Blood Money: U.S. Bank Funds Korean Project That Will Destroy Native Community

By Daphne Wysham, AlterNet. Posted April 21, 2007.

"When you share love's warmth, it returns even warmer. Together we can move the world."

So says the website of the South Korean-based Pohang Iron and Steel Co., or POSCO, an image of two beaming children and a bucolic mountain backdrop framing the message. American investors are among those sharing in the "warmth" of POSCO's profits, up 44 percent in the first quarter.

POSCO, the world's fourth-largest steel company, has apparently fooled many U.S. investors into believing this saccharine façade: The Bank of New York, a U.S.-based investment firm, is POSCO's trustee and largest shareholder, holding 22 percent of its shares. Another U.S. investment firm, Capital Research & Management (Capital Group Companies), one of the world's largest and most publicity-shy investment management companies, is No. 2, with a 4.4 percent share in POSCO.

Yet POSCO has been accused of marshaling police who jailed and beat striking union members -- one to death -- in its home country of South Korea, and it now stands poised to engage in even more violent tactics in India's eastern state of Orissa.

There, in the coastal village of Jagatsinghpur, farmers have railed against eviction orders for the past 22 months. Today, over 1,000 Indian officers -- 20 platoons -- of state police have encircled the villages where the POSCO site is planned in an attempt to repress the growing resistance. Farmers have formed "self-sacrifice squads" -- 500 men and women are prepared to die rather than move. Today, the Jagatsinghpur villagers have barricaded themselves behind bamboo fences in a desperate bid to protect their land.

In recent months, over 15 people were killed after police fired on protestors refusing to move to make way for an Indonesian chemical plant in Nandigram, West Bengal. Like the proposed POSCO site, the Nandigram village was one of hundreds of Indian "special economic zones" -- or SEZs -- neoliberal dreamlands where land rights, environmental and labor protections, and other laws are all but eliminated to attract foreign investors.

Similar massacres have taken place in SEZs in Kalinganagar and Kashipur, also in Orissa, and elsewhere. It is for this reason that the Jagatsinghpur villagers are demanding the immediate removal of the paramilitary forces and police from the vicinity of the proposed POSCO site, says Debjeet Sarangi from Living Farms, an organization working with farmers on sustainable agriculture in Orissa. And, he adds, they are asking for solidarity in their call that no project should proceed against the wishes of the local people.

The $12 billion POSCO project in Orissa is the largest foreign investment project ever in India. POSCO plans to take over 8,000 acres of fertile farmland to build a massive steel, automobile and ship-building complex, complete with its own power plant and port, displacing over 30,000 people. The POSCO project is the largest in the history of South Korea's overseas investment.

See more stories tagged with: free trade, human rights, posco, foreign direct investment, new economy

Daphne Wysham is a fellow at the Institute for Policy Studies in Washington, D.C., where she is the director of the Sustainable Energy & Economy Network.

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