15 Regulation of the Mining Sector in India

Ms Kanchi Kohli

 

epgp books

 

 

 

1. Introduction – India’s Mineral Sector and Regulation

 

Mines have been operational in India since the pre-Independence period. Several iron and coalmines were an important source of extraction during the British colonial rule. They have also been the backbone of old and public sector owned steel production units and thermal power plants. The mining sector continues to be a major thrust area for industrial expansion and economic growth even in current times.Minerals such as coal form a major part of India’s energy generation model as well.

 

The National Mineral Policy, 2008seeks to achieve goals related to large scale prospecting of minerals and large investments, which according to the policy are required to be implemented through latest technologies. According to the Indian Minerals Yearbook, 2012, the mining sector distribution of mineral production in 2011-12 “showed that fuels accounted for about 69%, metallic minerals about 18%, non-metallic minerals about 2% and minor minerals about 11%.”

 

The mining sector in India is regulated by a range of laws, which relate to allocation of mining areas, ensuring rational use of mines (See: Indian Bureau of Mines and Ministry of Mines), overseeing land acquisition as well as rehabilitation proceedings. This process needs to be followed each time land is being acquired for industrial or infrastructure purposes and incase of a military or disaster related emergency. While the government can acquire this land, it cannot do so without following due procedures. This includes giving notice, seeking consent and duly rehabilitating landowners and those dependent on the land for their livelihoods (See here).

 

However, each time land is to be converted for mining of iron ore, bauxite, coal or sand along rivers and beaches,there are wide ecological and social implications. It is bearing this in mind that several legislation have laid out procedures and safeguards which mining agencies would need to follow prior to initiating operations. These are under the jurisdiction of the Ministry of Environment, Forests and Climate Change (MoEFCC).

 

2. Learning Outcomes

 

In this unit, we seek to address three of the procedures and safeguards, which mining agencies would need to follow prior to initiating operations. They are:

 

1.Environment Clearance under the Environment Impact Assessment Notification, 2006 (EIA);

2.Forest Diversion Approval under the Forest (Conservation) Act, 1980 (FCA);

3.Approval for use of areas protected for wildlife under the Wild LifeProtection Act, 1972(WLPA).

 

Along with the key procedures and mandatory requirements in the abovementioned environmental laws, the next section also highlights some additional requirements instituted through administrative and judicial orders.

 

3.Environment and Forest Laws regulating Mining

 

3.1.Environment Impact Assessments and Approvals

 

3.1.1.Procedure

 

Mining of minerals is first amongst the list of activities for which “environment clearance” is required. This approval needs to be sought under the Environment Impact Assessment (EIA) Notification, 2006. This notification requires all mining operations to go through:

 

Preparation of an Environment Impact Assessment (EIA) report based on an earlier Terms of Reference (ToR) issued for what the EIA should contain.

 

Participate and seek responses during a Public Hearing.

 

Appraisal by an expert committee based on both the EIA and Public Hearing related documents.

 

For the purposes of administering the applications, the EIA notification has categorized most projects and activities as Category A and Category B projects.

 

3.1.2. Exceptions and Recent Changes

 

In recent times there have been specific changes to regulating mining projects, which have been instituted through court or government orders. For instance:

 

1. On 27.2.2012, the Supreme Court of India ordered that all mining leases even under 5 hectares will also require an environment clearance. Till then only mining projects between 5-50 hectares were treated as Category B projects. On 18.5.2012, the MoEF issued a clarification [Ref: OM No. L-llOll/47/2011-IA.II(M)].

 

2. Riverbed sand mining under 5 hectares would not require environment clearance.

Further, leases between 5 to 50 hectares will be considered as “B2” projects, which mean they don’t need to go through a detailed EIA and Public Hearing process. The approvals can be considered by the SEIAA based on a Form IA submitted to the authority [Ref: OM No. J-13012/12/2013-IA-1I (I) dated 24.12.2013].

 

3. Since 2012 several office memorandums have been issued for exempting one time expansion of coal mines over 16 MTPA capacities from the process of public hearings. This needs to be done by applying due diligence by Expert Appraisal Committee (EAC) for coal mining projects (Category A) and all conditions laid out earlier have been satisfactorily complied with [Ref: No. J-IIOI5/30/2004-IA.I1 (M) dated 28.7.2014].

