How Modi Government’s Thermal Power Reforms Aggravate Pollution

News Click | Nov 20, 2020

The push for the use of domestic coal is directly focused on revitalising coal mining and thermal power companies, including addressing their sluggish response to the coal auctions, said experts

New Delhi: Even as most of India is gripped by severe air pollution, reforms by the Modi government for the thermal power sector, particularly those undertaken to push the use of domestically-produced coal, could further aggravate the situation. In the latest in a series of relaxations, the BJP-led Central Government has granted thermal power plants leeway to change their sources of coal without amending environmental clearances.

The restrictions on sourcing of coal were lifted through an office memorandum issued by the Union Ministry of Environment, Forests & Climate Change (MoEF&CC) on November 11. Instead of seeking an amendment to environmental clearance, a thermal power plant will now simply need to ‘inform’ the ministry that it would be changing over to a new coal source, irrespective of the potential environmental hazards such a change would entail.

“Details regarding change in source (location of the source, proposed quantity, distance from the power plant and mode of transportation), quality (ash, sulphur, moisture content and calorific value) shall be informed to the Ministry and its Regional Office. The quantity of coal transported from each source along with the mode of transportation shall be submitted as part of EC [Environmental Clearance] Compliance Report,” the memorandum stated.

The memorandum also allows for transportation of coal along road routes, albeit in lorries covered with tarpaulins, which, nevertheless, could also be a potential source of air pollution.

In June, Prime Minister Narendra Modi had announced the auction of 41 coal blocks for commercial mining by private players. The auction process for allotment of the blocks is still underway even as the number of blocks were later scaled down to 38, primarily due to environmental concerns raised by the Chhattisgarh government.

However, in the run up to the auction of coal blocks, the Centre brought about policy changes that laid greater impetus upon usage of domestically produced coal. Coal mined in India has a higher percentage of ash as compared to high-grade imported coal, which is of better quality and hence, expensive. Environmental hazards from fly ash are only expected to increase over the next few years as more thermal power plants shift to domestically produced coal.

Experts say the move to allow thermal power plants to change the quality and source of coal at will, needs to be understood alongside the pool of reforms for the coal sector in India, including carte blanche approvals for road transportation where precautions, prior approvals or impact assessments do not exist.

“The push for domestic coal is directly focused on revitalising the mining and coal power companies, including addressing the sluggish response to the coal auctions,” said Kanchi Kohli of the Center for Policy Research, a Delhi-based public policy think tank.

Reforms for thermal power and coal mining industries have been brought into effect notwithstanding the fact that combustion of fossil fuel is one of the major sources of environmental pollution. Fly ash, which contains highly toxic elements, is one of the byproducts from coal combustion in thermal power plants. Improper management of gargantuan quantities of fly ash accumulated over several decades has resulted in large scale air and water pollution in areas close to thermal power plants. Apart from fly ash, thermal power plants are also cause air pollution from sulphurous emissions, where coal containing high percentages of sulphur is used.

In April 2020, the Modi government had come out with a policy which encouraged thermal power firms to switch over from imported coal to domestically-produced coal. The Union Ministry of Power, which issued the policy advisory, had also set up a mechanism to ‘deal with difficulties faced by the power companies in obtaining required quantity, quality of domestic coal including logistic bottlenecks’.

In May, the central government did away with the mandatory need to use coal with ash content below 34% in thermal power plants. Domestically-produced coal has an ash content in the range between 35% to 40% or above, while most coal imported to India has an ash content between ten to fifteen per cent. The notification, issued on May 21 by the MoEF&CC, also did away with the mandatory requirement of washing coal before its usage in thermal power plants. As per experts, coal washing is a procedure that helps remove ash percentage by around eight per cent.

Though usage of domestically-produced coal is expected to generate larger quantities of fly ash, the central government has, however, ruled out any entitlement for thermal power plants to increase capacities of their existing fly ash ponds unless they expand their electricity generation capacities.

In the latest office memorandum issued on November 11 too, the Centre has clearly ruled out any provision for additional ash ponds other than that which have been allowed in the environmental clearances to respective thermal power plants.

