#India-Mining Ministry’s Zero Loss Theory


In an elaborate cover-up, the Ministry of Mines is working behind the scene to save politicians and industrialists involved in illegal mining in Odisha
Prakhar Jain

January 10, 2013, Issue 3 Volume 10

Photo: Getty Images

HOW DO you defeat attempts to punish corruption? For the Union Ministry of Mines the answer is simple: set up a commission and then sabotage it.

TEHELKA has documents to prove that top officials in the mining ministry, which set up one such commission to investigate illegal mining, are working behind the scenes to dilute cases against politicians, industrialists and bureaucrats who are likely to be indicted in the commission’s report.

The matter pertains to the excessive mining of iron ore in Odisha, which the state government has already acknowledged as being illegal in several ways. However, the mining ministry has been trying its best to make the unlawful lawful by converting cases of illegality into irregularity.

The attempts at cover-up have speeded up as the former Supreme Court judge Justice MB Shah, tasked with probing illegal iron ore and manganese mining across the country in 2010, is expected to submit a voluminous report by the end of January.

Documents in possession of TEHELKA show that none other than the then mining secretary, Vishwapati Trivedi, was involved in the cover-up of the scam which, going by even the conservative estimates of Odisha government, caused a loss of 70,000 crore worth of natural resources. Calculated by market rates, the scam might rise to a staggering 3 lakh crores.

Seeds of the scam were sown in the beginning of the last decade when China started importing iron ore in huge quantities to build necessary infrastructure for the Beijing Olympics. As prices of iron ore skyrocketed, mining companies across the nation scrambled to exploit the opportunity.

According to the mining laws, no mineral can be extracted from ground without the prior permission of government. However, taking advantage of a loophole, mining companies in Odisha manipulated the law in connivance with bureaucrats and politicians, and started exporting an unprecedented quantity of iron ore. The companies include those associated with the Tata and the Birla groups.

The scam came to light after the 2009 state Assembly elections, when Rabi Das, the editor of a local Odia newspaper, started investigating into the campaign expenditure of two major political parties following the poll. The money was traced back to illegal mining. This prompted Das to file a case in the Supreme Court, forcing the state government to stop all major mining activities in the state.

When similar such cases were reported from Bellary and Goa, the Union mining ministry asked Justice MB Shah to inquire into the illegal mining of iron ore and manganese across the nation. In the following months, the ministry initiated the coverup by going to the extraordinary length of amending the rules and interpreting the laws to benefit the case of the criminals.

The ministry even sabotaged the Odisha government’s attempt to recover the price of ore mined illegally. Three days after the state decided the modalities of computing the penalty last July, the ministry changed the definition of illegal mining by issuing a notification and amending a rule through which a mine is allocated.

The notification read, “…violation of any rules… within the mining lease area by a holder of mining lease shall not include illegal mining.” It also selectively interpreted what would constitute “an area held with lawful authority” and says that a mining lease area shall be considered as an area held with lawful authority while determining the extent of illegal mining.

In addition to the notification, to leave no doubt about the ministry’s intention, a letter was written two months later by Trivedi to the chief secretary of Odisha. The letter stated, “…the interpretation that a land granted under a mining lease by the state government can be held to be occupied without lawful authority on the grounds of violation of provisions of any other law of the land is not appropriate and such interpretation may not stand in the Court of law.”

The letter went on to suggest that if other laws like the Environment (Protection) Act and the Forest (Conservation) Act have been violated by the miners, penalty can be imposed under those Acts and not under the law governing mining in the country. This distinction, Trivedi wrote, may also be clarified to the State Accountant General.

Since most of the illegal excessive mining in the state happened in lease areas (mostly under the grossly misused provision of ‘deemed extension’ when the process of renewal of mining leases is pending) the notification and the letter dealt a huge blow to Odisha. Under the mining laws penalty can be recovered only when mining is done illegally and without the authority of law. The ministry, therefore, killed all chances of recovering the loss caused due to illegal excessive mining of a major mineral.

