Mining, regulatory failure and human rights in India

Date of publication: 
14 June 2012

A new Human Rights Watch report calls on India’s government to set up mechanisms to support the license system for mining

The son of a former chief minister, Reddy’s personal assets allegedly include mining leases for over 181,000 acres. Earlier this week, the regional government cancelled two huge iron ore projects that had been granted to his brother-in-law.

“The scale of lawlessness that prevails in India’s mining sector is hard to overstate,” a report, Out of Control, published today by campaign group Human Rights Watch claims. “Even government officials acknowledge that the mining sector faces a myriad problems.”

Andhra Pradesh is certainly no exception. Official statistics point to more than 82,000 cases of illegal mining across the country, all of which leave environmental destruction in their wake.

Standards in India’s 2,800 registered mines are far from perfect either. In iron mining areas of Goa and Karnataka, for example, Human Rights Watch charts extensive evidence of water pollution, toxic waste and health problems resulting from metallic dust.

Disreputable companies are undoubtedly part of the problem. An ongoing campaign against FTSE 100 mining firm Vedanta, which has operations in an indigenous area of western Orissa, has served to highlight the nefarious activities of individual operators.

But companies operate in a wider context, and it is to this broader operating environment that Human Rights Watch turns its attentions.

“India has a reasonably good legal framework to address these issues … but these laws aren’t being enforced, to such an extent that they are almost meaningless,” says Chris Albin-Lackey, senior research at Human Rights Watch and co-author of the report.

The licensing system provides a case in point. By law, mining companies are obliged to produce an environmental impact assessment at the project proposal stage. No mechanism exists, however, to verify the independence of these reports nor to investigate their accuracy.

“Then there’s pressure to move forward these assessments with great speed because the country is trying to grow investment in this sector”, says Albin-Lackey.

As India’s economy shows signs of slowing, mining remains one of the bright spots on its horizon. India is the world’s third largest producer of coal and the fourth largest of iron ore. Its mining industry is predicted to grow to $36.2bn by 2016.

“We’re not trying to say that mining should be brought to a halt”, Albin-Lackey insists.

“But the government does have a core set of obligations to regulate the industry and mitigate its impacts … All we’re asking them to do is make the systems that they’ve already put in place function.”

The report’s findings win wide support among Indian civil society groups, which have become increasingly vocal in recent years over rampant abuses in the mining sector.

All too often, the laws work against those they are supposed to protect, observes Ramesh Gopalakrishnan, a researcher at Amnesty International and author of a report on Vedanta’s Indian operations.

He points to the Forest Act, for instance, which makes special provision for the protection of land traditionally occupied by indigenous groups.

“The problem is they have to file their claims before the same authorities who are alienating their lands in favour of the companies, so really they can’t get any justice”, he argues.

Endemic corruption is clearly a problem. This is nowhere clearer than in the mineral-rich state of Karnataka. The Human Rights Watch report describes how mining magnate Janardhana Reddy worked with government regulators to allegedly extort huge quantities of iron ore from other mine operators.

Understandably, a key recommendation of the report is for greater transparency in the permitting and licensing process. The introduction or strengthening of regional anti-corruption ombudsmen is also flagged up.

As Amnesty International’s Gopalakrishnan points out, the granting of rights to sub-surface resources in India is “completely arbitrary and opaque” and often determined on a “first come, first served” basis.

The need to establish a more transparent investment policy is echoed by Leo Saldhana, coordinator of the Environment Support Group, a Karnataka-based campaign group.

“This business of our state resources belonging to the current state minister has to end … At present, local governments have absolutely no say in what happen to the resources in their state,” he says.

India’s mining industry is as hamstrung by under-resourced government agencies as it is corrupt officials, the campaign group maintains. Also high on Human Rights Watch’s recommendation list, therefore, is greater capacity for government agencies.

The Ministry of Mines only has a “couple of dozen” monitoring officials for the entire country, notes Albin-Lackey.

“The government hasn’t allowed the regulatory institutions to grow apace [with the sector], so you have government officials who have no time to do any kind of infield assessments”, he adds.

