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World Bank Document

Public Disclosure Authorized
Document of
The World Bank
Report No. 15405-IN
STAFF APPRAISAL REPORT
INDIA
COAL SECTOR EVIRONMENTALAND SOCIAL MITIGATION PROJECT
APRIL 24, 1996
Energy and Infrastructure Operations Division
Country Department II
South Asia Region
CURRENCY EQUIVALENTS
(As of March 31, 1996)
Currency units
=
Rupees (Rs)
One Rupee
=
US$ 0.03 (approx.)
One US Dollar
One US Dollar
=
Rs 34.7
SDR 0.686
=
MEASURES AND EQUIVALENTS
I metric ton of (Indian) coal
=
0.46 metric tons of oil
1.9 metric tons of lignite
570 cubic meters of natural gas
1.0 metric ton of fire wood
2.0 metric tons of animal dung
ABBREVIATIONS AND ACRONYMS
CBO
-
Community based organization
CCL
CD
-
Central Coalfields Ltd.
Communiity development
CMPDI
CPCB
DGMS
EAC
EAP
EIA
EMP
EPAP
IPDP
MCL
MoEF
NCL
NTPC
-
Central Mine Planning and Design Institute Ltd.
Central Pollution Control Board
Directorate General Mines Safety
Environmental Approval Committee
Environmental Action Plan
Enviromnental Impact Assessment
EnviroiinmentalManagement Plan
Project-affected person entitled to rehabilitation
Indigenous Peoples Development Plan
Mahanadi Coalfields Ltd.
Ministry of Environment and Forests
NorthemnCoalfields Ltd.
National Thennal Power Corporation
OB
PAP
-
Overburden
Project-affected person
R&R
RAP
-
Resettlement and rehabilitation
Rehabilitation Action Plan
SC
SEB
-
Scheduled caste
Statc Electricity Board
SECL
SPCB
-
South Eastern Coalfields Ltd.
State Pollution Control Board
ST
WCL
-
Scheduled tribe
Western Coalfields Ltd.
FISCAL YEAR
APRIL I - MARCH 31
- i -
INDIA
COAL SECTOR ENVIRONMENTAL AND SOCIAL MITIGATION PROJECT
Credit and Project Summary
Borrower:
India, acting by its President
Implementing Agency:
Coal India Ltd.
Beneficiaries:
Northem Coalfields Ltd. (NCL), South Eastern Coalfields Ltd. (SECL),
Mahanadi Coalfields Ltd. (MCL), Central Coalfields Ltd. (CCL) and Western Coalfields Ltd. (WCL).
Poverty:
Program of Targeted Intervention: One of the projects main objectives is to
extend social mitigating actions to communities surrounding the selected 25
coal mines and to improve the access to schools, health care, water supply
and other community facilities (in particular to tribal populations and
women). Most of the people living in these communities are poor. The
project contains specific strategies for ensuring access to these facilities by
tribal populations and women.
Amount:
SDR 43.3 million (US$63.0 million equivalent)
Terms:
Standard, with 35 years maturity.
Commitment Fee:
0.50% on undisbursed credit balances, beginning 60 days after signing, less
any waiver.
Onlending Terms:
From the Government to Coal India Ltd. under standard terms and conditions
for loans to commercial enterprises. Normally, these carry an interest rate of
16% per annum with a repayment period of ten years and a grace period of
one year.
Financing Plan:
See para 3.21
Net Present Value:
The economic net present value of the associated and proposed Coal Sector
Rehabilitation Project is estimated at US$6,110 million and the corresponding financial net present value is estimated at US$8 16 million. A discount
rate of 16% was used for the calculations of both net present values.
Staff Appraisal Report:
15405-IN
-
111-
INDIA
Table of Contents
Page No.
1. THE ORIGIN OF THE PROJECT ..............................................
Coal: India's major source of commercial energy ...........................................
The need for reform ..........................................
Coal Sector Rehabilitation Project ...........................................
Coal Sector Environmental and Social Mitigation Project .............
..............................
Link to country assistance strategy .....
II. ENVIRONMENTAL AND SOCIAL ISSUES ...............................................
Environmental issues ..............................................
Social issues ..............................................
Consultations and dissemination ..............................................
Environmental and Social Review Panel .......
Poverty category ..............................................
Co In
al dia
Ltd...............................................
I
1
2
2
2
3.................................
3
4
6
10
11.................................
12
12
III. THE PROJECT AND ITS IMPLEMENTATION ..............................................
13
Project objectives and design ..........................................
Project description ..........................................
Lessons learned from previous Bank operations ..........................................
Project implementation ..........................................
Project cost ..........................................
Financing plan ..........................................
Status of project preparation.
..........................................
Procurement ..........................................
Disbursements ..........................................
13
13
14
15
17
18
19
19
22
This report was prepared by Messrs. /Mme. Peter Pollak (Task Manager), Sadhan Chattopadhya (Senior
Mining Engineer), Trish Hackman (Consultant), Lars Lund (Sociologist)and Yaacov Ziv (Senior Environmental Specialist). Messrs./Mmes. Robert Drysdale (Senior Operations Advisor), Charles Husband
(Senior Financial Analyst), Maria Kutcher (Operations Analyst), Malaine Manzo (Senior Operations
Officer), Maritta Koch-Weser (Chief, Environment and Natural Resources, Asia Technical Department)
David Marsden (Chief, Social Unit, NDO), Ellen Schaengold (Senior Sociologist) and Michael Whitbread
(Consultant) have made valuable contributions to this report.
This report could not have been written without the extensive support and contributions from Coal
India's World Bank Project Division.
The report has been reviewed by Ms. Maureen Cropper and Mr. Peter Van der Veen. It has been endorsed
by Mr. Heinz Vergin (Director, South Asia Country Department II) and Mr. Jean-Francois Bauer (Chief,
Energy and Infrastructure Operations Division)
-
lv
-
Page No.
IV. FINANCIAL AND ECONOMIC ANALYSIS...........................................................
Project benefits...........................................................
Social and environmental benefits ...........................................................
Financial and economic analysis ...........................................................
Project risks ...........................................................
V. AGREEMENTS AND RECOMMENDATION .....................
......................................
23
23
23
24
24
25
ANNEXES
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3.1
3.2
4.1
5.1
MIAP
Environmental aspects ........................................................
27
41
Coal India's corporate environmental policy ........................................................
Resettlement, rehabilitation and community development ....................................................... 49
59
Resettlement and rehabilitation policy of Coal India ........................................................
.....................................
67
Coal India's community development plan ...................
Consultations and participation of project-affect people ........................................................ 75
Coal mine safety, health and welfare ........................................................
83
93
Technical assistance: Terms of reference ........................................................
CoalIndiaLtd ........................................................
101
Project description .........................................................
III
139
Project implementation ........................................................
Financial and economic analysis of the Coal Sector Rehabilitation Project ............. ..............163
Documents available in project file ........................................................
173
INDIA
STAFF APPRAISAL REPORT
I. THE ORIGIN OF THE PROJECT
Coal: India's major source of commercial energy
1.1
INDIAS ENERGY RESOURCES. Considering the size of its economy, India is poorly endowed with
energy resources. While the country has relatively large coal resources, it has only modest oil and gas
resources:
India's coal resources are large enough to meet the projected demand for the next 250 years.
Coal currently meets two-thirds of India's energy needs. Considering that most of India's
coal resources can be produced relatively inexpensively (taking environmental and social
mitigating actions into account) and that India's transport infrastructure (ports, railways and
roads) would need to be expanded significantly to permit energy imports on a large scale,
indigenous coal is likely to remain the least-cost option for the bulk of India's energy needs
for the foreseeable future. The prospects for coal are closely tied to the reforms in the power
sector, which consumes almost 70% of India's coal output.
•
Domestic oil production meets about 25% of the country's needs and, unless major new oil
fields are discovered, existing reserves will last for only about 15 years.
*
Natural gas plays a relatively minor role in India's energy economy. Current domestic
production accounts for only 5% of India's commercial energy use and existing reserves will
supply current consumers for about 20 years. To relieve some of the demand pressures on
indigenous coal, the Gas Authority of India is considering the import of gas from the Middle
East.
*
India's potential for generating hydroelectric power is estimated at 100,000 Megawatts
(MW); about 30% of this potential has been developed. Opposition from environmental
groups, the resistance of potentially affected people to resettlement, and disputes about
riparian rights with neighboring countries have made it increasingly difficult in recent years
to implement hydroelectric projects.
*
India also has large resources of lignite. Most of these resources, which are estimated at 16
billion tons, are located in the south of India; smaller deposits have also been discovered in
Gujarat and Rajasthan. The Neyveli Lignite Corporation, which is India's largest lignite
mining company, currently produces 15 million tons of lignite from two mines in Tamil
Nadu. Because of the relatively low calorific content of lignite, the demand for this fuel is
restricted to the area around deposits.
1.2
Until the late 1960s, India met its energy needs predominantly through oil imports. After the steep
increase in international oil prices during the early 1970s made indigenously produced coal more economically attractive than imported oil, the Government decided to make coal-based thermal power generation the backbone of India's energy economy. To finance the massive investments for the expansion of
coal production, the Government nationalized most coal mines in the early 1970s. This not only provided
the industry with access to public finance for these investments, it also extended the Government's control
over all major management decisions.
-2 -
1.3
In exercising control over the coal industry, the Govemment was guided by the perception that the
industry provides a vital service to the rest of the economy, much like a public utility. Decisions were
driven by a single objective: to meet India's rapidly growing demand for energy. Financial considerations
played only a minor role.
The need for reform
1.4
A foreign exchange and budget crisis in 1991 forced the Govemment to rethink its support to the
public sector. As an initial step, the Govemment decided to phase out its financial support to several
public sector enterprises, including Coal India. Faced with dwindling financial support from the Government, Coal India's management decided to put its mines on a commercial footing, phase out loss-making
operations, eliminate surplus labor and reduce 'receivables' from major coal consumers. Many of these
steps are politically quite sensitive, in part because their impact would be concentrated in a few major coal
producing regions (mostly in Southem Bihar and West Bengal); they would affect sensitive Center-State
relationships (e.g. State Electricity Boards could no longer count on 'automatic' credit from Coal India for
coal supplies); and steps, such as the closure of mines and retrenchment of coal miners, would require the
support of labor unions, which would be reluctant to see their membership dwindle.
Coal Sector Rehabilitation Project
1.5
In the short term, Coal India's main objective was to remain financially viable while implementing investments without further support from the Govemment. Coal India and the Bank agreed that the
most effective way to assist Coal India would be by financing a time-slice of Coal India's investments. In
line with Coal India's short-termnfinancial objectives, the Bank's financial support would be limited to
investments in highly profitable mines that are economically viable, had no major environmental problems
and required the least number of people to be resettled. (Initially, 35 mines met these conditions. In the
course of project preparation, Coal India decided to finance urgently needed investments in 10 mines from
its own resources.) To minimize the time lag between investment and financial results, only existing mines
were eligible for Bank support. Broad agreement was reached with the Government and Coal India on a
reform program for the coal industry. (See Annex 2.9, para 25 for a synopsis of the reform program.)
Under the Coal Sector Rehabilitation Project, as it was originally proposed, Coal India would also have
received IDA financing for remedial and mitigating environmental and social actions to bring the selected
mines in line with the requirements of Indian laws and regulations and the Bank Group's Operational
Directives.
Coal Sector Environmental and Social Mitigation Project
1.6
In November 1995, agreement was reached with the Govemment and Coal India to package the
environmental and social components of the Coal Sector Rehabilitation Project as a separate project. This
decision made it possible to assist Coal India, through the implementation of high priority environmental
and social mitigation programs, to strengthen its capacity to deal more effectively with environmental and
social issues. As such, the project supports Coal India's objective to make coal production environmentally
and socially sustainable. The results of various environmental and social studies, the increase in staff with
social and environmental expertise and the enhancements to Coal India's policies for resettlement and
rehabilitation, community development and environmental management that were made by Coal India in
the context of the preparation of this project to bring them in line with the Bank Group's Operational
Directives will affect all of its 495 mining operations; they will be tested in the 25 mines included under
this project.
1.7
LINK TO THE COAL SECTOR REHABILITATION
PROJECT. In the course of the preparation of this project,
reviews of the environmental and social aspects were carried out for the coal mines that are slated to
receive financial support under the Coal Sector Rehabilitation Project. The aim of these reviews was to
ensure that the coal companies had complied with Indian environmental legislation and rules and the
conditions contained in enviromnental clearances, as well as the Bank Group's Operational Directives on
Environmental Assessment (OD4.01), Involuntary Resettlement (OD4.30) and Indigenous Peoples
(OD4.20). Where necessary, Environmental Action Plans, Rehabilitation Action Plans and Indigenous
Peoples DevelopmenitPlans were prepared to ensure full compliance with the above requirements. The
proposed project would provide Coal India with funds to implement these action plans.
Link to country assistance strategy
1.8
The project is consistent with the Country Assistance Strategy discussed by the Board on June 20,
1995. The strategy emphasizes continued Bank/IDA support for India on:
*
the reform of policies in key sectors of its economy;
*
the rationalization of its energy policy, in particular the pricing policies for various energy
resources;
*
the reform of public sector enterprises;
*
the enhancement of the social and environiental sustainability of the Government's investment program;
*
improving environmental protection, strengthening the capacity of the various entities to deal
more effectively with environmental issues and enforcing environmental legislation in India;
*
increasing the role of beneficiaries and NGOs in resettlement and rehabilitation of projectaffected persons, and
*
broad-based implementation of consultation and participation so as to enable affected
people, in particular women, to participate more fully in the development process.
1.9
This project gave the Association an opportunity to assist Coal India in the drafting of its policies
on resettlement and rehabilitation, community development and environmental management. As they
stand now, these policies reflect the requirements of the Bank Group's Operational Directives on Environmental Assessments (0D4.01), Involuntary Resettlement (OD4.30) and Indigenous Peoples (OD4.20).
Perhaps the most significant contribution that arose out of the Association's involvement with this project
is the extensive use of consultative processes with project-affected people in the preparation of the various
action plans.
II. ENVIRONMENTAL AND SOCIAL ISSUES
2.1
Coal production, whether it takes place in opencast or underground mines, requires access to land.
Unlike other industries, the coal industry has little choice in the location of its activities. The development
of coal mines depends on the availability of commercial reserves. In recent years, the social and environmental costs of developing coal reserves have increased steeply, particularly in the densely populated
areas of India's eastern States. Coal India finds it more and more difficult to acquire land for the expansion
of its operations.
2.2
This section briefly describes the main effects of coal mining operations on the environment and
the lives of the people in coal mining areas; the policies and enhancements (Coal India's Corporate
-4-
Environmental Policy, Resettlement and Rehabilitation Policy and the Community Development Policy
[IPDP]) Coal India has adopted to mitigate the adverse effects of its operations and to make them environmentally and socially sustainable; and the application of these policies (through the implementation of
Environmental Action Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans) in
the 25 mines.
Environmental issues
2.3
Box 2.1 provides an overview of the main adverse environmental effects of coal mining, the
underlying causes and Coal India's policy on how to mitigate them. A more detailed description of the
environmental effects of coal mining, the Indian environmental legislation and institutional arrangements
is contained in the Environmental Impact Assessment of the Indian Coal Sector (May 1995).
