Appeal Letter for rejecting the Coal Mines (Special Provisions) Bill 2014

To,
Hon’ble Members of Parliament,
Union of India

Subject: Appeal to reject the Coal Mines (Special Provisions) Bill 2014 on grounds of it being against the core Constitutional and Legislative framework of the country and being driven solely by narrow corporate interests while completely ignoring the peoples’ interests

Dear Hon’ble Member of Parliament,

As you are aware, the Government is planning to introduce and pass the Coal Mines (Special Provisions) Bill 2014 against the backdrop of recent judgment by the Hon’ble Supreme Court cancelling the allotment of 214 coal blocks that had been allotted to various public and private parties since 1993. As you would recall, in its landmark judgment, the Hon’ble Supreme Court had clearly elucidated how mining and utilization of valuable natural resources should strictly be driven by national interests rather than for commercial profiteering by private companies. This was a historic opportunity for the Government to devise visionary, long-term strategies and policy measures to utilize valuable natural resources in the strategic interests of the nation and the people who own these resources.

However, with undue haste, has come up with The Coal Mines (Special Provisions) Bill 2014 to completely nullify the effect of the Supreme Court judgment. This bill not only fritters away this historic opportunity to sincerely reflect and come up with a visionary legislation but moves decisively against the national and peoples’ interests’ in favor of the industry and the corporate, completely disregarding the spirit of the Supreme Court Judgment. Some of the key issues with this new bill are highlighted below:

  1. Opens up commercial mining for sale and private profit – Against the intent of the Supreme Court and completely violating the Coal Mines Nationalization Act, the Bill allows commercial mining for sale or any other purpose with no regard or restriction to specified end-use requirements. This would leave the sector vulnerable to commercial profiteering inviting various hoarders, black marketers, resale agents, etc. and rapid exploitation & frittering away of scarce coal reserves of the country. This would also weaken public sector companies like Coal India Limited.
  2. Attacks the federal structure of the Constitution – The Bill seeks to centralize the entire process of coal allocation without any room for consultation with States or elected local representatives. The role of state governments has been reduced to mere rubber stamps. Mining being and important issue for management of local ecology & environment as well as with huge implications for local population, was placed in concurrent list in the Constitution which envisaged a significant role for States in driving the application process, this was also validated by the recent Supreme Court order. The Bill negates entire role of State in the application process, while leaving them with the responsibility and liability of obtaining social consent.
  3. The bill represents an attack on the judiciary and due process of law – The Bill nullifies the Supreme Court order completely by systematically altering all the key grounds on which Supreme Court had held previous allocations as illegal e.g. formation of joint ventures, mining for strict end-use, no private profiteering, etc. Moreover, the Bill contains provisions to nullify all
    previous orders / decrees of court, tribunals or other authorities passed prior to the Bill / Ordinance with regard to these cancelled mines on grounds of various illegalities & irregularities.
  4. Would weaken public sector companies like Coal India Limited – The Bill contains no provisions to safeguard the interests of public sector undertakings even while allowing unrestricted entry of private sector companies, including in joint ventures. This might lead to cherry-picking of projects against the interests of Coal India Limited by private companies and could result in a rapid concentration of coal in a few hands. The provisions to allow private companies to undertake joint ventures with PSUs will further weaken the PSUs as had been the experience with past coal mine projects that were allocated to PSUs but then formed join ventures with private companies like Adani which then took full control of mining operations.
  5. Makes a mockery of due processes for ascertaining environmental impact and obtaining social consent – The Bill allows for auction of coal mines and realization of proceeds before forest clearances, environmental clearances or gram sabha consents. This is likely to present these approvals / consents with a fait accompli implying wide-scale damage to the environment and violation of rights of vulnerable tribal and farmer communities.
  6. Against the interests of mine workers and labour unions – Promotes large-scale privatization with limited protective mechanisms for the rights of mine workers and labour unions. Moreover, the Bill prohibits any prior claim for wages, bonus, royalty, rent, taxes, provident fund, pension, gratuity or any other dues against the mine, the allottee or the Government removing the scope for remedying any existing irregularity with regard to functioning of the mines.
  7. Seeks to promote large-scale acquisition of land at marginal compensation and limited relief & rehabilitation without consent – Provides for land acquisition using Coal Bearing Areas Act 1957 making a mockery of the consent requirements and provisions for compensation, relief and rehabilitation of the Land Acquisition Act 2013.
  8. Restricts scope for remedying past irregularities with existing mining projects – On the one hand, the Bill allows for automatic vesting of all clearances with the new bidder without any room for rectifying the various existing process irregularities pertaining to these clearances & consents. On the other hand, it restricts any legal or other remedies pertaining to the original allottee only as a personal remedy, making them completely meaningless. It also protects mining operations that are being carried out with complete disregard for all environmental compliance and norms.
  9. Aims to drown opposition and people’s voices against genuine grievances and concerns – The Bill nullifies previous orders/decrees of court, tribunals or other authorities passed prior to the ordinance with regard to these mines. Also contains provisions for heavy penalty of Rs 1-2 lakhs per day for any person accused of causing obstruction or impediment in takeover of mines by the bidder.

