By Sanchit Sharma
(Research Associate at Lex Jura Law and student at HPNLU)
- Introduction
The Ministry of Mines Strategy Paper ‘Unlocking the Potential of the Indian Mineral Sector’, published in 2011, highlighted India’s low position in the global mining sector, trenchantly pointing towards a relatively small exploration budget, and lack of global investments in this arena.[1] Further, in terms of consumption, and as a nation, our mining sector only contributes 1.75% to the country’s gross domestic product, with importing minerals worth ₹2.5 trillion annually.[2] Notwithstanding this, the fact that India is an affluent source of minerals is not obscure to us.[3] Our nation is, quite literally, seated on a gargantuan pile of resources, waiting to be explored and utilized; this is evident from the fact that of India’s obvious geological potential area of 0.571 million sq. km, only 10% has been explored.[4]
Having said that, one might be tempted to ask, ‘Why, as a nation, are we not advancing in this sector?’ Plainly, the answer could not be attributed and singled out as a solitary factor; but, prima facie, the bone of contention always revolves around legislation passed by the legislature, and regulations notified by the executive. Interestingly, one such policy is out for our discussion. On March 22, the Parliament cleared the Mines and Minerals (Development and Regulation) Amendment Bill, 2021[5] [Bill]. The new amendments are aimed at bringing reforms to the untapped mining industry, and in effect, boosting the economic activities in our country. The following article shall conduct a scrutiny of this bill, bringing forth both negative and positive factors.
- Background of the Legislation
The Mines and Minerals (Development and Regulation) Act is a central legislation thatwas enacted in 1957, to regulate mineral mining in our country, and at a time when the public sector occupied the commanding heights of the economy, It is the primary legislative instrument, along with Mining rules, which have governed the operation and functioning of the entire mining industry in India for six decades. Owing to this essential position, it has gone through several rounds of amendments over the years; they range from the inclusion of the private sector in mining and inclusion of Foreign Direct Investment in exploration of minerals, and in more recent years, ease of doing business, with the inclusion of auctioning of mines. The legislation, therefore, holds a position of prominence, and needs constant revisions, whenever need be. Keeping this in mind, new amendments have been introduced by the center, which not only promise 5.5 million jobs and state-of-the-art technology[6], but also act in the tranche of the ₹20 trillion stimulus packages to mitigate the economic fallout of the coronavirus pandemic.[7]
All considered, on the outset, the amendments may have the potential for boosting the economy, but the measures proposed and results expected wouldn’t, unfortunately, yield the same desired result.
- Expectation v. Reality: The Conundrum
- Pressing Environmental Concerns: Mining, which is an extractive process, has both severe long term environmental and social implications.[8] However, it is to be noted that the concern being put forward does not independently stem from the bill; instead, it is a product of the bill and the EIA notifications issued by the government in 2020. Often termed as “violator friendly”[9], the EIA notifications not only violate several provisions preset in laws made for the local communities, like the Forest Rights Act, 2006; but, they also contain provisions that allows for a post-factorial approval[10] to many industries, meaning that prior to any environmental clearance, various projects like acid manufacturing, highway construction, or as in our case, coal digging could be allowed.[11] On top of that, cognizance of any violation, if any, is bestowed upon the project proponents themselves[12], and no scientist or environmental specialist is allowed to take cognizance.[13] The rules, therefore, not only effectively bypass the vigilant eye of hoi polloi, who have all right to take cognizance of contraventions in law, but in the name of ease of doing business, the notifications also play a significant role in deterioration of the environment. Keeping this in mind, and as per the amendments put forward, the bill allows for transferability of all approval and clearances.[14] The mines, therefore, can continue their operations, without any legal implication, and without any forethought to the individuals living around the mining area.