2.4
ENHANCING COAL INDIA'S CAPACITY TO DEAL WITH ENVIRONMENTAL
ISSUES. Coal India recognizes
that an effective corporate strategy on environmental management would need to embody a strengthening
of Coal India's capacity to (a) design coal mining operations in a way that minimizes adverse impacts on
the environment and (b) ensure that these operations are implemented and operated in line with prevailing
environmental standards, regulations and (mine-specific) conditions contained in approval letters issued
by the Ministry of Environment and Forest (MoEF). This will require additional staff (with appropriate
skills) at the Coal Mine Planning and Design Institute Ltd. (CMPDI) and its regional offices, which
provide design and planning support to subsidiary coal companies. It will also require an increase in the
number of staff with environmental skills at the various management levels of the subsidiary coal companies. An overview of the staffing requirements is provided in Annex 2.1, Box 2.1.2. Coal India has
agreed to review with the Association, by June 30, 1997, a program, satisfactory to the Association, to
strengthen its environmental management capacity and to implement the program over thefollowing
eighteen months.
Environmental Action Plans (EAPs)
2.5
Legislation requiring the preparation of Environmental Management Plans (EMPs) as a precondition for obtaining environmental clearances came into force in India in 1986. For the 17 mines included
under the proposed Coal Sector Rehabilitation Project that were approved after 1986, Coal India has
submitted the EMPs and environmental clearances issued by MoEF (approval letters) to the Association.
For the remaining eight projects, which were approved before 1986, Coal India has voluntarily prepared
EMPs. The approval letters issued by MoEF stipulate the conditions under which mining operations may
be conducted. In addition, the State Pollution Control Boards (SPCBs) issue consent letters regarding
emissions into the air and water. These consent letters are valid between one and three years, after which
Coal India has to apply for renewal. Coal India has confirmed that it will continue to seek extension of
environmental clearancesfrom appropriate authoritiesfor each of the selected 25 mines before expiration of the current clearance and to take all required action to obtain the approvals andfurnish them to
the Association.
2.6
COMPLIANCE
WITH OPERATIONAL
DIRECTIVES.
The EMPs that have been prepared for coal projects
cover most of the subjects required by OD 4.01. (As far as coal mining is concerned, India's environmental
standards are broadly in line with similar standards in other major coal producing countries.) Subjects not
dealt with in the EMPs, such as environmental policy, environmental law, institutional arrangements,
occupational health and safety and public consultation, have been addressed in the Environmental Impact
Assessment of the Indian Coal Sector.
Box 2.1 Environmental
effects of coal mining
Environmental effects
Underlying causes
Air pollution
Drilling, blastingand transportof coal androck
Coal crushingand loadingin handling plant
Soft coke making.
Beehivecoke ovenemissions
Auto emissions
Mine fires
Operationswill be carriedout in such a way as to maintain
acceptableair quality standards.
*
*
*
*
*
Direct dischargeof mine waterto naturalwater courses
Effluentsfrom coal washeries
Coal fines in the washoff from coalstocksand dumps
Effluentsfrom workshopand vehiclewashing areas
Domesticeffluents
Acidity due to presenceof pyritic bandsin coal seams
The quality of mine waterbeforeit is dischargedto the
naturaldrainagechannelswill be monitored.Necessary
sedimentationpondsand watertreatmentplants will be
constructedto ensurethat the waterpumpedout from the
mine complieswith the relevantIndian standards.
Liquid effluents:Washerieswill operateon closedwater
circuit systems.The waterwill be clarified, cleanedand
recirculated.The processwaterwill not be dischargedto
natural drainagewithout propertreatmentto meetthe legal
standards.
Solid waste: The slurry managementsystemin all
washerieswill be organizedto ensurecollectionof fines.
The flow of fines into the naturaldrainagechannelswill be
avoided.
*
*
*
Drilling and blastingof coal and rock
Coal crushingand loading in handlingplant
Operationof heavyearthmoving machinery
Transportvehicles.
Operationswill be carriedout in such a way as to
maintain acceptablenoise standards.
Excavationin opencastminescutting acrossthe water
table
Undergroundmining createscracksin the overlying
strataanddisturbsthe water table
Opencastexcavationsand undergroundextraction
opensacquifersto unrestrictedflow.
The effectsof mining on the hydrologyof the areawill be
closely monitored.If any adverseimpact on the groutid
water is noticed,immediatemitigatingmeasureswill be
taken.In particular,the level of water in the nearbyvillage
wells and its quality will be regularly monitored.
Overburdendumpsfrom opencastmines
Rejectsfrom coal handlingplantsand washeries
Subsidence
due to undergroundmining
Mine design,planningand operationsshouldaim to make
coal mining environmentallysustainable.
Reclamationof minedout areaswill aim to achievea post
mining conditionconsistentwith the proposedterminaluse.
Progressivereclamationwill be carriedout assoonas the
minedout areasbecomedormant.Reclamationtechnology
will be developedto suit Indian ecologicalconditions.
Coal India is committedto minimizing the needsof forest
and agriculturalland and maximizingbackfilling.
Slopesof extemal dumpswill be suitably gradedor
terracedfor plantation.Scientific studieswill be undertaken
for this purpose.
Mixing of rocksand soil during overburdenremoval
Difficulty in segregatingthin soil layer
Runoff from overburdendumpsduring monsoon
Erosionby strongwindsduring dry season
Dischargeof untreatedmine waterand effluentsonto
surfacesoil
Surfaceor undergroundmine fires
Stackingtop soil for extendedperiod beforereuse
Top soil is recognizedas a valuablenatural resource,
especiallyfor the regenerationof regionalecology.
EnvironmentalManagementPlanswill give dueconsideration for its use in regeneratingecology.For effective
bioreclamationof disturbedland,studieswill be carried
out to selectsuitablespeciesfor eachcoalfield and a
sustainablesequenceof reclamationfrom grassto shrubs
to trees.
*
*
*
*
*
Water pollution
*
Noisepollution
Hydrology
Changesin the water
tableand damageto
the acquifer
*
*
Land
Formationof voids,
wasteheaps,overburden
dumps,subsidence,mine
fires, transformationof
agnculturalland, etc.
into residentialand
industrialareas
Soil
Mixing of organicand
inorganicstrata,dump
erosion,contamination
from effluent discharge,
sterilizationfrom mine
fires and stacking.
*
*
*
*
*
*
*
*
*
Source:CoalIndiaLid.
Corporate environmental policy
-6-
2.7
In line with its Corporate Environmental Policy (Annex 2.2), in particular the commitment to selfpolice compliance with environmental laws and regulations, Coal India has reviewed the status of environmental compliance of the selected 25 mines and prepared a program of actions (Environmental Action
Plans [EAPs]), which would bring each mine into full compliance with Indian environmental legislation
and standards as well as with OD 4.01. In preparing these plans, Coal India has made an effort to consult
with all project-affected people, their representatives and local NGOs. The EAPs contain a time-bound
action program for environmental mitigation and performance benchmarks to facilitate the monitoring of
their implementation; they have been included as an annex to the Environmental Impact Assessment of the
Indian Coal Sector.
2.8
MINE EMERGENCY PLANS. Mine emergency plans have been prepared as required by the Coal Mine
Regulations issued in 1957. Coal India has agreed to submit these plans to a team of expertsfor review
by December 31, 1996 and, if required, update these plans in line with their recommendations. Technical assistance for this review will be provided under this project.
2.9
OVERBURDEN DUMP STABILITY.
During the environmental review questions were raised with regard
to the stability of existing overburden dumps, in particular the erosion of slopes during the monsoon and
the difficulty of vegetating steep slopes. Although these are valid environmental concerns, they do not
seem to pose a significant danger to people or structures near the overburden dumps. Coal India informed
the Association that not a single overburden dump has collapsed since it started operations. The overburden dumps at the selected mines have a height of about 70-80 meters and have slopes at the angle of
repose of the overburden material (sandstone) with maximum values slightly greater than 35 degrees. At
the request of the Association, Coal India has contracted the Indian School of Mines to carry out safety
engineering studies for the approximately 150 overburden dumps at the selected 25 mines. These studies
are expected to be completed by August 15, 1996. Coal India has agreed to appoint a panel of experts by
August 15, 1996 that would review thefindings of the safety engineering studies. Coal India has further
agreed to implement the recommendations of this panel. Disbursementsfor remedial action, such as the
regrading of overburden dumps, would need to be based on respective recommendations of the safety
engineering studies and the panel's endorsement of these recommendations. In cases where Coal India
would like to carry out remedial actions on these overburden dumps for other than safety reasons, disbursements would require the Association's approval.
Social issues
2.10
As indicated in para 2.1 above, the location of coal mine is determined by the discovery of commercial coal reserves. In India, many of these reserves have been located in remote areas. Several studies
have shown that the expansion of coal mining into remote areas has a profound impact on people and
communities in these areas. Originally, most of these communities had only limited contact with 'the
modem world.' The livelihood of people was mainly based on subsistence agriculture, hunting and
foraging for forest products. The opening of a coal mine brought:
*
a loss of homestead and land for grazing and forest use;
*
an influx of 'outsiders' (officers and skilled laborers that worked in the coal mine, contractors, small businessmen, government officials);
*
employment opportunities (to the extent that the coal company or other businesses needed
land, they usually offered employment in addition to the purchase price for the land);
*
education and health care (usually provided for those fortunate enough to find employment
with the coal company);
- 7-
*
*
roads (construction of roads made it easier to reach and trade with other communities); and
electricity and water supply (coal companies provided these basic amenities primarily to
their colonies and a few villages next to their mines).
These factors profoundly changed traditional lifestyles and reduced the possibilities of employment based
on traditional skills. Above all these changes affected tribals and women. They were least likely to find
employment in one of the industries that had moved into the area. For a more detailed description of these
effects see Annex 2.3 and the studies listed in Annex 5.1.
2.11
The present day population living around the coal mines has been affected by the mining operations in different ways and to varying degrees. Those losing land and other productive assets on which
their livelihoods depended, such as land owners, tenants, agricultural laborers, etc., may experience a
decline in their living standard. A total of 16,310 persons will be affected by land acquisition during the
implementation of the project. Out of these 9,260 persons are above 18 years of age, and would be rehabilitated under the project.
2.12
Those living in communities surrounding the mines may be experiencing a break-up of social ties,
increased social differentiations and stratification, not by losing assets but by exposure to the changes and
differential access to employment. The communities are in need of interventions that will address the
needs of the poor and other vulnerable groups in order to maintain and improve the quality of life in the
communities. The population living in communities around the mines, and influenced by the mine operations, numbers 185,811 persons in 189 habitations.
Indigenous peLples
2.13
In all the mining areas the local population consists of a mix of scheduled tribes (from 2%-71%),
scheduled caste and caste people living in 'mixed villages.' Of the population around the mines about 30%
are scheduled tribes. About 25% of the project-affected people (3,999 persons) are classified as scheduled
tribes. With the exception of one mine (Jhingurdah), the tribal project-affected population lives in 'mixed'
villages together with non-tribals. All the tribals speak Hindi, except in Orissa, where they speak Oriya,
the local language.
2.14
Most of the tribals in coal mining areas are now integrated into Indian rural society and are
engaged in agriculture on fixed plots (as opposed to slash and bum cultivation) or crafts related to agriculture (blacksmith, carpentry, etc.). All of them have been in contact with mining operations for the past 1530 years. In places like Madhya Pradesh, tribal peoples constitute the majority of the local work force in
coal mines and have done so for more than 20 years. To safeguard the concerns of the tribal communities
and mitigate the impact of the proposed project on those communities in the areas affected by the project,
Coal India has prepared Indigenous Peoples Development Plans.
Mitigating measures
2.15
Coal India is concerned about the growing difficulties in acquiring land for the expansion of its
operations. In responding to this situation, Coal India has strengthened its management of environmental
issues, improved its policy for resettlement and rehabilitation of people affected by its projects and
adopted a community development policy that would ensure that communities in the vicinity of coal
mines benefit more directly from these developments. To implement these policies, Coal India has hired
NGOs or specialized local organizations to prepare (a) Rehabilitation Action Plans for all mines in which
- 8-
the investments under the Coal Sector Rehabilitation Project would affect the livelihood of people and (b)
Indigenous Peoples Development Plans for all mines where these investments would affect the quality of
life of existing communities.
Resettlement and rehabilitation policy
2.16
Box 2.2 provides a synopsis of Coal India's current policy for resettlement and rehabilitation. The
policy, which is reproduced in Annex 2.4, was approved by Coal India's Board on April 4, 1994. It
represents the latest stage in a development brought about by the increased challenges confronting the coal
companies when acquiring land. The development is characterized by several important changes:
*
from recognizing only the loss of land in the compensation process to including the loss of
all economic assets;
*
expansion of the concept of project-affected people to include not only land owners but
anybody whose livelihood would be affected, in particular the landless;
*
from considering land-owning families as the unit of entitlement to considering every adult
individual as the unit of entitlement;
Box 2.2 Mainelementsof Coal India'sresettlementand rehabilitationpolicy
Category ofpersons affected by the project
Compensation and rehabilitation entitlement options
A.(i)
Persons from whom land is acquired,including
tribals cultivating land undertraditional rights.
All landownerswith titles will receivemonetarycompensationfor the land acquiredfrom
them. The value of the land is determined on the basis of prevailinglegal norms. In addition,
a. if feasible, the subsidiaries will offer employment as per their own policies (Package A);
b. project-affected people identify and purchase, with the assistance of the subsidiary,
equivalent replacement land usingtheir land compensation (Package B);
c. the subsidiarywill assistproject-affectedpeople to establish nonfarm self employment
through the provision of infrastructures, petty contracts or formation of cooperatives
(Package C); and
d. if none of the other package are available, project-affected people with less than two acres
would Teceiverehabilitationassistancein the form of a subsistenceallowanceor grantto
be used for productiveinvestmentsprovidedthat their incomefrom other sources does not
exceed Rsl2,000 per annum (Package D).
A.(ii)
Persons whose homestead is acquired
The project-affected person will receive the replacement cost of his
homestead and the structures on it. In addition, the subsidiaries acquiring
his homestead will provide:
a. an altemate house site measuring lOOm per family,
b. assistancein designingthe newhouse,if so desiredby the project-affected person, and
c. a shifting allowanceto cover the full costof transportinghis belongingsto the relocation
site. (PackageE).
A.(iii)
Personswhose land and homesteadare
acquired
Seecompensationfor categoriesA.(i) andA.(ii) above.
B(i)
Sharecroppers, land lessees,
tenants,and day
laborers.
PackageC or jobswith contractors.Contractorswill be persuadedto give
jobs to eligible project-affected people on a preferential basis, where
feasible.
B(ii)
Tribals dependent on forest produce
Package C or jobs with contractors. Contractors will be persuadedto givejobs to eligible
project-affect people on a preferential basis,where feasible. In addition, the subsidiaries will
shift the tribal community asa unit andprovide facilities to meetthe specificneedsof the tribal
community that will allow themto maintaintheir uniquecultural identity.
B(iii)
Package E.
Somrce:Coalldia Ltd.
-9-
*
*
*
*
from using regionalguidelinesas a basis for resettlementand rehabilitationto a corporate
policy;
from providingemploymentwith the coal companyas the major vehicleof rehabilitationto
multiplerehabilitationoptions;
from being mainlyaccountableto the coal companyto beingprimarilyaccountableto the
project-affectedpeople;and
shift from top-downmanagementof resettlementand rehabilitationto a processthat is based
on extensiveconsultationand participationof project-affectedpeople.
