Category: Environment, Forest and Climate change

Whose minerals are they anyway?

Mongabay | Sep 10, 2020

Over the past few months, the government of India has been focusing on the mining sector to revive the country’s economy but it is feared that it could mean a troubled time ahead for communities involved and environment.
However, the major question is whether such a push is in line with the National Mineral Policy 2019 of India which talks about the concept of inter-generational equity as far as mineral wealth is concerned.
The organisations involved with the communities that are impacted by the mining believe that protection and welfare of tribal people and poor are rarely the focus area of mining plans which are heavily focused on higher revenues.
To tackle the already slowing economy, whose condition further deteriorated after COVID-19 pandemic, the Indian government is pushing for more mining. But is this push for more revenue in line with the principles in India’s mining policy that talk about sustainable mining and minerals being a part of shared inheritance with future generations?

Over the past few months, Prime Minister Narendra Modi and various other ministers in his government have emphasised that the push for mining including coal will result in additional investments and revenue worth hundreds of billions of rupees. The government has already unveiled more reforms in the mining sector.

Meanwhile, communities that are already struggling with land conflicts, pollution issues (water, air and soil), health impacts, continue suffering even as new areas that will be opened for mining come with a potential threat to the local ecology, including biodiversity, forests and the communities.

Odisha-based tribal rights leader Deme Oram said that communities whose areas have been destroyed due to the greed of mining companies and the state authorities are helpless. “There are many Supreme Court orders which state that mining in scheduled areas (as per the Indian constitution), should be done through cooperatives that have tribal communities as members. But it is rarely done and such orders are openly violated by states to favour corporates and money bags,” Oram told Mongabay-India. He is the member of Mines, Mineral and People (MMP), an alliance spread across 18 states with more than 100 grassroots groups and about 20 diverse support organisations.

The concept of minerals being part of the shared inheritance is mentioned in the Indian government’s National Mineral Policy 2019. It noted that “natural resources, including minerals, are a shared inheritance where the State is a trustee on behalf of the people and therefore it is imperative that allocation of mineral resources is done in a fair and transparent manner to ensure equitable distribution of mineral wealth to sub-serve the common good.”

The policy had stressed that mining needs to be carried out in an environmentally sustainable manner keeping stakeholders’ participation, and devolution of benefits to the mining-affected persons with the overall objective of maintaining a high level of trust between all stakeholders.

But the on ground situation shows that rarely happens as conflicts related to land, health and ecology in the mining sector are found in abundance. Once the mining starts, the life of the communities in and around mining areas takes a turn for the worse and even when the mining is over its after-effects have shown to continue to impact people. Increasingly, the concept of just transition is being discussed which deals with the discussion around sustainable mining and the impact of operational mines on people and ecology.

“Even if tribal communities form a cooperative, or they get together and start mining there is no one who will buy products from them and let them flourish. Moreover, when mining is done by corporates the poor people are exploited and the local ecology (air, water and soil) is completely destroyed. People are left to suffer and they have nowhere to go. The state authorities whose prime responsibility is to protect the rights of people are working for corporates. Even the District Mineral Foundation funds, whose control should have been with communities, is being used by authorities for work like roads etc which should have been done for those people irrespective of the DMF,” said Oram, who focuses on land rights of the tribal people and governance in Fifth Schedule areas. Fifth Schedule areas are tribal-dominated areas identified under the Indian Constitution where special care is taken for rights and welfare of tribal communities.

For instance, he said, around 20 years ago, when sponge iron plants started in Odisha, people were told that it would bring development. “The only thing those plants have done is to destroy the lives of people and air, water and soil. In such a scenario, communities have no place to think about who owns the mineral wealth and how that should be preserved for future generations. They are busy saving their present and trying to earn their livelihood,” said Oram.

Is sustainable mining the keyword?
India’s National Mineral Policy 2019 had also emphasised that mining operations shall not ordinarily be taken up in identified ecologically fragile and biologically rich areas. It had noted that the government shall identify such areas that are critically fragile in terms of ecology and declare as ‘in-violate areas’ or ‘no-go areas’ out of bounds for mining and with a view to reducing pollution, carbon footprint and operational costs, use of renewable sources of energy at mining sites will be encouraged through appropriate incentives.

