OUR SNF PROJECT ON SUB-NATIONAL POLITICS IN THE MINING SECTOR IN INDIA

The Graduate Institute Geneva | August 13, 2021

The SNF-supported research project Extracting Voice: the sub national law and politics of relationships between mining companies and affected communities in India uses District Mineral Foundations as a window into the political transformations of, and driven by, extractive economies in India. The project explores the dynamics of sub-national politics in the Indian mining sector, and their effects on socially and ecologically sustainable mining governance.

The mining sector generates significant social and ecological harm due to forced displacement, expropriation, ecological degradation, and destruction of livelihoods. Mining areas have also experienced violent conflict and legal disputes along with protracted struggles for land and forest rights. This follows the general dynamics of extractive economies around the world.

In response, Indian policymakers passed a legislation in 2015 establishing District Mineral Foundations (DMF). DMFs are an instrument (usually Trusts), established in each mining-affected district of the country, to collect a percentage of mining revenue for the direct benefit of affected communities, and which those communities are supposed to govern in conjunction with other local stakeholders. The project studies the implementation of DMFs to reveal how they are refracted through subnational rentier politics so endemic to mining. It asks: given that mining operations occur in complex and varied local contexts, how can companies, communities, and local authorities meaningfully collaborate in decentralized mining governance? Do DMFs mediate the company-community relationship, or do they reproduce and intensify patterns of regulatory and state capture?

Exploring DMFs in Odisha, postdoctoral fellow Bijayashree Satpathy finds a complex interplay between political struggles over forest lands, tribal (adivasi) rights, and mining activities which shape, if not constitute, subnational political organisation and contestations. In Odisha, major mineral reserves lie under the richest forest areas, mostly in fully and partially Schedule V districts like Keonjhar and Sundergarh, which are largely inhabited by tribal communities.

Mining companies in these regions, as with extractive frontiers across the world, are established with the promise of new employment opportunities for local communities. Communities’ aspirations for improved standards of living, and the narratives of both mining companies and the State ensures the maintenance of this potential for employment. However, in reality, companies largely employ high skilled migrant labourers in secure and formal positions due to increasing mechanisation in operations, whilst also create conditions which result in mid skilled migrant labour from either outside the state or district. On the other hand, local populations are employed in extremely low paid and precarious conditions as sub-contractual labour, and in very low numbers. This also coincides with the loss of traditional livelihood generation activities that are sometimes partially offset by the establishment of projects initiated through Corporate Social Responsibility and Non-Government Organisation funding to support small-scale activities for temporary and often short-term durations. However, overall steady jobs are absent, traditional livelihoods are eliminated or reduced, and new projects are temporary.

Against this backdrop of rentier politics, communities are largely unaware of DMFs and its functions. The community representation in the governance of DMFs is often limited in principle to the Sarpanch of the Gram Panchayat (or head of the village council) – and the quality of representation is variable. In practice, the District Magistrate or Collector – the chief district-level bureaucrat – takes the decisions regarding DMF projects and budgets.

As a consequence, DMF funds are often spent away from the communities they are supposed to benefit. Talking to ‘mines, minerals & PEOPLE’ (mm&P — an alliance of individuals, institutions and communities who are concerned and affected by mining) members in Sundergarh and conducting fieldwork in Keonjhar, Bijayashree Satpathy found that most of the funds are used in the construction of infrastructure in district headquarters, or for the benefit of the hometown or village of the local Member of Parliament (MP) or Member of Legislative Assembly (MLA). When they are spent on affected communities, communities are wary of their low rate of return: in Keonjhar, tribal communities are unhappy with DMF-funded agriculture programs, since the income they generate is far lower than that of the extractive activities which fund them. This combination of suspicion and low awareness creates space for local leaders to uphold positions over the villagers and maintain their connections with powerful groups by motivating villagers (including youths) to remain contingent on the benefits from mining activities. The local level politics may reduce the potential of DMF for mining-affected communities to any other government welfare schemes. Further, the implementation of similar projects by a parallel institution – OMBADC, in mining-affected areas may impact the purpose of DMF.