Rehabilitation Action Plans
2.17 Coal Indiahas, with the help of NGOs and specializedlocal organizations,preparedRehabilitation
ActionPlans for the 14mines in which peoplewouldbe affectedby the investmentsunder the Coal Sector
RehabilitationProject. Socio-economicbaseline surveysfoundthat 16,310people wouldbe affectedby
theseinvestments.Of these, 9,260personswouldbe entitledto rehabilitationassistance;CoalIndia and
contractorswouldbe expectedto provideemploymentfor 1,711persons(18%)and 7,549persons(82%)
wouldbe entitledto assistancefor self-employment.10,445personswouldhave to be resettled.The Plans
were reviewedby the Associationduring appraisaland foundto representa satisfactorybasis on which
Coal Indiacouldproceedwith the resettlementand rehabilitationof project-affectedpersons.A summary
of the RehabilitationActionPlansis providedin Annex 3.1.
Coal India 's policy for community development
2.18 Coal Indiamaintainsa closerelationshipwith the communitiessurroundingits coal mines.This
relationshipstarts well beforea coal mine is developed.The acquisitionof land and homesteadsand the
provisionof employmentin the coal mine requirethat Coal Indiaexplainsto the peopleliving in these
communitiesits plans aboutthe openingof a mine.The processof landacquisitionbrings the local
authorities,usuallythe DistrictMagistrate,into thepicture. Particularlyin remote areas,minemanagers
are often viewedby the peopleliving in the surroundingcommunitiesas the representativeof Government
authorityand people bring requestsfor assistanceto him. Coal Indiahas a fairlyextensiveprogram
throughwhich it assistscommunitiesin the areasaroundits mines.However,the programis not well
articulated.While mine managerswill usuallyreadily agreeto repairor compensatefor damagesthat can
be attributeddirectlyto miningoperations,such as cracksin housesdue to blastingor subsidence,the
responseto requeststhat haveno direct linkto miningoperationsis largely at the discretionof the mine
manager.
2.19 While most mine managersmakesincereeffortsto maintaingoodrelationshipswith the communities in their leaseholdarea, surveyscarriedout by Coal Indiaand othersshow that mostpeople are quite
dissatisfiedwith livingconditionsin coal mine areas.Evenpeoplewho havefound employmentin the
mine frequentlyvoice complaints.Severalfactorscontributeto the strainsbetweenCoal India's operations
and the surroundingcommunities.Threefactorsstandout:
*
Mostpeople resentthe changesthe developmentof a coal mine has brought with it, the loss
of the traditionalway of life, the influxof outsiders,the noise and pollutionof mining
operations,etc.
*
More importantare the tensionsthat developas a resultof the large differencebetweenthe
earningsof coal minersand what peoplecouldearn in otherjobs. (Coalminers earnabout
eight to ten times the minimumwage and their employmentis secure.)
- 10-
In addition, State Governments often feel that the welfare of these communities, in particular
the provision of services such as health care and basic education, is the responsibility of Coal
India. Coal India has been reluctant to take on these responsibilities. Coal India maintains
that it makes a significant contribution to the revenues of the States in which it operates
through its payments of royalties and cesses and that providing services, such as health care
and basic education, to all communities surrounding its 495 mines would place an unacceptable financial and administrative burden on the company.
2.20
In the context of this project, Coal India has cast its various efforts at providing assistance to the
communities in coal mining areas into a coherent policy statement on community development. (The
original text is reproduced in Annex 2.5.) The aim of this effort is to guide mine managers in their interactions with community leaders and to let the communities know in what ways Coal India is prepared to
assist them. The fact that Coal India issued such a policy underscores the company's commitment to the
development and welfare of these communities.
2.21
The objective of the community development policy is to assist local communities in mining areas
to create, revive and maintain relevant and functioning community assets, institutions and services that can
improve their choices and living standards and maintain and develop traditional ways of living and the
social ties of the communities. The benefits of these development activities are open to all people living in
the mine areas, but will be especially aimed at tribal communities, women and youths. In all-tribal villages
the target group will be the community as a whole. In the case of mixed villages, the policy adopts a
poverty focus that will benefit all weaker communities. The implementation of this policy will be carried
out through groups in the communities. No individual entitlements are envisaged. However, individuals
from the communities will benefit from the program and, as organizers of development activities, they will
play a critical role in the successful implementation of this policy.
Indigenous Peoples Development Plans
2.22
Based on the community development policy, Coal India, with the help of NGOs and specialized
local organizations, prepared Indigenous Peoples Development Plans for 24 of the 25 mines slated for
assistance under the Coal Sector Rehabilitation Project. (In one mine, Ananta, no people are living within
one kilometer of the leasehold of the mine.) Socio-economic baseline surveys were prepared and participatory planning methods were used to identify the critical needs of the communities. Special efforts were
made to ensure that the needs of tribals, other vunerable groups and the poor were addressed. The Plans
were reviewed by the Association during appraisal and found to represent a satisfactory basis on which
Coal India could proceed with the community development efforts in surrounding communities. A summary of the Indigenous Peoples Development Plans is provided in Annex 3.1.
2.23
Implementation of this policy in the communities surrounding the 25 selected mines would be a
pilot effort. It would allow Coal India to gain experience, in particular in the use of NGOs, with the
implementation of this policy. Coal India would be expected to apply the lessons learned from this pilot
effort in other communities. Coal India has agreed to review with the Association, by December 31,
1997, the lessons learnedfrom the implementation of the Rehabilitation Action Plans and the Indigenous Peoples Development Plans in the selected 25 mines.
Consultations and dissemination
2.24
Coal India has a tradition of interacting closely with the people living in its mining areas. This
process starts when Coal India takes a decision to develop a mine and starts the process of land acquisition
-11 -
and the hiring of local labor. Throughout the development of the mine and later on, people employed in
the mines or living in settlements surrounding mines can and do visit mine managers with requests or to
convey concerns. Coal India has issued an instruction to all mine managers of the selected 25 projects to
"issue a ... notice in the local newspaper, preferably in local language" noting a time when "anyone of the
interested project-affected people or local NGOs can meet an officer assigned for this purpose." In its
instruction, Coal India recommends a monthly meeting on a fixed date.
2.25
Consultations with project-affected people took place during the preparation of the social and
environmental action plans. For the preparation of these plans, Coal India hired NGOs with staff that
spoke the local dialects of the affected people.
For the preparation of the Rehabilitation Action Plans:
*
Interviewers visited the household of every project-affected family to prepare the baseline
socioeconomic surveys. This provided an opportunity to discuss with project-affected people
how the proposed project would affect their lives and the various options for rehabilitation.
During the course of these interviews, project-affected people were asked, on the basis of a
detailed questionnaire, about their perceptions regarding land acquisition, compensation, the
benefits of the project displacing them and the relocation site and host community.
*
In addition, most interviewers organized focus group sessions for various groups in Wle
villages, such as women, the landless and tribals. The main purpose of these focus groups
was to ensure a broad-based participation of affected people in the resettlement and rehabilitation process.
In parallel, Coal India conducted a number of workshops on opportunities for self-employment to which it invited representatives of project-affected people, NGOs and rehabilitation
experts. To ensure a wide participation of affected persons, Coal India paid the costs of
travel and subsistence.
For the preparation of the Environmental Action Plans:
*
At each of the mines included under the project, mine managers held meetings with projectaffected people in which they explained the program of mitigating actions that would be
undertaken in the course of implementation of Environmental Action Plans.
For the preparation of the Indigenous Peoples Development Plans:
The most extensive effort of consultation was undertaken during the preparation of these
plans. Coal India hired NGOs to visit all the villages and settlements in the areas surrounding
the selected coal mines. While the consultations focused primarily on ways to improve life in
these communities, it provided interviewers with an opportunity to again convey the purpose
of the project and to seek opinions on how the local communities perceived its effect on their
lives.
2.26
To ensure that this consultative process is indeed effective, Coal India has translated its revised
policy for resettlement and rehabilitation into the local languages of affected people; statements announcing this policy and the opening of public information centers at the headquarters of Coal India and its
subsidiary coal companies have been issued in local newspapers. Coal India has made all information,
such as Environmental Management Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans, available to the public in these information centers.
Environmentaland SocialReviewPanel
2.27
The project incorporates many novel approaches to the rehabilitation of project-affected people,
tribal issues and community development. Coal India agrees with the objectives of OD 4.01, 4.20 and
- 12 -
4.30. Meeting these objectives in the context of this project will require some experimentation. To ensure
that the objectives of the Operational Directives will be achieved, Coal India has agreed to appoint a
panel of social and environmental experts, by October 31, 1996, that will monitor the implementation of
the various action plans. The panel will recommend changes in case it finds that the proposed actions
under the various plans no longer meet the objectives of the Operational Directives.
Poverty category
2.28
One of the project's main objectives is to extend social mitigating actions to communities surrounding the selected 25 coal mines and to improve the access to schools, health care, water supply and
other community facilities, in particular to tribal populations and women. Most of the people living in
these communities are poor. The project contains specific strategies for ensuring access to these facilities
to these two groups. The implementation of Indigenous Peoples Development Plans in almost 200 communities would improve the lives of about 186,000 people, most of them poor. In preparing the Indigenous
Peoples Development Plans, the consultants organized special focus groups with tribals and women to
provide them with an opportunity to make their needs known.
Coal India Ltd.
2.29
The proceeds of the proposed credit would be onlent to Coal India Ltd. (Coal India) and five of its
subsidiary companies, Northem Coalfields Ltd. (NCL), South Eastem Coalfields Ltd. (SECL), Mahandi
Coalfields Ltd. (MCL), Central Coalfields Ltd. (CCL) and Westem Coalfields Ltd. (WCL).
2.30
The company was established in 1975, a few years after the industry had been nationalized. It is a
private limited company, owned by the Government, and is structured as a holding company with eight
subsidiaries: Bharat Coking Coal Ltd. (BCCL), South Eastem Coalfields Ltd., Westem Coalfields Ltd.,
Northem Coalfields Ltd., Eastem Coalfields Ltd. (ECL), Mahanadi Coalfields Ltd. and the Central Mine
Planning and Design Institute Ltd. (CMPDI). All of these except CMPDI are production companies. The
coal mines in Assam and neighboring areas are controlled directly by Coal India. Coal India currently
produces about 225 million tons of coal a year and is, in terms of output and employment, the world's
largest coal company. It has total assets of US$4.8 billion, an equity of US$1.8 billion, and has achieved
modest profits since 1989. It closed the year 1994/95 with a profit of US$120 million.
2.31
EXTERNAL AUDITNG.Coal India's accounts are audited annually by the Comptroller and Auditor
General of India. The audit is normally completed by November, after which the accounts must be submitted to Parliament for approval. Coal India's intemal auditors carry out a continuous audit during the year,
while the Corporate Management Group undertakes management audits on a regular basis. The audit
arrangements are satisfactory. The Government has agreed to submit to the Association the audit report
of the Special Account and the Statement of Expenses, if any, within nine months of the end of the
fiscal year. Coal India has agreed to submit to the Association its audited financial statements (income
statements, fundsflow statement and balance sheet) within nine months of the end of the fiscal year.
- 13 -
III. THE PROJECT AND ITS IMPLEMENTATION
Project objectives and design
3.1
The proposed project would assist Coal India in making coal production more environmentally
and socially sustainable. This objective would be achieved by
*
enhancing Coal India's capacity to deal more effectively with environmental and social
issues;
e
*
implementing appropriate policies for environmental mitigation and resettlement and rehabilitation of people affected by coal projects and providing support to communities, in
particular tribals, living in coal mining areas; and
testing the effectiveness of these policies in the 25 coal mines that have been slated to
receive financial support under the proposed Coal Sector Rehabilitation Project.
Project description
3.2
The proposed project would consist of
X
technical assistance to enhance Coal India's capacity to deal more effectively with the
environmental and social issues of coal mining operations (Capacity building component);
*
the implementation of Environmental Action Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans for the 25 mines slated to receive financial assistance
under the proposed Coal Sector Rehabilitation Project (Investment component); and
*
a review and, if required, implementation of a program of remedial action of the resettlement
and rehabilitation measures taken by Coal India in implementing projects that have received
Bank Group support in the past (Social remedial action component).
3.3
CAPACITY BUILDING COMPONENT.
This component (US$7.3 million equivalent or 8.7% of the total
project cost) would provide funding for studies and training aimed at strengthening Coal India's capacity
at corporate headquarters, subsidiary headquarters, area, and mine levels to deal effectively with environmental and social issues.
3.4
INVESTMENT COMPONENT. The bulk of the financing (US$76.4 million equivalent or 90.9% of the
total project cost) under the proposed project funds would be used for the implementation of Environmental Action Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans for 25 subprojects which have been identified to receive financial support under the Coal Sector Rehabilitation
Project. For a description of the investments for the selected 25 mines see Annex 3.1.
3.5
SOCIAL REMEDIAL ACTION COMPONENT.
This component (US$0.3 million equivalent or 0.4% of the
total project cost) would provide funds for the preparation and implementation of social remedial action
programs for the four coal mine projects which have received Bank support in the past (Dudhichua Coal
Project, which provided financial assistance for the development of the Dudhichua opencast mine, the
Jharia Coking Coal Project, which provided financial assistance for the development of the Jharia Block II
opencast mine and the Pootkee-Bulliary underground mine and the Coal Mining Coal Quality Improvement Project, which provided financial assistance for the expansion of the Gevra opencast mine and the
development of the Sonepur-Bazari opencast mine.) The Bank's support to the development of the
Pootkee-Bulliary mine was canceled, and resettlement under the Sonepur-Bazari mine has yet to commence. (Eastern Coalfields Ltd. has prepared a Resettlement Action Plan for this mine, which has been
reviewed by the Bank and found to be satisfactory.)
- 14-
3.6
Land acquisition for the three remaining opencast projects led to the resettlement of about 18,700
persons. Resettlement of project-affected persons under the Dudhichua and Gevra opencast projects has
been completed; while the resettlement sites for the Jharia coking coal project have been constructed, a
number of people refuse to leave their original homesteads until they have received employment with Coal
India. In line with the Bank's efforts to ensure that the incomes of project affected persons have been
restored under projects that have received financial support from the Bank in the past, Coal India has
agreed (a) to carry out an audit of its resettlement and rehabilitation efforts at the Dudhichua, Jharia
and Gevra opencast mines, (b) to identify project-affected persons whose incomes are below the poverty
line established by the Government, (c) to provide the Association, by June 30, 1997, with an action
program to raise the incomes ofpersons below the poverty line to a level above this line and (d) to
implement this program.
Lessons learned from previous Bank operations
3.7
The Bank has made three loans to the Indian coal industry: in 1984, a loan of US$ 151 million for
the development of the Dudhichua coal mine in Singrauli (Loan 2393-IN); in 1985, a loan of US$248
million for the development of an opencast mine (Block II) and an underground mine (Pootkee-Bulliary)
in the Jharia coalfield (Loan 2498-IN); and in 1987, a loan of US$340 million for the expansion of an
opencast mine (Gevra) in the Korba coalfield, the construction of an opencast mine (Sonepur-Bazari) in
West Bengal and imports of coking coal (Loan 2796-IN). In 1992, the Board approved a credit of US$12
million for a technical assistance project to deal with mine fires in the Jharia coalfield (Credit 2450-IN).
Loan 2498-IN for the Jharia Coking Coal project was closed on December 31, 1992, Loan 2393-IN for the
Dudhichua Coal project on March 31, 1993 and Loan 2796-IN for the Coal Mining Coal Quality Improvement Project on September 30, 1995. Implementation Completion Reports have been prepared for Loan
2393-IN and Loan 2498-IN. Loan 2393-IN has been audited by OED.