It had even suggested an inter-ministerial mechanism to decide the limits on the extent of mining activities that should be permitted including a detailed study for assessing the ceiling of annual excavation of minerals, considering the availability of mineral resources, the carrying capacity of the region, and the macro-environmental impact on the region while also “keeping in mind the principles of sustainable development and intergenerational equity and all other relevant factors.”

Rahul Basu, who is the research director at Goa Foundation, a Goa-based environmental group, said that it is important for governments to recognise that since natural resources, including minerals, are common wealth held in trust, not proprietary assets of the government in power, all the duties of a trustee apply to the government, including the duty to protect the corpus of the trust, prevent theft, loss or waste, and a duty to treat beneficiaries equally.

On the government’s efforts to boost the mining sector, Basu said it is “absurd to think increasing mining will lead to an economic revival.”

“Average daily employment in non-fuel major mineral mines is only around 100,000, around 0.25 percent of India’s workforce. And mining is steadily getting more mechanised. Further, if we see minerals as inherited wealth, surely it is better to purchase the minerals we need from others and keep our own minerals safely for our future generation,” Basu told Mongabay-India.

He explained that for most minerals, the existing mines in the country have sufficient reserves to supply industry and thus it would be preferable from community rights and environmental standpoint to expand existing mines rather than open new mines.

“However, the government seems focused on giving away large tracts for new extraction projects at exactly the worst time to be selling wealth. Even with the existing mines, there are many violations of community rights and environmental laws. For example, all mines in Goa were found to be violating one or more law. Why is it that the Indian mining industry is simply unwilling to follow the law? It would be better for the government to first do an intensive study of all existing mines to see if they are following the law, especially in connection with community rights and the environment,” argued Basu.

He further remarked that in cases where any violations are found, the local communities should be properly compensated, the environmental damage restored, the offending lessees blacklisted, and the leases auctioned off.

But what irks the communities is that the promised development due to mining rarely reaches them.

Sanjay Namdeo, who is the head of the Communist Party of India (CPI) in the Singrauli district, stressed mineral-rich Singrauli area, which is dominated by tribal people, was a land of abundant water, forests and agriculture but has now been ravaged due to human greed.

“The experience of extensive mining in this region over the past few decades has shown everything that is bad with the mining industry. Ideally, the communities should have full right over the water, forests and land as they nurture it over the years. But governments fail to do so. For example, in Singrauli, the government failed to ensure that people get the benefit. Instead, it is the industrialists who get all the benefits. Secondly, mining should have improved the lives of people involved or impacted by the mining sector including those whose livelihoods were based on the land where mining is taking place. But this never happened and instead, their lives have been completely destroyed. The mining profits should have been shared with the communities but that never happens,” Namdeo told Mongabay-India.

Minerals are a shared inheritance
Mining is an important sector in India’s economy and results in raw material for many other industries in the country. Right now, India now produces 95 minerals and is among the top producers of coal and iron ore globally. There are thousands of mining leases across the country. Over the past few months, the central government has been focusing on pushing the mining sector to boost the economy. For instance, it first allowed commercial coal mining to increase coal production and then, in August 2020, proposed reforms in the mining sector.

But the question is whether such reforms will be able to improve the lives of the communities involved.

Saswati Swetlena of the Mineral Inheritors Rights Association (MIRA), a network of civil society groups, said mineral resources are a shared inheritance and are best safeguarded by the local communities for the future generations.

“The local communities particularly, women, must be recognised as the custodians of all forms of natural resources and its governance as their fundamental right to ensure environmental justice. In the name of ease of business and public purpose, the state has been violating every legal provision meant to protect the rights of the communities. How does any mineral extraction make sense when it evicts and dispossesses millions from their life and livelihoods for the benefit of a few corporates? Is the state trust-worthy?” Swetlena questioned.

Rahul Basu of Goa Foundation said we need to ensure our children and future generations inherit at least as much as we did and we must ensure we capture the full value of our mineral wealth, save the entire proceeds for future generations, and distribute the income from the new investments equally to all as a citizens dividend, a right of ownership.

“At present, governments wrongly treat royalties as revenue, not a capital receipt, and merrily spend it, cheating our children and future generations of their rightful inheritance. There are a number of other inheritances that are depleted by mining, including the environment, the social fabric of the local community, the employment and incomes associated and the right to use the ore for useful things. Each of these inheritances is also subject to the inter-generational equity principle, and mining must be planned in such a way to ensure we avoid, restore or offset any damage to these inheritances, and if that is not possible, capture the full value and save it for future generations. This is only ethical, moral, fair, just and right,” Basu remarked.

