Thursday, June 8, 2017

African Development Bank – Some thoughts on Intent and Politics of Meeting in Gandhinagar

African Development Bank – Some thoughts on Intent and Politics of Meeting in Gandhinagar

1.     What is the logic behind holding the AfDB meet in Gandhinagar's Mahatma Mandir instead of holding it in Delhi?

The AfDB has been doing this in the past, having non-members host the Annual Meeting. Their site says
The Ahmedabad gathering is the fourth time the Annual Meetings are hosted by a non-regional member country, after Valencia, Spain, in 2000; Shanghai, China, in 2007; and Lisbon, Portugal, in 2011. In 2018, the meetings will take place in Busan, Korea.”

2.     Is it because a need was felt to keep the participants insulated, away from civil society, diplomats, intellectuals, who would influence them on different issues?

I think there is a larger tug of war that is going on which includes “insulation from these constituencies”, but as the EU is trying to take charge of AREI perhaps they are creating a counter-block. (See attached letter to EU from NGOs).

3.     There is a view that China has made major inroads into Africa. By holding the meet in Gandhinagar, Modi's men would be able to interact with Gujaratis who are in Africa and are on African boards. Do you agree with this view?

It is no secret that India wants as much economic space it can garner through all the mechanisms possible and do all the dirty things that corporates and hegemonies do. That’s why you find them investing in mining, telecom and oil and often in areas of conflict (Nigeria, South Sudan, Angola). Perhaps Indian State is concerned that China has so much surplus to invest that it has to enable AfDB and also find such filial nexus! The stories of Guptas in South Africa to big investors like Vedanta are clear articulation of extending our economic hegemony. Fundamentally, the Indian Corporates are in doldrums and have also led our banks to be so and the Government is desperate to save the banks and therefore these indulgent corporates and taking a “hair cut” of possibly over Rs 860,000 crores (130 Billion USD) the gross NPAs as of now. Recent analysis suggests that atleast Rs 100,000 crores need to be infused into the banks for them to survive.

The same article states in their official website,  “Key discussion will focus on how the Bank’s High 5s, especially agriculture and energy, can be leveraged to promote Africa’s transformation. These include a series of Presidential forums on critical agro-industry issues, such as Leadership for Agricultural Transformation; Creative Energy Solutions to Boost African Agriculture, Innovative Financing for Agriculture, Financing African Infrastructure, Women in Agriculture, and Changing Perceptions on Agriculture: the Role of the Entertainment Industry (“Nollywood Meets Bollywood); among other varied topics and issues.
“Our goal is clear: achieve food self-sufficiency for Africa in ten years, eliminate malnutrition and hunger and move Africa to the top of agricultural value chains,” says AfDB President Akinwumi Adesina. The Bank is investing US $24 billion in agriculture and agribusiness on the continent in the next 10 years.”
By hosting this event we are also eyeing for a pie!

4.     Gujarat-based tycoons are interested in making inroads into Africa. Do you think by holding the meet in Gandhinagar, things would become easier for them?

Gujaratis in particular but Indian Business in general. Ease of doing business is a mantra of this government both within the country and outside for the benefit of the corporates. The crisis in the economy has left very little options for the Government. After all, not every citizen does business. If it is not the business of the government to business it also not pandering to one of the most economically inefficient and corrupt system. The role of government must and should be only the welfare of the citizens and ensure that atleast the basic tenets of the constitution are practiced.

5.     By holding the meet in Gandhinagar, no questions would be asked on racialist attacks in Delhi. Do you agree?
6.      
These institutions are insular and multilateral, therefore they will neither nor it is expected of them to take a stance on the real life of the people. Even when we talk about the poor quality or often no rehabilitation and inadequate and de-human resettlements, most MDBs have a long-winding bureaucratic dispensation of grievance redressal that it will be concluded only when the project is completed and they have washed their hands.

7.     What could be AfDB's interest in holding the meet in Gujarat?

The fact that EU is trying to take charge of AREI perhaps they are creating a counter-block may have influenced the Bank. Many African countries are also vary of China.


