Posco says it's a law abiding company

New Delhi: Amid a green panel suspending environment clearance to Posco's $12 billion steel project in Odisha, the South Korean steel major today said it is a law abiding company and would comply with all the directives in this regard.

"We are a law abiding company and will abide by the directives. The National Green Tribunal has asked the Ministry of Environment and Forest (MoEF) to review afresh the clearance and we will ensure that we follow all directions to us," a company official said.

[caption id="attachment_261778" align="alignleft" width="380" caption="Agencies"][/caption]

In a blow to the country's single largest FDI, the Tribunal today suspended the green clearance granted to the much-awaited project on 31 January, 2011 and directed MoEF to review afresh the clearance and attach "specific conditions" which Posco would have to follow in a "defined timeline".

The Tribunal pointed out that memorandum of understanding between the Odisha government and Posco states that the project is for steel production of 12 million tonnes per annum (MTPA) but the environment impact assessment (EIA) report has been prepared only for 4 MTPA in the first phase.

More from Business

Meanwhile, industry body Assocham said suspension of the clearance is "disturbing," especially in view of prime minister Manmohan Singh's recent assurance to leading businessmen in Seoul that they must have faith in India notwithstanding the delays.

The Tribunal decision came close on the heels of Prime Minister Manmohan Singh assuring South Korean President Lee Myung-bak in Seoul that the project will be implemented and there was progress on it.

"Over six years of delay in giving various clearances for the $12 billion project - which is the biggest FDI in the country - will have an adverse impact on future investment climate," it said.

The steel plant, proposed at Jagatsinghpur district in Odisha, is hanging fire for over six years due to land acquisition hurdles.

PTI