Environmental regulation and post-COVID-19 economic recovery

On 24 March 2020, the central government declared a nationwide lockdown to deal with the spread of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), which caused the novel coronavirus disease (COVID-19) pandemic in India. The lockdown, implemented without the necessary social and economic support by the state, was a harsh ‘tradeoff’ in favour of public health. The country’s already sluggish economy took a massive hit due to the global pandemic and the near complete closure of international and domestic trade of goods and commodities. It pushed small and medium scale manufacturing and service enterprises out of business and millions of informal and daily wage workers into sudden unemployment and starvation. On the other hand, the environmental experience across geographies, especially polluted cities, was one of clean air, flowing rivers and a reappearance of bird and animal life in degraded habitats that they had avoided for long. The COVID-19 lockdown’s environmental effects showed the extent and scale of impact of industrial and urban construction activity on environmental pollution.

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Besides businesses, social sector organisations and state governments, which implement most of the social welfare schemes in their states, were looking to the central government’s announcement of monetary support. However, when the government began its unlocking efforts, it relied on old economic approaches and justifications to stimulate the economy[i] [ii].  This included a focus on highly environmentally damaging extractive projects that were known to have transferred wealth into fewer hands, impoverished the communities living in mining regions and encouraged corruption in politics.

Weakening environmental regulation

One of the main environmental reform proposals that were launched in the midst of the COVID-19 pandemic was the amendments to the Environment Impact Assessment (EIA) notification, 2006. 

The EIA notification mandates the need for prior environmental impact assessments, public consultation and expert scrutiny of project documents to ascertain the environmental viability of a proposed project or its expansion. The Union Ministry of Environment, Forest and Climate Change (MoEFCC) either rejects or conditionally approves any project based on these procedures. The approval that may be granted to the project is popularly known as an “environment clearance”. The EIA draft notification 2020 that was released for public comments during the lockdown was not a major surprise in terms of the content of the draft. The central government had made its intention quite clear right at the beginning of its term in 2014. It set up high level committees to amend several environmental laws[iii] [iv]. Last year, a zero draft of the EIA notification, 2019 was shared with state governments and industry bodies for comments[v]. The 2020 draft pools together existing relaxations and introduces several new exemptions from regulatory obligations and oversight. The MoEFCC has justified these dilutions as its contribution to the government’s overall aim to improve its “ease of doing business” by minimising delays and roadblocks in seeking environmental approvals[vi].

The MoEFCC’s proposed draft envisages a comprehensive redesigning of the EIA notification, 2006. This draft EIA 2020 was opened for public comments for sixty days during the COVID-19 lockdown. Written responses from youth groups, citizens and civil society organisations sought more time for the consultation, translations for regional dissemination and greater outreach efforts to obtain comments on the proposed amendments. The draft notification was challenged in at least three state high courts: Delhi, Karnataka and Madras (Tamil Nadu). The Delhi High Court ordered that the EIA 2020 be translated to “at least” all languages “mentioned in the Eighth Schedule to the Constitution”[vii]. Even though the translations were pending, the MoEFCC did not extend the formal time period for receiving comments on the English version of EIA 2020 beyond 11 August 2020. On the petition of United Conservation Movement Charitable and Welfare Trust, the High Court of Karnataka stayed the issuance of the final EIA notification, 2020 “till further orders”[viii].

The content of the draft EIA has been criticised on several grounds. These include exempting entire projects and project expansions up to 50 per cent from the requirement of public hearings, and reducing the notice period for public hearings from 30 to 20 days. The proposed amendments also normalise post facto approvals. The draft introduces a new section on “violations” to scrutinise projects, which started construction or operations without seeking prior approval. In 2017, this practice was introduced by the MoEFCC as a one-time opportunity[ix]. Projects were given a six-month window to disclose their illegality and seek a post facto approval. The draft EIA 2020 now proposes this to be a permanent option available in the legal framework. An analysis of the draft notification by the Centre for Policy Research (CPR) highlights how the introduction of the “violation” clause can encourage fait accompli and post facto approvals to projects. Large mining projects like the Odisha Mining Corporation’s Dubna-Sakradihi iron ore mine in Odisha have been operating without environment clearance for many years and are currently pending before the MoEFCC’s Forest Advisory Committee[x].