However, under huge political pressure, the state government went ahead with issuing show-cause notices to the miners in October last year for recovering almost Rs 70,000 crore for “illegal” production of iron ore “without the authority of the law”.This was despite the state government knowing that it would hardly be able to recover a single penny if the show-cause notice were challenged in a court of law.

Covering the tracks Those involved in illegal mining in the state include companies associated with the Tatas and the Birlas, Photo: AP

The companies, as expected, have challenged the notice before a revision authority working under the ministry of mines. Some industrialists have also approached the courts disputing the order, saying that the extra ore mined by them can at best be called an irregularity and not illegality.

Trivedi, however, defends the notification and his letter to the chief secretary. He says that the notification was issued in consultation with the law ministry, after the interim report of MB Shah Commission recommended that the laws against illegal mining be made stronger. “The miners in Odisha had a valid lease and therefore were not holding the area without lawful authority. Those proved to be mining beyond the lease area, which is illegal, will not be able to get mining lease in future because of the notification,” he says.

He further argues that the miners cannot be penalised under the mining laws for not having clearance under the environment and the forest laws. “And there is no limit to the ways in which a law can be interpreted. If someone disagrees with the ministry’s interpretation, then it would be best to let the courts decide,” he says.

Activists in the state blame the politicians for this cover-up. “A large number of senior politicians from the ruling Biju Janata Dal (BJD) and the Opposition, the Congress party, are deeply entrenched in the mining business. If the fine is recovered, they would get devastated,” says Rabi Das.

Biswajit Mohanty, a member of Transparency International, an international civil-society organisation, has filed a public interest litigation challenging the ministry’s notification. He describes it as “colourable exercise of rule-making power, which suffers from the vice of arbitrariness”.

Niranjan Patnaik, the state Congress president, who has indirect interest in the business through his relatives, also slams the fine and says that mine owners have only mined more ore from their leased areas and alleges that nobody is touching the illegal extraction by mafia/mafias who were working under the patronage of BJD leaders. “In comparison to what the mine owners have done, these mafias have extracted and sold 100 times more iron ore. Even the Shah Commission has not gone beyond the leased areas to investigate the real theft of minerals,” he says.

It would be interesting to see whether the Shah Commission is able to catch the real culprits behind the mining scam or gets hoodwinked by the systematic efforts of the bureaucracy to project that there is not scam at all.

prakhar@tehelka.com

 

Goa ‘beats’ Karnataka in illegal mining


Goa ‘beats’ Karnataka in illegal mining
By Dhananjay Mahapatra, TNN  and PTI | Dec 8, 2012,

The apex court’s high-powered environment panel said that the illegal mining was carried out allegedly with the “tacit” approval of the previous Digambar Kamat government.

NEW DELHI: Rampant illegal iron ore mining in Goa, which has devastated the state, is much larger than the illegal mining in Karnataka, and the Union ministry of environment and forests granted green clearances to 162 mines near national parks and sanctuaries in breach of Supreme Court orders, a report by the CEC (central empowered committee) said.

The apex court’s high-powered environment panel also said that the illegal mining was carried out allegedly with the “tacit” approval of the previous Digambar Kamat government.

The report was presented on Friday by amicus curiae A D N Rao before a bench of Justices Aftab Alam, K S Radhakrishnan and Swatanter Kumar.

The bench issued notices to the Union and state government seeking their response to the report, which said, “A very large number of mining leases were being operated by persons other than the lessees and in flagrant violation of the provisions of mining law and in all probability with the tacit approval of the state government.”

The report said that the state experiences plenty of rainfall, which washes the sediments of iron ore mining to the rivers, choking and irreversibly damaging the sensitive Zuari and Mandovi estuaries complex, said to be the largest in the country.

The CEC said that during 2006-2011, 39.56 million tonnes of illegal iron ore was exported from the state.

“The bulk of the mining leases are in the forests or natural vegetation and consequently mining has take a heavy toll on Goa’s natural vegetation and wildlife,” the environment panel said through member secretary M K Jiwrajka.

“The environmental clearances granted by the Ministry of Environment & Forests, (MoEF) for the 19 mining leases located within the wildlife sanctuaries and for another 23 mining leases located within a distance of upto 1 km from the boundaries of nearby national parks / sanctuaries being in violation of this Court’s orders dated. The mining operations in such mining leases may be prohibited,” the report said.

