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After the de-allocations – What happens to the clearances given to coal blocks, now up for auction again?

ItCommunitiesAndLegalAction_KanchiKohli made news last year when the Supreme Court of India “de-allocated” 214 coal blocks. The process of the allocation, the Court held, was illegal and arbitrary. Not all of them were operational, but where they were, the owners had to stop operations. While 42 of them got a six-month reprieve and four were “saved”, the remainder had to halt any mining operations with immediate effect.

All but 4 of the de-allocated ones have, as on April 1, 2015, entered into a process of auctions where either the current lease holders or someone else could emerge the highest bidder. Following the passing of the Coal Mines (Special Provisions) Act, 2015 in March 2015, the Ministry of Coal had published the details of the auction process. All these coal blocks may soon have new owners.

Given the changed circumstances, there is doubt among communities and activists about what is likely to happen next and how they should prepare for it. For example, for those who had prepared a legal challenge on environmental irregularities, where do remedies now lie? How should they prepare? To the affected communities, the impacts, unresolved illegalities, and the environmental and social liabilities of the coal blocks that are up for auction remain just as relevant.

Questions asked about clearances to coal blocks

Many of these coal blocks, whether or not they had started operations, had received “clearances” from the Ministry of Environment, Forests and Climate Change (“MoEFCC”) after completing the necessary procedures. These approvals were challenged in courts, on the streets, and through petitions before the executive. For instance, when the Supreme Court delivered its judgment, a challenge to the forest clearance granted to the Mahan coal block in Madhya Pradesh was pending before the National Green Tribunal.

Similarly, the public hearing of the Parsa coal block in Chhattisgarh had been completed in the face of stiff opposition. Questions had also been raised about whether due process had been followed for impact assessment and public hearings. The NGT had quashed the approval for forest diversion given to the the neighbouring coal bloc in Parsa East Kanta Besan and had sent the matter back to the MoEFCC for re-examination. The stay on the mining and transportation of the already dug up area was lifted by the Supreme Court soon after.

The affected villagers and campaign groups had also pointed out that the presence of an elephant habitat near the mining site was not disclosed and that the mandatory site inspection was done in a casual manner. Questions were also raised about the circumstances under which the environment ministry had, under directions from the empowered group of ministers, approved the project.

What happens to the matters before the Green Tribunal?

Mahan and a few other coal blocks, whose environment or forest diversion approvals had been challenged before the National Green Tribunal (“NGT”), were included in the Supreme Court’s de-allocation list. What did this mean? Did the appeals become infructuous? The NGT on September 26, 2014, while hearing the two cases filed against the Mahan coal block (Appeal No.18 of 2014 and Appeal No.34 of 2014) and also the PEKB coal block, held “the cause of action raised by the Appellant does not subsist any longer.” They also held that that the rights and contentions in relation to the “forest clearance” would be transferred to the third party who would get the coal block.

While dismissing another case challenging the environment clearance given to a BALCO coal block (Appeal No. 46 of 2012), on October 9, 2014, the NGT upheld the right of appeal in accordance with law. This meant that if the environmental clearance is transferred to another allottee, it does not take away the right of a legal challenge both on procedural lacunae and on the merits of assessment. This is yet to be tested before the tribunal but the order is in place.

MoEFCC Clarification

Both the EIA Notification and the process laid out under the Forest Conservation Act, 1980 for forest diversion allow for transferring the approval to another project authority, during the course of assessment or even after approvals are granted. For instance Section 11 of the EIA notification says, A prior environmental clearance granted for a specific project or activity to an applicant may be transferred during its validity to another legal person entitled to undertake the project or activity on application by the transferor, or by the transferee with a written “no objection” by the transferor, to, and by the regulatory authority concerned, on the same terms and conditions under which the prior environmental clearance was initially granted, and for the same validity period. No reference to the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned is necessary in such cases.”

On March 23, 2015, there was an additional clarification to Section 11 of EIA notification through an amendment. This allowed for the transfer of environment clearance on the terms above, in case “an allocation of coal block is cancelled in any legal proceeding; or by the Government in accordance with law”.

As on date, the environment clearances of 29 coal blocks have been transferred. Some of these are for approvals granted as far back as in 2000. The approval for  the captive underground coalmine village of Milupara Kondkel in Raigarh, Chhattisgarh is one such. It now stands transferred from Monnet Ispat to Hindalco. The most recently granted environmental approval that has been transferred is for the Ganeshpur Opencase mine in Latehar in Jharkhand. Here, the transfer is from Tata Steel to GMR Chhatisgarh Energy Ltd. Tata Steel had received the approval in January 2014, about seven months before the Supreme Court ruling.

For any affected community and for any of us working on the environment or the social and environmental impacts of coal blocks, this is an important space to watch. Many coal blocks where approvals are pending or where mining operations have not been initiated, are not yet on the radar of re-allocations and other revised regulatory approvals. A lot is likely to be tested in and outside of courts where communities and community-based organisations are involved in legal action.

Kanchi Kohli is a researcher working on law, environment justice, and community empowerment.

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