Odisha rules not transparent, to bring only limited benefit

The mines affected people along with social activists strongly condemned the District Mineral Foundation (DMF) rules recently notified by Odisha Government, saying that it will bring limited benefit to the mining-affected communities.The DMF rules were notified by the State Government on August 18 last in accordance to the requirements of the Mines and Minerals (Development and Regulation) Amendment (MMDR) Act, 2015.

The Centre for Science and Environment (CSE) in a Press release said that the notified rules released by the Odisha Steel and Mines Department will not fulfil the objectives for which the DMF was instituted.While analyzing the rules, CSE deputy director general Chandra Bhushan said that the Odisha DMF rules were lacking in several key aspects, including poor representation of affected communities in the decision-making body, no voice of people in deciding where and how DMF money should be used, conflict of interest in institutional design and a huge scope for misutilisation of funds.

CSE’s analysis shows the institutional design proposed for the DMF leaves little scope for people’s involvement. The composition of the Board of Trustees and the Executive Committee shows clear leaning towards a bureaucrat-driven institution. There is very little representation of people from areas that are actually affected by mining except for the Panchayati Raj or Urban local Body representatives as mentioned. However, in such cases, too, the representation has been restricted to a maximum of three.

Bhushan said, “The structure has the district Collector (DC) both in the Board of Trustees as well as the Executive Committee. Having the DC in both bodies will create a conflict of interest. In all likelihood, the actions of the Executive Committee will be accepted and passed on by the Board of Trustees.”

Rules have created ambiguity and left loopholes in use of DMF funds. While they mention that the proceeds of the fund shall be utilized only for direct benefit of the persons living in or for physical works within the areas affected by mining operations, Rule11(2) -exceptions have been made which can essentially ‘justify’ the use of such funds for various other purposes. The rules say that up to 40 per cent of the funds may be utilised for development of common infrastructure at the block or district level institutions to directly or indirectly benefit the persons living in the mining-affected areas. The Board may take up projects for development of common infrastructure like construction of roads, bridges, etc. which are of importance to the district in any excess amount from the 40 per cent limit on a case-to-case basis.

“Both these exceptions can lead to a huge misuse of funds,” said Bhushan. For example, in a particular mining district like Sundergarh, a district-level institution will include departments or agencies related to education, health, social welfare, rural development, water resources, agriculture, etc. All of these departments or agencies in some way have to do with the development of such areas. Therefore, one can essentially use DMF money to build or upgrade a building of such departments, or use it for procurement for other such materials on the pretext of development of infrastructure for people’s good.

“Moreover, DMF money should not be used for construction of roads, bridges and similar projects,” said Bhushan. Such big-ticket infrastructure projects should actually be taken care of by contribution from the State coffer that a district/block/village should normally receive. If the DMF fund is to be utilized for such needs, it should be used as an add-on. For such developmental purposes, there should be transparent mechanisms in place to transfer DMF funds to other concerned Government departments that can implement and maintain the assets.

The various provisions about investments as loosely prescribed in DMF rules also create scope for misuse of the funds. This will delay or stop the benefit flow for the right cause, said CSE.What’s additionally problematic is that the rules have listed activities to be undertaken using DMF money which actually fall under the ambit of other schemes instituted by the Government. This is particularly the case with suggesting that DMF money can be used for afforestation purposes, as mentioned in Rule 10(c). “It is completely unacceptable that DMF money should be used for afforestation. We already have the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) in place for such a purpose,” said Ajay Saxena, Programme Manager, CSE.

Even in the case of Scheduled Areas, the way development plans are conceptualized and implemented is problematic. As suggested, the planning will be done by the members of the DMF, essentially bureaucrats, and the Gram Sabhas will only be consulted during approval. “This makes it a top-down approach, which goes against the spirit of DMF and will lead to inappropriate use of DMF funds,” said Bhushan.