Ministry of Mines

Can the Executive Divert District Mineral Foundation Funds to Fight the Pandemic?

There was no reason to divert a special fund meant for people affected by mining unless the already existing state fiscal repositories had been exhausted and accounted for.

In wake of the unprecedented times and the COVID-19 pandemic, the Union finance minister, on March 26, while announcing several measures to combat the public health and the economic crisis in the nation, directed the states to use the District Mineral Foundation (DMF) funds to fight the pandemic.

The direction by the Centre to the states permitting the diversion of such special funds specifically meant for a targeted group of people who are affected by mining operations, again brings to fore the issues surrounding the legitimacy and propriety of such a move by the executive.

District Mineral Foundation (DMF) funds

In India, the mining industry is primarily regulated under the Mines and Minerals (Development and Regulation) Act, 1957. In the year 2015, by way of an amendment Act, the central legislation came to be amended bringing into effect far-reaching changes in the regulations governing the mining arena. One historical change was the creation of the District Mineral Foundation (DMFs). DMFs are essentially trusts to be set up in all the districts in every state affected by mining and are defined as institutions which will work ‘for the interest and benefit of persons and areas affected by mining-related operations’.

In our country, tribals, Adivasis and farmers have since long been known to bear the brunt of the adverse impacts of mining on their livelihoods which has resulted in degraded livelihoods and huge socio-economic, environmental and health hazards and costs. The realisation to contain such adversarial impact and rectify the historical injustice on these vulnerable group of people, led to the creation of DMF funds as a part of distributive justice and inclusive growth.

The DMF funds are collected at the district level and are essentially contributions from holders of mining leases. Pursuant to the 2015 amendment and creation of DMFs, the Union brought into effect the Pradhan Mantri Khanij Kshetra Kalyan Yojna (PMKKKY) in September 2015. The PMKKKY, inter alia, laid down the scheme qua the utilisation of the funds generated by the DMFs.

The DMFs generates fund by way of reserving 10% or 30%, as the case may be, of the royalty proceeds from the mining of minerals in the respective districts. From the total collections accrued under DMF, the mechanism provided envisages spending the same in the ratio of 60:40, 60% being for projects classified as high priority areas which include health care, education, sanitation, drinking water supply, women and child care, environment conservation, etc while the balance 40% being for projects classified as other priority areas which include construction of roads, railways, bridges etc.

Also read: SDRMF: Maharashtra Gets Lion’s Share at Rs 1,611 crore, Kerala a Paltry Rs 157 Crore

Thus, in substance, the entire idea of creating a special fund like DMF is to provide for funds for the welfare of people affected by mining. With that background in mind, one has to look at the issue of how legitimate and proper is it that a special fund meant for a targeted group of people is diverted for purposes other than what it has been constituted for? More so, when there are other funds like the Prime Minister’s National Relief Fund, Chief Minister’s Relief Fund in respective states, the Contingency Fund, etc, available at the disposal of the state to meet with the pandemic.

Diversion of DMF Funds to fight the COVID-19 pandemic

Pursuant to the finance minister’s announcement directing the states to utilise the DMF Funds to fight against the pandemic, the Ministry of Mines issued a letter specifying that districts with at least one COVID-19 positive case could put to use the funds for medical equipment and infrastructure while in other cases the same could be put to use for procuring masks, sanitisers, for distribution of food to the marginal, etc. However, the amount of funds that can be utilised has been capped at 30% of the unused funds of DMFs. As per the data available on the website of Ministry of Mines, Government of India, as on January 2020, the total amount of unspent funds for all the district is around Rs 23,511 crores.

Hence 30% of the unspent funds would approximately translate to Rs 7053 crore. Talking about the state of Gujarat, as per the data available on the website of District Mineral Foundation, Government of Gujarat, which varies from the data available on MoM, as on March 2020, the total amount collected under DMF from 2016-17 to March 20-21 is Rs 9434 crore and the total amount of unspent funds is Rs 8775 crores and hence 30% of such unspent funds roughly translates into Rs 2632 crores which can be put to use to fight the pandemic.

No doubt, that the scheme provides for utilisation of DMF funds for high priority areas like healthcare and hence these could be put to use, more so in areas affected by mining because these are mainly rural and remote areas with no healthcare facilities and infrastructure and hence the local populace are more at risk of community transmission with even one positive case of COVID-19 in the area.