3.8
Implementation of the projects supported by these loans has been uneven. While the construction
of the Dudhichua coal mine and the expansion of the Gevra coal mine proceeded without any major
problems and ahead of schedule, the opencast mine in the Jharia coalfield and Sonepur-Bazari were
plagued by land acquisition problems. This delayed not only their implementation and disbursements of
the loans, it also reduced the commercial viability of these projects. One component, the Pootkee-Bulliary
underground mine was canceled after it was discovered that the coal reserves at this location would not
support the original mine design, and the subsidiary coal company was unable to come up with another
commercially viable proposal.
3.9
Several lessons can be drawn from these projects:
*
Technical assistance greatly enhances the chances that a project is implemented properly and
on time. The Dudhichua mine is rightly regarded as one of the most successful mines in the
Singrauli coalfield. This is largely due to the fact that the construction of the mine had,
during its initial years, considerable assistance and guidance from an intemational mining
consultant.
*
Project implementation units need to be strengthened, in particular with regard to skills
required for the implementation of environmental and social action programs.
*
Project-affected people must be informed about a project as soon as it is contemplated. Staff
trained in community relations need to keep the affected people fully informed about a
project and ensure full participation of all socio-economic strata of affected communities.
-
*
*
15 -
If resettlement is involved, the process of consultation with regard to rehabilitation options
and the choice of resettlement sites needs to be substantially completed before start-up of a
project.
Environmental management needs to be built into the design of the coal mine (e.g. plans for
backfilling of overburden and reclamation of land).
Project implementation
3.10
Coal India executes all of its projects through its subsidiary coal companies. The physical implementation of the various environmental and social action plans will be carried out by the managers
('project officers' or 'agents') in charge of the 25 mines. In implementing these plans mine managers
receive support from specialized offices at the 'area' and 'subsidiary' levels. Most of the procurement,
monitoring of project implementation and liason with State and local agencies is done by these specialized
offices. Annex 3.2 shows the detailed organizational arrangements for the implementation of the project.
3.11
To ensure the timely implementation of this project, as well as the Coal Sector Rehabilitation
Project, Coal India has arranged for support from its environmental experts in CMPDI to strengthen the
Environmental Cell; signed a contract with the Indian Institute of Social Welfare and Business Management, which provided a team of social science professionals to support the work and training activities of
the Resettlement and Rehabilitation Cell; and hired a team of 3-4 expatriate consultants to assist the
Procurement Cell.
3.12
Coal India will provide guidance for the implementation of the Environmental Action Plans, the
Indigenous Peoples Development Plans, the Rehabilitation Action Plans and the remedial social action
programs for mines that have received financial support from the Bank in the past. Coal India has established a separate unit for this purpose ('World Bank Projects Division') at its headquarters in Calcutta. The
12 staff of the unit have been grouped into five cells: Environment, Resettlement and Rehabilitation,
Procurement, Finance and Economics and Project Monitoring. The unit is headed by a Chief General
Manager, an executive with more than 25 years experience in all facets of the coal industry.
3.13
Since environmental management is recognized as a separate management function within Coal
India's corporate management structure, appropriate positions have been created at all corporate levels,
(subsidiary headquarters, areas and mines) and staffed with executives that have been trained in Coal
India's Staff College or outside the company. While all of these executives have a background as either
mining or civil engineers, the additional training on environmental management ensured that they are well
qualified to implement environmental mitigation programs.
3.14
Resettlement, rehabilitation and community development was traditionally dealt with by Welfare
Officers posted at each mine. With the shift into opencast mining and the need for more land, the role of
these officers has become increasingly important. Coal India is currently in the process of setting up a
organizational structure for the management of social issues similar to the one for environmental management. While the positions have been created, the staffing with properly trained personnel has yet to be
completed. Since it will not be possible to recruit a social scientist for each of the 25 selected mines
quickly enough to maintain the timetable for implementation of Rehabilitation Action Plans and Indigenous Peoples Development Plans, Coal India will properly train and deploy its Welfare Officers to act as
Community Development/Resettlement and Rehabilitation Officers. If the workload requires, Coal India
will deploy additional officers. Coal India has agreed to post, by December 31, 1996, a full-time Community Development/Resettlement and Rehabilitation Officer at each of the 25 mines to coordinate the
-16-
implementation of the Rehabilitation Action Plans and Indigenous Peoples Development Plans and to
provide these officers with appropriate training in participatory community development.
3.15 Unlikethe implementationof RehabilitationActionPlans,which will be the sole responsibilityof
CoalIndia,the implementationof IndigenousPeoplesDevelopmentPlans will be sharedwith the communities that will ultimatelybenefit from thesePlans.The purposeof this arrangementis to ensurethat the
projectsthat will be eventuallyfinancedunder theseplans have the full supportof the communities;in
addition,the communitieshaveto demonstratethat they are willingto contributeto theseprojects either in
and
cash or kind and are preparedto maintainthem. CoalIndia's CommunityDevelopment/Resettlement
RehabilitationOfficerswill workcloselywith local NGOsand communitybased organizationsin the
implementationof the ResettlementActionPlans and the IndigenousPeoplesDevelopmentPlans. Coal
India has agreed to invite, by September 30, 1996,from qualified NGOs or specialized local organizations, proposals that would assist Coal India in implementing the Resettlement Action Plans and the
Indigenous Peoples Development Plans and to appoint these NGOs or specialized community organizations by December 31, 1996.
3.16 Annex3.2 showsthe majorstages of project implementation.The ProjectImplementationPlan
containsthe detailedimplementationschedulesfor the environmentaland socialaction plans. The Bank's
staff estimatesthat CoalIndia willbe able to implementall of these plans withinfive years. The projectis
expectedto be completedby December31, 2000.All EnvironmentalActionPlans,IndigenousPeoples
DevelopmentPlans and RehabilitationActionPlanshave beenreviewedby the Bank's staff. Government
approvals,to the extent that theyare requiredfor the implementationof theseplans, have been obtained
and the biddingdocumentsfor major itemshavebeen prepared.
Detailedimplementationschedulesfor the environmental
3.17 PROJECTMONITORINGAND SUPERVISION.
and socialaction plans have beenprepared.Theyare containedin the ProjectImplementationPlan and
summarizedin Annex 3.2. To monitorthe progressof their implementation,Coal Indiahas set up a
ProjectMonitoringCell in its WorldBank ProjectsDivision.Themain tool of this Cell will be a computerized projectmanagementsystemwhich has been developedby the ProjectMonitoringCell. It will
permit the staff of this cell to followup on implementationactivitieson a dailybasis and to discover
potential delays early on. Coal India has agreed to provide the Association with quarterly progress
reports in a standardformat that would track the physical implementation of the various project compo-
nents, procurement and disbursement Thesereportswouldalso quantifyand compareprogresswith
agreedperformanceindicatorsand highlightany emergingproblemsand constraints.The principalaim of
the quarterlyreports is to providethe Associationwith a clear indicationwhethera specificmine is in full
compliancewith the agreed implementationschedulefor the socialand environmentalaction plans. In
addition, Coal India has agreed to prepare a Midterm Review ofproject progress not later than December 31, 1998.
3.18 The aboveproject reviewand reportingarrangementsare designedto facilitateproject supervision
by the Association.Supportfrom the Associationwould consistof a main supervisionmissionannually,
supportedby one or two brief, mid-yearvisits;technicaladvice based on the experiencewith the implementationof similarprojectsin othercountries;and the necessaryclearances.Supervisionby the Association wouldbe based on the reviewof AnnualProjectImplementationPlans. (See SupervisionSchedule,
Annex3.2.) In view of the large numberof miningprojectsspreadover five States,it wouldbe physically
impossibleto carry out regularreviewsof project implementationin the field. CoalIndia has agreed to
arrange a 'Project Monitoring Consultancy' by August 31, 1996, through a contract with a team of
experienced consultants, satisfactory the the Association, that would assist the Project Monitoring Cell
- 17 -
in the periodic review and assessment of the implementation of the social and environmental action
plans in line with annual supervision plans acceptable to the Association and to maintain the above
arrangements for the duration of the project. The consultant team would visit each mine project at least
once during each quarter. Its reports would be made available to the Project Monitoring Cell, the Govemment and the Association. The costs of the consultancy would be reimbursable under the proposed credit.
Project cost
3.19
The project is estimated to cost US$84.0 million equivalent, including physical and price contingencies and taxes of US$4.1 million equivalent (Table 3.1). The respective amounts for the implementation of Environmental Action Plans, Indigenous Peoples Development Plans, Rehabilitation Action Plans,
project monitoring and social remedial action are shown in Table 3.2. Because of the nature of the project,
only 10.3% of the estimated project cost will be in foreign exchange. The proposed credit of US$63.0
million equivalent would finance all of the foreign exchange cost and about 72% of the local cost.
3.20
Estimated project costs are expressed in mid-1995/96 prices which have been derived from recent
contracts involving similar services and equipment. Physical contingencies of 10% of the base cost have
Table 3.1 Project cost estimate
Cost components
Foreign
Local
Total
Foreign
Rupees million
Land
93.7
Civil works
Equipment, materials and vehicles
Technical assistancc
Institution building
Policysupport
Total
USi million
93.7
2.7
2.7
41.7
41.7
Foreign
exchange
Percent
1,447.0
1,447.0
245.1
204.7
449.8
7.1
5.9
13.0
54.5
20.8
17.4
3.5
0.0
208.2
13.9
3.5
190.9
229.0
31.2
6.9
190.9
0.6
0.5
0.1
0.0
6.0
0.4
0.1
5.5
6.6
0.9
0.2
5.5
9.1
55.6
50.0
0.0
333.1
312.3
13.9
6.9
333.1
312.3
13.9
6.9
9.6
9.0
0.4
0.2
9.6
9.0
0.4
0.2
Miscellaneous
Incrementaloperatingcosts
Other resettlement benefits
Social remedial action
Base cost (1996)*
Local
265.9
2,286.7
2,552.6
7.7
65.9
73.6
10.4
24.3
10.4
211.7
114.5
236.0
124.9
0.7
0.3
6.1
3.3
6.8
3.6
10.3
8.3
Total project cost
300.6
2,612.9
2,913.5
8.7
75.3
84.0
10.3
Financing
300.6
2,612.9
2,913.5
8.7
75.3
84.0
10.3
Physical contingencies
Price contingencies
requirements
Note: Base cost include taxes and duties of UsS4. 1 million equivalent
Source: Bank staff estimates
- 18 -
Table 3.2 Cost estimate for project components
USS million
Item
Project cost'
IDA financed
Rehabilitation Action Plans
Environmental Action Plans
Project monitoring
7.1
5.1
71.0
0.5
0.3
3.3
4.8
54.1
0.5
0.3
Total
84.0
63.0
* Project cost includes phsical and price contingencies snd taxes and duties.
Source: Bank staffestimates
been included for in the total project cost. For components, suchs as community development infrastructure, technical reclamation and effluent treatment plants, where there is a fairly high likelihood that actual
requirements and expenditures could exceed Coal India's current estimates, correspondingly higher
physical contingencies were taken into account. Local price contingencies are based on projections of
local inflation of 8.5% in 1996, 8% in 1997, 7.5% in 1998, 7% in 1999 and 6% in 2000. Foreign price
contingencies have been estimated on the basis of the following projected rates of international inflation:
3.3% in 1996, 2.3% in 1997, 2.5% in 1998, 2.5% in 1999 and 2.5% in 2000. Taxes and customs duties on
imports were estimated on the basis of average rates provided by Coal India.
Financing plan
3.21
The financing plan for the proposed project, which has been agreed with the Government and Coal
India, is summarized in Table 3.3. The proposed IDA credit of US$63.0 million equivalent would finance
75% of the total project cost (79% exclusive of taxes and duties estimated at US$4.1 million). Coal India's
contribution to the project would be US$21.0 million.
3.22
The proposed credit would be made available to the Government on standard terms and conditions
and onlent to Coal India under standard terms and conditions for loans to commercial enterprises. Normally, these carry an interest rate of 16% per annum with a repayment period of ten years and a grace
period of one year. The Government would bear the foreign exchange risk. Coal India has agreed to set
up and maintain a system of separate accounts, satisfactory to the Association for the funds that would
be disbursed under this project
Table 3.3 Financing plan
USS million
Source offinance
IDA
Coal India
Total
Source: Bankstaffestimates
Foreign cost
8.7
8.7
Local cost
54.3
21.0
75.3
Total cost
63.0
21.0
84.0
Percent shares
75
25
100
- 19 -
Status of project preparation
3.23
Coal India's World Bank Projects Cell has reviewed the technical feasibility, equipment specifications, investment requirements, procurement scheduling and disbursement profiles of the 25 mine projects
for which Coal India has requested financial support under the Coal Sector Rehabilitation Project. Environmental Action Plans, Indigenous Peoples Development Plans and Rehabilitation Action Plans for these
25 mines have been reviewed by the Association and found to be in line with the Operational Directives of
the Bank Group. The terms of reference for most technical assistance components have been drafted
(Annex 2.9). An Environmental Impact Assessment of the Indian Coal Sector and a Summary of this
Assessment have been prepared by Coal India. These documents have been reviewed by the Association
and found to be satisfactory. Coal India has signed contracts for the preparation of the safety engineering
studies of about 150 overburden dumps. These studies are expected to be completed by August 15, 1996.
Procurement
3.24
Table 3.4 summarizes the procurement arrangements for this project. The proposed credit will
finance civil works contracts (US$43.6 million equivalent), the purchase of equipment and materials
(US$11.5 million equivalent) and vehicles (US$0.3 million equivalent), technical assistance including
training, studies and NGO contracts (US$7.3 million equivalent) and social remedial action (US$0.3
Table 3.4 Summary of procurement arrangements'
USS million
ProJect components
ICB
Procurement method
NCB
N.B.F.5
Land
2.94
Civil works
Equipmcntand materials
10.12
(8.02)
47.23
(42.48)
4.42
(3.50)
Total
Other
2.94
1.40
(1.12)
48.63
(43.60)
14.54
(11.52)
0.33
(0.27)
0.33
(0.27)
0.94
(0.94)
0.29
(0.29)
6.11
(6.11)
0.94
(0.94)
0.29
(0.29)
6.11
(6.11)
Vehicles
Technical assistance
Policy support
Miscellaneous
Operating costs, other resettlement benefits
9.95
Total
(IDA Credit)
0.27
(0.27)
10.12
(8.02)
51.65
(45.98)
Figures in parentheses are the respective amounts financed by the IDA credit.
b Notfinancedby the Association
Source: Coal IndiaLtd.
9.34
(9.00)
9.95
0.27
(0.27)
12.89
84.00
(63.00)
- 20 -
million equivalent). All procurement under the IDA credit will follow the Bank's guidelines for procurement and carried out on the basis of standard bidding documents. The following paragraphs summarize the
procurement arrangements that will be followed for major procurement categories.
3.25
LAND. The estimated project cost for this category (US$2.9 million) includes the compensation of
the purchase of land and homesteads Coal India needs to acquire for continued production of coal in the 25
selected mines and associated resettlement sites. Coal India would finance the cost of land acquisition.
3.26
CIVIL
categories:
(a)
WORKS
(US$48.6 million). Civil works contracts under this project fall into two broad
WORKS CONTRACTS.
These include contracts for such items as the construction of
primary school buildings, primary health care facilities or water supply systems in villages as
part of the implementation of Rehabilitation Action Plans or Indigenous Peoples Development Plans. Because of the remote locations of these villages, procurement would be carried
out through direct contracting with non-government or community based organizations or on
the basis of quotations solicited from at least three qualified contractors. Each of these
contracts will have a value of US$15,000 or less; and the combined value of these contracts
would be about US$ 1.4 million.
