The Supreme Court's (SC) decision to cancel allocated coal blocks is the break the government required to reset how green clearances are given for coal mining.
The SC cancelled 214 coal blocks in its order on August 25. The decision was followed by another critical one in the National Green Tribunal. The quasi-judicial body which adjudicates on all green issues, hearing the case of the controversial Mahan coal block in Madhya Pradesh, dismissed the petition noting that the SC order had made it infructuous. In other words, since the companies did not hold a right over the block anymore, a case challenging the forest clearance the companies had for mining the block also fell through.
This set the question up immediately: Once the government redistributes the coal blocks, would all the blocks have to seek environmental and forest clearances afresh? If so, under existing regulations, that could be a year-long process in the minimum, fraught with uncertainty for the industry about eventual success even after allocation of the mine.
To understand the complications green clearances present to any future allocations or auctions one must draw the web of regulations that exist today. A project proponent that has been allocated a coal block applies for an environmental clearance under the Environment Protection Act, 1972. The clearance is based on the approved mining plan and specifies the exact manner of mining and consequent pollution load and impact on resources. In parallel, the state government applies for the company to the Centre seeking a forest clearance for diversion of forestland under the Forest Conservation Act, 1980. Oddly, the two clearances run in parallel even if it is evident that the project is impacting forestlands.
"Well, honestly they are like fiefdoms really. The forest bureaucracy has a grip on the forest clearance and the environmental clearances are under the control of the IAS lobby in the environment ministry. Both work within their silos," said a retired official who has worked in the environment ministry. It took a SC order to link the two in 2012 and decide that the environmental clearance should not be given till the forest clearance is granted. That was done to make sure that forest clearance did not become a fait accompli as companies began work on the basis of just the environment clearance. But the orders, quite expectedly, did not go into a larger question: How can a government assess the impact of a project through such air-tight compartments to begin with.
If this is not enough, the impact of projects on designated wildlife zones such as national parks and sanctuaries is assessed through a third separate route - the National Board of Wildlife. To add to the regulations on environment and forests created in the '80s and '90s was the reform to the forestry sector with the Forest Rights Act. The law handed back powers to the tribals to control and regulate their traditional forestlands. It required miners to take consent from villagers when wishing to cut down their forests. But with rare exceptions, neither the miners nor the government really implemented this law.
Miners complained of delays in clearances and threat to locked-in investments when their proposals were rejected on grounds of impacting biodiversity and they at times approached higher political powers to reverse the decisions. Many landed up in court either seeking approvals or being challenged by petitioners who had never been heard in the clearance process.
The United Progressive Alliance government tried to bring a partial semblance of logic and surety to the process of clearances for the industry by introducing the idea of no-go areas for mining. Primarily it demarcated good forest patches in advance to let industry know that mining coal in those patches would not be permitted in future. But the policy was put on hold with opposition from within the government and the miners outside. The allocations had been made much before to several companies without considering the environmental impact of the mines. Many had invested in projects partially dependent on these mines presuming the green clearances would come through by default.
The government has now been gifted an opportunity to set the clearances process in order. The blocks are to be given afresh, all the green laws are being reviewed under a committee headed by T S R Subramanian and the no-go forest policy - now rechristened inviolate area policy - is under finalisation and the Vedanta order of SC has brought clarity on tribal rights. There could be no more opportune a time to bring the green and tribal laws and the process of allocation in harmony.
"This is the opportunity to demarcate the inviolate areas and make sure tribal consent in forests is an integral part of not just clearance but also deciding which blocks should be opened to mining and which should not be," says Ritwick Dutta, a senior advocate who has argued many environment law cases.
The Ashok Chawla committee on allocation of natural resources too had advised that the government should ensure a minimal level of clearances are in hand before mines and natural resources are auctioned. It would help discover the right price and also bring certainty to business.
Dutta says clubbing all kinds of clearances together may be fraught with problems. "But, there is a case for linking all brown clearances together and green clearances together. The capacities and issues on each front are so specialised that putting them all together in one basket would not be viable," he said.
Brown issues refer to those of pollution loads and green to biodiversity concerns.
The laws right now also empower states to give another set of clearances called the consent to establish and consent to operate. These, Dutta suggests, could be streamlined and linked up through a more holistic system of review of projects.
The T S R Subramanian panel is currently reviewing all the laws that involve clearances for industry. Though it's come under some flak from environmentalists for rushing through their work on a rather loose ground, the NDA government could not have it any better with the SC at least doing away with legacy issues involved with clearances and existing projects.