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
Most legislative assemblies make Parliament look like a paragon of virtue A COUPLE of days ago, an MLA from Orissa made news for climbing on to the speaker's table in the assembly. Not so long ago, television screens beamed images of Karnataka MLAs snacking and sleeping all night in the assembly. But these are only indicative of the incidents of the raucous behaviour of several MLAs in the recent past across the country. And the poor behaviour of some MLAs is only one aspect of the pitiable state of several of our state legislatures. The other aspect of our state legislatures that goes largely unnoticed is how poorly the secretariats of legislatures are equipped and how several systems that are seen as essential in Parliament are nonexistent in states. Even to know the complete picture of how our legislatures function, you need data. And several state assemblies are notoriously poor at putting out data on the functioning of the institution or the MLAs. After one gets used to the quality of Parliament websites and the regularity of their updates, it would be shocking to see that there are some state legislatures that do not even have functional websites. It has been observed that some state legislatures are lagging behind by a couple of years in compiling the "resume of work" which summarises the work done in a session of the legislature. So the first bottleneck in several instances is the inability to access data of the assembly. From the data we have managed to access, it is obvious that state assemblies meet for very few days a year. A case in point is the Punjab assembly which has met for an average of 19 days per year for a 10-year period between 1997 and 2007. Delhi was only marginally better averaging 21 days per year during the same period. Kerala has averaged some 50 days a year for several years now. Some states like Karnataka have legislated that they should meet for at least 60 days a year, but since passing that legislation in 2005, they have not managed to do so for even one year. I am not even accounting for the time lost due to disruptions. Bills are passed with little or no discussion in many state legislatures. While in Parliament, referring bills to the standing committees is the norm, most state legislatures do not have standing committees. The only examination of a bill, if any, happens on the floor of the House. And if data from the Delhi assembly is anything to go by, the average debate on a bill before is passed is a little over half hour. There are any number of instances where bills are introduced and passed in state assemblies on the same day -so there is not even a pretence of the need for MLAs to read, understand and deliberate on the provisions of legislation they are supposedly passing. MLAs are often far more narrowly constituency-focused than MPs are. On average, MLAs have lower education levels than members of Parliament. There is no formal definition of a role of an MLA, and they mostly have no exposure to ideas such as the separation of powers between the executive and the legislature. In one particularly revealing conversation with an MLA, he said, "At the time of elections, each of the contestants represents his party. But after the elections, the chiefministerbecomestheleader of all MLAs in the House. If an MLAneedssomeadditionalprojects/ favours for his constituency he needs to be in the good books of the chief minister and his cabinet ministers. So where is the question of taking on the chief minister on the floor of the House on any issue?" There are many aspects of state legislatures that point to a steady and visible decline of these important institutions. But beyond the frequent highlighting of theatrics by some MLAs, there is almost no public discourse on this issue. It is necessary to ensure that the legislatures run smoothly, and the speaker, as first among equals, has the biggest responsibility to ensure this. If there are rules and everyone knows that those rules will never be used to enforce discipline, then the rules will be broken, and repeatedly so. This practice needs to be urgently reviewed. The larger question is whether our legislatures are the highest deliberating and policymaking bodies or whether they are being reduced to platforms for political theatrics. Policy can almost never be devoid of politics and public posturing. But if this means poor deliberation of critical policy issues and the woefully inadequate functioning of our legislatures, then we may need to come up with creative ways in which this problem can be addressed. This article appeared in the Indian Express on December 20, 2010.
