At last, India gets genuinely serious about companies flouting mining and environment laws

21 Aug 2017

The landmark judgement of the Supreme Court imposing penalties of an estimated Rs 25,000 crore on illegal mining merits serious reading by the entire corporate sector, and not just by those who extract mineral wealth.

Two aspects of the verdict stand out. First, the verdict takes environmental law enforcement by the Centre and the highest judicial authority to a new high, which is a very strong deterrent against such practices in the future. This strong message will protect the environment and clean up the poisonous air in cities more effectively than some outrageous, controversial and ill-conceived steps taken by various authorities in recent years.

Second, the court has ordered heavy expenditure for the welfare of tribal people in affected areas. This reinforces the GoI’s declared strategy of targeting and extracting ill-gotten wealth to help the poor, whether by demonetisation of high-value currency notes, or with the goods and services tax (GST).

A crucial aspect of the court case that needs to be highlighted is the fact that the mines ministry, after Piyush Goyal took charge of its affairs, dramatically changed the relatively lenient position that the previous government had taken in the matter of companies violating green laws applicable to the sector. In doing this, GoI showed its determination to resist strong pressures.

Conventionally, mining was deemed illegal only if ores were extracted without a mining lease. Under the mining law, the penalty was equal to the entire output from such an operation. However, once the lease was obtained, even if the mining operation ravaged forests, made the air un-breathable and degraded the environment to make thousands of crores, the penalty under the environment law was a laughable Rs 50,000. This built a very strong business case to start mining without waiting for green clearances.

The government argued before the Supreme Court in January that extracting minerals without the necessary green clearance should be deemed illegal not just under the environmental law but also under the mining law that imposes back-breaking penalties for default. The Supreme Court has upheld this view.

This means that even if you have a mining lease, any extraction without forest and environment clearance is illegal and the state must recover the value of the entire output from the defaulter.

Further, the court has ordered that the hefty penalty must be used very transparently for the development of tribal areas where the mines are located. It has ordered that the “very large amounts” that will flow to Odisha after the verdict must be kept in a special purpose vehicle (SPV). To ensure that the funds are used for the benefits of tribal people in affected areas, it has asked the state’s chief secretary to file an affidavit stating the work done and audited accounts of the SPV.

For those who think they can make millions without caring for the environment, the court did not mince words. It delivered the message in the first paragraph of the judgement, “Lessees… in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests and perhaps caused untold misery to the tribals in the area.” Some steps taken to help the local people, the court said, seemed “not more than a drop in the ocean —also too little, too late”.

The stern words from the highest judicial authority in the country are a breath of fresh air in the otherwise polluted approach toward green issues some authorities have demonstrated in recent years.

The problem with such steps is that it creates mass public ill-will towards the noble cause of environmental protection simply because some authority has caused severe hardship with steps that scientists know wouldn’t clean the air. Such orders actually damage the environment because they make it difficult for political authorities to protect the environment when the common man thinks he is being short-changed.

In contrast, the Supreme Court’s latest verdict on mining, and GoI’s submission early this year, is a concrete step that will help the environment, even as some mining companies have genuine grievances.

The mining industry fears the verdict will disrupt business and that some mines may shut down. There are some legitimate grouses. It takes ages to get environmental clearances. Often, land is not available for compensatory afforestation. At times, clearances are not renewed even if there is no change in mining operations or output.

Legitimate concerns must be addressed. But for the crooks that ravage the environment, the message from the Supreme Court and the government is clear: if abiding by the law means shutting down your business, so be it.

Source-ET