The ordinance also fails to incorporate the long standing demand that a thorough environmental and social impact assessment of the entire coalfield be undertaken before splitting it into smaller coal blocks which process tends to undermine the overall ecological, social and environmental impact of the various coal mining projects. Overall, this ordinance will lead to blatant exploitation of scarce natural resources for narrow gains of corporate to the detriment of India’s ecology, environment and climate. This will also result in large scale displacement and violation of rights of marginalized adivasis and poor farmers.

In summary, this is a completely anti-people legislation that sacrifices people’s interests at the altar of corporate profits. We, therefore, urge you to strongly condemn this Bill and scrap it completely while proposing an alternate legislation that is more in-tune with the peoples’ interests.

Regards
Chhattisgarh Bachao Andolan

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The Coal Ordinance – Darker than the mineral beneath

The landmark judgment by the Hon’ble Supreme Court cancelling the allotment of 214 coal blocks had given a historic opportunity for the Government to reflect on its past policies, processes and its corporate-centric agenda adopted in the coal sector since 1993. The judgment itself and the various strictures passed against the Government during the course of the proceedings were an earnest attempt by the Hon’ble Supreme Court to encourage & coax the Government to devise visionary, long-term strategies and policy measures to utilize valuable natural resources in the strategic interests of the nation and the people who own these resources. However, in an unfortunate move, the Government, with undue haste, has come up with The Coal Mines (Special Provisions) Ordinance 2014 which not only fritters away this historic opportunity to reflect but moves decisively against the national and peoples’ interests’ in favor of the industry and the corporate, completely disregarding the spirit of the Supreme Court Judgment.

What the Supreme Court Mentioned in its judgment Provisions of the new Coal Ordinance
States should drive the application process for coal mining in consultation with the Central Government Centralized the whole process of coal allocation without any room for consultation with States or elected local representatives. The role of state governments has been reduced to mere rubber stamps.
No commercial mining in the private sector and coal mining restricted to specified end-use only, by companies who had clearly and already established end-use projects, and limited to the extent of their end-use requirements Allowed commercial mining for sale or any other purpose with no regard or restriction to specified end-use requirements. This would leave the sector vulnerable to commercial profiteering inviting various hoarders, black marketers, resale agents, etc.
Formation of joint ventures among private companies, as well as with state government undertakings to be illegal Allowed joint ventures, including with Central and State Government corporations. This would lead to rapid concentration of coal in a few hands and reduce the competitiveness of the state owned companies.
Formulation of clear and objective criteria for allocating coal blocks to various companies vital to prevent any unfair distribution of coal in the hands of few companies Public auction to be the only criteria for coal allocation without any regard to the other vital considerations like experience in mining, investments in end-use plants, environmental & social performance, etc.
A penalty of Rs 295/- per metric tonne to be levied for all the coal extracted till date by the defaulting mines – a clear message that coal belonged to the people of the country and any private profiteering from the above is illegal and invalid Allowed private profiteering from coal mines which will lead to blatant exploitation of blatant and rapid exploitation of scarce natural resources.