(b) CONTRACTS WHOSE VALUE EXCEEDS us$15,000. Roughly half of the contracts for civil works
are valued at US$15,000-200,000. Their combined value is approximately US$15.2 million.
In addition, there are about 60 contracts with a combined value of US$32.0 million, whose
individual value exceeds US$200,000. Most of the civil works contracts in this group are for
items such as the construction of dust suppression arrangements, effluent treatment systems,
surface water drainage channels, settling ponds, roads and the reshaping and biological
reclamation of overburden dumps. Although some contracts may be as high as US$3.5
inillion, the locations of these civil works contracts are spread over too wide a geographical
area to be of interest to intemational bidders. Thus, all civil works contracts whose value
exceeds US$15,000 would be awarded on the basis of National Competitive Bidding (NCB)
procedures satisfactory to the Association. International contractors would be eligible to
participate. Although no ICB works contracts are expected, any works contract exceeding
US$3.5 million would be subject to ICB procedures.
SMALL
3.27
EQUIPMENT,
MATERIALS AND VEHICLES (US$14.9 million). Under this category, 90 contracts (with a
combined value of US$0.6 million) are valued at US$15,000 or less and about 40 contracts (with a combined value of US$2.0 million) are valued at US$15,000-US$200,000. Most of these contracts in this latter
category are for environmental monitoring equipment, analytical laboratories, fire fighting, and dust
suppression. These contracts would be awarded on the basis of NCB procedures acceptable to the Association. In addition, there will be about 30 contracts (with a combined value of US$12.0 million) valued at
more than US$200,000. Most of these contracts are for the procurement of water sprinklers. They will be
grouped together into a single package and procured under ICB procedures satisfactory to the Association.
3.28
The proposed project would also provide funds for the procurement of vans equipped for environmental monitoring, jeeps and motorcycles that would enable community development officers to supervise
the implementation of Resettlement Action Plans and Indigenous Peoples Development Plans. Individual
contracts for vehicles would not exceed US$13,000 and their combined value would be about US$0.3
million. The vehicles would be procured under national shopping procedures, because procurement would
involve a variety of types of vehicles spread over a five-year period.
- 21 -
3.29
The Bank's standard procurement documents would be used for all procurement under ICB and
NCB. For a comparison of bids from domestic and foreign suppliers in the case of ICB, qualified domestic
bidders would be allowed a margin of preference in accordance with the provisions of paras. 2.54 and 2.55
of the Bank's procurement guidelines (January 1995).
3.30
TECHNICAL ASSISTANCE, TRAINING AND STUDIES (US$7.3 million). Expenditures under this category
would be for support of the implementation of the project (US$6.1 million), policy support (US$0.3
million) and institutional capacity building (US$0.9 million). Expenditures in this category include
contracts with NGOs (US$1.8 million) for assistance in the implementation of Rehabilitation Action Plans
and Indigenous Peoples Development Plans. There are about 50 contracts included in this category. The
individual costs of four of these contracts will exceed US$250,000. Five contracts are projected to cost
between US$100,000 and US$250,000. The remaining contracts are all valued at less than US$100,000.
The terms and conditions of contracts valued above US$100,000 would be guided by the "Guidelines for
the Use of Consultants by World Bank Borrowers and the World Bank as Executing Agency" (August
1981). The remaining contracts are too small and spread over the five-year implementation period of the
project to be of any interest to international consultants.
3.31
NGO PARTICIPATION
(US$ 1.8 million). In order to encourage comnunity participation and ensure
that local communities benefit to the maximum extent from the implementation of Resettlement Action
Plans and Indigenous Peoples Development Plans, Coal India will give preference to bidders that employ
local people and local NGOs. Since neither local bidders nor NGOs would have adequate financial backing to submit the necessary financial guarantees with their bids, Coal India and the Association have
agreed to modify the respective requirements of the procurement guidelines.
3.32
(US$10.3 million). This category of expenditures covers the following:
(US$9.6 million). Most of the expenditures under this
category are for additional environmental monitoring and the implementation assistance for
Resettlement Action Plans and Indigenous Peoples Development Plans by specialized staff
Coal India will hire for this purpose. All these activities would be financed by Coal India.
OTHER RESETTLEMENT
BENEFITS (US$0.4 million). This includes expenditures for the compensation for homesteads acquired by Coal India under the proposed Coal Sector Rehabilitation
Project, subsistence payments to eligible project-affected persons and the cost of transferring
eligible affected people to resettlement sites. All of these activities would be financed by
Coal India.
SOCIAL REMEDIAL ACTION (US$ 0.3 million). As indicated in para 3.6 above, Coal India would
provide the Association with an action program that would ensure that the incomes of all
project-affected persons under coal projects that have received financial support from the
Bank in the past would exceed the poverty level.
MISCELLANEOUS
(a)
(b)
(C)
INCREMENTAL OPERATING COSTS
3.33
REVIEW OF CONTRACTS.
Goods contracts valued at US$200,000 and more and civil works contracts
valued at US$500,000 or more would be subject to prior review by the Association. In addition, the first
ten civil works contracts with a value of US$200,000-500,000 would be subject to prior review. Contracts
for goods valued at less than US$200,000 would be subject to post review. Civil works valued below
US$15.,000 would be subject to a random post review. Contracts for technical assistance valued at
US$100,000 or more that are scheduled for signing during the first year of project implementation have
been submitted to the Association for review before negotiations. Consulting services with firms valued at
US$100,000 or more and with individuals valued at US$50,000 or more would be subject to prior review.
In sum, about 50% of all contracts would be subject to prior review by the Association.
- 22 -
Table 3.5 Phasing of disbursements
USS million
Annual
Cumulative
Year I
FY97
Year 2
FY98
Year 3
FY99
Year 4
FYOO
Year 5
FYOI
4.1
4.1
18.2
22.3
18.6
40.9
11.7
52.6
10.4
63.0
Source: Bankstaffprojecons
Disbursements
3.34
The phasing of the projected disbursements of the proposed IDA credit is shown in detail in
Annex 3.2 and summarized in Table 3.5. Disbursements are based on the assumption that the credit will
become effective by the end of the fourth quarter of FY96. While the projected disbursement period of
five years is substantially shorter than would be indicated with the Bank's experience with the implementation of environmental and social components in energy projects, the advanced state of project preparation makes this a realistic assessment. Coal India has worked closely with the Association to minimize the
risk of implementation delays and thus delays in the disbursements of the IDA credit. Based on the
projected schedule of expenditures a closing date for the IDA credit of June 30, 2001 has been established.
3.35
To facilitate disbursements a Special Account would be established with an authorized allocation
of US$3.0 million, which is equivalent to about three months of average disbursements. Disbursements
against civil works contracts valued at US$500,000 and above, the first ten civil works contracts valued at
US$200,000-500,000 and contracts for goods valued at US$200,000 and above would be fully documented. For individual consultants the limit would be US$50,000; for consulting firms, the limit would be
US$100,000. For all other expenditures, disbursement could be against the Statement of Expenditures.
Documentation for Statements of Expenditures would be retained by Coal India and made available to
IDA staff for review during supervision. The IDA credit would be disbursed against the categories outlined in Table 3.6.
Table 3.6 Allocation of the proposed IDA credit
Category
USS million
Percentage of expendituresfinanced
Civil works
41.6
90% of expenditures
Equipment, vehicles and
matenals
10.7
100% of foreign expenditures
100% of local ex-factory costs
80% of other local costs
Consultant services(including
NGOs), training and studies
6.6
Unallocated
4.1
Total
Souren:Bank#aff
63.0
100% of expenditures
- 23 -
IV. FINANCLkL AND ECONOMIC ANALYSIS
Project benefits
4.1
While the Environmental and Social Mitigation Project has significant social and environmental
benefits that would justify the implementation of this project on its own merits, quantification of these
benefits would need to be based on highly subjective judgements. In view of the close linkage between
this and the proposed Coal Sector Rehabilitation Project, quantification of the financial and economic
benefits of the latter would justify both projects. The following paragraphs will first describe the social
and environmental benefits of the Environmental and Social Mitigation Project, and then provide a
summary of the financial and economic analysis of the Coal Sector Rehabilitation Project.
Social and environmental benefits
Social benefits
4.2
The implementation of the Environmental and Social Mitigation Project will safeguard the rehabilitation of 9,260 people and the proper resettlement of about 10,000 people. In terms of the number of
people affected, the implementation of the Indigenous Peoples Development Plans is more important and
will improve the lives of about 186,000 people, of which 56,900 would be tribals. On its own Coal India
will need to extend the benefits of its resettlement and rehabilitation policy and its community development policy to much larger number of people. It is simply not possible to limit these benefits in large
coalfields to small isolated groups of people. However, it is also clear that without the involvement of the
Association and the Bank, these benefits would not materialize.
Environmental benefits
4.3
Implementation of the Environmental Action Plans will have a significant impact on Coal India's
management of land and water resources, as well as its control of air and noise pollution.
With regard to land management:
*
Revegetation of degraded land will help generate fuel, timber and other forest products,
which will help tribals and reduce the pressure on existing forests.
*
Large scale plantation after proper preparation of surface land will reduce soil erosion and
consequent soil losses.
*
Improved plantation coverage and recontouring of the land will substantially reduce the
siltation of rivers due to erosion in the catchment areas of coal mines.
*
Replanted and revegetated areas could later be handed over to State Forest Departments in
lieu of their requirement of compensatory afforestation. This will reduce the cost of the coal
company, which include the cost of land acquisition and compensatory afforestation, if forest
land is used for mining purposes.
*
Proper land reclamation and adequate plantation will also provide effective barriers to noise
and air pollution between active mining areas and settlements.
*
Implementation of large-scale plantation programs in the selected 25 mines will upgrade the
general ecology of the surrounding areas.
*
Regrading of overburden dumps located close to settlements will contribute to the safety of
the people living there.
- 24 -
With regard to water management:
*
The emphasis on recycling and the reuse of industrial water will reduce the water requirements from natural sources. This will make more water available to rural and tribal areas.
*
The implementation of measures to improve water quality will eliminate or, at least reduce,
any adverse effects on the groundwater regime and substantially increase the availability of
potable groundwater.
*
Improvements in the quality of the water of the natural water system through controls on
water pollution in mining operations, will help the normal development and growth of
aquatics flora and fauna.
With regard to noise and air pollution control:
*
Strict adherence to air quality standards will improve living conditions in the settlement
surrounding the mining areas and should also contribute to a reduction of respiratory diseases.
*
Construction of noise barriers will improve the living conditions in settlements close to
mining operations.
Financial and economic analysis
4.4.
As mentioned in para 4.1, the social and environmental programs that will be implemented under
the proposed project do not lend themselves to unambigous financial and economic analysis. Apart from
the description of the benefits of these programs (para 4.3) and their costs (para 3.19), the financial and
economic justification for implementing these programs rests on the economic viability of the associated
investments under the Coal Sector Rehabilitation Project. The results of these analyses are contained in
Annex 4.1. They show that the investments for each of the 25 mines included in the program carry financial and economic rates of return in excess of 16% per annum. From a financial and economic perspective
the investments under the Coal Sector Rehabilitation Project are robust. None of the investments showed a
rate below 16% per annum after taking into account multiple and project-specific risks using Monte-Carlo
simulations.
Project risks
4.5
COAL INDIA'S COMMITMENT TO THE PROJECT. The main risk the project faces would be a waning of
Coal India's commitment to its implementation, in case Bank support for the Coal Sector Rehabilitation
Project fails to materialize within a reasonable time horizon. Coal India has followed the Association's
advice in enhancing its environmental and social policies. It is doubtful that Coal India would have done
so without the prospects of Bank support for its investment and reform programs. In light of the pressures
Coal India faces from people living in coal mining areas, the company is committed to making coal
production more environmentally and socially sustainable. However, it is unlikely that Coal India would
implement all the enhancements, in particular those with regard to participation of project-affected people,
rehabilitation of the landless and community development, without support under the Coal Sector Rehabilitation Project.
4.6
IMPLEMENTATION OF COAL INDIA'S RESETTLEMENT AND REHABILITATION POLICY.
As indicatedin
Chapter II, Coal India has traditionally provided employment to project-affected families as part of the
compensation for land acquired from them. The extremely high wages offered by Coal India and the
security of employment (and the fact that jobs could be frequently passed on to a family member upon
retirement) made this a highly desirable form of compensation. With the cut in budgetary support, Coal
- 25 -
Indiahad to drasticallyreduceits offersof employment.CoalIndia's revisedpolicyfor resettlementand
rehabilitationplacesthereforegreateremphasison assistingproject-affectedpeople in developingopportunities for self-employment.
4.7
Sincethe revisedpolicy was adoptedin April 1994severallessonshavebeen learned:Trainingin
itself for self employmentis not enough,evenwhen it is supportedby loans or grants.The majorityof
project-affectedpersons are farmersor agriculturallaborers,and the transitionintoa new profession
requiresa considerableamountof follow-upassistance.To reducepressuresfor employment,Coal India is
keen to see this policy succeedand is workingcloselywith NGOsthat can offer assistancein this respect.
To learn from the experiencesof others, CoalIndia organizeda workshopon incomegenerationand selfemploymentin rural Eastem Indiain March 1995that broughttogetherNGOs, Govenmment
agenciesand
rural banks. In additionto providinga platformfor a dialoguewith the NGO communityabout this
project, it providedCoal Indiawith an idea of the scope of experienceand resourcesNGOs could offer. To
enhancethe chancesof makingself-employmenta viable altemativeto employmentwith the coal companies, Coal Indiawill continueto seek the closeparticipationof NGOs in the implementationof this policy.
4.8
MAINTENANCE OF INFRASTRUCTURE IN COMMUNITIES. Both Coal India's revised Resettlementand
RehabilitationPolicyand the CommunityDevelopmentPolicyembodiedin the IndigenousPeoples
DevelopmentPlan requirethat Coal Indiaprovidesextensiveinfrastructurefacilities,suchas schools,
clinics,roads,wells, tanks,piped water,street lighting,etc. Coal Indiahas providedsuch facilitiesin the
past. Experiencehas shownthat the peoplewho were to benefit from thesefacilitiesmade no effortsto
maintainthem. Coal Indiafound it too expensiveto use its own(expensive)manpowerto maintainthese
facilities.The result was that manyof these facilitiesfell quicklyinto disrepair.This has beenpointed out
in numerousreviews of resettlementsites. To safeguardagainstthis risk, Coal Indiais providingsupport
to VillageCouncils(under its CommunityDevelopmentPolicy)to build up the commitmentand capacity
in the affected communitiesto maintainthese facilities.
V. AGREEMENTSAND RECOMMENDATION
5.01
The followingagreementshavebeen reached:
(a) With the Govermmentthat it will:
(i)
submitto the Associationthe audit reportof the Special Accountand the Statementof
Expenses,if any, withinnine monthsof the end of the fiscalyear (para2.31); and
(ii) onlendthe fundsfromthe IDA credit to Coal IndiaLtd. under standardtermsand
conditionsfor loans to commercialenterprises.(para3.22).
