The recent order of the ministry of environment and forests (MoE&F) rejecting the application for grant of forest clearance to the Orissa Mining Company (the Vedanta project) has raised a number of important questions. The order cited the company’s non-compliance with a number of laws. But the Vedanta case is just one example. There are several projects in the country where similar issues are relevant. The question really is, are the multiple laws that are applicable in such cases in harmony with each other or are they working at cross purposes? In a sector such as mining, doing business is inherently complicated. There are at least four broad aspects that need to be addressed—obtaining mining licences, securing environmental clearances, acquiring land, and rehabilitation of people affected by such projects. We take a look at each of the four broad areas, to understand how the applicable laws interact with one another. Obtaining mining licences Doing business in the mining sector first entails obtaining a licence for activities such as prospecting and mining. The Mines and Minerals (Development and Regulation) Act, 1957, lays down the framework for any prospecting, leasing or mining activity to be carried out for specified minerals, and the licences that need to be obtained. The Act allows the central government to frame the rules and conditions applicable both for grant of licences and for the actual activity carried out by enterprises. The licensing authority for mining activities is the state government. Securing environment clearances Environmental clearances for industrial activities are governed by a number of laws. Most activities require clearances under the Environment (Protection) Act, 1986. Additionally, for activities in forest areas, clearance is also required under the Forest (Conservation) Act, 1980. Acts pertaining to wildlife protection, bio-diversity and the quality of air and water may also be applicable. The Environment (Protection) Act, 1986, enables the central government to take measures for “protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution”. These measures may include (among others) (a) laying down standards for the quality of the environment, (b) areas in which industries or operations may not be carried out, or carried out subject to certain safeguards. The rules framed under the Act make it compulsory for all new projects to take prior environmental clearance. For a specified category of activities clearance has to be obtained from the MoE&F, while for others, clearance has to be obtained from State Environment Impact Assessment Authorities (SEIAAs). The Forest (Conservation) Act, 1980, prohibits state governments and other authorities from any unauthorised change in the status of areas declared to be reserved forests, and any diversion of forests for non-forest purposes. It prohibits felling of trees within forest areas. Any such action has to be undertaken with the prior permission of the central government. To divert any forest area for non-forest purposes, state governments have to submit formal proposals to the Centre. State governments also have to show proposals for compensatory afforestation. Acquiring land for the project Acquiring land for projects has become increasingly contentious in recent years. The Land Acquisition Act of 1894 appears to have outlived its utility, which led the UPA-1 to introduce a Bill in the Parliament to bring a new legal framework to facilitate land acquisition. The Bill tried to address several critical aspects of land acquisition. It tried to redefine ‘public purpose’ somewhat more strictly than in the existing Act. ‘Public purpose’ was redefined to include defence purposes, infrastructure projects or for any project useful to the general public where 70% of the land has already been purchased. For acquisitions by companies, the Bill mandated that 70% of the land will have to be acquired directly from the land owners at market prices and that the government would step in under the Act to acquire the remaining 30% for the project. The Bill also aimed to provide for cases resulting in large-scale displacement. It stated that in such cases a social impact assessment study must be conducted. Tribals, forest dwellers and those with tenancy rights were also made eligible for compensation. It also mandated that the intended use of the land being acquired and the current market value of the land would have to be considered for determining compensation. The Bill lapsed when the Lok Sabha was dissolved in 2009. It is not known when the government proposes to reintroduce a Bill in the Parliament to address this issue of land acquisition. Rights of project-affected people When large projects are planned and land is acquired for those, people are often displaced from the project areas and need to be rehabilitated appropriately. The UPA-1 had introduced a Bill in the Parliament to create a legal framework for rehabilitation of project-affected people. However, the proposed Rehabilitation and Resettlement Bill, 2007, lapsed when the Lok Sabha was dissolved before the last general elections. But the UPA-1 government managed to pass a highly contested Bill that recognised the rights of scheduled tribes and other traditional forest dwellers. