By Aarushi Singh-
Introduction
India, today has fourth largest coal mine reserve in the world. Even after having such immense amount of this valuable resource we could not fulfill the increasing domestic demand and had to import 235 million tons of coal last year[1].
The Mineral Laws (Amendment) Bill, 2020 was introduced in Lok Sabha on March 2, 2020. The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act). An Ordinance with similar provisions was promulgated on January 10, 2020 to promote ease at doing business.
The aim was ease of doing business with more uniform and regular laws and continuance in the supply of the required minerals to the industries for coal business. For a great duration ministry have tried to amend abovementioned laws and brought various modifications and changes. Giving full autonomy to the leases will give rise to malpractices like harming the environment; therefore the environment ministry has also notified that the new leases will require obtaining fresh clearances through an “expeditious mechanism”. Environment laws are now stricter in almost all the world due to increase in environment degradation due to global warming and air pollution. Classic example of this is fine which is imposed on not having proper pollution certificate for vehicle which is INR 10,000 now whereas issuing pollution certificate hardly takes ten minutes.
Mines and Minerals (Development and Regulation) Act, 1957
This Act creates the basic regulation structure of mining in India. It regulates al the mining sectors in India. All minerals expects for the minor minerals and atomic minerals are regulated in this Act. It details the process and conditions for acquiring a mining or prospecting license in India. This Act does not regulate minor minerals because that is a State subject such as River Sand. For mining anywhere on the land whether forest land or any other land, a prior permission is required to be taken from the Ministry of Environment, Forest and Climate change[2].
Coal Mines (Special Provisions) Act, 2015
Actions and allocations of mines which were cancelled in 2014 by the Supreme Court is provided by CMSP Act those were around 219 in numbers. Schedule I contains the list of all the mines; Schedule II and III consists of the sub-classes of the mines listed in Schedule I. Schedule II consists the mine projects which are already in progress by 2014 and Schedule III mines are the ones that had been earmarked for a specified end- use[3].
According to Mines & Minerals (Development and Regulation) Act, 1957 and Mineral Concession Rules, 1960, State government is responsible for giving permissions for mining which is also known as mineral concession, for all the minerals located within their respective territorial jurisdiction[4].
However, the minerals specified under the Schedule I of the Mines & Minerals (Development and Regulation) Act, 1957, the Centre’s approval is necessary before granting the mineral concession. Minerals specified under the Schedule I include hydrocarbon, atomic minerals and metallic minerals like iron ore, bauxite, copper ore, lead, precious stones, zinc and gold[5].
Rationales to Adopt the Mineral Law (Amendment) Act, 2020:
As per the World Health Organization (WHO), COVID-19 has so far affected 216 countries or territories or areas and has infected over 9 million people globally.[6] This virus has cajoled the biggest of economies of the world to knuckle down before it. India has suffered a great loss during this lockdown and post lockdown, loss of labour during the mass exodus, unfinished construction projects, economic losses to digital companies, loss of education, immense money expenditure on food and necessary supplies. The pandemic has ruined many major Action plans of the nation and majorly hit the people below poverty line and the middle class sectors.
The amendments of the Act are major step towards boosting the falling economy of the country. The previous Acts gave all the powers to the government and the government sectors whereas this new Act distributes the opportunities among the private sector as well. The government sectors will not have monopoly over the mines and minerals. The Act is enforced in compliance with the environmental laws hence strict regulations have been made to which are not contradicting any environmental laws and policies, even are beneficial and helpful in better implementation of the environmental laws.
The Act promotes ease of doing business as well as encourages entrepreneurs to participate in the auctions which can impliedly help in increasing the self-production and self- mining of the resource which may result in less dependence on the imports of such minerals. This will also bring transparency regarding the allotment of mines or mining leases so that the principle of natural justice prevails. There were various provisions in the previous Acts which were problematic and needed amendments like the dual license system for prospecting and mining separately, monopoly of the government sector and no private use of the minerals if they are acquired under Schedule II and Schedule III of CMPS Act. After analyzing all these shortcomings of the Act, the need for the new legislation bring out this Act which can be helpful and can save the country during this recession period.
