Pits of corruption

Goa's mining industry is facing a crisis of reputation following a series of writ petitions, a leaked PAC report and an inquiry by a commission.

FOR the first time in its six-decade history, Goa's influential iron ore mining industry is confronted with serious questions about its mining and ethical practices and even the fundamental premise of its existence as a 100 per cent export-oriented industry. A series of writ petitions filed earlier this year by the environmental group Goa Foundation has put the industry on the back foot. Besides, the leaked report of the Goa Assembly's Public Accounts Committee (PAC), headed by Leader of the Opposition Manohar Parrikar of the Bharatiya Janata Party, has sought an inquiry into the various aspects of the illegal mining that goes on in the State and the failure of the departments that are responsible for monitoring the industry. In September-October, the Justice M.B. Shah Commission, appointed by the Central government to study the illegal mining, visited all the 91 working mines and several non-working mines in the State. Its report is expected in November, and this has the State administration in a nervous bind.

The intense media spotlight in the past couple of months prompted the Goa Mineral Ore Exporters' Association (GMOEA) to call a press conference to deal with the industry's crisis of reputation. Its president, Shivanand Salgaocar, admitted that fly-by-night operators who had entered the industry in the China boom phase post-2005 did indulge in illegal mining practices, non-payment of royalty, and pilferage of stacked reject ore. Investigate these and take action, but it is unfair to apply the same brush to tar and feather the entire industry, he said.

Following the writ petitions, the PAC report and the scrutiny of the Shah Commission, the Department of Mines and Geology and the Pollution Control Board in the State have suspended 40 mining leases for not having the required approvals.

Two mines operated by the Congress politician Dinar Tarcar under a power of attorney from its original leaseholders were closed down recently after pressure mounted on the government to act. The mines were found to be operating in excess of the limits sanctioned in the environmental clearance.

At the centre of the storm is Chief Minister Digambar Kamat, who has held the Mines portfolio for 12 years, both as second-in-command of the BJP government earlier and then as the leader of the Congress government he has been heading since 2007. Having survived several attempts by his own party colleagues to dislodge him, Kamat has been following a please-all policy to stay in power. This and his close coordination with Congress managers in New Delhi could help him to stay in power until the end of his five-year term in May 2012, but his laissez-faire policy has translated into a free-for-all. Despite his protestations, Kamat will have to face charges of turning a Nelson's eye to the illegal mining and other irregularities in the industry.

State Congress president Subhash Shirodkar and GMOEA secretary Swaminathan Sridhar argue that except in a few cases, comparisons of Goa to Karnataka vis--vis illegal mining namely extracting ore from land where there is no lease granted or without the permission of the leaseholders are grossly exaggerated. In one case where the State government was forced to act, Nationalist Congress Party leader and former legislator Jitendra Deshprabhu was arrested for ore extraction from his plot in Korgaon, Pernem, and for non-payment of royalty. In another case, machine operators fled from a site in Sattari which was being dug up on the pretext of constructing a pond. Parrikar suspects this to be a case of direct involvement by a Minister.

Neither the Goa Foundation nor the PAC chairman is willing to accept the mining industry's assertion that non-compliance with statutes or delayed royalty payments be termed as irregularities and not illegalities. There are several statutes which apply to mining, including the Environment Protection Act, the Air and Water Acts, and wildlife and forest protection laws. Violations of these laws are criminal offences, and they cannot be dressed up as mere irregularities, says Claude Alvares of the Goa Foundation.

According to Alvares, every single mine operating in Goa violates some law or the other and is therefore illegal. All mining in Goa is illegal. Show me any of the 91 mines in operation in Goa and I will show you how it is operating illegally, he says.

The foundation has filed hundreds of petitions against the ore industry over the years; it has stepped up public interest litigation (PIL) petitions this year.