(b) With Coal Indiathat it will:
(i)
reviewwith the Association,by June 30, 1997,a program,satisfactoryto the Association, to strengthenits environmentalmanagementcapacityand to implementthe
programover the followingeighteenmonths (para2.4);
(ii) seek extensionof environmentalclearancesfromappropriateauthoritiesfor each of
the selected25 minesbeforeexpirationof the currentclearanceand to take all requiredactionto obtainthe approvalsand furnishthemto the Association.(para2.5);
(iii) submitthe mine emergencyplans for the 25 selectedmines,by December31, 1996,to
an intemationalexpertteam for reviewand, if required,updatethese plans in linewith
their recommendations(para2.8);
- 26 -
(i")
appoint a panel of experts by August 15, 1996 that would review the findings of the
safety engineering studies and implement the recommendations of the panel (para
2.9);
(v)
review with the Association, by December 31, 1997, the lessons learned from the
implementation of the Rehabilitation Action Plans and the Indigenous Peoples Development Plans in the selected 25 mines (para 2.23);
(vi) appoint by October 31, 1996 a Panel of Social and Environmental Experts that will
monitor the implementation of the Environmental Action Plans, Rehabilitation Action
Plans and Indigenous Peoples Development Plans (para 2.27);
(vii) submit to the Association its audited financial statements (income statements, funds
flow statement and balance sheet) within nine months of the end of the fiscal year
(para 2.31);
(viii) carry out an audit of its resettlement and rehabilitation efforts at the Dudhichua, Jharia
and Gevra opencast mines, identify project-affected persons whose incomes are below
the poverty line established by the Government, provide the Association, by June 30,
1997, with an action program to raise the incomes of persons below the poverty line
to a level above this line and implement this program (para 3.6);
(ix) post, by December 31, 1996, a full-time Community Development/Resettlement and
Rehabilitation Officer at each of the 25 mines to coordinate the implementation of the
Rehabilitation Action Plans and Indigenous Peoples Development Plans and to
provide these officers with appropriate training in participatory community development (para 3.14);
(x)
invite, by September 30, 1996, from qualified NGOs or specialized local organizations, proposals that would assist Coal India in implementing the Resettlement Action
Plans and the Indigenous Peoples Development Plans and to appoint these NGOs or
specialized community organizations by December 31, 1996 (para 3.15);
(xi) provide the Association with quarterly progress reports in a standard format that
would track the physical implementation of the various project components, procurement and disbursement (para 3.17);
(xii) carry out a Midterm Review of the project not later than December 31, 1998, and
thereafter implement its recommendations (para 3.17);
(xiii) hire the services of a consultant, by August 31, 1996, for the duration of the implementation of the project to review the implementation of the Environmental Action
Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans in line
with annual supervision plans acceptable to the Association (para 3.18); and
(xiv) set up and maintain a system of separate accounts, satisfactory to the Association, at
Coal India headquarters, the subsidiary coal companies and the mines implementing
the action plans for the funds that would be disbursed under this project (para 3.22).
5.02
Disbursement condition:
(i) Disbursements for remedial action, such as the regrading of overburden dumps, would need
to be based on respective recommendations of the safety engineering studies and the panel's
endorsement of these recommendations. (para 2.9).
5.03
On the basis of the project justification and the agreements reached during negotiations, the
proposed project would be suitable for an IDA credit of SDR 43.3 million (US$63.0 million equivalent) to
the Government of India on standard terms with 35 years maturity.
- 27 Annex 2.1
Page 1 of 14
Annex 2.1 ENVIRONMENTAL ASPECTS
Introduction
1.
The steep increase in coal production brought with it the potential for significant adverse impacts
on the natural and human environments. These impacts are most obvious on large opencast projects and
include the sheer scale of physical site disturbance and disruption of existing land use; generation of fine,
airborne dust particles from haul road traffic, blasting, excavation and material transfer; equipment noise;
degradation of surface water and groundwater quality resulting from the discharge of mine water; erosion
of disturbed land surfaces; leachates from waste materials; and hydrological modifications due to groundwater drawdown and the disruption of surface drainage patterns. Underground mining, though less intrusive, can result in water quality degradation through the discharge of contaminated mine water, the disruption of groundwater and soil moisture regimes, smoke pollution and surface caving from underground
fires, and surface instability and subsidence due to the collapse of mined-out workings. All of these
impacts can be at least mitigated, and in some cases avoided all together, by appropriate mine planning
and design, responsive operational practice, and the timely, effective reclamation of land disturbances.
2.
Over the past two decades, the Central and State Governments have established a legal and
institutional regime for the protection of the environment and the management of adverse environmental
impacts. These government initiatives have occurred against a backdrop of growing concerns about
environmental and social issues by an increasingly knowledgeable public. Environmental and social
NGOs have been organized in India with strong links to international organizations. Like other industrial
sectors, the coal industry will face growing opposition to further expansion in many areas, unless it can
demonstrate that it can carry out its operations in an environmentally and socially responsible manner.
Environmental legislation and regulations
Legislation
3.
The conditions for environmental management and protection in all industrial activities are
established by four statutes of the Government of India: The Water (Prevention and Control of Pollution)
Act (1974); The Forest (Conservation) Act (1980), The Air (Prevention and Control of Pollution) Act
(1981), and The Environmental (Protection) Act (1986). The most important provisions of these acts may
be summarized as follows:
*
THE WATER (PREVENTION AND CONTROL OF POLLUTION) ACT AND THE AIR (PREVENTION AND
CONTROL OF POLLUTION) ACT.
The most importantprovisionof thesetwo acts is to establish,
and define the respective powers and functions of, Central and State Pollution Control
Boards. These acts prohibit waste emissions or discharges without written consent from, and
regulate payment of fees to, the State Pollution Control Boards; establish procedures for
enforcement of environmental standards, letters of consent and other orders or directives of
the Boards; and prescribe penalties for non-compliance.
*
THE ENVIRONMENTAL (PROTECTION) ACT.
This act provideslegalauthority for environmental
protection in areas not covered by other acts and establishes the authority for the Ministry of
Environment and Forests to assume a lead role in long-term environmental management and
short-term response to environmental emergencies. The power of the Ministry to issue
directions includes "the power to direct the closure, prohibition, or regulation of any indus-
- 28 Annex 2.1
Page 2 of 14
try, operation or process, or the stoppage or regulation of the supply of electricity, water or
any other service". The measures assumed by the Central Government under this act now
include: nationwide waste management planning; establishing objectives for the quality of
the environment; laying down standards for all sources of pollution emissions and discharges; designation of areas where certain types of industries may not operate or may
operate only under specified restrictions; development of environmental emergency response
and contingency planning procedures; hazardous substance regulations; environmental
protection and waste management research; inspections of waste generating facilities and the
issuance of pollution prevention, control and abatement orders; establishment or "recognition" of environmental laboratories; and the preparation of environmental management
manuals, codes and guidelines. Power is provided to require waste-generating operations to
submit information on their environmental management performance; for example, all
industrial facilities operating under environmental clearances or letters of consent from the
State Pollution Control Boards must file semi-annual environmental audit reports. The act
prescribes penalties for non-compliance with standards and orders at levels considerably
higher than the previous statutes, and gives the Central Government power to delegate its
authority and functions as it considers necessary, subject to conditions, to any officer, State
Government or other authority.
THE FOREST (CONSERVATION) ACT. The act states that no Govemment authority shall permit
the removal land from a forest reserve or use forest land for a nonforest purpose without
prior approval of the Central Government. In practice approval to occupy forest land for
mining is usually included in the environmental clearance for a project and entails offsite
compensatory reforestation of an equal area of forest land or one and one half times the area
of degraded land.
Regulations
4.
Both the air and water pollution control acts contain provisions for the establishment of regulations, however the more recent Environment (Protection) Act largely subsumes their regulatory role. The
regulations that exist under the two earlier acts relate primarily to the operating rules and procedures of the
Central and State Pollution Control Boards. Regulations have been established under the new act relating
to pollution discharge and emission standards, the process for environmental impact assessment and the
issuance of environmental clearances. Where environmental quality objectives and pollution standards
have not been formally established by regulation, the Indian Standards, which do not have force of law in
themselves, provide interim guidance. Current regulations of greatest relevance to the coal sector can be
summarized as follows:
5.
AMBIENT OBJECTIVES FOR AIR AND WATER QUALITY AND NOISE. Ambientenvironmentalobjectivesare
normally set to protect public health and sensitive natural resources such as fisheries, vegetation and soil
productivity. Ambient environment objectives become a basis for assessing and managing the cumulative
impacts of point-source discharges or emissions, which are usually regulated by permits or consent letters,
and non-point or dispersed pollution sources that are not usually amenable to direct regulation.
6.
Ambient objectives have been established for drinking water quality (Indian Standard 10500,
1983), air quality (Central Pollution Control Board), and noise (Environment Protection Rules, 1986,
Schedule III). These parameters are generally consistent with standards elsewhere in the world under
- 29
-
Annex 2.1
Page 3 of 14
similar conditions and, if appropriately enforced, should adequately protect public health and the environment. Possible exceptions to this general consistency with world standards relate to suspended particulates
in air and nitrates in water. It is not considered desirable to maintain the maximum permitted suspended
particulate level in air on a regular basis. For this reason, many jurisdictions are now posing their objectives on both a maximum 24hr and an annual average basis. Given normal seasonal climatic variations
these standards are normally achievable with good management. It should be noted here that the industrial
air quality standard applies only to the general operational zone on coal mines, not to the intensive working area where standards are set by the Director General of Mine Safety under the Coal Mines Regulations. These regulations allow suspended particulate levels up to 3000ug/m3 depending on silica content.
Recent concerns about the possible effects of nitrates in drinking water on the unborn fetus have prompted
some jurisdictions to reduce acceptable ambient nitrate levels to the 10 to 20mg/l range. This parameter is
of special concern to the mining industry because of the possibility of nitrates from uncombusted explosives leaching to surface and ground water from overburden dumps. Fortunately the problem is easily
manageable through plastic drillhole linings or switching to slurry-gel explosives during wet conditions.
7.
DISCHARGE AND EMISSION STANDARDS. This type of standard is usually applicable only to discrete,
point-sources of pollution, the typical 'stacks and pipes.' The great majority of air quality problems on a
minesite result from mobile and dispersed pollution sources (vehicles on roads, blasting and material
transfer points) and are much more amenable to regulation through the application of ambient standards.
Waste water discharge standards, established under Schedule II of the Environment (Protection) Rules
1986 and subsequent Gazetted Notice No. 120 of May 19, 1993, apply to a number of points on mine
sites: decants from settling ponds associated with minewater collection systems; wastewater from equipment maintenance and storage facilities; and discharges from domestic sewage treatment systems. These
standards are generally consistent with those used in similar conditions in other jurisdictions. The environmental protection rules require State Pollution Control Boards to take into account the assimilative capacity of receiving-waters at seasonal low flows "so that the quality of the intended use of the receiving
waters is not affected". Where such quality is likely to be affected, discharge may not be allowed.
8.
LAND RECLAMATION STANDARDS. Beyond standard statements in the environmental clearance that
the ultimate slopes of overburden dumps should be maintained at a maximum of 28 degrees, topsoil shall
be conserved for reclamation use, and land reclamation shall be carried out "to make it compatible with
the pre-mining land use pattern", there are no quantitative standards that define successful reclamation.
Presently, reclamation focuses on wood plantations. It must also be noted that the present system - where
Coal India must pay the cost of acquiring private lands, fund compensatory reforestation for lost forest
lands, carTyout reclamation and, after all this, surrender the land back to the Government at no cost provides no incentive at all, at present coal prices, to the company to do much more than carry out revegetation.
The environmental impact assessment process
9.
Environmental impact assessment (EIA) in various forms has been applied to development
projects in India since 1982. Gazetted Notice No. 72 of January 28, 1993 provided the first consolidated
direction on the EIA process. It has subsequently been modified by a further notification dated January 27,
1994 and amended on May 4, 1994. Lead agencies for the process are the Ministry of Environment and
Forests in the Central Government and the Departrnent of Environment and State Pollution Control Board
at the State level. The notice stipulates that no project prescribed in the schedules shall be undertaken
without environmental clearance from the appropriate level of government. Such clearance shall be based
- 30 Annex 2.1
Page 4 of 14
on an approved Environmental Management Plan (EMP) containing a quantitative (baseline) description
of the existing environment, a project description, an analysis of potential environmental impacts and an
acceptable plan for the management of those impacts. The 1994 notice modifies the schedule of projects
requiring clearance from the Central Government.
10.
Under the 1993 notice only coal mining projects requiring environmental clearance from the
Central Government needed to prepare Environment Management Plans. In practice that meant projects
that involved either the conversion of forest land or a total capital investment greater than Rs5OOmillion.
The 1994 notice now requires Central Government environmental clearance for all mining projects "with
leases more than 5ha". To its credit Coal India recognized from the outset that the investment/forest
land criteria in the original schedule were too narrow and has voluntarily prepared Environmental
Management Plans for all new projects and expansions. Environmental Action Plans are being prepared for projects that predated the environmental regulations (as staff resources permit). In addition to the
environmental clearance, the 1994 notice requires mining projects, pithead thermal power stations, and
three other categories of industry to obtain site clearances which "shall be granted for a sanctioned capacity and shall be valid for a period of five years for commencing.. .mining". Though not explicitly stated in
the notice, it is assumed that application for, and granting of, site clearance would precede the preparation
of project feasibility studies, the Environmental Management Plan and the application for environmental
clearance.
11.
DISSEMINATION.
The process also makes provision for project review by a committee of experts and
for public hearings if the lead agency feels these measures are necessary. The 1993 notice provides
unlimited public access to project feasibility summaries, Environmental Management Plans, recommendations of the expert committee and the conditions under which environmental clearance was to be given.
12.
CONSULTATIONS.
The evaluation of the Environmental Management Plan must be completed within
three months of its submission to the Government, at which time either a deficiency statement is given to
the proponent or an environmental clearance is issued, subject to such terms and conditions as the lead
agency deems necessary. In adjudicating the clearance and formulating the tenns and conditions, the lead
agency must consult with affected people. Where required, forest clearance is issued subject to the identification of land and the provision of funds for compensatory planting.
13.
AUDITS. Regular audits of compliance with environmental clearances must be undertaken and
reports of audits may be made available to the public by the lead agency, subject to the public interest.
14.
ENVIRONMENTAL
APPROVALS. All projects, whether subject to environmental clearance or not, must
obtain Consent Letters from the SPCB for any discharges and emissions to the environment.
Policy and procedures for compliance and enforcement
15.
The various acts and regulations provide a sound basis for compliance and enforcement activities.
However, it seems that the performance of the environmental agencies in this regard has been somewhat
haphazard and inconsistent. There appear to be a number of reasons for this. State Departments of Environment and Pollution Control Boards have limited resources to undertake regular, independent compliance monitoring to verify implementation of environmental conditions and to check the monitoring data
submitted by companies. The letters of environmental clearance and pollution consent seldom provide a
practical definition of the degree of noncompliance that will elicit an enforcement response. Finally, the
enforcement actions available are limited (essentially the options are to do nothing, shut an operation
- 31 -
Annex2.1
Page 5 of 14
downor take the operatorto court).Courtaction is usuallyso long and drawn-outthat it does not provide
effectiveenvironmentalprotection.The lack of enforcementcapabilitydescribedabovehas led to a
backlogof noncompliancein CoalIndia's environmentalperformance.Coal Indiais committedto
strengthenits environmentalmanagementcapabilityto enable 'self policing' of environmentallawsand
regulations,independentof the Governments'enforcementcapabilities.In addition,the backlogof noncompliancewill be correctedin the targeted25 opencastminesof this project.
The environmentalinstitutionalset up
CentralGovernmentinstitutions
16.
The two majororganizationsconcernedwith environmentalmanagementin the CentralGovernment are the Ministry of Environmentand Forestsand the CentralPollutionControlBoard. The Ministry
is primarilyresponsiblefor: nationalenvironmentalplanning;comprehensiveenvironmentalobjectives,
standardsand codes of practice;and administeringthe EIA and environmentalclearanceprocesses,
particularlyfor projectsrequiringnationalapproval.The majorfunctionsof the Board are to advisethe
Ministryon pollutionmatters,includingstandards;to provideguidanceand technicalassistanceto State
Boards;to carryout nationalresearchprogramson pollutionproblemsand abatementtechnologies;to
collectand publishnationalstatisticson pollution;and to preparemanuals,codesand guides relatingto the
prevention,controlor abatementof pollution.
