Goa’s Smoking Gun- Ore Chor! 144

Goans have lost Rs. 10 lakhs each as a result of the recent iron ore mining lease renewals. GMM has a strategy to recover this loss but the public are also needed to reinforce a unified action by lending individual support.

This is the seventh part of a series.  Read the other parts here

April 2014, and the Supreme Court declared all mining after 22-Nov-2007 illegal. All leases in Goa approved or allowed to operate under the 1987 Abolition Act were deemed to have expired from that date. This period alone resulted in compensation due to Goans of an estimated Rs. 65,058 crores.

At this stage the Goa administration had a clean slate for a mining redesign with the remit to preserve the rights of the people and future generations. In the interim the granting of illegal mining lease renewals have dashed these hopes. The total amount the state lost in respect of illegal mining activities has increased. It now stands at Rs. 144 thousand crores. An amount of Rs. 10 lakhs from each and every Goan.

Mineral mining in Goa stopped in 2012 following the Shah Commission Report. The previous five years bore witness to rampant, illegal mining resulting in “ . . . a complete collapse of the system” (Justice Shah). At this stage the loss was at least Rs. 65,058 crores, equivalent to Rs. 4.5 lakhs per person.

The SC ruling instructed the state to recover funds misappropriated by mining companies, retrieve and sell fifteen million tons of extracted iron ore from mining waste ‘dumps’. The court simultaneously instructed a swathe of committees, including the expert committee on caps (ECOC), to submit in-depth reports on how to orchestrate a fresh start for mining in the context of Goa.

The mining ban remains until such time as the state grants fresh leases, and the MoEFCC awards new permits for environmental clearances.

Prior to the SC ruling, a corrupt system of feral mining and lease abuses resulted in the loss of 95% of the value of its iron ore over the five-year period between 2004-05 and 2008-09. (Catastrophic Failure of Public Trust in Mining, Economic & Political Weekly, Sep 2015, Rahul Basu). The remaining 5% mysteriously disappeared without a trace into the government coffers.

A proposal for future mining:

It is clear that the two Constitutional principles of Public Trusteeship and Intergenerational Equity were not properly implemented in the past in Goa. The recent stoppage of mining provides an opportunity to re-design the system so as to better fulfill these principle’, Dr Claude Alvares, Director The Goa Foundation 2014

Under the constitution, the minerals belong to the state of Goa (Art 295). Within this, under the Public Trust Doctrine (Art 21 Right to Life), the state is merely a trustee. Ultimately the people of Goa own the minerals as ‘commons’. We are custodians of inherited, land-based assets and legally bound to bequeath them to future generations. If we sell our minerals, we’re obliged to create a new “non-wasting”, asset. This needs to be permanent, and of the same value or more.

In May 2014 GF submitted documents to then Chief Minister, Manohar Parrikar. These papers detailed the costs to Goa of illegal mining, the value and uses for mining dumps, the development of the Goan Iron Ore Permanent Fund, an analysis of employment opportunities and welfare schemes for the mining dependents and offered a comprehensive new framework for mining going forward.

GF had created a comprehensive strategy designed a to work in conjunction with the SC mandates, dramatically reduce the environmental burden on the state, provide a cushion of income for the state, while ensuring productive employment and better prospects for the mining belt.

Key elements

(a) Minimize loss of mineral value while mining

(b) Save ALL (100%) mining receipts in a Permanent Fund

Phased implementation

(a) Phase one: initial two years where e-auction of mining residues supports infrastructure building earth moving activities

(b) Phase two: where dumps are sold or used to restore abandoned mines

(c) Phase three: commence fresh mining to sustainable caps and potentially including one or two state-owned ventures

Result: fair mining

  • Miners earn a reasonable profit (calculations assume a 20% post tax return on assets)
  • The full costs of mining are paid, including to the mining dependent
  • The state fulfils its constitutional duties as a trustee
  • The inheritance of Goa’s future generations is protected
  • We, the people, benefit from the Citizen’s Dividend. This however is only possible if we discharge our duty with due diligence as custodians of our mineral commons inheritance

What happened instead?

The Supreme Court judgement was issued on a Monday. That same week 28 mining lessees approached the High Court (“HC”) of Bombay at Goa asking for a renewal of their leases on spurious claims of promissory estoppel. The Goa government opposed this by way of affidavit.

The HC directed the government not only to renew mining leases to the 28 parties, but gave a deadline of only three months within which to consider various other renewal applications.

The Goa government did not appeal the HC judgement at the Supreme Court. Instead, a few days later, the then CM, Manohar Parrikar, made a statement at the Goa Legislative Assembly: the government would pursue lease renewal as opposed to the superior alternatives of public sector operation or mine auctions. The reasons he gave were around prevention of corruption, inefficiency and risk of mining mafia involvement. Could public sector corruption or inefficiency exceed 100% illegal mining over 5 years, and consistent loss of 95% of value? Why should we mine at all?

The 2014 SC ruling on mining that had condemned collusion, multiple abuses and systemic malpractice, had been thrown asunder by Manohar Parrikar in this most bizarre and brazen manner. The doorway to illegal mining was thus flung open for the usual suspects to march in once again.


