Making India's mining sector socially and environmentally viable

Making India's mining sector socially and environmentally viable

By Chandra Bhushan

I learnt an important lesson on my travels in Orissa's Sundergarh and Keonjhar districts. One, the people of one of the most resource-rich areas of the country were also some of its poorest; and, two, this was because their land contained minerals that were important for industrial growth.

My trip was preceded by a visit from two social activists to our office in December 2006--Nicholas Barla of the Gangpur Adivasi Forum for Socio-cultural Awakening and Bharti Naik of the Lok Vikas Parishad, Sundergarh. They told me the reality of India's mining areas was far different from the way we saw it. They had many stories about the impact of mining on people's lives, livelihoods and environment. I had to go.

My trip began from Cuttack, down nh5a. The first destination was Sukinda, the country's chromite mining capital. That I was entering mining country became clear on the road from Chandikhol to Kalinganagar.Lined on both sides of the highway were stone crushers of every imaginable variety. Stone-crushing is a cottage industry in these parts.

We soon reached Bansadole village in Chakardharpur panchayat in Jajpur district, below a hill called Baghua--area of tigers. "There was a time when there were tigers here. Now there is only mining and stone-crushers," said Anant Mallick, a daily wage labourer at a stone-crushing unit. Three decades ago, springs from the hills irrigated the fields. But stone-crushing has taken its toll: springs and rivulets have dried up. "Noise and air pollution is acute," says Mallick. A few years ago the villagers had begun agitating against mining. But the unit-owners and their contractors crushed them too. Pushing on, we turned left from Kalinganagar along a state highway towards Sukinda.

Sukinda: Chromium country
The road from Kalinganagar to Sukinda was tolerable half the way--then it got rough. Sukinda had nothing to show for the valuable chromite extracted from it for 70-odd years. Potholed roads, dilapidated houses, a scarred landscape, dust and contaminated water have been its reward.

Sukinda's chromite mines were in the news in the 1990s because of high discharge of hexavalent chromium (Cr+6), a highly toxic and carcinogenic substance into water bodies and the Damsala river, a tributary of the Brahmani. The Orissa government's Centre for Environment Studies (ces) and the Regional Research Laboratory (rrl), Bhubaneswar, part of the Council for Scientific and Industrial Research network, investigated Cr+6 in Sukinda. Their 1999 report showed high amounts of Cr+6 in surface and groundwater samples, the soil, solid waste and wastewater from the mines and the food chain.

But nothing has changed. Mines continue to discharge untreated or partially treated wastewater. Treatment consists of using ferrous sulphate to convert Cr+6 into the less toxic trivalent chromium (Cr+3). But the large volume of wastewater generated makes complete treatment impossible. So no one, including Tata's chromite mines, supposedly the best of the lot, treats waste completely. What makes matters worse is the use of low-grade ferrous sulphate, which increases the iron content in treated water reducing the efficiency of treatment further. According to S N Das, head of the inorganic chemicals division, rrl, the cost of commercial grade ferrous sulphate is about Rs 70 per kg. But miners use ferrous sulphate that costs Rs 10-15/kg. The Tata mines, part of Tata Iron and Steel Company (tisco), use pickle liquor, a waste product from the steel plant in Jamshedpur. It contains ferrous sulphate, sulphuric acid and toxic metals. tisco does not disclose this.

During the ces-rrl study, the latter developed an electrolytic process to convert Cr+6 to Cr+3. Its techno-economic efficiency was proved. It remained unused since there was no regulatory pressure. When I reached the area, I checked water quality using a kit from Das. I did not detect Cr+6 till I reached a drain flowing out of a waste dump of the tisco mines. Thereafter, I detected Cr+6 in every water body in Sukinda.