The primary problem isn’t new laws. A proposed new mining bill is being debated in the Indian parliament right now. Where the system falls down is in the implementation stage.

In practical terms, this means more and better-equipped monitoring staff, Human Rights Watch insists. Likewise, it is calling for more resources to be earmarked for the review of proposed new mining projects.

It’s not only NGOs that should salute such measures. Companies should too. Operating in an environment that lacks clear rules introduces extraneous costs and additional risk.

“For the fly-by-night operators, the situation is good. But an investor interested in mining over a long period needs the assurance of no illegality,” states Sridhar Ramamurthi, chairperson of the local NGO coalition Mines, Minerals and People.

Appeals to the Federation of Indian Mining Industries have so far gone unheard, he laments.

That’s not to say India’s mining sector has been totally inactive. Jo Phelan, country director for the International Business Leaders Forum (IBLF) in India, points to an electronic auction platform for steel and coal called mJunction.

“mJunction has brought transparency to the market and helped raise standards in procurement”, he argues.

Another example is provided by Siemens. The German engineering giant, which sources iron ore in India for its steel production, now insists on full transparency and compliance from all its business operations.

Working in isolation is very tough, however. Phelan points to the example of the Sustainable Mining Initiative as evidence of a collective business-led attempt to “raise the bar” in India.

Convened by London-based mining company Rio Tinto, the ten-member initiative adheres to six core principles. The list is fairly generic: integrate sustainable development into decision-making, uphold human rights, conduct business ethically, and so forth. But it’s a start.

It behoves all companies operating in India’s mining sector, the vast majority of which are domestically-owned, to lobby for better regulation, concludes Albin-Lackey.

“Responsible companies shouldn’t just sit there passively and watch all this chaos”, he argues.

“Along with other stakeholders, they should be actively encouraging the government to put more meaningful governance in place for the whole sector.”

Oliver Balch is author of India Rising: Tales from a Changing Nation


India: Mining Industry Out of Control

Breakdown of Government Oversight Harms Communities, Fuels Corruption [link to report –]

14 June 2012

Mining operations often cause immense destruction when government doesn’t exercise proper oversight. India has laws on the books to protect mining-affected communities from harm, but their enforcement has essentially collapsed. – Meenakshi Ganguly, South Asia director

(Panaji) – India’s government has failed to enforce key human rights and environmental safeguards in the country’s mining industry, Human Rights Watch said in a report released today.

The 70-page report, “Out of Control: Mining, Regulatory Failure and Human Rights in India,” finds that deep-rooted shortcomings in the design and implementation of key policies have effectively left mine operators to supervise themselves. This has fueled pervasive lawlessness in India’s scandal-ridden mining industry and threatens serious harm to mining-affected communities. Human Rights Watch documented allegations that irresponsible mining operations have damaged the health, water, environment, and livelihoods of these communities.

“Mining operations often cause immense destruction when government doesn’t exercise proper oversight,” said Meenakshi Ganguly, South Asia director at Human Rights Watch. “India has laws on the books to protect mining-affected communities from harm, but their enforcement has essentially collapsed.”

India’s government has systemically failed to ensure that the country’s 2,600 authorized mining operations adhere to key human rights and environmental protections under Indian law, Human Rights Watch found. These problems are related to and have facilitated a series of high-profile corruption allegations in the mining industry that have rocked India in recent years. Illegality in the mining sector has deprived state governments of badly needed revenues, threatened the industry with costly and unpredictable shutdowns, and generated political chaos that helped bring down two state governments in 2011 and 2012.

The Human Rights Watch report is based in part on interviews with more than 80 people in Goa and Karnataka states, as well as in New Delhi, including residents in affected communities, activists, and mining company and government officials.

Farmers in Goa and Karnataka told Human Rights Watch that mining operations have destroyed or polluted vital springs and groundwater supplies. Overladen ore trucks throw off clouds of iron-rich dust as they pass through rural communities, destroying crops and potentially damaging the health of nearby families. In some cases, people who speak out about these problems have been threatened, harassed, or physically attacked, while government authorities failed to address their grievances.