However, the same still does not justify the diversion of funds and making them available for use for emergency purposes – as in the present scenario – because that wasn’t the objective with which it was formed. It is a fund targeted with a specific purpose and for a specific group of people and region. Hence, mooting the whole idea for it being diverted to meet the emergency and giving directions qua the same without any participation and consent of the people for whom the fund has been created, in itself is an anomaly and deceiving of its objective.

However, the same is not unprecedented. With our form of governance, where, welfare, inclusive growth and distributive justice are best only terms of theoretical concepts, even previously special funds have been diverted for purposes other than which they had been constituted. The best example of this is that of the CAMPA funds. Like DMF funds, CAMPA funds too have been diverted for other flagship initiatives and policies and hence the Supreme Court has time and again pulled up the state governments for diverting the funds for purposes other than what they were meant for.

Also read: Would Narendra Modi Please Care to Answer Some Questions About PM-CARES?

The funds from the social welfare schemes are for the benefit of the targeted population and not for the benefit of the government to shirk away its responsibility from providing basic amenities that it should as a state. Such people’s funds cannot be used in substitution of, for what state ought to incur expenditure from its own pocket. Otherwise, it defeats the whole purpose behind the creation of such funds.

With DMF funds, even after five years of its introduction, it still suffers dilatory implementation and sanctioning of projects overlooking needs of those affected, would now lose its very character if the diversion of funds is permitted to be carried on.

Diversion of special funds – legal?

The underlying premise behind the diversion is that the executive has always considered it to be its own fund. This needs to be dispelled. The DMF fund is a special fund which is meant for the welfare of the people affected by mining and is a people’s funds. However, this participative approach of the affected people or the targeted population for the welfare of whom the repository has been created have not been made part of the committees which look after the utilisation and implementation of DMF funds and hence their lies the genesis of the whole problem.

Each state frames its own rules with regard to the implementation of DMFs and pursuant to rules being notified, the committees have to be constituted. DMFs comprises of two committees, the composition of which is formulated by the state government.

One is the governing council and the other is the executive council. In Gujarat, the chairperson of the governing council is the prabhari mantri, who at present is MLA Bhupendrasinh Chudasama, while the chairperson of the executive council is the district collector of the respective district. These committees will determine which areas are mining-affected and thereafter allocate the fund, approve relevant projects and monitor their implementation.

However, the problem is the composition of the committees is such that it includes primarily bureaucrats and MLAs. There is no participation of people from the grassroots for whom the creation of the fund has been envisaged and hence from this undemocratic set up stems the superficial idea of it being government fund thereby leading to its diversion for purposes other than those specified.

To those who may ask that why should an emergent national interest when thousands of lives are required to be saved and protected, not be enough of a reason for diversion of DMF funds to meet with the national goal of containing the pandemic, the answer would be, that it is a structurally flawed understanding of fiscal responsibility of the state on their part.

Because, firstly, most districts have at their disposal, disaster relief funds, MPLADS funds granted to the member of parliament for the respective constituency, contributions from the funds granted to MLA for respective constituencies, etc. Apart from that, to meet with such emergent situations, there is the chief ministers relief fund for respective states, the contingency fund for respective states and the prime ministers relief fund. Moreover, even as the PM CARES Fund has been created which has received donations in high numbers takes care of the emergent national interest. So the legitimate question to be asked here is without having all these funds having been exhausted, why must the DMF Funds be used for fighting the COVID-19 pandemic?

Also read: Donations to CM Relief Fund Cannot Be Counted as CSR: Corporate Affairs Ministry

Moreover, even otherwise, a special fund could have been diverted only upon completion of all developmental activities of a district. Prior to that, even an emergent situation does not justify its diversion. The special funds are to be utilised specifically for the purpose they have been created for and that can be ensured only when there is appropriate leadership at the district level and villagers, local populace, labourers working in mines, grassroots organisations, panchayats, etc. should be consulted and their participation be called for rather than thrusting all the decision making power in the hands of the political representatives and bureaucrats, because for them such special funds become an easy way out, to be used and diverted for all and other purposes and thereby abdicate their responsibility from providing for the same from the existing fiscal repositories of the state.

It is true that in times as unprecedented as now when we are faced with a pandemic, which calls for extraordinary measures to contain the coronavirus, all that can be done would be less, but that is no reason to divert a special fund meant for people affected by mining unless the already existing state fiscal repositories have been exhausted and accounted for because had that been the objective then special funds would stop to serve any purpose and every time the executive failed to perform its obligations and provide for what it ought to, then the best way out would be to casually divert the special funds.