Key features of The Mineral Law (Amendment) Act, 2020:
The Mineral Law (Amendment) Act, 2020 have abolished two major above mentioned Acts and came into force. The major changes that this Act have brought are divided into certain sub-heads, described in details below[7]:
- Eligibility for Auction of Coal and Lignite Blocks:
Previous law required that the person who is seeking for the permission must have certain experience in the field of mining, some mining activities only then he was allowed to participate in the auctions of coal and ignite materials. But this latest amendment have clarified that the person does not need to have prior experience, mere knowledge would be enough. The major reason for this was to increase the participants in the actions for coal and ignite minerals as well as encouraging entrepreneurial skills of the people.
- Advance Action for Auctions:
In the previous Act, government had no rights to auction the mining lease before the expiry of the lease period except for some minerals. New Act gives power to State Government to lease out the entire mining in auctions before their expiry to ensure that all the activities are being performed in continuance of this Act[8].
- Transfer of the Statutory Clearances to new Bidders:
The Act extends the time period previous successful bidders to continue the mining activities for a period of two years with all the appropriate approvals, licenses and clearances whereas new lessee can continue mining activities but he has to obtain all the approvals and statutory clearances within these two years.[9]
- Abolition of Limitations on the end-use coal:
The previous Act had a restriction on the end-use of coal for certain activities only. Bidders who had acquired coal mines in an auction under Schedule II and Schedule III had to limit their usage of coal to power generation and steer production only and not for private consumption.[10] The new Act have given liberty and freedom to the companies to conduct their usage of coal mining operations even in personal capacity or for any other purpose, yet the directions are to be issued by the Central Government.
- Combined License for Prospecting and Mining:
Prospecting is a primary stage of analysis of territory by exploring, locating or finding a mineral deposit, fossils, precious metals or mineral specimen and Mining is the extraction of such minerals from the deposits for industrial use. They are two different processes hence two separate licenses were required according to the previous laws, commonly known as the prospecting licenses and the mining lease. The Mineral Law (Amendment) Act, 2020 added a new type of composite license which provides license for both these operations combined.[11]
- Approval from the central Government:
The Act gives power to the State Government to grant the licenses or mining activities or allocate the mines without the prior approval of the Central Government on lease except for few cases in which Central Government directly allocate the auctions and leases to the companies, then the permission will be required.[12]
- Non- Exclusive reconnaissance permit holders to get other licenses:
According to the previous Act, the holders of non- exclusive reconnaissance permit for exploration of certain specified minerals were not entitled to obtain a prospecting license or a mining lease. Reconnaissance means preliminary prospecting of a mineral trough certain surveys. New Act provides that such holders can apply for a prospecting license-cum-mining lease or a mining lease but it will only apply to certain licenses.[13]
Criticism of the Mineral Act (Amendment) Bill 2020:
Majorly all the developed nations are trying to save exhaustive resources and are looking for alternatives to sustain these resources for the future generations. There are instances in the news where people are inventing new ways to use cheaper resources, one such instance is water bike, where a person is trying to generate power to run a bike on water. In such circumstances, India’s step to come up with a new law that boost the demand for fossil fuel does not make the situation any better. In a recent case of Goa Foundation vs Sesa Sterlite LTD & Ors[14] the Supreme Court prioritized the environmental clearances and held that fresh environmental clearances are required by the successful bidders so that the environment is preserved. The new law is somehow promoting the use of fossil fuels instead of renewable ones and putting the environment at risk.
Many geoscientists and technologists have stated that the composite license has no use because no company would apply for mining lease until their have found a reservoir of mineral through prospecting which makes the new law not in favor of the companies though the Act still provides both the license separately as well.
