Miners should not dig themselves out of their social responsibility

Democracy allows a hundred ideas on a given subject to bloom before a policy is finally made. That the draft mining bill will provoke miners, stand alone ones and those who dig earth to remove minerals for captive use, to react is expected. Perhaps that is what the government wants. But what the group of ministers led by finance minister Pranab Mukherjee will find gratifying is that the reactions are in the nature of positive suggestions and not in any way strident criticism of the provisions of the draft bill.

Whether it is SAIL chairman C S Verma or Tata Steel vice chairman B Muthuraman, observations made on the provision that 26 per cent of mine profits is to be shared with the displaced local people by such notables should ideally be given due consideration by the GoM at its next meeting. Hopefully, before the bill is introduced in the winter session of Parliament, the GoM and subsequently the Cabinet will get the rough edges removed and the new Act replacing the existing Mines & Mineral Development & Regulation Act, 1957 will prepare the ground for big investments in mines in a transparent and expeditious manner.

Steel minister Virbhadra Singh who like mines minister B K Handique is a member of GoM acknowledges the “need for some kind of levy” on mines for the well-being of the people who make room for mines to be opened without, however, being specific about sharing of profits with the locals. Singh is rightly putting his faith on layers of discussion before the new Act is made. Interestingly, the reactions to the draft bill so far have come from steel groups with captive iron ore mines.

Honestly, the government does not have a problem with the likes of SAIL and Tata Steel which ages before corporate social responsibility became a catchphrase went beyond resettling the displaced people, including making them worthy of sustainable income to spreading welfare among communities around mine sites. But at the same time, there are any number of miners who taking advantage of legal vacuum first tricked the tribals and farmers out of their lands and then never spared a thought for their rehabilitation.

Culprits have been able to get away with their plunder so far. But they have left in the trail a huge mass of sullen people across the country’s mining belts. Because of the sins of unscrupulous miners, many good investment proposals for mines development now are running foul of tribals who thankfully enjoy the backing of local and foreign NGOs. Their protests became particularly strident at Niyamgiri hills beneath which lie rich deposits of bauxite. They found in Rahul Gandhi a champion of their cause. No surprise, therefore, Vedanta group, in spite of having a whole set of clearances, including a Supreme Court order in its favour was stopped in its track by environment and forests minister Jairam Ramesh.

In its attempt to wean away the tribals, constituting eight per cent of the population from the path of violence, denial of mining facility at Niyamgiri to Vedanta, however legitimate the company’s claims might have been is not a big issue for the government. Well before the GoM approval of the draft bill, groups making applications for mining rights have come to understand that from the point of starting price negotiations for land they will be required to treat the people to be displaced with compassion in paying compensation and resettling them.

National Advisory Council member N C Saxena says in a note that “project affected people are no longer in a mood to suffer passively. Consequently, there has been growing protest and militancy leading to tensions, conflict and violence. A well intended, liberal and comprehensive resettlement and rehabilitation policy is, therefore, required.” Two significant points made by Saxena relate to taking into account the future land value while working out compensation and allowing displacement only after implementation of resettlement and rehabilitation package. His note will form the basis of the Council’s input on laws to be framed for land acquisition and resettlement of the displaced.

So whether it is draft mining bill or new approach to land acquisition, the government is siding with the “wretched of the earth.” But at the same time a point not to be missed is the impossibility of arriving at net earnings of captive mines. Such mines don’t sell minerals at either quarterly agreed prices or at spot rates. Transfer cost of minerals to mills remains a grey area. Verma, therefore, did well to bring into focus the difficulties in calculating captive mine profits. No doubt this contentious provision will come for review.

Muthuraman unhesitatingly says if industry is found wanting in discharging its responsibility to society, then it should be mandated to do so. Unfortunately India still does not have many progressive groups like the one Muthuraman represents. Standalone mining companies in particular need to be nudged hard to empower the displaced through education, health care and skills development. But such activities in mine areas, as Muthuraman wisely suggests, should be allowed as cost before arriving at profits.