Odisha yet to collect ₹4000 cr mining penalty, 7 years after SC deadline: CAG

Bhubaneswar: More than 7 years after the deadline passed for the mining companies to deposit penalty money with a special purpose vehicle of Odisha government as punishment for iron and manganese ore mining without forest clearance (FC) or environmental clearance (EC), around ₹4000 crore of the amount is yet to be deposited with the Odisha government, the Comptroller and Auditor General of India (CAG) said on Wednesday.

The CAG ‘Performance Audit of Management of Odisha Mineral Bearing Areas Development Corporation (OMBADC) Funds’ that was placed in the Odisha Assembly on Wednesday said an amount of ₹3,966.34 crore (with interest) was yet to be deposited by the mining lease holders with Odisha Mineral Bearing Areas Development Corporation even though the Supreme Court had asked them to do it by December 31, 2017.

The Supreme Court in January 2014 ordered that 50% of the additional Net Present Value (NPV) recovered by the State of Odisha from mining lessees should be used by the State through a Special Purpose Vehicle to undertake specific tribal welfare and area development works to ensure the inclusive growth of the mineral bearing areas. Odisha in consultation with the Central Empowered Committee of Supreme Court formed a SPV in December 2014 for tribal welfare development and named it Odisha Mineral Bearing Development Corporation.

Accordingly, the Central Empowered Committee in its report in January 2018 recommended collection of compensation, amounting to Rs. 19,174.38 crore, from 131 mining lease holders, who had violated EC and FC. The amounts determined as due, from all the mining lessees, were to be deposited by them, on or before December 31, 2017.

The CAG report says Supreme Court of India had directed Odisha government that mineral iron ore and manganese, extracted either without an EC or without FC or without both, would attract the provisions of Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957 and 100% of the price of the illegally or unlawfully mined mineral, was to be compensated by the mining lessees.

“Scrutiny of records of the Director of Mines and Geology revealed that Rs. 3,966.34 crore (with interest), from the defaulting mining lessees were yet to be collected although seven years had lapsed,” the CAG report said, adding that the department of Steel and Mines had not taken effective steps like attaching immovable properties to recover the remaining balance of ₹3,966.34 crore (with interest) from the defaulting mining lessees. The CAG also said the Board of Directors of OMBADC, responsible for overseeing fund management and recovery processes, failed to ensure timely action.

Highlighting the weaknesses in the way the money was spent, the CAG report said the skill development initiative has largely missed its target, with over 95% of the enrolled candidates not belonging to the identified mineral-bearing villages. It said the SC/ST youth of the mining affected districts, were deprived of the benefits of skill development training. Crucially, key public health programmes, such as the prevention and control of pulmonary and vector-borne diseases, saw low expenditure and non-initiation of vital activities, despite Odisha reporting a high number of malaria deaths. Many completed health facilities were found to be non-functional or not meeting requirements.