Mixed reviews
Before pressing on to the mines I visited a few villages. The first stop was Ghushripada hamlet of Ransol, a tribal village. Tests confirmed residues of Cr+6 in the wells. Sarthi Mahapud, a dumper driver with a contractor for the tisco mines, told me the biggest problem in the area was the scarcity of clean water. People depended on the drain coming out of tisco except for drinking and cooking, for which they used groundwater. That had lower levels of Cr+6. Mahapud also complained about the pervasive dust. Blisters, nasal bleeding, tb and malaria were prevalent. Vinod Champia, another resident, told me about paralysis and goitre-like symptoms in animals. No one talked about cancer.

Next I went to Mahulkhal, a high-caste Oriya village. It had been adopted by the Tatas. The villagers gave the Tatas good press. Many of them worked in the mines. During the summers, the management provided drinking water. It also distributed medicines--even to those suffering from chronic diseases like tb. Dasrath Mahanto, a part-time contractor at the mines, was all praise. His only concern was that the mines were being mechanised and labourers were losing jobs. Ravi Narain Mahanto, a labourer, however, said agriculture had suffered. tb and malaria were the only diseases mentioned by the villagers.

No study
B N Mahapatra, a doctor who had worked at the mines, informed me that no serious health study had been done. A study by the Orissa Voluntary Health Association in the late-1990s found signs of Cr+6 poisoning. But it did not undertake extensive cancer-related investigation. Mahapatra added that the health impact on workers was difficult to track because of their fast turnover.

When I reached Tata's chromite mine, I met E Lakra, manager (quality assurance). He had an interesting spin on pollution. Most of the chromite ore from the mines was exported to Japan. It had a plant to wash the ore to increase its chrome content and reduce Cr+6. According to Lakra, Japan was strict about Cr+6, once rejecting a big consignment. Lakra now certified all consignments for Cr+6. He claimed wastewater from the Tata mines was treated, though my tests revealed the opposite.

Lakra blamed the Orissa Mining Corporation's (omc's) mines for not treating its wastewater and causing chromium pollution. omc's mines are, indeed, notorious. An officer of the Orissa State Pollution Control Board (ospcb) said the corporation's mines did not have consent to operate, but did so because they were profitable state government ventures.

Keonjhar: Contractor country
My next destination was Keonjhar. I took the district and forest road through the Daitri hills and Hadgarh sanctuary to reach nh215 at Harichandanpur. It was better than the highway. From a distance, I saw the Tata chrome refinery. I reached Keonjhar late, finding no accommodation. I was told there had been an explosion of contractors and traders. The hostelries were full.

Next morning was my first encounter with nh215. At its best, it was a narrow, metalled strip, a quarter of the width of the wheel base of the Bolero in which I was riding. At intervals were equally potholed bridges allowing the passage of a vehicle at a go. The saving grace was that from 7 am till 7 pm trucks were not allowed.

As I left Keonjhar, I saw a small airstrip. I was informed that a 20-seater shuttle was to start soon from Bhubaneswar to save miners the trouble of travelling along nh215. The flight operator, local newspapers wrote, was confident of filling every seat since taxis from Bhubaneswar were more expensive. From Keonjhar we reached Rimuli and took a left turn to Joda.

I had not imagined the road could get worse. We had to leave it and take to the fields, which was far more comfortable. Unfortunately, every now and then a shop or a house forced us to move back to the road. Two kinds of establishments ran successfully along the roads: dhabas and repair workshops, mainly for trucks. I met M D Sajjad, from Bihar. He had seven workshops.

I also met Ganesh Mahlakur and Susanto Makkur. Both drove trucks transporting iron ore from Joda to Paradip. They had severe back problems and spoke about the bribes they had to pay not only to the police, but to local villagers, who levied an 'inconvenience' tax because the trucks had ruined their fields and houses. Kasinath Mahato, a farmer from Batepur, Sukinda, told me his fields had been destroyed by the dust from the road, near which he lived before being forced to relocate. The 50-km journey from Keonjhar to Joda took us nine hours.

