In Odisha, funds meant for mining-affected communities are being diverted to urban areas

Scroll | Manish Kumar | May 09, 2021
Those living in mining areas have been seeking assistance for basic amenities for decades.

During the latest budget Session of Odisha’s Legislative Assembly, the Odisha government’s Cabinet in March approved several proposals but the one that raised eyebrows was to use the District Mineral Foundation funds, meant for the mining-affected community in the Sundergarh district, for construction of an international stadium in Rourkela town.

The proposed international stadium has been envisioned to host the Men’s Hockey World Cup 2023. This misuse of the funds is not a one-off incident, but there have been many similar trends over the years. In 2017, in the Jharsuguda district, the district administration sanctioned works related to the power supply to the Jharsuguda airport with an investment of more than Rs 20 crore squeezed from the District Mineral Foundation funds.

In another mining district of Keonjhar, the district administration in 2019-’20 sanctioned works for a handball stadium, and invested around Rs 5,00,000 for a patient facilitation centre for Cuttack-based medical college which is around 200-km away from Keonjhar.

In January 2020, the administration of the Sundergarh district bought 25 cars with the District Mineral Foundation funds for them to be used as patrolling vans by the police in Rourkela city, a non-mining affected area. Earlier, even integrated traffic management was sponsored with the funds. In the same district, the funds were also used to construct the boundary walls of the Circuit House.

The list of instances where the funds were used for works that had nothing to do with the welfare of the mining-affected communities goes on. This, experts warn, is worrisome because this comes at a time when the state’s own people living in the mining-affected areas are crying for attention and seeking help for basic amenities in their areas after living in poor and vulnerable conditions for decades.

This is important because according to the Union Coal and Mines Minister Pralhad Joshi, Odisha has seen the highest collection of Rs 11,984 crore as District Mineral Foundation collections from the miners operating in the state since the inception of funds in 2015.

The Odisha government recently told the state Assembly that the District Mineral Foundation collections in the state are rising in the state. While it was Rs. 395.44 crore in 2015-2019, in 2019-’20 the total annual collections stood at Rs 3,079.20 crore.

Though Odisha has a significant amount of the funds what is probably lacking is the provision of transparency related to their use. For instance, Rule 16 of the Odisha DMF Rules talks about sharing the annual report of the District Mineral Foundation trust on its website but hardly any annual reports have been uploaded online for several years.

Odisha’s DMF Rules mandates the usage of 60% of the funds in priority areas while 40% of them could be used in non-priority areas. The non-priority areas included investments in physical infrastructure, irrigation, energy and watershed development, afforestation and others.

Queries sent to PK Jena, who is the Odisha government’s secretary for the planning and convergence department, regarding the diversion of DMF funds for other purposes remained unanswered.

Pranav Sachdeva, a lawyer with the Supreme Court who has handled many mining cases in the apex court emphasised that Odisha and many states have attempted to dilute the very concept of the funds by diverting it to areas other than the mining-affected areas.

“As mining firms grow, the local community impacted by mining does not get any benefit from the money collected … in fact the local environment is impacted too,” he said. “But the governments often diverts these important resources away from the vulnerable community. They try to use the funds for works where ideally budgetary allocations should have been used. These funds were planned for the upliftment of the affected community for their health, education, livelihood and others and many portions land in urban areas.”

Pollution mess
According to the 2011 Census, about 1.62 million people (50 percent) in the Sundergarh district belong to Scheduled Tribes and many live in rural areas. This area is adjacent to the Chhattisgarh border and known for coal mining and other minerals for decades. But what is consistently ignored is the plight of the communities impacted by mining.

For instance, Naresh Meher, a resident of Ratanpur village in Gopalpur panchayat in Sundergarh district, said that people in his village are living in pathetic conditions due to mining taking place about 10-km away. He said that the levels of air pollution, water pollution and sound pollution have taken a huge toll on his village.