In August 2011, the foundation compared the information it gleaned from Right to Information (RTI) queries and replies to questions in the Assembly regarding the production and export of ore with the production limits set by the Ministry of Environment and Forests (MoEF) in its environmental clearance certificates.

The findings were revealing. As many as 48 mines were producing and exporting ore in excess of the prescribed limits. The foundation promptly took the MoEF, the Union Ministry of Mines, the Mormugao Port Trust, the Panjim Port Authority and several State agencies to court for overlooking this excess, collecting royalty payments and issuing export NOCs (no-objection certificates) for 13.47 million tonnes exported in excess between 2006 and 2010. Among the companies listed are many major and prominent operators.

According to the Goa Foundation, 20.4 million tonnes of unaccounted ore, worth Rs.4,500 crore at $50 a tonne or Rs.10,800 crore at $120 a tonne, was illegally exported from Goa between 2002 and 2010.

In addition, the Karnataka Lokayukta's report on illegal mining recommended the recovery of the cost of 45,59,365 tonnes of illegal iron ore transported from Tinaighat (Karnataka) to Sanvordem railway station (Goa) by some 40 consigners between 2006 and 2010, before ore movement from Karnataka to Goa was stopped.

Mining dumps

Goa's ore to overburden ratio is 1:3 (overburden refers to the soil and reject that is displaced in the process of ore extraction). This results in soil and lower-grade rejects piling up at mine sites. When the threshold limit of iron was reduced (from 55 per cent Fe to 45 per cent Fe) in 2009, low-grade ore became marketable in China. This sparked off the frenzied export of rejects accrued over the years. Overnight, mining dumps became gold mines. All that mattered now was how fast one could load them onto the ships to China. In the free-for-all that ensued, pilferage became rampant. Agricultural fields and villages on the ore's route suffered collateral damage. Errol D'Souza, Professor of Economics at Indian Institute of Management, Ahmedabad, says one reason for the gold rush is the quadrupling of iron ore prices internationally between 2004 and 2009. It is still rising. The price was $13.82 per metric tonne in December 2003 and it was $147.54 this September. That is the extent of the increase, he says.

As a result, some 15,000 trucks clog the roads as they make hazardous and accident-prone trips to loading points, coating forests and crops with a lethal red dust that asphixiates agricultural produce. Little wonder that there were scores of villages along the truck routes protesting and setting up roadblocks, leading to a volatile law-and-order situation in some places.

Mine dumps can only be worked after obtaining specific air and water pollution consents, but most of the dumps have been working without them, says Alvares. Apart from pollution laws, they also violate mine management plans and jeopardise mine closure plans, which means refilling pits with the soil dug out.

Ramesh Gauns, schoolteacher and social activist, says there are 316 mining dumps spread across Goa's four mining taluks of Sattari, Sanguem, Quepem and Bicholim. Up to 100 metres in height and with steep gradients of up to 70 degrees, many of these dumps have proven highly dangerous over the years, resulting in accidents, two of them as recently as June-July 2011 killing three people. Ore slipping into and destroying paddy fields and silting up rivers and nullahs, including those supplying drinking water, are only a minor part of the cumulative damage to the environment, says Gauns.

He says in many ways Goa is worse than Bellary district in Karnataka, which has been in the news for illegal mining. Goa's area of 3,702 square kilometres is less than half of Bellary's 8,447 sq km, but it has 105 operating mines compared with Bellary's 99. Between 2005 and 2009, Central environmental clearances were given to 150 mines to operate in Goa, but they are yet to start mining. When they do, there won't be much left of the interior of the State, Gauns adds. Though Goa is just 0.11 per cent of India's area, it produces 40 per cent of India's iron ore exports, 363 times more than its geographical potential.