Illicit trade
Iron ore mining began in the 1950s in the Joda-Badabil area, which yields large quantities of iron ore and manganese. Every large business house worth its salt has a presence. While they earn fabulous revenues, the region itself remains underdeveloped.

The Joda-Badabil-Koera area has more illegal than legal mines. Mines are not operated by leaseholders; they sub-lease it to contractors, who in turn work the seams unremittingly. There are few signs indicating that a mine exists. A worker told me that for every truck of legal iron ore removed at least two illegal truckloads are also sold (see box: Lawless prospects). Worse, sub-subsistence wages, appalling working conditions, and disregard for the safety and health of workers are common.

In Koera I met Ranjit Kar, a social worker who worked with labourers on health and safety issues. He told me that tribal people called Koera chora bhuian, the land of theft, and miners doko, meaning dacoit.

Koera is one of the most mined blocks of Orissa and one of the poorest. Land has been wrested from tribal people for mines, ore crushers and sponge iron plants. The town doesn't have a rudimentary medical facility, leave alone water supply, sanitation and roads. Trucks and truckers dominate their lives.

I also met Madusudan Singh Mankee, a local boy who studied in the government school for tribal people and became a doctor. He came back to the Koera community health centre and remained there since 1993 and is revered for this. The centre has little by way of infrastructure or manpower. Last year an x-ray machine was installed but there was no one to operate it. The incidence of malaria was very high. "Other than malaria, tb, asthma and bronchitis have increased significantly due to high dust levels in the environment," said Mankee. "A few months back we had sent a patient to Bhubaneswar. We were told he had aids. We had no facility to check."

In this area, the topic of conversation invariably shifts between mines and roads. My conversation with Mankee was no different. "The pain suffered by pregnant women on these bumpy roads when they come for delivery is worse than the pain of delivery, so we try our best to reach their homes," he said.

Next was a visit to mines in the area. The mines in Koera I visited are owned by the Essel Mining and Industries Limited, part of the Aditya Birla group. These were as bad as the illegal ones. They were right in the middle of agricultural areas. Dumps were spread everywhere. It was raining; and I could see the red slush from the mine getting into the agricultural fields.

The worst part was the workers' houses: four to five feet high, they were just big enough to cram in a few people, in stark contrast to Essel's claims about 'peripheral area development'. And, as far as the big boys of mining are concerned, Essel is hardly unique in failing the places it mines and their people.

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Inviting investment, neglecting people

In its mid-term appraisal of the 10th Five-Year Plan, the Planning Commission realised that the National Mineral Policy (nmp) adopted in 1993 "for encouraging the flow of private investment in exploration and mining", in the words of a panel it later set up, had not lived up to its billing. It's a different matter that the policy contained no such objective.

The reason for believing nmp had failed was laid out in a cryptic statement: "So far, the Central government has approved as many as 188 reconnaissance permits, involving an area of 2,54,307.303 sq km...and the Foreign Investment Promotion Board has granted 73 approvals for fdi (foreign direct investment) in the mining sector involving an investment of Rs 4,044 crore... there is no successful case of a reconnaissance permit being converted into a mining lease so far (emphasis added)... This is mainly due to procedural delays in various clearances at the levels of both Central and state governments, especially in the case of mandatory environment clearance and inadequate infrastructure." A "high-level committee" was constituted in September 2005 under Anwarul Hoda, member, Planning Commission on this basis. Its report was submitted in June 2006 and made public in December.

Blinkered vision
In 1993-94, the value of mineral production in country was about Rs 25,000 crore. This increased to more than Rs 84,000 crore in 2005-06. The compound annual growth rate was an astounding 10.7 per cent. Iron ore, the major metallic mineral produced in the country, grew at 8.25 per cent, with total production increasing from 59.6 million tonnes to 154.4 million tonnes. Bauxite production grew at 6.9 per cent (5.5 million tonnes to 12.3 million tonnes). Chromite production recorded 10.2 per cent (1.06 million tonnes to 3.4 million tonnes). Limestone, the major non-metallic mineral, grew at 6.2 per cent (83.2 million tonnes to 170.4 million tonnes).

