Goa Foundation

Supreme Court Dismisses Vedanta’s Plea to Renew Mining Lease in Goa

Curtains are finally down on the mining lobby’s last-ditch attempt to exploit legal loopholes to circumvent the spirit of the Supreme Court’s landmark ruling in 2018.

New Delhi: The Supreme Court bench of Justices D.Y. Chandrachud, Vikram Nath and Hima Kohli on Tuesday dismissed the appeal filed by Vedanta Ltd against a Bombay high court order concerning their alleged mining rights for a period of 50 years, that is till 2037, despite earlier Supreme Court judgments cancelling their leases. The bench also allowed the withdrawal of a writ petition by former mining lease holder Geetabala Parulekar.

On July 9, the Supreme Court had dismissed a batch of review petitions filed by the Goa government and by Vedanta against its judgment dated February 7, 2018 (in Goa Foundation v Sesa Sterlite) cancelling the grant of second renewal for 88 mining leases in Goa and directing grant of fresh leases and environmental clearances.

In Goa Foundation v Sesa Sterlite, the Supreme Court had invalidated the renewals granted under Section 8(3) of the MMDR Act, as it stood before the 2015 amendment Act, and held that the tenure of the leases ended on November 22, 2007. The judgment was authored by Justice Madan B. Lokur, on behalf of himself and Justice Deepak Gupta, both of whom subsequently retired.

The bench of Justices Lokur and Gupta had concluded as follows:

“The State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction.

The second renewal of the mining leases granted by the State of Goa was unduly hasty, without taking all relevant material into consideration and ignoring available relevant material and therefore not in the interests of mineral development. The decision was taken only to augment the revenues of the State which is outside the purview of Section 8(3) of the MMDR Act.”

On October 29, 2019, Vedanta wrote to the Goa government demanding an extension of their mining lease deed to enable them to carry on mining operations till 2037. The company argued that they were entitled to a 50-year period on their lease, after amendments to the MMDR Act, 1957 came into force on January 12, 2015.

Also read: Vedanta-Owned Company Evaded Thousands of Crores of Mining Royalties Owed to Rajasthan Govt

The Goa government agreed with their standpoint, but expressed an inability to extend the lease deed due to the judgment delivered by the Supreme Court in February 2018.

Vedanta, however, argued that with the coming into force of the 2015 Amendment Act, the tenure of all mining leases is deemed to be 50 years from the date of grant. The company pointed out that the Supreme Court had in Common Cause v Union of India (2016) had clarified that the benefit of such a tenure shall accrue even to leases that expired before the coming into force of the 2015 Amendment Act.

Vedanta thus submitted that notwithstanding the expiry of its leases on November 22, 2007, in view of Section 8A(3) of the MMDR Act, its leases stood extended by operation of law till November 22, 2037, that is, 50 years from the date of grant and which in the present case would be 50 years from 1987. The company attached a written opinion of senior advocate, Harish Salve, on the issue, in its submission to the Goa government.

Based on Salve’s opinion, Vedanta submitted that the direction in Goa Foundation-II (2018) judgment for the grant of fresh mining leases would come into play, and would take effect only after the 50-year period expires in 2037. “It is of some significance that the judgment in Goa Foundation (2018) does not address the effect of Section 8A upon the leases that were deemed to be granted and renewed by the operation of the Abolition Act,” Vedanta wrote to the Goa government.

In response, the Goa government pointed to Supreme Court’s directions in the Goa Foundation-II (2018) judgment as follows:

Paragraph 6: “The mining lease holders who have been granted the second renewal in violation of the decision and directions of this court in Goa Foundation are given time to manage their affairs and may continue their mining operations till 15th March, 2018. However, they are directed to stop all mining operations with effect from 16th March, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted.”

The Bombay high court, in its November 25, 2019 order in Vedanta Limited v Director of Mines & Geology & Others, rejected Vedanta’s contention that the state government was obliged to amend the lease deed in view of Section 8(A)(3) of the MMDR Act. Vedanta also submitted to the high court that the Supreme Court’s judgment in Goa Foundation (2018) did not come in the way of the state government in considering its representation.

The Bombay high court rejected Vedanta’s plea that the Supreme Court’s judgment in Goa Foundation (2018) was “per incuriam” and/or “sub silentio” and therefore, the state government or for that matter, the high court, should not consider itself to be bound by the said decision. Vedanta, however, did not press its plea of “per incuriam” during the hearing, but requested that the issue of “sub silentio” might be considered.

The high court asked Vedanta how it could direct the state government to consider its representation without being bound by the clear directions issued by the Supreme Court in the Goa Foundation-II (2018). “It will not be proper course of action for this court to follow. The state government too, quite correctly, has refused to adopt such a course of action,” the high court observed in its order.

Also read: Is the Modi Govt Watering Down Rules in the Thermal Power Sector to Help Corporates?

The high court pointed out that when the Supreme Court delivered its judgment in the Goa Foundation-II (2018), the provisions of Section 8(A)(3) of the MMDR Act or for that matter the entire 2015 Amendment, by which such provision was introduced, were already in force. The Supreme Court had made specific reference to the 2015 Amendment as also its earlier decision in Common Cause. The high court was disinclined to entertain Vedanta’s petition particularly because the state government had already filed a review petition before the Supreme Court in respect of the Goa Foundation-II (2018) judgment.