Mines in forest areas

Tourists who visit Goa's beaches would hardly be aware of its interior mining regions, which resemble scenes straight out of Terminator 2. Miners now have their eyes on newer areas, such as those in Quepem taluk and deep inside virgin forests, where rolling green hills are increasingly pockmarked by deep red gashes of open mining pits. Mining areas are largely situated in a 95-kilometre-long arc that runs though the Western Ghats. Once permission is granted to divert forest land through a mining lease for non-forest purposes ironically under the Forest Conservation Act that is the death warrant for the trees in the area, rues Alvares. Despite the vigilance of green groups, from 1995 to 2011, as many as 48 leases were procured from the Central government to mine in forest areas.

It was with some disquiet that Forest Minister Felipe Neri Rodrigues told the State Assembly recently that 58,940 trees had been cut for mining in the past four years, while 1,314 hectares of forest land had been diverted since 2008 for non-forest purposes, read mining.

Violations of law

In a PIL petition in March 2011, the Goa Foundation listed 57 mines operating in Goa without the consent of the Pollution Control Board. Following our petition, suspension orders were issued to 40 mines for not possessing pollution control okays, says Alvares.

Another violation is of the Wildlife Protection Act. For instance, no mining can take place on any of the 63 mining leases within the lush terrain of the Netravali Wildlife Sanctuary. But the position on mines functioning within the 10-km buffer zone of sanctuaries has been the subject of protracted litigation.

In 2004, the Goa Foundation approached the Supreme Court against three mining companies operating in the buffer zone without an NOC from the standing committee of the Wildlife Board. The decision on the case will apply to 40 other companies in Goa.

In September, following a dispatch from the MoEF, consent granted by Goa's Chief Wildlife Warden was withdrawn in the case of one of the defendants, Bandekar Mines. On the basis of this, the Pollution Control Board issued a suspension order on the mine, making it the 41st mine operation that was suspended in the past couple of months. The industry is pressing for a reduction of the buffer zone and a declaration of site-specific ecosensitive zones for the State instead of a blanket 10-km buffer zone, on the grounds that it is otherwise unsustainable for a small State like Goa.

Says Alvares: Ever since the Regional Plan for Goa was filed, the industry has been demanding that the buffer zone be reduced to 1 km and even 0 km. That is because there are eight mines operating within one kilometre of wildlife sanctuaries.

This demand was reiterated by the truck and barge owners' association, which blockaded streets and the Mandovi river in October, pointing out that 75,000 people dependent on the industry would be out in the cold if legal mining was shut down.

Non-payment of royalty

From 14 million tonnes in 1995, iron ore exports from Goa scaled up to 54 million tonnes in 2010-11 following the huge demand from China in the wake of the Beijing Olympics and the country's infrastructural needs. Increases in volumes and prices attracted everyone from politicians, panchas, former bureaucrats, former policemen and sundry influential persons to mining-related activities, as bees to honey. The endless convoy of trucks from mine pit to barge and barge to ship gets by with virtually no checks, relying solely on the highly convenient self-declaration and self-assessment methods for royalty payments, ore content and volume.

The Mines Department and the Indian Bureau of Mines, now in the dock for non-monitoring of the process, cite lack of personnel to conduct the checks even as the State government and the Mormugao Port Trust keep shifting the onus for checks and balances in the system onto others.

In his report, Parrikar says that 56,56,450 tonnes of ore was illegally extracted from the State, for which no royalty has been paid during 2010-2011. The ore is valued at Rs.1,100 crore, and the lost royalty amounts to Rs.120 crore, he says. The total quantum of illegal ore exported from 2005 to 2011 is estimated to be 1,42,00,437 tonnes, valued at Rs.2,776 crore, and the royalty loss, Rs.200 crore.

The State government had denied before the courts that iron ore was mined in excess of environmental clearance limits, saying that the amounts being shown as excess were actually fresh diggings taken from earlier dumps. The petitioner Goa Foundation's case is that the dump amounts should be calculated in the environmental clearance amount, as the EC calculates the various air and water pollution aspects, pollution and load during transportation and the capacity of the mine surroundings to deal with such movement.