These and other human rights problems in the mining industry are linked to deep-rooted government failures of oversight and regulation, Human Rights Watch said. Some key regulatory safeguards are virtually set up to fail because of poor design. But in many cases, the problem is that implementation is so shoddy that it renders relatively good laws ineffective, Human Rights Watch found.

“Mining scandals may grab headlines, but the root causes of India’s mining problems are more basic,” Ganguly said. “The government has encouraged lawlessness by failing to enforce the law or even monitor whether mine operators are complying with it.”

Indian law, like that of many other countries, situates core human rights protections somewhat awkwardly within regulatory frameworks designed primarily to mitigate the environmental impacts of mining operations. This places much of the responsibility for monitoring and enforcement with India’s Ministry of Environment and Forests.

The government has sufficient authority to correct the serious flaws in the existing regulatory framework, Human Rights Watch said. For instance, the government relies on mining companies to commission and produce the “independent” Environmental Impact Assessments that are used to gauge a proposed mining project’s likely environmental, social, and human rights impacts. This creates an unnecessary conflict of interest that could be solved by giving regulators the central role in commissioning those studies. The assessments also tend to give short shrift to human rights issues, focusing overwhelmingly on purely environmental concerns.

Enforcement is an even bigger problem, Human Rights Watch found. Regulatory institutions are hopelessly overstretched. A few dozen central government officials are tasked with overseeing the environmental and human rights impacts of every mine in India – and many other industries as well. This makes in-field monitoring a practical impossibility, forcing the government to rely almost exclusively on information provided by mine operators themselves. Many state government oversight bodies have even less capacity to implement their challenging mandates. As a result, government regulators have no idea how many mining firms are complying with the law or how many communities have been harmed by illegal practices.

Similar problems pervade the process for approving new mining operations. Regulators often rely exclusively on the Environmental Impact Assessments commissioned by mining firms to determine whether to allow a project to go forward. Field visits are rare and projects are considered and approved at such a rapid pace that there is no time for serious scrutiny of the conclusions of the environmental impact reports.

Yet the evidence shows that those reports are often rife with incorrect or deliberately misleading information. Under this framework, approval for new mining and other industrial projects is almost never denied. Many currently operational mines may have been given approval to proceed on the basis of false information about potential harm to neighboring communities.

The central government has taken some tentative steps toward improving oversight – like requiring companies to choose from a list of accredited firms to carry out Environmental Impact Assessments. But the reforms have not gone nearly far enough. Human Rights Watch urged the government to adopt a number of pragmatic policy recommendations to narrow some of the most important regulatory gaps.

“Mining is an important part of India’s economy, but that does not mean the industry should be allowed to write its own rules,” Ganguly said. “The government can and should empower regulators to do their jobs more effectively than they can today.”


India mining industry ‘out of control’

14 June 2012

The Indian government has failed to enforce laws to protect human rights and the environment in the country’s mining industry, says a rights group.

Human Rights Watch (HRW) says this lack of enforcement has led to “pervasive lawlessness” in the mining industry.

In a new report, the group alleges that irresponsible mining operations have damaged the health, water, environment and livelihoods of local communities.

India has been hit by several mining scandals in recent months.

In a 70-page report report “Out of Control: Mining, Regulatory Failure and Human Rights in India, which was released on Thursday, HRW says poor policies have meant little supervision of mining operations.

“Mining operations often cause immense destruction when government doesn’t exercise proper oversight,” Meenakshi Ganguly, South Asia director of Human Rights Watch, said.

“The government has encouraged lawlessness by failing to enforce the law or even monitor whether mine operators are complying with it,” she added.
Mining scandals

The report says that India has laws on the books to protect mining-affected communities from harm, but “their enforcement has essentially collapsed”.

HRW says the report was compiled after talking to more than 80 people in the states of Goa and Karnataka – two mineral-rich states that have been hit by mining scandals recently – and also activists, affected communities, government officials and mining companies.

Mining scandals have grabbed headlines in India recently.