The government received close to two million submissions that question both the process by which public comments have been sought and the content of the proposed legal amendments to the EIA notification[xi] [xii] [xiii]. Several politicians, including the current chairperson of the Parliamentary Standing Committee on Science and Technology, Environment, Forests and Climate Change, Jairam Ramesh, who is also a former environment minister, raised objections on the draft[xiv] [xv]. They pointed to excessive centralisation, weakening of environmental safeguards and public participation by the draft. The United Nations (UN) Special Rapporteurs asked the Indian government to respond to whether draft EIA 2020 amendments uphold India’s obligations to international laws and treaties[xvi].

Even as the comments are being reviewed and final amendments are yet to be notified, the MoEFCC has continued to modify the EIA 2006, currently in force. On 14 September 2020, it issued an office memorandum specifying a protocol for conducting public hearings during the COVID-19 pandemic[xvii]. In the last few months, the state regulatory agencies have come under serious criticism for announcing public hearings even while COVID-19 lockdown related restrictions were in force[xviii]. Several public hearings were conducted online and concluded despite their very limited outreach and technical difficulties. Physical public hearings were also organised amidst opposition and concerns about these gatherings increasing health risks to communities. The new public hearing guidelines issued by the MoEFCC now allow for organising a hearing for 100 people at a time on multiple days and through online platforms. Senior ministry officials stated that new guidelines were needed as projects could not be held up on account of lack of public hearings[xix]. No public inputs were sought on the health risks such public hearings would pose to citizens, and whether it would help achieve free, fair and maximum participation as mandated by the EIA notification.

Undemocratic mining law amendments 

 In March 2020, both houses of India’s Parliament passed the Mineral Laws (Amendment) Bill, 2020 paving the way for “transformative” amendments to two central laws that regulate the mining sector in India. The Mines and Mineral (Development and Regulation) Act (MMDR), 1957 and the Coal Mines (Special Provisions) Act, 2015 were amended for “a new era in Indian coal & mining sector specially to promote Ease of Doing Business”[xx]. This replaced the ordinance issued by the government in January 2020 that had already given force to these legal changes, but had to be enacted through Parliament when it reassembled in March[xxi]. These amendments created the legal space for the central government’s announcement to auction coal blocks. The government invited public and private sector companies from India and abroad to bid for 41 new coal blocks in five states: Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha. 

The two main changes operationalised through these legal amendments are, firstly, to expand the eligibility to participate in bidding to include all companies irrespective of their prior coal mining experience and secondly, to allow the extraction of coal without any prior restrictions of end use. Until now, coal mining was largely done by the public sector either directly or through “Mine Develop Operate” (MDO) contracts with the private sector. Private coal miners engaged in mining had to clearly specify the purpose for which extraction was being carried out including details of the end user i.e. a state-owned power plant or for their own captive consumption. These amendments of the mining laws also stated that in case new auctions result in transfer of ownership of coal mines, “environment and forest clearances along with other approvals and clearances shall automatically get transferred to the new owners of mineral blocks for a period of two years from the date of grant of new lease”[xxii].

The central government, led by the Bharatiya Janata Party, envisaged that the commercialisation of coal mining and other legal changes would help trigger private sector investment in the coal sector. It started these reforms when it first came to power in 2014 on the back of a major economic “scam” involving coal block allocations by the earlier government.[xxiii] When the government was reelected in mid-2019, the bureaucratic processes for these reforms were underway[xxiv].  

In May 2020, India’s finance minister Nirmala Sitharaman announced a series of structural reforms to stimulate India’s economic growth. These reforms were called the Atmanirbhar Bharat Abhiyan (self-reliant India movement)[xxv]. Under this, the government announced several sectoral proposals, which were repurposed from existing ones promised by the central government since 2014 when it first came to power[xxvi]. They were announced with the assurance of “fast tracking of investment clearance through Empowered Group of Secretaries”. The stimulus package included a major focus on India’s mining sector[xxvii].

In August 2020, another set of amendments were proposed to the MMDR, 1957 and public comments were sought within a short duration of ten days. The changes proposed removed the end use restrictions for all mining, mirroring the changes made to the coal sector earlier this year. These amendments also proposed a change in the definition of “illegal mining”. According to the government’s explanatory note, extraction of minerals beyond an approved limit will not be considered illegal if it is within an existing mine lease area[xxviii]. Only mining that extends into additional land encroached by the miner would be considered illegal.  By this understanding, the over-extraction of minerals that amounts to a loss of royalty to the state exchequer or results in damage to land, forests, water or livelihoods during the time of extraction and transportation will not be considered an illegality by the mining law. The MMDR amendments have been opposed by the Jharkhand government as it would impact the state’s economy and industrial climate. Jharkhand chief minister Hemant Soren has also raised disagreements with the new definition of illegal mining that condones over-extraction. The state government has demanded more consultation by the centre before proceeding with the final amendments[xxix] [xxx].