“Around 3,000 trucks cross our village every day,” said Meher, who himself is a tuberculosis patient. “Thick levels of dust often engulf our standing crops while polluted water is discharged from the handpumps. Several of the citizens here live with skin diseases, cancer and other diseases triggered by mining activities.”

But this is not the end of their poor fate as his village is now listed to be taken away for mining.

Social activist Suru Mishra from Sundergarh said that in the Hemgiri block in the district, a stretch of 25 km of road connects the mining centres of Sundergarh with Chhattisgarh and passes through several villages but even then the roads are in extremely bad shape.

“You cannot walk on that road,” Mishra told Mongabay-India. “Only trucks and heavy vehicles run on that road. There are very big potholes and the whole stretch gets waterlogged making it very difficult for the local communities to commute or for kids to use that to go to schools.”

Both, Meher and Mishra, said that these areas and many other mining-affected areas need government attention to improve their standards of lives. They also said that the Hemgiri Community Health Centre is still deprived of a digital X-ray facility and ultrasound facility and other medical facilities but the government has spent several portions of the DMF funds in boosting the District Headquarter Hospital, which is in an urban area.

The provision of District Mineral Foundation funds – to be collected from miners – were introduced in January 2015 by the government of India through an amendment in the country’s mining laws for all districts affected by mining-related operations.

In the Talcher region of the Angul district, the villagers living in areas close to the coal mining and coal washery units are left to suffer from the discharge of untreated water directly into the farmlands of the village. Similarly, in the Bansapal and Joda blocks of the Keonjhar district, the villagers are facing the crisis of polluted groundwater, a result of mining activities. This has also forced many women to walk for miles every day to fetch drinking water.

Funds diverted
Experts working on the issue of mining in Odisha and other states claim that the funds are now easily diverted for other priority areas and urban areas despite it being illegal and mining-affected communities crying for help.

Sankar Prasad Pani, a lawyer with the National Green Tribunal said, “In districts like Keonjhar, the salaries of doctors are now being paid through the funds which should ideally be coming from the state’s budgetary allocations.”

“Collectors find the funds sometimes hard to dispense and thus divert it for numerous urban-centric works,” he said. “But they are not annual budget funds, they can be accumulated and do not lapse. They can be used when needed. The need is to make priority-based plans to aid the mining-affected people.”

Ramesh Agarwal, a leading Indian environmentalist based in Raigarh in Chhattisgarh said, “The rules of funds have been framed in such a way that the district collector gets the power to sanction the funds with the approval of the local District Mineral Foundation committee. In many states, we have seen diversion of the funds to other areas which is not going to affect the mining hit communities.”

A study conducted by the New Delhi-based think tank Centre for Science and Environment on the usage of the District Mineral Foundation funds in different mining districts of Odisha found that despite lower social and health indicators the allocation of the funds on the issue of livelihood and other areas had not been much, say for example in Sundergarh district.

“In Sundergarh, one of Odisha’s top mining districts, a negligible Rs 3 crore has been provided for child development out of the district’s Rs 745 crore sanctions. This is at a time when the under-five mortality rate in rural areas of the district is as high as 67, and nearly 50% of the children below this age are victims of stunted growth,” the report said.

Srestha Banerjee, Programme Head, International Forum for Environment, Sustainability & Technology, who played a key role in producing the Centre for Science and Environment report, said the constitution of the District Mineral Foundation committee in the districts is one of the main problems.

“The District Mineral Foundation Committee in the districts have been formed in such a way that the local politicians including the parliamentarians and legislators exert more power in the decision making on the spending of the funds in their areas,” Banerjee told Mongabay-India. “The mining laws permit the administration to use part of the funds for administration works, but when the mining hit communities need attention for their upliftment and diversion of these funds to urban areas and for other similar works sounds less logical.”

She said that livelihood and income generation of the rural poor population living in the mining-affected areas need to get a priority under the District Mineral Foundation fund allocations. She also demanded that the funds should be spent based on priority areas rather than in a haphazard manner as it is happening presently in many mining districts of Odisha.

