Category: Mining

Complete projects within limited time framework: DC

The Pioneer | June 08, 2022

A review meeting was conducted at the district level of District Mineral Foundation Trust (DMFT) under the chairmanship of deputy commissioner Nancy Sahay. In the meeting the deputy commissioner has instructed all departments to prepare the plan according to the demand of the public.

She instructed all the block level and district level officers to complete every plan within the time framework, which is prescribed by the state Government. This is the basic duty of the concerned department to take the administrative sanction for the further action.

She further said that the departments must prepare the plan on health, education, drinking water and social welfare with the consultation of the

concerned block and panchayat and must be passed by the villagers general meeting.

Sahay said that the plan should be implemented after 15 days in each and every block. Those blocks which are affected by the mining must be put on top priority. She has instructed the engineers of every department they must be honest in the completion of the projects. If any negative report will come to headquarters then strict action will be taken on the concerned engineer.

She told the child development officers to select 200 Anganwadi Kendra and their diet chart as early as possible and send it to the district headquarter.

In the meeting civil surgeon, district panchayat raj officer, executive officer of district board, rural development building division engineers were present.

What a Scathing Audit on Mining in Jharkhand Tells Us About CAG’s Toothlessness

The Wire | May 25, 2022
A performance audit brings home the point of what happens when the national auditor is denied access to information and records.
A recently concluded performance audit on the functioning of District Mineral Foundation (DMF) Trusts in Jharkhand has indicted the state’s Mining and Geology Department for failing to furnish the actual figures of collections from mining leaseholders.

Bringing the sad state of affairs to public notice, the national auditor said, “There were three sets of un-reconciled collection figures: one reported by Director of Mines, one as per DMFT bank accounts and one by District Mining Officers (DMOs)”.

This performance audit presents all that has gone wrong with the implementation of this fund meant for the welfare of mining-affected communities in the country.

As per the figures available on the DMF dashboard, as on March 31, 2022, cumulative contribution to DMF stood at Rs 61,867.92 crores, out of which the cumulative expenditure as on March 31, 2022 was Rs 31,212.49 crore.

Jharkhand accounts for the third largest DMF collection, amounting to Rs 8,301.37 crore as on March 31 2022. Two other mineral rich states, Odisha and Chhattisgarh received the highest DMF contribution amounting to Rs 17,907.32 crores and Rs 8,943.47 crores respectively.

While the DMF Rules notified by Jharkhand government in 2016, as well as Pradhan Mantri Khanij Kshetra Kalyan Yojana Guidelines (issued by Union Ministry of Mines) dated September 16, 2015, envisioned preparation of annual action plans and budgets for respective DMFTs, the performance audit revealed, “The District Collectors of none of the sampled DMFTs prepared annual budget or annual action plan”.

Further, in a shocking revelation, the performance audit noted that the DCs of Bokaro, Dhanbad and Ranchi incurred an expenditure of Rs 1,568.04 crore from DMFT funds on various schemes during 2016-21, without identifying the areas affected directly and indirectly by mining and generating the list of affected people by involving the Gram Sabhas of the concerned affected villages.

A mammoth Rs 4,473.18 crore (81% of total DMF collection as on March 31, 2021) in Jharkhand was sanctioned on just two areas: piped drinking water schemes and ‘open-defecation free’ activities.

When CAG auditors raised a red flag on this, bureaucracy at different level mentioned that it was so “reportedly on the instructions of Chief Minister and Chief Secretary of the state to meet scheme targets.”
A paper tiger

Beyond all these details showing us how a fund meant for local area development with participation from mining-affected communities got reduced to a line departments-driven fund, lies another lesson. Reading this performance audit brings home the point of what happens when a national auditor is denied access to information and records.

The question of whether there is a need to amend the Comptroller and Auditor General of India (Duties, Powers and Conditions of Services) Act, 1971, to grant more enforcement powers to the national auditor has become an aimless cry in the wilderness. Indian auditors who passionately love to perform their constitutionally ordained duty today wonder what to make of the letter ‘P’ in the law that is popularly known by its abbreviation: CAG (DPC) Act, 1971.

