The Supreme Court on Wednesday said mining companies that had been operating without necessary clearances in Odisha would be subject to a 100% penalty on the price of the ore that had been illegally extracted. The bench also called the government’s policy on mining outdated and directed it to frame a new policy by December 31, 2017, to protect India’s natural resources for future generations.
“The facts revealed during the hearing of these writ petitions filed under Article 32 of the Constitution suggest a mining scandal of enormous proportions and one involving megabucks,” said the bench, headed by Justice Madan B Lokur. “Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests and perhaps caused untold misery to the tribals in the area.”
The order was based on a Public Interest Litigation filed by Common Cause, an NGO which has demanded action against illegal leases pointed out by the Justice MB Shah Commission on illegal mining. The violations primarily involve companies that had illegally mined ore in excess of the quantum permitted under the forest or environmental clearances they had been granted. Some had failed to obtain the clearances altogether.
Common Cause’s Prashant Bhushan had also called for a Central Bureau of Investigation inquiry into the connivance of officials involved in the scam.
Although the court did not order a CBI investigation, it did ask that an expert committee headed by a retired Supreme Court judge be set up to “identify the lapses that have occurred over the years that have enabled rampant illegal and unlawful mining in Odisha”. The panel will also have to recommend preventive measures not only to Odisha, but to all states in general.
Illegal mining in Odisha
In 2014, a Central Empowered Committee had found that 102 of 187 iron and manganese ore mining lease holders did not have the requisite clearances. According to the CEC, 2,155 lakh million tonnes of iron and manganese ore had been extracted without environmental clearances, a figure the court called “frightening.”
The CEC estimated that the total notional value of minerals produced without just environmental clearances, not counting house without foreign clearances, came to Rs 16,576 crore. Later, the Justice MB Shah Commission of Enquiry on illegal mining in Odisha had found that the scam in just two districts, Keonjhar and Sundargarh, comes to nearly Rs 60,000 crore.
The court had said it would not lean on the Shah Commission findings for its conclusions. It ordered that any penalty recovered from companies that had been found guilty of illegal mining must be deposited in the Special Purpose Vehicle for tribal welfare and area development works. It also directed the chief secretary of Odisha to provide the audited accounts of this SPV in due course.
Looking beyond Odisha, the court, in its order, also pointed out that the Union government does not have an effective mining policy. It said that the one that does exist does so only on paper “and is not being enforced perhaps due to the involvement of very powerful vested interests or a failure of nerve”.
It directed the Centre to develop a new mining policy, one that takes into account “the advent of rapacious mining in several parts of the country”, calling for the new law to be “more effective, meaningful and implementable”,