Environmentalists slam India government over failure on mining law

by Nita Bhalla | @nitabhalla | Thomson Reuters Foundation
Wednesday, 12 February 2014 12:51 GMT

Members of India's main opposition Bharatiya Janata Party (BJP) youth wing protest outside the prime minister's residence in New Delhi over the 'Coalgate' mining rights scandal. Picture May 12, 2013. REUTERS/Adnan Abidi

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Indian government's failure to push through key mining law before forthcoming election is a victory for vested interests in the deeply corrupt mining sector, leading environmental group says

NEW DELHI (Thomson Reuters Foundation) - A leading environmental group has slammed the Indian government for failing to get parliamentary approval for a bill that could have helped clean up the corruption-ridden mining sector and ensure mining firms shared their vast profits with local communities. 

The Mines and Minerals Development and Regulation (MMDR) Bill 2011 - which has been awaiting discussion by lawmakers since last year - will lapse because the government did not revive it in time, the Centre for Science and Environment (CSE) said.

Parliament is currently holding its last session before a general election due by May, but protests by unruly lawmakers over a variety of issues have made it hard for Prime Minister Manmohan Singh’s government to pass any legislation.

The government has tabled 39 bills to be approved before the national assembly adjourns on Feb. 21. The list did not include the MMDR Bill.

“For more than five years, communities and civil society along with government and industry representatives have worked on this Bill to bring in much-needed reforms in the legal and institutional structure of the sector,” CSE deputy director general Chandra Bhushan said in a statement late on Tuesday.

“But with the lapse of the Bill, it will be back to business as usual for the mining sector,” he added.

India's mining sector has among the weakest regulations and oversight and is the source of some of the country's biggest corruption scandals. In 2012, for example, a leaked report by the federal auditor accused the Congress-led coalition government of losing $211 billion in potential revenues by allocating coal mines too cheaply.

The Delhi-based think-tank said the bill - which provides for auctioning leases to provide transparency and sharing of profits with affected communities - could have cleaned up the extractive industries sector. Failure to pass it means that “non-transparency, non-accountability, corruption and environmental degradation” will continue, it said.

Among other things, the bill pushes for competitive bidding and auctioning of mine leases for transparency and makes it obligatory for data to be placed in the public domain. This includes information related to the granting and extension of permits and mining plans. It also recommends forming a National Mining Tribunal to deal with mining disputes. 

The bill also directs coal mining firms to share up to 26 percent of their profits with local communities, and other mining firms to pay local communities an amount equivalent to their royalty payments. The bill also broadens the scope of consultation between mining firms and local communities on a number of procedural issues, thus helping reduce conflicts between them.

Mining companies had balked at the requirements, saying the payouts would vastly increase their cost of business in a sector which already requires high capital investment and has a long gestation period. 

The CSE said it estimated that if the bill had been implemented in 2011, people affected by mining operations would have received more than 9,000 crore rupees ($1.4 billion) as their share of mining firms’ profits.

“This is a clear victory for the vested interests in the mining sector … that led to all the corruption in the first place,” said Bhushan. “The MMDR Bill has important provisions which aim to address the various concerns brought out by these scams.”

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