Many thanks to Rajiv Shah for provoking to think on specific questions…

Thursday, January 12, 2017

From Safe Havens to Tax Havens

The Mining Game Plan suiting State, Corporates and the Maoists must be abandoned
This is the reality of mineral richness and the politics of mining and money making in Chhattisgarh has become a zone of war. The State is more in focus in the recent days with the brutality unleashed and confrontations with extremists and loss of innocent lives from both sides and mindless pursuit of mining in the State. This is where the Prime Minister goes and announces a Mega Steel Plant for the benefit of the tribals!
Mining is perhaps the most destructive economic activity and Chhattisgarh being one of the mineral rich states has to unwittingly be a party to this profitable sector. In the madness to proclaim this model of development a success, such exploitative activity is politically and legally justified.
If we trace the history of any of the operational mine, the initial period was virtually a battle to push the local community aside to enter into the mining activity. Once huge profits are made they enable huge rents the entire system gets vitiated. Isolated such displacements and elimination often go literally un-noticed.  When an entire mineral belt is rapidly mined rapaciously, simmering discontent leads to anger and violence and gets to be the veritable space.
 So in the context where our mining industry and the mining sector is more tending towards the kind of methods that were in practice in the worst of its periods rather than as a limited economic activity, it has become a norm to violate all the laws and return with huge profits and in the event of any down turn renege all your commitments. Maoism and violence is handy once such circumstances are created.
Two decades ago what was a safe haven amidst the enclaves created by the reservoirs in the heat of the greyhounds and other state created entities in adjoining regions, has become a theatre of war. An estimate of around 7000 armed Maoists are made but even this data can never be credible. Let’s assume its correct. In contrast, just after 2013, over 25000 armed paramilitary personnel have been deployed in Bastar alone as per official statements. This is besides all the SPOs to other normal police forces and led by some of the ferocious and notorious officials, epitomised by the current IG.
Isolated areas with low population densities and rich mineral resources are ideal for both miners and Maoists. The huge exploitation provides a reason for sympathy, the isolation provides for certain opaqueness in operation, the need for explosives to mine -almost a kilogram for every tonne of ore produced provides ammunition. And over time this has settled into a tenuous economic and force equilibrium where the Maoists and the State including paramilitary forces pervade the space.
Eventually the local people have to be cleared as the last “overburden” for this profitable but intense and tenuous equilibrium to co-exist.
If it were not so, the slurry-pipelines to rail-lines exclusively meant for the ores seem to be more secure than a battalion of paramilitary forces.
See these two incidents, one on first of April 2015 and the other of same April Fool’s Day in 2016. It clearly points out that both actors are similar in their practice and therefore they are there to compete and not to resolve.
April 1 2015
Five employees of Jayaswal's Neco Company and few locals including drivers and machine operators were abducted and later released by about 10 armed CPI-Maoist cadres from Chargaon, Metabodli iron ore mines in Kanker District of Chhattisgarh. One of them was released soon after abduction while others were released in evening. Maoists had targeted to abduct important and senior officers but didn't succeed therefore released all of them. Maoists apparently opposed construction of roads and mining in the region and the supervisors and managers were out on inspection when the incident took place.
The villagers of Chintagufa from Sukma District of Chhattisgarh have claimed that the person killed in an encounter with the CRPF's CoBRA team on March 31 was "an innocent villager" and not a "Maoist".
1 April, 2016
On 1 April, officials from the state revenue department demolished three houses belonging to two families – including a Gond Adivasi family - in Bankheta village in the district of Raigarh for the expansion of the Gare Pelma IV/4 open cast coal mine. The mine is operated by Hindalco Industries, a part of the Aditya Birla group of companies. Human rights defenders protesting the evictions were detained briefly for allegedly obstructing public servants. The government had acquired land for the mine in 2010.
