India's new Mining Bill is an "outright assault on tribal communities"

Published by MAC on 2012-05-22
Source: The Hindu

Of mines, minerals and tribal rights

By Brinda Karat

The Hindu

15 May 2012

The proposed liberalisation of the mining and minerals sector is an assault on the rightful owners of the land and its resources.

Tribal and indigenous communities across the world have been asserting their rights to the mineral wealth often found under the land they own or possess or have traditional rights to. They have been historically denied even a share of that huge wealth, leave alone legal rights of ownership.

Under the contemporary deregulated neo-liberal policy framework, the exploitation and plunder of natural resources, including minerals, by domestic corporates and multinational mining companies has intensified.

But the resistance by affected communities across the world has also grown and is reflected, over the years, in the establishment of an international framework through ILO and U.N. Conventions, which recognise in varying degrees the rights of indigenous and tribal communities to ownership, control and management of land and resources traditionally held by them either individually or as a community; the right to a decisive role in decision making for development needs in their areas; and the right to prior, free and informed consent to any projects in their areas.

While these are encouraging advances won by the struggles and immense sacrifices of tribal communities, what is important is their translation into legal instruments in member countries.

The issue has immediate relevance for India, as the UPA government has introduced a Mining and Minerals (Development and Regulation) Amendment Bill, 2011 (MMDRA), which is presently before the Parliamentary Standing Committee.

Promoting privatisation

In India, ownership of minerals lies with the State. However, the Central government which has control over all major minerals like iron ore, bauxite, copper, coal and most State governments which have control over minor minerals like sand, stone, granite, etc., have promoted privatisation through leasing mines to private companies apart from handing over captive mines of iron ore and bauxite to steel and aluminium corporates like the Tatas and Birlas.

According to a recent report compiled for the industry by Ernst and Young, of the 4.9 lakh hectares of land given out in mining leases in 23 States by the end of 2009, 95 per cent of the leases comprising 70 per cent of the land were given to private companies.

The MMRDA Bill aims to further deregularise and liberalise the mining sector and encourage privatisation based on the recommendations of the Hoda Committee.

It introduces the concept of high technology reconnaissance, prospecting and exploration licences, and easy terms of conversion to mining leases to encourage the entry of FDI and foreign companies. It also gives weightage, in the allocation of leases, to a set of criteria which favour such companies and also allows them activity on much larger tracts of land than previously. This has adverse implications for equity, the environment and growth.

While these aspects need comprehensive analysis, here we focus on those provisions, which claim to address the rights of tribal communities.

There is a provision that makes it mandatory for coal mining companies to give funds amounting to 26 per cent of the profits. For other major minerals, an annual amount, which is the equivalent of the royalty paid in the financial year, must be given. While the principle of mandatory payment by companies is necessary, the problem in the MMRDA is that these funds are to be under the control of a district mineral foundation dominated by mine owners and the bureaucracy with a nominal representation of local communities.

Interestingly, in the U.S. where the Federal Government had set up trusts to manage funds paid by companies using the land on reserves owned by Native Indians, the government was recently forced to pay a compensation of $1.2 billion to 41 Native American communities for "mismanagement of the assets" of the trust and is expected to have to pay another $3.4 billion in a similar case.

When the affected people do not have a decisive say in the management of such funds, as in the case of the proposed district mineral foundation in the MMRDA Bill, "mismanagement" is inevitable. Also, rates of royalties in India are notoriously low.

Until recently, for example, the royalty for one tonne of iron ore fixed by the Central government for Orissa was just Rs. 26. With a low extraction cost of only Rs. 250 to 300 per tonne and a high market price around Rs. 7,000 a tonne, mining companies made huge profits. While royalty rates have been recently increased, it is still a pittance compared to the profits companies make.

Patron-client relationship

The very premise of the scheme replicates the patron-client relationship, which has reduced tribal communities into recipients of charity, instead of recognition as owners of the land and its resources. The related provisions of the Bill constitute an outright assault on the constitutional rights given to the tribal communities, in particular in Fifth Schedule areas.

The Bill gives legal sanction to the arbitrary rights of governments, both at the Centre and the States, to give different types of licences and leases from reconnaissance to exploration, prospecting and finally extraction without any procedure for even consulting, leave alone taking the consent of tribal communities.

The only reference to "consultation" (not consent), is for the grant of licences for minor minerals (but not major) in Fifth and Sixth Schedule areas where "the gram sabha or the District council, as the case may be shall be consulted."

Thus even the provisions under other laws such as the Panchayat Extension (to Schedule Areas) Act (PESAA), which mandates consultation with the gram sabhas, are violated by the complete absence of any consultative process prior to the granting of lease for major minerals, which are the main sites of tribal deprivation.

In another provision for notification of giving leases in forest areas and wildlife areas, the State government has to "take all necessary permissions from the owners of the land and those having occupation rights."

Thus an unwarranted differentiation is made between the rights of tribal communities in Fifth Schedule non-forest areas and forest areas. However even in the case of forest areas there is no provision for what would happen in case the owner does not give permission.

In Fifth Schedule areas, the law prohibits transfer of tribal held land to non-tribals. Different States have also enacted such laws like 70/1 in Andhra Pradesh, the Chotanagpur Tenancy Act and the Santhal Parganas Tenancy Act in Jharkhand.

None of the mining companies that gets leases is owned by adivasis. Presumably this was the reason why in the Samata case, the Supreme Court held that sale, transfers and even leases of tribal land to non-tribals are illegal. It directed that governments should consider a mechanism to include cooperative societies of tribal communities for mining operations.

The Bill overrides the Samata judgment.

Tribal cooperatives have been disqualified in the list of those eligible to get a lease for mining of major minerals, which can only be companies registered under the relevant laws. It is only for minor minerals and small deposits in the Fifth and Sixth Schedule areas that the State government "may" (not "shall") consider tribal cooperatives for getting the lease.

An earlier draft of the Bill in 2010 had included a provision for a guaranteed stake of tribal communities in mining companies. The provision had said "the company"... "will allot free shares equal to 26 per cent through the promoters quota." South African law under the Broadbased Black Economic Empowerment Act has a provision of mandatory sale of 26 per cent shares in all mining companies to "historically socially disadvantaged sections."

But in India, caving in to pressure from mining lobbies, the earlier provision has been replaced with a token allotment of "one share per member of the affected family."

There are other issues such as compensation and compensatory jobs in lieu of lost livelihood which are inadequate and also ambiguous. With cuts in permanent jobs and widespread contractual and casual work in the mining sector, the promise of employment to land losers cannot be taken at its face value.

Seen together with the pending Land Acquisition Bill which specifically excludes the issue of leasing tribal land, this Bill not only buries the ownership rights of tribal communities but facilitates the easy entry of international and domestic corporates to Fifth Schedule and tribal-dominated mineral-rich areas to plunder the natural resources of our country.

India, which is a signatory to many international conventions on the protection of tribal rights, is violating these conventions and adding to the burden of historical injustice.

The Bill, in its present form, should and must be opposed and resisted. Concerned movements should work together for an alternative model which will recognise the ownership and other rights of tribal communities in mining in Fifth Schedule and tribal areas through effective legal mechanisms.

(Brinda Karat is a member of the Polit Bureau of the Communist Party of India - Marxist.)