State Government institutions
17.
The relevantenvironmentalagenciesof State Governmentsincludethe Departmentof Environment,the Departmentof Forestsand the StatePollutionControlBoard.The Departmentof Environmentis
primarilyresponsiblefor administeringthe environmentalassessmentand clearanceprocessfor projects
under statejurisdiction,providingfield adviceto the CentralMinistryon the assessmentof projectsunder
the centralEIA process,and undertakingauditsof compliancewith environmentalclearancesfor all
projects.The primaryroles of the Departmentof Forestsin relationto environmentalmanagementin the
coal sectorare to identifylands for compensatoryreplanting,to advisethe CentralMinistryon applications for forest conversion,and to undertakereplantingof miningdisturbanceswith fundsprovidedby the
coal companies.The primaryfunctionsof the StatePollutionControlBoardsare to to issue consentletters
and collectfees for all pollutiondischargesand emissionsto the environmentand to inspectand monitor
waste-generatingfacilitiesfor compliancewith the conditionsof the lettersof consentand, where necessary, issue ordersfor the prevention,controlor abatementof pollution.The institutionalsetup of Central
and State Governmentenvironmentalagenciesshownin Figure2.1.1.
RegionalPlanningAuthorities
18.
In threecoalfields(Singrauli,Korbaand Talcher),Centraland State GovernmentshaveestablishedSpecialArea DevelopmentAuthoritiesto coordinateregionaldevelopmentactivities.These authorities compriserepresentativesof Centraland StateGovernmentagencies,Coal India,NationalThermal
Power Corporation,IndianRailways,private industrialcorporationsand localpublic groups.From the
perspectiveof environmentaland socialimpactmanagement,they havethe potentialto foster coordinated
regionalenvironmentalqualitymonitoringnetworks,integratedenvironmentalmanagementand pollution
abatementprograms,the assemblyof regionalbanks of non-forestedand degradedlands for compensatory
afforestation,and the cooperativedeliveryof resettlementand communityassistanceprograms.
- 32 Annex 2.1
Page 6 of 14
Figure 2.1.1 Institutional arrangements and information flows on environmental issues
MOEF: Central Government
CPCB: Central Office
Responsibilities:
* national environmental planning
* friming comprehensiveenvironmental objectives
* standardsand codesof practice
* administrationof impactassessmentand
enDirDnmental clearances
* interactionwith internationalbodies
* development of national centrefor environmental
protection
• tecthnologytransfer
* boostig natonal R&D effo
Functions:
(Ministry of Environment and Forest)
MOEF:
Regional
(Central Pollution Control Board)
Office
(Ministryof Environment and Forest)
*
.a...
.
providingguidanceand technicalassistanceto State
Pollution
..
ControlBoards(SPCBs)
* carryingout nationalresearch
programson pollution
problemsand abatementtechnologies
..
...
:
*
.
:
(State Pollution Control Board)
Functions:
the State's Departmentof theEnvironment
on pollutionmatters
*advising
_
*issuing
.j...L
o of
e
a
_______________________________I
I
MEiSaeoenet I
controlor abatent of pollution
4
*oadministration
I
~~~~~~~~~~~~~~~~~
|
Auit R
.FA
<
IoI
assessmentofprojectsunderits jurisdiction
* undertakingauditsofprojectsforcompliancewith
environmentalclearances
letters o consent
* collechtngfes r all dischargesand emissions
* inspectingand monitoringwaste-generatingfacilities
compfiancewith condttons of lettersofconsent
*
( hrnecessary)
issuingorders
for prevention,
:
+ BZ
*zi
*-:- ..I.
*
ofenvironmentalassessmentand
clearanceprocess foprojects
underSta
*provision
offiel aviceto CetralMO
EFonI.....
-
afor
a
HIIi;
(Department of the Environmnent)
Responsibilities:
_
SPCB:
............
* conductingsite visits to projectsapplyingfor
environmentalclearance
* monitoringenvdronmentalcompliance
collecting and publishing national statistics on
pollution
preparingmanuals,codesand guidelinesrelatingto
prevention,controland abatementof pollution
..........
Responsibilities:
advising MOEF on pollution matters induding
standards
w
: the
diurisdictarges
air
.....................
SA
Re,ional Office
X
IE:
t*
:
: ....Functions:
t*
conducing site inspectionsof industriesin the
region
.
o~~~~~~~~~~~I
Annual
Report~
-
in
prcssn
(taePoluin
air
aplcain
onrl
wattowatereand
fo:osnordshre
oad
- 33 -
Annex 2.1
Page 7 of 14
Coal India's organisational structure for environmental management
19.
The primary responsibility for the implementation of Coal India's corporate environmental policy
(see Annex 2.2) will remain with Coal India headquarters in Calcutta, the coal producing subsidiaries and
CMPDI. In order to be able to address environmental issues more effectively, CMPDI, which provides
expert services for mine planning and design, environment and research, established in January 1993 an
Institute of Environment (IOE) at its head office at Ranchi and regional environmental cells at its regional
offices (see Figure 2.1.2). To safeguard the effective implementation of its environmental policy, Coal
India will carry out, as part of the proposed project, a review of its capacity to deal effectively with
environmental issues. This review will focus in particular on the need for changes in the organisational
structure, the skills and staffing requirements.
20.
Within the subsidiaries, environmental responsibilities are assigned to an Environmental Cell at
the company level, responsible for monitoring program implementation and liaison with State Governments; an environmental cell at the area level, responsible for program coordination; and individual
Environmental Departments on each project, responsible for program implementation. The area level is
felt to be necessary because of the great distances between separate coalfields. NCL is the only company
that does not organize at the area level because all of its nine mines are concentrated in the Singrauli area.
Few companies as yet have environmental cells and departments that are completely operational and
staffed with the full compliment of environmental professionals. At negotiations, agreement will be sought
with Coal India on a timetable for making environmental cells and departments fully operation so as to
safeguard the implementation of the Environmental Action Plans.
21.
CMPDI is an independent corporation within Coal India, providing scientific, planning and design
services to the parent company and its subsidiaries. CMPDI headquarters is responsible for coordination of
the regional offices, national liaison with Central Government agencies, and identifying and pursuing
priorities for research and development in all aspects of coal mining, including environmental management. CMPDI's regional offices are responsible for all aspects of mine planning - from exploration to
government approvals and project implementation. They have the prime responsibility to ensure that
environmental considerations are incorporated in mine planning from the outset; generate Environmental
Management Plans, either in-house or through the administration of private consultant contracts; and
coordinate activities related to obtaining environmental clearances and letters of consent.
22.
Presently there is considerable variation among the subsidiaries in the implementation of Environmental Management Plans and, particularly, in the quality of environmental monitoring programs. This
appears due, in large part, to the lack of any entity at the corporate level with the overall responsibility for
the consistency and quality of environmental programs. To deal with this issue Coal India has set up an
Environmental Cell at CMPDI with responsibility for corporate policy, monitoring the implementation,
and assessing the performance of environmental programs. Because of its reporting relationship to a Board
which includes Government officers and private experts and its strong scientific focus, CMPDI may be in
a position to play a strong objective role in improving the consistency and quality of environmental
monitoring and in undertaking independent performance audits and to introduce training programs.
Strengthening of Coal India 's environmental organization
23.
Recognizing Coal India's deficiencies in environmental management capability, CMPDI developed an environmental management plan in parallel with this project development. This plan includes a
definition of responsibilities of the environmental cells and a staffing program (Box 2.1.2).
- 34 Annex 2.1
Page 8 of 14
Figure 2.1.2 Coal India's environmental and safety organization
|
_ |
Director I
Technical
Chief General Manager
Mines Safety
|
.
World Bank Projecs
|
|DY Chief MiningEnginee
, |
Environment
alManage
| Safety
Dieor
Tecncl
5 Projects
|
|
.
1''''''''-'''''''''''''''''''''-'''''''1
Generd Manal
Envirounnent & Safety
Planning
....................................
Environmental
|dLaboratory
|
M
Forest OfficerO
Area
|
Sapling
Staff
Director
Regional Istitte
G.neral
AreaMana
Director (Technicl)
I/C hnstitute of Envirorment
Environmet
_
Manager
iGeneral
Planing & ProiecS
t AreaCivilEnginer
W
+
Director
Mana
--------------
E
.nagerEnvironmental
Cell
Mining
nvHironmentl
~~~nagEnvronmenta
M
F
Aroect Civil Engineer
Aroect Survey
c Civil
Soumce:
CoalIndia
Saet
-
& En
Areaer Saet
l
------
<i
Ofie
Sampler
...........
v
Note:Solid lines indicate reporting arrangements. Broken lines irndicateinformation flows
- 35 Annex 2.1
Page 9 of 14
24.
During project preparation, Coal India and the Bank's project team concluded that the environmental management organization may be required to cover a wider agenda than that envisaged by CMPDI.
To make sure that the full range of environmental responsibilities could be covered by the environmental
organization, the technical assistance component will include an institutional strengthening and implementation assistance study. The Terms of Reference for this study are described in Annex 2.8.
Measures to improve coal quality
25.
A major environmental concem is the steady decline (at about 2% a year) of thermal coal quality.
Box 2.1.3 highlights the main causes of this decline in coal quality and proposes a number of remedial
steps.
Box 2.1.1 Coal India'senvironmentalorganisation
Corporate environmental cell
The Corporate Environmental Cell, to be located at Coal India headquarters in Calcutta, will have the following major responsibilities:
*
*
*
Drafting of Coal India's corporate environmental policy.
Liaison (jointly with the CMPDI Institute of Environment) with central govemment agencies, such as the Ministry of
Environment and Forests, the Ministry of Coal and the Central Pollution Control Board, on environmental policy issues that
affect the entire coal industry.
Submission of quarterly reports to senior management about the progress in the implementation of environmeiital
management and action plans with assistance from the Institute of Environment, Ranchi.
Environmental cells at subsidiary headquarters
Coal India has established environmental cells at the headquarters of each of its seven coal producing subsidiaries. Their main functions and
responsibilities are to:
*
*
*
*
*
*
*
Develop strategies to implement the corporate policy.
Formulate Environmental Action Plans for projects without EMPs with area and CMPDI's regional environmental cells.
Assist the regional CMPDI environmental cells in the preparation of environmental management plans (EMP).
Coordinate, with assistance from regional CMPDI environmental cel1,activities related to obtaining forest and environmental clearances and Letters of Consent from central and state agencies.
Monitor the implementation of environmental management and action plans as well as compliance with environmental
regulations throughout the company, and submit quarterly reports to the corporate environmental cell.
Ensure company-wide consistency in environmental monitoring programs. Seek the assistance of CMPDI's regional
environmental cells in this effort.
Coordinate with State Pollution Control Boards and Special Area Development Authorities (where they exist), implementation of mine-specific environmental management plans and compliance with regional environmental management plsans.
Interact and consult with local public and NGOs on environmental issues.
Area-specific environmental cells
Coal India is also in the process of setting up environmental cells at area levels. Their main functions and responsibilities are:
*
*
*
*
*
*
*
*
Preparation and supervision of the implementation of multi-year environmental (operational) action plans.
Scheduling of heavy equipment dedicated to mine reclamation.
Management of afforestation and revegetation programmes, including seed procurement and plant propagation facilities.
Setting-up of permanent ambient and project monitoring stations. Decisions on the location of these stations will be made
in close cooperation with the CMPDI's regional environmental cells and the SPCB in orderto ensure the most effective siting
of these monitoring stations.
Carrying out of regular environmental compliance inspections and "spot-checks" with portable instruments.
Ensuring that project staff respond to environmental problems and incidences of noncompliance.
Compiling and submission of the half yearly implementation reports required by the Ministry of Environment and Forests
for projects, where this is required.
Interact regularly with the environmental cells at the subsidiary company level and the mine level .
- 36 Annex 2.1
Page 10 of 14
Box 2.1.1 (cont'd)
Environmental cells at the mine
Coal India is in the process of establishing environmental cells at the mines. Their main functions and responsibilities are:
*
*
*
*
Implementation of the project-specific EMP and multi-year (operational) environmental action plans.
Application for and processing of consent applications for air emissions and water discharges.
Ensuring project compliance with conditions of the environmental clearance and pollution Letters of Consent.
Supervision of on-site physical and biological reclamation activities.
Institute of Environment at CMPDI headquarters
In addition to the environmental cells that Coal India has or is in the process of setting up, Coal India has also established in January 1993
an Institute of Environinent at CMPDI's headquarters in Ranchi. The main functions of this institute are to:
*
*
*
*
*
*
Ensure consistency and quality of services among CMPDI's regional environmental cells. (CMPDI has or will establish a
regional environmental cell in each of the seven coal producing companies).
Cooperate with the corporate environmental cell on national environmental policy issues with Central Government agencies
including the MOEF, CPCB and SPCB.
Identify programme priorities for research and development on aspects of environmental management and occupational
health in the coal industry and undertake those programmes approved by the CMPDI's Board of Directors.
Establish sampling and analytical standards and procedures for operational project monitoring;
Carry out regular monitoring for CCL mines and analysis requested by subsidiaries, as a reference laboratory for Coal India,
Carry out regular quality controUquality assurance tests on laboratories at the regional environmental cells.
CMPDI's regional environmental cells
CMPDI's regional environmental cells will:
*
*
*
*
*
*
*
*
Prepare mine designs that facilitate the mitigation of adverse environmental impacts, the implementation of environmental
rules, regulations and conditions contained in consent letters as well as the most cost-effective reclamation option.
Prepare Environmental Management Plans in consultation with company and area environmental cells.
Assist company environmental cells in the preparation of Environmental Action Plans for projects/mines without an EMP.
Assist company environmental cells in obtaining environmental clearances and Letters of Consent.
Organise, in consultation with the area environmental cell, all routine ambient environmental monitoring for air, water and
laboratory analysis in accordance with standards laid down by MOEF/CPCB/SPCB.
Assist the area environmental cells in the preparation of the regular (half-yearly) compliance reports required by the MOEF.
Assist the company environmental cell in preparing its annual compliance and implementation report to corporate
headquarters by compiling and evaluating ambient monitoring data and
Assist Institute of Environment at CMPDI (HQ) in completing quarterly monitoring reports for corporate cell.
- 37 Annex 2.1
Page 11 of 14
Box 2.1.2 Coal India's program for strenghening of its environmental management capabilities
Cadre descriptions
ENVIRONMENTAL
MANAGEMENT
PLANNERS.
Planning a coal mine project involves inputs from various engineers and technical personnel
(geologists, mine planners, electrical and civil engineers, mine safety engineers environmental engineers, etc.). Environmental considerations
must be built into the planning process of a project. Experienced environmental, mining, civil and geological engineers have backgrounds that
will facilitate their training as environmental management planners. Coal India believes that executives with experience in coal mining will be
best suited for this job after training and exposure. Their primary responsibilities will be to ensure that project designs are 'environmentally
benign', integrate production and environmental management objectives and facilitate the intended reclamation goals. Training will be provided
at Coal India's facilities in Ranchi and on site.
POLLUTION CONTROL ENGINEERS.
Without appropriate mitigating measures, mining operations can result in extensive air and water pollution.