Last August, BS Yeddyurappa had to quit as Karnataka chief minister after he was implicated in an illegal mining scandal. The state ombudsman said it had cost Karnataka $400m (£250m). Mr Yeddyurappa denies the charges.

In November, a report alleged that nearly half the iron ore exported from the western state of Goa was illegally mined.

India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world.

India’s metal and mining industry was estimated to be $106.4bn (£68.5bn) in 2010.


India doesn’t enforce rules, lets mine operators harm communities, environment, HRW reports

By Associated Press –

14 June 2012

NEW DELHI — The sugarcane on Rama Velip’s farm is darker than it should be, stained by the iron dust that blows from hundreds of mining trucks that pass through the south Indian village every day.

“I see red everywhere,” said Velip, whose village lies along the transport route from a series of iron and manganese mines to a cluster of smelters and refineries. “It’s not just the dust. Mud from these mines gets washed down the Zuari River and trickles into my fields.”

The 49-year-old farmer has lost more than half his harvest every year since India’s mining boom began in the early 2000s, watching helplessly as iron dust leeched moisture from his cane plants and mining mud dried up the springs on which he depended.

Over the past 10 years, he has seen the price of iron go from $10 per ton to $130. He has also watched as his wife and two of his three children have become asthmatic.

The plight of Velip’s family is shared by thousands of people in the states of Goa and Karnataka, where irresponsible mining has damaged the health of thousands of people, interfered with their livelihoods and poisoned the water, according to a human rights group that blamed the troubles on a systematic failure of governance.

In a report released Thursday, New York-based Human Rights Watch blamed the Indian government for failing to enforce key human rights and environmental safeguards in the mining industry.

The 70-page document found that existing laws have “effectively left mine operators to supervise themselves” and described in detail how regulations rely heavily on dubious assessments of the environmental impact proposed mining projects would have.

The report studied communities in Goa and Karnataka but said the troubles there reflected problems in the mining industry across India. Government authorities did not reply to questions seeking comment about the report’s findings Thursday.

“Mining operations often cause immense destruction when government doesn’t exercise proper oversight,” said Meenakshi Ganguly, South Asia director at Human Rights Watch. “India has laws on the books to protect mining-affected communities from harm, but their enforcement has essentially collapsed.”

Ritwick Dutta, a lawyer who heads the EIA Response Center, an environmental group, noted that all mining assessments must be cleared by the federal Ministry of Environment and Forests’ appraisal committee — until recently headed by M.L. Majumdar, who sits on the board of at least four mining companies.

“There are glaring conflicts of interest throughout the system,” Dutta said. “For instance, these assessments are conducted by hired consultants (paid by the mining companies). That’s why no mining project in this country has ever been rejected.”

Experts have also questioned the criteria for environmental assessments.

“They are based on data collected over just three months,” said Sujeet Dongre, head of the Center for Environment Education, which is studying mining in Goa. “For mining operations that will last several decades, seasonal changes at the site need to be incorporated — which is not possible without at least a year’s data.”

Both Dongre and Dutta say environmental assessments contain either incorrect or fraudulent information regarding proximity to water bodies, wildlife or other natural resources.

“The data has never been consistent with what we have seen on the ground,” Dongre said.

Chris Albin-Lackey, author of the Human Rights Watch report, says the overarching problem is that the government has not dedicated enough resources to regulators.

“A few dozen government officials are tasked with overseeing the impacts of every mine in India,” Albin-Lackey said. “This makes in-field monitoring impossible, and regulators end up with no idea of how many mining firms are complying with the law or how many communities are being harmed by illegal practices.”

The Indian mining industry, which produced about $44 billion of minerals in 2010-11, has been overrun by corruption scandals in recent years. A key bill on mining regulation, which proposes profit sharing between firms and local communities, remains blocked in Parliament.

For now, many farmers like Velip are considering going into the trucking business.

“Our fields keep drying up, and so many people in my village have switched from farming to trucking for the mines,” said Velip, speaking over telephone from Goa.

“But what will I do if I take a loan of 1.5 million rupees ($27,000) to buy that truck and the government finally agrees to shut down these mines?”