‘Mining Lease Is Used As James Bond’s Gun’

Santosh Hegde, 70, Lokayukta of Karnataka, probably has the most vexing job in the state, pointing out wrongdoings and hoping they’ll be corrected. His report on illegal mining in the state was the most damning in recent times on the subject. A second part of the report is due in a few weeks. In this interview with VIJAY SIMHA, Hegde, who was a judge of the Supreme Court for six years, lays bare the outrageous loot of state resources by a few and how it is devastating a people. Excerpts:

NO EASY OUT Hegde says there is no point in nationalising mining Photo: SB SATISH

Mining in Bellary appears to be a nasty business. How did the loot begin?
Around 2005 and 2006, the mining boom led to intense competition and conflicts between the two main groups, the Obalapuram family and the Baldotas. Political pressure was used. Plenty of money flowed into politics. Bellary grew, and the Obalapuram family [the Reddys] had by then entered politics, joining the Bharatiya Janata Party (BJP), which had no foothold there. They supported Sushma Swaraj in the polls, against Sonia Gandhi. They managed to continue with political support, especially from a former [Congress] Chief Minister of Andhra Pradesh (AP) with whom they had a nexus. Mining was lucrative and everybody in Karnataka and Obalapuram in Andhra, became active. When a lot of money starts coming, you try to find the quickest way — most often illegal — to earn more than others.

But mining is tightly regulated.
The Indian Bureau of Mines controls mining. You can excavate only so much from a particular mine head. You cannot go beyond six metres in depth. There should be a minimum distance between each mine head, otherwise they collapse. There are areas prone to landslides — you are not supposed to mine there. Some time ago, the Supreme Court had said that non-forest activity should not take place in forest area. It appointed a Centrally Empowered Committee (CEC), whose permission was needed to do anything that degraded the forest. So, the mining companies found it difficult to stick to the law and did what they wanted to do.

How weak are government officials?
The Reddys started doing other illegal things because the CEC did not have local people supervising, neither here nor in AP. The easiest people to buy are those in government service. The officers were from the departments of mines and minerals, forests, transport, police. Obviously, they were all available for a price. The price was a pittance compared to the earnings.

Amid all this, there is the curious case of a government firm showing losses during the gold rush. How come?
The Mysore Minerals Ltd (MML), which is wholly owned by the state, had very good iron ore available, running into thousands of kilometres. But they were not mining. Even in this mad rush, they were very cool about it. They granted sub-leases to somebody else. At their guesthouses in Sandur, Hospet and Bengaluru, these lease holders made merry. This was the only company that, between 2002 and 2008, ran a loss of about Rs 600 to Rs 700 crore. They had given it to third parties for a pittance. I mention this specifically for those who say we must nationalise mining. That is no answer at all. It’s like moving from the devil to the deep sea. Unless the human being is honest, nothing can happen.

Much distortion occurs during excavation. Could you detail what you saw?
What is excavated is contrary to the standards laid down by the Indian Bureau of Mines. There is nobody to supervise. Officers of the mines and minerals department were happy to stay in office-cum- residences because the share of the loot used to come to them there. Some time ago, the government got a royalty of Rs 27 on the best quality iron ore, which is called 65 Fe. The same metric tonne of iron ore, taken out on a royalty of Rs 27, was being exported in 2006-2007 at Rs 6,000 to Rs 7,000. Thousands of crores were lost.

Is this limited to the Reddy brothers?
It was not confined to the Reddys. It was there for every person who was mining. The number of leases given out was about 158. But mining was going on in more than 250 places. Nobody stopped it.

It would seem that everybody is guilty.
There is the looting of mineral, the environmental problem, the human problem, damage to the roads and loss to the state. I indicted many officers for giving leases without authority, checks and control. Leases are given on revenue land. The same lease is used as James Bond’s gun to kill anybody — anytime and anywhere. Not only is mining done in the forest area, it is also used as a dump. Trees are cut to make roads. It’s like rape, reap and run. After I went there and spoke to people, they started burning these vehicles because they were not getting anything. But, they are bought over by promises of a lakh or two as village development funds.

Is the government response lacking?
We constantly released information to see if it could activate the government into doing something. It never worked. You can understand from this how powerful the mining group has become. UV Singh, one of our most efficient officers, found in the Obalapuram border area that there was trespassing from Andhra into Karnataka, and that a large area of Karnataka was being mined on lease given by the Andhra authorities. There was a temple at the border that was blasted out. I recommended that the Centre get a joint survey done to preserve Karnataka’s border integrity. They never pursued it. You know the modus operandi — you complain, an inquiry commission is appointed. You ask them to do something, a letter is sent with no follow-up. Even today, nothing has been done. When two companies — the Reddys and the Modis — fight over boundaries, the Supreme Court asks for their boundaries to be preserved. When the state asks for it, nothing is done.

Do systemic loopholes make it even tougher?
There is evidence to show empty lorries coming into Karnataka, filling up material, going back on an Andhra permit — as if the minerals were mined there — and transporting it via Karnataka to various ports. I wanted check posts put up and every empty vehicle’s number noted. If it returned loaded, we could seize the vehicle, using the Mines and Minerals Act. But there is also the so-called compound offence that can be collected from a mining company. You collect Rs 1,000 for material worth Rs 1 lakh to Rs 1.5 lakh and let the vehicle go.

An entire state became paralysed?
It is because the mining families have become so politically powerful today. They are capable of manipulating the government. Remember the controversy over chief ministership in Karnataka some months ago? A deal was finally struck in Delhi. Officers transferred outside were brought back to Bellary. My understanding is that they have given Bellary to them [the Reddy family].

Will raising officers’ pay stop this?
There is no need to increase the pay of officers — it has trebled since 2008. They have gotten used to the bribes. If the government wants to do it, we can prevent all this. Iron ore export should be banned. Why send a non-renewable commodity to another country, whatever the price? If you stop exports and encourage people to have mills as close to the mines as possible, the Central Government will get thousands of crores a day as excise. State governments will get hundreds of crores as VAT. It gives employment to people whose land has been mined. One factory will do for the whole of Bellary. It will employ 40,000 to 50,000 people. Tell me one good reason why you want to export, when it is not worth it economically, ecologically, and environmentally — and when it is not people-friendly.