Consult affected people before putting coal blocks into auction

Text of the submission on the implementation of the Coal Mines (Special Provisions) Ordinance, 2014 ,promulgated on October 21, 2014, and the Draft Rules issued on November 19, 2014 by Mines, Minerals and People (MM&P), an alliance of over 180 mining affected communities and support groups, and National Coal and Thermal Power Gatherings, a process which is looking at the human and environmental costs of coal mining and thermal power projects:

The number of affected people are so large and widespread, and are unaware of the implications of the auctions proposed by this ordinance, which will completely deny their fundamental rights. Further, “It must now be regarded as well-settled law where a person who has suffered a legal wrong or a legal injury or whose legal right or legally protected interest is violated, is unable to approach the court on account of some disability or it is not practicable for him to move the court for some other sufficient reasons, such as his socially or economically disadvantaged position, some other person can invoke the assistance of the court for the purpose of providing judicial redress to the person wronged or injured, so that the legal wrong or injury caused to such person does not go unredressed and justice is done to him” (1981) Supp. SCC 87.

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The ordinance is inconsistent with Article 13 (Laws inconsistent with or in derogation of the fundamental rights): “All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. In this article, unless the context otherwise required, ‘law’ includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law.”

The ordinance clearly favours specific segment of the society without providing Article 14 {Equality before law}: “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.”

The ordinance also undermines the Article 21 {Protection of life and personal liberty}, which states, “No person shall be deprived of his life or personal liberty except according to procedure established by law.”

In State of Gujarat v Mirzapur Moti Kureshi Kasab Jamat & others, AIR 2006 Supreme Court 212, the Supreme Court held: “The interest of general public (public interest) is of a wide import covering public order, public health, public security, morals, economic welfare of the community, and the objects mentioned in Part IV of the Constitution (i.e. Directive Principles of State Policy)”.  The following Articles contain the Directive principles of State Policy:  39. Certain principles of policy to be followed by the State—“The State shall, in particular, direct its policy towards securing—

“(a) that the citizens, men and women equally, have the right to an adequate means of livelihood;

“(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;

“(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;

“(d) that there is equal pay for equal work for both men and women;

“(e) that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;

“(f) that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment. The ordinance particularly violates the sub sections (b) and (c) at a very fundamental level and does not support the cause of people who have been displaced or likely to be displaced.”

The importance and contentious nature of Land has been highlighted in the Approach to the 12th Plan as follows:

“5.24: Rapid growth is only possible if a part of land which is currently used for agricultural purposes, or degraded forest land can be made available for building much needed infrastructure, establishing new industrial units, undertaking mining and accommodating the inevitable expansion of urban settlements. The questions that arise are: how is the land that is needed for these activities to be obtained, how are the existing owners of the land or those dependent on it for their livelihood to be compensated and how are the nation’s interests in preserving food security to be protected? The past two decades have seen all these issues became highly contentious.

“5.25: These problems have arisen in large part because the legal framework under which land has been acquired is outdated. It is based on the principle of ‘eminent domain’ under which the State can forcibly acquire land for a public purpose at prices which do not reflect the market price nor provide any premium to reflect the fact that the acquisition is forcible. Where the acquisition is of forest land, which is not owned by tribals but on which the tribals have traditional usufuctury rights, the tribal communities have often not been consulted as is required under PESA and the displacement of tribal population has not been accompanied by well planned resettlement and rehabilitation programmes. Independent estimates place the number of people displaced following development projects over the last sixty years at 60 million, and only a third of these are estimated to have been resettled in a planned manner. Most of these people are the rural poor without any assets, marginal farmers, poor fisher-folk and quarry workers. Around 40.0 per cent of those displaced belonged to Adivasis and 20.0 per cent to Dalits. Given that 90.0 per cent of our coal, more than 50.0 per cent of most minerals and most prospective dam sites are in Adivasi regions, there is likely to be continuing contention over issues of land acquisition in these areas, inhabited by some of our most deprived people.

“5.26: The way forward is to move away from the colonial perspective of treating people as ‘subjects’, which is inherent in the doctrine of eminent domain, towards a vision of citizens, whose rights are guaranteed under the Constitution. Recognising that all the land needed for development cannot be obtained in a purely voluntary manner, there is need for a fair land acquisition law which resorts to compulsory acquisition only where it is unavoidable and provides fair competition, and also ensures that Resettlement and Rehabilitation (R&R) of dislocated persons is built into the legislation. R&R provisions must be made mandatory and not reduced to what they have become, conditionalities without consequences. It also requires an unequivocal commitment to imaginatively exploring ways of rebuilding the livelihoods of those adversely affected by development projects.”

The position of the Government to its avowed objectives and approach are diametrically opposed to what is being followed in the ordinance:

“21. (1) All existing land acquisition proceedings under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, in relation to Schedule I coal mines, shall continue in respect of such areas of land in accordance with the provisions of the said Act.

“(2) All such areas of land which are not subject matter of land acquisition proceedings,in relation to the coal mines, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 may be proceeded with by the Central Government in terms of the Coal Bearing Areas (Acquisition and Development) Act, 1957.

