Govt Rushes Law To Use Mining Ravages Fund For Roads

08 Sep 2020 0 min read  Share

After criticism, the government has extended by a week a 10-day deadline to oppose a mining-law change, which will use Rs 36,000 crore meant for people and communities affected by mining to build roads, bridges and other infrastructure. The notification was issued only in English. We explain what is at stake

Kusumunda coal mines in Korba District, Chhattisgarh.

Pune: Zarina lost her husband Amir in 2016 to the toxic-sand-laden air of the stone mines of Rajasthan’s Bhilwara district. Amir, then 40, suffered from silicosis, an incurable lung disease caused by the inhalation of silica dust. 

After her husband died, Zarina (who uses only one name), now 43, joined protest meetings seeking compensation not just for herself but also other young widows like her. Although she tended goats and worked as a farm labourer, it was difficult getting by on her income and providing for two school-going sons. 

In March 2019, Zarina received Rs 300,000 from Rajasthan’s District Mineral Foundation (DMF). “It came as a huge relief, to have some money that could be used for any emergency,” she said. “Otherwise, even if I had fever, I could not take a day off work as a labourer.” 

Rajasthan has been using the DMF to compensate patients of silicosis and their kin. In the new silicosis policy announced in October 2019, the government also intends to use the money to fund silicosis prevention.  

District Mineral Funds, nonprofit trusts set up in 2015 in India’s 583 mining districts, recognise local communities involved in or affected by mining as partners in development and use royalties from mining companies to ameliorate the condition of those adversely affected. Those mining before 2015 transfer 30% of the royalty they owe the government into the fund; new miners contribute 10%.

By January 2020, Rs 36,000 crore had been collected in DMFs nationwide and it is estimated to grow at Rs 6,000 crore every year, according to an April 2020 report from the Centre for Science and Environment (CSE), a nonprofit. 

In May 2020, Brookings Institute, a think tank, reported that DMF funds were “crucial” to ensure “income security”, boost local livelihoods and create jobs in India’s post-Covid era. The report pointed out that the Prime Minister had discussed how this money could fund “community development”. 

Now, the ministry of mines has, through a notice uploaded only in English on its website on 24 August, proposed amendments to the Mines and Minerals (Development and Regulation) Act, 1957, to allow the government to use DMF funds for “infrastructure construction”, including building roads and bridges. 

The government allowed public objections or suggestions till 3 September, but after criticism of the 10-day deadline, the time for public responses was extended to 10 September, also criticised as inadequate. 

India’s mining districts are some of its poorest: the highest-earning member in 80% of rural households in these districts earned less than Rs 5,000 per month,  according to the 2011 socio-economic caste census. Much of the work is manual, jobs mostly involve casual labour, so income is uncertain.

Widespread poverty in India’s mining districts makes access to healthcare, education and basic food and water needs a matter of chance. DMF funds were intended to compensate people displaced or otherwise affected by mining and to restore land destroyed by mines. Land that is mined, as various studies have proved (here and here), is no longer good for livelihoods based on farming or forests.

The distress many workers endured after a lockdown was announced on 24 March to contain the novel coronavirus led to the declaration two days later of government relief, which allowed states to use 30% of DMF funds for such assistance.

The new notice proposing changes in the Mines Act includes allowing private investment in exploration, thus far prohibited. It is also proposed to remove the distinction between “captive” mining used for specific industries and general mining. Changes in stamp duty on mining leases are also in the offing. 

Why The Notice Is Opposed

Critics said the seven-day extension to the 10-day deadline for objections to the proposed changes in the Mines Act is irrelevant because there is no time to file right-to-information petitions and receive answers. States have not been consulted, and this, said the Mineral Inheritors Rights Association (MIRA), an umbrella group of civil-society organisations, is “an assault” on the spirit of federalism.  

In a 28 August letter to the ministry of mines, national MIRA steering committee coordinator Saswati Swetlena said “a meaningful analysis” of the proposed amendments would only have been possible if “precise wording” of the proposed changes were made available: no source data, calculations and conclusions are apparent in the notice. 

“It would have been appropriate to have the notice in languages spoken in those areas, at a minimum, the official languages of the affected states,” said Swetlana. R Sreedhar of Environics Trust, one of the civil society groups that comprise the MIRA coalition, accusing the government of being “dismissive of the people directly affected by the mines”.

