Supreme Court lifts sus­pen­sion on iron ore min­ing in Goa

Supreme Court al­lows con­di­tional re­sump­tion of iron ore min­ing in Goa


For the min­ing in­dus­try in Goa, April 21, 2014, was a his­toric day. The Supreme Court pro­nounced an end to the 18- month- long sus­pen­sion of iron ore min­ing that had se­verely strained the state’s econ­omy. The judge­ment, de­liv­ered by Jus­tice A K Pat na i k , al­lows con­di­tional re - sump­tion of iron ore min­ing in the state, tak­ing into ac­count the prin­ci­ples of sus­tain­able de­vel­op­ment and in­ter­gen­er­a­tional eq­uity.

The judge­ment con­tains mul­ti­ple lay­ers that try to tackle is­sues of le­gal­ity, en­vi­ron­men­tal im­pact and fu­ture gov­er­nance of min­ing ac­tiv­i­ties. “Con­cerns re­gard­ing il­le­gal min­ing in Goa and its eco­log­i­cal im­pact have been long-stand­ing,” says Claude Al­vares, ex­ec­u­tive di rec tor of Goa Foun­da­tion, an en­vi­ron­men­tal non-profit, which had filed a pub­lic in­ter­est pe­ti­tion in the Supreme Court in Septem­ber 2012 un­der­scor­ing these is­sues. The pe­ti­tion was filed fol­low­ing the ob­ser­va­tions of the Jus­tice Shah Com­mis­sion re­port, which high­lighted ram­pant min­ing in the state. The com­mis­sion was ap­pointed on Novem­ber 22, 2010, to look into il­le­gal min­ing in Goa and six other states.

Just days af­ter the Shah Com­mis­sion re­port was tabled in Par­lia­ment on Septem­ber 7, 2012, the govern­ment had tem­po­rar­ily sus­pended min­ing ac­tiv­i­ties in the state. In the same month, the Union Min­istry of En­vi­ron­ment and Forests ( MoEF) di­rected sus­pen­sion of en­vi­ron­men­tal clear­ances of all 139 mines in Goa. In Oc­to­ber that year, the Supreme Court de­clared il­le­gal those leases in which vi­o­la­tions were de­tected by the Shah Com­mis­sion. The court asked its cen­tral em­pow­ered com­mit­tee ( CEC) to in­ves­ti­gate the mat­ter. As a re­sult of these or­ders, min­ing ac­tiv­i­ties came to a halt.

Le­gal sta­tus of mine leases

The Supreme Court judge­ment has not con­doned the il­le­gal sta­tus of the mine leases which were op­er­at­ing be­yond the lease pe­riod. The court clarifies that the va­lid­ity of the leases in ques­tion ex­pired in Novem­ber 1987, and sub­se­quently the max­i­mum re­newal pe­riod of 20 years ex­pired in Novem­ber 2007, as per pro­vi­sions of the Mines and Min­er­als De­vel­op­ment and Reg­u­la­tion ( MMDR) Act, 1957. The state govern­ment now has to reeval­u­ate them and grant fresh leases, while MoEF needs to give clear­ances. The or­der also says that reg­u­la­tory su­per­vi­sion of min­ing op­er­a­tions should be car­ried out by state au­thor­i­ties, in­clud­ing the Depart­ment of Mines and Ge­ol­ogy, the Goa Pol­lu­tion Con­trol Board and the na­tio nal en­vi­ron­men­tal reg­u­la­tory body, which is to be ap­pointed by the Cen­tral govern­ment. The na­tional reg­u­la­tor, as di­rected to be formed by the Supreme Court in July 2011, will be re­spon­si­ble for un­der­tak­ing in­de­pen­dent and ob­jec­tive ap­praisal of projects for en­vi­ron­men­tal clear­ances and mon­i­tor­ing of clear­ance con­di­tions.

Though the end of sus­pen­sion has come as a re­lief for the min­ing in­dus­try, the sta­tus of the il­le­gal leases has made them un­com­fort­able. Com­pa­nies such as Sesa Ster­lite and Fo­mento re­fused to com­ment on their plan of re­sum­ing min­ing ac­tiv­ity. In an of­fi­cial state­ment re­leased on April 22, Sesa Ster­lite said the “com­pany is work­ing to­wards se­cur­ing the nec­es­sary per­mis­sions for com­mence­ment of op­er­a­tions at the ear­li­est”.

Deemed ex­ten­sion: le­gal loop­hole?