Andhra Mining Minister orders high-level inquiry into Mamillapalle blast

Yahoo News | May 09, 2021

Amaravati (Andhra Pradesh) [India], May 9 (ANI): Andhra Pradesh Mining Minister Peddireddy Ramachandra Reddy on Sunday ordered a high-level inquiry into the Kadapa district blast in which 10 people died.

The Mining Minister’s office informed that an inquiry committee is formed and Kadapa joint Collector (revenue) will lead the committee. Officers from five departments — mining, revenue, police, mines safety and explosives — are members in the committee. The committee has to submit its report to the government on the tragic mishap in five days. District collector has already submitted a preliminary report.

The Minister expressed his concern over the demise of ten persons in that accident. He assured full government support to the families of the bereaved.

Minister said that compensation of Rs 10 lakhs for bereaved family members and Rs 5 lakhs for injured is being given from the fund of district mineral foundation trust. The blast took place due to negligence of lease holder, he alleged.

Earlier on May 8, 10 people died in an explosion due to gelatin sticks near Mamillapalle village in the Kalasapadu area of Kadapa district on Saturday. Four persons are missing after the incident which took place near Mamillapalle village of Kadapa’s Kalasapadu Mandal. (ANI)

Odisha Mining Industries Seek Public Hearing Through Online Mode

Republic Bharat | May 07, 2021

Bhubaneswar, May 6 (PTI) The mining sector in Odisha has urged the Centre to allow public hearings through online mode instead of cancelling the procedure due to the resurgence of the COVID-19 pandemic.

Federation of Indian Mineral Industries in a memorandum to the secretary in the Ministry of Environment, Forest and Climate Changes, said that cancellation of public hearing will adversely affect mining production in the country.

The federation wrote a letter after the Odisha State Pollution Control Board cancelled public hearing of certain mining projects due to the surge in the COVID-19 pandemic. The public hearings were cancelled to avoid gathering of people at the proposed events.

“Such cancellation of public hearing will cause inordinate delays in grant of Environment Clearance (EC) process,” the federation said, adding that this will further impede mining activities besides adversely impacting the socio-economic development as well as employment opportunities in mining regions, along with revenues of the exchequer.

Therefore, the federation suggested expediting the public hearing for mining projects by conducting them through online platform/ digital more rather than cancelling them.

Such online public hearing will greatly help in saving time and resources for the public as well as all other stakeholders while being able to strictly follow the governments guidelines for COVID-19 and being safe, it said.

The federation urged the Centre to advise the Odisha State Pollution Control Board to conduct public hearing instead of cancelling them for indefinite period.

Eastern Zone Mining Association also urged the OSPCB to facilitate EC proposals for the state based projects. PTI AAM RG RG

Odisha diverts DMF funds to urban areas as mining-affected communities suffer

India Mongabay | May 05, 2021
(i)Odisha is one of the mineral-rich states and has billions of rupees collected under the District Mineral Foundation (DMF) funds which according to the law are to be used for the welfare of the mining-affected communities.
(ii)Instead, the DMF funds are either being used for works that have nothing to do with the welfare of mining-affected communities like the creation of a stadium or diverted for urban areas.
(iii)Experts note that Odisha has more than Rs. 110 billion under the DMF funds but they are yet to find their way to the mining-affected communities.

During the latest budget Session of Odisha’s Legislative Assembly, the Odisha government’s Cabinet in March 2021 approved several proposals but the one that raised eyebrows was to use the District Mineral Foundation (DMF) funds, meant for the mining-affected community in the Sundergarh district, for construction of an international stadium in Rourkela town.

The proposed international stadium has been envisioned to host the Men’s Hockey World Cup 2023. This misuse of the DMF funds is not a one-off incident, but there have been many similar trends over the years. In 2017, in the Jharsuguda district, the district administration sanctioned works related to the power supply to the Jharsuguda airport with an investment of more than Rs. 20 crore (Rs. 200 million) squeezed from the DMF funds.

