UN independent human rights experts have called for an immediate halt to a $12bn (£7.4bn) steel project in the Indian state of Odisha amid concerns that construction will displace 22,000 people and disrupt the livelihoods of thousands more.

Approval for the scheme – the biggest single foreign investment in the country – was granted in 2011 after a six-year struggle between the South Korean steel giant Posco and environmental campaigners. However, construction has been delayed by regulatory hurdles and public protests at plans to clear more than 1,600 hectares of mostly forested land.

Acquisition of the land was completed in July, at which point Posco expected construction to begin within six months or a year. Now, eight UN special rapporteurs have weighed in, calling for the project to be suspended.

"The construction of a massive steel plant and port in Odisha, India, by South Korean steel giant Posco must not proceed as planned without ensuring adequate safeguards and guaranteeing that the rights of the thousands of people are respected," they said.

Though India has the primary duty to protect the rights of those whose homes and livelihoods are threatened by the project, the experts said: "Posco also has a responsibility to respect human rights, and the Republic of Korea, where Posco is based, should also take measures to ensure that businesses based in its territory do not adversely impact human rights when operating abroad."

The UN experts intervened after allegations of human rights abuses. "Forced evictions constitute gross violations of human rights," said the UN special rapporteur on adequate housing, Raquel Rolnik, "and may only be carried out in exceptional circumstances and in a manner consistent with human rights law, including after a genuine consultation, without leaving people homeless or vulnerable to further human rights violations."

The UN special rapporteur on the right to food, Olivier De Schutter, warned that the forcible removal of people from their lands could be tantamount to depriving them of their means of subsistence. "People who would be evicted for the Posco project have relied on their lands for generations in order to obtain adequate food and sustain themselves and their families," he said.

In July, Posco, the world's fourth-largest steelmaker by output, dropped plans to build a $5.3bn mill in the southern state of Karnataka, but said it would press ahead with the long-delayed and troubled Odisha project.

On its website, Posco India says it "has been highly sensitive to the human rights of the local community", and strongly denies having abused rights. "Posco has never infringed upon any human right of any individual in the course of project implementation. Its policy has been inclusive and protective," the company said.

"Posco has, therefore, always urged the government of Odisha to first safeguard the human rights and livelihood of innocent villagers and rejects/deplores any unlawful violence against them."

The plant, to be based in the port city of Paradip, was conceived in 2005, and is expected to create nearly 50,000 jobs. Posco says the plant has annual production capacity of 12 million tons and will include iron ore mine development over 30 years (total 600 million tons) at mines in the Keonjhar and Sundargarh districts of Odisha, as well as development of related infrastructure.