Fol­low­ing the court’s ob­ser­va­tions, ques­tions have arisen on how the mine leases con­tin­ued to be op­er­a­tional when their va­lid­ity ex­pired in 2007. In their de­fence, the lease hold­ers talk about deemed ex­ten­sion. The clause of “deemed ex­ten­sion” comes un­der rule 24A of the Min­eral Con­ces­sion ( MC) Rules, 1960. Deemed ex­ten­sion, as broadly un­der­stood, al­lows mines to op­er­ate even with­out a per­mit, as long as the lease holder files a timely ap­pli­ca­tion with the state govern­ment for the first re­newal of the lease. If an ap­pli­ca­tion for re­newal is made within the stip­u­lated time frame, typ­i­cally six months be­fore the ex­piry of a lease, which can be ex­tended up to one year by the state, the pe­riod of that lease shall be deemed to have been ex­tended till fur­ther or­ders from the state. The lease hold­ers ar­gue that the ap­pli­ca­tions for re­newal were filed within the stip­u­lated time frame but the govern­ment had not acted on them. In fact, as ob­served in the judge­ment, the Goa govern­ment said it had al­lowed min­ing from 2007 to 2012 based on deemed ex­ten­sion sta­tus.

De­lay by the state au­thor­i­ties to de­cide on the re­newal ap­pli­ca­tions has sus­tained this loop­hole. While prob­ing into the mat­ter of il­le­gal min­ing in Odisha, where deemed ex­ten­sion has also been ex­ploited, the Shah Com­mis­sion, in its re­port of June last year, pointed out that the clause fa­cil­i­tates lease hold­ers “to in­dulge in il­le­gal min­ing ac­tiv­ity at their sweet will”. The Goa govern­ment is now tak­ing a rec­ti­fied stand— it de­cided in the Goa Min­ing Pol­icy of 2013 that no mine can be al­lowed on a “deemed ex­ten­sion” ba­sis.

How sus­tain­able is the min­ing cap?

Min­ing sits big in Goa’s bal­ance sheet. The state is home to some of the most prom­i­nent min­ing com­pa­nies in the coun­try, in­clud­ing Sesa Ster­lite Limited, VM Sal­gao­car and Broth­ers and Fo - mento Re­sources. Close to 150,000 people in Goa are de­pen­dent on the min­ing in­dus­try for their liveli­hood. How­ever, the eco­nomic im­per­a­tive of min­ing is mar­ried to eco­log­i­cal con­cerns.

The re­port of the Shah Com­mis­sion noted that mines in Goa are lo­cated in for­est ar­eas, ecosen­si­tive zones and close to streams and rivers, caus­ing pol­lu­tion and loss of bio­di­ver­sity. Tak­ing into ac­count the eco­log­i­cal fall­out of min­ing ac­tiv­i­ties, the Supreme Court had con­sti­tuted an ex­pert com­mit­tee in Novem­ber last year to con­duct a macro- level en­vi­ron­men­tal im­pact as­sess­ment and to sug­gest a cap on min­ing in the state for sus­tain­abil­ity. Based on an in­terim re­port of the com­mit­tee sub­mit­ted in March this year, the court has sug­gested cap­ping min­ing at 20 mil­lion tonnes per year, sub­ject to an ad­e­quate mech­a­nism to reg­u­late and mon­i­tor its im­pacts. The cap re­mains ef­fec­tive till a fi­nal com­mit­tee re­port is sub­mit­ted in a year’s time.

But how sus­tain­able is this ceil­ing? The min­ing cap rec­om­mended by the court is 13.4 mil­lion tonnes less than the pro­duc­tion level of 2011- 2012. The com­mit­tee points out that its rec­om­men­da­tion is in line with the 2006 level of iron ore pro­duc­tion in the state, be­fore the min­ing boom started. But con­sid­er­ing the eco­log­i­cal im­pact of min­ing and the fact that iron ore re­serves in the state have to be sus­tained for at least 50 years, the Shah Commi ssion had sug­gested a cap of 12.5 mil­lion tonn es per an­num, much lower than the court’s rec­om­men­da­tion. Also, the judg ement does not clar­ify how the pro­duc­tion should be al­lo­cated to main­tain the cap of 20 mil­lion tonnes. The CEC re­port had sug­gested that the an­nual pro­duc­tion should be fixed lease- wise con­sid­er­ing min­eral avail­abil­ity, area avail­able for dump­ing over­bur­den and in­fra­struc­ture fa­cil­i­ties, par­tic­u­larly the car­ry­ing ca­pac­ity of the ex­ist­ing roads.

