Kolkata: Armed with a strongly-worded Supreme Court judgement that comes down heavily on mineral production in excess of environmentally cleared quantities, state governments have begun slapping hefty penalties on lease holders/mineral producers.
The judgement, delivered by a two-judge bench comprising Justices Madan B Lokur and Deepak Gupta on August 2, 2017, in writ petition (civil) no. 114 in Common Cause vs Union of India and others, 2018-19 marked the first full year of its implementation. The states took some time to grasp the implications and prepare district-level offices to act upon the judgement.
Now, the judgement has become a reference point for states dealing with environment-related violations, say sources. The bench gave the verdict while dealing with the violations brought to its notice in respect of mining of iron ore and manganese ore in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha.
Several instances of hefty penalty slapped on mines under the jurisdiction of the subsidiaries of Coal India are available in the annual report of CIL for 2018-19 released recently.
First Example: Penalty demand of Rs 2,178.14 crore raised by the Jharkhand government on Rajmahal area on S P Mines and Mugma area of Eastern Coalfields Ltd for “illegally or unlawfully mined mineral”;
Second Example: Demand notices amounting to Rs 17,344.46 crore issued in respect of 47 projects, mines and collieries of Bharat Coking Coal Ltd. The “allegation” is: coal production was undertaken either without environmental clearance, forest clearance, consent to operate and/or No-Objection Certificate. Where clearances were there, production exceeded the approved limits;
Third Example: Demand of Rs 13,389.38 crore raised by district mining officers of Jharkhand in respect of 41 projects of Central Coalfields Ltd for exceeding production beyond the environmental clearance limits;
Fourth Example: Collectors of Raigarh and Korba in Chhattisgarh have issued show cause/demand notices for Rs 10,129.21 crore in respect of mines of South-Eastern Coalfields Ltd for producing coal beyond the limit of environmental clearance and mining plan.
It may be mentioned that the state authorities have cited the judgement of August 2, 2017 and the Common Cause vs Union of India and others’ writ petition. Also, cited are Section 30 of the Mines and Minerals (Development & Regulation) Act 1957 and Rule 55 (v) of Mineral Concession Rules 1960. Only in the demand notice on SECL mines, Section 21 (5) of MMDR Act has been mentioned.
How does the Ministry of Environment & Forests define expansion of production? The ministry’s circular makes it clear at the outset that in respect of mining projects of major minerals with more than five hectares of lease area, the term ‘expansion’ will include increase in production or lease area or both.
Projects cannot increase production even if they have the Indian Bureau of Mines/coal ministry approval for enhanced production until environmental clearance is obtained for the enhanced rated capacity.
If the annual production of any year from 1994-95 onwards exceeds the annual output of 1993-94 or its preceding years (even if approved by IBM), it will constitute expansion.
Expansion in production beyond approved capacity, however small, will constitute violation and attract penal provisions of the Environment (Protection) Act. Therefore, lessees should make suitable calendar plans to get clearance for maximum annual output levels achievable from a project. Also, Environmental Impact Assessment/Environmental Management Plan study should be done. It will constitute expansion if production exceeds beyond what is indicated in EIA/EMP.
As coal ministry approves the mining plan for the entire life of a mine, the approved calendar plan for annual production for the life of the mine also needs to be submitted.
During the hearing, it was noted that according to the Union Ministry of Mines, a maximum variation of 20% in extraction over and above the mining plan “should be reasonably permissible”.
The strongly worded Para 1 of the judgement reads:
“The facts revealed during the hearing ...... under Article 32 of the Constitution suggest a mining scandal of enormous proportions and one involving megabucks. Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests and perhaps caused untold misery to the tribals in the area. However, to be fair to the lessees, they did the detail steps taken to ameliorate the hardships of the tribals, but it appears to us that their contribution is perhaps not more than a drop in the ocean – also too little too late”.
The penalty prescribed in the judgement reads: “In our opinion there can be no compromise on the quantum of compensation” that should be recovered from the defaulting lessees – it should be 100 per cent of the notional value of the iron ore and manganese ore produced ....without/in excess of environmental clearances. The defaulter must bear the consequences of the illegality and not benefited by pocketing 70 per cent of the illegally mined ore. States should not forego what is due from the exploitation of a natural resource”.
The portion reading “not benefited by pocketing 70 per cent” is in the context of the Central Empowered Committee’s suggestion for recovering 30% of the notional value. The CEC had, however, made it clear that action against defaulters should continue. This was acceptable to the Attorney-General of India “but Union of India in its affidavit said 30 per cent recovery would be contrary to the statutory scheme and 100 per cent recovery should be made under section 21 (5) of MMRD Act”, the judgement noted.
As admissible under the relevant provisions, the CIL subsidiaries have preferred appeals with the Coal Tribunal/Revisional Authority in the coal ministry and its ruling will show whether they get relief, and if so, how much and how much revenue will the state governments collect from the demand notices issued. Of course, the exercise may prove time-consuming.
The writer is a Kolkata-based independent journalist.