sulfuric acid were prone to corrosion and could be hazardous. In the appeal, Sterlite stated that a technical procedure needed be followed before the plant could be shut down. But the government of Tamil Nadu issued an order for the permanent closure of the plant...
Exhibits
Exhibit I: Group Structure
Exhibit II: Mission of Sterlite Copper
Exhibit III: Map of Tamil Nadu and location of Thoothukudi
Exhibit IV:
Environmental Impact of Copper Production
Exhibit V: NEERI Mandate
Exhibit VI: Annual Report Showing Production Details
Exhibit VII: NEERI Report – 2011
Exhibit VIII: Pages from the NEERI Report
Exhibit IX: Sulphur Dioxide Levels on March 23, 2013 at Sterlite Copper
Exhibit X:
Precautionary Steps Suggested by NGT to Safeguard the Environment
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