Mines and Ministers

Chief Minister B.S. Yeddyurappa gives a clean chit to the Reddy brothers even as Opposition parties demand their removal from the Cabinet.

in Bangalore

TROUBLES have haunted Karnataka Chief Minister B.S. Yeddyurappa ever since he led the Bharatiya Janata Party (BJP) to its first major political victory south of the Vindhyas in 2008. The leader, who has spent over 35 of his 40 years in public life on the Opposition benches, is finding it a lot more difficult to run a government even with a good working majority. In October 2009, dissident activities from a section of the party legislators, spearheaded by the influential Reddy brothers of Bellary, almost toppled him. He shed tears in public, yielded to pressure and reached a compromise to stave off the crisis.

Yeddyurappa's battle of one-upmanship with the Reddy brothers G. Janardhana Reddy (Tourism Minister), G. Karunakara Reddy (Revenue Minister) and G. Somashekara Reddy (a Member of the Legislative Assembly) and their confidant, Health Minister B. Sriramulu is no secret. That he is powerless to rein in the brothers, who enjoy a huge political clout and are financially powerful, is also no secret.

The Opposition parties have called illegal mining of minerals in Karnataka the biggest scam of the century and demanded a Central Bureau of Investigation (CBI) inquiry and the removal of the Reddy brothers, who are facing charges of illegal mining, and Sriramulu from the Cabinet. Yeddyurappa gave a clean chit to the brothers claiming that there was no evidence against them and even ruled out their removal from the Cabinet. The timing of the defence of the iron-ore barons is ironical since on July 19 the State government issued a notification directing the Karnataka Lokayukta (ombudsman), Justice N. Santosh Hegde, to inquire into the allegations of illegal mining and the export of iron ore between 2000 and July 2010.

Erasing boundaries

The latest challenge before the Yeddyurappa government is the illegal extraction and transportation of iron ore contravening forest rules, and its export, mainly to China, through ports in Karnataka, Tamil Nadu, Andhra Pradesh and Goa. That the Bellary mining lobby has in recent years been dictating the direction of politics in Karnataka is obvious, but under the BJP government its power and reach has become more overt. It has also been instrumental in disturbing the markings of the Bellary Reserve Forest and the boundary of two ore-rich villages that lie on either side of the Karnataka-Andhra Pradesh boundary. Further, the lobby, which stands accused of intimidation or finding its way out of every statutory requirement of the Forest, and Mines and Geology Departments, is also alleged to have staffed the district's administration with officers loyal to it.

A senior forest official who has knowledge of the illegal mining activities said: It is very difficult to mark the area accurately, whatever is done can only be a compromise. Field notebooks of the survey numbers concerned are there, but many are incomplete. Also, while the outer boundary of the particular survey number is there, the internal markings indicating which reserve forest land or village/revenue land can be mined is not available. This has helped the mafia to mine illegally. We have to re-establish the boundary with either the help of the British survey map of the region drawn in 1896 or the topography sheet of the mid-1970s. Once the Survey of India demarcates the boundary, we can find out where the encroachments are.

Officials in the Survey of India say that they can demarcate a boundary only as per the drawings provided to them by the Revenue Department. According to them, revenue records in areas where mining is done on the Karnataka-Andhra Pradesh border are either missing or are vague or predate the formation of the States or, worse still, are doctored. They say that in many areas a ridge line indicating the border is no longer visible on the ground since the ridge itself has disappeared thanks to illegal mining.

Can the BJP afford to antagonise the Reddy brothers, who are believed to have bankrolled the campaign of a few BJP legislators in the May 2008 election, especially those from the districts of Bellary (where the BJP won eight of the nine seats), Raichur and Koppal, and even further afield in Bagalkot and Chitradurga.

While it is true that the Reddys and Sriramulu neither own nor operate any mines in Karnataka (they do own four mines in Andhra Pradesh), their meteoric rise both politically and financially has raised questions about conflict of interest. During the much-touted Global Investors Meet in May, the biggest project (worth Rs.35,000 crore) to be cleared was that of the Reddys. A company owned by them plans to set up a steel and power plant with a capacity of six million tonnes per annum in Bellary district. It will be bigger than Mittal Steel or Posco's Precious Limited.

Janardhana Reddy sees no conflict of interest in pursuing his mining interests and his ministerial duties. He even cites a Supreme Court ruling, which he claims supports his stand. But Governor Hans Raj Bhardwaj certainly does not agree. On receipt of a complaint from Congress legislator K.C. Kondiah seeking disqualification of the Reddy brothers and Sriramulu from the Cabinet for conflict of interest, Bhardwaj sent a notice to them seeking explanation.

The Reddys did not turn up at the Raj Bhavan and instead sent their advocate, who failed to convince the Governor. Bhardwaj then referred the complaint to the Election Commission (E.C.), explaining that under both the Constitution and the Mining and Minerals Regulation Act no Minister could use his office to make competitive profits. The E.C. has issued a 150-page notice to the Reddys asking for an explanation.

