This article is written by Ms Sankalpita Pal, who is currently pursuing BBA.LL.B (Hons) from Symbiosis Law School, Pune. This article attempts to provide an overview of the Offshore Areas Mineral (Development and Regulations) Act, 2002.

Introduction

India is endowed with a variety of mineral resources such as coal, copper, iron ore, Bauxite etc. Its rich geological structure brings about such a variety. The bulk of the valuable minerals are products of pre-palaeozoic age. Thus, the export and internal trade of mineral resources is an important sector to be dealt with by the Indian legislature. In the past century, a need for regulation of development of mineral resources was felt in order to protect the mineral resources from exploitation and illegal mining and export. Therefore, in 2002, the Parliament passed the Offshore Areas Mineral (Development and Regulations) bill. This Act aims at the development and regulation of mineral resources on specific marine territories such as territorial waters, exclusive economic zone, continental shelf,  and other maritime zones of India. To regulate the mining in such areas the Parliament has enacted the Offshore Areas Mineral (Development and Regulation) Act, 2002. The Act officially came into effect from 15th January 2010, vide an order dated 11th February 2020 notified by the Central Government.

This article attempts to provide an overview of the Act and how far it is successful in regulating the offshore mining sector in India.

Objectives of the Act

There are a few objectives of this Act.

1. The Offshore Areas Mineral (Development and Regulation) Act, 2002 mainly regulates the offshore mining sector in India. As also mentioned above, it regulates the development of mineral resources found mainly in territorial waters, continental shelf and the Exclusive Economic Zone (EEZ) amongst other maritime territories.
2. This is a Central legislation, thus the regulation of development of mineral resources in  India is under the control of the Union. In fact, the mining sector of India is an asset to our country. Thus, one of the primary purposes of this Act is to empower the Central Government to overlook the mining of offshore resources under the additional administrative authority of the Indian Bureau of Mines (IBM). The Act also empowers the Central government to collect a royalty and grant concessions for offshore area mining.  
3. The Act provides provisions that ensure a deterrent punishment and fine in case there is a breach of safety standards. This gives primary importance to the health of a person involved in offshore mining or affected by it. 
4. It also provides prevention and control of pollution in order to protect the marine environment so that marine life is not affected due to activities in the offshore areas.

Scope of the Act

The Act provides mandates for all minerals in offshore areas. Even minerals listed under the Atomic Energy Act, 1962, are included in the said Act. However, it excludes oils and related hydrocarbons. Oils and hydrocarbons though are offshore minerals are dealt with under separate legislation.

Relevant Provisions under the said Act

There are 6 different chapters of this Act, each chapter dealing with a different topic. However, 3 out of them depict the primary role played by the said Act. 

• The Licensing Regime. (Sections 5, 10, 12)

Section 5 deals with the Reconnaissance, exploration or production to be under permit, licence or lease. Section 10 deals with the Availability of areas for grant of permit, licence or lease and has 3 clauses under it. Lastly, Section 12 deals with the Grant of exploration licence.

• Prevention and control of pollution and protection of the marine environment. (Section 20) 

This Section portrays one of the intents of this legislation. Mining and exploration of resources cause a lot of pollution in the environment. Thus, the mandate of this section requires operators to carry out only those activities which are authorised under this Act.

• Penal and civil liability in case of contravention. (Section 28)

Section 28 consists of 5 clauses that elaborate conditions that may lead to the civil liability of operators under this Act. it also empowers the Central government to file an application if there is any breach of license, lease or permit.

Note- The Mines and Minerals (Development & Regulation) Act, 1957 lays down a regulatory framework that governs the mineral and mining sector at the central level. It is principle legislation (or umbrella legislation) that overlooks the mining sector of India. Thus, the Offshore Areas Mineral (Development and Regulations) Act, 2002 is limited as compared to the principle legislation.

Permits, Lease and License under the Act

The OAMDR Act, 2002 mandates the issuance of a permit, lease or license for offshore mining activities. In case of activities like Reconnaissance or exploration of minerals or production operation in the offshore areas is taking place then the prescribed terms and conditions under the provisions of the Act must be adhered to. Thus, for this purpose different activity requires a different kind of grant from the administering authority. 

According to Section 5 clause (1), in order to carry out Reconnaissance, a Reconnaissance permit (RP) is required. Incase of exploration of mineral resources offshore, an exploration licence (EL) needs to be granted. Lastly, a production lease (PL) must be granted under the Act. It must be noted that other than following the provisions of the Act, certain rules must also be adhered to. 

A simple procedure must be followed while seeking the availability of the areas for grant of RP, EL or PL. Any permit, lease or licence shall be notified within 6 months. The Act provides a proper license regime that empowers the Central Government to grant RP, EL, PL, etc. if all the terms and conditions are met. A set of rules framed and notified on the 3rd of November, 2006. namely, the Offshore Areas Mineral Concession Rules, 2006. 

The Offshore Areas Mineral Concession Rules, 2006

The Offshore Areas Mineral Concession Rules, 2006, lays down the procedure for seeking renewal of the permits, lease or license under Section 35 which confers power upon the Central government to make Rules in accordance with the Offshore Areas Mineral (Development and Regulation) Act, 2002.

The rules mainly prescribe for safety measures that need to be followed in leased offshore areas and also provides for the protection of the marine environment. Furthermore, these rules provide operational guidelines when a certain activity seeks concession under the said Act. The rules prescribe measures for protecting the marine environment and safety measures to be followed in the leased area.