“(3) The State Governments which have initiated land acquisition proceedings under provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and all such lands which are also subject matter of the said Act in respect of Schedule I coal mines, shall—

“(a) not transfer any land to the prior allottees which have been acquired under the said Act;

“(b) continue the land acquisition proceedings till the appointed date;

“(c) for such Schedule I coal mines which have not vested in the successful bidder or the allottee, as the case may be, by the appointed date, continue the land acquisition proceedings for and on behalf of the Central Government;

“(d) upon the vesting or the allotment, as the case may be, after the appointed date, continue such land acquisition proceedings on behalf of the successful bidder or the allottee.”

Thus the ordinance neither provides for any provision for resolving issues of resettlement and rehabilitation but confers all rights and immunities to the bidders. The process of continuation of land acquisition proceedings on behalf of the Central Government places the community in a compromised situation. The Coal Bearing Areas Act which was exempt under the Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Act, 2013, with a statement that within a period of 12 months these exempt laws would also be brought under these provisions, is being subverted by specifying the use of CBA Act.

Such a process of rapid allocation through whatever mechanism violates the Article 40 of the Constitution which states by providing no alternative for the communities to enable:

“40. Organisation of village panchayats.—The State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.”

In Shrilekha Vidyarthi vs. State of UP (1991) 1 SCC 212, the court unequivocally rejected the argument based on the theory of absolute discretion of the administrative authorities and immunity of their action from judicial review and observed: “It can no longer be doubted at this point of time that Article of the Constitution of India applies also to matters of Governmental policy and if the policy or any action of the government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.”

Similar reasoning was rendered in Ramana Dayaram Shetty vs. The International Airport Authority of India (1979) 3 SCR 1014 and in Col. A.S. Sangwan vs. Union of India (1980) Supp SCC 559: “Hence, it was submitted that judicial review of Government policies is permissible if it does not satisfy the test of reasonableness and against the public interest. Although as asserted by the respondents herein that it is not the prima facie jurisdiction of this Court to examine what constitutes as ‘public purpose’ or not, as per judicial precedents in Kasturi Lal Lakshmi Reddy (Supra) and Other case laws as stated above, this Court is duty bound to interfere whenever the Government acts in a manner, which is unreasonable and contrary to public interest. In succinct, the Government cannot act in a manner, which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest.”

Therefore we contest the preamble to the ordinance which in its nature of intent states:

“AND WHEREAS it is expedient in public interest for the Central Government to take immediate action to allocate coal mines to successful bidders and allottees keeping in view the energy security of the country and to minimise any impact on core sectors such as steel, cement and power utilities, which are vital for the development of the nation;

“AND WHEREAS the Central Government considers it necessary to prescribe the conditions to rationalise the coal sector for mining operations, consumption and sale having regard to the coordinated and scientific development and utilisation of coal resources consistent with the growing requirement of the country;

“AND WHEREAS Parliament is competent to legislate under entry 54 of List I of the Seventh Schedule to the Constitution for regulation of mines and mineral development to the extent to which such regulation and development under the control of Union is declared by Parliament by law to be expedient in the public interest.”

The section defining mine infrastructure ‘(j) mine infrastructure’ includes “mining infrastructure such as tangible assets used for coal mining operations, being civil works, workshops, immovable coal winning equipment, foundations, embankments, pavements, electrical systems, communication systems, relief centres, site administrative offices, fixed installations, coal handling arrangements, crushing and conveying systems, railway sidings, pits, shafts, inclines, underground transport systems, hauling systems, (except movable equipment unless the same is embedded in land for permanent beneficial enjoyment thereof), land demarcated for afforestation and land for rehabilitation and re-settlement of persons affected by coal mining operations under the relevant law.”

Several of these would be of the nature of public utility and vesting rights to the future owners is likely to deprive some of the bonafide existing users such as the local population and therefore should be more specific on the current situation with regard to the illegally allotted block.

The role of the body responsible for settling issues of displacement, loss of livelihoods and provision of compensation and is not clarified and is seemingly not a concern at all since “prior allottee” means prior allottee of Schedule I coal mines as listed therein who had been allotted coal mines between 1993 and March 31, 2011, whose allotments have been cancelled pursuant to the judgment of the Supreme Court dated the August 25, 2014, and its order dated September 24, 2014, including those allotments which may have been de-allocated prior to and during the pendency of the Writ Petition (Criminal) No.120 of 2012; is neither allowed to continue his obligations nor is the new bidder charged of these crucial responsibilities as is clear from the following sections of the ordinance.

“13.Any and all alienations of land and mine infrastructure and creation of any encumbrances of whatsoever nature thereon which relate to Schedule I coal mines, made by any prior allottee after the 25th day of August, 2014 shall be void, save and except any registered security interest and charge over the land and mine infrastructure as registered by a bank or a financial institution or any other secured lender.