The high court found fault with Vedanta for not making the Goa Foundation a party in its petition.

Vedanta’s writ petition before the Bombay high court was dismissed on November 25, 2019, expressing inability to grant relief in view of the Supreme Court’s judgment of February 7, 2018. It is in response to the high court’s dismissal that Vedanta filed an SLP which was dismissed by the Supreme Court bench on Tuesday.

Parulekar also filed a similar representation before the Goa government demanding lease extension till 2037. This was also rejected by the Goa government. Unlike Vedanta, Parulekar did not move the high court, but filed a writ petition directly in the apex court.

On Tuesday, the Supreme Court disapproved of Vedanta’s attempt to raise the ground of “per incuriam” against the Goa Foundation-II judgment. “You cannot have two bites in the cherry. This is an abuse of the process of the law. It cannot be open to you to come again. You had argued the review here. You cannot bite the cherry here and there,” LiveLaw quoted the bench as saying.

Also read: Mining Had Always Affected Villagers in Goa. The Sudden Stop Finds Them Worse Off

Claude Alvares, director of the Goa Foundation, in a statement said:

“This was the last straw to which the mining lobby in Goa was hanging on to in desperation…After the dismissal of the review petitions (by the Supreme Court in July 2021), it was apparent that the appeals and petitions filed by Vedanta and Parulekar would also go out of the window. With this development, the private mining industry and its lobbies which held sway over the sector for more than 50 years has come to an inglorious end.”

It was thanks to Goa Foundation’s PIL, for the first time since mining leases were handed out by the Portuguese in the last century, that mining in Goa was brought to an abrupt end, suspending more than a decade of senseless extraction and looting which irreversibly brutalised the natural environment, destroyed the peace of village communities and damaged public health. The statutory authorities and other public bodies turned a blind eye or participated in the plunder and assault.The judgment in Goa Foundation-1 was delivered by the Supreme Court bench of Justices A.K. Patnaik, Surinder Singh Nijjar and Fakkir Mohamed Ibrahim Kalifulla in 2014.

“Rapacious and rampant exploitation of our natural resources is the hallmark of our iron ore mining sector – coupled with a total lack of concern for the environment and the health and well-being of the denizens in the vicinity of the mines,” Justices Lokur and Gupta wrote in 2018. Development must be sustainable and equitable development, and not otherwise, they had held. With Tuesday’s order, the Supreme Court has sought to reiterate its 2013 and 2018 rulings in Goa Foundation.

On Tuesday, as reported by LiveLaw, the Supreme Court bench indicted the Goa government for backing large entities in renewal of mining lease without following due process. It asked the Solicitor General, Tushar Mehta, who appeared for the Goa government, to advise his client to follow competitive bidding in handing out mining leases to maximise revenue instead of backing the renewal of leases of large mining companies.

Goa Hopes To Revive Mines – But Affected Communities Fear Return of Old Normal

A February 2018 order of the Supreme Court had effectively halted all mining operations in the state.

The Goa government, led by the Bharatiya Janata Party (BJP), recently passed the Goa Mineral Development Corporation (GMDC) Bill 2021 during the legislative assembly’s monsoon session. The Bill that enables the creation of a state-owned mineral corporation to revive mining operations in the state was passed without any discussion amid a walkout by the opposition party.

The Bill was introduced and passed following the July 2021 order of the Supreme Court of India dismissing review petitions filed by the Goa government and Vedanta Limited against the apex court’s February 2018 order ruling against the Goa government’s decision to renew 88 mining leases.

The February 2018 order of the apex court halted all mining operations in the state. The government now hopes that the decision to form the mineral corporation will help them during the state legislative assembly elections scheduled for early 2022.

In the July 2021 order, the Supreme Court observed that there were no legitimate grounds for review and dismissed the petitions on grounds of limitation. According to the law, the review petitions need to be filed within 30 days of the judgement. The apex court criticised the petitioners for a delay of more than 650 days suggesting that they waited for the judges who authored the 2018 order to retire. “Such practice must be firmly disapproved to preserve the institutional sanctity of the decision making of this Court,” the court said in its order.

Goa has been trying to find ways to move forward after the Central government’s 2015 amendment to the Mines and Mineral Development and Regulation (MMDR) Act 1957 made it difficult for them to allocate mining rights without auctioning them even though it provides for reservation of mining rights in favour of a government-owned company.

According to the latest GMDC Bill, the mineral Corporation that will be formed, after obtaining mining leases and prospecting licenses shall carry out all mining operations, including all business related to mining dumps, transportation, extraction of ore, export of ore and mining rejects, slurries, tailings, etc. It said that the Corporation shall also participate in the auction related to mining lease/prospecting licence as and when government auctions such mining leases/ prospecting licenses.

The Corporation will be headed by the state’s chief minister as its ex-officio chairman and will have the secretaries of mines, environment and finance, and a geologist as its members. The Bill was passed by the Goa Assembly ten days after chief minister Pramod Sawant returned from New Delhi where he met the Union Mines Minister Prahlad Joshi and signed an MoU with the ministry’s Mineral Exploration Corporation Ltd. for exploration of Goa’s mineral reserves – a prerequisite for auction.

If the state chooses to reserve the mining leases in favour of its newly created corporation, it will need the central government’s approval for the same. However, with no mining equipment and infrastructure of its own, the Corporation is likely to tender contracts for mine developers and operators (MDO) to run these leases. If the central government turns down its request to the state, the leases will be up for auction in which the corporation may also choose to participate.