What is the Indian Bureau of Mines?

The Indian Bureau of Mines (IBM) was established in 1948. It is a multi-disciplinary organisation under the government-run by the Department of Mines, Ministry of Mines. The purpose of this organisation is to promote conservation and scientific development of mineral resources. It overlooks whether any type of mining is causing excessive harm to the environment or not. All minerals including the mining of coal, petroleum, copper, ores, minor minerals etc can be mined under the administrative authority of the IBM. 

Role of IBM in the said Act

The primary mission of this organisation is to promote systematic development of mineral resources (both onshore and offshore). They are required to carry out regulatory inspections of all kinds of mining activities. They have the authority to approve mining plans and environment management plans. Every mining plan needs to be approved by IBM as they are required to ensure that minimal the environment goes through minimal adversity while these plans are executed (For example- extraction of minerals via open mining system).

The Controller General of IBM is the actual ‘Administering Authority’ as declared by the Government. The position of Controller General was created via provisions under the Offshore Areas Mineral (Development and Regulation) Act, 2002 itself. Since IBM is the ‘Administering Authority’, it is responsible for the effective implementation of the OAMDR Act, 2002. It also determines how much compensation must be given in case of damage to the marine environment (pollution) as a result of the operations which were carried out. 

Role of OAMDR Act, 2002 in the exploration and extraction of mineral resources

Section 5 under the OAMDR Act, 2002 plays  one of the most important roles of the said Act and it has been discussed above.

Under Section 20 the Central Government can take measures to prevent and control the pollution of the marine environment. Section 21 of the Act confers upon the Central Government and the administering authority to issue directions for the permittee, licensee or lessee to follow. 

Section 23 lays down the offences committed and the penal and civil liability for the same. For instance, Clause 1 lays down that if an offshore mining operation is carried out without license or any kind of permit under the OAMDR Act, 2002, shall be punished with 5 years and a fine up to Rs.50, 000. However, the OAMDR Act, 2002 only controls the development of the offshore minerals and any authority established under doesn’t own minerals in offshore areas. The ownership of minerals solely belongs to government  Article 297 of the Constitution.

The Offshore Areas Mineral (Development and Regulation) Act (Amendment) Bill, 2017

Initially, the government of India decided to allocate offshore mining leases to the private sector as well, by the way, auction route. However, a bill was proposed in parliament in order to facilitate the initial plan. Later on, the Government abandoned that plan. 

Realising the limitations of the OAMDR Act, 2002, the objective of the 2017 Bill was to set mechanism by which the grant of a licence for exploration and production lease on the basis of competitive bidding. Competitive bidding would have ensured a transparent and non-discriminatory regime for grant of operating rights in the offshore areas. 

It is interesting to note that only the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 makes auction mandatory for non-coal minerals in onshore areas. The OAMDR Act, 2002 doesn’t provide for anything like this. However, another point to be noted is that OADMR Act, 2002 doesn’t provide for auction for offshore minerals and neither does the MMDR (Amendment) Act. Eventually, the bill didn’t see the light of the day. However, it left the legislators with a whole new question as to whether the private sector shall be allowed to auction for mining operations in offshore areas.  

Other legal frameworks governing the Mining Sector in India

In India, most mineral resources are jointly managed and controlled by the Centre and the State. The mining sector in India is heavily regulated as it is a hazardous industry and also brings in a lot of revenue to the Government. India’s mining sector is a subset of the vast energy sector and it plays a crucial role. The government overlooks the energy sector through a policy framework, market regulations and public sector undertaking. Every Ministry has a role to play with regard to the energy sector as both the State and the Centre needs to coordinate as their coordination is crucial for other energy players.

Following major legislation related to mining. 

1. The Mines Act 1952 along with the Mines Rules 1955, and the Coal Mines Regulations 1957.
2. Mines and Minerals (Development & Regulation) Act 1957 along with the Mineral Concession Rules, 1960, Mineral Conservation and Development Rules, 1988, and the Mines and Minerals (Development & Regulation) Amendment Act 2010.  
3. The Colliery Control Order 2000  which is issued under the Essential Commodities Act 1955. 
4. The Colliery Control Rules 2004 which was issued under Mines & Minerals (Development and Regulation) Act 1957.

Conclusion

The OAMDR Act, 2002 is a well put together and simple regulatory legislation that is meant to overlook the development and mining of minerals in offshore areas. It can be said that it is recent legislation in India. However, just like every other legislation, it does have a few flaws and lacunas in it. This legislation is debated to not reflect uniformity of practice and implementation when it comes to the proper control and management of substances (hazardous) that harm the marine environment. 

The Precautionary principle is an important concept when it comes to dealing with environmental pollution. This Act doesn’t seem to take into account the significance of the ‘precautionary approach’. As also discussed above, when the 2017 Amendment bill didn’t get accepted by the Parliament, it left legislators with a new issue regarding private sectors being permitted to partake in competitive bidding in order to carry out offshore mining operations. In 2019 also, another bill was drafted and yet again this question was left out of the Amendment Act. However, with a few amendments, this legislation can be more effective and would achieve its original purpose. 

References

1. • https://shodhganga.inflibnet.ac.in/bitstream/10603/241533/1/10%20chapter%202.pdf
   • https://cuts-citee.org/wp-content/uploads/2019/08/Sustainable_Mining_in_India-Overview_of_legal_and_regulatory_framework_technologies_and_best_process_practices.pdf
   • http://ibm.nic.in/writereaddata/files/09232015123138Offshore%20Regions.pd

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