Freight trains are loaded with iron ore at a railway station at Chitradurga in Karnataka November 9, 2012. REUTERS/Danish Siddiqui/Files

Errant miners and enormous fines: The Supreme Court comes down on illegal mining in Odisha

It was a gross violation of environmental norms and traditional dweller rights, and it went on for decades. The state of Odisha is one of the country’s richest sources for iron ore. This resource was rampantly exploited by miners in the state as they plundered away for profits, sparing no thought towards the consequent impact on the environment, and the local tribal population.

In August last year, a petition by Common Cause resulted in the Supreme Court taking a strong stand against iron and manganese ore miners who had been operating beyond statutory approvals like forest and environmental clearances between 2001 to 2011, declaring them illegal. It further directed full compensation for value of excess ore lifted, post which the Odisha government issued notices to 131 defaulting mining companies. Reports of the Central Empowered Committee appointed by the court stated compensation for violation of environmental clearances by lease holders came up to more than seventeen thousand crores.

Relevant article: Case Commentary: Supreme Court judgment on illegal mining in Odisha

Relentless in its stand against illegal mining and the need for rehabilitation and regeneration of the degraded resources, the Supreme Court has once again pulled up the defaulters in payment early last week. Seventy-two mine owners had wholly or partially paid the compensation by the end of 2017. A few delayed payments came in the month of January as well.

The Court in this recent order has further directed that the state of Odisha must collect a twelve percent interest from all the mine owners paying after the due date. While certain errant companies like IDCOL have been allowed to run their mines so long as they pay the additional interest, Aditya Birla Group’s Essel Mining has been denied the same.

The Court has expressly asked Odisha to take “coercive steps to recover the unpaid dues” from the remaining defaulters. A debate that has formed at this point is whether the Court’s interpretation of Section 21(5) in The Mines and Minerals (Development and Regulation) Act, 1957 dealing with penalties in the present case has become the law of the land. The Ministry of Mines has taken this view and consequently, some states are making similar demands for fines upon violation of environmental clearances by their miners. A contrary opinion holds it to be merely compensation ordered in this particular case.

Backing the Supreme Court’s decision and explaining how the order led to restitution of the minerals to its owners by way of compensation, renowned environmental activist and member of initiatives like the Goa Foundation, Rahul Basu said, “… states own minerals in trust for the people and especially future generations. Illegal mining is effectively theft of public property… Where illegal mining has taken place, the state needs to recover the public property lost. This must include coercive steps if the ore illegally mined is not being disgorged. The state is only a trustee, and must use its full might to ensure that our children’s inheritance doesn’t suffer a loss.”

For Rahul Basu’s views and explanation of Intergenerational Equity, see: Rahul Basu in conversation with Norma Alvares

These recent orders become greatly relevant to the enforcement of environmental laws in India. We have had leaders participate and push for multilateral environmental agreements on an international scale. We have had our apex court upholding principles of intergenerational equity and sustainable development, time and again. Our state policy has begun to stress on sanitary and environmental action too. Yet, in actuality, we see the environment being compromised for development in nearly every industrial sector, which is a great threat to our aim of preserving resources for the generations of tomorrow.

The Mines Ministry tilting towards imposing penalties on defaulting owners in all states, despite the revenue that the mining sector generates, is something unexpected yet monumental. This might just be the beginning of environmental consciousness in India moving beyond state policy on paper, and into state practice.


Sukanya Singh is a fifth-year law student studying in USLLS, GGS Indraprastha University. She’s an intern at the Chambers of Sr. Advocate Ms. Indira Jaising, and has a keen interest in the field of environmental law.

The Leaflet