These relaxations have been granted even as several regions in the country are battling with air and water pollution caused by thermal power plants. There have also been numerous instances of fly ash pond dyke breaches in which toxic slurry has spread over farmlands and habitations resulting in loss of lives, damage to agricultural crops and pollution of nearby water bodies.

“Substitution of imported coal with domestically produced coal is good from the point of view of increasing our forex reserves. However, there are certain plants located along the coasts of the country that have been designed to have the natural advantage of using imported coal. A few ultra-mega power projects have also been specifically designed to use a certain quality, quantity and blend of coal. The correlation between fly ash generation and its utilisation is important. The economics of fly ash utilisation should not work to anyone’s disadvantage. Transportation of fly ash not only blocks rail capacity but also involves rail freight charges. And there is obviously the threat of environmental pollution during the loading and unloading processes,” former Advisor (Coal) to government of India, R.K. Sachdev, told NewsClick.

At the same time, most thermal power plants in the country have missed the December 2017 deadline for 100% fly ash utilisation. The Union Ministry of Environment and Forests, as it was called during the previous Congress-led United Progressive Alliance government, had in November 2009 issued a notification regarding fly ash utilisation. The notification had set a five-year time period with staggered deadlines for thermal power plants to utilise fly ash. For existing plants, a maximum period of five years was set for 100% of fly ash from November 2009. For new plants, the ministry has set a deadline of four years for 100% utilisation within a period of four years from the date of commissioning. This notification was later amended by the Modi government in January 2016 to extend the deadline for existing plants further, till the end of 2017.

However, as per the latest report of the Central Electricity Authority, fly ash utilisation in the country was only 78.19% during the first half of financial year 2019-20. Only 39 out of 105 thermal power plants had fly ash utilisation in the range of 100% or above.

On November 6, the National Green Tribunal reiterated its earlier order upon the Central Pollution Control Board (CPCB) to compute and recover environmental compensation from thermal power plants that have missed deadlines for the 100% utilisation of fly ash. This order was issued following a CPCB report, submitted to the tribunal in September, as per which 102 of 112 thermal power plants had refused to pay environmental compensation on various grounds (including appeals pending in the Supreme Court). Eight plants never responded to the CPCB notices while only two plants paid up the penalties.

“Ironically, this comes at a time when there is a global move away from coal-based power, including financial support. It also comes with complete knowledge that Indian coal which is high in ash content will only add to the huge backlog of fly ash mismanagement,” said Kohli.

Pitching for ‘Self-Assessment’ of Welfare Cess, Draft Labour Rules to Hurt Construction Workers

News Click | Nov 16, 2020

It marks a break with legal tradition in the construction sector, wherein till now an assessing officer was authorised to indicate the cess amount payable by the employer.

New Delhi: The amount to be collected as cess towards welfare of the construction workers will be self-calculated by employers, the Centre has proposed in the new draft labour rules. The move, say trade unions, will serve to empower construction companies to further shirk their responsibilities towards labour.

A cess that is not less than 1% of the cost of construction, “shall be paid by an employer in advance, on the basis of his self-assessment duly certified by Chartered Engineer at the time of approval or before the commencement of the work,” stated the draft rules of the Code on Social Security, 2020, notified by Union Ministry of Labour and Employment on Sunday, November 15.

The draft labour rules have been notified by the Centre just days ahead of a general strike call by 10 central trade unions and several federations and associations of workers, including those in the unorganised sector, on November 26.

For the purpose of self-assessment, the employer shall calculate the cost of construction as per the rates specified by the State Public Works Department or Central Public Works Department or on the basis of return or documents submitted to the Real Estate Regulatory Authority, according to the draft rules made public by the Central government for inviting stakeholders’ suggestions within a period of 45 days.

The draft rules, which elaborate the procedure for self-calculation and payment of cess, mark a break with the legal tradition in the construction sector, wherein earlier, under The Building and Other Construction Workers’ Welfare (BOCW) Cess Rules, 1998, an assessing officer was authorised to indicate the cess amount payable by the employer, after scrutinising the information furnished by the latter.