This will have severe environmental impacts, and are already being forecasted to be just as severe as the pandemic.[15] Not to mention, the most impacted of all would be the indigenous people, and in the midst of the pandemic, affected communities will be (and are currently being) relegated to token hearings and during the pandemic this has meant quick online hearings, and in some cases, these have also been bypassed.[16]
- Centralizing Decision Making Policy: In recent years, the Centre has come under fire for allegedly showing a tendency to centralize fiscal powers and policymaking.[17] One of the amendments in the bill proposed is of the same species. Entry No. 23 of List II (State list) to the Constitution provides that ‘Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union’, are within the purview of States.[18] Keeping this in mind, the bill suggests that if a state is unable to auction off listed mines, then the center will decide on the matter.[19] It has thus created a complex scenario where either the states will auction off mines much below par to maintain their sovereignty, incurring losses on the way; or, the states would have to make way for the center.[20] Even though the proceeds are going to go the state only[21], it is being termed as a sugar-coating a very bitter pill[22], as it takes away the state’s rights.[23]
As although the center, by the virtue of its power under Entry No. 54 of List I, has the power to make laws in this regard, which are expedient to public interest[24], one might argue that this public interest is counterbalanced by the extent of environmental and social repercussions it would wreak upon the indigenous population; therefore, in that light, it wouldn’t be wrong to say that the essence of federalism, that lies vested in our constitution, suffers from the scrutiny of this amendment. Even though Article 246 allocates a vast power to the center, the judiciary has, nevertheless, found that the application of this power should not be outright; instead, it should be based on various reasonable considerations;
- Political Move: Setting aside the legal perspective, the proposed amendments takes control of district mineral funds (DMF) from the state government, and this is being seen as a political move[25], rather than economic move, as most of the mineral rich states are non-BJP ruled.[26] It does interfere in something which, as mentioned previously, is present under State subject. This issue commenced when Nirmala Sitarman pointed out that Rest 25,000 crore are lying unutilized with DMFs; however, data gathered by FE shows that of Rs. 45,096 crore collected by DMFs so far, Rest 42,141 crore has already been sanctioned for over 2 lakh projects.[27] Furthermore, and notwithstanding the fact that the amendments have full potential to help the economy, it is hard to overlook the fact that these amendments, even though brought under the supreme legislation, are being pushed, or rather hurried, in the wake of a pandemic. The center, in the past, has followed a similar approach with EIA notifications, which barely saw any public consultation[28], or even the IT Rules, 2021;
- Constructive outcomes of the Bill
Pausing here, and before concluding, it would be pertinent for us to observe that the scrutiny conducted thus far was to bring forth the adverse consequences of the bill; this is, however, not to say that the amendments do not have their fair-share of constructive outcomes; for example, the Bill comes in the backdrop of the National Mineral Policy goal to increase mineral production by 200% in seven years.[29] Nonetheless, it shouldn’t perhaps be hard for us to acknowledge how the bill is also right in time of a persitig global pandemic, the second wave of which, incidentally, is more catastrophic, and holds the potential to render the economic position weak for our nation. Secondly, since the amendments provide for mineral blocks to be auctioned to the state government[30], it furnishes a jubilant opportunity for mining in many states; for instance, state-owned entities like Hutti Gold Mines Limited in Karnataka are prospectively being seen to take over Bharat Gold Mines Limited operating to mine Gold and bring back ‘the gold rush’ in Karnataka.[31] Lastly, amendments propose that rights, approval, clearances, license granted to a lessee shall remain valid even post termination of lease and siad authorisation will be transferred to the successful bidder of the mining lease. This amendment will not only augment an uninterrupted mining process, but it would also ensure that the new lease does not have to go through the redundant, superfluous, and nerve-wrecking process of obtaining fresh licenses.
- Concluding Remarks
W. Friedman has noted that economic necessity may reinforce social policy[32]. In the present scenario, ‘economic necessity’ has the potential to render a negative (or positive) social outcome. The present bill is being said to foster the belief in greater financial returns as somehow overcompensating the violation of rights of people and their habitat.[33] A critical object for an environmental policy is to integrate other frameworks that form a part of environmental governance; interestingly, as we have briefly observed, this is not the case here; further, EIA notification of 2020, act as an instigating factor to the whole equation. It is pertinent for us to note that in every legislation, ‘public interest’ has to take into consideration all strata’s of society, and cannot be afforded the power of vitiating the rights of individuals.
Perhaps the best way to conclude could be by projecting some numbers: In the 2019 ‘Ease of Doing Business’ report by the World Bank, India has steadily risen from 142nd ranking in 2014 to 63rd ranking in 2019;[34] however, it has steadily declined on the Environment Performance Index, from 141st rank in 2016 to 168th rank out of 180 countries in 2020.[35] The numbers speak for themselves.
Footnotes
[1] Vijay Kumar S (2019). Exploration and Mining in India: Time for a Deeper Look. TERI Discussion Paper (New Delhi: The Energy and Resources Institute) at page 7.
[2]Utpal Bhaskar, Lok Sabha passes MMDR amendment bill, mint (March. 19, 2021, 5:45 pm), https://www.livemint.com/news/india/lok-sabha-passes-mmdr-amendment-bill-11616154894177.html.
[3] Vijay, Supra note 1 at page 7; Hemant K Batra, Understanding the MMDR Act, thehindubusinessline (September. 25, 2020), https://www.thehindubusinessline.com/opinion/understanding-the-mmdr-act/article32698470.ece
[4] Supra note 2.
