Environment ministry failed to monitor forest diversion: CAG

Report of India’s chief auditor says compensatory afforestation not undertaken in many states; CAMPA funds misused or poorly utilised

By Sugandh Juneja
Published: Sunday 08 September 2013


The Comptroller and Auditor General of India (CAG), in a report, has brought to light serious regulatory lapses in forestland diversion in the country. The report, which looks at the performance of the Compensatory Afforestation Fund in India, was presented to Parliament on Friday.

CAG states that in many mining cases the Union Ministry of Environment and Forests (MoEF) has failed to promote compensatory afforestation or to check violation of environmental regulations and unauthorised diversion of forestland. It further states that MoEF failed to appropriately discharge its responsibility of monitoring of compliance with conditions of the Forest (Conservation) Act, 1980 relating to diversion of forestland.

MoEF invoked penal provision only in three instances between August 2009 and October 2012, and even in these, action was limited to issuing show cause notices. In CAG’s opinion, the penal clause prescribed in the Forest (Conservation) Act, is largely ineffective and not enough to deter illegal and unauthorised practices. As per Section 3A of the Act, whoever contravenes any provision is to be punished with simple imprisonment for up to 15 days.

CAMPA: how effective?

Between 1980 and May 2004, about 921,000 hectares (ha) of forestland had been diverted for non-forest (industrial, commercial and other development projects) purposes and 114,000 ha had been diverted after formation of ad-hoc Compensatory Afforestation and Fund Management and Planning Authority (CAMPA) till March 2012.

In October 2002, the Supreme Court (SC) of India directed the formation of a Compensatory Afforestation Fund. This fund was to accrue from all money received towards compensatory afforestation, penal afforestation and net present value (NPV) of the forestland. The fund is to be used for regeneration of forests, forest management, protection, infrastructure development, wildlife protection and management and related activities.

In April 2004, MoEF notified CAMPA. SC observed two years later that the fund has still not become operational and is working under an ad-hoc body called CAMPA. The court ordered that all money under CAMPA lying with various states be transferred to this ad-hoc body to be audited by CAG. During 2006-2012, Compensatory Afforestation Fund grew from Rs 1,200 crore to Rs 23,608 crore. 

The government has to receive an equivalent area of non-forest land for compensatory afforestation to take place. MoEF records, however, reveal that against 103,000 ha of forestland only 28,086 ha was received for compensatory afforestation during 2006-2012, only 27 per cent of the receivable. In addition, the compensatory afforestation realised over the receivable non-forestland is just seven per cent (7,281 ha).

In case non-forestland is not available, afforestation is to be carried out on degraded forest twice the size of forestland diverted. This has to be certified by the chief secretary. Afforestation on degraded forestland worked out to about 49 per cent (49,734 ha). But the report finds that on almost 71,000 ha of land compensatory afforestation was carried out without this certification. CAG found that seven states – Gujarat, Haryana, Kerala, Maharashtra, Meghalaya, Punjab and Rajasthan – carried out no compensatory afforestation either on non-forestland or degraded forestland. 
CAMPA fund utilisation also presents a dismal picture. Only 61 per cent of the funds released by the ad-hoc CAMPA were utilised by the states (Rs 1,775.84 crore), leaving a balance of Rs 1,149.81 crore while about Rs 52 crore was utilised for unauthorised activities like renovating buildings, buying vehicles, cell phone charges and honorarium. States like Meghalaya, Arunachal Pradesh, Chhattisgarh, Tripura and Delhi showed very poor utilisation of funds. Interestingly, MoEF and its regional offices did not make available 64 files for audit by CAG.