Therefore, it can be clearly seen that while formulating the new coal ordinance, the Government has failed to keep any of the Supreme Courts’ objectives in mind and has moved to completely nullify the above order. It is a clear attack on the independence of judiciary in the country and an attempt to subvert the due judicial processes. In addition, it has introduced several anti-people provisions which would have wide ranging implications with regard to environmental degradation, ecological instability, sustainability of local livelihoods, etc in the mining areas.

New anti-people provisions Likely impact
No need for due forest clearances, environmental clearances or gram sabha consents before auction of coal mines Likely to make a mockery of all due processes for ascertaining and mitigating environmental and social impacts of the mining projects. A large majority of Schedule I coal blocks do not yet possess these consents and clearances.
Automatic vesting of all clearances with the new bidder Does not leave any room for rectifying the various existing process irregularities pertaining to these clearances & consents. Moreover, in the Scheduled Areas, this also represents a violation of the PESA Act that requires consent of Gram Sabhas for any mining activity.
Restriction of any legal or other remedies pertaining to the original allottee only as a personal remedy, and removing the maintainability of land and mine infrastructure from such proceedings Severely restricts the ability to enforce any damages for process irregularities and violations undertaken so far e.g. issues with regard to false clearances, inadequate rehabilitation and resettlement packages, etc. It also protects mining operations that are being carried out with complete disregard for all environmental compliance and norms.
Nullify previous orders/decrees of court, tribunals or other authorities passed prior to the ordinance with regard to these mines Nullifies previous NGT orders cancelling EC/FC clearances as well as any orders / strictures passed by various courts regarding irregularities in existing mines like those pertaining to issues with land acquisition, compensation, resettlement & rehabilitation, worker issues, etc.
Prohibits any claim for wages, bonus, royalty, rent, taxes, provident fund, pension, gratuity or any other dues against the mine, the allottee or the Government for the period prior to the bidding Hurts the interests of all mine workers and trade unions removing the scope for remedying any existing irregularity with regard to functioning of the mines
Provides for use of the draconian Coal Bearing Areas (Acquisition and Development) Act, 1957 for all land acquisition for these coal blocks Makes a mockery of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 passed by the Parliament last year by using an old and archaic law to reduce the liabilities & compensation requirements for the private companies.
Heavy penalty of Rs 1-2 lakhs per day for any person accused of causing obstruction or impediment in takeover of mines by the bidder Targeted at drowning the people’s voices and opposition to such mining projects and preventing the community and civil society from highlighting genuine grievances against these projects.

The ordinance also fails to incorporate the long standing demand that a thorough environmental and social impact assessment of the entire coalfield be undertaken before splitting it into smaller coal blocks which process tends to undermine the overall ecological, social and environmental impact of the various coal mining projects. It also does not take into bearing India’s environmental commitments with regard to climate change or the recommendations of the Xaxa committee report submitted to the Ministry of Tribal Affairs.

This ordinance is likely to have a significant bearing on the state of Chhattisgarh which house 42 of the Schedule 1 coal blocks as per the ordinance. In addition, over 100 additional coal blocks have been mapped for allocation which might come up for allocation soon. These are also the blocks where a large number of serious process violations and irregularities were found with regard to the original allotments. Any measure to auction these coal blocks without first rectifying them is fraught with serious environmental, ecological and social consequences:

  • Most of these coal blocks lie in ecologically sensitive areas with rich-biodiversity and a substantial adivasi population i.e. critically dependent on forests. Many of these blocks lie in the “No-Go” zones identified by the Ministry of Environment & Forests in 2010 which no-go zones constitute only 8.11% of the total coal bearing area and 11.50% of the explored coal bearing area in the country.
  • The entire coal belt in Chhattisgarh lies under 5th Schedule of the Constitution of India where consent of Gram Sabhas is mandatory before proceeding with any mining activity. However, this provision has been blatantly violated or abused in most of the cases of current allotments.
  • The Forest Rights of the adivasis and other forest dwellers are yet to be recognized and serious irregularities have been found in the current process of recognition of individual and community forest rights. This was also a pre-requisite for any land acquisition but was consistently violated in the case of current allotments.
  • The Environmental and Forest clearances for many of the existing coal blocks have also been arbitrary and illegal and have already been struck down by the National Green Tribunal and other courts in the country.
  • Moreover, the existing mining operations are being carried out with complete disregard to all environmental compliance and norms e.g. the absence of green belts, high and contaminated dust levels, high levels of water pollution, mining being very close to the living habitation, etc which are causing wide-scale damage to houses, land and livelihood.
  • Serious irregularities were also found in the existing land acquisition, compensation, relief & rehabilitation processes followed by the current allottees of the coal blocks. These are being disputed in various courts across the country.

Chhattisgarh Bachao Andolan believes that this ordinance is against the interests of the people or nation-building and is driven solely by vested corporate interests. It is also a strong attack on the independent judicial process in the country. We wish the Government had applied more thought into this very critical and important issue and not displayed such an urgency to protect and serve narrow commercial interests. Therefore, we strongly condemn this ordinance and request the Hon’ble elected representatives to scrap the same in the Parliament and propose an alternate legislation that is more in-tune with the peoples’ interests.

Our Charter of Demands

  1. There should be no mining for commercial gains or private profiteering. All mining should be restricted to strict end-use for domestic needs based on a thorough assessment of the country’s coal requirements. Any decisions for coal mining should also take into account India’s abysmal performance on parameters for climate change.
  2. No joint ventures, especially those with public sector undertakings, should be allowed in mining which would lead to blatant misuse of scarce natural resources by private corporations and weaken the public sector undertakings like CIL. CIL should be accorded priority in all coal block allocations in the country.
  3. There should be a clear prioritization framework for allocation of coal blocks in the country taking into account the varied ecological, environmental and social impacts of such mining. There should be no mining in dense and bio-diversity rich forest areas of the country which constitute less than 10% of total coal reserves in the country.
  4. A comprehensive composite study of all the major coalfields in Chhattisgarh should be conducted to assess the overall environmental and socio-economic impact of various mining projects on the rich bio-diversity, dense forests, wildlife habitation, resources and livelihoods of the adivasis and other forest communities, water availability, soil fertility, air pollution, etc.
  5. The coal blocks where the complete process of obtaining gram sabha consents, environmental clearance and forest clearances has not been completed should not be put up for auction. Decentralized decision making process involving extensive consultations with local community should be followed before auction. The PESA Act should be fully complied with and the consent of gram sabhas obtained for any mining in the Scheduled Areas. All community and individual forest rights of the adivasis & other forest dwellers should be recognized.
  6. Local indigenous adivasis and other traditional forest dwellers should be treated as key stakeholders in any development activity in the region, including mining and should thus partake of the fruits of development. A new mining amendment bill should be drafted to recognize this on lines of the MMDR Amendment Bill 2011 which needs to be debated and finalized. Any further process for land acquisition should be as per the bill. In the interim, the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 should be fully complied with for all land acquisition for coal mining.
  7. All irregularities in existing mining projects should be rectified immediately, including full completion of the process of compensation, relief & rehabilitation, before any takeover by another player. Mining should be allowed to commence only once all environmental norms are strictly complied with and existing faults fully rectified. Ambiguities in current environmental laws which allow companies to get away from their environmental responsibilities, e.g. proximity of mining to habitation, etc. should also be removed at the earliest.

Note: Press Release by Chhattisgarh Bachao Andolan on 28th October 2014