Failing the mining-affected – How poor planning and implementation are leading to misplaced investments

By: | Published: August 1, 2018 1:53 AM

DMF funds are being diverted for urban projects that have nothing to do with the priorities of mining-affected areas and communities.

District Mineral Foundations have collected close to Rs 20,000 crore, but poor planning and implementation are leading to misplaced investments.

One of the most important but least talked-about rights-based legislations enacted by the National Democratic Alliance (NDA) government is the District Mineral Foundation (DMF). DMF was instituted in 2015 under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to ‘work for the interest and benefit of persons, and areas, affected by mining-related operations’. This is the first legislation in the history of independent India that recognises the rights of people to benefit from their natural resources, in this case, minerals.

DMF came into being after a decade-long discussion in the country on the issue of ‘resource curse’. The fact that India’s richest mining districts are inhabited by some of the country’s poorest and most deprived populations, prompted the government to set-up DMF as a non-profit trust in the mining districts of the country. Mining companies have to give an amount equal to 10–30% of the royalty to DMFs for investments to improve the lives and livelihoods of mining-affected people. In September 2015, the Union government launched the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) to guide the DMFs on the process of planning, prioritisation and utilisation of the funds.

In its three years of existence, DMFs have collected close to `20,000 crores (close to $3 billion). But, how is this money being used? Are DMFs serving the mining-affected? My colleagues at the Centre for Science and Environment (CSE) have just released a detailed assessment of the DMFs to answer some of these questions. The results are not encouraging.

Mining-affected people excluded

The DMF was supposed to be a people-centric institution. It was never conceptualised as a government department or a government programme. But, this is exactly what it has become. Officials and political representatives dominate the DMF administration in all states. Representatives of mining-affected people have been completely excluded. Some states are now making the situation worse by increasing the political hold. For instance, in June this year, Telangana amended its DMF rules to include all MPs and MLAs in its DMFs.

People in mining-affected areas have also been left out from the decision-making process. While the law says that investments will be decided based on the recommendations of the gram sabhas (village councils), none of the DMFs have engaged with them so far. Similarly, gram sabhas are also supposed to identify beneficiaries and monitor the implementation of projects, but they have not been empowered to do so.

The result of the above is that none of the DMFs have identified their beneficiaries—the mining-affected people. They have completely missed benefitting some of the worst-affected—those displaced due to mining operations as well as those who have lost their livelihoods and their traditional rights over the land being mined. For instance, Jharia, one of the most polluted mining-affected areas in the country, has not received a single rupee out of Dhanbad’s `935 crore DMF fund.

Poor planning mars DMFs

None of the DMFs have done a bottom-up planning or developed perspective plans, as required by the law. The lack of planning is leading to inappropriate investments. For example, many top mining districts—particularly with large tribal populations—are under the national radar for high mortality and malnutrition among children below five years. However, none of these districts have started a programme to address this important issue. Similarly, there are very few initiatives towards making many of the existing facilities—such as health centres, schools, etc—functional, a key problem in the mining area.

DMF funds are actually being diverted for urban projects that have nothing to do with priorities of mining-affected areas and communities. For example, in Odisha’s Jharsuguda district, funds are being diverted for electricity supply to an airport; in Korba, Chhattisgarh, the DMF fund is being used for work under AMRUT and construction of multi-level parking lots in the town, convention centres, bus stops etc.

There are numerous examples like these. Overall, DMF investments are heavily focused on construction; emphasis on improving human resources and reducing destitution is minimal.

Administrative setup and accountability

What is also hampering DMFs is the absence of a proper administrative set-up. Except for a handful, no DMF has yet set up an office for planning and coordination. DMFs are operating in an ad hoc manner with intermittent meetings of DMF bodies where decisions on investments are being taken without involving the real beneficiaries. Some districts have engaged private consultants to oversee DMF implementation.

There is also a problem of transparency and accountability of DMFs. Disclosure of information is a major concern as most DMFs are not putting information on investments in the public domain, which they are supposed to do by law. Similarly, auditing has not happened for most DMFs so far. Even for the few districts where it has happened, such as in Chhattisgarh and Odisha, financial audits have only happened once so far. There has been no performance evaluation or social audit, which is an essential component for people-centric schemes. The bottomline is that DMFs are not fulfilling their objectives. There is little evidence that mining-affected people are benefiting from this ‘rights-based’ programme. So, what is the way ahead?

The good thing about DMFs is that everything about its objectives, functioning and structure is mentioned in the MMDR Act and the PMKKKY. States are just refusing to implement them. In fact, many of the states have enacted rules in contravention of the MMDR Act. But, it is quite clear that DMFs can only deliver if they are implemented in the spirit they were enacted in. It will not be able to deliver without bottom-up planning and proper institutional structure. It can never make right investments or be transparent and accountable unless it involves the beneficiaries in decision making and monitoring.

The fundamental fact that the state governments have to understand is that DMF is not a government programme. It is an institution to facilitate the people living in mineral-rich areas of the country to benefit from their mineral resources. Till this is internalised, DMFs will keep failing.

The author is a Deputy Director General, Centre for Science and Environment
Twitter: @Bh_Chandra

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