The 1998 rules provided for operationalisation of provisions in the 1996 welfare Act for building and other construction workers, that is now subsumed, along with other eight Central labour enactments, under the social security code – passed by Parliament in September this year.

The Act provided for setting up of a welfare board by each state government for utilising the funds collected through the cess for the welfare of construction workers. The benefits for a registered worker with the board included pension, accident insurance, medical aid, scholarship for children among others.

The unions representing construction workers have flayed the ‘codification’ of the 1996 Act that has led to the “dilution” of its already neglected provisions. “The changes will bred corruption that will result in underestimation of the cess amount,” said Thaneshwar Dayal Adigaur, convenor, Nirman Mazdoor Adhikar Abhiyan, a Delhi-based umbrella body of over 40 registered unions in the city.

According to him, the ‘self-assessment’ provision doesn’t address the issues that are plaguing the cess collection process, which is “grossly delayed or not paid”, especially when it comes to the private construction activities.

“Already, not many private firms are registered with the board. Hence, no cess is collected on construction activities that are carried out by them. When it comes to the ones that are registered, they usually have a history of being not completely honest with the authorities. Allowing them to calculate the cess amount on their own may further give rise to instances of under-collection or ill-calculation of the welfare cess,” said Adigaur, a member of the advisory committee to the Delhi government that oversees matters relating to the construction workers’ welfare board.

Even as an assessing officer retains the authority to issue notices to an employer in case of any discrepancies in the calculation of construction cost and the cess amount, much of their other powers in keeping a check on construction activities have been taken away, as per the draft rules.

The draft rules propose that an assessing officer should visit the construction site only with prior approval from the Secretary of the BOCW concerned. Also, the power to stop construction work – for a period deemed necessary for the purpose of any examination – is now proposed to be withdrawn.

Furthermore, the rate of interest for delayed payment of cess has been reduced from 2% every month or part of a month to 1%, thereby giving a “breather” to the offenders.

A press note by the Labour Ministry on Sunday, however, claimed that the new code entitles even those workers to benefits under BOCW, who have migrated from one state to another. The responsibility to provide benefits in such cases shall lie with the board of the state in which a worker is currently working, it says.

It may be noted that the 2020 Code on Social Security already reduces the coverage of the legal provisions under it by not including any construction work that employs less than 10 workers or any project for residential purposes that is worth up to Rs. 50 lakh. Such a threshold amount was Rs. 10 lakh under the earlier BOCW Act, which also required all the establishments – irrespective of the number of workers employed – to get registered under it.

Subhash Bhatnagar, coordinator, National Campaign Committee for Construction Labour (NCC-CL), rued how the labour codes rob vulnerable construction workers of the legal shield that was meant to protect them. “As many as 64 clauses of the 1996 BOCW Act have now been reduced to only seven (this number is actually nine) under the social security code; while 15 of those under the 1998 rules are now down to only six (which is actually seven),” he told NewsClick.

Bhatnagar admitted that this could be so because “90% of the BOCW Act was related to the safety of construction workers,” who were supposed to find space under The Occupational Safety, Health and Working Conditions (OSH&WC) Code, 2020 –one among the total four labour codes.

Is that the case? Not really, said Bhatnagar, adding that “in fact, what the Centre has done is to compromise the occupational safety provisions for construction workers by clubbing it with other industries.”

He said relaxing the threshold limit for cess collection on residential projects would also put “negative pressure” on the registration of construction workers employed for such activities with the welfare board.

In March, as the country was going through a sudden COVID-triggered lockdown, the Centre issued an advisory asking all state governments to distribute the Rs. 52,000 crore – a cumulative amount collected as cess by the respective BOCW boards – among the 3.5 crore construction workers.

Trade unions had then reportedly pegged the total number of labourers engaged in the sector, and in need of an assistance, to be nearly six crore.

The draft rules, in a bid to provide app-based workers and those within the unorganised sector with benefits under the social security schemes, has provided for an Aadhaar-based self-registration system on the portal of the Central government.

