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A Comment on Mines and Minerals (Regulation and Development) Act, 2015

Author: Srihari Mangalam


Introduction


The Mines and Minerals Regulation Act[1] was introduced in 1957 to regulate the Indian mining industry. The Act enclosed multiple provisions to bring some order into the completely unregularized Indian mining sector. It essentially formed the basic framework for all mining laws in India. The act covered the mining process from preliminary provisions like licensing a mine to more complicated stages like the dispersion of extracted minerals. The legislative piece substantially defined which minerals, mining oils, leases, etc., fall within the extractable category and established rules to be followed while quarrying them.[2] The new precept truly brought about a change in the mining sector and transformed what earlier was a wild-west field into one of the most productive spheres of the Indian economy. Nonetheless, despite the many changes the act did bring about, many substantial issues were side-lined and left unaddressed. The provision was amended eight times before the 2015 revision.[3] Regardless, it is no surprise that a legislation enacted in the late fifties would need revisions. Legislative amendments are a medium through which an act or law is kept up to date with the field it governs. The earlier eight amendments did bring about substantial changes; legislative forums were made more approachable, and the functions of the act were better defined.[4] However, the fundamental aspects of transparency and tenure were still left unaddressed. The government recognised the many failings of the act and introduced the 2015 amendment to further modify and adapt the legislative piece. The 2015 revision aimed at the finer irregularities in the law and tried to better draft a change. Accordingly, the purpose of this writeup is to explore the rather expansive Mines and Mineral Act while pivoting on the 2015 amendment.


Significant features


The Mines and Minerals Act is applicable on all extractable commodities except natural and atomic minerals. The two unmarked categories fall within the state’s purview, and the state list defines the rules for minerals demarked as such.[5] A particular ore such as river sand is classified as a minor mineral, and the state in which its mines fall will be the one to specify rules for it.[6] Nonetheless, the factor of discussion; the 2015 amendment, did, in fact, change a lot of the pre-existing norms. The amendment was first introduced as an ordinance on 12th January 2015. However, the draft for public debate had already been released, the previous year. The Lok Sabha passed the amended provision on 3rd March, and the Rajya Sabha did the same on 20th March.[7] The Bill was introduced at a time when the Supreme Court cancelled licenses for Odisha’s 26 mills.[8] The mills had been operating even after their tenure’s were over and their licenses hadn’t been renewed. The Bill seeks to make the whole licensing process transparent and accessible, and the cancellation of licenses was one aspect which fell under its purview.[9] Licenses would now be auctioned off in place of a private sale. The idea was to make the licenses available for public bidding, where a transparent process for each bid will be followed; and the highest bidder will be allotted mining rights.[10] The amendment also fixates that a particular percentage of the revenue from the mine will go to the development of the area it is situated in.[11] The Government, in an attempt to balance out the harm mines cause, made it compulsory for license holders to contribute specific sums for the particular areas of development. The state will set the percentage of revenue to be paid, and the amount shall be in addition to the royalties. Moreover, the act substantiated a fund to encourage non-coal-based mining and promote the exploration of more geo-friendly extracts. The fund was allotted a preliminary amount of five hundred crores and was deemed to receive a percentage of all mining incomes of the licenced extractors. [12]


The validity period of the licence was also increased; the earlier thirty-year period was now expanded to fifty years.[13] The practice of renewal of licenses was also removed; upon completion of a term, the mining rights will be up for auctioning again.[14] A significant addition to the mining field was also the prospect-cum-mining provision. The government introduced a new two-stage process. The interested buyers now had a consolidated procedure of first presenting a prospective license and then auctioning for allotments. It did, in fact, cut down on a lot of unnecessary expenditure and cut short the time involved in the whole process. The prospect-cum-mining provision is applicable on all minerals baring a few. Bauxite, manganese and limestone will not require the prospecting license as they fall under the Government’s notified category.[15] Notified elements are recognised by the government and are given pre-listed licenses. Nonetheless, the minerals which do not fall under the notified category, require both prospect and mining licenses.


The act also introduced stricter punitive measures.[16] The Government made illegal mining, violation of norms and trespassing cognisable offences, with a maximum imprisonment period of two years. The new feature treats the rather historical flotation of mining rules a lot more seriously. The state was also allotted the function for setting up special courts to deal with mining offences. The revised Act has immensely helped dissipate the status quo of the mining industry and establish a sense of legal authority.


Inadequacies


The act’s major provision which divides the licensing process into two stages; prospect cum mining is heavily criticised. Experts maintain that a prospective license holder is highly unlikely to invest in a mine when he hasn’t gotten the chance to preliminarily inspect it. Experts in this field, have claimed for more than four years that no one shall be interested in applying for a license unless, they have already performed reserve checks to see if a particular place has minerals or not.[17] The opposing view has had an important place no doubt, as an investor is highly unlikely to put money in a project which he has no information about.


