Mahan Coal Block Allocation Also Deemed Illegal by SC

Greenpeace welcomes SC decision on coal scam; says this is a strong signal to NDA government to implement due process and norms on coal mining

Press release - August 26, 2014
New Delhi, 25th August 2014: Greenpeace welcomed the Supreme Court order today that deemed all coal block allocations since 1993 as 'illegal' on grounds of arbitrariness, legal flaws, lack of transparency, fairness and even application of mind. Greenpeace believes that this verdict is of significant importance in sending a signal to the NDA regime that future mining decisions would have to also adhere to high levels of scrutiny.

"Greenpeace has been pointing out that green clearances are not the hurdle for the delay in operationalisation of coal mines. Today's Supreme Court order has shown that crony capitalism has lead to the handing out of coal with little application of mind or of a modicum of transparency and due process. This gives hope to activists calling for the application of law and due process on other legalities to do with mining clearances such as rights of forest dwelling communities," says Arundhati Muthu, campaigner, Greenpeace India.

The SC called all allocations made by the screening committees as illegal. In case of Mahan coal block (situated in Singrauli Madhya Pradesh and allocated in 2006) for instance, the coal ministry's screening committee minutes and CAG documents state that the decision to allot Mahan jointly to Essar and Hindalco was taken at the 27th Screening Committee meeting on March 1, 2005. But the minutes of that meeting, obtained through an RTI, show that Essar was not favoured for Mahan.

"The Madhya Pradesh government initially lobbied hard to have the Mahan block allotted only to the state entity, Madhya Pradesh State Mineral Development Corporation Limited. However, when the Screening Committee decided to allot the block to Hindalco on the grounds that state entities were entitled to many blocks not available to private players, the MP government in a fishy quick turnaround then made the case for allotting the block only to Essar Power with completely new reasoning to justify this demand," says Muthu. Today's SC order [1] talks about the MP government's change in stance.

This crony capitalism is still at play as the right of community members of over 50,000 people from 54 villages are being quashed in the region of Mahan. "The ultimate beneficiaries are Essar and Hindalco. We need to press the pause button on all new block allocations and forest clearances till the murky issue of allocations is impartially probed," adds Muthu.

Notes to the Editor:

[1] SC's observation on the allocation of Mahan coal block (page 121 of the ruling): "...Sharing of Mahan Block between M/s. Hindalco and Esser Power Limited: The matter was discussed and by way of recapitulation the screening committee was informed that in the last meeting of the screening committee the representative of Government of Madhya Pradesh had taken a position that the Mahan block should be given to the State Mineral Development considering the overall merit of the competing claimants the block should be allocated to M/s Hindalco for their aluminium project in which the coal should be used in the captive power plant. However, the final decision was to be taken in consultation with the Government of Madhya Pradesh. The Government of Madhya Pradesh subsequently have given up their position for allocation of Mahan block to the State Mineral Development Corporation and have instead supported allocation of this block to M/s Essar Power Limited. Representative from Government of Madhya Pradesh stated that as they are power deficit state, they would recommend allocation of Mahan coal block to Essar Power Limited only. Representative from the Ministry of power also supported the request of Government of Madhya Pradesh. The Screening Committee decided that the views of the State Government and of the representative of Ministry of power be taken on record as they too had merit."

For further Information, contact:

Arundhati Muthu, Campaigner, Greenpeace India: Ph -9880639937;

Jagori Dhar, Media manager, Greenpeace India: Ph -9811200481;

Anindita Datta Choudhury, Senior Media Officer: Ph-9871515804;