English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)
The 111-page judgement of the Supreme Court of India in the Goa mining case was pronounced by Justice A.K. Patnaik on 21 April
2014 at 2.00 pm in a packed courtroom filled with blackcoats. Unfortunately, I was not in the Court room, but was informed by Prashant Bhushan later that the Court thanked the Goa Foundation and Adv. Prashant Bhushan for prosecuting the case with dedication and hard work. But those few words of praise in open court are not found in the judgement for the simple reason that the judgement itself contains most of the reliefs sought by the Goa Foundation.
The Court has allowed the petition in terms of the detailed directions which are already posted here by Rahul Basu. You can get the full judgement on the goafoundation website. Let me list the principal issues that have been decided and their implications:
a) Challenges made by the mining companies and lease-holders to the Justice Shah Commission’s report. Several mining lessees had filed petitions asking for quashing of the Justice Shah Commission Report. The Court side-steps the challenges by recording the statement of the Advocate General (Goa) that if and when they take action on the basis of the Shah Commission’s findings, they will give the affected persons/companies a fair hearing and also allow them to produce evidence in their defence. It refuses to quash the Justice Shah Commission report, however. At the same time, it says it cannot direct prosecution of the lessees on the basis of the Justice Shah Commission’s findings since they were not given a hearing. But the Court says it will use the Shah Commission’s findings nonetheless on legal and environmental issues to consider granting the reliefs sought by the Goa Foundation. It then proposes to do just that.
b) Challenges to the State Govt’s order suspending mining operations and the Ministry’s Order suspending Environment Clearances (ECs): Several writ petitions were filed by the lease owners challenging the suspension order dated 10.9.2012 issued by the Goa government closing down the mines. Petitions were also filed against the MOEF’s order dated 14.9.2012 suspending all ECs for mining leases in the state of Goa. The Court has rejected both challenges. In other words, the order of the Goa government closing down mining in Goa has been found to be correct and proper in the context of the Court having found that all mining leases expired on 21.11.2007.
c) Large-scale Illegal Mining in Goa: GF had urged that the leases had expired in 2007 and should therefore be cancelled and all mining after that date was illegal. This was our main challenge. The Court has agreed with the petitioner that the validity of the leases has expired by 21.11.2007. By one fell stroke, the entire mining industry finds itself without even a fig leaf of legality. All mining operations from 21.11.2007 are declared illegal. Where does the position of those who pleaded for the re-start of “legal” mining as opposed to “illegal mining” now stand after this declaration? That debate has now ended squarely in favour of the petitioner’s contentions. This was the main prayer in the petition filed by the Foundation: cancel all the leases because of illegalities. The Court agrees. The petition is allowed. Implications are vast and not just for Goa. The provision of deemed extension cannot be used, says the Court, in the case of second renewals. This will apply in other states as well, since the Court has decisively interpreted the central Act, the Mines & Minerals (Development and Regulation) Act, 1957, notably section 8 (3) governing the grant and renewal of leases. 20 pages of the judgement (pp.16-35) are solely on this significant interpretation of the law.
Since all leases are declared invalid from 21.11.2007, all previous environment clearances now go out of the window. Obviously all the ECs were granted to leases that are no longer valid after 2007. They cannot subsist. Any fresh grant of lease or renewal of lease will have to go through the EC process all over again. In para 61 of the judgement, there is reference to a set of directions issued by the Court to the MOEF to set up an independent regulator who will ensure that ECs are issued by MOEF on proper scientific and environmental considerations. The Court has removed the EIA assessment power of the Ministry since it was being subjected to political misuse. The Court had directed that the independent regulator be set up by the MOEF by the 31st of March. All future EIAs and ECs will therefore have to go through the regulator who will be independent of the Ministry. So ECs are not going to be that easy to get in future. Further, while granting EC, the authorities will have to consider anew the quantity of ore permissible to each lease, such that it is within the overall limits (20 million tonnes) prescribed for the State in the judgement. Leases in forest areas simply cannot be granted without prior clearance under the FCA, 1980 even if the lessees do not intend to interfere with the forest portions of the lease. And so on.
So, while the stay on mining in Goa imposed by the Supreme Court Court is vacated upto 20 million tons, mining cannot start because there are no people with valid leases! New leases have to be granted. They have to get ECs. How much time will all this take? Your guess is as good as mine!