There has been a consistent reading down of environment regulations for both new mines and mine expansions in recent years. For instance, the process of reducing the scope of public participation in approvals for new and expanding mines began in 2012 when coal mine expansions up to 25 per cent of their total capacity were exempt from holding public consultations[xxxi]. In 2017, coal mine expansions up to 40 per cent of their existing capacity were exempted from the need to conduct public consultations under EIA norms. In early January 2020, offshore and onshore oil and gas exploration were exempted from detailed impact assessments and public hearings[xxxii]. This legal change came under question after the recent oil fires in Baghjan in Assam because the Oil India Limited had been exempted from the need to hold public hearings before carrying out fresh oil explorations, on the grounds of conflicts with the surrounding villagers[xxxiii].

But the dilutions of environment regulations for the sector came to a head in the midst of the COVID-19 lockdown. The central government was already moving on its intention to privatise all mining by halting lease extensions[xxxiv] and auctioning mines instead. In March 2020, the MoEFCC issued two notifications to facilitate the transfer of environmental and forest clearances to the mine owners[xxxv] [xxxvi]. According to these notifications, these newly auctioned mines would need to secure fresh environmental and forest clearances anytime within two years from the date of new ownership. In the interim, the new mine owners could continue uninterrupted mining as per the conditions of the existing approvals. This extension of environmental approvals to mines that are being granted fresh leases assumes a fait accompli of projects. It takes away the opportunity to address the legacy of mine impacts, such as contamination of farm lands or water sources, degradation of forest areas or loss of lives due to mining accidents, before change of ownership of mines. Several such mines with legacy issues are listed for auctions[xxxvii].

Economic recovery through legalising violations

The expansion and privatisation of mainstream economic sectors such as mining and corresponding dilutions to environment laws have gone hand in hand. There have been multiple occasions since the late 1990s when regulatory procedures to protect the environment and for public participation were held responsible for the “delay” in economic investments or for creating “bottlenecks” in project approvals and operations. Several high-level committees have argued for single window clearances, lower pollution compliance standards, reducing public participation and self-regulation[xxxviii] [xxxix] [xl]. These recommendations, when implemented, have had a significant role in weakening or loosening environmental governance frameworks.

Since 2014 when environmental regulations have faced systematic and frequent changes in favour of “ease of business” and India has faced more frequent environmental disasters, air pollution and loss of species, the Indian economy has also performed its worst in decades. Besides, parameters such as economic inequality, informalisation of employment, precariousness of work and social unrest are strikingly high. The signs of an economic slowdown were writ large across certain sectors even before the COVID-19 pandemic[xli]. It shows that there were systemic problems with economic planning and management, and these concerns also affected the manner in which natural resources were governed[xlii]. 

To start with, laws and policies are being designed and enforced without parliamentary or public inputs. The recent legal and policy changes to environmental laws and economic sectors have major environmental impacts but they have hardly seen any discussion or debate. The only way to read the mining sector and environmental regulatory changes pushed through during the lockdown is that the central government used the limited possibility of social interaction during this period as an opportunity to legalise undemocratic decisions that could affect society. Environmental regulatory dilutions of the kind we have seen in India, especially the legalisation of violations as a matter of policy, cannot provide economic recovery or environmental sustainability. There are several court judgments and expert committees that have asserted the importance of democratic environmental regulation and proper enforcement of laws in overall governance.

The Samata[xliii] and Niyamgiri[xliv] judgments, the Justice M B Shah Commission reports on the illegalities of iron ore mining[xlv] and the final judgment in the case on iron ore mining in Goa[xlvi] elucidate why mining projects need to be regulated for environmental and social impacts if they are to have any public benefits at all. In different ways, these high profile cases have recommended caps on resource extractivism, greater disclosures, transparency and public participation to address corruption related to natural resources and the need for rule of law. Yet governments continue to propagate the myth of environmental regulatory hurdles and legitimise green grabs through undemocratic changes to EIA and mining laws.

Disclaimer: This article was prepared with the support of the Heinrich Böll Stiftung India. The views and analysis contained in the publication are those of the author and do not necessarily represent the views of the Heinrich Böll Stiftung.

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