No representation for communities affected or dependent on mining

The formation of a Corporation for restarting mining in the state, an important component of the economy of the coastal state in Western India, is being criticised for not giving space to the communities affected or dependent on mining.

Ravindra Velip, an activist from Cawrem, one of the villages severely impacted by mining, said: “First of all, there was no discussion of the Bill on the floor. It was passed without any comments or chance of amendments. Secondly, if you see the constitution of the Bill, it has the chief minister as the chairman and all the government bureaucrats as its members. Why is there not a single representation from any of the communities who have been affected by mining?”

“Before the state government decides to resume mining, it is required to do an assessment of the damage caused by mining, which has not been done. The government has completely failed to consider the views of the people who are dependent on mining and those who have been affected by mining,” Velip told Mongabay-India.

The sentiments were echoed by Sakaram Pedneker, a farmer and activist based in Maem, another village affected by mining. “If they start with the corporation, they need to collect the data of the ruins of the past. The corporation should have rules and laws that will ensure the destruction is as little as possible. It can’t be 100 percent no-destruction, but it needs to be as little as possible. There has been no restoration in our village. The old miners have gone. The corporation will come. Everything will be the same. How does this benefit us?” questioned Pedneker.

In May 2020, Pednekar and others had filed a Public Interest Litigation (PIL) in the Bombay High Court, demanding a restoration of their paddy fields destroyed by mining.

The court ruled in their favour but Pednekar said that an officer of the state’s water resource department told him that “they don’t have funds” to do any restoration work.

“Isn’t the government supposed to have a special fund for the mining-affected villages?” he asked. Earlier this year, Mongabay-India had reported that the majority of the funds from Goa’s District Mineral Fund (DMF) Foundation, meant to be used for the welfare of the mining-affected communities, were diverted for COVID-19.

Abhijeet Prabhudesai of the non-profit Rainbow Warriors also opposed the formation of the mineral corporation.

“A true corporation should have been formed of village communities. This is business as usual, with a clear clause that they can sublease the contracts to whoever they want. The old miners will be back in no time with the corporation.” Prabhudesai told Mongabay-India.

He said the real victims are the local people – either having their land destroyed or being made to take loans for trucks. “All of their loans should be waived off, and there should be a 20-year moratorium on mining. Restore the land to its original state. If and when it restarts, it needs to have all-inclusive, equitable village communities who are made equal decision-makers. That’s the only way we can have socio-economic justice,” he demanded.

Will the state mineral corporation address critical issues?

India’s experience with mining corporations, both as central and state entities has not always been encouraging.

For instance, the Steel Authority of India or the profitable state-owned Odisha Mining Corporation has, for years, squatted on large areas but, according to experts, it has not necessarily stopped it from being among the biggest violators of environmental laws as evidenced by the penalties it paid after an apex court directive.

Goa Foundation, an environmental group whose petition had led to the February 2018 order of the Supreme Court, congratulated the government for the formation of the Corporation, and for taking the leases from private players and putting them into the public sector. It asked the government to hire professional people and not politicians to run it, pass an order reserving all mining in the state to the Corporation, recruit former employees of the mining industry and not allow any fresh extraction till the restoration of mining areas is completed.

Rana Sengupta of the Mine Labour Protection Campaign, a non-profit based in Rajasthan, where the state-owned Rajasthan Mine Mineral Limited operates, said that things are a mess on the ground.

“The state raises tenders and gives contracts to private players. They have created a nuisance. There is no law and order. They have destroyed the environment and the livestock of the people. They have forced people to take loans to buy trucks, making them dependent on mining. And they promise them jobs and then offer them to go to a different city, and when they refuse, they render them jobless,” Sengupta explained to Mongabay-India.

Meera Mohanty, an independent journalist who has extensively covered the mining sector, said “The (central government) mines ministry has been inconsistent in its position on government-owned corporations, state or Centre, that are often abused for political patronage and more recently have been used to transition to the new auction regime.”

“While the Centre amended the mining law to allow government corporations to mine areas whose auctions were unsuccessful, it refused to entertain Jharkhand’s request for reservation of iron ore leases for the state mineral corporation,” Mohanty said.

For truck owners like Sandeep Parab of Pissurlem, a village where water supply was severely impacted because of mining, it doesn’t matter how mining happens as long as it resumes.

“We are desperate for work. We need work. We have been suffering since 2012 (when the mining was first stopped in the state due to a case in the Supreme Court). We don’t care about their motives. Let the work begin,” he said.

This article was first published by Mongabay-India and has been republished here under a Creative Commons license.

Goa Iron Ore ‘Mining Ban’ Continues After SC Rejects Review Petitions, Upbraids Miners

As of today, no entity holds a valid lease to mine iron ore in Goa.

Bengaluru: In an order passed on July 9, the Supreme Court of India rejected pleas by Vedanta Ltd. and the state of Goa to review a judgment that cancelled the company’s mining leases in the state. Notably, the court also criticised both parties for their legal strategy – waiting for judges to retire before filing their review petitions.

Review petitions are usually heard by the same bench that passed the original order except when the judges have retired.

In an order passed in 2018, the Supreme Court had cancelled Vedanta Ltd.’s lease to mine iron ore, which the Goan government had renewed in 2014. The order also directed mining companies to stop all mining operations until they obtained new environmental clearances and leases.