Following protests over the evictions by other human rights defenders and members of affected communities, on 2 April, the Additional Collector and Additional Superintendent of Police of Raigarh stated in writing that all evicted families would receive compensation and rehabilitation within 15 days, and that the cases against the human rights defenders would be dropped.
In my visits to the mining belts of Chhattisgarh it is very often that you see seasonal operators. Whenever they get an order they know where to quickly quarry and sell it. The state has no credible information. Take, an incident like this as a report said “The Maoists set ablaze at least 17 vehicles engaged in mining work in Kanker District of Chhattisgarh. Armed Maoists attacked the Barbaspur iron ore mining site under the limits of Korar Police Station and after threatening the labourers, torched 17 trucks deployed for mining work. They then fled into the forest.”  The attribution may be totally incorrect as may be one the seasonal operators for all we know. Thus while the Maoists themselves have a tendency to exaggerate their strength, the state plays a helping hand in attributing illegal mining mafia to their strength. While the real operators of minor minerals who raid river-sand are small-time mining mafias but just as the nexus with politics is so tight that with major mining areas extremism thrives.
In the height of the Chinese and Korean booms a tonne of iron ore raised and sent at a cost of Rs 300/tonne was selling at around Rs 6000 a tonne. NMDC’s operations rake in such huge profits. Its audit report states in the financial year 2014-15, EPS – Earning per Share - that for a Re 1 share the returns were Rs 16.20! If our perceptions about the efficiency of the Public Sector that it is inefficient in general are correct, the private players are making multi-fold profits. The reality is, if State institutions are themselves so exploitative and insensitive, how they could ensure that the rest of the industry follows the norms. This is a legitimate Government owned company. Even today the price is over Rs 3000 a ton.
It is not only the iron ore mining, the entire mining and industrial sector is using public money to usurp the resources and more and more people are being marginalised. This becomes a potent breeding ground for resistance. People have nothing more to lose. They have lost the livelihoods and lifestyles. The miners have made millions. You pull out the ore and the water and pump it hundreds of kilometre and ship it across the globe and the entire system becomes opaque. Thus the safe havens of Maoists have become the source for resources for the corporate to enrich the Tax Havens.
A person from a leading political party told me that their policy was clear – South Chhattisgarh has huge mineral and Forest Wealth and needs Military and Central Government to get out resources. The low population density and therefore fewer number of assembly segments means it is not important politically. If others are equally unpopular they could win seats. The rice bowl north of it, central Chhattisgarh has the maximum population density and needs nurturing and almost pandering to win maximum number of seats. The northern portion can still be left to the industrialists without much loss of political positions. He said after all you are politics to capture the assembly!
Ours is a country where we get legal information through the questions in the Parliament on the “illegal” mines. We have a whopping 100,000 of them as compared to 10,000 which probably has some clearances. Only a third report to the regulator and a tenth of them are perhaps ever inspected. There is absolutely no regulatory over sight. That most of the FDI is “round-tripping” The State is out to ease their business further!  The recent arbitration claim of USD 44.7 million by ANRAK from the Andhra Pradesh Government for not providing bauxite for its refinery which was to come from Jerilla may push the government into action and in the name of the Maoists brow-beat the local adivasis to allow for mining in this ecologically sensitive areas.
Potential violent exploitative mining scenario is emerging in South Chhattisgarh and perhaps may extend into the Jerrilla mines, in the five decade old mining zone rich in high quality iron ore and bauxite. This is reminiscent of the years of brutal mining for diamonds in Sierra Lone where local people were caught between mafia groups, security forces, industry armed security groups and are yet to recover ever since. Unless dramatic changes to reduce the rate of mining and ownership of resources and rights are established for the communities the situation could head to such an irretrievable situation very rapidly. The mining game plan of the State has to be abandoned and must be able to rebuild credibility with the community. The State and the Corporate have lost credibility and now even the credit in the emerging economic scenario.
This is not an alarmist proposition but a call for reasoning and response.

