Government denies allegations of favouritism and nepotism

Rinzin Wangchuk 

The proprietors of SSD Venture, a private firm engaged in dredging riverbed materials and surface collection in Phuentsholing, are threatening to sue the minister of agriculture and forests and the director of forests to claim a compensation of Nu 60 million (M). The amount is for losses the company claims it incurred due to unfair treatment.

According to the proponent, both Minister of Agriculture and Forests Yeshey Penjor and Director of Forests Lobzang Dorji refused to budge on their six appeals, although the company secured no objection clearance from the community, received approval from the Samtse dzongkhag administration, and had a renewal recommendation from the forest territorial office.

SSD Venture got approval for surface collection of sand and stone dredging of riverbed materials from state reserved forest land measuring 220 acres at Titiring in Tading gewog in 2018. The one-year environment clearance (EC) expired in September 2019.

The proponent then submitted a letter to the range office in Tading, requesting renewal of the EC as per the terms and conditions set. It is stated that the renewal of the EC is processed three months prior to its expiry, and requires a copy of the existing EC, a valid forestry clearance (FC), and compliance report on the implementation of its term and conditions routing through the concerned chief forestry officer, who will then recommend the renewal of the EC along with a detailed report on the assessment of available materials requested in the renewal of the EC.


Grounds for rejection

SSD Venture’s request was rejected based on the notification the Ministry of Agriculture and Forests (MoAF) issued on October 25, 2019,  which stated that ongoing dredging and export clearance/permit holders, government as well as private operators, should cease upon expiry of the validity of the given export deadlines. The notification requested that no authorities issue permits, approvals, or clearances for surface collection and dredging of sand and boulders either from riverbeds or elsewhere without consultation with the Department of Forests and Park Services (DoFPS).

The notification was issued to “safeguard proper management of the country’s scarce natural resources and ensure proper monitoring of activities.” It stated that multi-authority issuing of permits or approvals for such activities, in the past, had created confusion and misunderstandings in management of the surface collection and dredging activities.

Claiming huge investments in stone crushing machines amounting to Nu 60M had remained idle for more than two years and the pandemic inflicting heavy losses, SSD Venture resubmitted their applications twice in 2020 and thrice in 2021. All appeals were rejected, citing Cabinet directives and disputes from the Anti-Corruption Commission (ACC).

While discussing dredging and export of riverbed materials issues, the 78th session of the third Lhengye Zhungtshog held on November 17, 2020 decided that SSD Venture be allowed to export stocked materials only from Zone C through an identified access road/bridge in consultation with the Phuentsholing Thromde Development Project (PTDP), which is responsible for managing and decision making for dredging in Zone A and B at Toorsa.

The Cabinet decided that the MoAF could allow Druk Magical Private Ltd. to dredge from the identified 7.5 acres site at Zone C if there was a feasible deposit and if transportation accessibility could be arranged with SSD Ventures and PTDP. No other sites within Zone C were allotted for new dredging. All other new sites identified by the DoFPS as feasible for dredging were allocated through an open auction.

The Cabinet instructed the ministry to develop clear auction guidelines, spelling out a timeframe (definite dates) for the start and end of operations by the successful bidder.


Appeal to Prime Minister

The decision to allow Druk Magical Private Ltd to dredge from the identified 7.5 acres site in Titiring gave some hope to SSD Venture. They appealed to the Prime Minister on September 9 to “accord fair treatment and grant renewal of the expired EC.”

In their appeal, the proprietor stated that the DoFPS had discreetly solicited guidance from the ACC on their application for the EC renewal. However, the ACC had written to the DoFPS Director on September 2, 2021 stating that the ACC did not have any complaint allegations against SSD Venture from their end.

The ACC even stated that the referral of such a non-contentious matter by the department or ministry was unwarranted.

The letter stated that even after receiving the reminder letter from the ACC, DoFPS has not moved to renew the EC, now based on the ministry’s circular on October 25, 2019.

However, SSD Ventures reported that 55 dredging sites are still operational with EC renewals accorded without any impediments.

A new site was also approved on August 5, 2021 to Druk Magical Private Ltd at site Zone C at Titiring where SSD Venture’s dredging site is located. “It is only SSD Venture whose EC was not renewed for the past two years,” the letter stated. “We feel that SSD Venture is being singled out and unfairly treated for no legitimate reason.”

The Cabinet Secretariat on November 8 this year, has written to the MoAF directing it to “permit SSD ventures to clear the balance stock materials within a time period decided by the ministry.” Like in the earlier circular, the new dredging in the same site (Zone C) shall not be available to SSD unless they acquire it through open auction.

The Cabinet has also directed the MoAF to discuss with Chephen Nordup Export and permit the company to dredge at the average auction rate per acre established by the ministry.

This has further confused and created room for suspicion among dredgers.

One dredging owner, who received no new sites, said he didn’t understand why some are getting new sites and some not. “Such decisions indicate the existence of policy corruption in the governance system,” an aggrieved businessman said.

“Now, they are saying to auction,” he said. “Those who have an idea of the value will quote the right price, but those who are new will not. Chances are this business will be ruined.” Sources who are aware of the dredging business said that no auctions were held in the past to determine an average auction price.

“It must be fair. Auction means everyone takes part in the auction. Some are getting dredging renewals and new sites. It looks like some are getting favored by those in governance. It should be either auctioned or renewed.”


Blame game?

While both the MoAF and the Cabinet issued circulars and notifications to not issue permits or clearances for the renewal of ECs, some are questioning how the two companies, Druk Magical and Chephen Nordup Export, were allowed to dredge from the new sites.

“There was a Cabinet directive stating that until the Mines and Minerals Bill comes through, renewals for those already dredging would be given. But some got them and some didn’t,” another dredging proprietor said.

“It looks like the government has favoured these two companies since they were the promoters of Druk Nyamrup Tshogpa (DNT),” one accused.


Agriculture minister refutes allegation

Refuting the allegations, Minister of Agriculture and Forests Yeshey Penjor said the allotment of the new site to Druk Magical company had nothing to do with party affiliations. “It was ACC’s decision and not the Cabinet’s or the ministry’s,” he said.

According to Lyonpo Yeshey Penjor, since the identified dredging site is located adjacent to the proponent, Chephen Nordup Export’s land, he along with the community would not give clearance if another company wanted to do the job. “The community was willing to give clearance only to the proponent. Therefore, the Cabinet was compelled to let the proponent dredge from the state reserved forest land at the average auction rate,” Lyonpo said.

An official from SSD Venture said that if the EC is given based on the ACC’s letter, they too should be allowed to dredge with a new EC. “However, the ACC is not the competent authority to issue such clearances,” he said.

ACC officials said that they had written to DoFPS clarifying that the institution does not have any complaints or allegations against both the firms.

Director of Forests Lobzang Dorji was not available for comment.

Meanwhile, the Cabinet secretariat wrote to the economic affairs minister on October 5 this year, directing him to submit a holistic proposal on how Department of Geology and Mines will manage surface collection and dredging activities to ensure a smooth transition after taking it over from the DoFPS.

There are around 110 dredging sites under active operations across the country. Of that, 86 sites are handled by the Natural Resources Development Corporation Ltd (NRDCL).