With many questioning the decision to defer the Mines and Minerals Bill 2020, chairperson of the joint committee , Kinley Wangchuk, talks to Kuensel on why the committee did not submit a report to the joint session.
Why did the joint committee decide to defer the Bill?
Despite six consecutive meetings, there was no breakthrough. Disagreement was on the mode of nationalisation and never on private vs state ownership. Eventually, with full consensus from both the houses, the Bill was deferred in keeping with Section 59 (A-2) of the Legislative Rules of Procedure, 2017, which states that if the joint committee is not able to arrive at a consensus, it shall recommend the Speaker to defer the Bill from voting and such Bill may be reintroduced in future following due legislative process.
Untill the entry into the hall, everyone was of the view that the Bill would be deferred. So the Speaker’s decision was not actually surprising although National Council and Opposition party members sounded surprised. Procedurally, when the committee had no recommendation, there is nothing to debate.
The joint committee has more members from the National Assembly. Did this impact discussions?
The government is a minority if the National Council and the Opposition were of the same stand. But on the Bill, the Opposition and the Ruling members had the same stand while the National Council objected to certain conditions of nationalisation proposed in the original Bill and the one reviewed by the National Assembly.
What transpired in the joint committee meetings?
The joint committee referred to Constitutional clauses like Article 1(12), Article 9(10) and Article 14(6). These articles support fair market competition as opposed to commercial monopolies. Experts say the state operating the entire mines is a ‘public monopoly’ and warns of a regressive economy.
Nonetheless, the National Assembly members concurred to offer lucrative minerals like coal, dolomite and gypsum beside all strategic mines to the State. The Prime Minister was also fully supportive of the decision.
The National Council contradicted their stand. If all proven minerals are to be state-owned, why did their recommendation leave several captive mines in the hands of a private few?
What was the bone of contention in the joint committee?
While supporting nationalisation, we also had some reservations on unconditional offers of mines to SOE. More than who operated the mines, the NA members believed that the lives of those affected should be protected by law with a well-designed corporate social responsibility (CSR).
To ensure compensatory benefits and encourage the public-partnership model of growth, the National Assembly members insisted on divestment of public shares between 30 to 49 percent. We also recommended offering 3 percent free equity to the affected community.
The National Council, however, turned this proposal down saying that floatation of shares contradicts the DHI mandate and should be left to the operator’s discretion.
The National Assembly members were worried that the desired compensations will never come if CSR is left to the whims of operators. Members cited various examples from Khothakpa, Habrang, Rishore in the south-east to Chunaikhola in the south-west.
There are 22 active mines and over 37 quarries in operation today. Drying water sources, dust affecting the respiratory health of people, drastic downfall of agriculture and dairy productions, limited employment and contractual opportunities to the community were discussed during the meetings.
When the concern of individuals buying excessive shares was raised, the joint committee consulted the Royal Security Exchange of Bhutan (RSEB) for clarification. RSEB strongly recommended that it is practicable to limit the shares to any minimum figure per head or household to curtail individuals from possessing excessive shares. They also enlightened us on the merits of offering public shares, be it state-owned or private run. Thus, the rich becoming richer is no longer a valid argument.
The whole debate around the Mines and Minerals Bill 2020 is now perceived as the government not supporting the state ownership of mines and minerals.
It is a gross misconception fanned by hearsay and politically motivated opinions that the government opposes the state ownership of mines and minerals. When the Bill was introduced in the Assembly, it had two options, open auctioning of the non-strategic mines and the direct allocation of strategic mines exclusively to the state. Had there been a plan of taking the state out of the mining casket, the government would have maneuvered it so in the original Bill. Had privatisation been the intent of the government, why would the government give the profitable mines like coal, gypsum and dolomite to SMCL?
There are allegations that some interest groups are lobbying with the National Assembly members to keep mines with the private sector.
Unfounded allegations will continue to exist until democracy ceases to exist. As far as I know, we have neither been approached nor shall we entertain interest groups. The interest of the nation shall prevail.
So, where does the issue stand?
Within the span of one and half years, the National Assembly’s economic and finance committee had carried out a series of stakeholder consultations and a historic public hearing validated by exhaustive field visits. Thus, empathy of needing to do more for the affected communities is strong among the NA members.
With more time with the deferment, it is expected that the NC will be able to understand the plights of affected communities and be able to accommodate the welfare of communities.
We are also of the opinion that whoever operates the mines should prioritise the affected so that apprehensive communities will open up to mining activities. Today, for the fear of losing their ancestral homes, properties, lands, water and public infrastructures like roads, people have been trying to prevent mining from coming into their communities. For example, Haa DT suspended the mining exploration in Gakiling gewog this year. If such apprehensions continue, how could the State generate revenue from minerals?
The National Assembly’s version of the MM Bill has provisions of allocating 3 percent each of mining revenue to Bhutan Health Trust Fund and Bhutan for Life Fund. It also has plough back provision up to 10 percent of royalty to the community for timely maintenance of roads, irrigation channels, health facilities and arrangements to compensate displaced families. Further, the offer of free equity shares of 3 percent would sustain the livelihood of affected communities. Employment opportunities and contractual work awards have also been streamlined in our version.