  
No.
Major Mineral
2014-15
Value 
Rs Cr
2014-15
Royalty
Rs Cr
 Royalty as % of Value
Value
Rs/ton
1
Coal
10376.82
1808.20
17.43
770
 2
Iron Ore
9830.49
1336.99
13.60
3052
3
Bauxite
97.00
25.49
26.27
664
 4
Dolomite
97.29
22.27
24.39
345
 5
Limestone
439.58
170.80
38.86
189
Directorate of Mining and Geology; Chhattisgarh


Monday, July 11, 2016

Environmental Supplemental Plan: A last nail in the Coffin



If there has been one broad area which has been the casualty in the recent times is the Environment. Being obsessed with “ease of doing business”, the various safeguards that have been built over the past have been falsely targeted as a villain and attacked. The Environmental Supplemental Plan is perhaps the final nail on the coffin.

EIA Resource and Response Centre[1] filed a series of Right to Information (RTI) requests to the Ministry of Environment, Forests and Climate Change (MoEF & CC) with respect to the number of projects approved and challenged. Only the Committee for CRZ and Miscellaneous Projects responded which is indicative of the trend. All big construction projects, airports and malls are appraised by this committee. During January 2013 to March 2015, a total of 118 projects were granted Environmental and CRZ Clearance. Of the 118 projects, only 4 projects were challenged before the National Green Tribunal. Of the 4 projects challenged, the Environmental Clearance of only one project i.e KGS Aranmula Airport in Kerala was revoked by the National Green Tribunal.

Thus, out of a total of 118 projects approved, only one Environmental Clearance was revoked. While some of these trends were visible in the dying stages of the previous regime, the new Government has accelerated the process of completely undermining the environment. Immediately after assuming power, the government began its exercise to curtail several safeguards, dilute provisions of existing laws and bring creeping changes through office memorandums and instructions. Several dilutions have been affected in the name of decentralising power.  In short in the first two years of “less government, more governance” the Government has been living with rhetoric on saving the environment while acting diametrically opposite to the cause. Transparency is clearly restricted to the corporate and governments whether the issue of auctioning natural resources, formation of rules and regulations and setting standards.

The time and information and the mode in which it is made available to the public makes it extremely opaque and this notification only adds to the maze.  While the Environmental Supplemental Plan (ESP) for the first time defines “Environmental Justice” as “the fair treatment and meaningful involvement of all people, caste, colour, creed or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies”, the ESP itself is a symbol of violation of this principle with very little information provided to people who have web access. For this very reason alone the process needs to halted and a comprehensive mechanism for meaningful involvement of those who are and will be particularly affected by the violation need to be consulted.



Tampering with Environmental Legislations

The first serious attempt to bring about a wholesale dilution in a range of environmental legislation was the formation of a High Level Committee. The committee was constituted on 29th of August 2014 by the Ministry of Environment, Forests and Climate Change (MoEF&CC) to review various environmental laws submitted its report to the Central Government on 20-11-2014. The Committee was entrusted to review the Environment (Protection) Act, 1986, the Forest (Conservation) Act, 1980, the Wildlife (Protection) Act, 1972, the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981. The Indian Forest Act, 1927 was added subsequently to this list. 

The recommendations include a ‘single window’ approval process, a fast track treatment for linear and power and coal projects, ‘a special procedure’ for ‘strategic’ and ‘national projects’. There is also an introduction of what can be termed as the ‘private trust’ doctrine as opposed to the ‘public trust’ doctrine.

Under this ‘private trust’, there is implicit trust in whatever information is submitted by the private business entities under the concept of ‘utmost good faith’ and at the same time, there is a sense of suspicion on the community by requiring the people to prove their ‘bona fide’ and by limiting public participation to only those the HLC describes as ‘genuine local people’. 

In sum, in less than three months the HLC has not only suggested radical changes that would undermine all of the laws it was tasked to review, is has also recommended changes to render less effective a number of laws it was not charged to review and has also recommended a brand new piece of legislation to be strangely called as the Environmental Laws (Management) Act or ELMA, which the HLC suggests, they suggest, would prevail over all contrary court judgments issued in past decades or the provisions of any environment law promulgated till date.  This prompted the concerned environmentalists to state “Calling the HLC report ‘radical’ is an understatement – it is revolutionary, but a revolution against the environment, the voice of the people, and democratic processes[2].”