The mineral sector might have grown at a healthy rate since nmp was released, but it also caused environmental damage, economic marginalisation and social unrest on a massive scale. Unfortunately, the policy, which had emphasised meeting the environmental and social challenges posed by mining rather than fast-tracking private investment, failed to deliver on these fronts as envisaged, a fact ignored while finalising the terms of reference for the Hoda committee. The terms concentrated almost exclusively on investigating how procedures could be streamlined to facilitate private investment without recognising that serious environmental and social issues needed to be addressed.

This was also reflected in the composition of the committee. Only government and business representatives were included and only government and business representatives were invited to submit their views. L P Sonkar, adviser (minerals), Planning Commission, and convener of the Hoda Committee, put things in perspective with a rhetorical question to a Down To Earth reporter: "Do you expect us to call tribals to the committee?"

Apart from this built-in bias, there was a flawed presumption. The Hoda committee said the balance between conservation and exploitation of resources in forest areas had tilted towards the latter, with the judiciary's intervention making the mining clearance process more difficult.

Under the Forest Conservation Act (fca), 1980, forestry clearance was required from the Union ministry of environment and forests (moef).In the 17 years since fca came into force, 1980-1997, forest clearances were granted for 317 mines diverting 34,527 hectare (ha) of forest land--an annual average of roughly 20 projects and 2,030 ha. Between 1998 and 2005, moef cleared 881 mining projects diverting about 60,500 ha of forest land--an annual average of roughly 125 projects and 8,650 ha. Obviously, the Hoda committee's conclusions were not borne out by the statistics: the speed and scale of clearances for mining has, in fact, been increasing.

Private unlimited
Nevertheless, the crux of the Hoda committee recommendations was about ushering in private investment, both domestic and foreign, into mining, with environmental and social controls seen as hurdles to be crossed.

The committee pinned its faith on two mechanisms--the sustainable development framework and global reporting initiative (gri)--to solve environment and social problems. Multinational mining companies have been under intense criticism over the past decade for poor environmental, social and human right records in the developing world (see box: Mine sharks). Against this backdrop, and with the World Summit for Sustainable Development planned for 2002 in mind, nine of the world's largest mining companies decided to initiate a project to examine the role of the sector in contributing to sustainable development, and how that contribution could be increased. Through the World Business Council for Sustainable Development, they contracted the International Institute for Environment and Development to undertake a research and consultation project--the Mining, Minerals and Sustainable Development Project (mmsd), which came out with a wish list of sustainable development principles.

Meanwhile, in 2001 these mining companies also promoted the International Council on Mining and Metals (icmm) to improve their image. The mmsd's sustainable development principles were then converted into a sustainable framework by icmm, to be implemented by all its members. It mandated an annual report on social and environment performance to be verified by private auditors under gri.

The problem with the framework was that it was no different from existing voluntary certification systems. Its principles were so broad and vague--for example, contributing to social, economic and institutional development of communities that companies could claim they adhered to them without doing much. The reporting and verification process was also farcical: companies could write what they wanted because verifiers were paid by companies to verify what they wanted. Even in India's current regulatory regime, mining companies are supposed to submit annual environment audit reports and half-yearly progress reports on environmental management plans. Given that this mandatory system has failed, the question is how a voluntary one would make mining sustainable. Not surprisingly, the committee believes if the framework is implemented more forestland can be opened to mining.

Through the thicket
At the core of the Hoda committee's recommendations on forest clearance are proposals to change laws to assure prospectors they will get forest clearance if they find minerals and the clearance process will be expedited.

Under existing fca guidelines, permission to survey, explore, or prospect for minerals in forest areas does not imply leases will be granted. This was stipulated to expedite exploration and prospecting, without extensive damage to forests. However, before granting leases, detailed impact assessment was envisaged to protect ecologically sensitive areas.