The state of Odisha has expressed its willingness to use the DMF funds to fight COVID -19 and has rather requested the Centre to remove the cap of 30% usage of unspent funds. In spirit, as good as it may seem that a state is going out of its way to provide for its citizens but this could ensue a dangerous trend of diverting funds meant for welfare schemes for other purposes. However, at the same time, there are officials who discourage this trend.

Moreover, without any guidelines and accountability being in place, there is a higher risk of these funds being used for purposes that have nothing to do with mining-affected people and area. One of the factors which requires consideration is that there might be several projects which have been sanctioned for a district or area on the basis of the funds collected but since they have not been commenced the expenditure to be incurred might be lying with the trust. Hence overlooking the nitty gritties and without any law or guidelines in place to divert a portion of unspent funds could risk jeopardising several projects that may be in the pipeline.

Not only is the diversion of DMF funds illegitimate, improper, unjustifiable and a very unsustainable response of ruling dispensation’s for its failed governance but it has also rather increased the trust deficit of the farmers community and affected people who now fear that the DMF funds meant for their upliftment will be diverted by the government to meet its obligation which otherwise it should have from its own funds.

Also read: COVID-19, Aadhaar-DBT and a Reminder of the Issues With Transaction Failure Data

In Gujarat, several farmers affected by mining in Bhavnagar district have written to the state government and to the chairperson and members of the governing council and the executive council to not divert the DMF funds for any activities other than what has been envisaged under the PMKKY scheme and shall be utilized only for the targeted population for which it has been brought into existence.

Our history is replete with examples where special funds earmarked for special purpose have been diverted thereby time and again calling for legislative and judicial intervention to curb such diversions. However, the lesson has not been learnt and hence once again the step taken by the government runs the risk of becoming a dangerous precedent allowing ill-prepared authorities with a lack of foresight to use funds for specific functions as their personal kitties in the future and steps must be taken to avoid such occurrences.

Anandvardhan Yagnik is a practising lawyer at the Gujarat high court.

In Odisha’s Chromite Valley, Adivasis Are Paid in Poisoned Water

Sukinda, the world’s largest open-cast mining area, is also the world’s fourth-most polluted place – and the cost is carried by its original inhabitants.

Sukinda (Jajpur district, Odisha): Outside her mud-walled house, Pitayi Mankidia, 30, is holding her two-year-old daughter Huli, who is crying. Huli’s face is smeared with neem leaves to soothe the pain and itching that is aggravated by the dust in the area. Both mother and daughter have specks of blood dotting the rashes on their bodies.

“Trucks keep passing every second without a break, the roads are broken exposing the bare earth. The dust never settles,” Pitayi said, gesturing at the queue of loaded lorries outside her house. “It is difficult to breastfeed my children. I barely lactate these days.” Pointing at one of her sons, Bablu, who is also affected with rashes – small beads of them all over his back – she adds, “This makes him too unwell most of the time to even attempt going to school.”

This 20-km stretch is the country’s largest deposit of chromite, an ingredient of metallic chromium, used to make stainless and tool steels. It is also the world’s biggest open-cast mining area.

Across the road from Pitayi’s home, the world looks very different. The Tata residential colony, built for employees, has parks, water-treatment plants, club-houses, supermarkets, schools and the only post office in the area. The Tatas also control the most essential facility for survival here: the hospital. The colony’s world-class living conditions are indicative of the class-apartheid that mining and capital have produced here.

The morrum topsoil heaps from where the rundown water joins the stream.

A 2007 report by the Blacksmith Institute ranked Sukinda as the world’s fourth-most polluted place. The report states that “approximately 70 per cent of the surface water and 60 per cent of the drinking water contains hexavalent chromium at more than double national and international standards and levels of over 20 times the standard have been recorded.” High levels of the compound are extremely carcinogenic, and put people at risk of permanent damage to eyes, skin and the gastrointestinal system.

The reply by the Orissa State Pollution Control Board, quoted in the Blacksmith report: “It is unique, it is gigantic and it is beyond the means and purview of the Board to solve the problem”.

Poison in water

In August, intermittent rains have brought Sukinda’s dam to the brim, and newly built ponds are full. It is a busy day for all, with farmers tilling their land and tending to cattle. The place is surrounded by lush green paddy fields, and beyond, the Daitari and Mahagiri forest ranges. Amidst this is the hamlet of Mankidia Sahi, home to about 500 Adivasis recognised by the G=government as a ‘Particularly Vulnerable Tribal Group’. They live here without electricity, and with no toilets in any home.

