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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
The President addressed the Parliament after the 2009 Lok Sabha Elections on 4th June 2009. She also addressed Parliament on 22nd February 2010, as well as on 21st February 2011. The tables below highlight some items from the agenda of the central government as outlined in these speeches, as well as the initiatives undertaken with respect to these agenda items. Table 1: Some Items from the President’s Address to Parliament on 4th June 2009
Agenda Items outlined in the President’s Speech | Current Status |
Establishment of National Counter-Terrorism Centre | Proposed launch of NCTC in March 2011 on hold |
Enactment of legislation for prevention of communal violence | Communal Violence Bill 2005 pending in Parliament. New bill drafted by NAC but not introduced in Parliament |
Unique Identity Card scheme to be implemented in three years | Unique Identification Authority of India created under Planning Commission on 28 January 2009. Bill to give statutory status pending in Parliament |
Establishment of a regulator for the pension sector | Bill introduced in Lok Sabha on 24 March 2011 |
Convergence of NREGA with other programs; expansion of works permitted; independent monitoring and grievance redressal | |
Rashtriya Swasthya Bima Yojana to cover all families below the poverty line in five years | |
Enactment of Right to Free and Compulsory Education Bill | Bill passed in 2009 and brought into force on 1 April 2009 |
Madhyamik Shiksha Abhiyan to universalize access to secondary education | Rashtriya Madhyamik Shiksha Abhiyan launched in March 2009 |
National Mission for Female Literacy to make every woman literate in five years | National Literacy Mission recast in 2009 to focus on female literacy |
Construction of 1.2 crore rural houses under Indira Awas Yojana in five years | |
Introduction of Rajiv Awas Yojana for slum dwellers and urban poor | Phase I approved by Cabinet on 2 June 2011 |
Enactment of National Food Security Act | Introduced in Lok Sabha on 22 December 2011 |
Enactment of Amendment Bill to Land Acquisition Act and Rehabilitation and Resettlement Bill | Land Acquisition, Rehabilitation and Resettlement Bill 2011 introduced in Lok Sabha on 7 September 2011 |
Enactment of Women’s Reservation Bill | Passed by Rajya Sabha, pending in Lok Sabha |
Constitutional Amendment for 50 percent reservation for women in panchayats and urban local bodies | Two Bills introduced in Lok Sabha in November 2009; both pending in Parliament |
Amendment of RTI to provide for disclosure by government in all non-strategic areas | |
Model Public Services Law to be drawn up in consultation with states | Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievance Bill, 2011 introduced in Lok Sabha on 20 December 2011 |
Introduction of Goods and Services Tax | Constitutional Amendment Bill introduced in Lok Sabha on 22 March 2011 |
National Council for Human Resources in Health | Introduced in Rajya Sabha on 22 December 2011 |
National Council for Higher Education | Bill introduced in Rajya Sabha on 28 December 2011 |
*Note: Blank cells indicate that PRS has not been able to find official information in the public domain. Table 2: Some Items from the President’s speech to Parliament on 22nd February 2010
Agenda Items outlined in the President’s Speech | Current Status |
Introduction of legislation to ensure food security | Introduced in Lok Sabha on 22 December 2011 |
Rural teledensity of 40 percent by 2014 | Rural teledensity of 33% as of February 2011 |
Introduction of Rajiv Awas Yojana for urban poor and slum dwellers | Phase I approved by Cabinet on 2 June 2011 |
Disposal of remaining claims under the Scheduled Tribes and Other Traditional Forest Dwellers Act | |
Introduction of amendment to the Wakf Act | Passed by Lok Sabha; pending in Rajya Sabha |
Enactment of Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005 | Pending in Rajya Sabha since 2005 |
Enactment of Women’s Reservation Bill | Passed by Rajya Sabha; pending in Lok Sabha |
Constitutional amendments for 50 percent reservation for women in panchayats and urban local bodies | Two Bills introduced in Lok Sabha in November 2009; both pending in Parliament |
Establishment of National Council for Higher Education and Research | Higher Education and Research Bill, 2011 introduced in Rajya Sabha on 28 December 2011 |
Legislation for facilitating participation of foreign academic institutions in the education sector | Foreign Educational Institutions Bill, 2010 introduced in Lok Sabha on 3 May 2010 |
Voting rights for Indian citizens living abroad | Bill passed. NRIs can vote at the place of residence that is mentioned in their passport |
Table 3: Some Items from the President’s speech to Parliament on 21st February 2011
Agenda Items outlined in the President’s Speech | Current Status |
Enactment of Food Security Law | Introduced in Lok Sabha on 22 December 2011 |
Whistleblower Bill | Bill passed by Lok Sabha; pending in Rajya Sabha |
Enactment of Judicial Standards and Accountability Bill | Introduced in Lok Sabha on 1 December 2010 |
Enactment of new Mines and Minerals Bill | Introduced in Lok Sabha on 12 December 2011 |
Rural teledensity of 40 percent by 2014 | Rural teledensity of 33% as of February 2011 |
Construction of 1.2 crore rural houses during 2009-14 | |
Enactment of Women’s Reservation Bill | Passed by Rajya Sabha; pending in Lok Sabha |
Introduction of Bill regarding protection of children from sexual offences | Introduced in Rajya Sabha on 23 March 2011 |
Introduction of Biotechnology Regulatory Authority of India Bill | Not introduced till date |