 

 

3.2.Forest Land Diversion

 

In India, many mining projects involve either partial or entire use of forestland for the purposes of extracting the mineral. A map produced by the Centre for Science and Environment overlays mining areas in the country over officially recognized forest land (See here). Therefore there are very few instances where mining projects donot require the diversion of forest land.

 

Such diversion of forestland for non-forest use invokes the provisions of two legislation, i.e.the Indian Forest Act, 1927 (and its corresponding state laws) as well as the FCA. As forests are part of the Constitution’s Concurrent List, jurisdiction rests with both the Central Government as well as the state governments (See text of these legislation here and here).

 

3.2.1.  Procedure

 

Any proposed mining operation seeking to use forest land (be it a government department or a private agency/individual) has to seek permission for the same. According to the Forest Conservation Rules, 2014, clear timelines and steps have been provided on how an application for forest diversion needs to be processed. Some key steps are:

  • A user agency (in the present case a mining company/individual) needs to submit an application seeking for diversion of forestland from the state forest department, and in particular the Divisional Forest Officer (DFO).
  • The DFOs needs to inspect the site, prepare a report based on a series of criteria and forward their recommendation on whether or not the forest should be given away for non-forest use.
  • Based on the DFO’s recommendation, the Principal Chief Conservator of Forests (PCCF) forwards the proposal to the MoEFCC.
  • This practice of MoEFCC giving prior approval for forest diversion was institutionalized through the FCA, when the Central Government had recognised that there are uncontrolled and unprecedented rates of deforestation in the country.
  • At the MoEFCC, a Forest Advisory Committee (FAC) reviews the proposal and gives its recommendations. In the process of review the FAC can call upon experts, make additional site visits and seek any amount of additional information.
  • Based on the recommendations of the FAC, the MoEFCC can either reject or approve the forest diversion proposal. There have been instances where the MoEFCC has not agreed with the decisions of the FAC,e.g. Mahan Coal Mine in Madhya Pradesh (See here) or the Renuka Hydro Electric Project in Himachal Pradesh (See here).
  • After the MoEFCC’s decision, it is the state government, which needs to issue an order invoking section 2 of the FCA, and only then the land can be transferred to the user agency.

 

 

3.3. Wild Life Related Approvals

 

The construction of mines may involve the use of areas designated as National Parks, Wildlife Sanctuaries, Conservation Reserves and Community Reserves under the Wild Life Protection Act (WLPA), 1972 (amended in 2002). In such cases, the project is referred to the National Board for Wildlife and its Standing Committee for approval as per section 29 of the WLPA. This section restricts any person from destroying, damaging, exploiting or removing anything from areas protected for wildlife under the Act. Permission may however, be granted by the Chief Wildlife Warden.

 

3.3.1. Procedure

 

The permission for use of an area for mining cannot be granted unless the state government is satisfied that “such destruction, exploitation or removal of wildlife from the sanctuary is necessary for the improvement and better management of wildlife.”

 

In the case of wildlife sanctuaries, the procedure entails seeking the permission of the Chief Wild Life Warden (CWLW) of the particular state where the sanctuary is located. However, the CWLW has to consult the concerned State Board for Wild Life (section 29) before permission is granted.

 

For National Parks, the consultation needs to be with the National Board for Wild Life (NBWL) and its Standing Committee, which has been delegated several tasks of the NBWL (section 35 (6).

 

In addition to areas within the PAs, if any project requiring environmental clearance (under the Environment Impact Assessment Notification, 2006) or activity is to be undertaken within 10 kilometers of a National Park or Sanctuary, the permission of the NBWL will need to be sought.

 

It is important to know that prior to 2002 the NBWL was referred to as the Indian Board for Wild Life (IBWL). Its composition and powers underwent a change in 2002 when the WLPA was amended. However the NBWL was notified only in 2003 and its first meeting was held in December 2003. Like the IBWL, the Prime Minister of India also chairs the NBWL. The WLPA amendment also stated that the NBWL would have the discretion to constitute a Standing Committee to which it can delegate specific tasks and duties (See: this and this).