[5] PRS Legislative Research, The Mines and Minerals (Development and Regulation) Amendment Bill, 2021, PRS (March. 22, 2021), https://prsindia.org/billtrack/the-mines-and-minerals-development-and-regulation-amendment-bill-2021
[6] Shreya Jai, Decoded: Why the industry is unhappy with amendments to mining law, Business Standard (March. 23, 2021, 6:10 am), https://www.business-standard.com/article/economy-policy/decoded-why-the-industry-is-unhappy-with-amendments-to-mining-law-121032201391_1.html.
[7] Bhaskar, Supra note 2; Vijay, Supra note 1.
[8] Victoria R. Nalule, Social and Environmental Impacts of Mining, 55-81 (In: Mining and the Law in Africa. Palgrave Pivot, Cham)
[9] Akash Lohia, Problems with Draft EIA 2020: “Violator-Friendly” Says Fridays For Future India, The Citizen (August. 6, 2020), https://www.thecitizen.in/index.php/en/NewsDetail/index/13/19162/Problems-with-Draft-EIA-2020-Violator-Friendly-Says-Fridays-For-Future-India-
[10] Id.
[11] Lohia, Supra note 9.
[12] Clause 22, Subclause (1), EIA Notifications 2020
[13] Lohia, Supra note 9.
[14] Section 8B of the Bill.
[15] Lohia, Supra note 12.
[16] Editorial, The ‘Common Good’ Has a Price, 56(14) Economic & Political Weekly (2021)
[17] Surya Sartahi Ray, Now, Centre seeks to control district mineral funds, Financial Express (March. 18, 2021, 4:25 am), https://www.financialexpress.com/economy/now-centre-seeks-to-control-district-mineral-funds/2215006/.
[18] Constitution of India, Entry No. 23 of List II
[19] Section 14 (iii) of the Bill
[20] Neeraj Mishra, Mining Act: Will the Centre Usurp the Powers of Mineral-rich States?, The Leaflet, (April. 8, 2021), https://www.theleaflet.in/mining-act-will-the-centre-usurp-the-powers-of-mineral-rich-states/#
[21] Section 14 (iii) of the Bill
[22] The Print Team, Why MMDR Amendment bill will help unlock mining industry that has been under-performing, The Print, (March. 24, 2021, 3:40pm), https://theprint.in/opinion/why-mmdr-amendment-bill-will-help-unlock-mining-industry-that-has-been-under-performing/627587/
[23] Id; Special Correspondent, Rajya Sabha passes Mines and Mineral Amendment Bill, The Hindu (March. 22, 2021, 9:52 pm), https://www.thehindu.com/news/national/rajya-sabha-passes-mines-and-mineral-amendment-bill/article34134612.ece
[24] Constitution of India, Entry No. 54 of List I. See also: Baijnath Kedia vs State 1970 AIR 1436; Hingir-Rampur Coal Company v. State of Orissa AIR 1961 SC 459; State of Orissa v. M.A. Tulloch & Co. (AIR 1964 SC 1284)
[25] Surya Sartahi Ray, Now, Centre seeks to control district mineral funds, Financial Express (March. 18, 2021, 4:25 am), https://www.financialexpress.com/economy/now-centre-seeks-to-control-district-mineral-funds/2215006/.
[26] Neeraj Mishra, Centre usurping powers of mineral-rich states by amending Mines and Minerals Act, National Herald (April. 9, 2021, 8:45 pm), https://www.nationalheraldindia.com/opinion/centre-usurping-powers-of-mineral-rich-states-by-amending-mines-and-minerals-act;
[27]Supra note 25.
[28] Stella James and Nayana Udayashanka, From 2006 to 2020: The Ongoing Problems of the EIA, Socio-Legal Review (August. 13, 2020), https://www.sociolegalreview.com/post/from-2006-to-2020-the-ongoing-problems-of-the-eia
[29] Bhaskar, Supra note 2.
[30] PRS, Supra note 5.
[31] Amit Upadhye, V Velayudham And Ramakrishna Badsesh, Will it be gold rush again in Karnataka after Mines Act modification?’ The New Indian Express (March. 29, 2021, 2:37 am), https://www.newindianexpress.com/states/karnataka/2021/mar/29/will-it-be-gold-rush-again-in-karnataka-after-mines-act-modification-2282902.html.
[32]Dullbonline, Welfare State and Rule of Law, dullbonline (June. 28, 2017), https://dullbonline.wordpress.com/2017/06/28/welfare-state-and-rule-of-law-w-friedmann/.
[33] Supra note 19.
[34]Press Release, Doing Business 2020: Reforms Boost India’s Business Climate Rankings; Among Top Ten Improvers for Third Straight Year, The World Bank (October. 24, 2019), https://www.worldbank.org/en/news/press-release/2019/10/24/doing-business-india-top-10-improver-business-climate-ranking.
[35] Environment Performance Index, June 2020.