The 124-page report was placed before a three judge bench headed by Justice Aftab Alam which would consider its findings and recommendation in the next date of hearing.

Taking note of the Justice M B Shah Commission report which estimated a whopping Rs.35,000 crore loss to the exchequer due to illegal mining in the last 12 years, the bench had halted mining operations in all the 90 mines in Goa.

It had also asked the CEC to submit its report on the illegal mining in the state within four weeks.

The committee in its report said that on the line of Karnataka, Goa also prepare a reclamation and rehabilitation (R&R) plan and the apex court should examine the environmental clearances given to the mining leases.

“Goa may be directed to immediately notify comprehensive Rules to regulate the storage, transportation and shipment of mineral,” the report said adding “Till such comprehensive Rules are put in place, the resumption of mining operations may be not be permitted.”

The CEC said that mining operation be allowed only after Environment Impact Assessment is done and reclamation and rehabilitation (R&R) plan is prepared.

“The mining operation may be allowed to be resumed in Goa by the mining leases not found to be involved in any illegalities only after (a) the Macro Level IA study report of the ICFRE is received by this Court and decision regarding Taluka wise ceiling on permissible annual production from all the mining leases is taken (b) the survey and demarcation of the mining leases by the team constituted by this Court is completed and (c) the R&R Plans are prepared,” the report said.

The Committee also recommended that additional Principal Chief Conservator of Forests, Bangalore may be directed to verify that the mining operations will not have adverse impact on the flora, fauna or wildlife habitat and the status of the forest areas have correctly been stated by the companies for seeking environmental clearances.

“This court may consider taking a decision regarding validity of such environmental clearances after considering the recommendations of the Standing Committee of the National Board for Wildlife, the report of chief conservator of forests Bangalore and other information / details. Till then the such environmental clearances may be directed to be held in abeyance,” the report said.

The CEC filed its report in compliance of the Supreme Court direction which passed the order on a PIL filed by an NGO, Goa Foundation, seeking probe in the illegal mining activities in the state.

The state government had on September 10 temporarily suspended all mining operations till October 2012, but the petitioner alleged that suspension did not affect the trade as the private companies are transporting the ores from mines.

The court is already seized of the illegal mining cases in Karnataka where, after halting all mining activities for more than year, it had on September 3 allowed operations in only 18 mines out of more than 100 mines where the irregularities were minimum.

 

When excess mining got a legal seal #Odisha


pic courtesy, Reuters

Debabrata Mohanty : Bhubaneswar, Mon Nov 12 2012, 01:22 hrs

A key mining regulator, The Indian Bureau of Mines, allowed excess mining to carry on in Orissa by raising the permissible limit of those responsible, says the state government, which recently slapped a penalty on several leaseholders.

The IBM, however, says that excess mining is not illegal as long as the companies involved pay the royalty for what they have extracted. In fact, because of an amendment to mining rules, the state and the Centre continue to debate what constitutes illegal mining.

The IBM, with its headquarters in Nagpur, approves the mining plans of each company for a period of five years with predetermined annual limits under section 5(2)(b) of the Mines & Minerals (Regulation & Development) Act, 1957 and other rules such as Mineral Concession Rules, 1960, and Mineral Conservation & Development Rules, 1988. A lease period of 20 or 30 years is, therefore, divided into four or six mining plans. After the state government gets the IBM-approved mining plan, it grants or renews a lease.

When the first signs of excess mining in Keonjhar and Sundargarh showed in 2003, IBM officials on the ground spotted it. Official sources said that under the MC&D Rules, 1988, IBM officials are empowered to cancel the lease or impose penalties. It instead revised the mining plan, the sources said.

Documents with the steel and mines department show that in Khandabandh mines in Keonjhar, the IBM had approved extraction of 3.60 lakh tonnes by Tata Steel in 2006-07. The company raised 7.64 lakh tonnes, and again 7.42 lakh tonnes in 2007-08. The next year, the IBM raised the limit to 7.06 lakh tonnes without imposing penalties. In 2002-03, when the limit was 24 lakh tonnes at Joda East mines, the Tatas mined 30.5 lakh tonnes. The next year, the IBM raised the limit to 40.1 lakh tonnes.

