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Unease and foreboding grip Goa’s mining universe, after SC mining judgment on Odisha

06 Aug 2017 07:14am IST

Report by
Sujay Gupta

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06 Aug 2017 07:14am IST

Report by
Sujay Gupta

The ramifications of the order of the two judge bench of the Supreme Court in the Orissa mining case (Common Cause vs Union of India and others), delivered earlier this week, whose inspiration has been Adv Prashant Bhushan, have the potential of having damning consequences for Goa’s mining.

If the basic premise that no lease or operations carried out post February 1994 was valid unless there was an existing Environmental Clearance and extended to all renewals post that, Goa’s mining cold be staring into the abyss.

Post facto Environmental Clearances, arguably the bane of Goa’s mining and in some ways its DNA, have been rejected by the Supreme Court, and if applied across India, will throw into jeopardy the legality of all extractions in Goa post 1994. The 100% recovery of the worth of all these extractions has the potential to effectively cripple and shut down mining and the future of even the biggest mining giants.

If there is one critical take away that will underline all mining operations anywhere in the country it is this. No mining activity can, could have or will take place unless the Environmental Clearance is received before the commencement of operations, and not post facto. The majority of Goan mining leases fell foul of this emphasis.

What is important is how the Supreme Court has dealt with the contention of the mining companies that there were MoEF circulars which sought to regualrise and effectively condone the absence of ECs obtained post 1994. The MoEF had taken the view that such units may be permitted to apply for an EC by 31st March, 1999 which was then extended to 30th June, 2001. In May the deadline for applying for an EC was extended up to 31st March, 2003 as a last and final opportunity to obtain anex post facto EC, was given to mining companies

In the Common Cause case the mining companies contended that it was not obligatory for those who did not expand their mining operations to obtain an EC and in any case post facto approval was permitted till March 31, 2003. The Supreme Court contended that the circulars pertaining to the above were not with them and hence they were not in a position to comment. But what they did say is significant.

The SC referred to a case, also in the Apex court, known as the MC Mehta case which banned mining in the Aravalli Hills in the districts of Faridabad and Gurgaon. It referred to the Apex court’s opinion on the validity of 1994 notification which lays the ground rules of mandatory EC clearances before the commencement of mining.

“We are unable to accept the contention that the notification dated 27-1-1994 would not apply to leases which come up for consideration for renewal after issue of the notification. The notification mandates that the mining operation shall not be undertaken in any part of India unless environmental clearance by the Central Government has been accorded. The clearance under the notification is valid for a period of five years. No mining operation can commence without obtaining environmental impact assessment in terms of the notification.”

What Goa will be closely watching: A) At this point of time there is a heavy air of uncertainty as neither lease holders nor the government nor the legal eagles quite knowing how this will pan out. At this juncture let us introduce two documents the mining industry could rely on, the EIA notification of 2006 and a subsequent circular of 2017 which states “all such mining projects which did not require environmental clearance under the EIA Notification, 1994 would continue to operate without obtaining environmental clearance till the mining lease falls due for renewal, if there is no increase in lease area and/or there is no enhancement of production”.

The Court is clear on this “Post EIA 2006, every mining leaseholder having a lease area of 5 hectares or more and undertaking mining operations in respect of major minerals (with which we are concerned) was obliged to get an EC in terms of EIA 2006”.

B) Another major area which will concern and is likely to affect the Goan mining space is the five year validity of leases. The Supreme Court drew attention to an EIA notification of January 27, 1994, with regard to (i) expansion or modernization of any activity (if pollution load is to exceed the existing one) and (ii) a new project listed in Schedule I to the notification. The notification provides that in case of mining operations, site clearance shall be granted for a sanctioned capacity and shall be valid ONLY for a period of five years from commencing mining operations. This could literally be the proverbial last straw for Goa mining as all leases automatically become invalid. This is regardless of the quantum of extraction permissible in the mining plan or the mining lease and regardless of the duration of the mining lease.

The potential counter to this, if a legal challenge needs to be made is the clarification notification which was issued in 2013 by the Ministry of Environment and Forests. The MoEF had “clarified” that the EC offers mining firms up to five years to commence operations as against the previous (1994 notification) interpretation that an EC is valid only for five years from the commencement of operations”. 

This again will be subject to how the Court, if placed before it, interprets the 2013 notification. It has not escaped the attention of those following the Odisha judgment and the MC Mehta case that the Court has indicated that it feels that there is a cozy relationship between the Ministry of Environment and Forests and the mine owners.

This paragraph of the ‘Common Cause’ judgment related to miming in Odisha is damning. “MoEF was, in a sense, cajoling the mining lease holders to comply with the law and EIA 1994 rather than use the stick. That the mining lease holders chose to misconstrue the soft implementation as a licence to not abide by the requirements of the law is unfortunate and was an act of omission or commission by them at their own peril. We cannot attribute insensitivity, to the MoEF or even to the mining lease holders, to environment protection and preservation, but at the same time we cannot overlook the obligation of everyone to abide by the law.”

The mining lease holders of Goa, may perhaps like  to feel that  the Odisha judgment  does not apply to them and conclude that the NIMBY (Not in my backyard) factor would work since this was an Odisha related judgment. A close scrutiny and the ability to read between the lines and look at the broader intention of the Apex court would conclude that the intention of the highest judiciary was to lay down clear lines of functioning, like a manual, and cut through the ambiguity and vagueness.

But there is a universe which is beyond the courts. The mining lease owners, and to an extent the government as the custodian of the extracted minerals, as natural resources belong to the people, are yet again staring into a tunnel of uncertainty after three years of absolute closure of mining.

And the fear is that if the observations, interpretations and directions of the court, become applicable to Goa and rest of India (if unchallenged or not reversed), Goa could be staring into an economic abyss and be forced to depend on revenue from cash cows like the casino industry and be dependent on central funds. It will surely be a while till alternative revenue streams, industries and jobs and raising the revenue bar through alternative tourism or farming will fructify.

This does not justify, even by a long stretch, that directions and interpretations of the Supreme Court and the boundaries of legal mining, both within and outside the lease and very much during the entire process from extraction to export, can be flouted. 

But the unease and the sense of foreboding is very much palpable in Goa’s shrinking mining universe after the Odisha judgment.

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