EIA Draft to Mineral Laws Amendment Act: Who bears the cost?

Mining Excavation - Photography © Vlad Chetan

India’s emissions increased by 76 percent between 2005 to 2017 while the emission intensity was reduced by 20 percent against the target of 33 percent by 2030. Emission Intensity is a ratio of a given pollutant in the total activity compared to emissions that imply the absolute levels of pollutants. To achieve the target, India would need to double its current rate of forest cover expansion and thereby conserve its existing biodiversity. Balancing the growth of the economy and protection of the environment is one of the primary tasks for the State. Legislation and Provisions act as a crucial tool to control excessive growth of an economy at the cost of the environment.

India’s concern over the environment started post 1970s from examining the river-valley projects with impact assessments. Since then, India has been a pioneering voice in international summits among both the developing and developed countries in the realm of environmental policies and climate change. India is the third largest GreenHouse Gas (GHG) emitting country contributing to more than half of the global carbon dioxide emission. India in recent time has determined to participate in international climate change dialogue in order to follow the international standards for environment protection. The United Nations Framework Convention for Climate Change – the Paris Agreement (2015), India has made commitments of immense significance globally and nationally. Commitment to reduce GHG emission intensity per unit GDP by 33-35 percent is one of the highlighted proposals.

Although India has advertised her interest in an international platform and committed to reduce carbon emissions, there is a need to look at environmental protection beyond just CO2 emissions. Carbon emissions are one parameter to view the environmental damage, but it is important to note the inherent ambiguity in estimating the environmental cost presents a big opportunity for industries to take advantage of the legislative system. Aftermath of Bhopal Gas Tragedy in 1986, an umbrella act of Environment Protection Act was set up to regulate the industries. In 1994, Environmental Impact Assessment was initiated to study the potential damage that industries could cause before granting the clearance. Theoretically, this regulation ensured public consultation was taken to arrive at the decision. After 2006, in 2020 the draft has altered a few elements that has invited severe criticism from the public and various environmentalist groups. Similarly, in January a Mineral laws Amendment  Act was passed but without getting much attention from the media and public. 

Mineral Laws Amendment Act

The Mineral Laws Amendment Act can be considered as an offshoot of Mines and Minerals Development and Regulation Amendment Act of 2015 and the Coal Mines Special Provisions Act 2015. To increase the competition in the coal mining sector, this act was passed to replace the Ordinance cleared by the parliament in 2020. The law allows 100 percent FDI in this sector and also companies participating in the auction of coal and lignite blocks need no prior experience in India. The law also removes restrictions on end use of coal which means that entities not involved in the end use of coal can also participate in the bidding. Further companies can continue the coal mining operations for their own plants for the production purpose or for sale. The bill also provides for a composite license for prospecting (exploration) and mining which were separate licenses earlier. 

Coal power plants, cattle and rice paddies are the main contributors of emissions which is expected to witness a sharp rise. Power sector of India contributes around half of the country’s emissions and more than 75% of India’s electricity is still generated from fossil fuels with coal being the main input. India targeted to achieve a coal production of one billion tonne by 2019. In reality, the annual growth rate in this sector was just 0.05% with a coal production of 729 million tonnes in 2020. However, illegal mining has increased from 91,587 cases in 2014 to 114,492 cases in 2019.

The mineral amendment act aids in increased domestic and foreign competition in the coal mining sector. Although on face value this proves to increase the production of coal, the environmental cost associated is largely ignored. Legitimising more private players through the act to conduct mining operations would inevitably lead to over-exploitation of resources. 

The  bill was touted to reduce coal imports and provide a conducive framework for mining industries. However, it calls for a serious impact with increasing frequency of  mining activities and thereby the negative externalities associated with it. Negative externalities are the unintentional damage caused to the community/environment by the industry during their operations. Apart from the threat of resource exploitation, mining activities can also cause serious environmental damages that have direct and indirect effects on human lives. 

Majority of the mining works in India (including the illegal ones) are underground which poses a health risk for the workers engaged. Constricted geometry, darkness, heat, humidity and thermal stress can negatively affect the health of the workers. Further, the law provides an option of using coal in the production process – producing fatal substances like sulphur dioxide and nitrogen dioxide. Poor labour law regulations might just overlook the health hazard that mining causes to the labourers and the intention of the bill has clearly not prioritized human resources. 