Eco­log­i­cal buf­fer

The eco­log­i­cal con­cerns of min­ing in Goa do not end with the sug­gested cap. Given the small size of the state, defin­ing the buf­fer zone around eco­log­i­cally im­por­tant ar­eas has been a mat­ter of con­tention. As al­leged by the Goa Founda tion, 33 mines in the state

op­er­ate within 1.5 km of wildlife sanc­tu­ar­ies or na­tional parks. The CEC re­port of 2012 sug­gested that min­ing leases that are op­er­a­tional within 10 km of these ar­eas should be kept in abeyance and their en­vi­ron­men­tal clear­ances should be reeval­u­ated by the stand­ing com­mit­tee of the Na­tional Board of Wildlife ( NBWL). The lat­est or­der of the Supreme Court pro­hibits min­ing within 1 km.

NBWL had de­cided in 2002 that land fall­ing within 10 km of the boundary of na­tional parks and sanc­tu­ar­ies should be no­ti­fied as ecofrag­ile zones. It re­vised its de­ci­sion in March 2005 and said that de­lin­eation of ecosen­si­tive zones have to be site- spe­cific where ac­tiv­i­ties need to be strongly reg­u­lated. This de­ci­sion was com­mu­ni­cated by MoEF in May 2005 to all the state gov­ern­ments. Fol­low­ing re­sponses of the states, the min­istry is re­quired to no­tify the ecosen­si­tive zones. The coun­sel of the lease hold­ers, K K Venu­gopal, had ar­gued that in the ab­sence of such a no­ti­fi­ca­tion, min­ing ac­tiv­i­ties can­not be pro­hib­ited be­yond the bound­aries of a na­tional park or wildlife sanc­tu­ary. Ac­cord­ing to an Oc­to­ber 2013 of­fice me­moran­dum of MoEF, the min­istry had re­ceived pro­pos­als from the Goa govern­ment iden­ti­fy­ing ecosen­si­tive zones around pro­tected ar­eas. “The min­istry pre­pared a draft no­ti­fi­ca­tion on March 3, 2014, defin­ing such ecosen­si­tive zones, which has been put for­ward for stake­holder con­sul­ta­tion,” says Amit Love, deputy dir ec tor, MoEF. The Supreme Court has now asked the min­istry to is­sue a fi­nal no­ti­fi­ca­tion within six months. “Fol­low­ing a 60- day re­view pe­riod of the draft, it is to be fi­nalised shortly by the next govern­ment,” Love adds.

Deal­ing with over­bur­den

The min­ing method, which is open cast in Goa, gen­er­ates vast quan­ti­ties of over bur­den or waste ma­te­rial. The Di - rec torate of Mines and Ge­ol­ogy re­veals that on an aver­age, 2.3 tonnes of waste have to be re­moved to pro­duce a tonne of iron ore. The ques­tion is: where does the over­bur­den go? “Dis­card­ing over­bur­den out­side the lease area has been a com­mon prac­tice in Goa,” says Girish Ku­mar Jangid, deputy con­troller of mines at IBM. “This is typ­i­cally be­cause most mines are of small size, not more than 100 hectares (ha),” he adds.

The small min­ing leases are a legacy of the Por­tuguese rule in Goa. Ac­cord­ing to the Por­tuguese Colo­nial Laws, 1906, mine leases of sev­eral min­er­als, in­clud­ing iron ore, should not be for more than 100 ha. “Since most mine leases were in­her­ited from that pe­riod, the size of mine leases re­mains small,” Jangid ex­plains.

The Supreme Court or­der pro­hibits dump­ing of over­bur­den out­side the lease area. The Min­eral Con­ser­va­tion and De­vel­op­ment rules, 1988, which deals with the mat­ter of over­bur­den dump­ing, does not spec­ify that over­bur­den should be dumped in­side the lease area. As Jangid clarifies, the Rules note that the over­bur­den and waste ma­te­rial ob­tained dur­ing min­ing op­er­a­tions should be dumped and

stacked separately on the ground ear­marked for the pur­pose, which should be away from the boundary of the work­ing pit. He adds that for Goa to ac­com­mo­date dump­ing of over­bur­den and waste within the lease ar­eas, big­ger leases should be sanc­tioned while con­sid­er­ing fresh per­mits. “This can be done through amal­ga­ma­tion of leases pro­vided they are con­tigu­ous,” Jangid says.

The sell­ing of iron ore re­mains from the over­bur­den dumped out­side the lease ar­eas has been an­other ma­jor con­tro­versy. This has been go­ing on with­out any per­mis­sion or pay­ment of royalty to the state. The Supreme Court has ob­served such il­le­gal­ity by un­der­scor­ing that the MC Rules do not re­quire a levy to be paid for dump­ing re­jects, but re­quires so if sale or con­sump­tion is in­volved. Be­sides, any dump­ing be­yond the lease area with­out a per­mit is il­le­gal as that is pri­vate or govern­ment land.

