Despite some doubts over the efficacy of the proposed central regulator in curbing illegal mining, the Union government has decided on substantive teeth to the National Mining Regulatory Authority (NMRA) to be set up under the new mining legislation.
The draft of the Mines and Minerals (Development and Regulation) Bill, 2010, finalised by a 10-member Group of Ministers (GoM) after consultations over the past six months, has sought to give wide powers to the NMRA, from investigating illegal mining cases to settling disputes of jurisdiction between the Centre and the states. A final meeting of the GoM is likely soon, to formally approve the draft, after which it would be introduced in the winter session of Parliament.
“The NMRA shall have powers to authorise investigation and launch prosecution against any person for offences under the Act, relating to mining for any mineral without license, undertaking of mining or exploration activity outside the area granted under licence, storage or export of illegally raised minerals without lawful authority,” Section 61 of the draft Bill states.
Companies continuing with mining activity even after the expiry of their mining lease and mining outside the area granted under the lease are the two chief constituents of illegal mining. Overall, 182,000 cases of illegal mining had been in the five years ending March 2010, and only in 17 states for which data is available. These include the resource-rich ones of Andhra Pradesh, Chhattisgarh, Jharkhand, Karnataka, Maharashtra, Orissa and West Bengal.
The Bill lists as many as 16 powers granted to the mining regulator under the legislation. These powers, in addition to those mentioned earlier, include reviewing royalty rates, suggesting penal action for failure to pay royalty, advising the Centre on issues of increasing transparency in grant of mineral concession, supporting investment, recommending the amount of fee levied on miners, advising on models on competitive bidding of minerals and laying down quality standards.
‘Central monitoring needed’
Asked on the thinking behind putting in place a strong central regulator despite the concerns over states losing their traditionally held ownership and control over minerals, a senior central government official closely associated with the drafting said: “There has been a perception that wherever minerals are not regulated in the best interest of the nation, the central government has a duty to intervene.”
The official, who did not wish to be identified as the matter was still with the GoM, also said the need to induce greater central control over the sector had been felt across the political spectrum. “In the previous session of Parliament, there was a sentiment cutting across party lines in both the Houses that because minerals are national wealth, in addition to the mining leases entered into by the state governments, the Centre has a duty to ensure that conservation of minerals happens in the national good,” he said.
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The sharp teeth the new legislation seeks to provide to the regulator is in marked contrast to the current situation, where the Indian Bureau of Mines (IBM) serves as a sector regulator, but a toothless one. “The IBM has been a technical regulator. The basic idea in the Bill has been to put in place a regulator which does not have to intervene in day-to-day management like IBM. The regulator should be a body which can sit outside and take decisions at an arm’s length,” the official said.
Experts believe a strong central regulator was due for a long time in the mining sector. “Mining is a specialised subject. There are issues in the sector which impact the country as a whole. It is important to have uniform regulatory framework regarding, for instance, how many leases are to be given,” said Shubhranshu Patnaik, executive director, Deloitte India. “The provisions of the Bill do encroach on the states’ jurisdiction to some extent, but it is the state governments who will have to implement these. The regulator will act like an additional watchdog.”
The NMRA will have its head office in New Delhi and will consist of a full-time chairperson, along with nine members. The chairman will have “special knowledge and experience of not less than 4 years in law relating to mines and mineral concessions,” the draft Bill states. It also states that for the selection of the chairman and members, a screening committee headed by the cabinet secretary will be set up once the Act comes into force. The screening committee will have the secretary of the mines ministry and the law ministry as members. NMRA will also have benches, consisting of a chairperson and a member, spread across the country.