Ongoing Coal Scam Proceedings: The Environmental Angle

by Ms. Kudrat Dev, B.A., LL.B. (Hons.) 2009, JGLS

In the latest coal block allocation scam, the Central Government has been accused of causing a loss of INR 1.86 lakh crores to the national exchequer due to the arbitrary allocation of coal blocks. The Report of the Comptroller and Auditor General of India (CAG) noted that private players were granted mining licenses arbitrarily without a competitive bidding process. With filing of several Public Interest Litigations (PILs), the Supreme Court will rule on the issue of allocation of the coal blocks. However, the pertinent question is whether the allegations of abuse of power and arbitrariness against the State have overshadowed the important question of sustainable development.

Hence, it is first essential to briefly outline the process of coal block allocation:

First, the applications received by the Ministry of Coal, are checked for eligibility and completeness and are thereafter sent to the administrative Ministry/State Government concerned for their evaluation and recommendations.  After receipt of recommendations of the administrative Ministry/State Government concerned, the Screening Committee considers the applications and makes its recommendations.  Based on the recommendations of the Screening Committee, the Ministry of Coal determines the allotment. The Screening Committee (chaired by the Secretary, Ministry of Coal) plays the most crucial role as it makes recommendations for or against the final allocation to a particular applicant. The decision is made on the basis of several criteria including: “satisfaction level of coal requirement”, “assessed (coal) requirement” of the applicant preparedness and investment made by the applicant.  However, ‘environmental clearance(s)’ as such, are not a determinative factor or a pre-requisite for allocation of coal blocks. 

Recently, the Supreme Court ordered the Ministry of Environment and Forest to submit a report on the environmental clearances that have not been obtained by the coal block allottees under consideration which would influence the decision to de-allocate coal blocks. Hence, even though late in the day, the “environmental angle” has come into some light in the ongoing proceedings. Moreover, around INR 145,000 crores had been spent on projects linked to coal blocks under question which are now held up due to various problems including environmental clearances.

In view of the above, environment clearances should become a very strong factor (if not a decisive factor) in allocation of coal blocks by the Screening Committee. This seems like the correct approach because: (a) it follows an approach that is leaning towards sustainable development which is the need of the day in light of extreme depletion of mineral resources coupled with lack of ecological restoration and (b) it cuts short the process of first allocating coal blocks to allottees who do not have the required environmental clearances and later finding out another suitable applicant for allocation. In this way, different ministries (in this case, the Ministry of Coal in addition to the Ministry of Environment and Forest) and different organs of the government could collectively serve as multiple check-points for sustainable development to the extent possible to ensure that deviation from sustainable development does not go unnoticed and can be corrected efficiently as well as effectively.