The court was hearing the case after the Goa Foundation, an NGO of Goa-based environmentalists, Sudip Tamankar, Rama Velip and others, filed a petition challenging the legality of the leases.

Various news outlets in India reported the 2018 order as “a mining ban in Goa”. This is effectively true: as of today, no entity holds a valid lease to mine iron ore in Goa. The leases of existing lease-holders have also been suspended; they are required to obtain new leases.

A separate petition that mining companies have filed, arguing that their leases are valid until 2037 under the Mines and Minerals (Development and Regulation) (MMDR) Act 1957, is currently pending hearing in the Supreme Court.

Goa sought to review the Supreme Court’s 2018 order and filed four review petitions in November 2019, after Justice Madan B. Lokur retired. Vedanta Ltd. followed with four more review petitions in August 2020 after the retirement of Justice Deepak Gupta.

The practice of filing review petitions after the retirement of relevant judges should be “firmly disapproved to preserve the institutional sanctity of the decision making of this court,” the bench of Justices D.Y. Chandrachud and M.R. Shah said while dismissing the review petitions.

The verdict comes “not just as a renewed responsibility for all Goans, but is also an eye-opener for many,” Ronnan Da Cunha, a member of the Save Mollem Campaign, told The Wire. According to him, the order is a prompt to abide by “intergenerational equity” and eliminate greed.

In February 2018, the bench of Justices Lokur and Gupta cancelled 88 iron-ore mining leases that Goa had renewed for the second time. These leases had originally been granted by the colonial Portuguese government, and had been renewed first in 1987 under the Goa, Daman and Diu (Abolition of Concession and Declaration as Mining Leases) Act passed that year.

This extension validated the leases for the period of 1961 – when Goa was liberated and became a part of India – to 2007. The second renewal followed seven years later, in less than ideal fashion.

In 2014, the new Bharatiya Janata Party (BJP) government at the Centre determined that private operators couldn’t acquire mining rights to natural resources except through auctions. But the Goa government, of the BJP, invoked the spectres of a ‘mining mafia’ and corruption to renew 88 existing leases instead of holding new auctions or re-allocating existing leases to PSUs. As a result, it also sundered a claim of Rs 1.44 lakh crore from the miners.

Further, the 1960 Mineral Concession Rules’ deemed extension clause allows miners to continue mining by filing an application with the state government to have their leases renewed.

But between 2014 and 2018, a particularly important ‘development’ happened. After the second renewal, mining companies resumed operations from August 2015. And within months, the residents of Sonshi village were protesting the foul air, decimated water bodies, the desolation of their lands and the constant movement of ore-laden trucks through their roads. Ravindra Velip, a young adivasi activist and the panch of Caurem village, told Nidhi Jamwal, “Except dried up water bodies and tonnes of dust, there is nothing left in Sonshi for villagers to return to.”

In 2017, the high court of Bombay at Goa took suo motu cognisance of the problem and asked the Goa State Pollution Control Board to submit a report on ways to mitigate the pollution. Then, in its 2018 order, the Supreme Court bench directed miners to obtain new leases under the MMDR Act itself.

According to Rahul Basu, a member of the Goenchi Mati movement for mining reforms, both the companies that held valid leases until the court’s verdict and the state’s politicians want these leases to exist and to be legitimate. Kanchi Kohli, a legal researcher at the Centre for Policy Research, echoed this view, saying the companies’ and the state’s review petitions are an effort to keep mining operations at the centre of Goan economy.

Basu also said governments and mining companies in the state operate as a ‘complex’, which has meant mining has been at the centre of Goan politics as well. “Mining has been controlling Goa’s politics since the pre-liberation era because politicians get a lot of money from mining,” he said.

Even after the Supreme Court’s 2018 order, 40 of the state’s MLAs asked the Central government to amend the law in the lease-holders’ favour. Basu and Claude Alvares, as members of the Goa Foundation, wrote for The Wire at the time:

“The alternative of restoring the environment as an economic opportunity is never discussed by Goa’s politicians. Instead, they see only two legal courses of action – fresh mining through a PSU or fresh mining through auctions of mining leases to private entities. Neither is attractive. The existing miners would still need to cough up huge sums and they would nevertheless be debarred from mining for their persistent illegalities. This is a mortal threat to the entire miner-politician-bureaucrat nexus.”

As Kohli put it, the “constant push” to maintain high-impact mining operations in Goa is “a constant reminder of the strong nexus between the government and private mining corporations.” But the apex court’s stand has clarified, she added, “that legacy mining operations will not be revived.”

With Goa’s MLAs Set to Ask for Mining Lease Extensions, the Politician-Miner Nexus Comes Full Circle

The state’s politicians could’ve used recent court judgments as an opportunity to carry out reform. Instead, they will plead with the Modi government to extend mining leases further.

The state’s politicians could’ve used recent court judgments as an opportunity to carry out reform. Instead, they will plead with the Centre to extend mining leases further.

Natural resources, including minerals, are a shared inheritance, owned by the state in trust for the people and especially future generations. Credit: Reuters

A delegation of members of legislative assembly (MLAs) from Goa are headed to Delhi on Monday. They will plead with the Centre for an ordinance to retrospectively amend a 1987 Act, so that existing mineral leases get automatic extension for another 20 years (till 2037).