The declaration that the mining was illegal from 2007 leaves the door open for proceedings for recovery of some Rs.30,000 crores from the lease-holders since the ore was illegally mined. (This works out to pproximately Rs.2 lakh per person in Goa, three times the state’s budget, three times the state’s debt.) This the state of Goa must now recover. It can attach Sesa Ghor and Cidade de Goa and other real estate from the mining companies to recover the money. Besides the Rs.30,000 crores from illegal mining over five years, it also has to recover Rs.35,000 crores as per the Shah Commission’s findings (mining outside lease areas).
In the meanwhile, the State of Goa is already getting the sales proceeds from the disposal of inventories of 15 million tonnes which are in the midst of e-auction. This will be worth Rs.4,500 crores. This is another gift from the Goa Foundation, together with the Rs.30,000 crores and the Rs.35,000 (from Justice Shah). We are talking of some Rs.70,000 crore worth of illegal mining, which is 16 years revenue of the Goa government! And there are still people who want to abuse the role and work of the Goa Foundation. Well, you can’t please all the people all the time.
d) Mine Dumps outside the Lease area: The next question the Court answers is whether the practice of dumping rejects and mine wastes outside leases is legal and whether there are any provisions of law that legitimise it. The Goa Foundation pointed out to some 2796 ha encroachment by mining dumps outside leases as documented by the Justice Shah Commission. The mining companies had urged that as long as the dumps were on lands owned by them or for use of which they had made arrangements with the owners, there was no violation of law. The Court disagrees with their submissions.
The Court holds with the Goa Foundation and supports the Justice Shah Commission’s point of view. It reiterates its view taken in the Karnataka Bellary Iron Ore Mining petition. It holds all dumping outside the lease as illegal. It holds that any removal of material from dumps would need environment clearance. That settles the issue of mining from dumps. No longer will lessees be able to create huge mining dumps outside the leased areas. All work in connection with mining, i.e., pits, ore stacks, overburdens and rejects will all have to be conducted within the boundaries of the lease. In other words, the operating area has been severely and strictly limited to the boundaries of the lease and mine lessees can no longer encroach on open areas in Goa, even if they have the money to buy people or private land. This declaration will eventually facilitate rehabilitation of the mine as well, since excavation of new pits may not be possible unless the stacked material is removed and the earlier pits filled up.
e) Buffer zone and Ecologically Sensitive Areas outside the boundaries of wildlife sanctuaries. The Court observes that in its order dated 4.8.2008 (in the Godavarman case), it had imposed a one km ban on mining as an interim measure. That ban stands for the present. However, as regards prohibition of mining within 10 km buffer zone around wildlife sanctuaries, the Court records that this issue has not been finally decided by the Court and hence there is no ban on mining outside one km but within 10 km of wildlife sanctuaries..
While noting the Goa Govt’s submission that Goa is a small state, bounded on one side by the Western Ghats and wildlife sanctuaries, lush forests, CRZ limitations and agricultural lands declared as ecozones, the Court also records the stand of the MoEF that the Goa government position on zero buffer is rejected. Stating that the procedure laid down under the Environment Protection Act, 1986 will have to be followed for any restrictions beyond 1 km, the Court directs the MOEF to complete the process of notification of the buffer zone in the space of 6 months. (Those notifications have since appeared in the Central gazette and last date for filing of objections/suggestions is the first week of May, 2014).
f) Violations of Specific Provisions of the Mines Act: The next major issue the Court examines is the charge made by petitioners – and supported strongly by the Central Empowered Committee –that there has been large scale violation of Rule 37 of the Mineral Concession Rules. This provision prohibits mining being done on any lease by any person who is not the owner of the lease without the prior permission of the Govt. The Fomentos, Timblos and Sesa Goa made their fortunes mining other people’s leases in addition to their own. The Court has said action must be taken by the Government on this. Action provided in the Mineral Concession Rules is cancellation of the lease which has been wrongly occupied and mined.
