The economic affairs minister has expressed satisfaction over the Mines and Minerals Bill 2020 despite not being able to push it as an urgent Bill.
The Bill was first introduced in the second session and the ministry wanted to pass it as an urgent Bill in the ongoing session. But the plan did not materialise due to resistance from the National Council (NC) and the Legislative Rules of Procedure.
Economic affairs minister Loknath Sharma said, “I’m hoping that the National Council will look at the Bill objectively. They will definitely add more value to the Bill.”
He was of the view that two sessions would have been enough for the Parliament to pass the Bill. It was introduced in the second session.
“But if the Mines and Minerals Bill 2020 was taken up as an urgent Bill it would have been better. Then we could have been able to work better in the changed context,” he said.
The minister, who comes from a mine-affected dzongkhag, said that he was satisfied with the Bill.
“I have some idea about how mining is done and what are the impacts on the community. Some people are affected by the dust but it’s some other people who pocket the money,” he said.
Lyonpo Loknath Sharma said that he was fortunate to have become the economic affairs minister and could push the Bill.
He said that he was able to understand the mining issues from both the sides – the community and the government.
“I am sure that the Bill will benefit the country at large,” he said, citing many direct benefits the communities will receive under the provisions of the Bill. One of the benefits, he said, was the community development fund that the Bill seeks to establish.
The Bill carries significant policy changes in the mining sector, one of which is the provision that mandates the state to plough back 10 percent of annual royalty collected from the mines as a community development fund. The fund will be used for the maintenance of roads, ensuring clean drinking and irrigation water.
The minister said that in the past, it used to be just the company’s managing director or someone who would decide what the communities would benefit from the mine. “We have made provisions that will help the community directly and some of our big companies are expected to replicate the system,” he said.
Chairman of the economic and finance committee which reviewed the Bill, Kinley Wangchuk, said that provisions that will encourage community engagement and ownership of mines.
The mining companies will have to employ only Bhutanese and out of which 30 percent has to be from the affected community. The Bill also mandates that 49 percent of the shares should be allotted to members of the concerned community.
It also states that three percent free equity shares and preference of short-term commercial mines and surface collection should be given to the affected community.
Another significant change is the lease period that has been increased to 20 years, but it cannot be renewed unlike in the past. This means that all eligible investors will be able to take part in the auction after the expiry of a lease.
The State shall recognise the best miner who ensures utmost Corporate Social Responsibility for the community.
However, Kinley Wangchuk said that the provisions in the Local Government Act pertaining to Local Government’s (LG) say over the mines and minerals in their locality needs to be reviewed and amended. The LG Act states that the Dzongkhag Tshogdu shall issue clearance for establishment and operation of mines and quarries in accordance with the Mines and Minerals Act.
The LG Act also empowers the Gewog Tshogde to monitor establishment and operation of mines and quarries in consultation with the concerned community.
One of the provisions, some members are uncomfortable, is the provision that provides for obtaining written consent from the landowner although the Bill says mines and minerals are state property. Some feel that it has limited the state’s right to extract minerals from private land to the nation’s economic benefit.
The Bill, on the other hand, does not provide for how the long duration required for obtaining the license for operation of mines will be addressed. An official during a public hearing on the Bill said it took about two years to complete the process of getting a mining permit.
Until the new Act is passed, he said, the government would go by the existing Act, which was enacted in 1995.
Economic affairs minister Loknath Sharma said that some mines remain closed today due to expiry of their lease because of which many people have lost their jobs. He said that a mine can be auctioned even under the old Act if need be.
He said that the ministry would have loved to put in place a new Act before the expiry of the lease period. He reasoned that it takes some time to make rules and regulations even after passing the Act.
“Considering all these, I was of the view that the Bill should be passed within this session as an urgent Bill. Then I would have been the happiest because there would be enough time to make regulations,” he said.
“There are no financial loses as such due to closer or some mines are the delay in the passing the Bill. Because we will still follow the old Act,” he said.
There are small and bigger mines in operations. Coal mines have expired and closed, which otherwise could have contributed to the revenue generation capacity of the mining sector.
The economic affairs minister said that the government was not in favour of renewing the coalmine lease. He said some time would be taken to auction the mine again.