The more recent is the attempt to bring in the Environmental Law (Amendment) Bill, 2015. The Objectives state, the Bill aims to provide for an “effective deterrent penal provisions and introducing the concept of monetary penalty for violation and contraventions”. The effective deterrent is as regressive as the position of the Government in the case of nuclear liability. Just as it restricts the liability of the project entity to Rs 500 cr in case of a nuclear disaster, this bill envisages a maximum fine of Rs 20 cr for a polluting industry.  Devoid of any scientific basis, the Bill proposes the following categories of violations and penalties.

Nature of Offence
Definition
Penalty Proposed
Substantial Damage
Within 5 Kms of the Outer Boundary of the Project
Minimum Rs 5 Crores and Maximum Rs 10 Crores

Beyond  5 Kms of the Outer Boundary of the Project within 10 Kms
Minimum Rs 10 Crores and Maximum Rs 15 Crores

Beyond 10 Km
Minimum Rs15 Crores and maximum of Rs 20 Crores
Non Substantial Damage

Maximum Rs 1 Lakh and Maximum Rs 5 Crores
Minor Violation

Minimum Rs 1000 and maximum Rs 10,000

It is common sense that impacts and cost of remediation would vary with the nature of the project and pollutions effects cannot be capped arbitrarily to some kilometre-basis. Therefore if a mine-dump or ash-dam breach regular in mining areas and coal-fired thermal power plants, the impact has to be beyond 10 kilometres for evoking the maximum fine. Environment Protection Act came in the backdrop of the disastrous Bhopal Accident for which even after spending over thousands of crores is still unresolved. A similar accident post this law would mean that the company pays Rs 20 cr and remains in business. This bill envisages creation of adjudicating authorities thereby restraining the role of the National Green Tribunal.
Dilution of the provisions
It is a cardinal principle of law that there is no power to confer legislative power on the executive. The Supreme Court has held that essential legislative function cannot be delegated by the Legislature, that is, there can be no abdication of legislative function or authority by complete effacement, or even partially in respect of a particular topic or matter entrusted by the Constitution to the Legislature;  Power to make subsidiary or ancillary legislation may however be entrusted by the Legislature to another body of its choice, provided there is enunciation of policy, principles, or standards either expressly or by implication for the guidance of the delegate in that behalf. Entrustment of power without guidance amounts to excessive delegation of legislative authority.[3]
The proposed legislation aims at excessive delegation and this will certainly be cause of rent-seeking. Many of existing laws have been diluted through executive action. For instance projects which have a capacity expansion of 25 percent do not have to go through a process of fresh environmental assessment process and public hearing. This opens up a way for increasing capacities multiple times and avoiding the due diligence. Environmental clearances have been made “transferrable” even if it is known that the new possessor is a habitual violator and may need greater safeguards. Linear projects no longer require the consent of the gram sabhas as if the linear projects do not have impacts on the resources or land of the villages. Similar has been the case with the effort to do away with the provisions of Social Impact Assessment and consent in the Right to Fair Compensation and Transparency in Land Acquisition Resettlement and Rehabilitation Act 2013 in the omnibus category of “infrastructure” projects.
Dilution of provisions is also being encouraged through the States in the name of decentralisation and cooperative federalism. Several State Governments want to keep the implementation of the Forest Rights act in abeyance in areas where they want to grant mining leases, promote hydropower projects or industries and this seems to be done with active knowledge and collusion of the respective central authorities. In the case of National Highways the Government has done away with the environmental clearance for projects below 100 km thus paving way for breaking them into projects below this length as is been done with the NH-21 from Chandigarh to Manali. It has been broken into four segments and the Govind Sagar Sanctuary denotified to enable the construction of a four-lane highway and ironically dump muck into the Bhakra Reservoir. In March 2016, the Government has done away with Environmental clearances for a new “white” category of industries which includes hydropower projects under 25 megawatt and several industries whose products may be harmless or less harmful but the process could involve pollution in the presumption that these have virtually no impacts.