Bijayashree Satpathy is presently continuing her fieldwork in Tamnar, which has a high concentration of tribal populations and is also one of the most affected coal mining blocks in Raigarh district in the state of Chhattisgarh. Coal and limestone are the major minerals extracted from this district by major companies like South Eastern Coalfields Limited (SECL), Jindal Steel and Power Company and Hindalco Industries Limited. Since a major share of DMF contributions comes from coal mining in Chhattisgarh, it is interesting to explore the company-community relationship in this state as well.

Banner image by Bijayashree Satpathy: Open cast mining site of South Eastern Coalfields Limited (SECL) in Tamnar block, Chhattisgarh
Source of map: Shutterstock

Rajasthan High Court directs state govt to conduct training of Principal Magistrates for sensitizing them with JJ Act

India Legal | July 15, 2021

A suo motu case has been filed based on a news report published in ‘Dainik Bhaskar’ relating to the miserable condition being faced by the oral and hearing disabled children housed in a school Hostel in Jodhpur.

The Rajasthan High Court has directed the state government to conduct training of Principal Magistrates in Juvenile Justice Boards for sensitising them with the Juvenile Justice Act, 2015.

The Division Bench comprising Justice Manoj Kumar Garg and Justice Sandeep Mehta passed these directions on July 13, during the hearing of a suo motu case based on a news report published in ‘Dainik Bhaskar’ relating to the miserable condition being faced by the oral and hearing disabled children housed in a school Hostel in Jodhpur.

Additional Advocate General (AAG) Pankaj Sharma placed on record a copy of the communication dated June 1, 2021 issued by the Mining Department, Government of Rajasthan, which indicated that as per Rule 15 of the District Mineral Foundation Trust Rules, 2016, the fund of District Mineral Foundation Trust and State Mineral Foundation Trust for upliftment of the Child Care Institutions (CCIs) can be used for the welfare of Women and Children.

Further, a copy of the order dated March 17, 2021 has been placed on record, as per which, appointments of Officers have been made on the vacant posts of Principal Magistrates, Juvenile Justice Board, in accordance with Section 4 of the Juvenile Justice (Care and Protection of Children) Act, 2015.

In this background, the Court expected that the Department of Child Rights shall immediately move the concerned members, be it State or District Trust, for allocation of funds from the Mineral Trust Funds, so that the Child Care Institutions in the entire state can be upgraded.

The bench observed that the training of Principal Magistrates, Juvenile Justice Board has already been scheduled by the Rajasthan State Juvenile Academy in this week itself.

In light of above facts, the Court directed AAG Anil Gaur, representing the Child Rights Department, shall ensure that a training programme is organised within next 45 days for training and sensitisation with the Juvenile Justice (Care and Protection of Children Act), 2015.

“Child Right Activist Govind Beniwal pointed out that there is no regulatory body, which can monitor the functioning of Child Welfare Committees, thus appropriate directions are required to be issued in this regard for ensuring proper functioning of Child Welfare Committees across the State,” the order read.

The Court therefore also directed Govind Beniwal, to meet the Secretary, Child Rights Department in order to chalk out an action plan for effective monitoring of the functioning of Child Welfare Committees.

Matter will be next listed in the first week of September, 2021 for further hearing.

Mines auction can trigger Odisha’s trillion-dollar dream

the pioneer | July 05, 2021

Mineral wealth is a blessing if measures are taken to transform it into a sustainable development. Odisha has shown to the rest of the country as to how a transparent auctioning process can not only trigger growth and development but can also herald in huge revenue inflows for the State. The State has already triggered the process of auctioning and in 2020 witnessed aggressive participation by 86 companies resulting in successful auction of 17 mines. Moreover, these auctions witnessed high premiums and have even gone up to 154 per cent of the reserve price which proved to be a bonanza for the State.