In effect, this is a plea by Goa’s ruling politicians to regularise illegal mining from November 23, 2007 till date – the amounts recoverable from Goa’s miners likely exceed Rs 1,00,000 crore – and to hand over another tranche of public money valued at another Rs 1,00,000 crore to the same illegal miners, instead of getting the state the best value through public actions.

To apply the Supreme Court’s words used by it in its recent Goa mining lease renewal case, “the inferences that can be drawn are obvious”.

Natural resources, including minerals, are a shared inheritance, owned by the state in trust for the people and especially future generations. It is our duty to ensure that we protect our inheritance for future generations. Only if we do that may we consume the fruit. A loss is a loss to our children and all future generations.

In the run-up to the Beijing Olympic games, the demand for iron ore soared. The resulting iron ore mining boom in Goa led to a free-for-all situation, with the environment being devastated and laws being violated. In response, the Goa government set up a public accounts committee (PAC) under Manohar Parrikar to examine mining. The PAC observed:

“There is a complete breakdown of all machineries provided by the statute which are required to ensure that mining is undertaken and carried out in a legally permissible manner. The term ‘irregular mining’ is nothing but illegal mining.”

The Centre set up the Justice M.B. Shah commission to examine illegal mining in Goa. After visiting Goa, it wrote:

“Inaction, delayed action and mild actions have had created fearless atmosphere, abuse of law and regulations in the Goa state. This has paved ways for large scale irregularities, illegalities and corruption. … The regulatory mechanism has been totally collapsed and irregularities due to maladministration have risen to its peak. In the process, the sole loser is environment, eco-system of the Western Ghats, general public and treasury of Goa state.”

“It is pertinent to state here that such illegal acts can’t happen without connivance of the politicians, bureaucrats and lessees. There is a complete collapse of the system.”

Riding the anti-corruption surge and the leaked PAC report, the BJP led by Manohar Parrikar won a majority in Goa’s legislative assembly elections in February 2012. A key promise was to clean up corruption.

Goa mining case

Following the Shah commission report, Parrikar banned mining in Goa on September 10, 2012. In the subsequent PIL filed by the Goa Foundation (GF), the Supreme Court issued a historic judgement in April 2014.

Some of the key rulings were:

All mining leases had expired on November 22, 2007,and mining done thereafter for five years was illegal
The Goa government would have to issue fresh leases, keeping the laws and constitution in mind
On grounds of intergenerational equity, an interim cap was imposed of 20 million tonnes per annum (mtpa)
A fresh levy of 10% of the sale value was imposed to be deposited in the Goa Iron Ore Permanent Fund for future generations

A number of other illegalities alleged were left to the Goa government to pursue. The period of illegal mining was under Digambar Kamat of the Congress.

Goa now had a clean slate. No existing leases. The recoverable due to nearly 5 years of 100% illegal mining was conservatively estimated at Rs 65,058 crore, or Rs 4.5 lakh per person (Goa Foundation). Recent claims by the Goa Mineral Ore Exporters Association (GMOEA) – that Goa exported $7 billion of iron ore each year before 2012 – would lead to recoverable amounts of over Rs 2,04,750 crore!

Mining lease renewals

Less than a month after the SC judgment, in May-2014, the BJP won a historic majority in the general elections, promising that natural resources would henceforth only be auctioned. Keeping with its promise, in November 2014, it introduced a bill for public consultation providing that henceforth mining leases could only be granted to private players through auctions. Only public sector undertakings (PSUs) could still be allotted mineral leases without an auction.

Back in Goa, Parrikar ruled out auctions and PSU mining despite the BJP manifesto. Auctions raised the threat of the unknown mining mafia coming into Goa, he said, and PSU mining raised the possibility of corruption and misgovernance. Instead of recovering the amounts legally due from the miners and either auctioning mines or mining under a PSU, the BJP government, initially under Manohar Parrikar and later under Laxmikant Parsekar, renewed 88 mining leases.

Not just renewed leases, but back-dated their period of validity to November 22, 2007.

Period	Mining leases renewed
Between November 5, 2014 and November 17, 2014	13
17 November, 2014 – Draft MMDR Amendment issued
Between December, 10, 2014 and January, 2, 2015	19
January, 5, 2015 – Cabinet approval for MMDR Ordinance
Between January 5, 2015 and January 12, 2015	56
Total	88
On January, 12, 2015 (MMDR Ordinance promulgated)	31

In effect, this gave up the claim of Rs 65,058 crore. Also, as the leases would continue on the old regime without auctions, a further Rs 79,865 crore would be handed over during the remaining life of the leases (to expire November 22, 2027). All in all, a total grant from the Goa government to the miners of Rs 1,44,865 crore (or Rs. 10 lakh per Goan).

An important justification was the disruption to the income of the mining dependent. Over the years, approximately Rs 300 crore has already been spent for the mining dependents, mostly for truck and barge owners.

Mining restarted on August 10, 2015. Within two years, Goa witnessed massive air pollution violation in Sonshi village, when the Bombay high court took suo motu notice, as did the state Child Rights Commission and the state ST Commission. Simultaneously, using the mining surveillance system, 12 new cases of illegal mining were detected.

Goa lease renewal case

Three groups of petitioners – Goa Foundation, Sudip Tamankar, and a group lead by Rama Velip – filed cases in the Supreme Court challenging the renewals and a related high court order directing them. On February 7, 2018, in a scathing judgment, the SC quashed the mining lease renewals, but gave the miners until March 16, 2018 to manage their affairs. The SC said:

“The state ignored the fact that every single mining lease holder had committed some illegality or the other in varying degrees.”