The most recent in this series of dilutions through delegation is the proposal to establish a District Environmental Impact Assessment Committee and Authority to grant clearance to mining projects of upto 5 hectares of lease area. The Irrigation Engineer is nominated as the head of this authority. Everyone knows that he has a conflict of interest if it involves materials for irrigation projects. Further when even the National and State level formations are so bereft of knowledge and courage to undertake unbiased and technical evaluations, this authority will only be a “rubber-stamp” and a new opportunity for rent-seeking.
Projects with Disastrous Consequences
Several disastrous projects which have been in abeyance have begun to come back into reckoning including the interlinking of rivers. The Ken-Betwa link is a classic example of this type of projects. The project will significantly destroy the Panna Tiger reserve. Let us remember that this was a reserve where all the tigers were eliminated and over the years crores have been spent to bring back tigers and today claims to have over 20 tigers. While people are being displaced in the name of conservation, apart from this, the corridor between Panna and Navardehi Wildlife sanctuary is under serious threat as the Government is doing all it can to enable a global mining company with an extremely bad reputation to open up a diamond mine sacrificing nearly 1000 ha of forests.
The Polavaram project which will involve displacement of over 300 villages is another such example where despite alternatives being suggested, the project which is being surreptitiously pushed ahead.
The case of Vizhinjam port is actually astonishing as it involves the company which is seen as a “blue-eyed boy” of this government. Originally touted as a naval infrastructure and most clearances obtained on that basis, the project is turning out to be a “port-estate”. The naval component has been abandoned and the company being allowed to build luxury apartments and hotels with access to the sea-face. Thus it avoids the Coastal Zone and other regulations if the project as it was conceived by the corporate was revealed in the beginning.
While the government has been lauding itself about the high targets it has set for renewable and claims to be very conscious of the climate, it is doubling the coal output and promoting production through polluting sources almost with a vengeance. The result is that we have coal inventories mounting and thermal power plants forced to either reduce production or sell at prices below par.
In short, if the trend we are watching in the first two years of the new regime continue, whether the dream of “Make in India” succeeds or not, it is certain that no meaningful environmental protection will remain in the next decade. This calls for seriously bringing to bear the importance of environment in our long term sustainability at the core of our governance agenda.
Today 'Polluter Pay Principle' and the 'Precautionary Principle' form the edifice of environmental law. The Supreme Court has held that Polluter Pay Principle can't be a licence to pay and pollute. The draft notification allows illegal activity to take place without environmental clearance, and ESP amounts to 'pay and pollute.'
The fundamental problem in the draft notification is that it condones a criminal act on the part of the project proponent and replaces it with a procedure which allows the violation to be legalised with a semblance of pecuniary punishment. In the case of violation of a statute, the law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim “Expressio unius est exclusion alteris”, meaning thereby that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following other course is not permissible. (See Taylor v. Taylor, (1876) 1 Ch.D.426; Nazir Ahmed v. King Emperor, AIR 1936 PC 253; Ram Phal Kundu v. Kamal Sharma; 25 and Indian Bank’s Association v. Devkala Consultancy Service, AIR 2004 SC 2615).
There is also a growing criticism of plagiarisation in the draft notification. Such mindless application of some law from another country no matter however “developed” it may be considered will lead to greater deterioration. We need an indigenous method of monitoring and evolving methods to control the process.
Thus it is essential that extreme “good faith” must be placed on the community to monitor as it is their living environment. The need of the hour is definitely “Environmental Justice” and this is not much contested on its definition. It is the opaque manner in which the environmental monitoring and especially through indicators which cannot be easily comprehended by the community. We need communicable indicators to be able to ensure environmental justice. This needs to be followed up with actual analysis before what the new draft ESP notification – the classical “putting the cart before the horse”- does. It sets up a process where violation could turn out to the norm and this risk is avoidable.
We demand that the present notification should be withdrawn and a meaningful mechanism must first be created to seek inputs from diverse groups of people affected by the decisions of the Ministry on upkeep of the environment. This will go against the very spirit of this notification itself, let alone the environment.