The table below illustrates the effect of unlocking this wealth through auctions to the exchequer of the State Government. Arcellor Mittal Nippon Steel and JSW Steel have reported desptach of 21 million tonne with a contribution of about 12,0005 crore to the Government exchequer during July-2020 to June-2021 by way of royalty and premium from auctioned mines despite initial hiccups in fully operationalise the mines. Practically mines were hardly operational for six months in the first year since commencement. On the other hand the non-auctioned mines such as Tata Steel ( three mines), SAIL( four mines), Rungta (two mines), Essel (one mine) contributed6,189 crores to the State exchequer by dispatching 56 million tonnes during the period. This is just the contribution of two corporates and if you extrapolate the figures for the entire State then one can only imagine the quantum of economic growth the State is looking at. Contribution to State Ex-exchequer by auctioned and non-auctioned mines in Odisha: In the first quarter of 2021 the revenue collection would be above 9,049 crore, up from2,735 crore generated in the corresponding period of the previous fiscal. It needs to be underlined here that this spike is achieved despite Covid headwinds and only 16 blocks of auctioned mines starting their production activities.

In future, if approximately 250 MT of iron ore in the State is put to auction with an average price of 3, 000 per tonne and calculation be done with average auction premium of 75per cent, Odisha would generate revenue of around 56,250 crores annually.

About 40% of India’s districts have some form of coal dependency

Mongabay | July 05, 2021

The government had mandated that 60 percent of the DMF contributions collected by each district should be applied in high priority areas including health care, education, skill development, and sanitation.

— India has been under international pressure to rapidly phase out coal and scale up the installation of renewable power systems. However, much work remains for a fair transition of coal-dependent communities.

— A latest study has found that close to 40 percent of India’s 736 districts have some form of coal-dependency whether it is money collected through District Mineral Foundation or the direct and indirect jobs the coal sector provides.

— Experts argue that for a just transition in the coal sector, long-term planning for a period without coal, needs to start now, while keeping in mind the interests of the coal-dependent communities.

As countries around the world are gearing up to attend the crucial 26th United Nations Climate Change Conference of the Parties (COP 26) in Glasgow this year to deliberate strategies to combat the climate crisis, there is increasing pressure on India to reduce its coal dependency. However, if India takes steps to phase out coal, it has implications for several Indian states and their local districts.

A latest study finds that close to 40 percent of districts in India have some form of coal dependency as they are either home to coal workers or pensioners, collect funds under the District Mineral Foundation (DMF) or are benefitting from coal mining companies spending billions of rupees under the Corporate Social Responsibility (CSR) programmes.

The study was published by Sandeep Pai, a researcher, as part of his doctoral dissertation at the University of British Columbia. He analysed data collected from coal-mining company Coal India Limited (CIL), power utility company NTPC, Coal Controller’s Organisation and India’s Ministry of Coal, among others. The analysis shows that India’s transition away from coal cannot be ‘just’ for people and the environment unless comprehensive interventions are planned and implemented, addressing the concerns of millions of people involved directly or indirectly.

“There are 284 districts (38.5 percent) in India that have some form of coal dependency. They are either home to coal workers or coal pensioners or collect DMF revenues, or benefit from the CSR spending by coal companies. Out of these 284 districts, I found that 33 districts are among the most coal-dependent and would be central for any just transition planning,” Pai told Mongabay-India.

In India, so far, coal mining is largely led by government-owned companies. For instance, in 2018-2019, CIL, Singareni Collieries Company Limited (SCCL), and Neyveli Lignite Corporation (NLC), the three largest government-owned coal mining companies, produced 93 percent of the total coal produced in India. According to the study, the coal sector provides millions of direct, indirect, and induced jobs. The study states that CIL directly employs 270,000 people but “the number of indirect jobs (such as people working for contractors who repair coal mining equipment) and induced jobs (involving people working in local retail industries in coal towns such as in tea shops or grocery stores) … are common in all coal-producing regions.”

