MoEF grants forest clearance, but FRA, PESA compliance still needed

This wedding season, anxious grooms from Parsa and Ghatburra, two villages in Chhattisgarh's Surguja district, were offered financial assistance from an unlikely source. Adani Mining Pvt Ltd, a subsidiary of Adani Enterprises Ltd, was handing out loans to all those who could prove that the money would be spent on marriage arrangements.

"A company official took us to the bank, opened accounts in our names, and gave us cheques of Rs. 20,000 each. He then took us to the tehsildar and made us sign an agreement," said Mohar Sai, a resident of Parsa, who said he knew of about 20 villagers who had taken such loans.

Mr. Sai said that in loan agreements, made out on stamp paper in the presence of the tehsildar, villagers promised to repay the company from money received when their lands in Parsa East and Kente Basan were acquired by the district administration and turned into a coalmine operated by Adani Mining.

"The company came to us and said the villagers needed the money. We told them to approach villagers through the Gram Sabha," said Surguja Upper Collector H.L. Nayak.

But what if the project proposal was rejected? Would the company forfeit the money?

"The government would acquire the land anyway," said Mr. Nayak. "The company would have to deal directly with the villagers for the money."

When the Adanis began handing out marriage loans in March this year, the future of their coalmine was far from certain, as the Ministry of Environment and Forests (MoEF) had already rejected proposals to mine in the area on three separate occasions in 2010.

Finally, in June 2011, then-Environment Minister Jairam Ramesh lost his long-running battle with the Coal and Power Ministries and was forced to open up the coal-rich, heavily forested region of Hasdeo Arand in Chhattisgarh to mining for the first time. Stage I forest clearance was granted to three blocks "on the fringe" of the area: Parsa East and Kante Basan – both of which will be operated by the Adani group – and Tara.

While that initial battle might have been decided in New Delhi, many uncertainties still remain on the ground in Chhattisgarh. Under the law, tribals and forest dwellers in the area also have rights to the forest land, which must be settled before mining can begin. The local gram sabhas must be consulted – and their consent might be needed – before land acquisition and compensation can be finalised. Hence, the Adanis effort to smooth their way by spreading around some cash in wedding season.

Private or public sector?

Given that the public sector use of the coal was one of the key reasons that Mr. Ramesh gave for clearing the blocks in defiance of his own Forest Advisory, it is interesting to explore the role of Adani, a private sector player.

In 2008, Rajasthan Vidyut Utpadan Nigam Ltd (RVUNL), a public sector company, and Adani Enterprises formed a company called Parsa Kente Collieries Ltd (PKCL) and applied for the Parsa East and Kente Basan coal blocks to feed RVUNL's thermal power plants in Rajasthan. According to the Adani group website, Adani Mining Pvt Ltd signed an agreement with the newly formed PKCL for "obtaining approvals (including approval of mining plan), acquisition of land, setting up washery and construction of railway siding at the mine."

Over 2009, 2010 and 2011, the Forest Advisory Committee repeatedly advised against granting mining leases in the area, saying that it would destroy dense forests that sustained a rich ecosystem inhabited by elephants, leopards and sloth bears. The MoEF upheld the committee's recommendations thrice, but then overturned its earlier decision this June.

In his approval order, Mr. Ramesh noted that the Rajasthan Chief Minister Ashok Gehlot had persistently lobbied for clearance for Parsa East and Kente Basan as the coal was needed for a state-owned project. This despite the privately-held Adani group owning 74 percent equity in PKCL, the company tasked with operating the mine. Coal washery rejects from Parsa will also be used to set up a 1080 MW thermal power plant in Surguja that will be wholly owned and operated by Adani Mining Pvt Ltd.

Preparations for mining are underway in Surguja – survey teams can be seen across the area, boring for mineral cores and verifying land ownership records before the process of land acquisition formally begins, but several land issues are yet to be resolved.

Forest rights incomplete

Before final clearance, the state must prove full compliance with the Forest Rights Act (FRA) 2006 which grants tenancy rights to tribes who can prove residence on forest land prior to December 13, 2005. As per the Act, a tribesperson must fill out a form staking his/her claims and no one can be evicted from such land until the verification of claims is complete. Both the FAC report and interviews with village officials reveal that the verification process is far from complete.

"Only 34 of 302 applications [to the Forest Department] have been settled in Ghatburra panchayat," said Amresh Markam, the Sarpanch of Ghatbarra, in a recent interview, "All 302 applications are for lands that shall be taken by the coalfield."

"So far only 77 out of 193 applications for forest land in Salhi and Hariharpur have been processed," said Satish Agarwal, who served on the village level forest committee for both villages.

According to officials, the district administration is yet to ascertain the exact number of unprocessed applications for forest land. "We are still tabulating the number of applications. But all applications shall be dealt with before the land is handed over for coal mining," said Mr. T.R. Agrawal, the officer in charge of land acquisition.

It may be pertinent to note that in other high-profile cases such as the Posco integrated steel project and Vedanta's bauxite mine, both in Orissa, protests over the lack of FRA compliance stalled projects even after the Stage I clearance had been granted.

PESA: Gram sabha consent?

Apart from FRA clearance, the state government must also prove that the land was acquired in compliance with the Panchayat Extension to Scheduled Areas Act (PESA) of 1996, which is applicable in tribal areas like Surguja. In its 2009 report, 'Development Challenges in Extremist Affected Areas', the Planning Commission notes that "Schedule V and PESA are powerful legislation…but implementation of this law is weak and ineffective." Of particular contention is a provision that states that tribal lands can be acquired only in consultation with the gram sabha.

But is 'consultation' the same as 'consent'?

In an interview last month Vivek Dhand, Principal Secretary for Rural Development, disagreed. "As per our reading, the PESA simply mandates that the gram sabha be consulted before any decision is taken," he said, a stand at odds with that of Jairam Ramesh, now Union Minister for Rural Development.

"In my reading of PESA, it is 'consent', not simply consultation, but the [Chhattisgarh] State government thinks otherwise. If required we will seek a legal opinion on the matter," Mr. Ramesh said, but declined to provide a timeframe for when this opinion would be sought.

The distinction is of particular import in the Parsa East and Kente Basan area where gram sabhas have agreed to part with their land only if a broad charter of demands is met. The demands include compensation to the tune of Rs. 50 lakh per acre of land and Rs. 10 lakh per house, Rs. 1 lakh for every fruit-bearing mango tree and Rs. 2 lakh for every fruit-bearing tamarind tree.

Surguja Upper Collector, Mr. Nayak said the land would be acquired at Rs. 12 lakh, Rs. 8 lakh and Rs. 6 lakh per hectare in accordance with State government policy. Thus the gram sabha has certainly been 'consulted', but its 'consent' is yet to be established.