According to the Hoda committee, however, "such a stipulation militates against the seamless transfer dispensation that the committee would like to promote to attract investment into mining". It wants the government to spell out in advance the conditions to be met during mining so that forest clearance can be granted without a hitch. This recommendation is based on the belief that "the miner eventually leaves the land and can recreate or even improve upon the forest as it existed before commencement of operations". But the 300-odd officially declared abandoned mines (there are thousands of unofficial ones) belie this claim. International experience with mining rehabilitation hasn't been great either. Mining companies have left abandoned mines for governments to deal with, worldwide.

Cosmetic change
The core of the committee recommendations for speeding up the forest clearance process is outsourcing the responsibility of divisional forest officers (dfos) and attenuating moef's role. It has also proposed a coordination-cum-empowered committee (ccec) at the centre and in states to act as a single-window clearance outpost. It has also recommended that mine lease, forestry and environmental clearance should be parallel rather than sequential processes. No major change has, however, been proposed at the central level; the committee has recommended that moef's internal processes remain unchanged--its decisions will be binding on ccec.

The problem is that the committee has taken a blinkered view of restructuring systems to minimise delays in granting of leases. What it has not done is to actually see how the system functions and take into consideration ecological and environmental issues.

Take the case of renewing leases. Hoda committee wants the clearance process for renewals to be a mere formality, unless there are serious adverse effects on the forest and wildlife or environment in an area or violations of stipulated conditions. The problem is that it has not specified a mechanism through which 'serious adverse effects' can be identified and to check whether they are or not at present. The committee believes the report of moef's regional officer should do this job.

The need for renewals arises in the first place to assess damage from actual mining operations and then decide on a future course of action. Industry cannot complain because cases of large mines being denied renewals on ecological or environmental grounds are almost non-existent, though denial of renewals is often necessary, as with the Sukinda chromite mines in Jajpur, iron ore mines in Joda-Badabil and in Bellary-Hospet, Karnataka, coal mines in Jharia-Dhanbad, Jharkhand, and uranium mines in Jharkhand. They should not have been granted renewals because of the extensive damages they caused, but did partly because regulators often reasoned that since the damage had already been done, mining should continue.

So, while the Hoda committee's proposals on renewals might not materially change the situation, what should be put in place is a system in which ecological and environmental performance of mines are periodically assessed and renewals granted on the basis of ground reports.

Public limited
The Hoda committee believes the public hearings create complications in the environmental clearance process in India. It wants them to be dispensed with for mining leases for areas less than 50 hectares (ha) and renewals of any leases. It also wants public hearings to be limited to issues arising out of environment impact assessment (eia) reports and to people, legislators or ngos of areas concerned--meaning complete outsiders should not participate. Though the last is part of the new eia clearance process, the implications for the first two are disastrous. To say that 50-ha mining do not need public hearings is to imply they have no environmental impact. However, the number of people a 50-ha mine can affect and the environmental degradation it can cause has been witnessed across the land.

The recommendation of the committee to dump public hearings for renewals does not take into account the fact that these are the only forums in which affected communities can express their opinions. Regulators would have no means of knowing about the impact of mining without them.

Another damaging recommendation, which, if accepted, could multiply environmental and social problems many times relates to size. The Hoda committee wants the upper limit for a single mine lease to go up from the existing 10 sq km (there are a few exceptions in the public sector) to 50-100 sq km to develop "world-class ore bodies". What it does not have recommendations for is how to deal with massive displacement, especially given that the government can't even deal with current levels of displacement.

Clearly, for mining to remain a viable economic activity, a 'social licence to operate' must be enshrined in future legislation. People will voluntarily accept change if they perceive an overall benefit. But if impoverishment is the anticipated consequence of mining, people will resist. If people do not want mining, then it can only happen with the help of the coercive power of the state, which will be accompanied by large-scale human right violations and social and economic dislocation. Hoda's report comes to the aid of this process of coercion.

