Loot in Bellary

A Supreme Court-appointed committee finds large-scale illegal mining in Karnataka with the connivance of officials.

THE issue of illegal mining in Karnataka and the large-scale corruption in political and public life resulting from it refuses to stay away from the headlines. The sordid tale of mining-linked corruption (Cover Story; Frontline, July 16, 2010) has had a few recurring characters a beleaguered but defiant Bharatiya Janata Party (BJP) Chief Minister B.S. Yeddyurappa; the Bellary billionaires G. Janardhana Reddy, G. Karunakara Reddy and G. Somashekara Reddy and their associate B. Sriramulu; the Lokayukta, Justice N. Santosh Hegde, and his team; and some dedicated activists who have been brave enough to ask questions. The people of the State find the audacity of the Reddy brothers, two of them Ministers in the State Cabinet and one the Chairman of the Karnataka Milk Federation, and the helplessness of Yeddyurappa in reining in his party colleagues incredulous, even as they watch with hope the dogged efforts of the Lokayukta, the old-fashioned crusader against corruption, whose final report on illegal mining is expected to be submitted soon.

The Supreme Court-appointed Central Empowered Committee (CEC), which submitted its interim report on April 15, has vindicated, in clear and forceful language, the general perception of colossal illegal mining in Karnataka, particularly in Bellary district. The first part of the Lokayukta report submitted to the State government in 2008 had pointed to many of the issues raised by the CEC report, and subsequent investigations by journalists and vociferous demands by opposition leaders kept the issue alive although little was done to curb the mining.

The CEC was asked to investigate the issue on February 25, 2011, when a writ petition (WP CIVIL No. 562 of 2009) filed by Samaj Parivartana Samudaya (Society Improvement Organisation), a Dharwad-based non-governmental organisation headed by S.R. Hiremath, came up for hearing. Hiremath told Frontline that he petitioned the Supreme Court because of the large-scale damage done to the environment and the lack of social justice caused by illegal mining in Bellary, and, at a smaller level, in Anantpur district in Andhra Pradesh.

Our organisation has worked in Bellary and we have seen the total breakdown in governance that illegal mining has caused in Karnataka. From the time the iron ore is mined until it reaches the various ports there is absolutely no law binding their activities. We went ahead with the writ petition also because of the failure of the opposition parties to deal with the problem constructively, Hiremath said.

The three-member CEC team, comprising P.V. Jayakrishnan (Chairman), M.K. Jiwrajka (Member-Secretary) and Mahendra Vyas, submitted its interim report after consultations with several officials in Karnataka and personal investigation into the questions raised in the writ petition. According to the Lokayukta, the team also had a meeting with him to discuss the methods adopted in his investigation, and his findings.

The CEC report is significant in that it was ordered by the Supreme Court and that swift action has followed its submission. Karnataka filed an affidavit in response to the CEC's findings. A 1,000-word report prepared by the State as part of the affidavit was submitted to the court on April 21. For the first time, the Chief Minister went on record to say that there were instances of illegal mining in Karnataka. Yeddyurappa had earlier denied the existence of illegal mining operations, especially after he had banned the export of iron ore from the State in July 2010, but refused to concede the demand for a Central Bureau of Investigation (CBI) inquiry.

Grim assessment

Yeddyurappa's reluctant confession might have resulted from the fact that the Lokayukta's investigations have shown that iron ore is continuing to be extracted from the mines in Bellary. When Frontline asked the Lokayukta whether the ban on the export of iron ore had had any impact, he said the quantity exported continued to be the same. Earlier, when iron ore exports were allowed, the miners used ports on the coast of Karnataka, like Mangalore, but now since the ban, all they do is use less frequented routes through the forests bordering Bellary before they enter Andhra Pradesh and then use the ports on the eastern coast such as Visakhapatnam and Chennai. Money was being made by officials in Karnataka earlier; now money is being made by officials in Andhra Pradesh, he said. His grim assessment is backed by the teams of investigators with whom the Lokayukta is continuously in touch.

This state of affairs is brought out vividly in the CEC's report. According to information provided in the report, there are 266 iron ore mines in Karnataka, of which 134 are located in forest areas, while the rest are in non-forest areas. Bellary district, which is often pejoratively described as the Republic of Bellary' run by the Reddy brothers, has 148 mines, of which 98 are in the forest area. The total iron ore reserves in Karnataka are estimated to be 1,148 million tonnes, according to figures provided by the Indian Bureau of Mines in 2005. At the official rate of extraction, these resources are expected to last for 20 years, but the report makes a grim assessment when it says that if the figures of illegal mining is added, which is substantial, the resources will get exhausted in a much shorter period and raises serious questions of inter-generation equity.

A similar point was made by Paranjoy Guha Thakurta, an independent journalist who has made a documentary film titled Blood and Iron on the connection between criminality, illegal mining and politics in Karnataka and Andhra Pradesh. He said: Once the iron ore is taken away, it is never going to be replenished. If you look at the 2G scam, of course, the sum is huge, but it is a notional loss. But illegal mining is causing a serious and real loss to the exchequer. There is no doubt that this is the biggest case of natural resources being looted in the country.

