Mining has no moral backbone

In 2012, mining leases in Goa had expired and mining activities halted. The Supreme Court had declared all mining, from 22-Nov-2007 illegal. Goa had a clean slate! A fresh start could be made in all aspects of mining and mining controls. Now the question is where to begin?

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

In order to build a better relationship with mining we first need to evaluate the impact of mining reduction on state finances, mining dependents and Goan citizens affected by mining cessation. We also need to consider not only our own current welfare, but that of our future generations.

The 2014 Supreme Court judgement drastically reframed mining activity in terms of delineating physical mining lease boundaries, licensing, extraction caps and ensuring sustainable development. Large amounts of mined ore were handed over to the state to e-auction. In addition an estimated Rs. 65,058 crores was recoverable on account of the period of illegal mining.

Despite such hefty amounts gifted by the Supreme Court to the state, why has the Goa government withheld support from mining dependents that suffered due to lost income? Is this a cynical strategy designed to guarantee that our unemployed miners become desperate? Is it a way to ensure enough agitation to force a restart of senseless, greed-driven, destructive form of mining?

There are in effect two key categories of local people involved with mining: the mining dependent and the mining affected. Mining dependents are direct and indirect employees. The mining affected are a much larger group situated mainly in the mining belt where they bear the brunt of the mining impacts. Lives have been decimated due to depleted agricultural incomes, chronic respiratory health due to dust, constant noise stress, poor water quality (especially the Selaulim dam which supplies South Goa), the desolation of the river life and frequent mortalities from truck accidents.

Historically mining has a long tradition in Goa. Iron ore mines were known to the Portuguese from the early 1700s. From as early as 1910 manganese ore was mined in Bicholim. At that time extracting was manual and generated significant employment. After WWII demand soared for reconstruction works. By the time of liberation in 1961, mining was a big employers and some 800 mining concessions were granted.

Mechanisation meant mining on a much larger scale. Explosives, trucks and sophisticated machinery was employed for excavation, loading and transporting. Trucks increased in size to 10 tons and barges to 2,000 tons. According to the DISHA report by TERI mass extraction continued to accelerate until the mining suspension when growth was at a consistent at 11.1% per annum.

As a direct result of augmented mining activity traditional societies collapsed: the state witnessed mass incoming migration and women lost financial status due to the male-dominated industry.

In 1987 the Indian Government passed the Abolition Act, converting perpetual concessions into fixed term mining leases. The China boom in the early 2000s caused iron ore prices to soar and in the rush to extract and export malpractice became common. Numerous PILs were filed and mines shut down culminating in the release of the explosive Shah Commission Report in the Parliament, and the subsequent mining bans.

During the Supreme Court hearings following the Shah Commission, it became clear that there were massive amounts of abuse and violations by miners with involvement of the state administration.

There is a lot of controversy surrounding the impact of illegal mining on the economy of Goa. It’s sometimes difficult to separate fact from fiction but one thing is certain: Goans have suffered a staggering loss due to an uncontrolled mining bonanza both directly and indirectly. Damage that equates to an estimated Rs. 10 lakhs for every man, woman and child just on account of the renewal of the 88 mining leases.

The corrupt status of mining in recent history only serves to line pockets. It does virtually nothing to support the livelihoods of Goans. We need to recognise that minerals are a finite resource. According to the Shah Commission, we were on course to deplete our mineral resources within 9 years. Mining will come to an end and Goans will have failed to discharge our moral duty towards our future generations who will inherit a devastated land devoid of resources and an impoverished future. Could we look them in the eye?

One cannot emphasise enough the significance of the Supreme Court ruling which validates public ownership of Goa’s subsoil minerals. Intergenerational Equity has now assumed centre stage whereby the people of Goa are reinstated as the beneficent owners of our land and our minerals. The ruling endorsed public ownership of minerals by the creation of the Goa Iron Ore Permanent Fund, the first fund of its kind in India whereby proceeds from mineral sales are banked and generate interest for and on behalf of the citizens. A financial model already successfully adopted by mineral rich countries such as Norway, Alaska and Chile.

How important is mining for Goa?
Contrary to popular opinion as promoted by state misinformation, mining is not the backbone of our economy. If anything reliance on mining is leading rapidly towards economic and political chaos. The current trajectory sees a bankrupted Goa within the foreseeable future. A barren landscape. A wasteland. A dustbowl where once stood lush forest, a loss of all hope and the disgrace of the biting poverty of future generations. Minerals are a significant aspect of Goa’s wealth, there is no denying that, but careful limited extraction at the optimum time so as to maximize the benefit and not decimate the resource and our future. Unless we act now, and in the right way, the future for the ordinary Goan looks bleak.

How important is mining for the state economy?

‘The CM has recently stated that due to the mining stoppage, the growth of the Goan economy was only 7-8%. By comparison, India as a whole grew only at 4.5% in 2012-13. This is not an economy in a deep slump due to the mining stoppage. The small group of mine owners and companies which got fat on large-scale, illegal mining in the past six years is the only set of interests severely impacted by the mining ban. They have made, among themselves, profits adequate to take care of several of their generations, despite the fact that the resources belonged to the people of the State’. Goa Foundation

There is a slew of statistics being propounded by the government catastrophizing the effect on the state due to the current suspension of mining. This is not borne out in practice. Mining accounts for around 4-6% of our GSDP. However even in the absence of mining, Goa’s economic growth has parity with the rest of India:

2012-13      2013-14(P)      2014-15(Q)
4.17%               7.71%               7.37%

If the economy is growing, where is the disaster that is commonly portrayed? We are more than keeping pace with growth across the rest of India. The mining stoppage was only a temporary blip to the Goan economy overall. For this, the government must be congratulated.

