Tuesday, December 13, 2011
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Around 90 per cent of mining being done in India is illegal but govt is keen on opening more areas

Mining is something that if undertaken, the possibility of any other alternative use of that land is finished. That’s why it is called a terminal industry. We all know about the socio-political issues related to mining. Most of the mines are located in areas which are homeland to tribals and dalits and hence have specific development issues. The problem with emerging countries like India and China is they are not willing to look for alternatives to mining. Their economies are increasingly getting dependent on mining hence binding them to systems that have failed in the west.

When talking about governance, we have to consider community welfare rather than concentrating on agriculture and mining as sectors of income generation. In India, we have an oppressive but legitimate government. So whenever there is any protest against mining by people, the involvement of state police makes it illegal and against a democratically-elected government. Industry is overpowering today and false propaganda is generated by raising issues like how we are facing acute shortage of electricity and how our steel usage is still very low as compared to other countries and hence we need to mine much more. Specific issues like water shortage in the area because of mining are ignored in the debate.

We are still at a stage where accurate information about impact of mining on environment is not available. At least the government and civil society should get the right information no matter how they use it further. A recent CAG report revealed that 239 mines of Coal India Limited (CIL) had been operating without environmental clearance. Instead of issuing immediate notice, the government decided to lend more time to CIL on the pretext that any harsh action may impact the country’s power production.

A recent CAG report revealed that 239 mines of Coal India had been operating without environmental clearance. Instead of issuing immediate notice, the government gave more time to CIL on the pretext that any harsh action may impact country’s power production.

Beneficiaries and losers

Investors and investment bankers constitute a major section which benefits from mining. International investors are increasingly being invited. For instance, Warren Buffet who moves around in India as a great philanthropist has a stake in POSCO. Owners and managers of mines also benefit from this activity besides politicians and contractors. 

Now let’s have a look at who is paying the cost of mining. Local communities are being affected the maximum because of environment degradation and its health impact since they consume all the pollution. Another section is of workers who are progressively getting paid less as compared to profits earned by mining companies. If in 1980, 9-11 per cent earning was spent on workers, today it has come down to 4-7 per cent.

The local ecosystem is suffering the worst damage, which in many areas is irreversible. For instance, untreated waters from mines have contaminated Brahmani river in Orissa to such an extent that restoration is next to impossible. When we take about valuation of damages, the issue is what standards are we following? Compensations can be asked for damage to the ecosystem but will these valuations depend on the standards of international organisations or local communities? This is a moot question, which is yet to be addressed. 
The Indian government has contradictory policies. While our Constitution says India is a socialist, secular and democratic republic, our policies have been diametrically opposite to this principle since 1991. The corporate-friendly policies pass off as economic agenda. There are contradictions in agendas of different government departments too. While one department demands $10 billion for the green mission, another roots for 100 per cent foreign direct investment in mining which will destroy forests.

There are contradictions in agendas of different government departments too. While one department demands $10 billion for the green mission, another roots for 100 per cent foreign direct investment in mining which will destroy forests.

This entire hullabaloo goes on even as around 90 per cent of mining being done in India has been found to be illegal. In response to a question raised in the Parliament recently, the Union Ministry of Mines had submitted that 82,000 illegal mines had been detected in the country last year. On the other hand, there are only around 8,000 mines which are operating with official sanction.  The fact that our government favours mining is evident from the minor alteration in nomenclature of the law governing mining. The original legislation was Mines and Minerals (Regulation and Development) Act which was amended in 1990s to be known as Mines and Minerals (Development and Regulation) Act because instead of regulation, development of mines gained prominence. Of all the laws which directly or indirectly deal with mining, only a small window of opportunity is offered under the environment impact notification for local community to represent their apprehensions or grievances. Besides this, no other law has a provision to give voice to those who are going to bear the brunt of mining either through land acquisition, depletion of natural resources or environmental pollution.

Change in law: What to expect?

The draft Mines and Minerals Development and Regulation Act 2011, which will soon be placed in the Parliament, has also been tweaked to favour the corporates. The original draft, which had set things right by ensuring 26 per cent equity in any mining project to affected communities, has now been amended because of intense lobbying by private companies. Instead of ownership, 26 per cent of the previous year’s profit will now be spent on welfare of local communities affected by coal mining. In case of other minerals, the provision has been diluted to read that an amount equal to royalty given to the state will be spent on community welfare.

A district mineral foundation will be formed in the mining areas with the district collector as its chairman and district mining officer as the member secretary who will decide on utilisation of the fund. Even in this set up, it is expected that Rs 10,000-15,000 crore would be spent on welfare of the local area. However, one of the key issues raised by the communities regarding consultation in framing rules and regulations has not been addressed. In addition, issues of mine workers need to be included in the legislation. Currently, there are two laws governing the workers. If an accident occurs on the surface, the Factories Act is implemented and local labour inspector is authorised to take action. However, if an accident occurs under the ground, the director general of mine safety needs to be approached. The confusion regarding two should be rectified.

There is a proposal to establish a state-owned company to act on behalf of big players and get government clearances for mining operations. Needless to say, a state-run firm would find it much easier to get the mandatory clearances and licences.

There is a proposal to establish a state-owned company to act on behalf of big players and get government clearances for mining operations. Needless to say, a state-run firm would find it much easier to get the mandatory clearances and licences for operation from the government functionaries. Also, there is a talk about offering long term price security to investors so that they don’t post losses.  We need to understand that because of rampant mining, our natural mineral resources are depleting. The self-sufficiency we have acquired in certain minerals is not going to be long lasting. India needs to mine only for its own requirements rather than turning to export. A moratorium on new mines is essential at least till we succeed in regularising or completely shutting down the illegal mining business.

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