Mining Right(s)

Written by  //  August 24, 2010  //  Economic & Social Policy  //  Comments Off on Mining Right(s)

The practice of mining is fast becoming the new stage on which the age-old conflict between private, commercial interests on the one hand, and  community rights on the other hand is being fought in India. Just this week Union Minister of State for Environment and Forests Jairam Ramesh rejected Vedanta Resources’ application for forest clearance to start bauxite mining in Orissa’s Niyamgiri hills. What is most likely to take up news space soon, however, is the new proposal to ‘revamp’ Indian mining laws. This proposal to reform the 1957 Act is called the Mines and Minerals (Development and Regulation) Act, 2010. It seeks to perform the impossible balancing act between protecting the interests of local communities while simultaneously making the Indian mining industry more investor friendly. The most innovative proposal discussed in the context of this Bill was the requirement for mining companies to transfer equity equal to 26% of their profits to affected local communities. In return, companies would allegedly be assured of faster clearances for projects. Giving local communities 26% ownership in mining companies in return for faster mining clearances is problematic for several reasons. But even if the merits of this proposal were to be kept aside, the purpose and impact of a new mining law of this nature can be questioned for several reasons.

First, the problem that ails most sectors in India also ails the mining industry – flagrant violation of laws and standards. Even though several environment and human rights’ protection statutes technically exist on the books, these are rarely enforced or followed – a few examples being the Forest Rights Act, general principles of reasonable compensation for land acquisition, the Environmental Protection Act, etc. In fact, only last month, a bench of the Supreme Court cautioned the central and state governments to strictly enforce laws related to the mining industries. Given that none of these laws are being enforced or followed, there is really no reason to believe that a new law will suddenly be hugely efficacious. It is equally probable that that there will be speedy clearances, but no corresponding transfer in equity. Second, government-owned mining companies themselves have terrible records when it comes to spending money on local community rehabilitation. Just recently it was reported that the government owned mining companies in Chhattisgarh spent less than .5% of their profits on any kind of corporate social responsibility. Third, there is lot wrong with the mining industry in India over and above its obvious violation of the rights of local communities living on the mined lands – a concern this new Bill has not even touched on. The health hazards mine workers are vulnerable to is an oft ignored subject, and there is a need for greater regulation and standard setting in this field. Finally, the environment impacts of surface and underground mining are often un-accounted for. There is a lot of lost soil, land that is improperly and insufficiently reclaimed, and wildlife migration (just recently, the Forest Department asked coal companies for Rs 7.17 crore for a wildlife plan to compensate for the large scale destruction of forest cover due to mining) – all of which impacts the life of local communities just as much as the land-grabbing for mining projects does. Again, the Bill ignores a lot of these concerns.

This new revamping suffers from the same problem that has characterised a lot of recent legislative activity in India – catering to the need for symbolism. The State proposes legislation to show that something is being done about a perceived problem, instead of improving the functioning of laws and measures already on the statute books. In the present case, the need for State action certainly exists. On the one hand, there have been reports of law and human rights violations by mining companies. On the other hand, mining is an almost essential component of India’s energy security strategy, and incentivising private participation in the mining industry is crucial for the State. The wisdom of such reform is, however, questionable and the mining industry could definitely be better regulated through better enforcement of existing law.

Comments are closed.