In another mining district of Keonjhar, the district administration in 2019-20 sanctioned works for a handball stadium, and invested around Rs 500,000 for a patient facilitation centre for Cuttack-based medical college which is around 200 kilometres away from Keonjhar.

In January 2020, the administration of the Sundergarh district bought 25 cars with the DMF funds for them to be used as patrolling vans by the police in Rourkela city, a non-mining affected area. Earlier, even integrated traffic management was sponsored with the DMF funds. In the same district, the DMF funds were also used to construct the boundary walls of the Circuit House.

The list of instances where the DMF funds were used for works that had nothing to do with the welfare of the mining-affected communities goes on. This, experts warn, is worrisome because this comes at a time when the state’s own people living in the mining-affected areas are crying for attention and seeking help for basic amenities in their areas after living in poor and vulnerable conditions for decades.

This is important because according to the Union Coal and Mines Minister Pralhad Joshi, Odisha has seen the highest collection of Rs. 11,984 crore (RS. 119.84 billion) as DMF collections from the miners operating in the state since the inception of funds in 2015.

The Odisha government recently told the state Assembly that the DMF collections in the state are rising in the state. While it was Rs. 395.44 crore (Rs. 3.95 billion) in 2015-2019, in 2019-20 the total annual collections stood at Rs. 3,079.20 crore (Rs. 30.79 billion).

Though Odisha has a significant amount of the DMF funds what is probably lacking is the provision of transparency related to their use. For instance, Rule 16 of the Odisha DMF Rules talks about sharing the annual report of the DMF trust on its website but hardly any annual reports have been uploaded online for several years.

Odisha’s DMF Rules mandates the usage of 60 percent of the funds in priority areas while 40 percent of them could be used in non-priority areas. The non-priority areas included investments in physical infrastructure, irrigation, energy and watershed development, afforestation and others.

Queries sent to P.K. Jena, who is the Odisha government’s secretary for the planning and convergence department, regarding the diversion of DMF funds for other purposes remained unanswered.

Pranav Sachdeva, a lawyer with the Supreme Court who has handled many mining cases in the apex court emphasised that Odisha and many states have attempted to dilute the very concept of the DMF funds by diverting it to areas other than the mining-affected areas.

“As mining firms grow, the local community impacted by mining does not get any benefit from the money collected … in fact the local environment is impacted too. But the governments often diverts these important resources away from the vulnerable community. They try to use the DMF funds for works where ideally budgetary allocations should have been used. These funds were planned for the upliftment of the affected community for their health, education, livelihood and others and many portions land in urban areas,” he said.

The pollution mess in the mining-affected areas of Odisha
According to the 2011 Census, about 1.62 million people (50 percent) in the Sundergarh district belong to Scheduled Tribes and many live in rural areas. This area is adjacent to the Chhattisgarh border and known for coal mining and other minerals for decades. But what is consistently ignored is the plight of the communities impacted by mining.

For instance, Naresh Meher, a resident of Ratanpur village in Gopalpur panchayat in Sundergarh district, said that people in his village are living in pathetic conditions due to mining taking place about 10 kilometres away. He said that the levels of air pollution, water pollution and sound pollution have taken a huge toll on his village.

“Around 3,000 trucks cross our village every day. Thick levels of dust often engulf our standing crops while polluted water is discharged from the handpumps. Several of the citizens here live with skin diseases, cancer and other diseases triggered by mining activities,” said Meher, who himself is tuberculosis (TB) patient.

But this is not the end of their poor fate as his village is now listed to be taken away for mining.

Social activist Suru Mishra from Sundergarh said that in the Hemgiri block in the district, a stretch of 25 kilometres of road connects the mining centres of Sundergarh with Chhattisgarh and passes through several villages but even then the roads are in extremely bad shape.

“You cannot walk on that road. Only trucks and heavy vehicles run on that road. There are very big potholes and the whole stretch gets waterlogged making it very difficult for the local communities to commute or for kids to use that to go to schools,” Mishra told Mongabay-India.

