Parliament passes controversial mining bill

Opportunity to truly reform mining governance to balance economic growth with social justice and environmental safety has been lost

By Srestha Banerjee
Published: Saturday 04 July 2015


The upper house of Parliament on Friday passed the controversial mining bill, which is perceived as anti-people and pro-miners.

The Mines and Minerals (Development & Regulation) (Amendment) Bill (MMDR), 2015, tabled before Parliament to amend the mining Act of 1957, was passed on the strength of 117 votes; 69 members voted against it and two abstained from voting. The members of Janata Dal (United) walked out in protest as voting started. 

The bill was earlier passed by Lok Sabha on March 3. On Friday, the bill was once again cleared by the Lok Sabha after it was returned by Rajya Sabha with amendments in two sections.

After the bill was introduced in Rajya Sabha, a 19-member select committee, headed by BJP MP Bhupender Yadav, was asked on March 11 to review the bill. The committee was given just one week to review it and was required to table its recommendations by March 18. The select committee incorporated amendments with respect to the functioning of the District Mineral Foundation, the trust to be developed by state governments to administer sharing of benefits of mining with affected communities. The amended provision notes that the objective and functioning of the DMF should be guided by Constitutional provisions as it relates to Fifth and Sixth Schedules for governing tribal areas. It should also be guided by the provisions of Panchayats (Extension to Scheduled Areas) Act, 1996 and the Forest Rights Act, 2006 the recommendation states.

However, the short time given to the committee to review the bill proved highly contentious. P Rajeev of CPI(M), moved a motion on March 19 to send the MMDR Bill, 2015, back to the select committee for further consideration. Though members of Opposition, particularly of Congress and the Left, voiced strong support for it, the motion was defeated on Friday on the floor of the house.

“The select committee was railroaded to present the current report,” said Mani Shankar Aiyar, nominated member of the Rajya Sabha and member of the select committee. Ghulam Nabi Azad, leader of Opposition, criticised the government for passing the bill, noting that it should have been referred to the Parliamentary standing committee in the first place for detailed scrutiny. What’s more, given the time constraint imposed on the select committee, the “whole purpose of sending it to the select committee has been frustrated,” asserted Azad. 

Members of the Opposition also strongly protested the fact that the select committee was not given any opportunity to consult state governments, despite the fact that mineral resources are under states’ jurisdiction. Wider stakeholder consultations could also not be carried out, they pointed out. 

The MMDR Bill 2015 was criticised on several counts. A major criticism was that it gives overarching power to the Centre over states. “The bill practically renders the states into non-entities, leaving them only to do clerical paperwork,” said K T S Tulsi, nominated member of the Rajya Sabha and a member of the select committee. Similar concerns were expressed by members of the Left front who said the bill makes states dependent on the Centre. Concerns were also raised about the fund disbursement mechanism of DMF. It was also argued that though the highest limit on the sum of money that a mine lease holder is required to pay (not exceeding one-third of the royalty for all respective minerals) has been specified, there is no lower limit. 

The earlier MMDR bill of 2011 was considered a much better law. Recognising the fact the districts richest in mineral resources are also inhabited by the poorest, the MMDR Bill 2011 (it lapsed in February 2014) had introduced provisions of benefit-sharing in an equivalent manner. The 2011 bill specified that for major minerals, the leaseholder should pay the local community an amount equivalent to royalty each year. For coal and lignite, it was to be an amount equal to 26 per cent of profit after tax. This money was to be put in a fund for certain specified benefits. 

Missed opportunity
With the appropriate provisions, the MMDR Bill could have been a watershed policy move to change the mining equation and mining practices in the country. But the bill in its current form, which is being championed by the government to resolve many issues plaguing the mining sector, may do more harm than good.  

With a limited vision of expediting growth in the mining industry, the proposal offers little for protecting people’s interest and the environment. It fails to make communities and institutions of local government partners in the processes of mineral development. It fails to deliver on the promise to capture windfall profits from mining and share the mining wealth with local communities. From the perspective of the environmental, it holds little promise of steering the mining sector towards environment-friendly practices. In fact, it is more likely to encourage poor mining practices. Ironically, it even hurts the long-term growth prospects of the mining sector by limiting impetus for scientific exploration of minerals. 

Overall, the proposed reforms display a bias towards short-term growth and fail to take into account the need for deep reforms to improve mining governance and tackle the irregularities associated with it. Most of the reforms in the governance mechanism do not tackle the root problem. This is evident from the provisions for checking illegal mining only through increasing fines and creating of courts; there is no mention of institutional strengthening required to deter companies from violating the law. Most importantly, the central tenet of governance reform—auctioning of all mineral concessions—is poorly framed.  

The amendments, when enforced, will not end mining controversies; it will open new avenues of marginalisation and exploitation of people and the environment. Once again, the opportunity of develop a good mining law has been lost. What was needed was a law that combines economic growth with social justice and environmental safety. 


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