 

3.4. Role of the Supreme Court

 

If a mining project involves the non-forest use of a Protected Area, it also attracts the provisions of the 14.2.2000 order issued inT.N GodavarmanThirumulpad v. Union of India and Others(Writ Petition 202/1995), an ongoing case in the Supreme Court of India which has had far reaching consequences in determining the nature of forest management in the country. This order bans the removal of “dead, diseased or wind fallen trees, drift wood and grasses, etc” from any National Park or Game Sanctuary or forest. Thereby any activity in a PA that amounted to such removal, entails seeking permission from the Supreme Court of India (See: this and this).

 

4. Two Cases related to Mining and Environmental Law

 

In this section we look at two cases where the above-mentioned environment laws have come into question both in social movements and courtroom discussions. In each of these cases there are significant judgments of the Supreme Court and the National Green Tribunal that have had a bearing on the practice of environment regulation in the mining sector. Each case has been briefly described, key elements of the judgment highlighted and links to additional reading material provided.

 

4.1. Bauxite mining in Niyamgiri Hills, Odisha

 

Till 2004, the Niyamgiri Hills spreading across Rayagada and Kalahandi districts of Odishawere known to a few. But once Sterlite Industries (part of M/s Vedanta plc, registered on the London Stock Exchange) and the Odisha Mining Corporation (OMC) disclosed their plans to mine bauxite at the hills and transport it to Sterlite’s alumina refinery at Lanjigarh, it brought the area to national and international attention.

 

Three sets of cases were filed before the Supreme Court’s Central Empowered Committee (CEC) set up as part of the ongoing Godavarman case (mentioned in sections above). The cases highlighted a range of impacts that included those on the lives of the DongriaKondh tribal communities for whom the hills are sacred; on forest produce; wildlife and sources of water emanating from the hills.

 

One of the key legal issues from the very beginning of the legal battle was that Sterlite had initiated the construction of the refinery without approvals for the mining component, integral to the project’s viability.The total mining lease area is 721 hectares. But of this, 660.749 hectares is forest land, and the diversion of the same for such purpose required permission under the FCA. This was still pending at the time the project began. Sterlite and OMC linked and delinked the mining component several times over to ensure that the construction of the refinery does not get impacted. In November 2007, four years after the case was filed, the court suggested that mining could take place provided there is a Special Purpose Vehicle (SPV) set up by Sterlite and OMC.

 

Later, the Supreme Court through its August 2008 judgment recommended forest diversion and directed the MoEFCC to consider the project for diversion in “accordance with law”. The in-principle or Stage 1 forest clearance from MoEFCC followed on 11 December 2008 with conditions. One of them related to the recognition of rights of the forest dependent and tribal communities living in and around the mine. During the course of the litigation, the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA) and its corresponding rules of 2008 (See this and this to read more about this law) had been enacted. The forest land therefore could not be diverted for mining purposes till the rights of the people in the area were duly recognised under the FRA.

 

The MoEFCC subsequently rejected the proposal for final (Stage 2) forest clearance for mining in Niyamgiri on 24 August 2010 with the support and recommendation of the statutory FAC. Sterlite and its parent company Vedanta, challenged this in the Supreme Court. The SC’s 18 April 2013 decision therefore vests the future of bauxite mining in the hands of the gram sabha or the village assemblies in Niyamgiri. This process was carried through the Ministry of Tribal Affairs, where unanimously all 12 gram sabhas rejected the proposal for mining in Niyamgiri. Following this the MoEFCC rejected the forest diversion for mining of bauxite in Niyamgiri Hills [read more about this case here, here and here; also see videos here and here).

 

4.2. Restriction on Sand Mining till environment clearance

 

The unregulated and large scale mining of sand, gravel and stones across riverbeds in India is not devoid of environmental and social impacts. It causes erosion of the river beds and often times leaves the river-plains much more vulnerable to flooding with the loose land mass being swept away, especially in monsoons. It is also stated to have caused salinity intrusion into the rivers altering and damaging the riverine ecosystem.

 

On 5 August 2013, the National Green Tribunal (NGT) (See website) passed a strong interim order which restrained removal of sand from river beds across the country until requisite approvals by the MoEF and the concerned SEIAA had not been procured. This had been a mandatory requirement following the judgment of the Supreme Court of India in February 2012, which amongst other things had said that environmental approval under the EIA Notification, 2006 is needed for all sand mining and gravel collection activities even if the area being used is under 5 hectares (See section on Environment Clearance described earlier). The NGT’s follow up order of 14 August 2013, reinstated and took forward the non-compliance of the February 2012 judgment of the Supreme Court. This Supreme Court judgment in Deepak Kumar v. State of Haryana and Others,had also made critical observations related to environmental impacts of sand mining before issuing directions (See here).