Indu Netam, convenor of the Adivasi Jan Van Adhikar Manch and a member of MIRA said that “every now and then” they hear of legislative changes made without consulting the communities involved. 

“How can they expect Adivasis or forest dwelling communities to access the website and read notices displayed only in English?” asked Netam. “Posters and pamphlets on the ‘Ujwala scheme’ (offering LPG connections to poor women) or ‘Swacch Bharat Abhiyan (cleanliness and sanitation)’ and ‘Digital India’ were displayed in villages with a huge photograph of Prime Minister Modi. Why then cannot critical information that affects our lives reach us?” 

In a 10-page response on 3 September to Veena Kumari Dermal, PhD, a director at the ministry of mines, the Environics Trust made some suggestions: 

Across the country, there are 10,000 legitimate mining leases, but about 80,000 mines operate illegally. Illegal mining operators pay no royalty and make no contribution to the DMF, so the letter suggested that village officials bring mining operations into legal records and fine illegal operators. “Revenues and penalties collected and vehicles seized must be brought into the revenues of the DMF.”

The extraction of minerals affects vegetation, soil and water quality, leaving a lasting impact on communities; while just nine per cent of India’s population is tribal, about 104 million according to the 2011 census, 40% of all mining land is in tribal areas, according to this government report. These are populations especially hard hit by the pandemic, where the DMF could prove a cushion.

Using Mining Royalties To Aid Local Communities

Many large mining states notified DMF rules by 2016, but it took a while for institutional mechanisms to be set up to use this money. In January 2019, the ministry of mines offered recommendations for better implementation and sought the involvement of  gram sabhas or village-level elected bodies in planning and identification of beneficiaries. 

At a January 2019 national meeting on the DMF with district collectors of all mining districts that had collected over Rs 25 crore in the fund, officials noted that only 24% of the funds had been utilized. The minutes of this meeting identified where the funds should not be used—administrative expenses should not exceed 5% of the fund—pollution control and management of mining activities should be the joint responsibility of the licence holder and the government; and the fund should “not be treated as the state budget”.

By August 2019, Chhattisgarh revised the rules and made gram sabha members a part of the governing body of the DMF. Other major mining states have not followed suit. 

DMF funds should be used to address environmental degradation from mining and to improve the living conditions of those affected, said M K Devarajan, PhD, who served as a member of the Rajasthan state human rights commission and pushed the cause of those stricken by silicosis.   

“However, politicians are using these funds for normal developmental work that should be financed from the regular budget,” said Devarajan. “Such use is illegal and unethical.” 

No more than a third of Rs 30,500 crore set aside for healthcare and drinking water in mining-affected districts had been spent over five years, said the CSE April 2020 report, which noted a proclivity to spend money on physical infrastructure, such as school-building renovation

“Different regions have different needs, and with greater participation of the gram sabhas, there will be possibilities of better planning for the long term,” said Chinmay Shalya, a CSE researcher. In Chhattisgarh’s Dantewada district, for instance, hospital staff were recruited with DMF funds and this made a “huge difference to healthcare access”, he said. 

In Chhattisgarh’s Bijapur district, too, DMF money was used to hire doctors.  In Odisha’s Keonjhar district, it helped buy millets to boost child-nutrition programmes and help local farmers; the fund was also used to hike wages of workers in the district under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. 

The Environics letter mentioned previously quotes from a 2017 government report, “State Agrarian Relations and the Unfinished Task in Land Reforms”, to underline the “twin phenomena” of rapid economic growth and an agricultural slowdown since the 1991 liberalization of the Indian economy. 

The Covid-19 pandemic “has very clearly brought out” how an economy built over “a neglect of farming” can be “in the doldrums”, said the letter, noting that agriculture and forestry grew 3.4% in the April-June quarter, as India’s gross domestic product contracted 23.9%, compared to the same quarter last year. 

This made the role of the ministry of mines that much more crucial in assessing whether to extract minerals or let them stay longer in the ground. “Many of us have come to realize that this earth that we live and depend upon,” said the letter, “is truly inherited from our future.”

(Rosamma Thomas is a freelance journalist based in Pune.)