Left Protests Against Andhra Govt’s Gross Negligence of People Affected in Godavari Floods

News Click | Prudhviraj Rupavath  | Sep 02, 2020

Only 3,922 out of the one lakh families displaced by the Polavaram Project have been rehabilitated until now, and the rest have been heavily affected by the ongoing floods.

Hyderabad: Demanding compensation for the thousands of families affected in the River Godavari floods in August, and rehabilitation for the Polavaram project affected families, Communist party of India (Marxist), [CPI(M)] and its affiliated organisations held protest demonstrations across several mandals in West and East Godavari districts in Andhra Pradesh on Wednesday, September 2.

Reportedly, the Godavari witnessed nearly 22 lakh cusecs per day flood flow in the third week of August. Left party leaders who have recently visited the flood affected regions told NewsClick that the floods have resulted in the evacuation of about 17,000 families from 100 villages in Godavari districts.

“The gross negligence of the state government in failing to provide adequate rescue and rehabilitation arrangements in the flood prone area has pushed thousands of families in agency areas to shift to hill tops to take shelter,” said J Babjee, state secretary of Andhra Pradesh Vyavasaya Vruthidarula Union (APVVU), a trade union of agricultural workers, marginal farmers and fisher people in the state.

“Hundreds of houses have been submerged in the floods, road connectivity to numerous mandals has been damaged, power supply has been affected, agriculture crops have been damaged, and even the government’s ration supply has not reached many villages, leaving many families in dire situation. But the government has announced just Rs 2,000 per family as compensation, which reveals their negligence,” said Babjee.

CPI(M) state secretary P Madhu visited the affected villages on Wednesday and gave a protest call, demanding compensation and rehabilitation across revenue offices in the two districts on September 5.

“Most families have run out of rice, fuel and groceries, etc., supplied by the authorities,” said A Ravi of West Godavari district, who participated in the protest.

Polavaram project affected families who have been awaiting rehabilitation have also been severely affected in the recent floods. “Evidently, the governments are interested in completing the project but not in ensuring proper rehabilitation to the affected families,” said P Madhu.

The Polavaram project affected families have been demanding fair compensation as per the provisions under Land Acquisition Act, 2013 for years.

The project was granted national status (full cost to be borne by the Union government) by the UPA II government through the AP Reorganization Act, 2014. After the YSRCP led government under Chief Minister Y. S. Jaganmohan Reddy came to power, the authorities called for new tenders for project work under reverse tendering process, and subsequently Megha Engineering and Infrastructure Limited (MEIL) grabbed the project.

In February, 2019, the Technical Advisory Committee of the Union Jal Shakti Ministry gave clearance for Rs 55,548 crore revised cost estimates of the project.

As per the government records, so far, only 3.7% of the rehabilitation works have been completed.

In March, Union Jal Shakti ministry stated in the parliament that out of 1,05,601 Project Displaced Families of Polavaram project, Rehabilitation & Resettlement (R&R) works in respect of only 3922 families has been completed.

Observers argue that 50% of the affected people are Adivasis belonging to Koya and Kondareddy communities. And nearly 30% of the remaining belong to Scheduled Castes and Other Backward Castes.

“The resettlement colonies being constructed for project affected families are lacking basic amenities and facilities which are to be provided as per the land acquisition Act,” said Babjee. He added that hundreds of Adivasis who were having community land rights titles under Forest Rights Act were not compensated.

Coal blocks auction in tribal areas: Modi govt jettisoning Fifth Schedule

The Federal | BS Nagraj | July 01, 2020
The government has set in motion a process to sell off 41 coal blocks across five states for private commercial mining through auctions

The Narendra Modi government’s cavalier approach to issues concerning the environment is well known. Equally subversive is its naked attempt to disregard a Constitutional provision that enjoins the state to safeguard the rights of tribal populations over land and resources in areas falling under the Fifth Schedule.

The government has set in motion a process to sell off 41 coal blocks across five states for private commercial mining through auctions. The promised moolah that the government expects to rake in at the end of the auction is an estimated ₹33,000 crore. If and when the money flows into the government’s coffers at the end of five years, it would have effectively defanged the Fifth Schedule of the Constitution.