Here again, app-based firms (colloquially known as the gig economy) will be contributing towards the fund for welfare of their workers after self-assessment.

Gig economy companies are required to make contributions to the fund that “shall not exceed five per cent of the amount paid or payable” to its platform workers, the Code on Social Security had stated earlier. As for the funding towards the welfare of unorganised workers, the draft rules have reportedly failed to provide any clarity, say unions.

Problematic quest for tangible assets

The Indian Express | September 21, 2021

Proposal to use District Mineral Foundation funds for creating infrastructure goes against the purpose of such funds – they need to be used for welfare of mining-affected communities.

The Ministry of Mines has recently proposed “reforms” in the mining sector under the Atmanirbhar Bharat scheme to stimulate economic growth in the wake of the COVID-19 pandemic. A key proposition of the reform draft is to amend rules/guidelines for the use of District Mineral Foundation (DMF) funds to increase focus on creating “tangible assets”. The Ministry of Mines (MoM), it seems, wants to direct a large corpus of funds meant for mining-affected communities towards only creating infrastructure.

The proposal undermines the very law under which DMFs have been instituted. It also opens the floor for massive misdirection of funds. DMFs are non-profit trusts set up in all mining districts of the country under the Mines and Minerals (Development and Regulation) Amendment Act, 2015 to work for the “interest and benefit of people and areas affected by mining-related operations.” Mining companies contribute 10-30 per cent on the royalty amount that they pay to the government to DMF Trust in the district they are operating in. The idea behind the contribution is that local mining-affected communities, mostly tribal and among the poorest in the country, also have the right to benefit from natural resources extracted from where they live.

Currently, DMFs have been set-up in 572 districts of the country, with a cumulative accrual of more than Rs 40,000 crore so far as per MoM data. The corpus is only growing. To give a broad estimate, the big coal districts like Dhanbad, Ramgarh and Chatra in Jharkhand are likely to accrue Rs 250 crore each annually in DMF. So will many key coal and iron ore mining districts of Chhattisgarh and Odisha, with estimates ranging from Rs 100-400 crore annually for each.

The functioning of the DMF trusts and the fund use governed by states’ DMF Rules incorporate the mandates of a central guideline, Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) that specifies high priority areas of investments.

Why shouldn’t the DMF fund use be tied to tangible assets?
First, DMF is a huge corpus available at the district level, it is not tied to any specific scheme, is non-lapsable, and comes with a mandate to improve the socio-economic well-being of the mining-affected communities. This gives scope as well as provision for decentralised planning for the use of funds. The law also underscores this.

At this critical time, when the effort is to bring the economy back on its feet, this is an opportunity to invest in building income security through local livelihoods, adequate healthcare and nutrition access to the most vulnerable group of people in mining districts. These areas are also considered high priority under PMKKKY on which districts are mandated to spend at least 60 per cent of their DMF funds.

Second, over the last five years, the biggest problem with the DMF investments across states has been a blind focus on construction of infrastructure. Analysis of data from states and key mining districts until March 2020 shows that investments in the physical infrastructure sector through DMF have been the highest, ranging from 30-40 per cent of the total investment. This is for roads and bridges alone. Parse through the investments in healthcare, nutrition, education and you will find largely construction works.

This has happened because investments have so far been ad hoc and unplanned. By putting the focus on creation of tangible assets, MoM would only end up diluting the very idea behind the institution of DMFs, reinforcing poor investments, quick to show on paper, but not of real value to the people it is meant to serve.

This is not to say that infrastructure isn’t needed. But most districts have departmental funds for this. Also, there is existing infrastructure which lies under-resourced. Often, “creating infrastructure” is the easiest and quickest way to show spending but making the infrastructure useful to people is the biggest challenge. Similarly, investing in local livelihoods is more challenging because it requires planning and shows results only after a few years. This is where DMF must step in to address the gaps, invest in human resources and local livelihoods, make existing schemes better, and innovate to build socio-economic equity and resilience. The fact that it is untied and non-lapsable allows for time to think and plan wisely.