While this question was discussed at biannual Accountants General Conference in October 2008, and an amendment draft was prepared in 2009, consecutive finance ministers and ruling governments have largely ignored the matter.
In a final draft of the Jharkhand mining performance audit, the Principal Accountant General, Indu Aggarwal stated:

“Audit was denied access from examining and reporting on the functioning of State Level Monitoring Committee, which is the apex body to monitor the (District Mineral Foundation Trust) Fund at state level though the matter was reported to the Secretary of the Department and escalated to the Chief Secretary of the State Government.” [emphasis added]

At another place in the performance audit, the PAG noted:

“Thus, restrictions on access to crucial and primary records to audit despite assurance of full cooperation by the Secretary of the Department in entry conference, especially when all the audit procedures and criteria for conducting audit were explained in the entry conference (held during initiation of the performance audit, wherein PAG office briefs the representatives of the audited department about the scope and methodology of audit) and Chief Secretary of the state government was taken on board with requests to produce records is a Red Flag to presumptive fraud and misappropriation. These potentially derail the constitutional mandate of audit and prevent it from providing insights to the State Legislature for fixing accountability on erring officials”. [emphasis added]

Reading the above quotes from the final draft of the performance audit of DMF in Jharkhand reminded me of the concern expressed by P.K. Kataria and Subir Mallick in a theme paper, ‘Auditing for Good Governance: Oversight and Insight’.

Arguing for the need to grant the CAG of India wider powers on access to information and records kept by public offices, Kataria and Mallick stated:

“While section 18 of the CAG (DPC) Act, 1971, provides access to the records and accounts and empowers Audit to inspect any offices of accounts under the state or central government, it doesn’t provide any enforcement powers to the CAG of India to ensure compliance by the auditee to her/his request for information within a reasonable time.”

CAG of India had initiated the performance audit on District Mineral Foundation Trusts in Jharkhand with an entry conference in December 2020 with the Secretary of the Department of Mines and Geology. The performance audit was carried out between December 2020 and April 2022 (roughly 17 months) and the audit team picked up just six districts (Bokaro, Chatra, Dhanbad, Hazaribagh, Lohardaga and Ranchi) out of 24 districts in Jharkhand as a representative sample.

In the final draft, there is a full paragraph on constraints faced by the audit.

In this paragraph, the Principal Accountant General noted down the factors which hindered the audit examination:
“(i) The Department (of Mining and Geology) did not provide any information on the functioning (policy decisions, instructions, corrective measures, monitoring etc.) of State Level Monitoring Committee (SLMC) on District Mineral Foundation Trusts despite repeated requisitions and reminders (between September 2021 and April 2022) by Audit to the Secretary of the Department and Director of Mines followed by active pursuance by audit team.

(ii) Audit requested (October 2021) the Chief Secretary of the state who is also the chairman of State Level Monitoring Committee to intervene in the matter in providing the access to the functions rendered by SLMC in handling the DMFT Funds. However, no response was received even after lapse of more than six months. This impeded the audit mandate as SLMC is the only body established under the Act to handle the Fund centrally at the Apex level. Denial of access to records of SLMC prevented audit from examining and reporting on the performance of SLMC in managing the Fund during the period under the audit (i. e. 2015 to 2020).

(iii) The Secretary of the Department and Director of Mines were also requisitioned and reminded (between August 2021 and April 2022) for production of monthly collection report of DMFT contribution and royalty. However, these were not responded to even after lapse of more than seven months (as on 19th April 2022). This prevented Audit from ascertaining the correctness of DMFT contribution and its actual loss in the state arising from delayed promulgation of DMFT Rules. Besides, the Director of Mines and the Department could not provide data of DMFT collection and expenditure for the year 2020-21 to audit as no authority had been maintaining such records for the state as a whole.

(iv) The Department did not provide, despite repeated reminders, any record for the methodology adopted for selection and prioritisation of schemes or for identification of directly/ indirectly affected area and people in compliance with the Act/ Rules. Such non-production of records from Audit prevents examination of the basis of resource allocation in the absence of mining affected area and people. The matter, therefore, merits examination from a vigilance angle as it is not possible, without impartial investigation, to find out how resources have been allocated and spent on any particular area, cluster or for any set of beneficiaries.