If we look closer to how large mining is in the Goan economy, we find that from 2004-05 until 2014-15, mining has never exceeded 7.23% (2009-10) of the state GDP at constant prices. In that year, manufacturing contributed 27.28% and construction 9.32%. Is mining the third backbone of the economy?

Goa Government finances
If we look at the annual State receipts from mining between 2000 and 2013 (prior to the ban) we can see that it exceeded Rs.100 crores for only four of those years. In only two of the years did mining receipts exceed 10% of state revenues. And only in 2011-12 was it expected. For comparison, the budget is currently approximately Rs. 10,000 crores.

goa-state-royalty-chart

Further, the Goa Fiscal Responsibility and Budget Management Act was amended in March 2014 during the mining suspension. The amendment was to provide that the revenue deficit would be brought to zero by 31st March 2015 and maintained thereafter. In fact, the last two budget have also been revenue surplus budgets. Clearly mining isn’t crucial to the state budget. The government must be congratulated for demonstrating it.

Let’s be reminded of the fact that mining ‘receipts’ is not ‘revenue’ or ‘income’, it is the sale of publicly-owned, Goan assets and as such is not the property of either the mining company lessees or the state. It belongs to the citizens of Goa. It must be saved for future generations, not spent. It cannot be treated as revenue.

The mining dependents
There is real suffering for those who engaged full-time in mining employment. Also, following the judgement, there are clear avenues and funds available to help the mining dependent. Instead, there appears to be a cynical attempt to keep the mining dependents desperate. Instead, spend the money from e-auctions for building the NH-17 bypass proposed in the draft Regional Plan 2021. This will employ many trucks gainfully. Then we can start on the dumps, sell what is saleable, restore abandoned pits, restore light and air to those living in the shadows of the dump hills.

Government estimates of mining dependents are greatly overstated. Figures provided for mining employment vary widely, from 50,000 to 3,50,000 from estimates advanced by the government and NCAER (commissioned on behalf of GMOEA). These numbers have been widely debunked by Economic censuses and the Rajya Sabha in favour of much lower figures.

The government estimates mining employment at 1,00,000 which is 20% of the working-age population. NCAER estimated a total of 75,000. However, the Rajya Sabha query on mining employment in Goa states actual mining employment to be a maximum of 8,302 between 2011 and 2013, which is less than 2% of the working-age population. This is such a small section of Goa’s population and it reveals that mining is not an important industry for employment generation

Since the mining suspension, unemployment increased by approximately 8,000, a total that clearly endorses the Rajya Sabha figures. Mining dependent schemes benefit was distributed to about 9,000 individuals, mainly truck owners, with a total spend of less than Rs. 300 crores. Surely the government can do more for them and the other, unrecognized mining dependents: the indirectly dependent.

Mining affected
We should not forget those adversely affected by mining, many of them now also mining dependent and alcohol dependent. The mining directly and negatively affected number at least 3,68,140. These most affected are those in Bicholim, Sattari, Sanguem, Ponda and Quepem talukas.

At a more fundamental level, all Goans are mining adversely affected. We’ve lost so much. Not only us, but all future generations of Goans will remember this dark time. Where is the moral backbone in mining?

Should we extract our minerals and if so, when and how much?
In his essay ‘When should Goa convert iron ore to other assets?’ Professor Pranab Mukhopadhyay writes that intergenerational Equity is in essence sustaining “welfare” and the sum of welfares across generations. Professor Mukhopadhyay concludes that there is no compelling reason to re-start extraction. In fact, due to the highly unsustainable nature of the industry, it may be better not to restart mining.

The DISHA report by TERI chimes with this when it states that the goal for the mining activities in the state should be to shift towards sustainable and controlled mining with limited environmental impacts.

Ultimately as our minerals are in common ownership, and thus follow the principles of Intergenerational Equity, it is for the public to decide on how and when mineral receipts are spent or saved, as well as when minerals are mined for the optimum financial return.

Goans, especially our future generations have suffered a catastrophic loss due to rampant corruption, culminating in poor governance by various party legislatures and multiple agencies. The scale of loss is at least 10 times all other scams in Goa put together. We are faced with severe damage to the environment which will take years to recover if at all. The minerals themselves are being wasted: iron, manganese and bauxite ores also contain gold and heavy metals. This comprises the overburden which is being unceremoniously dumped wholesale into our rivers, fields and national parks, rather than extracted.

  • How do we ensure that our fresh start is truly better than the old picture?
  • How do we guard against the ‘usual suspects’, politicians and mining barons, quietly colluding to subvert change because it hurts their profits?
  • When and how much should mine
  • How should we mine? Who should mine?
  • What is an appropriate mining cap?

This is the fifth part of a series. Read the earlier parts (1) about how fair mining can take place, and (2) the astounding losses to our children from legal mining, (3) the incredible damage to the environment, our health and our society caused by mining, and (4) the historic Supreme Court judgement and its implications.

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

 

By Sarah Dynah McGinnis

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