NEW DELHI— A chemist in Sriganganagar Rajasthan, a defunct wine business in Jamtara Jharkhand, a food-processing firm in Noida Uttar Pradesh - these were just some of the companies to have won a controversial sand-mining auction held by the Nitish Kumar-led government in Bihar’s Banka district in December 2019. More on them later in this report.
Now, on October 14 this year, the National Green Tribunal declared the auction as “void and a nullity”, or in other words — illegal.
“The action of the State is apparently unguided, whimsical and arbitrary,” said the tribunal’s 89 page order which goes on to list a litany of violations of environmental norms by the Bihar state government under the Janata Dal (United) and Bharatiya Janata Party (BJP) coalition.
The violations in Banka district offer an insight into the lawlessness in the sand mining sector — an industry long-believed to be controlled by powerful, politically connected vested interests.
A sample: the government auctioned off the sand mines without first preparing a district survey report — as required by law. These reports are drafted, the green tribunal explained, not only for “exploitation of a mineral solely with the economic objective but also to ensure sustainable mining so that natural resources can be utilised in an environment friendly manner”. But this was not visible in the case of the Banka district’s electronic auction. In that instance, according to the green tribunal, the revenue of the state was the “sole criteria”.
Worse, the government placed no limits on how much sand the firms could mine, making a mockery of the notion of sustainable mining. “No quantum of the mineable mineral has been prescribed thereby providing unlimited access for mining,” the NGT order says.
Chief Minister Nitish Kumar has spent significant political capital on a so-called ‘crackdown’ against illegal sand mining in the state since 2017 when he joined hands with the BJP to form a government. At the time, some news reports claimed that many of the illegal mines were operated by people linked to the principal opposition party of Bihar, the Rashtriya Janata Dal (RJD).
The National Green Tribunal’s latest order, however, exposes the state government’s violations of environmental norms and arbitrariness in auctioning the rights to mine riverine sand. Evidently, illegalities persist despite the crackdown; even the state administration has been found to be complicit in them.
“It is a welcome judgment,” said Vanshdeep Dalmia, the lawyer who argued against the auction in court. The judgment, Dalmai said, reiterates that district survey reports must be conducted before the auction process.
Bihar government’s senior counsel Keshav Mohan, who shared the Rs 130 crore revenue figure with HuffPost India, was critical of the national green tribunal’s order and said the state plans to appeal against it.
These Firms Won The Sand Ghat Auction
The NGT’s order on the illegalities in Banka district offers a fascinating insight into the still prevailing illegalities in Bihar’s sand-mining business, and the worrying failure of the state administration to conduct the auction process in compliance with environmental norms.
The auction process for Banka, according to the green tribunal order, was part of the statewide process for 24 districts which collectively yielded the state exchequer around Rs 2700 crores. As mentioned earlier in this report, the Bihar government lawyer Keshav Mohan said the Banka auction yielded Rs 130 crores for the state.
Analysis of official documents by HuffPost India revealed that firms based in Sriganganagar district of Rajasthan got seven of the 11 sand ghats in the auction. Of the remaining four sand ghats, two were awarded to an Uttar Pradesh based firm whose core business appears to be food processing and two others were awarded to a Jharkhand based firm, which is registered in the Jamtara district, and which was set up initially to participate in the alcohol business.
One of the firms in Sriganganagar is named Shree Ganesh Medical Agency while the others are named after individuals who are also listed as owners of those firms. There appears to be very little information about these individuals in the public domain.
The medical agency is listed as a chemist, located near the district’s railway station, on Justdial. The agency’s ‘partner’ Lalit Mittal, whose name appears in many government documents relating to the sand ghat auction, is an enigmatic figure.
After this reporter called on the publicly listed number of the agency, Mittal became quickly guarded and refused to share any information when asked why a medical agency bid for sand ghats and whether he had any prior experience or actual interest in the business. Mittal refused to discuss details over the phone, declined a videoconference or an email, and discontinued the phone conversation soon after.
A conversation with Shankar Singh, whose firm Dhanbad Wines got two sand ghats in the auction, went on similar lines. Singh confirmed that his firm was in the alcohol business in the past but now the firm has no ongoing projects or business.
On being asked how he thought of bidding in a sand mine auction, Singh said that since the alcohol business didn’t work out, he bid for the sand mining auction. When asked how he, a resident of the Jamtara district in Jharkhand, came to bid for auctions in the Banka district of Bihar, Singh simply said the auction was happening so he bid and refused to give any more information. He also confirmed that he has no prior experience of the sand mining business. The Jamtara resident said he was unaware that the auction had been declared illegal by the National Green Tribunal.