(v) The Director of Mines visited (October 2021) the office of the Principal Accountant General (Audit) and assured to provide all the above records/data/information etc. (which were not produced) besides data dump of Jharkhand Integrated Mines and Minerals Information System (JIMMS) portal. The records however were not produced when audit teams again visited (between November 2021 – April 2022) the office of the Director of Mines who informed audit that data/information called from field offices (DMO) were not received. In the name of data dump, a CD was sent (November 2021) by post to audit which contained excel sheets of DMO wise daily collection of DMFT contributions. No information was available in the CD (excel sheets) how these contributions were arrived at. Thus, audit was prevented from verifying the system of collection and computation of DMFT contributions being captured in JIMMS. The Director of Mines was informed (December 2021) that it was not data dump but excel sheets without any information of the royalty and payable DMFT contribution. Further request (April 2022) to provide data dump was not responded to (as on 19th April 2022).

(vi) Audit forwarded a draft report on audit findings covering the period 2015-2020 on working of DMFTs in October 2021 for response and reply of the Department. No response has been received (as on 19th April 2022) for the Department”.
The performance audit was shared with Chief Secretary with a letter from the Principal Accountant General dated April 20, 2022. In the letter, PAG informed the Chief Secretary that a copy of the final performance audit had already been shared with Secretary, Mining and Geology Department, Jharkhand on April 19, 2022. With that letter PAG office had requested the Secretary of the Mining and Geology Department, to furnish the replies within two weeks and requested the date for an Exit Conference in the first week of May 2022. The letter also reminded that an earlier correspondence dated October 22, 2021 has not been responded to by the office of the Secretary, Mining and Geology Department.

In a file noting, the Chief Secretary, while forwarding this letter, noted:

“Kindly go through it. A reply must be sent without fail by 30/04/2022”.

Has the reply been filed by the Secretary, Geology and Mining Department, who is under the custody of Enforcement Department?

Will the ‘exit conference’ to this performance audit take place soon?

We may have no clue on the probable answers to such questions. However, one thing is certain. If the ruling government indeed wants to walk the talk we heard from the podium of the National Audit Diwas, it must give a consideration to the proposed amendments to CAG (DPC) Act, 1971.

Himanshu Upadhyaya is assistant professor at Azim Premji University.

AAL going for production shortly?

The Hindu | Sumit Bhattacharjee | 09 Feb, 2022

Activity picks up at plant, power plant trial run held

Anrak Aluminium Limited (AAL) which was set up in 2014 with an investment of around ₹6,000 crore at Rachapalle in Makavarapalem mandal of Visakhpatnam district, is yet to go into production. The plant was set up with an installed capacity of 1.5 million tonnes per year, but with the cancellation of G.O. 97 by the Jagan Mohan Reddy government and the company failing to get a linkage for bauxite ore, the operation of the plant has been stalled. Now there are strong rumours that the company is gearing up to start production and it is learnt that initially February 5 was the date given but it had to be postponed to a later date.

Initially, G.O. 97 had given permission to the plant to mine bauxite ore in Gudem and Chintapalle block in Visakhapatnam Agency, and the mining was to be done by the A.P. Mineral Development Corporation in the reserve forest area. But due to stiff resistance from the tribals who followed the Niyamgiri model of agitation, the YSRCP government had cancelled the G.O., sticking to its election promise.AAL, a joint venture between Penna Group and Ras Al-Khaimah Investment Authority (RAKIA), has been waiting since then to establish a bauxite linkage and start production.

Sources say that it has been importing bauxite ore from abroad and building up its stock. It is also learnt that AAL is going the Vedanta way that has an alumina refinery at Lanjigarh in Odisha.After Vedanta failed to get its linkage from Niyamgiri due to the resistance, it had established linkages from other States such as Rajasthan and Gujarat. Sources say that apart from importing bauxite, AAL is also planning to take one mine from Vedanta on lease to establish domestic linkage. However, no AAL official could be contacted for confirmation.

Sources say that a railway line is being laid from Bayyavaram in Kasimkota mandal to Makavarapalem, along with a siding to unload bauxite.

Hinting that something is on at the company, a few employees confirmed that hectic maintenance activity was on and the trial run of the power plant has been conducted successfully.

Ravi Rebbapragada of Samata, who was the architect of the Samata Judgement, based on which mining in the Fifth Schedule area by private parties was banned, said, “We do not mind if AAL imports bauxite or takes a mine on lease in some other State, but it cannot mine in Fifth Schedule areas.”