The Fifth Schedule is, as the late Chief Justice of India M Hidayutallah termed it, “A Constitution within the Constitution, or miniature Constitution, for certain scheduled areas of India.” Fifth Schedule areas are those where tribals constitute over 50 per cent of the population and enjoy special rights under The Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 (PESA), and Forest Rights Act, 2006.

PESA requires that the gram sabha and the Tribal Advisory Council be consulted before any project is undertaken in the Fifth Schedule areas. In all, 10 states have been designated Fifth Schedule areas with the coal blocks to be auctioned located in five of them – Chhattisgarh, Jharkhand, Maharashtra, Odisha, and Madhya Pradesh.

While such consultation has not taken place, the plan to auction the coal blocks also constitutes a blatant violation of the landmark 1997 Samata judgement of the Supreme Court.

In the Samata versus the Andhra Pradesh government case, the apex court ruled that minerals are to be exploited by tribals (in Fifth Schedule areas) themselves either individually or through cooperative societies with the financial assistance of the state, and that transfer of mining lease to non-tribals, company, corporation aggregate or partnership firm, is unconstitutional, void, and inoperative.

The court, while stating that the government has no right to grant mining leases in these areas where lands belong to tribals, had ruled that mining activity in Fifth Schedule areas can be taken up only by the state and that too if it does not violate the Forest Conservation Act and the Environment Protection Act.

Ravi Rebbapragada, Executive Director of Samata, an NGO working for tribal rights which had filed the case in the Supreme Court says, “The decision taken by the government lacks stakeholder participation. Except for the central government and corporates, the other stakeholders were not consulted. It is also a violation of the Samata judgement.”

Since the Samata verdict of 1997, there have been a few other court judgements on similar lines.

In 2013, in the Orissa Mining Corporation Ltd versus Ministry of Environment & Forest (Niyamgiri Judgement) case, a three-judge bench of the Supreme Court said forest clearance to any mining project could be given only in consultation with and after taking the consent of the gram sabhas.

In the same year, in the Thressiamma Jacob & Others versus Department of Mining, Kerala, a three-judge Supreme Court bench headed by Justice RM Lodha held that ownership of minerals should be vested with the landowners. The court declared that the landowner has right not only over the soil but also the subsoil and minerals underneath the surface of his land.

In 2017, the National Green Tribunal cancelled four environmental clearances granted in December 2008 for four blocks in the Chintapalli Mandal in Visakhapatnam district of Andhra Pradesh for bauxite mining. The tribunal’s order came in response to the petition filed by Samata for cancellation of the environmental public hearing held in 2008 under a “curfew-like situation.”

The coal auction decision has been challenged by the Jharkhand government in the Supreme Court even as it appears that the ground made there is that the state government has not been consulted in the matter, rather than that the decision is violative of the Samata judgement.

“Commercial mining is a major policy change and it has to be taken in consultation with states. Unless states come on board, this won’t succeed,” Jharkhand Chief Minister Hemant Soren has been quoted in media reports as saying.

Sarpanches of nine panchayats in the densely forested area of Hasdeo Arand in Chhattisgarh have also written to the prime minister opposing the auction of the coal blocks. In fact, many of these blocks lie in the ecologically sensitive ‘no-go’ areas for mining, as observed by Congress leader Jairam Ramesh in a letter to Environment Minister Prakash Javadekar.

It will be interesting to see if and how the courts will view the current challenge to the coal auction decision. A publication Land and Governance under the Fifth Schedule – An Overview of the Law brought out by the Ministry of Tribal Affairs brought out with the support of the UNDP, notes, “Unfortunately, this (Samata) landmark judgment has not been able to achieve its full potential, and has been the subject matter of considerable debate and semantics.”

Referring to a “telling” Supreme Court ruling in the Balco Employees Union case, the ministry observes that a narrow interpretation of the Samata judgement is “clearly rooted in the alignment of the State with mining interests, rather than on any honest interpretation of the law it lays down.”

“Numerous decisions of the Special Forest Bench of the Supreme Court have permitted extensive industrialisation and mining in forest lands which are the traditional homelands of Scheduled Tribes, without consideration of the Constitutional framework,” it adds.