Similarly, petitioner had pointed out to violation of Rule 38 of MCR (highlighted by the Justice Shah Commission as well), that several leases adjoining each other were being mined jointly, without the benefit of an amalgamation order. Such violations were explained away by the State Govt as not being of serious consequence since the State has powers to grant transfers of lease or amalgamation of leases. However, the court has taken serious note of such transgressions and of the casual way in which mining law was operating in the State and it has directed action on this ground as well.
g) Production and Transportation of Minerals: The Court agrees with the CEC that there was a complete lack of control on production and transportation of minerals from the mining leases in the State of Goa. However, it notes that the Goa government has brought in stricter regulations to prevent illegal mining and transportation and it hopes these will deal with the problem in future.
h) Environmental Damage to the State from Mining: What of the large scale environmental damage from reckless mining which has been elaborately documented through photographs and report by the petitioner? The Court refers to its Expert Committee and extracts several damaging paragraphs on the negative impacts of mining in the state from the committee’s report. It accepts the opinion of the Expert Committee that for the present a cap of 20 million tonnes may be set, subject to its final report which will take a year to complete. It agrees with the Expert Committee that even this 20 million tonnes must be removed with proper precaution. It also includes the question of how the dumps are to be handled in the terms of reference of the Expert Committee. It castigates, in this connection, the abysmal conduct of the State Pollution Control Board which permitted mining lessees to violate the Air and Water Acts with impunity and never took action to implement and enforce the law. It said the Board will now take action including closure of the leases if they are found to be creating pollution beyond the norms in force.
i) Intergenerational equity: The Court accepts the submissions of the petitioner that provision must be made for the future generations from the sale of its present ore assets. It agrees with the proposal of the Expert Committee (which itself was based on presentations made by the Goa Foundation before the Expert Committee) that to provide for the need and welfare of future generations of people in Goa, some portion of the earnings from sale of mineral ore should be set aside in perpetuity in the form of a Goa Iron Ore Permanent Fund. The Court has directed setting up of the Fund and said 10% of the sale price from iron ore sales will go to the Fund. So, for example, if there is a sale of Rs.10,000 crores in a year, Rs.1,000 crores of that will have to go into the Permanent Fund (in addition to royalty payments). The State Government in consultation with the CEC will submit a report to the Court in six months on the modalities of the Permanent Fund. We have suggested that Government could use the interest from the money deposited in the Permanent Fund, after adjusting for inflation. This proposal, together with the cancellation of the existing leases, is a significant advance. Civil society members in other states of India are bound to demand setting up of such Permanent Funds in their states for their coming generations. This is the landmark nature of Justice Patnaik’s (and his brother judges, S.S. Nijjar and Fakkir M.I. Kalifulla’s) judgement. They will be remembered for all time for this signal direction alone. (Both Justices Patnaik and Nijjar retire in the first week of June.)
j) Auction of Leases: The Goa Foundation had sought a direction to the Goa government not to allow any leases or renew any leases except through the process of public auction. Iron ore, like spectrum, is a scarce natural resource. Its alienation or depletion must get the State the best possible price. (Please note all leases were granted practically free by the Portuguese government. In fact, when the concessions were converted into leases by the 1987 Act, concession holders were compensated in cash amounts for the action.) The Court has chosen not to issue such a direction as it is for the Govt to decide on the best way to raise revenues from the sale of natural resources. However, it has rather ominously laid down that should the procedures for grant or renewal of leases not be fair or transparent, or in consonance with constitutional requirements, the Court can, on being petitioned, review such renewals.
On balance, what has the Goa Foundation got on its petition? Almost all the reliefs it sought, except for criminal prosecution on the basis of Justice Shah Commission Report, restraining the Goa government from granting renewals without auction and a restriction on mining within 10 km of wildlife sanctuaries. What has the Government of Goa got? A permission to mine upto 20 million tonnes with strict implementation of the provisions of the mining law and the various environment protection Acts. However, since the leases are all cancelled, mining cannot start in the near future. If the government, under the inducements of mining companies, grants renewals as it did in the past, these will be subject to legitimate judicial review.
The judgement has settled legal issues, as a Court is expected to do. However, the petition is not finally disposed of. It will come back on board once the three reports called for are filed in the Court: 1) The final report on the cap on production. The present figure of 20 million is temporary. It could go up or down, depending on the one year long study approved now by the Court; 2) The report on the auction of 15 million tonnes; and 3) The report on the Goa Iron Ore Permanent Fund and its set up, to be done by the Goa government in consultation with the CEC.