Pitayi’s day begins as early as 5 am. She cooks the morning meals for her family, walks out to gather firewood, bundle it and sell it in the market to earn about Rs 120 a day. She is back by dusk to cook again, now in darkness. “But I am weak, it is becoming impossible to work,” she says.

The direct disposal of waste-water from processing units, and the run-off from the morrum topsoil heaps, has contaminated her community’s water. “Our only source of water are these contaminated streams and a tube-well,” Pitayi says. “Water kills us every day, like a slow poison.”

In 2017, advocate Sankar Pani, on behalf of local activist Lambodar Mahanta, filed a petition with the National Green Tribunal to challenge the destructive activities and unscientific management of mines by Tata.

According to RTI information sourced from the Odisha State Pollution Control Board, the standard for hexavalent chromium is fixed at 0.1ppm for India, while water sources in Sukinda contain upto 15 times this amount. The number of people affected may be beyond 1 lakh. The SPCB, however, referred to these as “occasional violations” and dismisses them as “not uncommon in industrial and mining activities and … not unique in case of the chromites mines in Sukinda.”

The polluted stream that is the source of water for farming, animal rearing and often for other human uses.

Pitayi’s husband Biju Mankedia, working in a nearby minefield for a meagre sum of Rs 200/day, too, takes ill very often. His risk is even higher; he enters the mouth of those mining pits for as long as eight hours every day. The constant fatigue makes him unable to work for longer. He has dry, patchy skin in certain places, like fish scales, that itches and sometimes bleeds.

Apart from a primary health care centre 35 km away, the Tata hospital is the only accessible one in the valley. The compact, single-storeyed structure, with only 30 beds and seven doctors, caters to about 40,000 people from 42 villages. “We had been to the Tata Hospital a few times and never recovered fully,” Pitayi said, “Later, they asked me to have specialised treatment for which I had no money. We have been on home remedies ever since.”

The reality of corporate social responsibility

The 2014 CSR policy of Tata Steel lists health as one of four “thrust areas.” It aims at, among other things, “ensuring access to potable drinking water” and “setting up and running clinics and hospitals.”

Gautam Chakravorty, HR manager, Tata, said, “We cannot go and bring them to the hospital. If they want to come to us, only then can we treat them.” The failure in medical awareness of the region is left unaddressed and the Adivasis are trapped in a vicious cycle of poor health and poor living conditions, one leading to other. “The schedule of the awareness camp has not been enough. The Mankidias live in unhygienic conditions, their living standards are not conducive.”

For those who reach the hospital, the next critical component of a healthcare system is missing: the doctor. “We do not have the full sanctioned strength of doctors here,” Chakravorty admits. “Like, a medicine specialist is needed here for the longest time.” Due to the remote location, no one is ready to join. “A handsome salary and good accommodation facilities are not enough for the doctors – they do not often want to lose out on private practice and seminar opportunities.”

In the absence of any health-related guidance, most families, like Pitayi’s, never know what they are being treated for. “The hospital does not have all the facilities for specialised diagnosis and treatment,” said one paramedical staffer, on condition of anonymity. “We take precautionary measures and refer them.” The patients are only told they need specialised treatment in a city, and that is often the end of their stint at the Tata hospital.

‘Darkness beneath a burning lamp’

In 2011, the Ministry of Mines acknowledged in its Sustainable Development Framework report that mining has produced little or no benefits for local populations in industrial areas. In view of this inequity, the Mines and Minerals (Development and Regulation) Act was amended in 2015.

In Odisha, the state government created mechanisms including District Mineral Foundations, non-profit trusts, to share royalties with the affected communities.

In Jajpur, the total amount collected in the District Minerals Fund as of June 30, 2018, was about Rs 530.30 crore. A summary of the utilisation of funds on the Odisha DMF website is startling: The Sukinda block, categorised as the ‘directly affected region’ has been sanctioned only a paltry sum of Rs 66.99 crore – of which Rs 14.21 crore has been released and Rs 0.03 crore spent.

Mankidia Sahi as the day comes to an end. Women beginning to wash utensils and prepare to cook. Children cleaning themselves up in the only tube well in the area. At a distance, the trucks line up for ferrying people to the mines.