Sequence of events
22-Nov-07 Mining leases expire
21-Apr-2014 SC judgement
25-Apr-14 Writ Petition filed in High Court
25-Jun-14 Goa government strongly opposes HC petition
13-Aug-14 HC judgment renew 28 leases, examine others
18-Aug-14 CM, Manohar Parrikar, statement in the Goa Legislative Assembly. Renew leases instead of auctions or PSU mining
01-Oct-14 Draft Goa Grant of Mining Leases Policy based on Parrikar’s statement uploaded on DMG website
5-7 Nov-14 Renewals commence. 13 leases renewed
08-Nov-14 Parrikar resigns as CM, Parsekar sworn in
19-Nov-14 Draft MMDR amendment bill released
10-Dec-14 3 leases renewed
24-Dec-14 10 leases renewed, Parliament winter session prorogued
25-Dec-14 MMDR amendment ordinance (re: no renewals) to cabinet
1-5 Jan-15 8 leases renewed (34 cumulative)
06-Jan-15 MMDR ordinance approved by cabinet, 22 renewals!
09-Jan-15 1 lease renewed
12-Jan-15 MMDR ordinance promulgated
31 renewals granted after amendment to the MMDR Act eliminates provision for lease renewals. Total renewals: 88
15-Jan-15 Goa government withdraws mining suspensions
20-Jan-15 Goa Grant of Mining Leases Policy notified in Gazette
20-Mar-15 Ministry of Environment & Forests revokes suspension of
10-08-15 Sesa Goa started mining operations at Codli in the presence of the CM, without having a valid consent order

Following this debacle, the Directorate of Mines and Geology, Goa posted a draft ‘Goa Grant of Mining Leases Policy, 2014’. This latter endorsed the CM statement but was subject to finance department approval.

A cavalcade of lease renewals commenced in early November. Manohar Parrikar resigned as Goa CM soon after and was replaced by Laxmikant Parsekar.

Ten days later the Union Ministry of Mines released a draft MMDR Amendment Bill, 2014 for public consultation. The Supreme Court judgements on allocation of natural resources had necessitated amendments. This Bill was due to be passed before the winter close of Parliament. Goa Foundation submitted two responses.

On 25th of December the mines ministry moved an ordinance to the Union cabinet for approval. This was completed in early January. The new law outlawed lease renewals making auction mandatory. Leases length was standardised at 50 years. Existing leases would terminate at the earlier of (a) the existing lease expiry; (b) 50 years from inception or (c) 5 / 15 years (merchant / captive mine) from ordinance promulgation.

12th of January, 2015, the MMDR Amendment Ordinance was declared. It had one crucial difference: existing leases would now terminate at the LATER of the three conditions. Since existing leases had not been auctioned, the extensions loophole would act to transfer wealth from the people (owners of the mineral commons) to the miners.

Once news spread of the forthcoming ordinance, lease renewal numbers burgeoned. 21 leases were renewed in the space of 5 weeks between early December and the 5th January, 2015. In the days leading up to the cabinet approval, 23 renewals were made and on the day of the MMDR Amendment Ordinance itself, an unbelievable 31 leases renewed.

The total number of 88 leases renewals demonstrates a flagrant waiving of all legal restrictions by the mining cartels. In spite of clear and far-reaching judgement by the highest court in the land, it would appear that the mining lobby and associated parties consider themselves above the law.

The state government notified the final Goa Grant of Mining Leases Policy on 20th January, more than a week after the new MMDR Bill became law. Not only did the policy endorse now defunct lease renewals, but due process had not been observed. No official draft was made available prior to allow the public to examine and petition and of course a large amount of lease renewals had been completed beforehand ‘under the radar’.

Fresh litigation

Goa Foundation and others have challenged the lease renewals at the Supreme Court. The grounds for challenge include:

  • 31 leases were renewed on the 12.02.2015, when the provision for renewing leases ceased to exist on the law books.
  • 54 were renewed in just one week (6-12 January, 2015). In none of these cases is there any report from the IBM as required; Except for one instance, there are no such reports after the SC judgement
  • Only 61 have environment clearances restored on 20.03.2015. The renewal of the remaining leases is senseless.
  • None of the leases has got the NOC from the standing committee of the Nat Board of Wild Life (NBWL), as required by the Supreme Court’s order of 2006.
  • 11 Leases have been renewed without forest clearance.
  • 24 leases have violated Rule 37. However, the government was yet to conduct an inquiry.
  • 42 leases have violated Rule 38. Results of inquiry, if committed, not known.
  • All leases of Sesa Goa and two other Sesa companies have been found to be in violation of MMDR Act, in the Justice Shah Report III.
  • Losses due to granting of leases without auctions or ensuring zero loss of value, are estimated at 79,836 crores, which contravenes judgements on allocation of natural resources.

Ore Chor! 144

The estimated loss to the public from the renewals totals Rs 1,44,000 crores

  • Illegal mining recoverable 65,058 cr

From 1-Dec-2007 – 31-Mar-2012

  • Fresh mining 79,836 cr

Leases renewed on old basis

  • Total loss 144,895 cr

This represents a loss of Rs. 10 lakhs for every man, woman and child

Thanks to committed individuals from GF and GMM for their persistent and determined efforts to monitor activities, prepare and win complex legal cases we have advanced to this point. Now it’s time for the people of Goa to stand up and be counted if they are to be refunded.

‘Evil prospers when good men do nothing’, John Philpot Curran

As custodians it’s our moral duty to protect our resources. This money represents our childrens’ inheritance. If we don’t act now we risk being complicit in the theft by virtue of apathy.

The GMM are urging citizens lend their weight and support the efforts of the Goenchi Mati Movement campaign for fair mining. The aim is to ensure that their plan for fair mining is included in the election manifestos of the incoming political parties.

Mining threatens to return with a vengeance and all we have is a smoking gun.

We must reclaim the missing income and prevent further theft. This must STOP!!

This is the seventh part of a series.  Read the other parts here


By Sarah Dynah McGinnis


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