The subsequent processes in mining cause severe biodiversity losses, due to extensive mining in the Jaintia Hills district and Nokrek Biosphere Reserve in Meghalaya, large areas of land degraded, causing reduction of vegeatiave species as the density of trees, shrubs and herbs in mined areas decreased. 

Although mineral laws received less attention from the public – the environmental effects of the bill cannot be ignored and deserves more scrutiny from all the stakeholders. 

Environmental Impact Assessment Draft

Environmental Impact Assessment (EIA) is a tool identified by the UNEP for evaluating the potential environmental impacts of a proposed project also taking into account socio-economic, environmental damage. These projects include coal mining, infrastructural projects, thermal and nuclear power plants etc. The methodology and process of EIA is statutorily backed by the Environmental Protection Act of 1986.

According to the EIA norms, the steps for assessment involve:

  • Screening
  • Scoping
  • Collection of Baseline Data
  • Impact Prediction
  • EIA Report
  • Public Hearing
  • Environment Management Plan
  • Assessment of Alternatives and Mitigation Measures
  • Risk Assessment

EIA exercise serves as a powerful tool to neutrally assess the impact of a particular business before it gets the approval. This is primarily because most of the environmental damage is irreversible and the costs associated with repairing is much higher than the revenue made. 

The most fundamental issues relating to the EIA draft explicate a more liberal approach in favour of industries. Ideally, the provision is to help the public and business negotiate their deals better. However, operations being more flexible to industries would mean the transaction cost for the public to negotiate would increase. Such an asymmetric bargaining power by design might work against the initial intent of EIA. 

The draft also proposes that projects that are considered “strategic” by the government- 40 industries under clause 26 are exempted from getting prior environmental clearances. Construction projects of 1,50,000 square meters along with highways and inland waterways projects also enjoy the benefit of not requiring an approval under EIA. Creation of an ex-post-facto clearance route – would imply that a list of projects can start without the clearances and can “manage” the violations under the assessments. Also, the time period for public hearing has been reduced while the reporting rules for the industry have become more liberal. The debate revolves around conservationists and industrialists – the former believe EIA removes the scole of public engagement in the process. The latter argue about the rigid bureaucratic rules that have been constraining businesses.

The real question is to determine what level of damage is acceptable, who decides it and who bears the cost?

Hydropower projects are usually considered as “green energy sources” of energy and require construction of large dams. Flooding of valleys and loss of forest covers are consequences of dam construction which further leads to wildlife losses, greenhouse gas emissions, loss of air and water quality etc. It also affects aquatic life due to habitat fragmentation, disruption of movement downstream and also develops dangerous flow of sediments. A prime example is the 2013 Uttarakhand floods in which one of the significant causes of the disaster was increased sedimentation in the dam. 

Hydropower projects usually require mandatory EIA. But the EIA reports for many projects has severe flaws in its assessments, like the Etalin hydropower Project in Dibang Valley, Arunachal Pradesh and Demwe Dam in Arunachal Pradesh EIA which has factual mistakes in vegetation and wildlife of the valley and improper rainfall data. Around 2.7 lakh trees are estimated to be cut-off as the project location is in a subtropical evergreen forest and subtropical rainforests which is considered as a home to extraordinary biodiversity. Similarly, the Athirapally Hydel Electric Project has been given clearance by the Kerala Government after the Expert Appraisal Committee approved it under EIA norms. The region is known for its rare and diverse species of flora and fauna and there were reports from biodiversity assessment stating that the project might adversely impact the already fragile river ecosystem. 

Legislations made recently by the parliament can jeopardize the commitments made by India in the Paris conference and might adversely affect its diplomatic relations in a global scenario since India has been considered as a torch bearer for action against climate change. The world economy is now facing a global recession which has a profound and mysterious long-term impact. 

Economy and environment is a trade-off, the government might have to resort to draconian measures to boost the economy. However, these measures must be scrupulous by considering more sustainable and environment-friendly driven policy decisions. By investing more in research and development of renewable energy and biodiversity conservation as well as adopting cutting edge sustainable technologies, India can move towards the sustainable path and go in accordance with the country’s international commitments.

As we witness chaos at a global level, India can either drive towards a commercialization of sustainable models or to make radical decisions for industrial growth by ignoring the long term environmental cost. 

Nikhil Sreenivas
Masters in Environmental Economics with avid interests in Economics, Development and Environment
Manjari Balu
Economics enthusiast and a coffee lover aspiring to build a network of like minded thinkers across the world.
Nikhil Sreenivas
Masters in Environmental Economics with avid interests in Economics, Development and Environment