Shah panel recommends fines, prison terms for Orissa mining violations

Written by Priyadarshi Siddhanta | priyadarshi siddhanta | New Delhi | Updated: Jan 3 2014, 07:09am hrs
Orissa miningThe Union Cabinet referred the MB Shah commission?s report on illegal mining in Orissa to a CoS to scrutinise the report.
The Union Cabinet on Thursday referred the MB Shah commissions report on illegal mining in Orissa to a committee of secretaries (CoS) to scrutinise the report, which has indicted the Orissa government for failing to contain illegal mining leading to a colossal financial loss of about Rs 60,000 crore to the exchequer.

The Cabinet, which met under the chairmanship of Prime Minister Manmohan Singh, discussed the inquiry panels report in detail and decided to refer it to the CoS for submitting a report within two months, said finance minister P Chidambaram.

The CoS to be headed by cabinet secretary Ajit Seth is expected to furnish a blueprint detailing steps needed to contain unlawful mining in Orissa, which have assumed endemic proportions, a source said.

The commission in its lengthy report has held unlawful mining in Orissa as one of the biggest ever seen by it and has strongly suggested that this is an apt case for being handed over to the CBI for a thorough probe. Pointing out that illegal extraction of iron ore has led to the exchequer suffering a loss of about R59,203 crore, it said it appeared that so far miners enjoyed paying meagre royalty and pocketing windfall profits. However, the state government is reluctant to ask the CBI to do probe the matter, arguing that its own administrative and police machinery is adequately geared up to do so. However, the panel wants the FIRs filed by the police to be handed over to the CBI.

Of the over 185 mining leases of iron and manganese ores in Orissa, the commission said, over 110 were functioning without lawful authority by violating the relevant green laws. It is learnt to have recommended that the Naveen Patnaik government should suspend mining operations in over 50 mines along the Baitarani river in Balasore district besides review their green clearances.

Holding that iron ore mines in Joda and Koira areas have witnessed serious violations, the Shah commission said while 92 mines were operating without green clearance, a similar number have got delayed environmental clearance. Observing that there are a huge number of iron ore mines operating in violation of Environment Impact Assessment notifications of 1994 and 2006, the inquiry panel said over 90 such mining leases are functional under presumed extensions or in common parlance called deemed extensions.

Detecting massive freight evasion by iron ore exporters, who have furnished manipulated excise certificates to trick the railways into believing that their cargo was meant for domestic use, the commission has asked it to entrust the CBI to investigate the matter. The railways says it has served recovery-cum-show-cause notice to 14 such firms to recover an amount of over Rs 8,000 crore.

A senior Orissa government official said the state has served 146 notices to various companies for indulging in over-extraction by flouting the approved mining plans. Firms that have been served such notices include Essel Mining (an Aditya Birla Group firm) for Rs 3,387 crore, state-run SAIL for Rs 3,990 crore, Rungta Mines for Rs 1,046 crore and two notices to Tata Steel for Rs 6,693 crore and Rs 2,997 crore.

Recommending stiff penalties for miners violating green norms under the Forest Conservation Act, the commission suggested the violators should be imprisoned for six months, which could be extended to seven years. Heavy financial penalties should be imposed on them as well, it said.

The commission said it was disturbing to find that although most mines are located in tribal-dominated zones, the tribals have remained a deprived lot. Unless the miners operating in those zones are mandated to spend half of their profits locally, their lot would not be improved. Till recently the ministry of corporate affairs was toying with a proposal to give non-transferable shares of the mining companies to the eldest woman member of each family living near the iron ore mines.

The inquiry panel has asked the Patnaik government to auction iron ore mining leases to enable it ensure large profits to the state treasury. The commission said half the profits from mining operations mining leases should be used by the state on welfare activities.