In terms of jobs, the study estimates that 3.6 million people are either directly or indirectly employed in the coal mining and power sectors in 159 districts in India. Of the 3.6 million people, nearly 80 percent of these coal jobs are linked to the coal mining sector located in 51 districts while the rest 20 percent of coal jobs are linked to coal power plant jobs. “This is an important finding as it shows that the coal mining sector’s socio-economic contribution in terms of jobs is much higher than the power sector but that it is more concentrated in a smaller number of districts,” said Pai.

Some of these 159 districts exhibit a heavy coal dependency on account of direct and indirect coal mining and coal power plant jobs. For instance, there are seven districts with over 100,000 direct and indirect coal mining and coal power plant jobs while there are 43 districts (including the seven) that have over 10,000 such jobs and 83 districts have 1,000-10,000 such jobs.

According to the study, the Dhanbad district in Jharkhand is home to the largest number of coal workers at nearly 500,000, the majority of whom are employed in the coal mining sector.

The concept of ‘Just Transition’ from coal to clean energy has gained pace across the world with many governments and international organisations formulating strategies to help fossil fuel workers and their communities navigate such a transition in a fair manner.

For India, the issue is critical as the country is trying to increase its domestic coal production as well as step up the installation of renewable power. Experts have, however, said that the increase in coal mining is not in conformity with India’s climate goals and will increase the coal dependency, making the implementation of just transition harder.

In 2015, India had promised a reduction in the emissions intensity of Gross Domestic Product (GDP) by 33 to 35 percent; achieving about 40 percent installed power capacity from non-fossil fuel-based energy resources; energy efficiency; and creating an additional carbon sink of 2.5-3 billion tonnes of carbon dioxide equivalent through additional forest and tree cover.

“Beyond jobs, policymakers also need to focus on economic, social, regional, demographic, and other aspects of just transition. The study finds that just transition is not only a jobs problem. It requires a holistic understanding of different social, economic, demographic, and other issues. Just transition also requires a spatial, geographic lens. What is required for a just transition may vary at the regional level within a country; different regions may have different just transition considerations,” Pai said.

He said proper implementation of just transition strategies for fossil fuel workers and their communities may help “increase the general acceptability of climate policies among fossil fuel-dependent communities.”

Coal mining contributes heavily to the DMF funds and CSR

In June 2015, through an amendment in India’s central mining law – the Mines and Minerals (Development and Regulation) Act (MMDR Amendment Act 2015) – DMFs were introduced in all districts in the country that were affected by mining-related operations. These district mineral foundations were tasked with managing and utilising the funds for the interest and benefit of people and areas affected by mining.

The government had mandated that 60 percent of the DMF contributions collected by each district should be applied in high priority areas including health care, education, skill development, and sanitation.

Pai’s study claims that in at least nine Indian states, the coal mining industry pays considerable taxes and royalties to state and district governments. The royalties paid at the district level are direct contributions to the DMF funds.

For instance, in 2019, the CIL paid approximately Rs. 500 billion (Rs 50,000 crores) in total taxes and royalties to federal, state and district governments – which is about three percent of federal governments’ annual revenue collection. According to the study, the coal industry collectively contributed Rs. 33.46 billion (Rs. 3,346 crore) towards DMF in 52 districts in India. In 2019-2020, coal mining and power companies also spent Rs. 10.11 billion (Rs. 1,011 crores) as CSR spending in sectors such as health, education and infrastructure development.

Of Rs. 10.11 billion, about Rs 6.8 billion (Rs. 680 crore) was spent by companies in 90 districts while the remaining Rs. 3.3 billion (Rs. 330 crore) was spent on national and state projects that were not tied to any particular district, the study said. The study shows that “some districts are more heavily dependent on jobs, while others have large numbers of pensioners or depend more on DMF contributions or CSR spending.”

Pai said that “money collected and spent under the DMF or CSR component is critical for development work in some districts.”

“Take the case of Angul district in Odisha – it has the highest level of CSR spending. In 2019-20, about Rs. 1.31 billion (Rs. 131 crore) were spent. So, if a state in India loses coal royalties and this revenue is not replaced by other sources, overall cuts in state spending may impact coal-dependent districts as well. This might be more severe in states like Jharkhand where there is heavy coal dependency in multiple districts and the state government itself relies on coal royalties,” the study notes.