When asked for specific details about the auction which his firm won, Singh said he did not remember them, and said he did not wish to answer them over the phone and could answer them in person if this reporter visited his village in the Jamtara district.
Also curious is the case of the Prime Vision Industries Private Limited, a Noida based firm which, according to this database, is involved in “production, processing and preservation of meat, fish, fruit vegetables, oils and fats”. HuffPost India tried reaching out to one of its two directors Kavach Kumar Nirmal who is, interestingly, also the only whole-time director of another firm purportedly in the business of coal mining. Both these firms have rather limited paid-up capital.
Unlike the previous two firms, it is unclear if this one has any experience of mining sand. It is clear from public databases that the company’s core business is entirely unrelated with sand mining.
“What is clear from a scrutiny of the firms which won the multi-crore sand mining auction is that these are not companies with any significant experience of the business and the credentials of some of them appear to be questionable...”
Further, what is clear from a scrutiny of the available information about firms which won the auction for 11 sand ghats in December last year is that these are not companies with any significant experience of the business and the credentials of some of them appear to be questionable. They do not appear to be fully transparent either.
If the firms that won the auction prompt so many questions, the actual auction process only adds a mountain of legal questions about the way it was held by violating environmental norms and the potentially adverse impact on environment due to the sand mining.
This Is Why The NGT Scrapped The Auction
At the heart of the National Green Tribunal’s in depth scrutiny of the process of e-auction for Banka are two specific questions: If a proper District Survey Report was prepared for Banka before its sand ghats were put up for auction and, if the District Survey Report 2018, the document which was relied upon by the state government in the process of auction of the sand ghats, is valid.
The quick answer to both questions is “No”.
Neither of the two District Survey Reports cited by the state government, the green tribunal found, were drafted according to the Sustainable Sand Mining Management guidelines 2016. The 2018 District Survey Report, in fact, was drafted in violation of the national green tribunal’s order dated 13 September 2018 in the case of Satendra Pandey versus Ministry of Environment, Forest and Climate Change and others.
But what are these all important District Survey Reports and why is drafting them important for sustainable mining?
First introduced through a notification issued by the Narendra Modi government’s environment ministry in January 2016, a District Survey Report is a comprehensive document based on studies that record the extent of presence of sand and other minor minerals in a district and list out the various ways in which they can be extracted sustainably to ensure minimum damage to the riverine ecology.
The 2016 notification was partially stayed by the green tribunal in 2018, but the Sustainable Sand Mining Management guidelines of 2016, issued in June 2016, and the Enforcement and Monitoring Guidelines For Sand Mining 2020 issued early this year, also require District Survey Reports to be prepared before auction.
The NGT’s October 14 order explains the importance of District Survey Reports or DSRs in some detail. The preparation of the reports, the order says, is not just a technicality or formality to be completed prior to exploiting a resource for economic gain. Rather, these reports are essential for sustainable development.
While the Bihar government claimed that the administration took a “studied scientific approach” in the preparation of the report for Banka, the tribunal dismissed this as “a fallacious and a bald assertion”.
The NGT also noted that the Bihar government prescribed no limits on how much sand the firms that won the auction could mine.
“No quantum of the mineable mineral has been prescribed thereby providing unlimited access for mining,” the tribunal noted.
In other words, one key difference between illegal and legal mining — putting an upper ceiling on the extent of minerals a miner can extract from the earth for a pre-defined time period — did not exist in this auction. The mining entity that won the auction had “unlimited access for mining,” the green tribunal’s order states.
Contradicting the state government’s claims further, the NGT order also reveals that the 11 auctioned sand ghats “had been auctioned even before being included in the DSR as claimed by the State rendering the stand of the State seriously questionable.”
In other words, the state government simply auctioned off ghats it wanted to give to the highest bidder and all the legal compliance related documentation such as preparing District Survey Reports was done afterwards. “...we find mineable areas having been added and Sand Blocks are created without following the due process with an objective of revenue maximization,” the two member bench of the National Green Tribunal observes in its order.
In the order, the NGT has also directed that the District Survey Report should be prepared afresh for Banka by the state level expert bodies set up to screen projects which seek environmental clearance. The order also asks that accredited private consultants may be involved for drafting the district survey reports.