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Lax easing: Change system, share benefits

In the absence of stringent laws and strong institutions, mining remains one of the most unregulated of activities in the country despite its huge social and environmental fallouts. It may be true that it takes a lot of time to get a mine lease sanctioned after doing the rounds of a number of byzantine government departments, but once permission is granted there is almost no capacity within the government to regulate mining.

Mining is one of the very few sectors in which laws relating to environmental and social fallouts have not been codified in detail. The environmental law that has been tailored for mining, under the Mineral Conservation and Development Rules, 1988, is a two-page collection of empty statements which leaves ample scope for mine-owners and regulators to do nothing. A sample: "Wherever possible the waste rock, overburden, etc. shall be backfilled into the mine excavations with a view to restoring the land to its original use as far as possible."

Multiplicity
Then there is institutional confusion. The Indian Bureau of Mines (ibm) and state pollution control boards (spcbs) are responsible for monitoring environmental fallouts. ibm also clears mine plans and mine closure plans, but the moef clears environment impact assessments (eias). With overlapping jurisdictions, ibm and spcbs do not have enough manpower to monitor large-scale mines, leave alone small, medium and illegal ones. In Orissa, of the 300-odd officially operating mines, the spcb has only 172 under its regulatory net. The situation is no different in Jharkhand and Chhattisgarh. spcbs have stopped taking legal action against violators, because procedures are time-consuming, they don't have legal capacity and violators usually walk. To stop large-scale violations, credible deterrence, rather than legalistic nitpicking, is essential.

ibm's inspection reports show that on an average it visits 80-90 per cent of officially operating mines annually, finding about 50 per cent of them violating the law. It prosecutes about 10 per cent of violators. Less than 1 per cent of the violators have operations suspended.

Mine closure is another problem area. It was only in 2003 that closure plans were made integral to the clearance process in India. But what we see in closure plans are pits disguised as water bodies and waste dumps as plantations. Internationally, mine closure is recognised as a major component of mining and 'starting with closure in mind' is established practice. It is estimated that the environmental and social costs of closing and rehabilitating old and abandoned mines in the developed world are likely to be in trillions of dollars, far beyond the capability of mining companies. Governments will have to foot the bill. This has prompted regulators to ask companies for comprehensive financial assurances.

Indian policymakers have not learnt the lessons. Financial assurance under the law is Rs 15,000-20,000 per hectare. This is not enough for proper earthwork, forget environmental, social and economic rehabilitation.

What rehab?
The track record on land acquisition, displacement and rehabilitation is even worse, if that is possible. People displaced from their land decades ago have not been compensated yet. Some have faced multiple displacement. Though there are no reliable official statistics, but estimates for 1950-91 show that of all development projects mining has displaced the second highest number of people--25.5 lakhs, of whom 55 per cent are members of Schedule Tribes. Not even 25 per cent of those displaced have been resettled, forget rehabilitation. So, while the miners prosper the people whose land yields the riches remain poor.

In such a scenario, social unrest and conflict is natural--as mining areas of Orissa, Jharkhand, Chhattisgarh, Karnataka and Goa have demonstrated. There is a general feeling, borne out by numbers, that displacement and environment degradation by mining aggravates poverty. States like Jharkhand, Chhattisgarh and Orissa, which have a high level of dependence on mineral resources, have lower per capita incomes, higher levels of poverty, lower growth rates and higher levels of mortality, malnutrition and morbidity. In other countries, too, a high level of mineral dependence is often associated with retarded economic performance and poor development outcomes. This phenomenon has been given a name--"resource curse".

This has led to new thinking about ways in which mineral wealth can be converted into sustainable development benefits for local communities. Most new approaches are built around a framework in which compensation, benefit-sharing, community development and mine closure are central. The assumption is simple: the wealth generated from mining is not for companies and the government alone, places and people affected by mining must share its benefits. If India wants mining to create prosperity, we must follow this path.