“With the mining lease holders violating virtually every applicable law or legal requirement, it is clear that the rule of law was not their concern.”

“It was observed by Justice Khehar in Natural Resources Allocation that material resources of the country should not be dissipated free of cost or at a consideration lower than their actual worth. This was not kept in mind and mining leases were renewed for a small payment of stamp duty and royalty. It is therefore clear that the considerations that weighed with the State were not for the people of Goa but were for the mining lease holders.

“The entire exercise undertaken by the state was a hasty charade, regardless of violations of the law by the mining lease holders, without any benefit to the Indian industry and without any concern for the health of the average Goan.”

“…Without making any serious attempt to recover such huge amounts, the State of Goa has granted second renewal of mining leases and the MoEF played ball by lifting the abeyance order in respect of the environment clearances. The inferences that can be drawn are quite obvious.”

In effect, the position from the previous judgment has been restored. Mining after November 22, 2007 is illegal. Even larger amounts are recoverable, more than enough to provide for any further doles to the mining dependents.

MLA delegation

Goa can restore the environment first and simultaneously pursue recoveries. Dumps the size of 300 Giza pyramids litter the state, using up land. An estimated 150 million tonnes are saleable if we remove the iron ore from these dumps alone. (There are several other valuable minerals in these dumps, discarded as waste.)

Numerous mining pits and quarries have been abandoned, even in wildlife sanctuaries. Agricultural fields & river bottoms are coated with iron ore, at times a metre thick. Dump mining could be conducted by a PSU, with auctions of the raising contract and the iron ore for sale. This would utilise the mining cap for at least 8 years, giving the land some breathing time and space to recover health. Recoveries are to be saved in the permanent fund, and only the real income distributed as a common dividend. This option, advocated by the Goenchi Mati (Goan Earth) Movement, would create jobs, provide a shared prosperity and restore a green Goa.

Also read:

Like Congress, the BJP too turned a blind eye to Goa’s illegal mining
Which is the mega-project that Goans fighting ‘dirty coal’ are up against? Nidhi Jamwal explains
Anuj Srivas on how the SC order shines spotlight on how Goa pushed through second renewal of mining leases

The alternative of restoring the environment as an economic opportunity is never discussed by Goa’s politicians. Instead, they see only two legal courses of action – fresh mining through a PSU or fresh mining through auctions of mining leases to private entities. Neither is attractive. The existing miners would still need to cough up huge sums and they would nevertheless be debarred from mining for their persistent illegalities. This is a mortal threat to the entire miner-politician-bureaucrat nexus.

As a result, Monday will witness Goa’s MLAs (both Congress and BJP) pleading with the NDA government at the Centre to pass an ordinance so that they do not have to pursue their miner friends for recovery of illegal gains and start afresh. They will plead to give away more of our collective mineral wealth to a few super-rich miners, leaving behind a corrupt, devastated and bankrupt Goa for our children.

We hope they do not succeed. That is not the reason they were elected to the assembly. They were elected to ensure the public welfare of all Goans – not to betray it.

Claude Alvares and Rahul Basu are part of the Goa Foundation.

National Mineral Policy Review – A Golden Chance for Change

While illegal mining is worrying, what is little understood is the enormous loot that is taking place legally. Mineral owners sometimes receive less than 5% of the value of minerals.

Mining in Goa. Credit: PTI

The three iron ore scams in Karnataka, Goa and Odisha have some things in common. There were widespread and diverse breaches of the constitution, laws, rules and regulations. The environment was badly damaged. The minerals were being exhausted. Enormous corruption was apparent, with both the politicians and the bureaucracy likely involved. In turn, miners became politicians, politicians became miners, and crony capitalism bloomed.

In the Odisha mining case, the Supreme Court has responded in three principal ways:

(a) it has clearly defined what is illegal mining, and clarified that under the mining laws, illegal mining requires the return of the mineral or its full value (as would be the case with theft), and jail terms/fines in addition;
(b) it is considering the formation of an expert committee to examine the myriad ways the laws were breached and to suggest appropriate controls; and
(c) after a discussion on inter-generational equity, it directed the government to revisit its National Mineral Policy, with the aim of making it effective.

While illegal mining is worrying, what is little understood is the enormous loot that is taking place legally. Under the pre-auction regime, we calculated that over an eight-year-period (2004-2012), the iron ore mining in Goa resulted in the receipt by mineral owners of less than 5% of the value of the minerals (after deducting all expenses and a 20% post tax return on assets for the miners). These estimates were made using the audited financials of Sesa Goa and volume statistics from the industry body.

In simple terms, we were legally selling minerals worth Rs 100 for Rs 5. While this many have been legal (hence in the audited financials), any sensible person would see it as fundamentally illegitimate. A rational miner with such a deal would extract as much as possible as quickly as possible and exit. Trees, tigers or tribals stand between the miner and fabulous treasure, and are bulldozed with the full force of the establishment – speed is essential. When they resist, we have conflict and our civil war.

Goa isn’t an aberration. Iron ore mining elsewhere in India, coal, oil and gas, and even sand show similar results. And the results from the recent coal and mineral auctions bear out the enormous losses from the non-auction regime. Rs 335,000 crores is the coal auction premium, Rs. 69,000 crores is the subsidy on coal for power, and Rs 94,000 crores in mineral auctions premia. Rs 5 lakh crores.

