Wide Angle Story: Two Coal Blocks And A Political Story

By Kanchi Kohli / Delhi

The controversy surrounding the clearances given to the Mahan and Chhatrasal coal blocks that are located within forested areas in Madhya Pradesh illustrates the continuing tussle between environment and conservation on one side and regulatory trade-offs in the interests of speedier economic growth on the other. It also exposes the conflicting approaches and attitudes within the government.
The sal forests falling within the catchment of the Mahan river have found themselves bang in the middle of the coal-forest conundrum facing India today. Private companies and high-profile committees are lobbying to gain control of these forests, located in Singrauli district, Madhya Pradesh, to mine the coal. At present, these forests support the livelihoods of several forest-dwelling communities.

Mahan and Chhatrasal are two proposed captive coal blocks in this region. They exemplify the narrative of regulatory trade-offs and political influence that surrounds the coal-forest debate in the country. Both have received their first stage approval for forest diversion by the Ministry of Environment and Forests (MoEF). This approval, which is mandatory under the Forest (Conservation) Act (FCA), 1980, came after stiff opposition from within the ministry both on the grounds of destruction of the rich forest cover as well as the large-scale social impacts this diversion would have on tribal and other forest-dwelling communities.

Locating Mahan and Chhatrasal
The Ministry of Coal had allocated the Chhatrasal coal block to Sasan Power (a subsidiary of Power Finance Corporation) on 26 October 2006. The coal from this mine is to be used exclusively for the 4,000 MW Sasan Ultra Mega Power Plant (UMPP) of Reliance Power. The Mahan coal block was allocated to Mahan Coal to feed the requirements of 1,200 MW power plant proposed by Essar and a 650 MW captive power plant of Hindalco. Mahan Coal is a joint venture between Essar and Hindalco listed in the London Stock Exchange (Kohli 2012; Kohli et al 2012).

Both these coal blocks are part of the catchment of the Mahan river, where the forests are considered to be one of the oldest and largest sal forests of Asia with an estimated canopy density of 70%. But the similarity in the story of these two coal blocks does not end here. For the last two and a half years these coal blocks are being spoken about together for a variety of reasons.

The Chhatrasal coal block received in principle (Stage 1) forest clearance of 965.40 hectares of forestland on 23 November 2012. The Mahan coal block was granted in principle (Stage 1) approval by the MoEF, less than a month before on 30 October 2012. This approval was for 1,182.351 ha of forestland to be diverted for non-forest use. While Chhatrasal had 37 conditions, the Mahan approval came with 36 conditions what mirrored those mentioned for the former. The conditions relate to a range of critical studies on cumulative impacts, water recharge assessments and impacts on wildlife habitat and corridors to be completed post facto the approval. The compliance with the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 is also a precondition to the Stage 2 approval for both these coal blocks.

The life of the Chhatrasal coal block is 21 years and it will fell 6,80,362 trees that have been officially recorded in the official fact sheet of the project. The proposed Mahan coal block alone will fell as many as 5,12,780 trees which play an important role as the watershed for the Rihand reservoir. Coal is available in this mine only for the next 14 years. The power plants seeking coal from both Mahan and Chhatrasal coal blocks are already under construction and also partially operating, thereby making the demand for the coal from these areas even more “urgent”. In fact, both the Group of Ministers (GOMs) headed earlier by the then finance minister, Pranab Mukherjee as well as the Ministry of Coal, have used this to argue in favour of approval. For the investors this was definitely a strong reason for ensuring their coal linkage (MoEF 2011).

The events and developments that transpired alongside this coal-forest debate since 2011 have a deep connection with why and how the clearances for these coal blocks finally went through. A closer look into these processes gives us insights into the reasons why both Mahan and Chhatrasal were approved for forest diversion in late 2012.

Go or No-Go Criteria
One of the first high-profile processes where the coal-forest interface of Mahan and Chhatrasal becomes relevant is in relation to the criteria jointly developed by the MoEF and Ministry of Coal for declaring forest areas “go” or “no-go” for coal mining. In June 2009, the discussions around “go” and “no-go” were meant to identify the blocks in India’s existing nine coalfields that could be allowed to be mined and others that would remain untouched and kept as strategic energy reserves for the future. When the first list was released in March 2010, Mahan, Chhatrasal and other coal blocks in and around the Mahan forests (like Amelia, Dongrital II), all part of the Singrauli coalfields, found themselves in the “no-go” zone (Kohli 2011; Kohli et al 2012).

On 1 March 2011, the then minister of environment, Jairam Ramesh submitted in the Rajya Sabha that Mahan’s forest would be made available to Essar and Hindalco companies and Chhatrasal’s for Reliance’s Sassan power plant operations. Dongrital II and Amelia have been allocated to Jaypee and will also not be in the “no-go” list. Each of these allocations was towards feeding the requirements of thermal power plants that were already under construction (ibid).