Nimmalapadu’s protracted struggle: Despite legal win, 3 Andhra tribal villages fight to save land from mining

Down to Earth | Shagun | Jan 29, 2022

Villagers near Andhra-Odisha border are fighting the state for calcite reserves two decades after securing Supreme Court victory

In 1997, the residents of Nimmalapadu, a village in Andhra Pradesh, achieved the unthinkable: They won a legal battle against the state government and a private company to save their village from mining.

The Supreme Court overruled a 1993 Andhra Pradesh High Court order in favour of the state government, it declared that only people belonging to the Konda Dora tribe and their cooperatives can exploit the minerals in Fifth Schedule areas and that private mining here, even with government backing, is illegal.

The verdict, popularly called the Samata judgement after the name of the non-profit that helped the people fight the case, adds that even if the state government decides to mine directly, it needs to keep the interest of the tribal people first.

Yet, over two decades later, the residents of the village near the Andhra Pradesh-Odisha border are fighting the state over their calcite reserves. Calcite is a mineral that is used in building material, abrasives, soil treatment, construction aggregate, pigment, and other applications.

The residents allege that the Andhra Pradesh Mineral Development Corporation (APMDC), the state agency responsible for mining licences, has issued licences five times since 1997 to cooperatives or individuals from the state belonging to the Konda Dora community. Every time, it has found new ways to keep the people out of the process.

“The Durga Sandstone MAC Society gave Rs 2 lakh per year to people whose land was brought under mining. Landless residents were given Rs 1 lakh per year. It also enrolled some of the residents as members and gave them a salary,” says Latchanna Rao of adjoining Karakavalasa village.

The most recent attempt to undermine the people was made on March 16, 2021, when APMDC floated a tender to mine calcite in a 32.7-ha area, which will impact Nimmalapadu along with the neighbouring Karakavalasa and Ralagaravu villages. Within days of the tender, the residents got a stay order from the High Court on the grounds that they will not be able to apply as the tender only allowed bidding by contractors with experience in heavy-mechanised mining.

The petition was filed by Sri Abhaya Girijana Mutually Aided Labour Cooperative Society, a group floated by the residents who worked with Durga Sandstone MAC Society, and now want to mine directly.

“Our elders never wanted mining. But seeing the government’s persistence, we have decided it is better if we get involved,” says Chompi Balaraju, a member of the cooperative.

In April last year, APMDC removed the contentious clause and awarded a five-year-long mining licence to two contractors who belong to the Konda Dora community but are not from the three villages.

“The contractors have no experience in mining and will remain responsible for the mines only on paper. Private players, whom the people have been fighting for long, will start to exploit the land through them,” says Ravi Rebbapragada, executive director of non-profit Samata.

He adds that if the government was serious, it would award the contract to the people’s cooperative. The contractors can extract 4,000 million tonnes of calcite every month and will pay APMDC a fee of Rs 448 per tonne.

The residents allege the government agency has also not taken a go-ahead from the three gram sabhas before awarding the licences, as mandated under the Provisions of The Panchayats (Extension to The Scheduled Areas) Act, 1996.

“While 18 families have land in the proposed mining area, there are at least 130 families who are either agricultural labourers or cultivate on government land for generations without legal rights. All of them need to be compensated,” says Rebbapragada.

Based on their learnings from 2012, the residents are demanding royalty for their land, besides annuity till the time the project is operational. They also want a fund for rehabilitating the land after the company is gone. Other demands include employment, land for land, a cellular tower, a 24-hour doctor, and transportation facilities.

“Most of our demands are about development, which is ideally the work of the government. But the state has punished us for not allowing private mining. It has not carried out any developmental projects in the region since the 1970s when calcite was first found in the area,” says 60-year-old Pandana, who had actively participated in the struggle.

The nearest hospital is in Bobbili, a town some 40 km away. “There is a surge in malaria and typhoid cases because of poor sanitation. We also do not have good roads or reliable mobile connectivity,” says Balaraju. Education is another challenge with most children forced to travel to other villages or cities to attend good schools.

In December 2021, the contractors and APMDC proposed that they will only mine government land, and asked residents for approval. The residents have in response demanded `1.50 lakh per acre (0.4 ha) for families cultivating on government land. They also said that if the land adjoining the mines gets disturbed, the contractor will have to compensate for the same.

“Durya Rukmani, a former mandal parishad president and one of the new contractors, is trying to convince us informally. His people are organising cultural events and festivals. But we will not budge till the time they agree to all our demands and sign a legal contract for the same,” says Balaraju.

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

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