A new analysis, published today by BankTrack, shows commercial banks may be considering providing finance for a highly controversial steel project in India, despite strong opposition from local communities and international NGOs. On February 20th, BankTrack sent letters to 22 recent bank financiers of JSW Steel, including BNP Paribas, Mashreq Bank, and Standard Chartered, calling on them to publically rule out support for a proposed steel and coal-fired power plant project in Odisha, India that has been opposed by the local community since 2005. Only half of the banks offered a response, and none ruled out finance for the plant. (1) 

BankTrack’s letter highlighted in detail the serious human rights violations suffered by the communities of the four Indian villages in Jagatsinghpur district, Odisha State. JSW Steel is developing an industrial park, including a steel plant and its captive coal power station, known as JSW Utkal Steel, on their lands. The letter urged the banks to steer clear from financing this project on the basis of these human rights issues, including loss of livelihoods due to land grabbing, forced evictions, lack of Free, Prior, and Informed Consent (FPIC) from the Indigenous population, the violation of the rights of human rights defenders, and gender-based violence, as well as risks of destruction of critical ecosystems and massive greenhouse gas emissions.(2) The letter also invited banks to establish a dialogue with affected communities on the issues raised, an invitation that none of the banks accepted.

Of the 22 banks, only 12 responded to the letter, while none committed not to finance the project or at least responded substantively, addressing the allegations raised.(3) This result is unsettling, as it emphasises once more the alarming trend among commercial banks to offer fewer responses and less transparency on their financing of harmful companies and projects. As BankTrack’s 2024 Human Rights Benchmark highlighted, only 21% of the enquiries regarding human rights impacts addressed to commercial banks result in a response addressing the issues raised or acknowledging a link to the impacts, while only 15% result in a response that describes any kind of action being taken by the bank to prevent, mitigate or address the impact or the bank’s link to it.(4) The quantity and quality of the responses to the letter addressed to JSW Steel’s financiers appear even sub-par to these already discouraging statistics. (5)

Next to the severe human rights impacts the affected communities are already suffering, JSW Utkal Steel, once operational, would also cause massive greenhouse gas emissions. No climate impact assessment has been conducted, even though the project would apply highly polluting and outdated steel production technologies and rely on captive coal power. It would also further strain the environment of a region that is already deemed as one of the most polluted areas in India, due to the activities at the nearby Paradip port. The project was originally announced by South Korean steel maker POSCO in 2005, while JSW Steel took over in 2017 after local peaceful opposition managed to drive POSCO away. The project has been met with strong resistance from the local communities.

Prasant Paikray, Spoke Person, Anti-jindal & Anti-POSCO Movement (JPPSS), Odisha, India, says: “Financing this project is unacceptable. JSW is forcefully grabbing our land and resources without our consent. They are violating the principle of free, prior informed consent as specified in Forest Rights Act 2006 and Indian constitution.” 

Camilla Perotti, Banks and Coal campaigner at BankTrack, says: “It is troubling that banks choose not to respond or to hide behind client confidentiality when it comes to projects that are actively and severely impacting the human rights of thousands of people. This project should not be developed for numerous human rights, climate, and environment-related reasons, let alone receive finance from some of the largest global commercial banks.” 

Notes to editors

1. The letter was addressed to these 22 banks: ANZ, Axis Bank, Barclays, BMO Financial Group, BNP Paribas, Citi, CTBC Bank, DBS, Deutsche Bank, First Abu Dhabi Bank, Groupe BPCE, HSBC, ING, JPMorgan Chase, Mashreq Bank, Mizuho Bank, MUFG Mitsubishi UFJ Financial Group, Société Générale, Standard Chartered, State Bank of India, Sumitomo Mitsui Banking Corporation (SMBC), and UBS. You can read an example letter here. 

2. The affected communities include the Adivasi people, and Dalits (Scheduled Caste)  classified as Indigenous under India’s Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities Act) 1987. 

3. These 12 banks responded to the letter: Barclays, BNP Paribas, Deutsche Bank, Groupe BPCE, HSBC, ING, Mizuho Bank, MUFG Mitsubishi UFJ Financial Group, Société Générale, Standard Chartered, Sumitomo Mitsui Banking Corporation (SMBC), and UBS.

4. ‘The BankTrack Global Human Rights Benchmark 2024’ (November 2024) p 48 et seq.

5. An analysis of the responses has been added to BankTrack's Response Tracking Database. Scores of 0, 0.5, or 1 were assigned to each criterion for every bank's response, following the methodology first outlined in BankTrack’s Actions Speak Louder report, and later integrated into BankTrack's Global Human Rights Benchmark.