Mankidia Sahi as the day comes to an end: women beginning to wash utensils and prepare to cook.; children cleaning themselves in the only tube-well in the area. At a distance, trucks line up to ferry people to the mines.

The website, further, lists the priority sector expenditures: Power has no allocation to its account. Women and child welfare has Rs 5.90 crore allocations, of which Rs 0.90 crore is sanctioned. Drinking water and education have allocations of Rs 42.39 crore and Rs 5.84 crore, of which only Rs 3.59 crore and Rs 0.81 crore, respectively, have been sanctioned.

Benefit sharing and priority expenditure alone won’t solve the problem. Studies of the pollution and its health-symptoms are necessary. The Orissa Voluntary Health Association reported that 84.75% of deaths in the mining areas, and 86.42% of deaths in nearby industrial villages, occurred due to chromites-mine related diseases.

“It is like the darkness beneath a burning lamp,” said, Lambodar Mahanta, the petitioner in the NGT case. “The opulence of Tata burns brighter and brighter, and just under its arms, exists this village with its people – uncared, forgotten and forlorn, as if lost from everyone’s vision behind the green paddy fields and rising red topsoil mounds from these mines.”

Sweta Dash is a writer and aspiring academic, and Abinash Dash Choudhury is a writer and activist.

How India’s Largest Beach Sand Mineral Exporter Got to Where He Is

S. Vaikundarajan has been accused of large-scale illegal mining, a charge he denies, though he admits to using all sorts of methods to tackle those who stand in his way.

S. Vaikundarajan. Credit: Sandhya Ravishankar

Chennai: As S. Vaikundarajan bustled into the office of the Chennai bureau of the Economic Times in January 2015 in response to a request for an interview with this reporter, it was hard not to stare. The 58-year-old founder chairman of VV Mineral, the country’s largest miner and exporter of rare earth minerals – garnet, ilmenite and rutile – is a crorepati many times over, yet clad in a thin white cotton shirt and a veshti (dhoti in Tamil). His feet were bare. He is polite to a fault and addresses everyone, young or old, with respect. As he began speaking about himself in his booming voice, his audience was enthralled. It is easy to see why “Annachi” (elder brother as he is called by those who work with him) is both worshipped and feared in his southern fiefdom of Tirunelveli.

“You can go ahead and record this,” he waved, a picture of nonchalance. “Ask me anything, I am prepared to answer.”

Money seems to be second nature to Vaikundarajan. He remembers the exact amounts of deals struck even two decades ago. Ambition burns bright in him as he details how he single-handedly pushed for and changed the Indian government’s rare earth mining policy about two decades ago, despite the public sector Indian Rare Earths Limited (IREL) vehemently opposing the move.

“I asked Thiruvattar MLA Appu Nadesan, a friend of mine, to write a letter to the Ministry of Mines asking them to allow private players to enter rare earths mining,” said Vaikundarajan. “The ministry directed the Indian Bureau of Mines to study the issue and give them a report. They studied the whole area for nine months and gave a detailed report on how many tonnes of minerals was wastefully going back un-utilised into the sea,” he said.

Vaikundarajan and his aide Yesu Selvan then decided to head to Delhi. “Appu Nadesan was a naïve man, he would never lie,” smiled Vaikundarajan. “He asked me to join him in the meeting. Both Yesu Selvan and I went in the guise of his PAs and spoke in the meeting. IREL said they are protecting their 700 employees by not allowing [the] private sector into the field. Then we convinced them that our mineral wealth is going away to Sri Lanka through the sea and we are losing out. The minister understood. He said India’s mineral wealth should not go to another country and that private players too should mine. That is how the policy got changed,” he explained.

Vaikundarajan’s telling of the tale is indicative of the way he handles his chosen profession. Rivals abound but a rustic grit and quick thinking have helped Annachi either crush them or make them join forces with him. So much so that out of a total of 64 licences to mine beach minerals in the country, 45 belong to Vaikundarajan. Most others belong to his brothers. And he said that his rivals have fuelled him and made him who he is.

Also read: The Countdown Begins For Tamil Nadu’s Beach Sand Mining Cartel

Over 200 criminal cases and at least 150 civil cases have been slapped on Vaikundarajan over the years, by his own admission. Not once has he faced arrest. Rival businessmen, instead, have either sold out to him or gone down fighting.

