GF Letter to GCCI, GSIA and CII

23 October, 2020

Mr. Manoj M Caculo
Goa Chamber of Commerce & Industry
Narayan Rajaram Bandekar Bhavan
T.B. Cunha Road, Panaji, Goa
0832 2424252 / +919764161205

Mr. Vishwanath Kochkar
President, GSIA,
4th Floor, GOA-IDC House,
Patto Plaza, Panaji,
Goa 403 001
Phone: +91 832 2438395 / +91 9146233246

Mr. Blaise Costabir
Chairman, CII Goa
CII Goa State Office
1st Floor, Salgaocar Centre,
Rua De Ourem, Panaji-403001
Phone : 91-832-2422790 / 2422796/2422814

Subj: Your joint statement supporting a “legislative cure” for Goa mining

Dear Mr Caculo, Mr. Costabir, Mr. Kochkar,

We are writing in connection with your joint representation to the Chief Minister as reported in the Times of India on Oct 17, 2020 . Unfortunately, we do not have the benefit of seeing a copy of your actual representation.

We welcome the reported statement that the funds in the District Mineral Foundations should not be used to meet state governments’ expenses, but instead be used for mining-affected communities in the mining affected areas of Goa. We particularly appreciate your recognition that the mining-affected communities should have greater say in the selection of development projects. This is an issue we have taken up with the state government, and more recently the High Court, and we appreciate your support.

However, we are very concerned about your representation on mining per se:

Industry leaders said that they still felt that a legislative cure would have been the ideal and quickest way for the Centre to allow Goa to resume mining. If the Centre granted Goa’s mining leases to operate for 50 years from May 1987, it would ensure mining operations can continue till May 2037. “This must be maintained,” said the statement.

This proposal is wrong in at least four different ways:

First of all, there is no ban on mining in Goa. In fact, the Supreme Court has ordered the state government to issue fresh leases, which order is being ignored. At present, there are two ways mineral leases may be granted – by auction or if the state decides to extract ore itself. The order to issue fresh leases was issued on 21.4.2014. It has been renewed by the Supreme Court on 7.2.2018 and 30.1.2020.

Second, since the stoppage of mining on 15 March 2018, over two and a half years have passed, and there has been absolutely no movement. Is a “legislative cure” actually the quickest way to resume mining? Had the state government adopted either the auction or the state mining route, surely operations could have begun?

Third, as you are aware, the state of Goa owns minerals as a trustee on behalf of the people and especially future generations of Goa. Mining is nothing but the sale of the mineral, and with private mining, the mineral wealth sale consideration is royalty and auction premia. The iron ore lease auctions over 2015-2019 across India have resulted in a 6-fold increase in the mineral sale proceeds. If royalties (+DMF, etc) was 1, auctions are resulting in 6. By asking for a “legislative cure”, you are effectively asking for the state to hand over a huge portion of the wealth of the future generations of Goa to those who would benefit from these leases. This is immoral, unconscionable, and unconstitutional. We would also like to point out that NMDC, a PSU, had better margins than Sesa Goa over 2004-12.

Finally, as you are aware, the Supreme Court, in its judgment on 21 April 2014, had declared that all mining carried out in Goa after 22-Nov-2007 was illegal. 100% illegal. Illegal mining is effectively theft of public property. Normally, an entity found to have been guilty of illegal mining for such a long period would be blacklisted, deemed unfit to manage public wealth. However, it is obvious to everyone that with such large amounts at stake, and after illegal mining took place for nearly 5 years, why leases were again renewed in 2014-15 instead of fresh leases being granted, and why a “legislative cure” is the preferred option of the miners and the politicians.

We are therefore quite surprised that the entire business community of the state is supportive of such an obviously unfair system that is selling off our wealth to a few for peanuts, and for maintaining a corrupt system. Poor uncaring governance is not in the interest of either environmentalists like us, or industry like you. We would have expected that the vast majority of the members of your organizations would support a corruption free and effective government. In fact, we would have expected that with such clear and adverse Supreme Court judgments, the miners would have been deemed unfit to be members of your organizations. Hence, we are extremely puzzled and concerned that you have supported the proposed “legislative cure” so strongly.

It is possible that many of your members are unaware or haven’t thought deeply about these issues. It is easy to mistake royalties as “revenue” and assume more mining means more government revenue which is good for the state. However, if we are selling off our wealth for less than 20% of its worth, and calling the trifles we receive as revenue and consuming it, leaving nothing for our children, it is clearly madness. And unsustainable too.

We are enclosing our recent letter to the then Governor that explains these and related aspects in much greater detail. We would request you to circulate this letter as well as the letter to the Governor to your entire membership, so that a fuller picture of Goa mining is before them.

We would also welcome an opportunity to explain our perspective to the members of your esteemed organizations. In all fairness, they ought to hear other perspectives on the mining problem. If not, they may end up unthinkingly supporting bad business and bad mining.

Best wishes.

(Dr. Claude Alvares)

Encl: Goa Foundation letter dated 6-May-2020 to Goa governor