WHY THE SUPREME COURT ACTION IN GOA IS NUDGE TO HONOUR RIGHTS TO COMMONS

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Today is stakeholders’ last chance to send feedback to the draft National Mineral Policy 2018. That includes everyone, including coming generation

The Supreme Court has quashed all iron ore mining leases in Goa on Wednesday

The Supreme Court quashed all iron ore mining leases in Goa on Wednesday, two days before the deadline for public feedback to the draft National Mineral Policy (NMP) 2018. The court had mandated the NMP last September, saying the older, 2008 policy was “not being enforced perhaps due to the involvement of very powerful vested interests or a failure of nerve”.

Back in October 2012, the top court had suspended iron ore mining and transportation in Goa, following the report of the Justice M B Shah Commission on illegal mining. In April that year, the court had ordered a 10% levy on the sale value of ore to set up a Goa Permanent Fund (GPF) for protection of intergenerational equity — the idea that human beings “hold the natural and cultural environment of the Earth in common both with other members of the present generation and with other generations, past and future”.

So when the SC directed the Centre to revise NMP 2008, it was looking for a “fresh, more effective, meaningful and implementable” policy to fight corruption, protect the environment, and safeguard intergenerational equity.

What draft says, doesn’t say

The draft NMP 2018, made public on January 10, calls for a “long term export policy for the mineral sector” to bring stability and incentivise investments in “largescale commercial mining”, and proposes to offer mineral exploration companies the right of first refusal when mines explored by them are auctioned.

But there is not much in line with global best practices such as the Extractive Industries Transparency Initiative (EITI), whistleblower protection, Wealth Accounting and the Valuation of Ecosystem Services (WAVES), etc., to ensure transparency and counter the “very powerful vested interests” flagged by the SC.

The draft also does not spell out the strategy to protect Intergenerational Equity, a doctrine that the Economic Survey 2016-17 has acknowledged while referring to the apex court’s orders.

This, despite an initial draft of the new NMP prepared in October 2017 for “internal discussion” having noted that “the full value of the minerals must be received… [and] a portion of the proceeds… should be deposited in new, ‘non-depleting’ assets” and “any income generated must only be shared equally with all as a right ownership, a commons dividend”.

The miners’ objections

Mining companies including Vedanta and Fomento have challenged the creation of the GPF, arguing that with the District Mineral Foundations (DMFs) aimed at intergenerational equity and livelihood support for families affected by mining already in place, the GPF amounted to a double levy.

The Centre had ordered the setting up of DMFs in mining-affected districts in September 2015 to fund the Pradhan Mantri Khanij Kshetra Kalyan Yojana. Contributions were fixed at 10% of royalty for leases granted on or after January 12, 2015, and 30% for older leases. By December 2017, over Rs 14,600 crore had been collected under 337 DMFs in 12 mineral-rich states, and were being used to supply drinking water, control pollution, healthcare, education, sanitation, welfare of vulnerable sections, and skill development, etc.

The SC is yet to decide on the miners’ plea.

The global benchmarks

The global experience underlines the “benefit of inheritance”; the Economic Survey 2016-17 noted that “Norway and 50 other countries/sub-nations have created permanent funds based on extracting economic rent from oil and other natural resources.” Set up in 1990, Norway’s Oil Fund is now the world’s largest sovereign wealth fund, worth more than $ 1 trillion — over 1.5 times the country’s GDP. In September 2017, it guaranteed $ 192,307 (over Rs 1.2 crore) to every Norwegian citizen.

In North America, Alberta and Alaska set up Oil Funds in the mid-1970s. But unlike Norway that put its entire oil and gas revenue in the permanent fund, Alberta and Alaska used the bulk of revenues to cut or abolish taxes, and allocated only a fraction to their Funds.

Chile set up its Copper Stabilisation Fund in 1985. During the 1997-98 financial crisis, it channelled $ 200 million from the Fund to the national economy.

Botswana established the Pula Fund in 1994 to save part of the income from diamond exports for future generations. In 2008, Mongolia created a Human Development Fund, making every citizen eligible to own an equal share of the national mineral wealth.

The fundamentals of intergenerational equity demand some nonnegotiable principles: zero-waste and zero-loss mining, judicious capping, conserving reserves, minimum environmental damage under the polluter-pays principle, free informed consent of the mining-affected, funds for future and, most importantly, transparency.

jay.mazoomdaar@expressindia.com

Courtesy Indian Express

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