“A rival who I was fighting, Paul Durai, said he wanted to sell his land to me,” said Vaikundarajan. “Before that he had even filed police complaints against me. He fed me cake at his house – that was the first time I had eaten a cake with raisins and I couldn’t believe that such cakes could exist. After we ate, he told me that he wants to sell his land. He said his auditor and others had told him that I (Vaikundarajan) am a moradan (rough, thug-like) but that I am true to my word,” he said.

When Vaikundarajan tried to buy a mine in Andhra Pradesh, the owner refused to sell it to him, calling him a “criminal”. Vaikundarajan says he agreed with the other man’s assessment. “Yes I am a criminal,” he recounted as having told the mine owner at the time. “But your guys started it. I only defended myself.” His ethos is an earthy one: “I have a principle – if you simply carry on with your business I will not bother you, I will go my way. But if you cross my path I will not spare you, I will give as good as I get. By that definition yes, I am a criminal,” said Vaikundarajan.

During the initial stages of his business, a senior miner refused to allow VV Mineral trucks to use the path running through his lands. “I had a small plot in which I was mining and the surrounding 40 acres belonged to him,” said Vaikundarajan with a twinkle. “He said you cannot go inside. So what did I do? I bought 400 acres around his 40 acres of land and then told him he cannot go inside,” he laughed heartily.

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

In a 2014 CBI probe involving the disproportionate assets of Tuticorin Port Trust chairman Subbaiah, Vaikundarajan moved court for anticipatory bail fearing arrest. He got it and has been questioned by the CBI since. “In 2008 I made an agreement with Subbaiah’s mother to buy her land,” he explained. “I gave an account payee cheque – no one who is bribing will pay by cheque. The land value was around Rs 4 crore but I gave more because I wanted him to change the land classification. I really wanted that land because it has 2.5 million tonnes of limestone. I have an unofficial report on this and only I knew it. If the land classification is changed I don’t have to go to Delhi, so Rs 8.5 crore is very cheap for me,” he shrugged.

Vaikundarajan frankly admits that its no holds barred when it comes to getting results. “In 2002, based on a false complaint, the government asked me to stop mining because I did not have environmental clearance,” he said. “I got a stay in court. You cannot imagine the kind of money asked by the enviro sciences officials – Rs 25 to 30 lakh per lease to prepare a report! I had a large number of leases so we discussed what to do. My brother said whether it is right or wrong you go give the money and get the clearances. They (officials) said you have to give 60% upfront, 20% on preparation of report and 20% on report being cleared. I didn’t have a choice and I paid the money and got it. I am the only company to have environmental clearances in CRZ land.”

About 7-8 years ago, Vaikundarajan went head to head with a secretary in the Ministry of Mines, he says. “Normally, to approve a file in the ministry it costs around Rs 15 lakh to Rs 20 lakh,” said Vaikundarajan. “When I met this secretary I offered him Rs 25 lakh. But he said no, there are 15 files here so you give me Rs 15 crore. I said Rs 15 crore is not possible. This secretary rejected the files,” he said. Annachi won this battle too, in his own words, by destroying conspiracies and having his day in court.

Now Vaikundarajan has set his sights on pushing the government to allow private players to mine monazite, an atomic mineral currently mined only by the Centre’s IREL. He is litigating against the government asking for licences, having filed two suits in 2013 in the Madurai bench of the Madras high court, which challenged the Department of Atomic Energy’s rejection of his applications to mine the mineral from which the nuclear fuel, thorium, is produced. “I only want to mine the rare earth oxide from the monazite,” argued Vaikundarajan. “The rest we will give it to the government. We will give uranium mined as yellow cake itself to the authorities. Then India will not have to import uranium ever again. We will do the same thing with thorium. I said I have 80 acres of land which is superb and safe, I shall store the thorium underground as per your rules. The note was prepared accordingly. On the fifth day, stories came out in the papers and the GoI cancelled the plan. That is the reason I had to go to court over this.”

Cut-throat business rivalry

Former Congress MP Dhanushkodi Adithan was an early miner who exported raw sand, one of Annachi’s first rivals, and when contacted, he was reluctant to speak on the subject. “He has crores of money, there is no one in the south like that,” he said haltingly. “He is powerful because of money. So his word is law. Any government will kowtow to him. Everyone lives in fear in the area. He divides and rules in the villages where he operates,” he said.

