Nitya Nanda. The Energy and Resources Institute (TERI)

Transcription

1 Nitya Nanda The Energy and Resources Institute (TERI)

2 Mining For whom? The Great Overlap Mineral Rich but... The Indian Framework Environment Externalities Social Externalities Experience with Revenue Management New Legal Framework Emerging Context Implications for SDGs Lessons Learnt

3 It must also ensure positive benefits for ALL: People Wellbeing, Fulfilment, Dignity Communities Sustainable Livelihoods, Social Capital Economy Materials, Access, Secure Supplies Global Life-Support Systems Biodiversity, Climate, Nature Environment Ecosystem Services, Air and Water Quality Institutions -- Governance, Partnerships (Govt, Industry, Civil Society), Ownership

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5 Share in GDP Mining VA Mining Lease Area Per Capita Income Mining VA in Ten Billion Rupees, Mining lease area in hec/sq.km, Per capita income in Thousand Rupees

6 States own mineral resources but development and regulation of these resources are the exclusive domain of the union govt., except for minor minerals., which can be developed and regulated by the states Minor minerals include building stones, gravel, ordinary clay, ordinary sand, limestone used for lime burning, boulders, kankar, murum, brick earth, bentonite, road metal, slate, marble, stones used for making household utensils etc. Therefore, all other minerals not defined as minor minerals are treated as major minerals. They include coal, manganese ore, iron ore, bauxite, limestone, kyanite, sillimanite, barites, chromite, silica sand, fluorite, quartz etc. Recently 31 additional minerals have been notified as minor minerals. State governments, as the owner of resources, get the royalties. They often impose cess as a compensation for pressure on infrastructural facilities Union government collects clean environment cess (CES) from coal but it is not meant for mining affected areas available indications to

7 Communities have only been entitled to get compensation for land acquired and some R&R benefits some government owned mining companies offer jobs to some of them The famous Samatha Judgement of the Supreme Court of in 1997 ruled that mining in Shedule V (tribal inhabited) areas should not be allowed without the participation of the local people. It also suggested that 20% of net profits to be set aside as permanent fund for establishment and maintenance of waters resources, schools, hospitals, sanitation and transport facilities, reforestation and maintenance of ecology and so on However, it took long time to give legal effects to this judgment, and the new MMDR (Mines and Minerals Development and Regulation) Act (2015 Amendment) tries to address these issues The new law, however, is applicable to everywhere (not just the tribal inhabited areas) There has been a framework for sharing value between the union government and the states but no mechanism as such to share with communities and the local governments who depend largely on the state governments and CSR activities

8 Environmental damage is significant in mining projects There are several laws that empower central and state governments to take appropriate action Compensatory afforestation and penal compensatory afforestation Net Present Value (of forestland) and Catchment Area Treatment, under Forest Conservation Act (FCA) of 1980 Compensatory Afforestation Management and Planning Agency (CAMPA) However, all these policies, laws and measures, seem to be of little help in several mining regions Environmental problems like excessive dusts, extensive mine fires, land subsidence, emission of harmful gases, and contamination of water bodies with slurry flowing Falling of ground water level is a serious issue, affecting both availability of potable water as well as availability of water for agricultural purposes, making land almost sterile these are areas neighbouring mining sites and not acquired and hence are not entitled to any compensation.

9 Displacement caused shatters the family from its resource base, smashes informal relationships and support groups, and precludes the informal gathering of forest products, fish and aquatic resources, as well as medicinal substances - Policy makers did not value these, as they were not necessarily accounted for - Protests by affected communities were taken as a law and order issue The National R&R Policy, issued in 2007, recognizes the need to carry out Social Impact Assessment (SIA) - However, expected benefits to PAP are mostly exaggerated People are given alternative site and lump sum money Often state-owned mining companies have given jobs often helped but often also led to social issues one among several brothers getting job or son getting job but not looking after parents SPCBs only look after environmental conditions attached but even that is not done SPCBs do not have human resources to do this. But monitoring mechanism for social conditions attached

10 Royalties received by state governments went to the general fund of the government and special attention was given to look after mining affected areas Even the cess collected did not go the mining affected regions Royalties are prescribed by the union government Massive illegal mining in several states leading to loss of revenue for government also no regard for social and environmental externalities by the illegal miners In water resources, no revenue is earned as such, states charge only users fees that does not include valuation of natural resources In forest resources, communities have been given right over NTFPs Old framework could do little to promote SDGs but new MMDR Act can help

11 New law (MMDR) provides for competitive bidding of mining lease and also provides for constitution of District Mineral Foundation (DMF) DMF to be funded in following manner: o Ten per cent of the royalty in respect of mining leases or prospecting licence-cummining lease granted on or after o Thirty per cent of the royalty in respect of mining leases granted before that mining companies give an amount not exceeding one-third of royalty to through creation of District Mineral Foundation. The exact rate decided by the state governments The Pradhan Mantri Khanij Kshetra Kalyan Yojana (Prime Minister s Mining Area Welfare Scheme) will be implemented by the DMFs of the respective districts using the funds accruing to the DMF. The overall objective of PMKKKY scheme will be o o o (a) to implement various developmental and welfare projects/programs in mining affected areas, and these projects/ programs will be complementing the existing ongoing schemes/projects of State and Central Government; (b) to minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts; and (c) to ensure long-term sustainable livelihoods for the affected people in mining

12 A new framework has been initiated but not yet fully implemented Only in Orissa DMF is operational now It does not keep fund for future generations Can have positive impacts for the following Goals (11/17): o 1(Poverty), 2(Hunger), o 3(Health), 4(Education), o 6(Water/Sanitation), 7(Eenergy), o 8 (Decent work), 9(Industry/Infrastructure), o 10(Reduced inequality), 11(Sustainable communities), o 16(Peace/Justice/Institutions) What if expected benefits are too small compared to social impacts? o There have been concerns that royalty, payments to DMF, mandatory CSR, along with competitive bidding might make mining unviable in India there will be pressure of the govt., to have lower royalty and if accepted funding to DMF will also be low What if people are encouraged to accept mining projects by lure of benefits disregarding long term consequences?

13 It is not just responsible mining but also about responsible governance enforcement of laws It is important that governments address negative externalities adequately and fairly, recognize possibility of incomparable values, and create trust to ensure a social license to operate and avoid conflict Displaced people must be better off in both absolute and relative senses Building transparency in government and company functioning

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