What happens when a very long lease (20-30 years or more) of a mine expires? Does it need to go through a fresh environment and forest clearance cycle, along with seeking other requisite permissions? What happens if the mining company does not receive the new clearances before its lease period expires? Should it shut down, or can it continue its operations with temporary working permits?

The Kudremukh Iron Ore Company Limited (KIOCL) in Karnataka is a classic case study of these questions. The 30-year-old mining lease for this company to extract iron ore expired in July 1999; however, extensions of its mining permits allowed the company to continue mining operations until 31st December 2005, after which the Supreme Court of India decided not to grant any further extensions. Nor is KIOCL the only company in India to have benefited from the temporary working permits (TWPs) it received more than once. Several mines, both public sector and privately owned, have been seeking TWPs, and getting them. Interestingly till 4th August 2006, there were no clear guidelines for the grant of these TWPs, even when it involved impacts on an ecologically sensitive area like a designated National Park or Sanctuary.

After a year of deliberations, the Supreme Court issued clear-cut guidelines. In the KIOCL case, the court's decision to finally end the renewals of the mining permit was in response to an intervention filed in 2001 by K M Chinnappa, a retired Forest Officer and Trustee of the NGO Wildlife First, as part of an ongoing case before the court, T. N. Godavarman Thirumulkpad Vs Union of India and ors (WP No 202 of 1995) (For details see here).

TWPs can only be granted for renewal of mining leases, and not when the lease is being sought for the first time.

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On 16th September 2005, the Supreme Court issued an order that, "no Temporary Working Permissions, or Temporary Permit, or any other permission, by whatever name called, shall be granted for mining activities in the National Parks, Sanctuaries and Forest areas." It was further directed that no mining activity would continue under any Temporary Working Permit or Permission (T.W.P.), which may have been [already] granted." This order was later relaxed based on applications filed by several mining companies. The Central Empowered Committee (CEC) a monitoring body constituted by the court under the Godavarman case, was also asked to submit a report on the issues relating to TWPs. Suggestions were filed by the Amicus Curiae (friend of the court), Harish Salve and also the Ministry of Environment and Forests (MoEF) and the Federation of Indian Minerals Industries (FIMI).

The court's order prompted fresh filings, including one to determine the fate of the mining lease for TISCO's plant in Jamshedpur. The counsel for the company, Arun Jaitely, at the 30th September 2005 hearing, had highlighted that the company was first granted lease in 1925, and this was subsequently renewed in 1985 for a period 20 years. In 2004, Tata Steel put in an application for further renewal, which is pending with the state government till date. Meanwhile the mining lease has expired on 30th June 2005. However, the company's forest clearance is still valid, and Jaitley argued that according to the Forest Conservation Act, if there is a delay on the renewal of the lease at the state government level, the company can continue its activity based on the forest clearance for the previous lease. A fresh forest clearance will be sought once the decision on the renewal is taken; meanwhile the company has temporary working permit to carry out mining activity.

New rules

On 4th August 2006, the court put down clear-cut preconditions for the grant of TWPs. These conditions were decided after extensive debates and discussions within the court, both before and after the report submitted by the Central Empowered Committee. Among these are:

  • TWPs can only be granted for renewal of mining leases, and not when the lease is being sought for the first time.

  • The mine cannot be located inside any National Park or Sanctuary notified under the Wildlife (Protection) Act, 1972,

  • The grant of the TWP would not result in any mining activity within the safety zone around such areas. For instance an interim measure by the Supreme Court, a one-kilometer safety zone, is to be maintained around Jamua Ramgarh Sanctuary in Rajasthan.

  • The user agency that has broken up the area of the mine, for which the TWP is being sought, should have had the requisite environmental clearance and not violated the Forest (Conservation) Act, 1980. However, a TWP can be granted if the past violations have been regularized by the MoEF.

  • All the conditions at the time of the grant of forest clearance have been met with by the mining company e.g. compensatory afforestation or dumping etc.

  • TWP can be granted only for one year. If the application for forest clearance is not disposed off during this period, then an extension to operate the mine can be granted based on Supreme Court orders for a maximum period of three months.

What does it all mean?

What have all these deliberations lead too? What does the 4.8.2006 order of the Supreme Court lay down as a procedure for the grant of TWPs for the renewal of mining operations? Listed below are the steps specified in the Supreme Court order:

For seeking forest clearances,

  • A proposal seeking clearance under the Forest (Conservation) Act, 1980 need to be filed two years prior to the expiry of the mining lease to the state government.

  • If additional information is required, the State Government will ask for the same within 90 days after the receipt of the proposal by the mining company.

  • The state government will forward the proposal to the central government along with their recommendations within 9 months of the receipt of the proposal.

  • The central government (MoEF) will dispose off the application for grant of permission within four months of its receipt, under ordinary circumstances. If it is unable to do so, the special reasons for the same would need to be recorded explaining the delay.

For obtaining a Temporary Working Permit,

  • If the application is delayed at the MoEF level, the user agency or applicant can apply for grant of a TWP. In such cases it can apply to the state government in the proforma prescribed by MoEF with an advance copy to the MoEF. Such applications can be made any time after the expiry of 13 months from the date of filing of the proposal with the State Government but not later than 9 months prior to the expiry of the existing approval under the Forest Conservation Act.

  • In cases where lease/renewal was granted prior to 1980 and the lease period has not expired, the application shall be made at least 9 months prior to the expiry of lease period.

  • The proposal seeking TWP would be processed and forwarded by the state government to the MoEF within 3 months and the MoEF will place it before the Forest Advisory Committee (FAC).

  • If the state government fails to forward the application, the advance copy will be placed before the FAC. The FAC will allow for an opportunity to the State Government and user agency to be heard before giving its final recommendations.

  • If the state government refuses to grant TWP (reasons to be recorded in writing), then FAC will give an opportunity to both the state government and the user agency to present their views and pass orders.

  • If no recommendation is received by the state government then the FAC will pass the appropriate orders after giving an opportunity to the state government to be heard.

A few other directions were also provided by the court; these apply to both forest clearances and TWPs. Some of these directives are as follows:

  • FAC will consider all proposals for forest clearances and TWPs. If it recommends grant of clearance or TWP, then MoEF will issue orders within 4 weeks, listing the terms including that of payment of Net Present Value of forest land diverted for non forest use.

  • The decision on grant of forest clearance would need to be conveyed to the user agency before the expiry of TWP.

  • In case MoEF disagrees with the FAC recommendation, they will give it in writing to the FAC for consideration. If there continues to be a disagreement, then the Supreme Court may be approached.

  • In cases where FAC makes recommendation without state government inputs, the TWP will be effective only after the facts are confirmed by the state government. If there is a variance, the state government can refer it back to the MoEF. The MoEF, if so advised can suspend the TWP.

It is too early to say whether or not these guidelines will be effective. Implementing them would clearly require a significant level of coordination between state governments and MoEF, which does not always run smoothly. Nevertheless clear-cut guidelines now exist, which is a significant development in itself.