DEBABRATA MOHANTY, The Financial Express
Thursday, Nov 08, 2012
Bhubaneswar: When Union Minister of State for Chemicals and Fertilisers Srikant Jena described Orissa’s mining scam as bigger than those of Goa and Karnataka put together, it might have been only a figure of speech. But indication of how big it could be has come now, with a penalty demand note of Rs 68,000-odd crore sent by the Orissa steel and mines department to the holders of 103 mining leases for excess mining between 2000 and 2010.
The showcause and demand notices to companies such as Tata Steel, Essel Mining, Rungtas and Indrani Patnaik for extracting iron ore and manganese beyond the permissible limit set by the authorities came almost three years after the mining scam had broken out in the state. Incidentally, the order came when members of the Justice M B Shah Commission, now probing the scam, were touring the state for the third time in less than a year.
State mines secretary Rajesh Verma said the companies have been been issued notices under Section 21(5) of the MMDR Act for crossing the limit set by the Indian Bureau of Mines, the Orissa Pollution Control Board and other regulatory bodies. Section 21(5) of the MMDR Act says, “Whenever any person raises, without any lawful authority, any mineral from any land, the state government may recover from such person the mineral so raised, or, where such mineral has already been disposed of, the price thereof, and may also recover from such person, rent, royalty or tax... for the period during which the land was occupied by such person without any lawful authority.”
The penalty notices followed a decision by the steel and mines department in July after the department found that 104 mines had raised ore in excess of the quantity approved by Indian Bureau of Mines in the mining plan/scheme at various times during the period of 10 years. Besides, 190 mines were found to have produced over and above the limit approved under the provisions of Environment (Protection) Act, 1986. Incidentally, state-owned PSU Orissa Mining Corporation was also slapped a showcause notice for excess production.
Officials in the department said that as per the existing rules, any miner, before digging, needs to obtain from the Orissa Pollution Control Board a consent-to-operate (CTO) certificate that stipulates the quantity of ore that can be mined in a year. The quantity has to be approved by the IBM.
Mining companies, an association of miners and former mining department officials said, however, that the government order is flawed and can be challenged in the mining tribunal on the argument that a Union Mines Ministry notification of July 26, 2012, making changes in Mineral Concession Rules, 1960, will have rendered the state’s present showcause notice null and void.
Under the changed rules, the Centre defines illegal mining as any reconnaissance, prospecting or mining undertaken in any area without holding a permit, a licence or a lease as required under sub-section 1 of section 4 of the Act. For mining leaseholders, the rules say violation of any rules other than those under section 23C of the Act within the lease area would not constitute illegal mining.
“As per changes in the rules of MMDR Act in July, overproduction in the leasehold area is not illegal mining. Illegal mining is only when ore is extracted outside the leasehold area,” said B K Mohanty, former director in the mines department and now a member of a society of miners. “Besides they have already paid the royalty and other charges. So how did the state government find this illegal now?”
State mining officials argue that the changes in the MC Rules can’t undo the illegal mining done by these miners 10 years ago. “How can a current change in rules justify the illegalities committed by these companies 10 years ago? The changes can be applicable only from July onwards,” said a department official.
Late awakening
Official documents accessed by The Indian Express indicate that officials of several departments including forest and environment and steel and mines, as well as the Orissa Pollution Control Board, failed to check companies when they were apparently flouting the rules. “All miners submit their monthly figures of ore extraction to the IBM. It’s so easy to find out if a particular mine has crossed the limit,” said the owner of a small iron ore mine in Joda. Essel Mining was sent a closure notice by the OPCB’s regional office in Keonjhar district on January 24, 2006, for violating conditions and running two screening plants inside the forest area without mandatory environmental clearance. It did not shut shop.
The divisional forest officer of Keonjhar in January 2011 had recommended that the principal chief conservator of forests, Orissa, move the Centre to withdraw forest clearance to Sarada Mines, and that the state government cancel Sarada’s lease for Thakurani Iron Ore Mines. The DFO sent several reports of the company having violated the Forest Conservation Act,1980.
Under an approved mining plan, Indrani Patnaik’s company was allowed to raise 2.10 lakh tonnes per annum but in three years it extracted 28 lakh tonnes, paying royalty and other taxes for every tonne. Her husband D R Patnaik, who holds the power of attorney for the mines, told The Indian Express: “It’s true we might have committed some irregularities, but there was no illegal mining. If we had committed any illegalities, how did the officials accept the royalty amount we paid? Nobody raised a voice then.”