Both, Meher and Mishra, said that these areas and many other mining-affected areas need government attention to improve their standards of lives. They also said that the Hemgiri Community Health Centre (CHC) is still deprived of a digital X-ray facility and ultrasound facility and other medical facilities but the government has spent several portions of the DMF funds in boosting the District Headquarter Hospital (DHH), which is in an urban area.

The provision of DMF funds – to be collected from miners – were introduced in January 2015 by the government of India through an amendment in the country’s mining laws for all districts affected by mining-related operations.

In the Talcher region of the Angul district, the villagers living in areas close to the coal mining and coal washery units are left to suffer from the discharge of untreated water directly into the farmlands of the village. Similarly, in the Bansapal and Joda blocks of the Keonjhar district, the villagers are facing the crisis of polluted groundwater, a result of mining activities. This has also forced many women to walk for miles every day to fetch drinking water.

How Odisha’s DMF funds are being diverted for other purposes?
Experts working on the issue of mining in Odisha and other states claim that the DMF funds are now easily diverted for other priority areas and urban areas despite it being illegal and mining-affected communities crying for help.

Sankar Prasad Pani, a lawyer with the National Green Tribunal (NGT) said, “In districts like Keonjhar, the salaries of doctors are now being paid through the DMF funds which should ideally be coming from the state’s budgetary allocations.”

“Collectors find the DMF funds sometimes hard to dispense and thus divert it for numerous urban-centric works. But they are not annual budget funds, they can be accumulated and do not lapse. They can be used when needed. The need is to make priority-based plans to aid the mining-affected people,” he said.

Ramesh Agarwal, a leading Indian environmentalist based in Raigarh in Chhattisgarh said, “The rules of DMF have been framed in such a way that the district collector gets the power to sanction the DMF funds with the approval of the local DMF committee. In many states, we have seen diversion of the funds to other areas which is not going to affect the mining hit communities,”

A study conducted by the New Delhi-based think tank Centre for Science and Environment (CSE) on the usage of DMF funds in different mining districts of Odisha found that despite lower social and health indicators the allocation of DMF funds on the issue of livelihood and other areas had not been much, say for example in Sundergarh district.

“In Sundergarh, one of Odisha’s top mining districts, a negligible Rs. 3 crore (Rs. 30 million) has been provided for child development out of the district’s Rs. 745 crore (Rs. 7.45 billion) sanctions. This is at a time when under five Mortality Rate in rural areas of the district is as high as 67, and nearly 50 percent of the children below this age are victims of stunted growth,” the report said.

Srestha Banerjee, Programme Head, International Forum for Environment, Sustainability & Technology (iFOREST), who played a key role in producing the CSE report, said the constitution of the DMF committee in the districts is one of the main problems.

“The DMF Committee in the districts have been formed in such a way that the local politicians including the parliamentarians and legislators exert more power in the decision making on the spending of the DMF funds in their areas. The mining laws permit the administration to use part of the DMF funds for administration works, but when the mining hit communities need attention for their upliftment and diversion of these funds to urban areas and for other similar works sounds less logical,” Banerjee told Mongabay-India.

She said that livelihood and income generation of the rural poor population living in the mining-affected areas need to get a priority under the DMF fund allocations. She also demanded that the DMF funds should be spent based on priority areas rather than in a haphazard manner as it is happening presently in many mining districts of Odisha.

Government should make suitable amendments in MMDR Act

The Hitvada | B K Shukla | 28-04-2021

Recently the Central Government amended The Mines and Minerals (Development & Regulation) Act-1957, a parent statute, which contain regulations for grant of mining leases in India. Reasons cited for amendments in the Act is to boost domestic production and to reduce import of minerals but it does not seems to achieve the object. 1. “Mining operation” occurring in Section 4A of MMDR Act-2015 is now replaced by “production and dispatch”, as result Lessee has to start production and dispatch of mineral from lease area within two years from date of executing mining lease agreement. This period of two years could be extended by maximum period of 1 year, if lessee satisfied the Government that reasons for not producing and dispatching the mineral from his mine were beyond his control. Thus after period of three years, mining lease will be lapsed.

