Friday, October 8, 2010

Mines Ministry to GoM: Ask firms to spell out CSR plans

Dear Friends,

A welcome step from the Ministry of Mines, Govt. of India through the draft Mines and Minerals (Development and Regulation) Bill 2010! The consequences of mining on ecology in terms of bio-diversity, flora, fauna and habitat and  on the quality of life of local population are humongous. The Ministry through this draft looks at mitigating these consequences by ensuring that the Companies engaged in mining set out their plans in advance and allocate a certain percentage of their profits for their Corporate Social Responsibility towards the ecology and the local population.

The ministry also wants that the Companies furnish a Progressive Mine Closure Plan  in terms of  "sustainable development framework" that should include details of closure, rehabilitation and restoration activities proposed in the next five years and what companies proposed to invest on these activities.

The draft law also talks about National and State Mineral Funds which could be inter alia used for maintenance of community assets and services for local populations in the area; and human resource development of local populations for creating employment and self-employment capabilities.

There are many areas which might not be liked by the Mining Industry but this is the minimum essential cost that should come from them to the community!

SC Vashishth

Here is the coverage from Indian Express, October 07, 2010
Mines Min to GoM: Ask firms to spell out CSR plans

The metal and mineral PSUs aspiring captive mines would henceforth have to spell out the quantum of money they intend to spend annually in their Corporate Social Responsibility (CSR) activities to secure mineral concessions. If the Group of Ministers (GoM) approves a proposal of the mines ministry to this effect, then these companies would have to elaborate their welfare spent by appending a CSR note in their mining plans.

The suggestion of the mines ministry is currently being deliberated by the GoM, headed by Finance Minister Pranab Mukherjee, which has been constituted to iron out the inter-ministerial differences on the Draft Mines and Minerals (Development and Regulation) Bill 2010. In its supplementary note for the consideration of the GoM, the ministry has said, “without prejudice to the generality of the provisions of the mining plan, there shall be attached to the mining plan in respect to the mining plan in respect of all major minerals, a CSR document, comprising of a scheme for annual expenditure by the lessee on socio-economic activities in and around the mine area for the benefit of the host population...”

In the document the companies would have to spell out the measures for enabling and facilitating self employment opportunities for the populace impacted by their mining activities. “The lease holder shall at the end of each financial year publish in his Annual Report and corporate website, the activities carried out during the year and expenditure thereon,” the ministry pointed out.

Reacting to this move, a senior steel ministry official told The Indian Express that all profitable steel PSUs have earmarked at least 2 per cent of their distributable surplus for CSR activities since 2007-08. The ministry mining behemoth National Mineral Development Corporation (NMDC) has earmarked 5 per cent of its distributable surplus for CSR activities. In total a total of Rs. 290.11 crore had been allocated for carrying out CSR activities by the Steel Ministry PSUs during 2008-09.

This move is likely to trigger reactions from the steel utilities, who meticulously remind all and sundry of their CSR activities in and around their plant and mining areas.......... (click on the link below to read the full story)  Mines Min to GoM: Ask firms to spell out CSR plans

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