Steel and mines department officials privately admit that the state was aware of excess production since 2003 as mining returns are filed with the IBM every month. “It was not as if we discovered just now. The first reports of over-mining came in 2003,” said an official.
Biswajit Mohanty of Transparency International India, who was one of the petitioners in the Orissa High Court demanding a CBI probe into the mining scam, agreed that the state government’s order may have too many flaws. “They have calculated the penalty taking the average price of iron ore for that period. But the price of iron ore changes every quarter and so due care should have been taken to arrive at the correct figure. The moment the companies move the Mining Tribunal, the orders would be stayed,” he said.
Mohanty alleged mines ministry officials were in collusion with the errant miners as the ministry had changed the MC rules. “How can rules be changed to negate the relevant Act? In this case the change in rules negated section 21(5) of the MMDR Act,” he said.
Officials & miners
If an area to be mined comes under a forest area, the state forest department recommends a forest diversion to the Ministry of Environment and Forests under the Forest Conservation Act,1980. The MoEF’s forest and advisory committee can then okay the forest diversion, following which companies go ahead with mining. Before diversion, the companies have to take up compensatory afforestation.
Following RTI applications by Biswajit Mohanty to the forest and environment department, details came out about vehicles being provided by miners to forest officials. The replies showed that successive officials in the state forest and environment department and the office of the principal chief conservator of forests rode Scorpios, Boleros, Tata Spacio and air-conditioned Ambassador cars provided by the mining companies. These were supposedly to monitor and protect the compensatory afforestation plantations being done by the mining companies, according to letters sent by forest officials to these companies.
The Tiringpahar manganese mines of Tata Steel operated between 2000-01 and 2004-05, allegedly without environmental clearance from the MoEF, yet the authorities continued to issue transport permits to lift material. The State-level Enforcement Squad detected this during a raid in 2011, after which mining was stopped.
In Keonjhar district, the DFO of that forest division issued a showcause notice to Essel Mining and Industries on December 23, 2010, for seven violations at its Kasia Iron and Dolomite Mines that were recorded by them during inspection.
The BJP asks what the government has done in the last three years after the scam was unearthed. “Excess mining could not have been done without the collusion of officials of the mining, forest and environment, railways and revenue departments. What action has been taken against them?” said state BJP vice-president Ashok Sahoo.
Thursday, Nov 08, 2012
Bhubaneswar: When Union Minister of State for Chemicals and Fertilisers Srikant Jena described Orissa’s mining scam as bigger than those of Goa and Karnataka put together, it might have been only a figure of speech. But indication of how big it could be has come now, with a penalty demand note of Rs 68,000-odd crore sent by the Orissa steel and mines department to the holders of 103 mining leases for excess mining between 2000 and 2010.
The showcause and demand notices to companies such as Tata Steel, Essel Mining, Rungtas and Indrani Patnaik for extracting iron ore and manganese beyond the permissible limit set by the authorities came almost three years after the mining scam had broken out in the state. Incidentally, the order came when members of the Justice M B Shah Commission, now probing the scam, were touring the state for the third time in less than a year.
State mines secretary Rajesh Verma said the companies have been been issued notices under Section 21(5) of the MMDR Act for crossing the limit set by the Indian Bureau of Mines, the Orissa Pollution Control Board and other regulatory bodies. Section 21(5) of the MMDR Act says, “Whenever any person raises, without any lawful authority, any mineral from any land, the state government may recover from such person the mineral so raised, or, where such mineral has already been disposed of, the price thereof, and may also recover from such person, rent, royalty or tax... for the period during which the land was occupied by such person without any lawful authority.”
The penalty notices followed a decision by the steel and mines department in July after the department found that 104 mines had raised ore in excess of the quantity approved by Indian Bureau of Mines in the mining plan/scheme at various times during the period of 10 years. Besides, 190 mines were found to have produced over and above the limit approved under the provisions of Environment (Protection) Act, 1986. Incidentally, state-owned PSU Orissa Mining Corporation was also slapped a showcause notice for excess production.
Officials in the department said that as per the existing rules, any miner, before digging, needs to obtain from the Orissa Pollution Control Board a consent-to-operate (CTO) certificate that stipulates the quantity of ore that can be mined in a year. The quantity has to be approved by the IBM.
Mining companies, an association of miners and former mining department officials said, however, that the government order is flawed and can be challenged in the mining tribunal on the argument that a Union Mines Ministry notification of July 26, 2012, making changes in Mineral Concession Rules, 1960, will have rendered the state’s present showcause notice null and void.
