Communities say not much benefit from mining 

… National Assembly held the first televised public hearing on January 10

MB Subba 

Communities affected by mining operations say that they have little to benefit from mining in their localities, while the impacts threaten their livelihood and health. Mine operators disagree.

Representatives of the mining companies and affected communities came face-to-face in the first televised public hearing on the Mines and Minerals Bill 2020 on January 10.  

The public hearing was organised in the build-up to the upcoming Parliament session where the Bill will be tabled.

A representative from Samdrupjongkhar’s Phuntshothang village said that excavation work had affected their water sources and dust from the site had affected crop yields. He said that farmers were able to harvest only about 50kg of paddy from the field which used to produce about 300kg.

“We are concerned about dust-induced health hazards and possible landslides. People haven’t benefited much in the form of corporate social responsibility in my community,” he said.

A representative of the affected community in Pugli, Samtse shared similar concerns. He said that heavy vehicles were a major problem for the roads and that they generated dust. “There should be more tankers to sprinkle water on the road to reduce the dust problem.”

He also expressed concerns about water sources drying up in the community.

The representative from Pugli said that only about 10 per cent of the job opportunities were being given to the local residents. “But those jobs are mostly blue-collar. People from the community do not get jobs at the supervisory levels,” he said.

The community representative from Phuntshothang said that people in the community would be unaware of when the job opportunities in the mining sites open. “The community do not get information on the availability of jobs.”

However, a representative from the SD Eastern Bhutan Coal Company stated that mining and minerals businesses benefit the country in the form of job opportunities and businesses the operators give to various quarters of the population.

He said that the corporate social responsibility carried out by the company had directly benefited the community and shareholders benefited from returns on their investments. “We provide employment to the people and temporary jobs to students and hire excavators,” he said.

The miners were also quizzed if the business was profitable. A representative from Druk Satair said that it was not true that only a handful was becoming rich in the mining sector. He justified that 30 per cent of the shares were allotted to the public and that a significant number of people were employed in the sector.

“As the mining companies make a profit, the government draws benefits in the form of taxes and employment generation among other benefits, which is a positive thing,” he said.

Among the witnesses was the deputy Dzongkhag Tshogdu chairperson Ugyen Tshering from Pemagatshel, who was asked to testify in what ways the community was affected by mining operations.

“We don’t want to stop the operation of mining in our communities, but the problem is that the community is losing out,” Ugyen Tshering said. He called for proper rules and regulations and that they should be implemented strictly.

National Environment Commission (NEC) secretary Sonam P Wangdi said about 120 environment clearances were issued out of which 46 were in operation. The rest, he said, are either not operational or are being closed.

One of the NA committee members, Dorji Wangdi, said that there were 66 mines and quarry operators in the country. He asked the director general of the Department of Revenue and Customs (DRC) if the perception that only a handful reap the direct benefits from the sector was true.

“Mines and minerals are national wealth. But various data and figures on the mining sector seem to justify the statement that only a handful are reaping the benefits from the mining business,” he said.

DRC DG Wangchuk Thayey said that there were 37 registered mining enterprises but only 18 were paying taxes to the government. “This means that only 18 are making profits from the business.”

He was of the view that there weren’t many operators due to the capital-intensive nature of the business. He said that the country was benefiting in the form of taxes.

The committee is hoping to make sure that the Bill would enable the mining sector to create thousands of jobs and ease the business operation in the mining sector. One of the witnesses admitted that today it takes about two years to acquire a mining license.

Economic and Finance Committee chairperson, Kinley Wangchuk said that the public hearing was conducted as it was important for the public to know about such issues. He said the Mines and Minerals Management Act of 1995 has never been amended although several changes and related issues have emerged during the last 24 years.

“The public hearings were conducted before, but this is the first time we are doing it in such a manner,” he said. The hearing was broadcast live on BBS TV.

Witnesses included officials from the Department of Geology and Mines as the owner of the bill, local governments, NEC, forest and park services department, private miners, state mining corporation and affected people, among others.

Minerals are among the top 10 exports of the country. Seven mine-based industries (MBIs) in the country paid a total of Nu 455.8 million (M) in 2017 and Nu 601.2M in 2018 as Corporate Income Tax (CIT), according to reports available with the committee.

The net profit earned by the seven MBIs was Nu 1.1 billion (B) in 2017 and Nu 1.3B in 2018. According to the reports, the total royalty and mineral rents levied was less due to the application of incentivised royalty system.

One of the questions was on whether the Bill would be able to solve the problems facing the mining sector. There were no concrete answers from the DGM.

The prevailing perception, DGM Director General Choiten Wangchuk said was that there were not many direct benefits to the community.

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