Third, by tying DMFs to tangible assets the MoM would undo some small but meaningful strides made by states and districts to improve investments. Over the last couple of years, there has been growing evidence from districts that proves that DMF funds can be used to improve critical human development indicators and improve incomes and livelihood of mining-affected communities through better ways than just creating infrastructure.

Here are some examples. In June, the iron-ore rich Keonjhar district in Odisha topped up the wages paid under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) to match the state minimum wages. The district is using DMF funds to fill the gap and ensure more cash to the workers during the COVID-19 pandemic. Parity of minimum wages with MGNREGA wages has been a long-pending demand nationally.

The district recently also used the fund to integrate locally and agronomically produced millets into the Integrated Child Development Scheme (ICDS), a move to improve dietary diversity, nutrition indicators and also incomes of local self-health groups involved in food preparation.
The remote tribal and forested district of Bijapur in Chhattisgarh, set-up a fully functional district hospital by converging DMF funds with health department and other available funds. From a dilapidated building with a doctor or two, the district now has a hospital compliant with most Indian Public Health Standards (IPHS) norms.

DMF funds were particularly used to incentivise doctors and pay them competitive salaries. This had a cascading effect, with districts in Jharkhand and Odisha also improving local health access by hiring doctors and even paramedics. Kabirdham (Chhattisgarh) used it to train local Baiga tribe youth to teach in primary schools, creating local livelihood and addressing teaching shortage in one move. There are many such examples of convergence of funds, new and innovative initiatives, or just simply topping up the existing government schemes for better reach or impacts.

State governments are also gradually showing more inclination towards better investments. Chhattisgarh amended state DMF rules in September 2019 and gave representation to mining-affected people in the DMF decision-making body, asking for better focus on livelihoods, particularly forest-based livelihoods; Odisha amended its DMF rules in 2018 to improve focus on local livelihoods. The MoM itself put out a recommendation in 2019, calling for a focus on soft resources, long-term planning and better accountability of DMFs. The new reform measure focusing on creating tangible infrastructure would mean that these gains, which can be consolidated further, will be offset.

The overarching PMKKKY guideline needs strengthening. However, tying it to tangible assets is not the solution. Instead, the mandate must be for participatory local planning to address long-term needs of mining-affected areas and people. It must also ensure that districts are equipped with required expertise to aid their staff with this planning and implementation.

States must be given clarity on how to clearly and scientifically identify mining-affected people and delineate their respective mining-affected areas so that investments can be targeted towards them. Focus must be on achieving better human development indicators and building economic resilience among local communities.

Investment in infrastructure should strictly be a means to an end, and not an end in itself. Given the potential of DMFs, spending on infrastructure, in fact, must be brought down, monitored closely and tightly capped.

Construction workers concerned over move to repeal welfare act

The Hindu | July 17, 2020

Kerala was the first State to set up a welfare board for construction workers in 1989, becoming a model for the Central Act in 1996

The Central Government’s proposed move to repeal 15 existing laws on social security, including the Building and Other Construction Workers Act 1996 (BOCW), and replace them with a single Labour Code on Social Security and Welfare, has led to much concern among construction workers.

Kerala was the first State to set up a welfare board for construction workers in 1989, becoming a model for the Central Act in 1996. It is also one state where the system has wide reach, with 20 lakh construction workers as members, and regular disbursal of various benefits. Across the country, around 3.5 crore workers are registered under such state-level boards for construction workers.

The funds for the running of the welfare board is raised from the 1% building cess levied during construction of buildings. The benefits provided included pension, accident insurance of ₹4 lakhs, medical aid, scholarship for children and around 15 other benefits. In Kerala, the board even runs an old age home for ‘retired’ construction workers in Thiruvananthapuram, perhaps the only such initiative in the country.

During the COVID-19 pandemic, an amount of ₹1,000 was released to all the 20 lakh registered members in Kerala, in addition to monthly pension of ₹1,300 to 3.5 lakh members.

