Supreme Court pushes for Sustainability in Mining
Supreme Court pushes for Sustainability in Mining

Supreme Court pushes for Sustainability in Mining

In this article, the authors have discussed the environmental interventions made by the Supreme Court in the mining sector. Further, the authors have analysed the consequential impact on various others industry sectors because of such interventions.

All the major countries of the world are striving for sustainable development. Sustainable development refers to the development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. Both national and international organisations have highlighted the importance of sustainable development.

Mining is one of the major sectors, which plays a crucial role in the process of country's economic development and acts as a catalyst for the growth of other core industries like power, steel, cement, etc., which, in turn, are critical for the overall development of the economy. India is one of the largest exporters of iron ore, chromite, bauxite, mica and manganese, and it is ranked fifth among the mineral-producing countries in terms of volume of production.

Mining includes activities like pitting, digging and quarrying among others undertaken to gainfully extract a mineral from the Earth's crust. Mining is a fault-line of development which runs between environment and economy. It largely impacts the environment and sustainable development goals of the government. The judiciary has time and again made interventions in the mining sector in order to meet the threshold of sustainable development goals.

The Supreme Court intervention in mining operations dates back to the year 1997 when in Samatha v. State of A.P., (1997) 8 SCC 191, the Court recommended that at least 20 per cent of the profit be set aside as a permanent fund for development needs.

Goa Foundation v. M/s Sesa Sterlite Ltd & Ors. (February 7, 2018)
In Goa Foundation v. Union of India, (2014) 6 SCC 590, the Apex Court issued various directions considering the finding that illegal mining was committed in the State of Goa. One of such directions was, to the State of Goa, to frame a policy to decide in what matters mining leases are to be granted and such grant shall be subject to the provisions of Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and other related laws. Court in this case was aware and conscious of illegal and indiscriminate mining for which it did not interfere with State Government's order suspending said mining leases. The court never intended renewal of said mining leases but instead intended that State should grant fresh mining leases.

Subsequently, on February 7, 2018, the apex court in 'Goa Foundation v. M/S Sesa Sterlite Ltd. & Ors, (2018) 4 SCC 218' cancelled 88 iron ore mining leases in the State. The court held that the State was obligated to grant fresh leases, rather than allowing second renewals, pursuant to its order in the case of Goa Foundation v. Union of India. The court also came down on the State for showing undue haste in renewing the mining leases, observing that the State was willing to sacrifice rule of law for the benefit of lease holders.

Common Cause v. Union of India (August 2, 2017)
The apex Court in 'Common Cause v. Union of India, (2017) 9 SCC 499' took notice of rampant and illegal mining going in the State of Orissa which was causing untold misery to tribal people in that area. There was over extraction of 2,155 lakh MT of iron ore and manganese ore. Rs 17,506 crore worth mineral ore produced without obtaining environment clearance. In such circumstances, court suspended various illegal mining activities going in Orissa. The grounds of dismissal were as follows:
  • No forest clearance or environment clearance or both;
  • The lease holder had a working lease and has wrongly been included as a non operational lease;
  • Non observance of statutory requirements.

    The ambit of the phrase 'illegal mining' was also discussed in this case. The court held that illegal mining does not only mean mining outside lease area. Illegality may take place inside the lease area. Purpose of MMDR Act is to ensure scientific mining, balanced utilisation of natural resources and protection and preservation of environment by adhering to statutory requirements. Non adherence would invite penalty and termination of lease. Adherence to statutory provisions implies adherence to provisions of Environment (Protection) Act, 1986, laws pertaining to air and water pollution, Forest Conservation Act, 1980 and mining statutes.

    Manohar Lal Sharma v. Principal Secy (August 25, 2014)
    The Apex Court in 'Manohar Lal Sharma v. Principal Secy., (2014) 9 SCC 516' quashed the allocation of 214 coal blocks, which were allotted to private miners between 1993 and 2011. It was held that the allotment of coal blocks made by the Screening Committee of the Government of India were arbitrary and illegal as the allotment did not meet the requirements of the procedure laid down in the statute. The court largely relied on the CAG report of 2012, which assessed the loss to the exchequer to the tunes of 1.86 lakh crore due to this illegal coal block allocation. Apart from these, there have been other judgments wherein the Apex Court has interfered in the mining sector. The table mentions all the important judgments showing the intervention of the Supreme Court in the mining sector. Intergenerational equity (rationale for interventions by the SC)
    Majorly, the Apex Court has interfered on the grounds of sustainable development and the principle of intergenerational equity. The principle of intergenerational equity states that we, the human species, hold the natural environment of our planet in common with all members of our species: past generations, the present generation, and future generations. As members of the present generation, we hold the Earth in trust for future generations. At the same time, we are beneficiaries entitled to use and benefit from it.