Use money from District Mineral Foundations (DMF) for benefit of mining-affected communities and not for general purposes, says CSE’s new report

CSE | April 27, 2020

Government’s recent move to use DMF for healthcare provisioning during COVID-19 emergency must be limited to mining-affected areas and people. It must also look beyond towards building economic resilience of mining-affected communities, says CSE

New Delhi, April 27, 2020: In a new report on DMF (District Mineral Foundation), Centre for Science and Environment (CSE) has found that DMFs have a huge potential to address some of the key challenges which mining-affected communities have been burdened with for decades. In the wake of the recent government proposition to use DMF funds for healthcare measures for Covid-19 pandemic, CSE cautions that it must strictly be used for building health and economic resilience of mining-affected communities and not used as a general development fund. DMFs should continue to be used for improving the lives and livelihoods of affected communities in India’s mining districts.

Says CSE director general Sunita Narain: “We understand the need for urgency and the importance of our response to COVID-19. However, it is also clear that DMF has been designed for our mining-affected communities, who live in the poorest and most backward regions of our country. Our report suggests that DMF should continue to improve and do more to build livelihood security in these regions. We are concerned that there are efforts to merge this fund for more general purposes. This must not happen.”

DMF: Implementation status and emerging best practices (https://www.cseindia.org/dmf-implementation-status-and-emerging-best-practices-10057), as the report is titled, shows how — over the last two years — districts in India have tried to improve income levels, healthcare access, nutrition support, educational coverage etc using DMF. Says Narain: “Such investments, complimented by outcome-oriented and inclusive planning, can go a long way in ensuring equity and social dividend in India’s mining areas.”

DMFs have been set up in most mining districts of India, with the stated objective to work for the benefit of communities ‘affected’ by mining. Since it was set up, DMF has accrued over Rs 36,000 crore in its coffers. Says Narain: “We believe the fund can play a crucial role in improving lives of people who are living on the margins of survival – caught between poverty and the environmental devastation caused by mining.” The flagship scheme of the Government of India – the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) — also recognises this fact, the report points out.

CSE has been following the progress of DMFs across the country for the past five years. The Centre has consistently and regularly reported on the scheme’s implementation, administration practices, and challenges (see all our DMF reports on www.cseindia.org).

The latest report is the third in a series – CSE’s 2018 and 2017 reports had exposed the critical shortfalls in DMF administration, planning and investments which have been undermining the potential of the Foundations to benefit mining-affected communities. While many of those issues still stand, there have been efforts at course correction since then. Says Chinmayi Shalya, Environmental Governance Unit, CSE: “The 2020 report is an effort to capture some of these in the hope that more states and districts will be compelled to think and bring them into policy and practice.”

Narain says: “We strongly recommend that DMF should not be merged or used for general purposes – even when it comes to the COVID-19 emergency. Instead, it should be used in the mining districts for the benefit of mining affected communities to improve their health infrastructure and well-being. This would certainly go a long way in building more inclusive societies, which will — in turn –improve our resilience against future disasters.”

Can the Executive Divert District Mineral Foundation Funds to Fight the Pandemic?

The Wire | Anandvardhan Yagnik |April 17, 2020

There was no reason to divert a special fund meant for people affected by mining unless the already existing state fiscal repositories had been exhausted and accounted for.

In wake of the unprecedented times and the COVID-19 pandemic, the Union finance minister, on March 26, while announcing several measures to combat the public health and the economic crisis in the nation, directed the states to use the District Mineral Foundation (DMF) funds to fight the pandemic.

The direction by the Centre to the states permitting the diversion of such special funds specifically meant for a targeted group of people who are affected by mining operations, again brings to fore the issues surrounding the legitimacy and propriety of such a move by the executive.

District Mineral Foundation (DMF) funds

In India, the mining industry is primarily regulated under the Mines and Minerals (Development and Regulation) Act, 1957. In the year 2015, by way of an amendment Act, the central legislation came to be amended bringing into effect far-reaching changes in the regulations governing the mining arena. One historical change was the creation of the District Mineral Foundation (DMFs). DMFs are essentially trusts to be set up in all the districts in every state affected by mining and are defined as institutions which will work ‘for the interest and benefit of persons and areas affected by mining-related operations’.

In our country, tribals, Adivasis and farmers have since long been known to bear the brunt of the adverse impacts of mining on their livelihoods which has resulted in degraded livelihoods and huge socio-economic, environmental and health hazards and costs. The realisation to contain such adversarial impact and rectify the historical injustice on these vulnerable group of people, led to the creation of DMF funds as a part of distributive justice and inclusive growth.

