Tashi Dema

The National Council will deliberate the Mines and Minerals Bill of Bhutan 2020 which is expected to harmonise conflicting laws to resolve the legality issue over surface collection of riverbed materials and also address the loss of government revenue.

The National Assembly forwarded it during the winter session of Parliament in January this year.

Three Acts, the Mines and Minerals Management Act of the Kingdom of Bhutan 1995 (MMMA), Forest and Nature Conservation Act of Bhutan 1995 (FNCA), and Water Act of Bhutan 2011 have conflicting provisions over surface collection.

MMMA and FNCA provided the respective departments authority over surface collection, putting Department of Geology and Mines (DGM) and Department of Forest and Park Services (DoFPS) at loggerheads.

With the two Acts enacted on the same day—September 1, 1995—neither Acts could repeal each other and the two agencies issue permit and monitor the collection.

“But once Parliament passes the Bill, the Act will repeal section 3G (iv) of the FNCA 1995 on boulders, stone, sand, gravel and rocks and also section 26 (b) of the Water Act of Bhutan 2011,” said DGM’s deputy executive engineer, Karma Chophel.

With the Royal Audit Authority pointing out that DoFPS issuing permit for surface collection and dredging of riverbed materials directly since January 2017 resulted in huge revenue loss to the government, as the royalty fees differ between the two implementing agencies. The Bill is also expected to make the royalty uniform.

It was learnt that although the government revised export fee, which is now based on the number of truck wheels on permits issued by DoFPS, it is still less than two percent of the value per tonne on permits issued by DGM.

The bill would repeal section 51.D of the Local Government Act, as it takes about three to six years to obtain clearance.    

Karma Chophel said that with many people now questioning their stake since minerals belong to the state, the policies, through the Bill and Mineral Development Policy 2017, would ensure equity share through broad-based ownership so that the benefit trickles down to every individual.

“The bill will also ensure a clear delineation of policy and regulatory functions to enable independence and autonomy of functions as prescribed by the policy,” the deputy executive engineer said. “It will also avoid conflict of interest between promotional and regulatory roles.”

An independent mining regulatory authority (MRA), established through the Bill, would be responsible only for regulating the compliances of the mines and collecting royalty, mineral rent, surface rent, fees and other applicable charges. “MRA will not have any role in policy and licencing.”

Once enacted, the Bill would also maximise the benefits of mining to the communities through community development agreement and community development fund based on how much minerals are dispatched, irrespective of profit or loss.

Section 146 of the Bill states: “The Authority shall formulate a Community Development Agreement for leased mine prescribing the Benefit Sharing Scheme for the communities.” Section 147 states: “The Authority shall create and manage Community Development Fund maintained in a saving account with a financial institution for the lessee to deposit fund to finance activities under the Community Development Agreement.”

Karma Chophel said while there would be no free cash distribution, the community development fund could be used for economic development of the community and other sustainable projects.

Meanwhile, NC will have two versions of the Bill to deliberate, one drafted by DGM and the other deliberated and amended by NA. The bill might be deliberated in joint sitting if NC refuses to agree with NA’s proposal.