    Three principles form the basis of Intergenerational Equity. The first principle relied on is called the principle of "conservation of options". This requires each generation to conserve the diversity of the natural and cultural resource base in such a manner that the options available to future generations are not restricted. The second principle relied on is the principle of "conservation of quality". This was with reference to the submission that future generations should not be subjected to a quality of the planet worse than what it is today. In other words, future generations are also entitled to quality enjoyment of the diversity in the natural and cultural resource base. The third principle relied upon was the principle of "conservation of access" which is to say that future generations have an equitable right to access the diversity of the natural and cultural resource base as is available to the present generation.

    Consequential impact of such interventions on other sectors
    Out of the total industrial sector, mining contributes around 10 - 11 per cent of the country's GDP. Interventions in the form of ban on mining, cancellation of leases will largely impact other sectors also. The first and foremost impact of such ban occurs on the employment of people. Since a chunk of the State population, where mining is conducted, is involved in the mining operations including truck drivers. Mining ban or cancellation of leases will leave a large chunk of population jobless which will impact the GDP of the State.

    Second, manufacturing sector will be affected since the manufacture of a lot of products depends upon the supply of minerals and most of the manufacturers depend upon local supply generated through mining. Complete ban will forced the manufacturers to import minerals from other States which consequently will impact the final price of the product or it will lead to force closure of such manufacturing units.

    Third, mining has been a source of revenue generation for many states and such bans largely impact the State exchequer. It is to be noted that the impact may lead to reduction in the GDP of the State. Apart from these various other dependent sectors will be affected and therefore the Supreme Court should consider the consequences before making such interventions.

    Banning and cancellation of mining leases will increase our dependence on import as we have to import massive volumes of these minerals, putting more pressure on State exchequer, rendering industries uncompetitive and generating a massive loss of employment. The court should put together a group of relevant experts and industry personnel to find a way out of this imminent disaster. Two suggestions can be made here for a possible way forward:
  • To immediately establish technically competent and independent regulators. These regulators, by drawing up the necessary regulations and enforcing them strictly, will de-politicise the sector and minimise violations of environment laws and rights of the tribal people.
  • The government has to make sure that its policies attract organised, technologically well-equipped and socially and environmentally conscious mining companies.

    Implementation of these suggestions may allow to meet its goal of sustainable development along with gaining economic development. Complete ban of mining activities is not the solution, we have to be better regulators and enforcement of policies by the State agencies is the need of the hour.

    Judgement Date Findings Minerals
    Samatha v. State of Andhra Pradesh 11.07.1997 Government lands, tribal lands, and forestlands in the scheduled Areas cannot be leased out to non-tribals or to private companies for mining. All
    M.C. Mehta v. Union of India 18.03.2004 No mining should be allowed in the Aravalli mountain range in Haryana and Rajasthan. All
    Orissa Mining Corporation Ltd v. Ministry of Environment & Forests 18.04.2013 The Company was allowed to begin its $1.7 billion bauxite mining project only if it had the consent of the gram sabhas (village councils) in Niyamgiri hills. Bauxite
    Goa Foundation v. Union of India 21.04.2014 Illegal, uncontrolled and unmonitored mining in Goa. Cancelling of expired mining leases. Iron ore
    Manohar Lal v. Principal Secy. 25.08.2014 Quashing of allocation of coal blocks by the Central government between 1993 and 2011. Coal
    Common Cause v. Union of India 02.08.2017 Illegal and rampant mining found in State of Orissa. Suspension of illegal mining going on. Iron ore and manganese ore

    Banning and cancellation of mining leases will increase our dependence on import.

    KG Singhania and Alok Vajpeyi of Singhania & Co. Mumbai
    Singhania & Co., Mumbai - The information in this article is not intended to constitute legal or other professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your business, you should consult a qualified professional adviser. Singhania & Co. shall not be responsible for any loss whatsoever sustained by any person who relies on the information contained herein.
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