Another highly criticised fragment of the act is that the new period of licensing, which is fifty years is too long. Any provision which gives a stagnation period of half a century must be cut short. Any new changes in mining laws, redrafting of a license holder etc., with such a long period will become troublesome to formulate and hold effectively applicable. The demand for a shorter period is reasonable and must be administered for a more objective and definitive mining act.


Many reactionary groups also called for better provisions for the tribals who are quite often displaced by mining activities.[18] Additionally, there were reactionary claims at the start which maintained that the act reduced the state’s power. These are political in nature and don’t really stand much ground as all the practical features are within the state’s purview. Even though the centre set up the decisive powers for mining activities, the primary powers of execution are with the state authorities.


Conclusion


The Mining and Minerals act is one of the few legislative pieces which historically has revamped the extractable minerals field. The act no doubt legislates the terminal essence of all mining activities; bringing with it a sense of legal authority. The 2015 amendment did sufficiently encapsulate the need for transparency in the licensing process. The idea behind holding auctions to provide contracts, necessitates a level playing field for all interested. The essence of a legislative piece, apart from the punitive and pecuniary ones, is to establish an equitable social identity for the field it regulates. The act and its amendments make sure that every party has an equal and a fair opportunity to represent themselves. Moreover, the introduction of a two-stage process to acquire mining rights removes the rather opaque and pre dated practice of preliminary allotment. The new amendment has brought about significant changes in the whole process; nonetheless, the obvious flaws must be addressed. The prospective stage should be adultered and a provision to allow the checking of a particular mine before applying must be allowed. Additionally, the time period of fifty years should be revised and brought down to thirty as it originally was, five decades is too long to allot a mining license. No legislative draft comes without flaws; however, it’s the duty of the legislature to check them and bring a difference. The act is fundamentally equitable, nevertheless for it to be equal in practice these rather small but significant faults must be addressed. A fair and transparent mining sphere requires the addressing of all lacunas in the legislations governing it.


[The author is a student of Law at the West Bengal National University of Juridical Sciences (NUJS), Kolkata and a member of the Centre for Research and Studies in Land, Mineral and Real Estate Laws, NUJS.]


Notes and References

[1]The Mines and Minerals Regulation and Development (Amendment) Act,2015. [2]Id. [3] Mondaq, India; The Mineral Law Amendment Stance: Key Changes , February 5, 2020, available at https://www.mondaq.com/india/mining/890404/the-mineral-laws-amendment-ordinance--key-changes (Last visited on July 20, 2020). [4]The Hindu, Ordinance on Mines, 9th by NDA government, January 14, 2015, available at https://www.thehindu.com/news/national/ordinance-on-mines-ninth-by-nda-govt/article6785810.ece (Last visited on July 20, 2020). [5]The Atomic Minerals Concession Rules, 2016. [6] Id [7]Jagran Josh, The Lok Sabha passed the Mines and Minerals (development and regulation) amendment bill, 2015, March 04, 2015, available at https://www.jagranjosh.com/current-affairs/lok-sabha-passed-mines-and-minerals-development-and-regulation-amendment-bill-2015-1425453386-1 (Last visited on July 20, 2020). [8] Odisha news insight, Oshisha Govt. Issues orders for lease extensions of 26 mines, Apr 18, 2015, available at https://odishanewsinsight.com/odisha/odisha-govt-issues-orders-for-lease-extension-of-26-mines/?page_number_0=4 (Last visited on July 20, 2020). [9] The Hindu,Union govt to create District Mineral Foundation in mining-affected areas,"November 27, 2015, available at https://www.thehindu.com/news/national/other-states/union-govt-to-create-district-mineral-foundation-in-miningaffected-areas/article6638970.ece (Last visited on July 20, 2020). [10]Zee News, Parliament passes Mines and Minerals, Coal Mines Bill, March 21, 2015, available at https://zeenews.india.com/business/news/economy/parliament-passes-mines-and-minerals-coal-mines-bill_121521.html (Last visited on July, 20, 2020). [11]Id. [12]Live Mint, Proposed mines Bill for hefty penalty for violators, November, 18, 2015, available at https://www.livemint.com/Politics/BjAPr5YBi9JBLVl9tnZlWO/Proposed-mines-Bill-for-hefty-penalty-for-violators.html (Last visited on July 20,2020). [13]The Mines and Minerals Regulation and Development (Amendment) Act,2015, §8A. [14]The Mines and Minerals Regulation and Development (Amendment) Act,2015, §11. [15]The Mines and Minerals Regulation and Development (Amendment) Act,2015, §10. [16]The Hindu, Land and Coal Bills introduced in Lokh Sabha, February 25, 2015, available at https://www.thehindu.com/news/national/land-acquisition-amendment-bill-introduced-in-lok-sabha-amid-opposition-uproar/article6928709.ece (Last visited on July 20, 2020). [17]Id. [18]Lexology, Mining in India, July 18, 2018, available at https://www.lexology.com/library/detail.aspx?g=6e1b8cb8-f7bd-4905-9d0e-13a304d9cb4d (Last visited on July 20,2020).

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