“The mining plan/scheme is an instrument to systematically conserve the ores and not finish them overnight. Once a mining plan is given for five years, it should not be revised midway, but that’s what the IBM did,” said Orissa director of mines Deepak Kumar Mohanty. “They didn’t levy any penalty on over-mining and instead set new limits the next year. If you are going to condone illegalities, why have a mining plan/scheme at all?”

IBM officials say excess extraction is not illegal as long as the miner pays the royalty. “Once royalty is paid on excess production of ore, it can’t be called illegal mining. This was more like irregular operations,” said M Biswas, regional controller of mines with the IBM.

Biswas rejected the state’s allegation that the IBM failed to detect irregularities in mining. “We have done our duty and the state government is doing its job,” he said. “The IBM should not be blamed for the wrongs. It has taken action against certain mines by suspending their operations.”

Chief secretary B K Patnaik had written to the Union Mines Ministry about the IBM’s inaction, and the mines secretary wrote back to say that 20 per cent excess mining for a given year is condonable. This July, the ministry amended the MC Rules, 1960, saying mining outside the lease area is illegal but excess mining inside the lease area is not. The state government finds this difficult to accept. “Where is the rule in the MMDR Act that says 20 per cent excess mining can be allowed?” says the state director of mines.

Jayant Das, president of the Orissa High Court Bar Association and a lawyer on mineral matters, said, “The IBM had all the information to be able to crack down on illegal mining. But companies continued to over-extract from mines which had a deemed renewal status. This is not possible without a quid pro quo arrangement.”

Environmental activist Biswajit Mohanty, who has filed a PIL in the Orissa High Court demanding a CBI probe into the scam, said, “If deemed renewal by the state steel and mines department was the main cause of excess mining, the IBM’s negligence or condoning gave the miners the licence to loot.”

 

Journalist, family murdered; hand of mining mafia suspected


       Feb 19, 2012, Mahim Pratap Singh, Hindu         

Chandrika Rai had been writing consistently against illegal racket

The brutal murder of a senior journalist and his entire family on Saturday night in Madhya Pradesh‘s Umaria distict, over 450 km from here, has sent shockwaves across the State with fingers being pointed at the illegal coal mining mafia active in the region.

Journalist Chandrika Rai (42), his wife Durga (40) and their two teenage children — son Jalaj (19) and daughter Nisha (17) — were murdered using a sharp object at their residence, police said. The bodies were found in four separate rooms.

Mr. Rai was a freelance journalist who contributed regularly to the Hindi daily Navbharat and English daily The Hitavada. He had been writing consistently against the illegal coal mining in the region. He had written a series of articles alleging the involvement of a local BJP leader in illegal mining.

The district is known for the Umaria coalfield under the control of the South Eastern Coalfields Ltd. However, illegal coal mining is also rampant in the region.

“The local illegal mining mafia has resorted to this horrific crime to silence the power of his pen,” said Congress MLA and leader of the Opposition in the State Assembly Ajay Singh. “The BJP government gives open protection to the local mining mafia. Recently Chief Minister Shivraj Singh Chauhan and some of his Ministers were seen sharing the stage with wanted criminals. In such a situation, criminals have no fear of the law and commit such mind-numbing crimes with impunity whenever their interests are harmed.”

The crime came to light when Mr. Rai’s brother broke open the door on Saturday evening after he became suspicious on seeing it locked from the outside the entire day.

Linked to abduction?

The Umaria police believe the murders could also be linked to the kidnap of the seven-year-old son of a government official for ransom on Wednesday. He was rescued by the police on Thursday.

“DGP Raut visited the crime scene on Sunday and has ordered an STF probe,” Umaria SP Manohar Singh Jamara told The Hindu. “He also spoke to journalists here and assured them that the criminals would be brought to book as soon as possible. We have constituted a team to look into the crime and assist the STF which will arrive here tomorrow [Monday].”
Land dispute

Another angle the police are investigating relates to a land dispute involving Mr. Rai and another local individual.

 

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