Lokayukta's resignation

The latest round of troubles for Yeddyurappa began on June 23 when Santosh Hegde resigned from his post (14 months before completing his term), accusing the government of being indifferent to the Lokayukta institution. He cited a series of reasons for his resignation the government not heeding his plea to fill up the post of Upa Lokayukta, its inaction over his report (submitted in December 2009) on illegal mining and the Chief Minister reneging on his assurance that officers suspended on the Lokayukta's recommendation would not be reinstated. The last straw, he said, was a Minister's recommendation to suspend one of his honest officers. On July 3, at the intervention of senior BJP leader L.K. Advani, Hegde withdrew his resignation.

In January, during a tour of Karwar, Hegde had received complaints from the public about illegal mining. He asked one of his senior officers to investigate the matter. In the last week of February, the officer conducted raids and seized 99 trucks with illegally mined ore and 40 sacks of forged documents near the Belekere port. The Lokayukta informed the Mines and Geology Department of the seizure, but no action was forthcoming.

Hegde then asked the Deputy Forest Officer of Karwar, R. Gokul, to seize the ore from the Belekere port and file a first information report. The forest officer, during his raid, found that 8.5 lakh tonnes of ore, purchased for export by 11 companies, had arrived at the port without valid permits. The companies filed a writ petition in the High Court questioning the seizure. But even as the High Court was deciding on the matter, around 6 lakh tonnes of ore was shipped out.

Strangely, Minister of Ports and Ecology Krishna Palemar suggested that Gokul be placed under suspension. This angered the Lokayukta, and he submitted his resignation.

Under pressure, the State government on July 10, within a week after Hegde withdrew his resignation, granted suo motu powers to the Lokayukta to investigate all cases of corruption, favouritism and nepotism involving public servants. Earlier, the Lokayukta had lacked suo motu powers to investigate bureaucrats earning a monthly salary of Rs.20,000 or more.

But the government stayed short of equipping the Lokayukta with suo motu powers to investigate the administrative misconduct by the political class, including the Chief Minister, Cabinet Ministers, legislators, and chairmen and members of boards, corporations, government companies and cooperative societies nominated by it.

Governor's intervention

Hegde's resignation catapulted the illegal mining issue to centre stage and galvanised the Opposition and, interestingly, the Governor to take on the illegal mining lobby. Bhardwaj, after calling on President Pratibha Patil, told journalists that he had, without naming the Reddy brothers and Sriramulu, asked Yeddyurappa to take action against three Ministers who were indulging in illegal mining and amassing huge profits.

The Governor said: It is a big issue of integrity and probity of those in high office. The Chief Minister is a person who realises the problem. I told him to take action against them. He said he was aware that natural resources were being looted but that he needed time. Bhardwaj also called on Prime Minister Manmohan Singh and Home Minister P. Chidambaram and apprised them of the illegal mining activities in Karnataka.

Although the Governor defended his decision to make an issue of illegal mining saying that his constitutional obligations compelled him to draw the attention of the Central authorities, many constitutional experts call it a case of gubernatorial overreach and impropriety.

The BJP was quick to react to Bhardwaj's interference. It accused the Governor, who is a self-confessed Congress loyalist, of trying to destabilise a democratically elected government at the behest of his Congress masters.

Yeddyurappa's attempt to stonewall the demand by the Congress and the Janata Dal (Secular) for a CBI inquiry created unruly scenes in the Assembly. BJP and Congress members virtually came to blows, and for five days and four nights, the Opposition staged a protest inside the Assembly. The MLAs climbed on tables and slept in the well of the House and under the treasury and Opposition benches, munched biscuits, ate biryani and sipped cups of tea. The Congress plans to organise a 320-km march from Bangalore to Bellary to expose illegal mining.

The monsoon session of the legislature was curtailed as the Opposition did not take part in the proceedings. Law and Parliamentary Affairs Minister S. Suresh Kumar lamented that 18 pieces of legislation and a budget of over Rs.70,000 crore were approved without the participation of some legislators.

The Opposition says it will not rest until a CBI probe is ordered. Karnataka Pradesh Congress Committee president R.V. Deshpande said: We have full faith in the Lokayukta. But even after the farcical recent amendments to the Karnataka Lokayukta Act, it does not allow the Lokayukta to take suo motu action against Ministers/legislators. Also, with Yeddyurappa admitting that the export of illegal ore took place from ports even outside Karnataka, what jurisdiction does the Lokayukta have to go there? Can he go abroad? And, as per the recent amendments, the Lokayukta will have to seek the State government's permission before he approaches any Central agencies for help. Given this situation, how can there be a fair inquiry?

Deshpande does not agree that a CBI probe into the illegal mining activities would meet the same fate as a similar probe conducted in Andhra Pradesh, which has made no progress even after seven months.