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SC panel proposes mild reprimand for offenders in Karnataka mining scam:

Written By Krishna on Monday, April 02, 2012 | 12:59 AM

NEW DELHI: The bang with which Karnataka mining scam came to centrestage, dethroning B S Yeddyurrapa as CM in its wake, could soon end in a whimper, if the Supreme Court's Centrally Empowered Committee's (CEC) recommendations are accepted.

The Karnataka Lokayukta had in its report noted that the miners in Karnataka earned Rs 12,228 crore between 2006 and 2010 from illegal exports of ore. Thousands of crore worth of ore was also illegally sold domestically during the same period. It had indicted several hundred officials, politicians and businessmen for their involvement in one the largest mining scams to hit the country.

However, the SC-appointed panel's recommendations could help wrong-doers lightly. It suggested that all 166 mines should be regularized, even though 162 of them were found to have operated blatantly flouting norms. A fine of around Rs 430 crore should be imposed on 72 of them. Forty nine leases (mostly small operators) should be cancelled and resold to other miners with their existing mine stocks confiscated, while 24 of mines would get away scot-free. The committee has not recommended prosecution of a single official, politician or businessman involved in the scam that turned three districts in the state - Bellary, Chitradurga and Tumkur - into a black hole of corruption.

If the SC accepts these recommendations, what was purported to be a massive organized criminal racket could now be legitimized with a relatively minor penalty.

The CBI has been asked by the apex court to investigate only a single illegal mining case in Karnataka and the state police has found it hard to take any action. Hence, the rest could get away without any criminal proceedings. The petitioners before the SC, aggrieved by the CEC report, have filed another plea demanding probe into corruption by Yeddyurrapa along with Jindal and Adani groups. But the CEC is yet to weigh on it even as the firm involved in the corruption case of the former CM has been absolved of its 'minor illegalities'.

The CEC final report notes that "massive illegal mining and transportation because possible because of the blatant connivance of officials and public functionaries." It adds, "the extend and level of rampant unauthorized unregulated, environmentally unsustainable and illegal mining its various facets and consequent massive encroachment in the forests area perhaps had no other parallel in the country."

Yet, the CEC has ignored its earlier observation that "the ill-gotten profits of the wrong doers should be disgorged at 5 times the market value" of the ore illegally extracted over years. It has instead suggested an encroached area-based formula to penalize that would add up to a total fine of a paltry Rs 430 crore. This too has been done in such a way that several big players could get away scot-free because as a percentage their encroachment seems small. Many of the small players are put into a category, and their mines should be resold to others. Consequently, some miners in the same bracket of encroachment get away with paying peanuts, while others lose their leases. There is no reference to the millions of tonnes of iron ore the companies mined over years in flagrant violation of several norms.

The CEC does put a cap on future mining in the area, and a formula to extract an extra amount from the mines that would be continued to operate through a special purpose vehicle which would be used to undertake land rehabilitation and other regulatory measures.

It's not the first time that the CEC has resorted to such a formula. There is a precedent in a mining scam in Odisha in 2010. In that case, the CEC had found that 215 out of 341 working mines - or more than 60% - in Odisha wee operating without statutory central government clearances - some of them in business for decades without even submitting a statutory mining plan to authorities. Yet, the CEC offered an amnesty scheme to all: advising that a one-time fine of about Rs 2,000 crore be collected to legitimize their operations based on a land cost formula. Again, it had not recommended anyone's prosecution, and the court had accepted the suggestions.

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