Following the change of guard at the MoEF in July 2011, the current minister, Jayanthi Natarajan is reported to have not favoured the “go” and “no-go” classification. The ministry took the position that some forest areas must continue to remain “inviolate” for all kinds of activities and a criteria developed for the same. This proposal is still pending finalisation (ibid).

Empowered Group of Ministers
On 3 February 2011, the Government of India also constituted an Empowered Group of Ministers (EGoM) to look into issues around coal block allocations. Mahan and Chhatrasal coal blocks were high on the EGoM’s radar from the very beginning (PTI 2012).

In July 2011, the then minister of environment, Jairam Ramesh indicated that the ministry’s Forest Advisory Committee (FAC) had strongly recommended against the grant of approval for Mahan on grounds of its rich forest cover and in consideration of the rights of forest dwelling and tribal communities. He also stated that there was a constant push from the Ministry of Coal for approval to be granted as the thermal power plants for which the coal linkage was being sought were already up and running. Since a decision could not be arrived at, the next steps were handed over to the EGoM (MoEF 2011). Chhatrasal was also not recommended for forest diversion by the FAC, the statutory body set up under the FCA, 1980. However unlike Mahan, this issue was not sent formally to the EGoM.

Minutes of the 30 May 2012 meeting of the EGoM indicate that the minister, environment and forests argued strongly against the grant of approval to both Mahan and Chhatrasal citing the quality of the forests and the impacts on forest-dependent communities as reasons. At the same meeting, ministers of power and home pushed for the clearance of both Mahan and Chhatrasal coal blocks. The following day, the media reported that the EGoM had recommended the approval for the coal blocks (PTI 2012).

Cabinet Committee on Investment
One of the most controversial proposals on the environment and economic growth tussle was the setting up of a National Investment Board (NIB). Mooted by Finance Minister P Chidambaram in September 2012, the idea was to establish an empowered body to clear large infrastructure projects of over Rs 1,000 crore that were delayed due to lack of decisions within the government machinery (Kohli 2012a).

The justification given for setting up the NIB was that factors such as land acquisition, environmental and forest clearances were delaying many large and economically important projects and thereby hampering economic growth. Other factors contributing to delay such as regulatory disregard forced possession of land, were not taken into account by the EgoM.

Natarajan objected strongly to the NIB and she opposed any move that would empower the NIB to bypass approvals administered by the MoEF. Several reasons were cited in her letter to the prime minister on 8 October 2012 including the importance of environmental regulation and other issues related to parliamentary functioning (ibid).

For a while there appeared to be a stalemate in this committee and there was news in December 2012 that the union cabinet had deferred decision on setting up the NIB till such time as inter-ministerial consultations are held (Anon 2012). In January 2013, NIB was rechristened to become the Cabinet Committee on Investments (CCI) and also approved by the cabinet. The CCI is set up through an amendment of the Government of India (Transaction of Business Rules), 1961. It is created as a new standing committee with overarching powers.

Arriving at Approvals
As mentioned earlier, the first stage approval for Mahan came on 30 October 2012 and Chhatrasal soon after on 23 November 2012. The trajectory of these approvals alongside all the above-mentioned high-level political negotiations is intriguing to say the least. However, when both these projects were approved, the note-sheets (as available under the Right to Information Act 2005) by Natarajan bring to the fore the regulatory debate over coal and forests.

The approval for forest diversion in Mahan was given despite strong reservations of the MoEF against the diversion of the dense forestland. The justification for the approval was that the EgoM had already decided and the entire civil work and construction of the Essar and Hindalco plants were complete after the procurement of environmental clearance. The environment minister’s note said, “Needless to say, it is crucial to avoid such classic fait accompli situations in the future in order to preserve the integrity of our forests”.

For Chhatrasal, the environment minister has noted that she had sent for the file once again because the project was being reviewed at various levels including the GoM and also because references were made by the Prime Minister’s Office (PMO) on delays in clearances causing loss to the economy. Therefore, she wrote, that the requirements for the additional information and studies should be done without any further delay in the grant of the first stage of the approval and that this should be “integrated before the grant of Stage 2 clearance”.

Despite these differences in approach between the different ministries, the push for both Mahan and Chhatrasal continues. On 26 August 2013, the CCI had directed MoEF to expedite final approval for Chhatrasal as reported in several national newspapers (Anon 2013).

What is evident from these developments is that the environment and social logic is being ignored even where the ministry has used it for its decisions. Now “higher” approval bodies like EGoM and the CCI can simply over-rule considered opinions of expert bodies and the positions taken by the MoEF. The approvals for coal blocks such as Mahan and Chhatrasal illustrate how crucial environment and forest regulations that had a significant bearing on environmental decision-making in the country are now being kept aside with ease.