The DMF funds are collected at the district level and are essentially contributions from holders of mining leases. Pursuant to the 2015 amendment and creation of DMFs, the Union brought into effect the Pradhan Mantri Khanij Kshetra Kalyan Yojna (PMKKKY) in September 2015. The PMKKKY, inter alia, laid down the scheme qua the utilisation of the funds generated by the DMFs.

The DMFs generates fund by way of reserving 10% or 30%, as the case may be, of the royalty proceeds from the mining of minerals in the respective districts. From the total collections accrued under DMF, the mechanism provided envisages spending the same in the ratio of 60:40, 60% being for projects classified as high priority areas which include health care, education, sanitation, drinking water supply, women and child care, environment conservation, etc while the balance 40% being for projects classified as other priority areas which include construction of roads, railways, bridges etc.

Thus, in substance, the entire idea of creating a special fund like DMF is to provide for funds for the welfare of people affected by mining. With that background in mind, one has to look at the issue of how legitimate and proper is it that a special fund meant for a targeted group of people is diverted for purposes other than what it has been constituted for? More so, when there are other funds like the Prime Minister’s National Relief Fund, Chief Minister’s Relief Fund in respective states, the Contingency Fund, etc, available at the disposal of the state to meet with the pandemic.

Diversion of DMF Funds to fight the COVID-19 pandemic

Pursuant to the finance minister’s announcement directing the states to utilise the DMF Funds to fight against the pandemic, the Ministry of Mines issued a letter specifying that districts with at least one COVID-19 positive case could put to use the funds for medical equipment and infrastructure while in other cases the same could be put to use for procuring masks, sanitisers, for distribution of food to the marginal, etc. However, the amount of funds that can be utilised has been capped at 30% of the unused funds of DMFs. As per the data available on the website of Ministry of Mines, Government of India, as on January 2020, the total amount of unspent funds for all the district is around Rs 23,511 crores.

Hence 30% of the unspent funds would approximately translate to Rs 7053 crore. Talking about the state of Gujarat, as per the data available on the website of District Mineral Foundation, Government of Gujarat, which varies from the data available on MoM, as on March 2020, the total amount collected under DMF from 2016-17 to March 20-21 is Rs 9434 crore and the total amount of unspent funds is Rs 8775 crores and hence 30% of such unspent funds roughly translates into Rs 2632 crores which can be put to use to fight the pandemic.

No doubt, that the scheme provides for utilisation of DMF funds for high priority areas like healthcare and hence these could be put to use, more so in areas affected by mining because these are mainly rural and remote areas with no healthcare facilities and infrastructure and hence the local populace are more at risk of community transmission with even one positive case of COVID-19 in the area.

However, the same still does not justify the diversion of funds and making them available for use for emergency purposes – as in the present scenario – because that wasn’t the objective with which it was formed. It is a fund targeted with a specific purpose and for a specific group of people and region. Hence, mooting the whole idea for it being diverted to meet the emergency and giving directions qua the same without any participation and consent of the people for whom the fund has been created, in itself is an anomaly and deceiving of its objective.

However, the same is not unprecedented. With our form of governance, where, welfare, inclusive growth and distributive justice are best only terms of theoretical concepts, even previously special funds have been diverted for purposes other than which they had been constituted. The best example of this is that of the CAMPA funds. Like DMF funds, CAMPA funds too have been diverted for other flagship initiatives and policies and hence the Supreme Court has time and again pulled up the state governments for diverting the funds for purposes other than what they were meant for.

The funds from the social welfare schemes are for the benefit of the targeted population and not for the benefit of the government to shirk away its responsibility from providing basic amenities that it should as a state. Such people’s funds cannot be used in substitution of, for what state ought to incur expenditure from its own pocket. Otherwise, it defeats the whole purpose behind the creation of such funds.

With DMF funds, even after five years of its introduction, it still suffers dilatory implementation and sanctioning of projects overlooking needs of those affected, would now lose its very character if the diversion of funds is permitted to be carried on.

Diversion of special funds – legal?

The underlying premise behind the diversion is that the executive has always considered it to be its own fund. This needs to be dispelled. The DMF fund is a special fund which is meant for the welfare of the people affected by mining and is a people’s funds. However, this participative approach of the affected people or the targeted population for the welfare of whom the repository has been created have not been made part of the committees which look after the utilisation and implementation of DMF funds and hence their lies the genesis of the whole problem.

Each state frames its own rules with regard to the implementation of DMFs and pursuant to rules being notified, the committees have to be constituted. DMFs comprises of two committees, the composition of which is formulated by the state government.