Con­cerns of eq­uity

Tak­ing into ac­count the con­cerns of fair share, the Supreme Court has di­rected lease hold­ers who ben­e­fit the most from min­ing to con­trib­ute 10 per cent of the sale pro­ceeds to­wards a pub­lic fund—the Goan Iron Ore Per­ma­nent Fund— for shar­ing the ben­e­fits. The court has or­dered the state govern­ment to frame a com­pre­hen­sive scheme in this re­gard in con­sul­ta­tion with CEC within six months.

Al­though stake­hold­ers in Goa’s min­ing sec­tor wel­come this de­vel­op­ment, they con­sider the de­ci­sion to be in­ad­e­quate. Christo­pher Fon­seca of the Goa Min­ing People’s Front, a coali­tion of min­ing work­ers, says, “Ten per cent ap­pro­pri­a­tion of sale pro­ceeds is not enough to en­sure long- term eq­uity given the wind­fall prof­its that the in­dus­try has been mak­ing.”

Ramesh Gauns, a so­cial ac­tivist in Goa, says the court could have taken a more lib­eral stand while sug­gest­ing the shar­ing of sales pro­ceeds. Ac­cord­ing to Gauns, the new MMDR Bill, tabled in Par­lia­ment in 2011, sug­gests that com­pa­nies that mine ma­jor min­er­als like iron ore will have to com­pen­sate the af­fected people by pay­ing them an amount equal to the royalty they pay to the state an­nu­ally. Con­sid­er­ing this, the 10 per cent eq­uity share is in­ad­e­quate, he adds.

Will it make a dif­fer­ence?

Al­though the Supreme Court judge­ment has touched ma­jor as­pects re­lated to the min­ing in­dus­try in the state, it re­mains to be seen how ef­fec­tive it will be in curb­ing il­le­gal­i­ties. Ac­tivists are con­cerned about the role of the state. The court places much faith in the Goa ( Preven­tion of Il­le­gal Min­ing, Stor­age and Trans por tation of Min­er­als) Rules, 2013. Drafted in Oc­to­ber last year, the law in­cludes sev­eral pro­vi­sions to pre­vent il­le­gal min­ing and to reg­u­late the sale, ex­port, tran­sit and stor­age of the min­eral. “It is not the case that il­le­gal­i­ties were go­ing on with­out the knowl­edge of the state. The govern­ment’s in­cli­na­tion to­wards com­menc­ing min­ing at the ear­li­est can lead to half- hearted im­ple­men­ta­tion of the court’s or­der,” says Gauns.

Au­thor­i­ties both at the state and the Cen­tre re­fused to com­ment on fu­ture ac­tions. When con­tacted, of­fi­cials across the board— from the Direc­torate of Mines and Ge­ol­ogy to the state en­vi­ron­ment im­pact as­sess­ment author­ity to the state Pol­lu­tion Con­trol Board— said that the judge­ment is com­plex and needs to be thor­oughly un­der­stood be­fore mea­sures can be ini­ti­ated. MoEF di­rec­tor Sonu Singh, who specif­i­cally looks into min­ing in Goa, adds that the Cen­tre will only act once ac­tions are ini­ti­ated by the state.

But is it only the per­ceived com­plex­ity of the judge­ment that is hold­ing the state of­fi­cials from ini­ti­at­ing mea­sures? Al­vares es­ti­mates that the state govern­ment is wait­ing for a new govern­ment at the Cen­tre. “If the Bharatiya Janata Party comes to power, it will make mat­ters eas­ier for the Manohar Par­rikar- led BJP govern­ment in the state to con­tinue min­ing,” he says.

Will the set­ting up of a na­tional en­vi­ron­men­tal reg­u­la­tor act as a check against the po­lit­i­cal pre­rog­a­tive? Af­ter miss­ing the Supreme Court’s dead­line of April 30 to set up the na­tional reg­u­la­tor, the Cen­tre has ar­gued for the next govern­ment to set it up. With a na­tional reg­u­la­tor in the off­ing, the pos­si­bil­ity of a new govern­ment and the eco­nomic and eco­log­i­cal con­cerns, it will be chal­leng­ing to bal­ance the min­ing equa­tion in Goa.

Close to 150,000 people in Goa de­pend on the min­ing in­dus­try for liveli­hood

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