India’s mining law enables the government to recover 100% of the value of minerals extracted illegally. Based on this provision, in August 2017, the Supreme Court of India ordered the recovery of Rs 17,576 crore from mining companies that had extracted iron ore and manganese in Odisha in violation of environmental laws.
If the Modi government has its way, such recoveries will not be possible in the future.
On August 24, the mines ministry released a notice summarising “proposed reforms” to the Mines and Mineral (Development and Regulation) Act, the main law governing mining in India. One of the proposed amendments will change the very definition of “illegal mining”.
From extraction of minerals in violation of laws and regulations, the definition will be narrowed down to extraction done outside the mining lease area – or the defined area within which a company has been granted mining rights. Once the amendment is passed, any violation within the mining lease area – whether over-extraction of minerals beyond the mining plan or by flouting environmental and forest laws – will no longer be considered “illegal mining”.
This will be a bonanza for mining companies.
The Supreme Court’s 2017 judgement had left the companies alarmed. The order for recovery was limited to illegally mined iron ore and manganese in just three districts of Odisha between the years 2001 and 2011. Extrapolate it to other minerals and other states, it is evident that mining companies potentially stand to lose billions of rupees.
The Supreme Court’s judgement could have been used a precedent to get mining companies that have violated the law to pay up. But the Modi government is amending the law, seemingly to let them off the hook.
Making a policy U-turn
Strikingly, in January 2017, the Ministry of Mines had submitted an affidavit in the Odisha mining case in the Supreme Court, supporting an expansive interpretation of Section 21(5) of the MMDR Act, from which the definition of illegal mining flows. The ministry said the provisions “would apply to all minerals raised without any lawful authority, be it forest clearances or environment clearances or any other such legal requirements”.
Three years later, what has prompted the Modi government to take a full U-turn?
And why is the government pushing through the amendments in such haste?
A 10-day window
The mines ministry notice has invited comments and suggestions from the general public, states and Union Territories, industry and other stakeholders till September 3. The time given is just 10 days – a fraction of the 30-day minimum window under the pre-legislative consultation policy.
“The government is making a mockery of cooperative federalism and transparency when it seeks responses to far reaching changes in the mining sector in India in 10 days,” said R Sreedhar, former chairperson of Mines, Minerals and People, an alliance of over 160 mining affected communities and support groups, in a statement released by the Mineral Inheritors Rights Association.
Worse, the mines ministry has only shared a summary of the proposed changes, not the actual draft of the amendments.
“Pre-legislative scrutiny contributes towards making legislative and policy proposals more robust,” said Chakshu Roy, head of legislative and civic engagement at PRS Legislative Research. “They should not be reduced to check marking exercises.”
Lack of information
The change in the definition of illegal mining is just one of the many amendments to the mining law proposed by the Modi government. One of the amendments would allow auctions of mineral blocks for which reconnaissance permits, prospecting licences, and approvals had already been granted, but which failed to come into operation. This is a good move – Scroll.in had critiqued the 2015 amendments to the mining law that had put these blocks outside the purview of auctions. However, the government has not shared any details on how many blocks have already been escaped auctions because of the 2015 amendments.
Another proposed amendment would pave the way for the auction of partially explored mining blocks, or areas for which the government does not yet have a full estimate of the volume and spread of mineral reserves. Wouldn’t such an auction run the risk of larger mineral deposits getting auctioned at lower prices? Scroll.in emailed queries to the Ministry of Mines but did not get a response.
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