The Central Empowered Committee (CEC) of the supreme court leaves us aghast with the unprecedented loot and plunder in the 266 iron ore mines of Karnataka. It has recommended that SC directs the state to "ascertain the total quantity of iron ore and other minerals extracted by the respective lease holders and an amount equivalent to five times the normative market value may be directed to be recovered as exemplary compensation". One estimate of the illegal transportation and exports cited by CEC (based on figures provided by the Karnataka CM in the Assembly on July 9, 2010 between 2003-2004 and 2009-2010) is Rs 15,235 crore. A compensation of five times this amount would exceed Rs 76,000 crore.

In a report extending five volumes submitted today before the SC, copies of which are available with Governance Now, the committee which functions as the apex court’s eyes and ears on forest cases, has reported:

* "We would like to place on record that during the last nearly nine years of the existence of the CEC, it has dealt with a number of cases involving illegal mining such as in Haryana, Rajasthan, Uttar Pradesh, Madhya Pradesh, Chattisgarh and Orissa. In many of the cases, the extent of illegal mining has been found to be quite extensive. However, all these case pale into insignificance when compared to the illegal mining on colossal scale that has taken place in the state of Karnataka, particularly in District Bellary (148 mines involving 9,527 ha.of forest land and 1,341 ha. of non-forest land) and that too with the active connivance of the officials of the concerned departments and also the public representatives."

* "Lokayukta has highlighted action to be taken against the then Chief Minister of Karnataka and a number of senior officers, process followed for dereservation of areas including forest area for mining by private persons, illegalities and irregularities of illegal mining and encroachments in forest areas by lease holders/MoUs entered into by MoUs entered by Mysore Minerals Ltd (a state undertaking), effective transfer of mining leases and sub-lease, illegal grant of temporary transport permits, illegality in transportation of iron ore, ineffective transport permit system, damage done to environment and water bodies, and improper orders of the deptt of mines, (but) unfortunately, hardly any perceptible follow up action and corrective actions were taken on his findings. Meanwhile, the mining leases, continued. Out of 99 cases involving illegal mining, the survey and demarcation of only seven leases have so far been completed. The illegal mining not only continued, but in fact, increased manifold."

* "The forest cover in mining leases illegally granted in Ramghad Forest blocks and other forest blocks as seen from satellite imageries have been wiped out (see some satellite images, before and after). In spite of a firm stand taken by the forest department, mining leases illegally granted were allowed to be continued and iron ore worth hundreds of crores of rupees has been extracted. Illegal mining on a massive scale took place particularly during 2009-2010 even after the filing of the report by the Lokayukta. The connivance of the concerned officials is glaring. The satellite imagery vividly bring of the extent of illegal mining which perhaps runs into thousands of crores of rupees."

* The CEC noted that the chief minister of Karnataka himself stated in the assembly that between 2003-4 and 2009-2010, out of 7,75,33,925 mt of ore exported from the state, 3,04,90,729 mt was illegal and without valid permits. Of these illegal exports, 71,27,937 mt was exported in 2009-10 alone. The CEC uses a conservative fob value of Rs 5,000 per mt to say that "a nominal value of illegally exported iron ore from Karnataka comes to Rs 15,245 crore".

* The CEC has pointed out that out of 8 lakh mt of iron ore seized on March 18, 2010 from Belikeri Port (worth at the assumed fob price to be Rs 400 crore) 6 lakh mt was found missing within 2.5 months of a seizure!

Before

After

The CEC has placed before the SC a sealed cover of politically-sensitive documents regarding, "i) alleged receipt of huge amounts as donations by a trust managed by close relatives of a senior political leaser from Karnataka from a) a business house and its business associated companies and b) from a builder; ii) the growing mining mafia in Bellary; iii) alleged acts of a senior political leader of the state; iv) alleged export duty evasion and income tax evasion by mining company onwed by a senior political leader; v) alleged illegal transfer of a mining company in favour of a senior political leader; vi) suppressed sale of Rs 86.43 crore in the income tax return by a mining company operating in Bellary Forest".

The CEC drew the SC’s attention to the fact that out of the 21 mining leases which are working within lease areas approved under the Forest Conservation Act, 1980, as per the state government’s statement, all these 21 mines fall into the category of 'not working/idle mines' and which shows that there is not even a single mine in the entire state which is presently operational and is not working in the violation of the FC Act. This information speaks volumes about the sorry state of affairs in the state of Karnataka.

Before

After

It may be recalled that the Lokayukta, Karnataka had submitted a scathing report on December 18, 2008, stating that 1081.40 ha. Of forest area is under illegal mining/encroachment by way of mining pits, over burden dumps, construction of roads, etc., undertaken by various lease holders outside their sanctioned mining lease area.

The CEC noted the role and complicity of the state government, for taking "more than 2.5 years for even seeking legal opinion" on the Lokayukta’s report on various leases "where concerned lease holders have transferred their leases by way of raising contracts or sub leases".

Before

After

"This is simply not acceptable and indicates the extent to which the rot has set in and the vested interest(s) have a hold on the government." The CEC has dedicated an entire report on the state government’s complicity with one Lakshimarayana Mining Company (LMC) in sandur Forest range of Bellary, which illegally mined in neighbouring forest area, and then "remained a mute spectator to the destruction of evidence by allowing the lessee to fill up the pit and remove the so-called over burden without verifying whether it contained any saleable iron ore".  The CEC has recommended that LMC paid an exemplary compensation equal to five times of the illegal ore that it had mined. In another report the CEC castigated Karnataka for "the speed with which concerned authorities colluded (with Dalmia Cements (Bharat) Ltd) and defrauded the department and the government and transferred a non-existent lease, rightly set aside by a learned (Karnataka HC) judge".

In an oblique indictment of the Lokayukta for yielding a legal point to one of the petitioners, VS Lad & Sons, by not giving him a hearing, the CEC quoted from a Karnataka High Court judgement, "One should not forget that the office of the Lokayukta is held by a former Judge of the Apex Court. It is difficult to presume that the said high authority would give a report without any material basis whatsoever. We are unable to digest the contention that the Lokayukta’s report cannot be a basis even to initiate an action against an illegal act. However, on the ground that the petitioner did not have an opportunity to be heard, we do not intend to take any view against the petitioner as it would otherwise be opposed to the principles of natural justice."

The CEC pointed to the "confusion" and lack of formal demarcation in the inter-state boundary between Andhra Pradesh and Karnataka over the Bellary Forest Reserve. "A number of mines are operating in areas adjoining the disputed inter-State boundary. To curb illegal mining and transportation and disputes, it is imperative that the inter-State boundary is determined and laid on the ground immediately."