This Rs 5 lakh crores, much more than the amount of black money found, has come about solely due to the PILs filed by some brave individuals and NGOs. It is a comment on the state of our democracy that instead of rewarding the petitioners, they are routinely vilified and called anti-national.

The 2015 amendment to the mining laws mandated auctions in future. It also contained a provision that extended all existing leases including many that stopped functioning years earlier. These leases are still on the old royalty only basis. In other words, in these leases, we will sell our minerals to the miners for a fraction of their value for the period of extension. One estimate that the loss on account of this provision in Chattisgarh for iron ore is estimated at Rs. 122,000 crores. One state one mineral!

Iron ore mining. Credit: PTI

In Goa, there were approximately 120 leases working prior to the ban. In 2014, the Supreme Court found that all iron ore mining in Goa was illegal for nearly five years. Today, there are 89 leases which have been renewed, over half in the week prior to the ordinance, including 31 on the day of the ordinance. And a further 188 leases have been extended by the ordinance. These are all on the royalty only basis. And nothing has been recovered due to the illegal mining.

Also read: One Month Later, Misgivings Abound About How New India’s Updated Mineral Policy Will Be

It is already apparent that the mineral auctions are failing. The winning bidders are struggling to commence operations. This should be no surprise. Auctions have taken place at significant multiples to the royalty value. TAMRA (Transparency, Auction Monitoring and Resource Augmentation), the app from the mines ministry, informs us that of minerals worth Rs 156,747 crores auctioned, the amounts due under the royalty only regime amounted to Rs 27,439 crores (17.5% of mineral value), and the auction premia amounted to Rs 94,479 crores (60.3% of mineral value).

Again in simple terms, miners with a royalty only lease is paying Rs 17.5 for minerals worth Rs. 100 on the open market, while those with auctions are paying Rs 77.8 for the same mineral. Auctions will be failures as long as the old leases are grandfathered under a lower royalty regime. How can they compete?

The economic consequences are serious. The government will find mineral production hard to increase. It will lay the blame at the door of civil society and the people on the ground. Environmental regulations will be diluted and human rights ignored. All the while, the real issue lies in the enormous incentives for crony capitalism. When the Supreme Court mandated auctions, why were leases extended without auctions?

The review of the National Mineral Policy is a golden chance for a change. Minerals are a shared inheritance, akin to family gold. The foremost objective of our mining laws must be to ensure that we as owners do not suffer any loss when we sell our family gold. We are simply custodians over our inheritance for our children and our future generations. If we suffer a loss, so do our children and all future generations. The thieves are many, and they are often those responsible for safeguarding our common wealth.

Goa Foundation, the petitioner in the Goa mining case, is advocating some key principles be enshrined in the new mineral policy:

(a) treat minerals as our family assets or gold,
(b) conservation of minerals must include conserving the value of the minerals;
(c) mineral development to include zero waste mining;
(d) adopt zero loss mining as an explicit target of the policy;
(e) save all mineral receipts – royalty and auction premium – in Future Generations Funds and distribute the real income from such Funds to all citizens of the state as a commons dividend;
(f) caps on mining extraction on environment protection grounds and to ensure access to minerals (and job opportunities) for future generations;
(g) best-in-class and state of the art controls;
(h) radical transparency;
(i) active local control over mining, and
(j) restructuring the mines ministry at the centre and states to ensure these departments actively work to safeguard our shared family assets represented in these minerals.

Together, we can lay the foundations for a shared prosperity, where inequality is held in check, where corruption is controlled, where governance works, where human rights are safeguarded, where the environment is held in trust for our children. If we fail, our democracy itself is at stake.

Rahul Basu is a member of Goa Foundation.

One Month Later, Misgivings Abound About How New India’s Updated Mineral Policy Will Be

The K.R. Rao committee has only recently taken on board the views of civil society stakeholders, raising questions as to whether illegal mining and environmental issues will be properly addressed.

Credit: Reuters

New Delhi: A government committee in charge of revamping India’s 2008 mineral policy has belatedly agreed to rectify its industry-skewed composition by roping in several civil society stakeholders as ad-hoc members.

However, according to multiple industry and environmental experts, it is unclear whether the K.R. Rao committee’s eventual draft policy will reform or shake up an industry that has been characterised by rampant illegal mining and gross environmental violations over the last decade.

“What we are looking at mostly is tweaks with some changes. There will be new paragraphs added to address issues of inequity, illegal mining and environmental concerns,” a senior government official on the committee, who declined to be identified, told The Wire.

The panel was set up after a recent Supreme Court judgment on illegal iron ore mining in Odisha. On August 2, 2017, Justices Madan B. Lokur and Deepak Gupta, disposing of a petition filed by non-profit organisation Common Cause, ruled that 100% of the value of the iron and manganese ore that been mined illegally in the state would have to be recovered, dealing a blow to companies such as Tata Steel and Essel Mining.

As part of its judgment, the bench also ordered the Modi government to set up a committee that would have a fresh look at the 2008 national mineral policy, “especially on areas of conservation and development”.

Lack of representation

The K.R. Rao committee, set up in August 2017 as a result of this, didn’t get off to a great start.

The panel’s only non-government representatives were from general and mining-specific industry lobbies. What was missing was civil society stakeholders and representation from sections of India’s adivasi population.