[2] The High Level Committee Report on Environmental Law: A Recipe for Climate Disaster and Silencing People’s Voice 
Ritwick Dutta, Manoj Misra, Himanshu Thakkar

[3]1968 AIR 1232

Saturday, June 18, 2016

MINE CLOSURE – THE LAW AND THE ENFORCEMENT MECHANISMS FOR MEETING COSTS


  • Closure is an absolute responsibility of the Lease holder; Government should not dilute this principle

1. The Mineral Concession and Development Rules 1988 clearly lay down the procedures and the financial guarantee that the closure plan will be executed.
2. The current legislation on mine closure provides for abysmally low levels of financial assurance ranging from Rs. 15,000/hectare and Rs. 25,000 / hectare.
3. 14 % of leases account for 83% of the lease area comprised of Large leases (>50 hectares and above). More than 70% of non-coal mining leases are held by private sector. Therefore much of the closure tasks are of the major miners.
4. Mine closure is an absolute responsibility of the lease holder and all costs and appropriate activities should be supported as a part of the project costs. This is an important aspect of the legal requirement as well as important obligation in the process of mining.
5. The current situation is causing confusion on the issue and perhaps orchestrated to get public expenditure to take care of the closure. Any percentage of Royalty and deposits at abysmal rates will not solve the problem. Even if we assume 30 percent of the royalty, this works out to a meagre Rs 25 per hectare.
  • Closure is a Scientific, Technical and Socio-economic Process with specific tasks and procedures and cannot be just equated with some monetary mechanism

1. Mine closure is not an activity that a universal model will be applicable. Just as the mine plan is site and mineral lode specific, the closure plan will require complex activities.
2. These costs can be fairly well estimated and as a precautionary measure a solatium must be levied. Volume is a better metric than area of lease for computation. However this is to be based on empirical results in each mineral and ecological belt and can only be indicative.
3. Mine closure plan must dovetail with the Environmental Management Plan, the Compensatory Afforestation Plan, and maintenance of green belt, conservation and restoration of water sources and other such measures including human settlement issues.
4. Currently mine closure plans are only a piece of paper to ease-the-business of doing mining without a serious thought about the future of the region and people. The mechanism set up at the apex level, PAMCAF should not relegate it to mere certification and pressure the ministries to initiate mining without a proper closure plan.
5. An institutional mechanism is required to ensure closure and has to become a part of the closure and environmental obligations.
  • Closure is necessary task and has no relevance to whether the mine makes profit

1. Closure is a necessity for every mine and irrespective of whether the mines are profitably producing or otherwise the investments on closure is sine-qua-non
2. We already have a number of legacy issues and only a very few of them have been identified as abandoned mines and orphaned mines and this data is over a decade ago.
3. Every mining company by virtue of the structure of the industry will be facing reduced revenues towards the end-of-life of the mine when closure costs peak. Companies have a tendency to apply for bankruptcy and escape the burden of reclamation.
4. Therefore even before we begin mining, a robust mechanism must be created to ensure the proper reclamation, rehabilitation and safety of the mine after its closure for eternity.
5. The level of capability shown by the IBM and the existing corporate responses do not reflect the importance that needs to be attached to mine closure.
  • We need to ensure proper mine closure for our future generations

1. We need proper plans and progressive costs which are transparently presented to the community.
2. The costs and the tasks must be identified with concurrent understanding of the impacts and implications.
3. The “financial assurance ” as laid down in the rule also provides for four forms of financial assurance, as given below. However the rule says any one or a combination is sufficient. We need to use all four instruments effectively.
(a) Letter of Credit from any Scheduled Bank;
This is to ensure that the liability does not end with the entity having no resources to complete the mine closure. A letter of credit must be obtained for the estimated amount including the solatium;
(b) Performance or surety bond;
This is required to ensure that all the scientific processes indicated in the plan have been implemented and will be carried out to the fullest satisfaction of the community and the Government;
(c) Trust fund build up through annual contributions from the revenue generated by mine and based on expected amount sum required for abandonment of mine;
A corpus and a cash flow is required for long term maintenance of the institutions and infrastructure created for mine closure.
(d) Any other form of security or any other guarantees acceptable to the authority;
Insurance of the future closure plan could provide a basis for ensuring intergenerational equity and sustainability
These measures are necessary for a fair assurance that the mine will be closed properly.