Lapsed lease could be revived, only once during entire period of lease, if lessee satisfies the Government that reasons for not producing and dispatching the mineral from his mine were beyond his control. It is pertain to note, within above period of time, lessee has to procure all “Statuary Clearance” like environment clearance, consent to operate the mine, consent of occupier of land, Forest clearance etc. and thereafter lessee have to install plant and machinery, construct road within mine and remove over burden of mine and to continue such extraction and dispatch the mineral from the mining lease without interruption during entire period of mining lease, irrespective of market conditions, lock-down, strike, labour problems or directives of authorities not to undertake mining operation. Government should examine and consider the reasons for which the lessee could not start or continue mineral production in the mine. Shortage of minerals in the domestic market cannot be overcome by lapsing existing mining leases and allotting same, through auction, to others.

  1. Tenders for allotment of minerals blocks, through auction, were invited by the State Government from “specified category of bidders” who undertakes to consume 100% of minerals in their own industry (Captive use). Such successful bidders were not allowed to sale minerals in open market. Through amendment in Section 8 and 8A of Act, the Central Government now permit such lessees to sale up to 50% minerals so produced from auctioned mine in open market, on payment of additional amount to the State Government. Had there been this condition in the tender document to sell 50% of annual production in the open market, a number of otherwise eligible applicants would have participated in the auction process and the State Government would have fetched a better premium on allotment of such mineral blocks. Subsequent relaxation to sell mineral being contrary to terms of tender documents is therefore bad in law. According to the Ministry of Mines, one of the reasons for this amendment is to make available in open market huge quantity of mineral, extracted during the last 50 years, stocked unutilised at mine head of PSU. It is matter of record that this unutilised stock of mineral is of low grade (mineral reject) therefore same could not be utilized in mineral industries. Amendments in these provisions of law will help lessees (who before amendment were not allowed to sale their mineral in open market) to sale their high grade mineral in open market. Moreover such lessees are required to pay lesser additional amount to the State Government (at the rate zero to 50% of royalty payment) in compare to lessees, who were allowed to sale the mineral in open market, (at rate of 100 to 200% of royalty payment).
  2. The Government acknowledges, it requires longer period of time for procuring environment clearances, consent to operate the mine from PCB, Forest clearances, consent of occupier of land to enter piece of land for undertaking mining operation (in some cases, such clearances are not granted even after 10 years) and therefore by amending Section 8B of the Act, validity of such statuary clearances, if already procured by previous lessees, will be extended to new lessees. Since provisions of MMDR Act and provisions for grant of above statuary clearances are govern by different statutes and separate ministries / departments, enforcement of this amendment may not help new lessees in undertaking mining operation without acquiring such clearances individually. If the Government acknowledges it is beyond control of applicant / lessees to acquire above statuary clearance in short period of time it is unfair on part of the Government, to declare the entire bunch of pending applications as lapsed (for not procuring said clearances by applicants in time), by amendment in section 10A of Act.
  3. By deleting Sub-Section (6) of Section 12A, the Government has now allowed to transfer mining leases, acquired otherwise through auction, by lessees, in favour of third parties (subject to additional payment to the State Government, mentioned in the “Sixth Schedule” of Act). Such lessees are at liberty to charge premium, from prospective transferee, for transfer of mining leases. This amendment will boost trading of mineral concessions 5. Long pending suggestion of mining industry for appropriate amendment in MMDR Act: Since the Central Government is authorised, under provisions of the Constitution, to take control of regulation and development of mines and minerals in India, suitable amendments should be made in MMDR Act authorising the Central Government to obtain all clearances required for undertaking mining operation, before any mineral block is made available for auction. The author is Mining Law Consultant and can be contacted at bhupesh.shukla@yahoo.com
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