The Act gives freedom to companies to conduct the operations as they like whether in personal capacity or for steer production and power generation which may result in over-exploitation of the mineral resources and nothing will remain sustainable. Usually it is seen that companies only think about making profits and will mold procedures and operations in such manners where they will incur maximum profits. The lifting of the limit will also increase the competition among the rivals and hence the demand for coal would increase which will be another reason for over-exploitation of the resources.
There are instances in which EU banned India’s Alphonso mangoes along with five other fruits and vegetables because their quality was not up to the mark and it was considered bad for their citizens, this ban was lifted in 2014. EU prioritized health of its people[15]. It is not for the first time a nation has prioritized its nation’s health more than certain profits and losses. Hence health is the primary factor every nation look up to but this new law is in complete contradiction to this principle. Growing of the mining sector shall increase the production of coal in the industry and burning of coal produces fatal matter like Sulphur dioxide, nitrogen dioxide and mercury. This will be a threat to the lives of people living in that region.[16] This law also jeopardize India’s ratification to the Paris Agreement which can be a huge diplomatic setback. The companies would try to make major profits which might result is undermining the labour guidelines and the law might be considered harmful to certain human rights as well.
Conclusion It is a significant step which will attract more audience towards this sector, many foreign companies would also want to invest in our economy which will give a boost to FDIs. Domestic production will lead to less dependency on imports and more on self-production. The law provides freedom to the companies to utilize the resource as they want to. Ease of doing business would attract more entrepreneurs to this sector. Everything has its pros and cons hence this Law is coming with various good enactments which can be profitable in various Action Plans of the government like ‘Electricity for All’ but the government will need to be cautious about the production and usage of minerals and proper preventive measures should be applied to the laws. The Environmental Laws and this Law should never contradict each other at any point. Proper safeguard along with the economic growth should be the motive if the law wants to enrich the maximum benefits.
[1] ‘RSTV: laws in the making – the mineral laws (amendment) bill, 2020’ (Insights on India, 31 March 2020) https://www.insightsonindia.com/2020/03/31/rstv-laws-in-the-making-the-mineral-laws-amendment-bill-2020 (Last visited on 12 August 2020).
[2] Mines & Minerals (Development and Regulation) Act, 1957, available at https://mines.gov.in/writereaddata/UploadFile/MMDR%20Act,1957.pdf (Last visited on 12 August 2020).
[3] Coal Mines (Special Provisions) Act, 2015, available at http://legislative.gov.in/sites/default/files/A2015-11.pdf (Last visited on 12 August 2020).
[4] Ibid. MMDR Act, 1957.
[5] Ibid. CMSP Act, 2015.
[6] Covid-19 Map List, available on https://www.jagranjosh.com/general-knowledge/list-of-all-countries-affected-by-covid19-1585121800-1 (Last visited on 12 August 2020).
[7] Amendments to the Mines and Minerals (Development and Regulation) Act, 1957, available on https://coal.nic.in/sites/upload_files/coal/files/curentnotices/gazette%20biil17032020.pdf (Last visited on 12 August 2020).
[8] Ibid. Chapter III, available at https://coal.nic.in/sites/upload_files/coal/files/curentnotices/gazette%20biil17032020.pdf (Last visited on 12 August 2020).
[9] Ibid.
[10] Ibid.
[11] Ibid.
[12] Ibid.
[13] [Burning issue] The Mineral Law (Amendment) Bill, 2020, available at https://www.civilsdaily.com/burning-issue-the-mineral-laws-amendment-bill-2020/ (Last visited on 13 August 2020)
[14] (2014) 6 SCC 590.
[15] Banning of Alphonso and four other vegetables by EU, available at https://www.thehindu.com/news/international/world/eu-bans-indian-alphonso-mangoes-4-vegetables-from-may-1/article5956482.ece (Last visited on 13 August 2020).
[16] The Mineral Act (Amendment) 2020, available at https://blog.ipleaders.in/all-about-mineral-laws-amendment-act-2020/ (Last visited on 13 August 2020)