This is opposed by the miners, who argue that the clearance limit covers only the amount that can be excavated and not the amount that can be exported, which may be taken from earlier dumps. The matter is still before the court for interpretation.

Damage to the environment

Before Jairam Ramesh as Union Minister for Environment and Forests halted the controversial environmental clearances for mines in Goa, the Ministry, under his predecessor A. Raja, had handed out 150 such clearances.

Public hearings to ascertain the impact of mining in villages in Goa were a farce, with local villagers at times shouted down by truckers brought in for the meetings. A similar situation ensued during the public meeting called by the Justice Shah Commission. Confirming long-held suspicions, Parrikar has now questioned the environmental clearance certificates issued, citing incorrect data and manipulation in environmental impact assessment (EIA) studies with respect to tribal population and location of schools, fields and waterbodies, and heritage and archaeological sites.

Anger at having been ignored at public hearings has spilled onto the streets over the past years, causing former South Goa Collector G.P. Naik to warn the government about a volatile situation in villages along the truck routes.

Power of attorney leases

Though the government and the GMOEA have taken the stand that leaseholders subcontracting mine operations to third parties is standard industry practice and perfectly legal, critics are unwilling to accept this as legal. Section 37 of the Mineral Concession Act, 1960, is very clear, as also the MMRD Act, 1957 [Mines and Minerals Development and Regulation Act], that only the concessionaire and leaseholder can operate the mine, says Alvares.

Despite this, government agencies, including the Pollution Control Board and the Environment Ministry, have issued consents to power of attorney holders and contractors to operate the mines.

Many big mining companies and several politicians double as contractors working mines for leaseholders. Minister Joaquim Alemao is a raising contractor for around six mines, but he says his business is perfectly legitimate. Though Parrikar had named several Congress leaders in press statements, he notably stopped short of nailing down those he mentioned in the draft PAC report.

Renewal applications after cut-off date

One of the most significant illegalities publicised by the PAC Chairman is the entertaining of applications for revival of leases years after the cut-off date of November 1988. According to the report, several concessions considered as lapsed are being fraudulently sought to be revived.

By a rule introduced in 1994, powers were granted to the State government to condone the delay and bring back to life dead leases. Since then 40 condonations of all kinds have been granted, including permissions to withdraw letters of surrender of leases, benefiting power of attorney holders with influence, political clout or strong finances, the draft PAC report says.

It points out that in some cases, ore was produced and procedures for forest land diversion were undertaken even before the condonation was granted, indicating the connivance of officials. Questioning the legal opinion given to the State government in these cases, the report seeks criminal investigations into these illegalities, specifically pointing to a power of attorney holder in the name of Ms Simplified Technology Services Pvt Ltd, which is suspected to have political connections.

The report concludes: ...[T]here has been rampant illegal mining in this State, violating not only environmental laws but the very mining laws itself under which the mining operations are required to be carried out. In our opinion, this is not possible without the active connivance of the Directorate of Mines, its officials, the Indian Bureau of Mines and its officials and other authorities which are required to ensure that any activity is carried out in accordance with law.... It appears that there is a deliberate attempt on the part of the Department of Mines to remain a silent spectator while allowing the rampant illegal mining which is going on in the State.

Gauns, however, has been immersed in the issue long enough to be cautious about the overt political tinge the issue has taken in the tit-for-tat game between the BJP and the Congress in the run-up to the Assembly elections next year. To look at mining from the involvement of politicians itself would be to miss the point, he says. Public memory is short, but one can hardly forget that the BJP's Parrikar dubbed an anti-mining activist as a naxalite not very long ago or that he supported an agitation to have the Mhadei Wildlife Sanctuary denotified.

Though currently the opposition finds itself allied with the environmentalists, their paths are likely to diverge over Parrikar's call for a cap at 30 million tonnes a year in exports. The environmentalists' view is that this is no more sustainable than the current situation.