Supreme Court allows resumption of mining in Goa

Order follows committee report suggesting extraction up to 20 million tonnes of iron ore be permitted, subject to an adequate regulatory mechanism being put in place

By Srestha Banerjee
Published: Tuesday 22 April 2014

Goa has incurred a loss of `35,000 crore because of illegal mining

The suspension of mining activities in Goa has ended with the Supreme Court allowing conditional resumption of iron ore mining in the state on Monday.

The judgement, delivered by the bench of JusticeA K Patnaik, has allowed a maximum annual extraction of 20 million tonnes from the mining leases in the state, after taking into account the principles of sustainable development and inter-generational equity.

All mining activities in the state have been at a standstill since 2012 after the Union Ministry of Environment and Forests (MoEF) announced suspension of environmental clearances of all 139 mining leases in the state. The latest decision of the Supreme Court comes as a big respite to mining players such as Sesa Sterlite, earlier known as Sesa Goa, the main subsidiary of multinational mining and metals giant, Vedanta. When contacted, the company refused to comment on the developments expected following the judgement.

The Federation of Indian Mineral Industries (FIMI) has welcomed the decision. Basant Poddar, vice-president of FIMI, emphasised that the decision of lifting mining ban will not only help the mining industry but also the people whose livelihoods have been hit by MoEF's suspension order.

The order comes following the report of the C R Babu committee, that was tabled in the apex court last month. The expert committee set up by the Supreme Court to evaluate the macro-level environmental impact of iron ore excavation in Goa, suggested a cap of 20 million tonnes a year on iron ore mining, subject to an adequate mechanism to regulate and monitor the ecological and environmental impacts of mining activities. The annual cap of 20 million tonnes is to stay until a final and more comprehensive report is submitted by the expert committee. The court is now awaiting the final report which is expected to be completed within one year.

Concerns regarding illegal mining activities in Goa and its ecological impact have been long-standing. The report of Justice M B Shah Commission, which was tabled in Parliament on September 7, 2012, highlighted illegal mining activities in Goa. The commission was appointed on November 22, 2010, to inquire into the illegal mining in Goa and six other states. Just days after the Shah Commission report was submitted in Parliament, MoEF ordered temporary suspension of mining activities in the state. The Supreme Court in October 2012, ordered that the mine leases where violations were detected by the Shah Commission should be suspended and asked its central empowered committee (CEC) to investigate the illegalities.

Ensuring legal operations

Though the suspension order on mining operations has been lifted, the apex court has not condoned illegal mining. The order specifically says that there will be no change in the status of the mining leases which have been declared illegal earlier. The bench has clarified that the validity of the impunged lessees expired in November 1987, and subsequently the maximum of 20 years of their renewal period also expired in November 2007, making these leases illegal. Legal status can only be established following decisions by the state government to grant fresh leases and decisions of MoEF to grant fresh environmental clearances for mining projects. The regulatory supervision of mining operations should be carried out by the Department of Mines and Geology, the Goa Pollution Control Board (GPCB) and the national regulator appointed by the Central Government (as required by the Supreme Court Order of January 2014).

The decisions about the manner in which mining leases are to be granted in future in Goa remains vested with the state government, but the constitutionality or legality of the decision of the state remains subjective to judicial review by the Supreme Court as deemed necessary. The state government has also been entrusted with checking illegal of mining operations through strict enforcement of the Goa (Prevention of Illegal Mining, Storage and Transportation of Minerals) Rules, 2013.

The right balance

A central concern of the judgment, as evident from deliberations, remains balancing the economic needs of the state with the environmental impacts of mining activities. The decision of lifting the suspension order clearly reflects the concern for the people whose livelihoods have suffered a blow because of the ban on mining. Taking into consideration the financial setback that labourers involved in mining activities had to suffer, that bench has noted that workers who could not be paid wages by the lessees, will have to be paid compensation at the rate of 50 per cent of their basic wages and dearness allowance during the period of non-employment on account of suspension of mining operations.

However the permit to commence mining operations in the state comes along with directions for implementing environmental safeguards. Considering serious negative impacts that mining has inflicted upon the environment of Goa, contributing to enhanced air, water and soil pollution, the bench has directed the GPCB to take strict measures. Looking at the environmental nuisance from mining activities, the bench has reprimanded the pollution control board, saying that sincere efforts were not made by them to monitor the water quality and air quality in the mining areas. It has noted that “GPCB, though conferred with immense statutory powers, has failed to discharge its statutory functions and duties.” GPCB has been asked to strictly monitor matters of air and water pollution, and if necessary take punitive actions to close down mining operation of lease holders found violating air emission and water discharge standards while carrying on mining and related activities.

The order also prevents dumping of minerals outside the mine lease areas and prohibits mining activities within one kilometre from the boundaries of national parks and sanctuaries in Goa. MoEF has further been asked to issue the notification of eco-sensitive zones around such parks and sanctuaries within a period of six months.

Concerns of equity

The judgement also dwells on concerns of equity. The judgment notes that if mining has to continue it should be done in an equitable manner. Taking into account the recommendations of the expert committee on sharing of profits/earning from mining activities for benefit of the community through creation of a public fund, the bench has directed that lessees who benefit the most from mining, must contribute from their sale proceeds to the Goan Iron Ore Permanent Fund for sustainable mining. This will require that 10 per cent of the sale proceeds of iron ore excavated in the state sold by the lessees, must be appropriated towards the Goan Iron Ore Permanent Fund for the purpose of ensuring inter-generational equity.  The State of Goa in consultation with CEC, has been directed to frame a comprehensive scheme in this regard and submit it to the apex court within six months.

Claude Alvares, executive director of Goa Foundation, the petitioner in the case, says that the terms and conditions laid out in the order will be instrumental in determining future mining activities and its environmental impacts. He remains fairly content with the Supreme Court order which he considers has taken into consideration different aspects involved in mining.


Order: Supreme Court order on mining in Goa, 21 April 2014

Rule: Goa (Prevention of Illegal Mining, Storage and Transportation of Minerals) (First Amendment) Rules, 2014

Report: Survey of environmental & socio-economic impacts of interim ban on mining in Goa

Report: Interim report by CEC on illegal mining in Goa

Report: Report of Justice M.B. Shah Commission of inquiry for illegal mining of iron ore and manganese

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