Coal Scam and New Legislation: A Remedy Worse Than the Disease?

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New legislation and auctions around coal mining legitimises illegal players, does not address existing violations or create transparency amongst local stakeholders, setting the stage for greater inequity, writes R Sreedhar for CoalScam.

In late August last year, millions of poor Indians rejoiced a Supreme Court judgement on the allocation of coal blocks. It was a source of hope for many that the Court’s subsequent order categorically held all allocated coal blocks, except four, to be illegal. For those whose lives hung directly in the balance, it was a reprieve from forced displacement, loss of livelihoods and a life of pollution and exploitation.

People hoped that the breathing time given by the Court before setting up a new coal allocations framework and a catena of laws passed over the last decade would enable the focus to shift to the gross irregularity of field-level operations in each of these coal blocks. It is an undeniable fact that a huge backlog of legacy issues of compensation, resettlement and rehabilitation still exist, not to mention false cases filed against human rights defenders protesting these illegally allocated coalblocks.

It was also redemption for a number of people who have been pointing out that the entire direction of development being pursued in the last decade has been undermining the basic tenets of the Constitution. The process of allocation of natural resources to companies has been under the scrutiny of the Comptroller and Auditor General (CAG) of India and the Supreme Court. In the coal scam alone, CAG’s estimates varied between nearly two lakhs to over ten lakh crores of undue gain to companies.

The Coal Mines Ordinance promulgated on 24th October, exactly a month after the Supreme Court’s judgment, so completely undermines the Constitution by legitimising all illegal players. The Government’s persistence and political jugglery of different kinds through two rounds of the ordinance- finally finding form in the Coal Mines (Special Provisions) Act 2015 in March- has reinforced the general belief that political parties professing good governance are not aiming at human development but “keeping conflicts to manageable limits”.

In doing so, they have persisted with furthering a dependency on oligarchs with track records of violations, not a far cry from the British and the rent-collecting, landed zamindar class. The State in India is in a terrible bind. The fallout of the scam was a huge debt given by state institutions to profligate corporates. The State Bank of India claimed close to Rs 70,000 crore exposure to miners and downstream power projects. The RBI Governor indicated that the top companies were to repay debts of nearly Rs 2,36,000 crores in the last five years and have so far deposited only Rs 31,000 crores. So to save itself, the State has given the same players responsible for this vulnerable financial situation more resources and perhaps more debts, without thought for the people who could be uprooted.

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However, aside from the mind-boggling financial loss that some quarters called ‘notional’, justice in India, hinges on the questions raised by a petitioner. In the coal scam case, since the Article 14- that talks of equality before the law- and Article 39 A- on equal justice- were invoked at some stage, stewardship demanded that the questions of equity, environmental soundness and self-reliance are also addressed by the court.

The tribal and particularly the poor are to face the greatest inequity of these en masse allocations.

The massive number of people who will be displaced for this climate-unfriendly ambition is stupendous. In Odisha’s district of Angul alone, over lakhs of people will be displaced. These are the original inhabitants and perhaps the first stakeholders. In Jharkhand, the fresh proposals add to a whopping 70,000 families to be displaced for coal mining and related projects. The ordinance which was brought under the guise of the court order and new Act want this process of alienation of land to continue and do not have even a single line about the fate of these communities.

Making it easier for the defrauders, the Act says that the new bidder will have all rights and no liabilities. This must be the first law in the country where defrauders are bestowed with rights and the right holders of the local area are being pushed into a corner with no recourse to justice. The past sins of these companies- from forged consent and illegal land acquisition- have been absolved and only those who have a conviction and have been imprisoned for three years will be ineligible from participating in auctions. This essentially means all players who indulged in malpractices are being accommodated by a government that has used the coal auctions as an example of being ‘clean and transparent’.

The Supreme Court, in a historic judgment (Criminal Appeal No/ 11/2011), observed how many Indians treat the Scheduled Tribes, or Adivasis, stakeholders of a large number of these blocks that just went under the hammer.

“Since India is a country of great diversity, it is absolutely essential if we wish to keep our country united to have tolerance and equal respect for all communities and sects. It was due to the wisdom of our founding fathers that we have a Constitution which is secular in character, and which caters to the tremendous diversity in our country.Thus it is the Constitution of India which is keeping us together despite all our tremendous diversity, because the Constitution gives equal respect to all communities, sects, lingual and ethnic groups etc. in the country.The Constitution guarantees to all citizens freedom of speech (Article 19), freedom of religion (Article 25), equality (Article 14 to 17),liberty(Article 21) etc.”

The Act and the rules,provide no space for affected communities, even those who live in Constitutionally-protected areas, to raise their concerns. The outcome of this legislation and recently concluded auctions will, no doubt, be a cause for restlessness and social conflict in already troubled and marginalised regions..

As the bidding process has unfolded, it is becoming clearer that crony capitalists can also collude. The oft-hailed ideal of transparency that was supposed to have been ushered in by the new Act has been limited to the state and the bidders but not to the community at large who will bear the consequences.

Further, the transfer of environmental and forest clearances without even ensuring that the companies were complying is a mockery of the governance systems.

While the CAG is globally spearheading bold initiatives on environmental audits, it would be a great service if the CAG also conducts a concurrent audit of the ecological damages and social equity issues associated with the coal block allocations, and look at the current Coal Mines (Special Provisions) Act from the larger prism of sustainability.

As Mahatma Gandhi once said, “An unjust law is itself a species of violence.”

R.Sreedhar is with the Environics Trust. He can be reached at [email protected]

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