Under the changed rules, the Centre defines illegal mining as any reconnaissance, prospecting or mining undertaken in any area without holding a permit, a licence or a lease as required under sub-section 1 of section 4 of the Act. For mining leaseholders, the rules say violation of any rules other than those under section 23C of the Act within the lease area would not constitute illegal mining.
“As per changes in the rules of MMDR Act in July, overproduction in the leasehold area is not illegal mining. Illegal mining is only when ore is extracted outside the leasehold area,” said B K Mohanty, former director in the mines department and now a member of a society of miners. “Besides they have already paid the royalty and other charges. So how did the state government find this illegal now?”
State mining officials argue that the changes in the MC Rules can’t undo the illegal mining done by these miners 10 years ago. “How can a current change in rules justify the illegalities committed by these companies 10 years ago? The changes can be applicable only from July onwards,” said a department official.
Late awakening
Official documents accessed by The Indian Express indicate that officials of several departments including forest and environment and steel and mines, as well as the Orissa Pollution Control Board, failed to check companies when they were apparently flouting the rules. “All miners submit their monthly figures of ore extraction to the IBM. It’s so easy to find out if a particular mine has crossed the limit,” said the owner of a small iron ore mine in Joda. Essel Mining was sent a closure notice by the OPCB’s regional office in Keonjhar district on January 24, 2006, for violating conditions and running two screening plants inside the forest area without mandatory environmental clearance. It did not shut shop.
The divisional forest officer of Keonjhar in January 2011 had recommended that the principal chief conservator of forests, Orissa, move the Centre to withdraw forest clearance to Sarada Mines, and that the state government cancel Sarada’s lease for Thakurani Iron Ore Mines. The DFO sent several reports of the company having violated the Forest Conservation Act,1980.
Under an approved mining plan, Indrani Patnaik’s company was allowed to raise 2.10 lakh tonnes per annum but in three years it extracted 28 lakh tonnes, paying royalty and other taxes for every tonne. Her husband D R Patnaik, who holds the power of attorney for the mines, told The Indian Express: “It’s true we might have committed some irregularities, but there was no illegal mining. If we had committed any illegalities, how did the officials accept the royalty amount we paid? Nobody raised a voice then.”
Steel and mines department officials privately admit that the state was aware of excess production since 2003 as mining returns are filed with the IBM every month. “It was not as if we discovered just now. The first reports of over-mining came in 2003,” said an official.
Biswajit Mohanty of Transparency International India, who was one of the petitioners in the Orissa High Court demanding a CBI probe into the mining scam, agreed that the state government’s order may have too many flaws. “They have calculated the penalty taking the average price of iron ore for that period. But the price of iron ore changes every quarter and so due care should have been taken to arrive at the correct figure. The moment the companies move the Mining Tribunal, the orders would be stayed,” he said.
Mohanty alleged mines ministry officials were in collusion with the errant miners as the ministry had changed the MC rules. “How can rules be changed to negate the relevant Act? In this case the change in rules negated section 21(5) of the MMDR Act,” he said.
Officials & miners
If an area to be mined comes under a forest area, the state forest department recommends a forest diversion to the Ministry of Environment and Forests under the Forest Conservation Act,1980. The MoEF’s forest and advisory committee can then okay the forest diversion, following which companies go ahead with mining. Before diversion, the companies have to take up compensatory afforestation.
Following RTI applications by Biswajit Mohanty to the forest and environment department, details came out about vehicles being provided by miners to forest officials. The replies showed that successive officials in the state forest and environment department and the office of the principal chief conservator of forests rode Scorpios, Boleros, Tata Spacio and air-conditioned Ambassador cars provided by the mining companies. These were supposedly to monitor and protect the compensatory afforestation plantations being done by the mining companies, according to letters sent by forest officials to these companies.
The Tiringpahar manganese mines of Tata Steel operated between 2000-01 and 2004-05, allegedly without environmental clearance from the MoEF, yet the authorities continued to issue transport permits to lift material. The State-level Enforcement Squad detected this during a raid in 2011, after which mining was stopped.
In Keonjhar district, the DFO of that forest division issued a showcause notice to Essel Mining and Industries on December 23, 2010, for seven violations at its Kasia Iron and Dolomite Mines that were recorded by them during inspection.
The BJP asks what the government has done in the last three years after the scam was unearthed. “Excess mining could not have been done without the collusion of officials of the mining, forest and environment, railways and revenue departments. What action has been taken against them?” said state BJP vice-president Ashok Sahoo.
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