 

The issue of sand mining had been in news just prior to the NGT order where an Indian Administrative Service (IAS) officer came into the limelight because of her efforts to crackdown on the sand mining mafia in the area where she was posted. This was in the northern Indian state of Uttar Pradesh where humans have been intrinsically linked to the riverine systems through cultivation, religious and industrial means. This incident also brought out the rampant illegal sand mining, which was being carried out despite the February 2012 order.

 

The NGT order first acknowledges that rampant illegal sand mining has continued despite directions of the higher judiciary and then directs all state governments in India to respond to seven issues raised in this order. Since the time the directions were first issued the state governments have been submitting information to the NGT on what steps they have taken to implement the SC’s judgment along with how many sand mining proposals they have approved and how many rejected [For more details on this case, read this, this and this).

 

5.  Additional Reading

 

5.1. M.B.Shah Commission and Iron Ore Mining

 

A Commission under the Chairmanship of Justice M.B. Shah was set up in November 2010 by the Ministry of Mines to inquire into iron ore mining in the different parts of the country. The Commission submitted several state specific reports for Odisha, Jharkhand and Goa along with one interim and one final report. One of the highlights was the approach of the Commission towards conservation, preservation and systematic development of minerals through the clauses of the Minerals Development and Regulation Act, 1957. While the Shah Commission acknowledges that iron and steel is critical for industrial development in the country, it seeks to conserve (preserve) and develop these minerals for future generations and for future requirements of developing industries in India. It also looked at aspects of environment and forest diversion approvals for iron ore mines in India as discussed in the previous sections. All the reports are available on the website of the Ministry of Mines (see this). [For additional reading see this and this.]

 

5.2. Supreme Court on Coal Mine Allocations

 

The Supreme Court has been passed a judgment on 25 August 2014 directing that the allocation of coal blocks for the period 1993 to 2010 to various companies has been illegal and arbitrary. The allocation of these 218 blocks has been since challenged before the Supreme Court in two separate Writ Petitions, which were collectively heard and judgment was delivered.While dismissing the two petitions filed by ManoharLal Sharma and another by Common Cause, the bench delivering the judgment has said that a separate set of hearings before the court will be undertaken to decide on what action has to be taken regarding the blocks which have been illegally allocated. As of 12 September 2014, the final decision was pending. The full judgment is available on the website of the Supreme Court of India (see here for judgment in Writ Petition (CRL) No.120 of 2012 and some writings can be accessed here, here and here).

 

Summary

 

The mining sector in India is regulated by a range of laws, which relate to allocation of mining areas, ensuring rational use of mines, overseeing land acquisition, rehabilitation proceedings and environmental safeguards. Each time land is to be converted for mining, there are wide range ecological and social implications. This module deals with three regulatory frameworks which lay out procedures and safeguards that mining agencies would need to follow prior to initiating operations. These are: “environment clearance” under the EIA Notification; forest diversion approval under the FCA; and approval for use of areas protected for wildlife under the WLPA. It further locates the application of these laws in two landmark cases related to bauxite mining in Niyamgiri Hills (Odisha) and restrict of sand mining across the country. It finally gives a glimpse into two significant legal and policy processes that have had a significant bearing on regulating the iron ore and coal mining sector in India.

you can view video on Regulation of the Mining Sector in India

 

Web links

  • Papers, Studies, Reports, Books and Articles on Law, Mining and Environment
  • http://www.saiindia.gov.in/english/index.html
  • http://www.cseindia.org/content/rich-lands-poor-people-sustainable-mining-possible
  • http://goafoundation.org/mining/
  • http://mines.nic.in/index.aspx?level=1&lid=673&lang=1
  • http://www.epw.in/editorials/niyamgiri-triumph.html
  • http://www.epw.in/commentary/two-coal-blocks-and-political-story.html
  • http://mines.nic.in/writereaddata/filelinks/88753b05_NMP2008.pdf
  • http://www.greenpeace.org/india/Global/india/report/How-Coal-mining-is-Trashing-Tigerland.pdf
  • http://ibm.gov.in/IMYB_2012_01 Indian Mineral Industry &NationalEconomy.pdf