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Ramesh calls for environmental levy from mining

Seeking to enforce compliance to environmental norms by the miners,union Ministry of Environment and Forests (MoEF) minister Jairam Ramesh...

Written by Priyadarshi Siddhanta | New Delhi |
July 20, 2010 1:14:24 am

Seeking to enforce compliance to environmental norms by the miners,union Ministry of Environment and Forests (MoEF) minister Jairam Ramesh has asked the Mines Ministry to introduce a “polluter-pays principle” through introduction of an “environmental levy” in the new draft Mines and Minerals (Development and Regulation) Bill 2010. The move is like to act as a double whammy for the mining community,as the Bill also mandates them giving 26 per cent stake to the people in their project areas.

Ahead of the meeting of the Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee on the MMDR Bill on July 22,Ramesh has written to the mines ministry saying,“A polluter-pays principle could be laid down in the bill,which mandates an environmental levy for pollution caused by mining activity during the life of the project. This levy should be used directly for combating local environmental degradation through the state environment department with information passed on to MoEF.” Agreeing to Ramesh’s suggestion,a top ministry official told The Indian Express that a similar provision by fixing a mine closure security at a very high level of “Rs 100,000 per hectare to be collected annually in installments from the revenue stream during the mine life in addition to any other statutory provisions under the Environmental Protection Act and the Forest Conservation Act.”

On Ramesh’s suggestion that the mines ministry ought to consider resorting to annual revenue sharing model instead of equity sharing model in extending the 26 per cent stake to the project-affected populace,the latter endorsed his contention saying dividing equity amongst families could create enormous variations. “The issue essentially is the principle to be applied. If the principle is to give the affected person a feeling of ownership and a tangible stake in the activity,then equity is a solution. If,however,benefit sharing is to take a clear monetized form,revenue sharing is no doubt simpler and less prone to creative accounting solutions. Our ministry is of the opinion that creation of stake would be mutually beneficial in the long term for the project as well as the persons compensated” the official reasoned.

Delving on another suggestion made by Ramesh that a good rehabilitation package be extended to the project-affected families and the remaining money from the 26 per cent equity be used for local development,the mines ministry pitched for a making a clear distinction between extending community benefits and individual benefits. “In view the different absorption capacities of the affected persons,it is proposed to create two separate revenue streams from the Act—a cess on royalty going into the Mineral Fund for community infrastructure and services and an equity/annuity ensuring purchasing power to the people and empowering them to access community infrastructure and services,” the official pointed out. Similarly,wherever an area is notified,the new Act provides for weightage to local infrastructure creation and setting up of downstream industries,in a transparent manner,the official said and pointed out that this could impact the financial bid,but Section 13 of the Bill provided the state the flexibility of adopting a combination of models for local area development.

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