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act passed in 2006 focuses on the rights of forest-dwelling Scheduled Tribes and traditional forest dwellers. The Act seeks to recognise and vest forest rights in forest dwelling Scheduled Tribes with respect to forest land and their habitat. The Act mentions 13 separate rights given to forest dwellers. These include (a) living in the forest for habitation or for self-cultivation for livelihood, (b) right to own, use or dispose of minor forest produce, (c) right to protect and conserve any community resource that they have been traditionally protecting and (d) individual and community rights of habitat for primitive tribal groups. These rights have to be formally recorded/recognised by state governments. The Act also prevents any modification of forest rights or the resettlement of forest dwellers unless the Gram Sabha of the village consents to the proposal in writing. There are additional requirements to be met if developmental activities are to be undertaken in tribal dominated areas (defined as Scheduled Areas in the Constitution). The Panchayat (Extension into Scheduled Areas) Act, 1996, extends the part of the Constitution providing for Panchayati Raj in rural areas to Scheduled Areas. The Act requires that government authorities consult the Panchayat or the Gram Sabha before acquiring land for development projects and for rehabilitating persons affected by such projects. At a conceptual level, there is no apparent contradiction in the applicable laws and each of the laws mentioned above appear to be necessary to ensure that there is fairness for all stakeholders involved. However, a distinction has to be made between the legal principles these laws seek to enforce, and procedural formalities that need to be complied with to be on the right side of the law. Also, a closer look at these individual laws and their implementation will reveal a number of loopholes that need to be plugged to ensure that the spirit and basic principles enshrined in each law are enforced efficiently. From the point of view of the company that intends to do business in India, all this adds up to a lot of time-consuming process. This is perhaps why the Doing Business index published annually by the World Bank group ranks India at 133 out of 183 counties in terms of ease of doing business. The challenge, going forward, is for us to strengthen processes that are fair to all stakeholders, but at the same time are not unduly burdensome on the company that seeks to make investments in the mining sector. By CV Madhukar and Anirudh Burman This was published as an article in Financial Express on September 2, 2010
Tribunals function as a parallel mechanism to the traditional court system. Tribunals were established for two main reasons - allowing for specialised subject knowledge in disputes on technical matters and reducing the burden on the court system. In India, some tribunals are at the level of subordinate courts with appeals lying with the High Court, while some others are at the level of High Courts with appeals lying with the Supreme Court. In 1986, the Supreme Court ruled that Parliament may create an alternative to High Courts provided that they have the same efficacy as the High Courts. For an overview of the tribunal system in India, see our note here.
In April 2021, the central government promulgated an Ordinance, which specified provisions related to the composition of the search-cum-selection committees for the selection of members of 15 Tribunals, and the term of office for members. Further, it empowered the central government to notify qualifications and other terms and conditions of service (such as salaries) for the Chairperson and members of these tribunals. In July 2021, the Supreme Court struck down certain provisions of the Ordinance (such as the provision specifying a four-year term for members) stating that these impinged on the independence of the judiciary from the government. In several earlier judgements, the Supreme Court has laid out guidelines for the composition of Tribunals and service conditions to ensure that these Tribunals have the same level of independence from the Executive as the High Courts they replace.
However, Parliament passed the Tribunals Reforms Bill, 2021 in August 2021, which is almost identical to the April Ordinance and includes the provisions which had been struck down. This Act has been challenged in the Supreme Court. For a PRS analysis of the Bill, please see here.
On 16th September 2021, the central government notified The Tribunal (Conditions of Service) Rules, 2021 under the Tribunals Reforms Act, 2021. A couple of the provisions under these Rules may contravene principles laid out by the Supreme Court:
Appointment of the Administrative Member of the Central Administrative Tribunal as the Chairman
In case of the Central Administrative Tribunal (CAT), the Rules specify that a person with at least three years of experience as the Judicial Member or Administrative Member may be appointed as the Chairman. This may violate the principles laid down by the past Supreme Court judgements.
The CAT supplants High Courts. In 1986, the Supreme Court stated that if an administrative tribunal supplants the High Courts, the office of the Chairman of the tribunal should be equated with that of the Chief Justice of the High Court. Therefore, the Chairman of the tribunal must be a current or former High Court Judge. Further, in 2019, the Supreme Court stated – “the knowledge, training, and experience of members or presiding officers of a tribunal must mirror, as far as possible, that of the Court it seeks to substitute”.
The Administrative Member of the CAT may be a person who has been an Additional Secretary to the central government or a central government officer with pay at least that of the Additional Secretary. Hence, the Administrative Member may not have the required judicial experience for appointment as the Chairman of CAT.
Leave Sanctioning Authority
The Rules specify that the central government will be the leave sanctioning authority for the Chairperson of tribunals, and Members (in case of absence of the Chairperson). In 2014, the Supreme Court specified that the central government (Executive) should not have any administrative involvement with the members of the tribunal as it may influence the independence and fairness of the tribunal members. In addition, it had observed that the Executive may be a litigant party and its involvement in administrative matters of tribunals may influence the fairness of the adjudication process. In judgements in 1997 and 2014, the Supreme Court recommended that the administration of all Tribunals should be under a nodal ministry such as the Law Ministry, and not the respective administrative ministry. In 2020, it recommended setting up of a National Tribunals Commission to supervise appointments and administration of Tribunals. The Rules are not in consonance with these recommendations.