Srestha Banerjee, who is the Director, Just Transition at the International Forum for Environment, Sustainability and Technology (iForest), a think-tank working on issues related to the environment and ‘Just Transitions’, said the DMF funds are not going to dry up tomorrow but what is needed is proper planning.

“DMF money is not going anywhere for the next 15-20 years (this depends on the district’s mining activities/ mine life) at least. What is required is to plan about its proper usage right now so that there can be a focused endeavour on creating long-term assets, and diversify income opportunities at the local level. Once such provisions are carved out then even if the DMF money is not there tomorrow the villages or towns won’t feel their absence,” Banerjee told Mongabay-India.

She explained that many local officials also explain that the DMF money comes without any conditions attached and they can do wonders with that but what they lack is their capacity to plan with long-term goals.

“Districts should use five percent of the DMF annual budget for proper planning and implementation. There is a need to create dedicated capacity for DMF planning and implementation. Also, our districts should create a future corpus using DMF funds for long-term security. We also need to ensure the participation of the public, specifically from mining-affected communities, in the bodies deciding the usage of the DMF funds. Basically, we need to plan for the future and maximise the resources by ensuring optimum usage today,” she said.

About 500,000 people depend on pensions from the coal sector

According to Pai’s study, there are nearly half a million coal industry pensioners in India living in 199 districts, whose pensions depend on the continuation of the coal mining industry.

The pension fund for coal miners is run by Coal Mines Provident Fund Organisation, a government organisation that collects equal contributions from coal mining companies and workers, then pays pensions to coal mine workers after their retirement. This means that money from existing workers and coal companies is paid out to retired workers and thus any transition away from coal would lead to consequences for coal industry pensioners.

Sanjay Namdeo, who is the head of the Communist Party of India (CPI) in Madhya Pradesh’s Singrauli, a district with high coal dependency, said: “The conversation around energy transition is good but we need to remember that a coal sector worker who spends his or her entire life working in the coal mines should get the pension or health benefits. Taking that right away from them is not right.”

“If that happens their life will be in a disarray. When a politician who is elected can get a pension why not these workers who spend their entire life in this sector. Any plan for the transition of such workers or areas needs to focus on ensuring that the workers get these benefits till they are alive,” Namdeo told Mongabay-India.

Pai said that it is important to understand the socio-economic dimensions of coal transitions in order to create just transition plans for coal-dependent communities that will facilitate justice in transition, and help mitigate potential political resistance these communities may raise against such low carbon policies.

DMF can be used for gauthans: CM Baghel

the pioneer | June 29, 2021

Chhattisgarh Chief Minister Bhupesh Baghel on Monday said the District Mineral Foundation Trust Fund (DMF) should be utilised to upgrade the arrangements in gauthans established under Suraji Gaon Yojana.

Development of grazing area, shed construction for multi-activity centres, construction of Devgudi and ‘Ghotul’ in Bastar region are permitted under the Fund, he said.

Baghel was holding a review meeting of the Mining department here, an official statement stated.

He said the plan is to develop gauthans as Rural Industrial Park. The shed constructed will be utilized for income generation activities by women self help groups.

The CM Haat-Bazaar Clinic Scheme has been effective in remote and rural areas. The vehicles for the scheme will be procured from the DMF.

Baghel said farmers should be provided irrigation facilities by installing pumps to utilize water stored in unused mines. The royalty amount of minor minerals should be disbursed to the Panchayats.

The Chief Minister approved a proposal to explore new areas for minerals mainly diamond, gold, silver, copper, tungsten, base metal, nickel, bauxite and iron ore with assistance from companies having mining technical expertise.

Star Rating standards have been developed for mining lease holders. The rating is based on scientific and systematic mining of mines, environmental protection, conservation of minerals and compliance of mine safety measures.

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