“We are distressed to discover that the only outside representatives on the Dr Rao committee are from business lobbies. No other stakeholders are present. The Ministry for Tribal Affairs and the 6th Schedule areas are not represented. Civil society is completely excluded from the discussion, as are our children and future generations, whose shared inheritance we are consuming, violating Intergenerational Equity,” the Goa Foundation, a well-known environmental organisation that has been involved in litigation against illegal mining, said in a note to the committee on September 13.

As experts have pointed out, the environmental fallout and land resettlement issues associated with India’s mining boom disproportionately affects local adivasi and tribal communities.

In the committee’s first three meetings (August 28, September 11 and September 26), there has been no representation from the tribal welfare or panchayati raj ministries.

Minutes of the second meeting show that Rao “informed the committee that suggestions and comments” from both ministries had been requested – ironically, the current minister for mines (Narendra Singh Tomar) also holds the rural development and panchayati raj portfolio.

Implementation not on the table?

On September 26, at the panel’s third meeting, government bureaucrats heard out submissions made by Karnataka-based non-profit Samaj Parivartan Samudaya (through its president S.R. Hiremath) and the Goa Foundation. After doing so, the committee agreed to co-opt them as ad-hoc members and have them submit inputs by October 5, 2017.

According to the committee, the first draft will be put together by October 13, 2017 and then released for public comments by the end of the month.

“While we appreciate them hearing us out, we are deeply troubled by this consultative process. Many of the representatives of industry lobbies who had come and were participating were from companies that in the past had been pulled up for violations. So where is the question of a fresh start. While we will be drafting our input on issues such as intergenerational equity and zero-loss mining, the revamped policy will not contain elements that will lead to strong implementation,” said Claude Alvares, environmental activist and secretary of the Goa Foundation.

Ease of doing business

While mines ministry joint secretary Bipul Pathak acknowledged during the committee’s second meeting that the panel’s purpose was to “address environmental concerns, concerns of intergenerational rights, sustainability and other related issues”, the issues put forth by state and industry representatives have so far had more to do with the ease of doing business.

For example, in the same meeting Jharkhand’s mine commissioner, Aboobaker Siddique P, stated that the “major challenge in commencement of mining is obtaining FC and EC [forest clearance and environmental clearance].”

The Geological Survey of India’s (GSI) representative had grievances about how the environment ministry’s guidelines on prospecting in forest areas were not clear enough, with companies requiring more boreholes. “It was stressed upon the committee to address the issue of facilitating exploration in forest areas with the requisite number of boreholes,” the GIS representative’s account notes.

A director of the Odisha government, Deepak Mohanty, also hammered home this point, emphasising that because “exploration operations don’t sacrifice any greenery,” there was a need for the MOEFFC (ministry of environment, forests and climate change) to “allow and facilitate geological exploration in a serious manner”

On the troubling issue of illegal mining, multiple state government representatives acknowledged that the problem needed addressing. Pathak’s official view in the second meeting was that “concerns regarding illegal mining have also been addressed to a great extent” as a result of “administrative measures such as mining surveillance systems”.

At the moment, it appears as though illegal mining will be addressed as a separate paragraph in the new policy – the word ‘illegal’ appears only twice in the 2008 policy, clubbed to other issues as an afterthought – with reference to a host of technological methods that could help in tackling future problems.

Transparency, bad firms and intergenerational equity

Environmentalists and civil society stakeholders believe that this is not enough and that deeper reform is necessary.

When transparency proposals such as India joining the Extractive Industries Transparency Initiative (EITI) – a global standard for good governance of mineral resources – were brought up in the panel’s last meeting, sources say that a senior industry representative joked and pointed out that it would be difficult for mining firms to “get bank loans” if such a standard was adopted. The implication was that the core business fundamentals of mining companies in India were too unsound to qualify for institutional lending without some degree of opacity.

“The new mineral policy needs to acknowledge what the 2008 policy essentially failed to prevent over the last ten years. Why aren’t solid principles such as 100% recovery in cases of illegal mining or ways to weed out companies that have bad track records being discussed,” said Alvares.

The Goa Foundation’s submission recommends three reform measures that the new policy should ideally incorporate: they revolve around a state’s people getting the full value of mined minerals when sold, with this money then being put into a common fund from which dividends could be issued.

A similar, if toned down version, was proposed by the Shah Commission which recommended that 50% of the value of mined ore should flow to the state from which it was taken. Out of this money, 50% should go towards the development and welfare of the site (and its original population) from which the minerals were extracted.

The state’s politicians could’ve used recent court judgments as an opportunity to carry out reform. Instead, they will plead with the Centre to extend mining leases further.

Also read:

Like Congress, the BJP too turned a blind eye to Goa’s illegal mining

Which is the mega-project that Goans fighting ‘dirty coal’ are up against? Nidhi Jamwal explains

Anuj Srivas on how the SC order shines spotlight on how Goa pushed through second renewal of mining leases

While illegal mining is worrying, what is little understood is the enormous loot that is taking place legally. Mineral owners sometimes receive less than 5% of the value of minerals.

Also read: One Month Later, Misgivings Abound About How New India’s Updated Mineral Policy Will Be

The K.R. Rao committee has only recently taken on board the views of civil society stakeholders, raising questions as to whether illegal mining and environmental issues will be properly addressed.