Thakurta's film has been screened in Bangalore, at the India Habitat Centre in Delhi, and on a major television news channel. It is gaining popularity for its unique method of chronicling the serious situation prevailing in Karnataka and in a few districts of Andhra Pradesh. It has been translated into Malayalam, Kannada and Bengali to cater to a large audience.

A large part of iron ore mining in Karnataka is illegal because it is practised in clear violation of the Forest (Conservation) Act, 1980; the Mines and Minerals (Development and Regulation) Act, 1957; and the Karnataka Minor Mineral Concession Rules, 1994. The CEC's report dwells mainly on how mining is causing serious damage to the environment. It also comments on how there is no regulation of the extent of iron ore that can be extracted and how it is leading to an unsustainable load on the supporting infrastructure, including roads.

It states: The present system of allowing individual mines to decide their level of production, without any linkages to overall mineral availability, status of roads, maximum number of trucks that should be permitted, requirement of the industries in the State and also the adjoining States, is not a very effective way of operating a valuable mineral which very soon may become scarce. Similarly, a firm policy about the extent of mineral that could be allowed to be exported from the State/specific areas needs to be taken.

The report also emphasises how the State boundary between Andhra Pradesh and Karnataka passing through the Bellary Reserve Forest has been tampered with. A number of iron ore mines are operating in the areas adjoining the disputed inter-State boundary, says the report. The first part of the Lokayukta report, submitted in December 2008, also made similar observations about how Obulapuram Mining Company (OMC, owned by the Reddy brothers), which had a mining lease in Andhra Pradesh, in an area bordering Bellary district, encroached into Karnataka by entering into a raising contract agreement (RCA) with Hind Traders, a mining lessee on the Karnataka side of the border.

An RCA, as described in the Lokayukta report, is an agreement entered into between the holder of a mining lease/quarrying lease and a contractor providing entrustment of work for carrying out mining of minerals/quarrying of minor minerals and to sell them or to use them for self-consumption on payment of premium or consideration to the holder of the mining lease/quarrying lease. This concept is not recognised in any piece of legislation relating to mining.

The CEC report also makes a reference to the report of the Lokayukta and says how no follow-up action or corrective measures were taken on its findings. It reiterated that illegal mining was done by raising contracts, illegal granting of temporary transport permits, committing large-scale illegalities in the transportation of iron ore, granting stock yard licences and through ineffective transport permit systems and improper attendance in court cases pertaining to instances of illegal mining.

Questions had also been raised about the behaviour of the Department of Mines and Geology in Karnataka and the State government for de-reservation of forest areas to carry out mining.

The CEC's report states: The CEC would like to place on record that during the last nearly nine years of the existence of the CEC, it has dealt with a number of cases involving illegal mining such as in Haryana, Rajasthan, Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Orissa. In many of these cases the extent of illegal mining was found to be quite extensive. However, all these cases pale into insignificance when compared to the illegal mining on colossal scale that has taken place in the State of Karnataka, particularly in district Bellary and, that too with the active connivance of the officials of the concerned departments and also the public representatives.

The report says that the Deputy Commissioner, the Deputy Conservator of Forests, the Superintendent of Police and the Director of the Department of Mines in Bellary brazenly colluded with the mine leaseholders before they were transferred. An earlier move to transfer them had almost precipitated the fall of the Yeddyurappa government as the Reddy brothers had seen that move as interference in their operations in Bellary.

The subsequent parts of the report deal in detail with the grant of illegal mining leases in Sandur, illegal mining operations in forest areas and encroachment of forest areas and looks at specific illegalities committed by mining companies operating in the Bellary region.

A couple of years ago, the Chief Minister had conceded in a private meeting with journalists how his hands were tied when it came to dealing with the Reddy brothers. The CEC report clearly alludes to the powerful brothers. The sealed documents submitted along with the report are supposed to contain material that directly names them. It is surprising that the politically influential brothers hardly ever engage with the media to clarify their position. In the past, they have tried to sabotage the functioning of the Yeddyurappa government to have their demands met, and this has made the Chief Minister even sob in public. Activists and bureaucrats have also made stray allegations of violence against them.

Thakurta told Frontline: It was relatively less difficult for me to make a film about illegal mining in Karnataka because I am from Delhi. It wouldn't have been possible for me to make this film if I was a journalist in Bellary or even in Bangalore, you can never say what would've happened. Even now I fear for my children. This shows the culture of intimidation at work in Karnataka.

One person who indirectly took on the Reddy brothers is the Kannada film actor Upendra. In his film Super, he directs the public's fury at the incredible power of the brothers and mocks the ineffectual Chief Minister. Super went on to become a box-office hit in Karnataka, perhaps proving the latent support for any move against the Reddy brothers.

The Lokayukta, while refusing to name the Reddy brothers, drops enough hints about who he is talking about when he discusses the issue of illegal mining. The Lokayukta has promised that his second and final report will be submitted within the next few weeks, but it is a promise he has been making for the past two years. Going by the thorough investigation that was done for and the findings of the first part, there is no doubt that the second report will provide a comprehensive account of the nature and method of illegal mining in Karnataka.

Some big names figure in this report, the Lokayukta told Frontline. But the delay in the submission is cause for worry. The Lokayukta is to retire in August. Is he just waiting for the right time?