“14. (1) Notwithstanding anything contained in any other law for the time being in force, no proceedings, orders of attachment, distress, receivership, execution or the like, suits for the recovery of money, enforcement of an security or guarantee (except as otherwise provided for under this Ordinance), prior to the date of commencement of this Ordinance shall lie, or be proceeded further with and no remedies shall be available against the successful bidder, or allottee, as the case may be or against the land and mine infrastructure in respect of Schedule I coal mines.

“(2) The proceedings as referred to in sub-section (1), shall continue as a personal remedy against the prior allottee but shall not be maintainable or continued against the land or mine infrastructure of Schedule I coal mine or the successful bidder or allottee, pursuant to this Ordinance.

“(3) Every liability of any prior allottee in relation to a Schedule I coal mine in respect of any period prior to the vesting order or allotment order, shall be the liability of such prior allottee and shall be enforceable against it and not against the successful bidder or allottee or the Central Government.”

Further the ordinance goes on to promulgate, “(6) For the removal of doubts, it is hereby declared that—

“(a) no claim for wages, bonus, royalty, rate, rent, taxes, provident fund, pension, gratuity or any other dues in relation to a Schedule I coal mine in respect of any period prior to the date of vesting order or allotment order, as the case may be, shall be enforceable against the Central Government or the successful bidder or the allottee, as the case may be;

“(b) no award, decree, attachment or order of any court, tribunal or other authority in relation to any Schedule I coal mine passed prior to the date of commencement of this Ordinance, in relation to the land and mine infrastructure of Schedule I coal mines, shall be enforceable against the Central Government or the successful bidder or the allottee, as the case may be;

“(c)  no liability for the contravention of any provision of law for the time being in force, relating to any act or omission prior to the date of vesting order or allotment order, as the case may be, shall be enforceable against the successful bidder or allottee or the Central Government.”

Thus it completely absolves all the entities which have or would be beneficiaries of the allocation.

The ordinance states that with respect to Schedule II mines:

“17 (1) On and from the appointed date, the Central Government or a company owned by the Central Government shall be deemed to have become the lessee or licensee of the State Government in relation to each of the Schedule II coal mines, in respect of which a mining lease or prospecting licence has been granted prior to the date of commencement of this Ordinance, as if a mining lease or prospecting licence in relation to such coal mine had been granted to the Central Government or a company owned by the Central Government and the period of such lease or licence shall be the maximum period for which such lease or licence could have been granted by the State Government under the Mineral Concession Rules, 1960, and thereupon all the rights under such mining lease, including surface, underground and other rights shall be deemed to have been transferred to, and vested in, the Central Government or a company owned by the Central Government.

“(2) On the expiry of the term of any lease or licence, referred to in sub-section (1), such lease or licence shall be renewed, by the State Government, in consultation with the Central Government for the maximum period for which such lease or licence can be renewed under the Mineral Concession Rules, 1960.

“(3) As it is considered expedient and necessary in the public interest and in view of the difficult situation which has arisen, the powers of the State Government, under the Mines and Minerals (Development and Regulation) Act, 1957, to prematurely terminate a prospecting licence or mining lease, shall stand suspended, in relation to Schedule I coal mines, for a period of one year from the date of commencement of this Ordinance or such other period as may be notified by the Central Government.”

However, it is totally silent on the responsibilities of resettlement and rehabilitation and other provisions which need to be implemented.

The ordinance tries to take away the basic right of citizens of seeking judicial recourse by stating that

“26. No court shall take cognizance of any offence punishable under this Ordinance or any rules made thereunder except upon complaint in writing made by a person authorised in this behalf by the Central Government or nominated authority or the designated custodian.”

The Act also completely undermines the provisions of various other laws and also provides itself with such an immunity:

“27. The provisions of this Ordinance shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any such law.”

The issue of natural resource allocation and that too in quantities exceeding 25 per cent of the known coal reserves of the country and which will change the very geography and demography of large tracts of the country need not be hurried through the route of an ordinance. The implementation of the Act should only begin after a proper bill is placed in Parliament and debated to identify the pros and cons of the process. The Government seems to be in undue hurry in providing for such sweeping clauses as

“30. (1) If any difficulty arises in giving effect to the provisions of this Ordinance, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for removing the difficulty: Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Ordinance.

“(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.”

Any process of resource allocation must explicitly include the concerns of the people affected and the implications to long term ecological well-being. In keeping with this Government’s thrust on transparency all the details of the blocks being put to auction including the number of people to be displaced, the land and forests that would be lost, status of resettlement and rehabilitation should be available in public domain.

In the minimum, the Rules framed should have explicit clauses that ensure the rights of those whose land and natural resources are at stake will be consulted before the blocks are put into auction. In its urgency the Government has published the ordinance and the rules only in English and the time period given is so short that the actual stakeholders are completely in the dark about the future of their land and resources. A concerted effort to provide in vernacular to the communities in the regions where the coal blocks exist will be imperative to ensure communities can participate in the process.

It should explicitly ensure that all pending issues of compensation, resettlement and rehabilitation are independently evaluated and specific liability is imposed on the company which will ultimately benefit from the natural resource.

Pic: Aruna Chandrasekhar 

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