This claim is backed by environmentalists in the area who are familiar with Vaikundarajan’s modus operandi when it comes to getting mining leases along the coast. “These people (Vaikundarajan and his brothers) have been buying up a number of villages along the southern coast. The panchayat president is the authority to give permission for anything from a shrimp farm to mining or any project at the village level. So these people simply pay some amount to the panchayat leaders and fund some local functions or pay ‘salaries’ to locals without any work and thereby any opposition is stifled,” said Probir Banerjee, president of the non-profit PondyCAN, an expert in coastal issues.

The biggest thorn in Vaikundarajan’s side is Dhaya Devadas, miner and exporter of river sand garnet. The two have been battling for a slice of the rare earth mining business for almost two decades. Vaikundarajan says that he has defended himself against Devadas’s onslaught for the past two decades and only recently has gone on the offensive. “But we will pick fights too with our rivals,” said Vaikundarajan. “There is a saying that if there is 51% right on your side then you should fight and if there is 51% of right on your rival’s side you should back down. That is why we fight. If everyone has come and everyone has fallen at my feet but only this man is constantly opposing me that means enmity is soaked into his blood,” he said. Devadas refused to comment on Vaikundarajan as cases against him are currently under trial.

Vaikundarajan’s ire has also been turned on geologist Victor Rajamanickam, the petitioner who filed the 2015 PIL against him. He claims that he has proof of alleged corrupt practices committed by Rajamanickam in his capacity as a geologist with government agencies and as a professor at Thanjavur University. Rajamanickam denied these claims and said that his one-time friend Vaikundarajan has now changed. “He is a very hard worker, he is immersed in his business for 24 hours,” said Rajamanickam. “There are two faces to Vaikundarajan. He is a very very human person. He behaves in a very respectful manner with old or young, officials and you won’t find any animosity in him. His other face is that of cruelty – he is always aiming to punish. An eye for an eye, a tooth for a tooth. That is why people are afraid of him. The more he welcomes you, the more he is going to punish you,” he said.

Also read: Thirty Years of Official Collusion Helped Tamil Nadu’s Beach Miners Break the Law

Vaikundarajan’s modus operandi when faced with trouble, is to try and induce cooperation and if that cannot be accomplished, threats follow. If that too does not work, he will file a string of legal cases and ensure slander and doubt envelop the person he is up against.

The case of the present animal husbandries and fisheries secretary of Tamil Nadu and senior IAS officer Gagandeep Singh Bedi confirms this. In 2013, when then chief minister J. Jayalalithaa banned beach sand mining in the state and ordered a probe, Bedi was appointed head of the special committee to conduct the probe. He was then the state’s revenue secretary.

In 2014, VV Mineral and Transworld Garnet India, companies owned by Vaikundarajan, filed cases in the Madras high court alleging bias against Bedi and demanding that he be removed as the chairman of the committee. Vaikundarajan referred to Bedi’s tenure as Kanyakumari district collector in 2002, when action was taken against VV Mineral’s alleged illegal sand mining. He also produced documents to show that Bedi, in his capacity as collector, had refused to accord clearance for a mining lease. Bedi and the state government denied all charges in court, detailing the procedure of verification of mining leases using a multi-layered process, which made the procedure transparent and fair. “I have no grudge against Mr S. Vaikundarajan as alleged or at all,” the beleaguered bureaucrat submitted in court in November 2014.

In August 2015, Justice T. Raja ruled that Bedi be removed as head of the committee and replaced by a retired judge. In September 2015, a two-judge bench comprising the chief justice of the Madras high court Sanjay Kishan Kaul and Justice T.S. Sivagnanam issued a stay on Bedi’s removal. But the final report is yet to be submitted to the state government as there is a stay on that too in another case. While field inspections by the committee are over, verifications are yet to be compiled for the districts of Trichy and Madurai, according to the state industries department.

Dhaya Devadas’s battle with Vaikundarajan began in 2000 – when he lost a mining lease after “bitter litigation” with Vaikundarajan and his brother Jegadheesan. Devadas then began sending complaints to various departments alleging illegal sand mining by Vaikundarajan and family. Vaikundarajan hit back with a slew of complaints and court cases. Vaikundarajan, with more political muscle, won the war. In 2011, Devadas’ mines were shut down by the state government.

Apart from Vaikundarajan’s ongoing furious rivalry with Devadas, the miner is also estranged from his brothers Chandresan and Kumaresan. Vaikundarajan himself admits in his affidavit before the high court in March 2015 while disputing allegations about his links with a company called Industrial Mineral Company: “This is an entity belonging to my estranged brother Mr Chandresan against whom I have had arbitration proceedings over division of properties. The division is complete and we are no longer together,” he says.