Reliance’s Sasan UMPP and other beneficiaries

Certain specific cases of non-compliance were also observed. For instance, the Andhra Pradesh Electricity Board diverted forestland for the Nagarjunasagar dam without the prior approval of the SC. In five other cases, Rajasthan and Odisha did not get prior approval from the Central government while renewing mining leases, making them unauthorised. The report also notes, “numerous instances of unauthorised renewal of leases, illegal mining, continuance of mining leases despite adverse comments in the monitoring reports, projects operating without environment clearances, unauthorised change of status of forestland and arbitrariness in decisions of forestry clearances were observed.” CAG found in 219 cases that the state government concerned has renewed mining leases without the approval of MoEF. 

The CAG report points to certain cases in which MoEF did not observe due diligence while granting forest clearance under the Forest (Conservation) Act of 1980. Sasan Power Limited, a special purpose vehicle of Reliance Power Limited, is a case in point. In June 2007, the state government of Madhya Pradesh sought approval from the Central government for diversion of 321 ha of forestland for building the ultra mega power project (UMPP) in the state’s Sidhi district.

MoEF gave in-principle nod to the project in December 2008 and the final clearance in April 2009. The Madhya Pradesh government simultaneously applied for forestland diversion of 1,064 ha to the Central government for coal blocks for Sasan UMPP. MoEF gave in-principle approval to this project in November 2009 and final clearance in May 2010. CAG noticed a number of deficiencies in the process of forestland diversion to Sasan Power.

According to the guidelines, the company was to provide 1,385 ha of non-forestland for compensatory afforestation in Sidhi or its proximity. The company produced a certificate from the chief secretary about non-availability of forestland in Sidhi and MoEF granted them exemption from providing equivalent non-forestland. CAG states that the MoEF did not ask Sasan Power to furnish such certificate for entire Madhya Pradesh or make efforts for identification of non-forest land for compensatory afforestation anywhere else in the state. Instead, the company was allowed compensatory afforestation over double degraded forestland even though it was not eligible for such an exemption. MoEF overlooked this even though the regional office pointed out that Sasan Power is not eligible for such an exemption.

CAG says: “The MoEF not only did not exercise due diligence in ensuring compliance with conditions but also inexplicably overlooked the deficiencies in the certificate pointed out by a subordinate authority while granting exemption in the instant case.” Also, MoEF has not made any effort to find out if Sasan Power has carried out additional afforestation over 1,065 ha, states the report. MoEF chose to remain “silent” to CAG’s query on the Sasan Power’s case.

It, instead, blamed the matter on the company by saying that it never informed the Forest Advisory Committee that the shareholding pattern was transferred from Power Finance Corporation to Reliance Power Limited in August 2007. CAG has refused to accept this clarification since the approval by the MoEF was granted more than two years after the change in shareholding.

Land not taken back from violators

CAG report also found that the figures of forestland diversion and receipt by the states provided by the regional offices of MoEF do not reconcile with those provided by the state. CAG also found that MoEF did not carry out the cost-benefit analysis of any of the 219 projects whose files were inspected. This implies that forestland was diverted without ascertaining the overall public interest. MoEF remained silent on this issue as well.

Under Forest (Conservation) Act, forest clearance for any project having been accorded in-principle clearance is to be revoked if it does not meet the clearance conditions. But CAG found that of 1,022 proposals involving 254,000 ha of forestland diversion, which had not complied with in-principle clearance conditions, were neither rejected nor revoked. MoEF responded that the onus to comply with conditions stipulated in the in-principle approval lay with the user agency and the state governments.

Similarly, while granting forest clearance to Accion Wind Energy Private Limited, MoEF put in a condition that if the company fails to develop the wind farms the entire forestland would be reverted. CAG found that even after four years, the company has not complied with the condition of setting up a wind farm even then the forestland has not reverted to the government. MoEF has responded to CAG that the present status of the project will be verified and appropriate action will be taken.

CAG pointed out several other problems. For example, in Karnataka and Goa forestland has been diverted for mining in violation of Forest Conservation Act, forestland has not been surrendered to the government after expiry of lease period in a number of cases, many mining leases have not submitted their monitoring reports, mining without environmental clearance, non-realisation of net present value.


Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.