“Once the board stops to have an independent existence, and is merged with other welfare funds, the construction workers stand to lose out, because it is one of the better managed compared to other funds. The Central Government will also get complete control over the fund, and steps like investment of these funds in the stock market, as it happened with PF fund could happen. The welfare fund is one of the biggest sources of support for existing as well as retired workers. We should only strengthen it, not weaken it,” said V.Sasikumar, Secretary of the Construction Workers’ Federation of India.

On Monday, the Centre of Indian Trade Unions(CITU) organised nationwide protests with five workers in each centre, against the move.

CPI(M) Rajya Sabha MP Elamaram Kareem, a member of the Parliamentary Standing Committee on Labour, says that the Central Act was enacted in 1996 after more than a decade of struggle by workers, and hence the repealing is unjust.

“This is part of the BJP Government’s plans to repeal all existing labour laws and merge them into four separate codes. One of the codes has already been passed in the Parliament without referring to the labour standing committee. The remaining three are in front of the standing committee. Due to the pandemic, the discussions have been held up. Now, under the centre’s pressure the meeting has been fixed on July 17, but many of us would be unable to make it to Delhi. The Speaker has also denied permission for an online meeting,” said Mr.Kareem.

Mineral fund with Rs 23,800 cr can cushion Covid havoc in Odisha, Jharkhand, Chhattisgarh

The Print | May 28, 2020

The District Mineral Foundation funds have nearly Rs 23,800 cr after less than 40% of the amount accumulated over the past five years was spent.

Mumbai/New Delhi: An under-utilized $3.1 billion fund targeted at the poorest in India’s mining belt could prove to be a crucial resource in the South Asian nation’s fight against the coronavirus pandemic.

Created under a new law in 2015, the so-called District Mineral Foundation funds have nearly 238 billion rupees, after less than 40% of the amount accumulated over the past five years was spent, according to data from the country’s mines ministry. The funds were created from contributions by miners in addition to royalty payments and were aimed at improving the lives of people in areas affected by mining.

That could come to the aid of mining states, which decide how the funds should be used, after a nationwide lockdown shut factories, malls and offices, bringing the economy to a halt. As restrictions begin to ease, the states will need the funds to buy protective equipment, strengthen their medical infrastructure and create jobs.

“The DMF has come as a huge support for mining districts,” Amit Kumar, the deputy commissioner of Dhanbad district in Jharkhand known for its coal mines, said on Friday. “At the moment we have seven positive cases, but should the numbers rise, we will not be short on funds to deal with this.”

Dhanbad has used the funds for filling in staff vacancies at hospitals and for water and sanitation projects, an investment that’s being put to good use today, Kumar said.

The contagion is escalating in the South Asian nation of 1.3 billion people, with 150,793 infections, including 4,344 deaths as of Wednesday, according to data from Johns Hopkins University. To combat the virus, India’s government introduced the world’s biggest lockdown in March and extended it until May 31, while easing restrictions in certain sectors to boost economic activity.

The lockdown has had a damaging economic impact, with the country hurtling toward its first full-year contraction in four decades. An estimated 122 million people lost their jobs in April while consumer demand has evaporated.

“DMFs in various states and districts cannot afford to put the issue of livelihood in the backseat anymore,” Srestha Banerjee, a consultant at Brooking India, said in a report. “Given the urgency of the economic situation, the states and districts must shore-up investments towards this.”

Bureaucratic hurdles, ignorance by local political representatives of the DMF and its aims, lack of monitoring mechanisms and little pressure from the affected communities for its adequate utilization are some of the reasons for the slow deployment of funds in projects, according to Oxfam.

While some states like Chhattisgarh have spent a big portion of the funds on welfare projects, others like Odisha, which has collected the highest amount at 100 billion rupees, have spent about 35% so far, according to the mines ministry.

There is a lack of transparency and public accountability in the implementation of various welfare projects, Oxfam said. There is need for a mandatory monitoring mechanism tracked by the federal government, to ensure these funds are spent on projects that benefit communities and their local environment and livelihood rather than on capital and infrastructure projects only, it said. –Bloomberg

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