The bitterness with Kumaresan goes back a long way. Kumaresan is the eldest son of their father’s first wife. On August 28, 2016, Kumaresan held a press meet in Chennai asking the Jayalalithaa government to take action against his stepbrother Vaikundarajan. Kumaresan said he had evidence to prove his allegations although he did not present these to the reporters present. Vaikundarajan issued a press release the following day, stating that his stepbrother was a schizophrenic and denying all the allegations he had made.

The code of the south

While a slight is not forgotten, neither is a good turn. Vaikundarajan’s sense of loyalty is deep rooted and almost feudal. Rajan, a friend who lent him money during a time of need has not been forgotten even now. Vaikundarajan admits he spent Rs 1 crore to help Rajan win a diocese election.

The same Rajan loaned him a broken down generator to help load his first shipment during the power-starved early 1990s. “We worked through the night and somehow loaded the shipment,” says Vaikundarajan. “My brother went and bought a new generator in the morning and said we could return Rajan’s generator. I said no way. It is the raasi (good luck) of the generator that our first shipment went on time. I will buy Rajan a new generator instead.” Vaikundarajan claims he still has that generator.

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

Vaikundarajan’s climb has been nothing short of phenomenal considering his humble beginnings. Educated only upto class 12, with no knowledge of English until his later years, his grit and wit have stood him in good stead. Following a fallout with his family over the ownership of his father’s rice mill, Vaikundarajan headed out in a huff with his pregnant wife and sought shelter in a broken down godown on his father’s property. His friends gave him a business idea – to sell ration shop rice that would fall off the back of a lorry. The local tehsildar who was a friend helped Annachi in this lucrative business.

With his earnings as a rice seller, Vaikundarajan built his own rice mill. By this time, the family feud was over and he decided that he could not compete with his own father in the same business. Annachi shut his rice mill down. Friends and advisors then introduced him to beach sand mining.

Vaikundarajan’s father A.S.V. Subbaiah Nadar appears to have been an enormous influence in his life. Vaikundarajan’s voice softens as he speaks of his father and an incident during his younger years when he helped him with the rice mill. To avoid the power quota of 200 units imposed in that era, Vaikundarajan says he tried to circumvent it by reversing the meter so the rice mill could run for more than 10 days. “On the 11th day my father was astonished – he asked me how come the rice mill was still running despite our quota getting over. I told him I had reversed [the meter]. My father was shocked – he said I had done a great wrong. He said that wealth accumulated by thieving will destroy the whole clan. He asked me how much I had reversed it by and I said by around 200-220 units or so. So he calculated the cost of the stolen power which was Rs 1.50 per unit and also penalised me 50 paise per unit stolen as punishment. He said donate that entire sum to the temple,” smiled Vaikundarajan.

He also talks of his father’s code which he follows religiously. “My father was a very honest man. He always told us that we should never get into businesses like liquor and cinema. He used to say that the income from these will never profit the next generation. The Dharmaneedhi that the Mahabharatha talks about – that is what my father always followed,” he said.

Vaikundarajan denies allegations that he is a benami of former chief minister Jayalalithaa. To questions of his shareholdings in Jaya TV and Midas Distilleries, both owned by close aides of Jaya’s confidante Sasikala, he replies that he owns shares in a lot of companies and these are only some of them.

He spoke of his policies towards his employees, the larger than life ‘benefactor’ who provides free health cover and has built hospitals in the villages where he operates. He also spoke of his VV College of Engineering in Tirunelveli which takes no capitation fees and in fact, charges less than the government-prescribed fees.

As he left the building, he responded to a query on why he does not wear chappals. With an impish smile, Annachi says that his father had only allowed one pair of chappals to each of his sons. Vaikundarajan lost three pairs. His father then refused to buy him one more. An incensed Vaikundarajan swore that he will never wear chappals again in his life. He remains true to his word even today.

But what rises dizzily, must fall someday. And so it is with Vaikundarajan, who commands a monopoly over the lucrative beach sand mining sector in the country. As the Madras high court unearths more dirt during hearings in the suo motu PIL in which Vaikundarajan and his brothers stand accused, and as the Centre and the state governments turn against the miner, a crackdown appears to be in the offing. Vaikundarajan, son of Tirunelveli’s soil, is quite likely a worried man today.

Sandhya Ravishankar is a Chennai-based journalist who has been investigating illegal beach sand mining for years. She tweets at @sandhyaravishan