One is the governing council and the other is the executive council. In Gujarat, the chairperson of the governing council is the prabhari mantri, who at present is MLA Bhupendrasinh Chudasama, while the chairperson of the executive council is the district collector of the respective district. These committees will determine which areas are mining-affected and thereafter allocate the fund, approve relevant projects and monitor their implementation.

However, the problem is the composition of the committees is such that it includes primarily bureaucrats and MLAs. There is no participation of people from the grassroots for whom the creation of the fund has been envisaged and hence from this undemocratic set up stems the superficial idea of it being government fund thereby leading to its diversion for purposes other than those specified.

To those who may ask that why should an emergent national interest when thousands of lives are required to be saved and protected, not be enough of a reason for diversion of DMF funds to meet with the national goal of containing the pandemic, the answer would be, that it is a structurally flawed understanding of fiscal responsibility of the state on their part.

Because, firstly, most districts have at their disposal, disaster relief funds, MPLADS funds granted to the member of parliament for the respective constituency, contributions from the funds granted to MLA for respective constituencies, etc. Apart from that, to meet with such emergent situations, there is the chief ministers relief fund for respective states, the contingency fund for respective states and the prime ministers relief fund. Moreover, even as the PM CARES Fund has been created which has received donations in high numbers takes care of the emergent national interest. So the legitimate question to be asked here is without having all these funds having been exhausted, why must the DMF Funds be used for fighting the COVID-19 pandemic?

Moreover, even otherwise, a special fund could have been diverted only upon completion of all developmental activities of a district. Prior to that, even an emergent situation does not justify its diversion. The special funds are to be utilised specifically for the purpose they have been created for and that can be ensured only when there is appropriate leadership at the district level and villagers, local populace, labourers working in mines, grassroots organisations, panchayats, etc. should be consulted and their participation be called for rather than thrusting all the decision making power in the hands of the political representatives and bureaucrats, because for them such special funds become an easy way out, to be used and diverted for all and other purposes and thereby abdicate their responsibility from providing for the same from the existing fiscal repositories of the state.

It is true that in times as unprecedented as now when we are faced with a pandemic, which calls for extraordinary measures to contain the coronavirus, all that can be done would be less, but that is no reason to divert a special fund meant for people affected by mining unless the already existing state fiscal repositories have been exhausted and accounted for because had that been the objective then special funds would stop to serve any purpose and every time the executive failed to perform its obligations and provide for what it ought to, then the best way out would be to casually divert the special funds.

The state of Odisha has expressed its willingness to use the DMF funds to fight COVID -19 and has rather requested the Centre to remove the cap of 30% usage of unspent funds. In spirit, as good as it may seem that a state is going out of its way to provide for its citizens but this could ensue a dangerous trend of diverting funds meant for welfare schemes for other purposes. However, at the same time, there are officials who discourage this trend.

Moreover, without any guidelines and accountability being in place, there is a higher risk of these funds being used for purposes that have nothing to do with mining-affected people and area. One of the factors which requires consideration is that there might be several projects which have been sanctioned for a district or area on the basis of the funds collected but since they have not been commenced the expenditure to be incurred might be lying with the trust. Hence overlooking the nitty gritties and without any law or guidelines in place to divert a portion of unspent funds could risk jeopardising several projects that may be in the pipeline.

Not only is the diversion of DMF funds illegitimate, improper, unjustifiable and a very unsustainable response of ruling dispensation’s for its failed governance but it has also rather increased the trust deficit of the farmers community and affected people who now fear that the DMF funds meant for their upliftment will be diverted by the government to meet its obligation which otherwise it should have from its own funds.

In Gujarat, several farmers affected by mining in Bhavnagar district have written to the state government and to the chairperson and members of the governing council and the executive council to not divert the DMF funds for any activities other than what has been envisaged under the PMKKY scheme and shall be utilized only for the targeted population for which it has been brought into existence.

Our history is replete with examples where special funds earmarked for special purpose have been diverted thereby time and again calling for legislative and judicial intervention to curb such diversions. However, the lesson has not been learnt and hence once again the step taken by the government runs the risk of becoming a dangerous precedent allowing ill-prepared authorities with a lack of foresight to use funds for specific functions as their personal kitties in the future and steps must be taken to avoid such occurrences.

Anandvardhan Yagnik is a practising lawyer at the Gujarat high court.

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