Control measures for preventing and mitigating pollution of these two vital natural resources is required. These engineers can be drawn from
PHE, civil or environmental disciplines. Exposure, formal training and association with pollution control agencies will develop this cadre.
EXECUTIVE
CHEMISTS.
This executive will manage the environment laboratories being established in CMPDI's regional environmental cells.
ENVIRONMENTAL
MONITORING
ENGINEERS. Their main task is to manage teams that carry out field sampling to inonitoring
air, water and noise
standards. The engineers can be from any suitableengineering discipline, trained forthree months in environmental engineering courses suitable
for the coal industry and then can be deputed for this field sampling jobs.
RECLAMATION
ECOLOGISTS.
The reclamation of mine-out areas and overburden dumps need expertise and sustained efforts of dedicated
personnel. Scientists with backgrounds in botany, plantation, agriculture, forestry or ecology will be suited to carry out this exercise. These
scientists will be supported by landscaping engineers for designing suitable land uses.
SUPPORT STAFF. The environmental specialists mentioned above will need techincal and nontechnical support staff. The technical staff will
assist in planning, laboratory analysis, field sampling, plant nursery development, etc. Nontechnical staff will carry out assistance in the field,
laboratory and office.
CURRENT
STAFFING
LEVELS
AND PROJECTED
FIVE YEAR
REQUIREMENTS. The tablesonthe followingpagesummarize
the currentstaffinglevels
and projected staffing requirements for environmental cells. The executive staff grades referred to in the tables are as follows:
M3
M2
Ml
E5
E4
E3
E2
El
Chief General Manager (E9)
Chief Engineer (E8)/Chief Mining Engineer/Additional Chief
Deputy Chief Mining Engineer (E6)
Superintending Engineer, Superintendent of Mines, etc.
Senior Executive Engineer
Assistant Engineer, Assistant Mine Manager, etc.
Assistant Engineer, Mine Under Manager (graduate entry level)
Apprentice Engineer
Staff training and technical assistance
The build up oftechnical expertise foreffectivecompliance with environmental provisions requires training ofthe involved personnel. There
are four clear training facets leading to achievement of the objectives:
*
*
*
*
environmental planning to be integrated with the project report preparation,
execution of mitigational measures for controlling pollution,
monitoring and evaluation of planning and execution of the mitigational measures, and
modifying the planning and execution guidelines for better results, if required.
To make environmental personnel responsive, responsible and committed to environmental safeguards, training on these facets is required.
Both classroom training and on site training on demonstration projects with local and foreign experts will be provided. The framing of training
schemes and effective implementation is a specialised job for which consultants (from within and outside the country) will be engaged.
Programs for immediate training needs are:
*
*
*
*
*
*
environmental and social impact appreciation short-courses for senior management on environmental regulations, objectives and standards, and management's responsibilities in the management of environmental and social impacts;
design, construction and operation of surface water control and treatment schemes for engineers at project/area levels;
design, construction and recontouring of overburden dump systems for stability and eventual reclamation;
Reclamation plant species selection and revegetation techniques;
effective design and operation of air and water quality and noise monitoring networks; and
environmental inspection and compliance auditing techniques.
- 38 -
Annex 2.1
Page12of 14
Box 2.1.2 (cont'd)
Five-Year Plan of environmental facilities and equipment needs
Buildings andfacilities
OMCE ACCOMMODATIONS AND STORAGEBULDINGS. Office accommodation for cells from Coal India's corporate cell to subproject cells are
housed in the main offices ofthe units. No separate office is called forexcept perhaps at the project level. Provision is beingmade for construction
of a 300m2office at each subproject. This is expected to required two years (i.e. 1996-99) to complete.
ENVIRONMENTAL LABORATORY FACILITIES. Coal India has decided that CMPDI will develop Laboratoryfacilities under their Regional Institute
to supply effective environmental monitoring to the subprojects. Five laboratories will be established, two in SECL and one each in MCL, WCL
and NCL. The environmental laboratories at Institute of Environmental (CMPDI- HQ) will cater to CCL and will render specialist services to
the five regional laboratories being set up in the Regional Institutes.
PLANT PROPAGATIONAND NURSERY FACILITIES.Each area will develop a nursery facility for plant propagation. Generally, the sapplings are
purchased from State forest departments and large scale facilities are not required.
ENVIRONMENTAL MONITORING AND LABORATORYANALYSIS. The CMPDI regional laboratories to be opened for the four companies will be
provided with laboratory instruments and other infrastructure. This will be over and above the field kits to be used by area level cells in their
own areas for surprise and spot checks.
EARTHMOVINGANDLANDRECLAMATION.
The machinery or contractual expenses for land reclamation have been included in the 5 year EAPs
for subprojects.
Summary of executive requirements
Executives
Corporate
Company
headquarters
Area
Project
CMPDI
headquarters
ChiefGM
-
-
-
-
I
GM (Env)
1
5
-
-
1
Chief/AddlChiefEngr
-
20
I
5
5
2
3
-
-
20
-
Env EngrE4
-
5
-
-
Env Engr. E/E,
Forestry Officcr
Secy (CGM/GM)
I
5
5
-
20
Dy.Chief Engr(Env)
SE (Env)/Lab
Civil Engr E3
-
I
Under Manager
-
-
-
Total
4
30
40
Regional
CMPDI
Total
5
10
I
7
5
27
19
-
-
20
-
4
9
5
-
10
I
-
2
36
6
S
-
-
7
-
-
7
27
20
24
145
Source: Coal India Lid.
Summary of executive placement
Executdves
Currently
inplace
Requiredby
by 2000
96-97
Placementschedule
97-98
98-99
Chief GM
I
I
-
GM(Env)
7
7
-
4
16
10
1
21
1
5
5
27
19
20
9
36
6
8
1
7
3
8
2
-
-
15
3
3
2
7
-
-
-
40
4
Chief/Addl.Chief Engr.
Dy.ChiefEngr(Env)
SE (Env-Lab)
Civil Engr E,
Env Engr, E4
EnvEngr,E2/E,
Forestry Officer
Secyto COM/GM
Under Manager
Total
Souwce:Coal India Ltd.
I1
94
145
-
-
-
-
99-00
-
- 39Annex 2.1
Page 13 of 14
Box 2.1.3 Improvement of coal quality
1. THE DECUNE IN THE QUALITY OF INDIAN THERMAL COAL. Coal India's main thrust has traditionally been towards the production of a higher
tonnage of coal, many times at the expense of quality. Indian thermal coal, in general, is of inherently low quality. Its structure contains finely
disseminated clays and shale which cannot be removed by low cost, gravity-basedwashing techniques. More expensive beneficiation techniques
are required to improve its quality. The boilers of Indian power stations, however, are specifically designed to bum Indian coals. The boilers
could operatr efficiently with low quality coal, only if its quality is consistent.
2. The siigle Indian criterion of thernal coal quality, its 'useful heat value (UHV),' is decreasing at the rate of about 2% per year. However,
the purpose of this annex is not to comment on the inherent quality of Indian coal, but to discuss ways of improving the quality of the product
delivered to powerstations. This would result inhigher efficiency and availability, a reduced requirement forrail transport and reduced pollution.
3. The quality of Indian thermal coal is measured in terms of its 'useful heat value' in kcal/kg, claiming to be a relative index of the commercial
value in marketing coal, although it is not physically measured as such but is determined by applying the more easily analytically determined
ash and moisture content percentages to an empirical formula designed by the Central Fuel Research Institute in Dhanbad. This formula is taken
as representative of all Indian thermal coals regardless of theirarca of origin. The system has no parallel outside India and would not be accepted
by foreign power companies since it has no direct correlation to delivered heat.
4. PRICINGsTRucruRE.The present pricing structure of Indian thermal coal is based on a series of steps from lower to higher quality; each step
spans a wide variation in the UHV of the coal. In the case of the more plentiful, lower quality coals, this can mean that a single price per ton
applies to coals with as much as a 10% variation in ash content. Careless handling and inclusion of extraneous matter in the product can often
be advantageous to a mine, since it can increase output tonnage without incurring a penalty on the price per ton. At the same time, the costs of
transporting the extraneous matter, handling it, crushing it, buming it, and disposing of the resultant ash are bome not by the mining companies,
but by the powergenerating companies since the coal is sold on an ex-mine basis. There is a strong practical case for the revision of the 'stepped'
nature of the pricing structure to a simple price gradient which would reward every effort expended towards production of higher and consistent
quality coal.
5. Presentpotential for beneficiationofcoaltransported more than500km is 80million tons peryear(which requires an investment ofUSS250
million. Based on 2% improvement in powerplant availability, about 19million tons per year of C02 (andassociated pollution) can be reduced
from 300 million tons (the total present emissions from coal fired power plants in India). About 950 MW of power generation capacity can be
saved by improving plant availability. The value of the saved generation capacity is about US$1.1 billion. The merits to global warming, by
GEF criteria, would have the value of US$380 million ( pricing the reduced emissions at USS20/ton). By year 2010 the potential for coal
beneficiation could double alongside with all other benefits mentioned above.
6. INCLUSIONOF EXTRANEOUS MATrER. The code of practice laid down by Coal India's technical subsidiary, CMPDI in Ranchi, requires noncoal intercalationmorethan onemeterthick to be excavatedseparately anddisposedof in the backfilling of the mine. This means that, inpractice,
anything of a meter thickness or less is incorporated into the product sent to the power plant. In addition, the standard excavator, used in Coal
India's mines, is a traditional rope-operated shovel loading into trucks. The geometry of its operating action - a curving, upsweeping motion
- is not conducive to selective excavation. In most intemational opencast operations, hydraulic excavators are mandated for the excavation of
coal and rope operated shovels on overburden.
7. However, it is quite practical for Coal India to separate non-coal intercalation of 20cm or more, given the right equipment and an effective
incentive to do so. In contrast, in British Coal opencast mining, the separation and discard of any non-coal intercalation of 5cm or more is
mandated.
A working practice which should be discontinued is the blasting of coal seams that contain significant
intercalation ofnon-coal matteracceptable by CMPDI's dimensional standards. Blasting effectively makes separation impossible since the noncoal mnatteris mixed inextricably with the coal itself. Should the coal be too difficult to excavate without prior breaking-up, it should be broken
by bulldozers equipped with standard multi-tined rippers; equipment which Coal India's subsidiaries do not presently possess.
8. INAPPROPRIATE WORICIN PRACTicFs.
9. Two areas contributing additional extraneous matter to the product are at the top and bottom of the coal seam. In the former case, insufficient
attention is given to the careful cleaning off of the upper surface of the seam to remove material left by the overburden stripping excavators or
spilled by dump trucks. In the latter case, it is very easy, when using a rope operated shovel, to excavate into the material below the floor of the
coal seam and include that matter in the final product or to deliberately stop short of the floor and waste coal in the process.
10. INacN arrAs long as any efforts by the coal industry towards a cleaner product are likely to go unrewarded, the present situation will
not change. There must be incentives or directives to implement changes in equipment and working practices to improve the overall product,
as well as financial penalties for not doing so. Remuneration should be based not so muchon tonnage of a presently typical coal and dirt mixture,
but more on actual heat quantities transferred from the coal company to the power company. This would necessitate the abandonment of the
UHV system andrequire determination ofnetcalorific value (togetherwith proximate analysis) carried outon a frequentand regularbasis. Power
-40 Annex 2.1
Page 14 of 14
Box 2.1.3 (cont'd
companies regularly purchasing large quantities of coal should have the right to inspect coal in-situ and refuse shipment of coal at the mine if
it can be seen to contain unacceptable levels of contaminants. Contracts between the companies should contain agreed payment rates, based
on measured gross calorific values of coal received on a monthly average basis, and penalties for excessive ash content.
11. Prior to implementation of recommended practices it will be necessary to carry out a detailed initial examination to determine a list of
appropriate equipment, specific to each mine, to be procured under the consecutive rehabilitation project. The practical implementation of an
improvement program will not be possible until the equipment is in place.
12. aENEFITs. The benefits of betterdelivered coal quality would accrue almost entirely to the customerat the present time. While this remains
the case, there are unlikely to be any efforts made by the coal producers to produce cleaner coal. The benefits to the generating companies are
substantial; less wear on crushing equipment, less material to handle, less ash to dispose of, less rail transport cost and greater boiler efficiency.
Pollution due to ash and its toxic constituents are severely reduced and less landis needed forash disposal. A formula which equitably distributes
the financial benefits of cleaner coal, in line with the landed price of imported coal, should be agreed and implemented, case by case, together
with appropriate penalties for quality below agreed target values.
-41Annex2.2
Page1 of7
Annex 2.2COAL INDIA'S CORPORATE ENVIRONMENTAL POLICY
Preamble
1.
Coal mining has a pronounced impact on the environment. The impacts may be positive or negative. The application of the impacts and
search for the measures depends on the quality and quantity of impacts
and hence assessment of impacts due to a project becomes a critical
activity in appraising a project for detailed planning and implementation.
2.
Coal mining started in 1774 in the Raniganj Coalfield. Slowly it
started to expand westward and reached the coalfields of Bihar. By
second world war, coal was already being mined in the States of Bengal,
Bihar, Orissa, Madhya Pradesh, Andhra Pradesh and Assam. During early
70's, coal industry was nationalised. Thereafter, it started expanding
at a fast rate to meet the requirement of power, steel and other sectors. The major growth in coal production was achieved by opencast
mining method. This has a shorter gestation period and low winning
cost. However, it has more pronounced impacts on environment.
3.
The environmental considerations, specially in the coal mining
industry, started only from 80's. The appraisal of the projects from
environmental angle started from 1980-81, when a chapter on this subject was introduced in the project report. A committee called Environmental Appraisal Committee (EAC) was constituted by the Central Government to examine the environmental aspect of the project. The EAC slowly
added dimensions to the details required to be incorporated in the
environmental chapter. A separate questionnaire and check list were
also required to be submitted. In 1984, Government (Ministry of Environment & Forest) requested for a separate write-up to be submitted for
consideration of EAC. From 1987, this document, called Environmental
Management Plan (EMP), has taken shape. Today, it is an exhaustive
document covering all facets of Environment Impact Assessment (EIA)
with detailed cost estimates and implementation structure.
4.
Coal India Limited subscribes to the view of sustainable development. Unless the environment can sustain all the developmental activities, any pursuit of development in isolation can cause irreparable
damage to the ecosystem and associated environmental attributes. Therefore, there is need to lay down policy guidelines on this subject for
all the operating companies (Subsidiaries) of Coal India to work within
a framework of environmental Policy which will lead to sustainable
development.
Note: This is the original text of the policy statement regarding Coal India's Environmental Policy which
was issued in July 1995.
-42Annex2.2
Page2 of7
5.
This policy document is complementary to the document on CIL's
policy on Resettlement and Rehabilitation of project affected persons.
Objective and strategies of Coal India's environmental policy
6.
The main corporate objective is to lay down guidelines for the
subsidiary companies so that they in turn can formulate strategies,
develop methodologies and generate Work Plans to match their activities
with the guiding principle of SUSTAINABLE DEVELOPMENT. This will involve compliance with the environmental statutes, guidelines and instructions from legal agencies and carrying out activities in consonance with provisions of EIA/EMP, clearance letters and consent letters.
7.
One important objective is to ensure required organisational capacity build up at all levels to meet the challenges of environmental
compliance.
8.
Other objectives in fulfilling environmental goals are:
i
To fully integrate environmental impact assessment and environmental impact management with mine planning ,design and
operation.
*
To mitigate the adverse environmental impacts of mining to
the maximum extent possible, so that the coal sector is
accepted as socially responsible.
*
To educate and train the environment personnel and arouse
awareness at all levels, in the operational/field personnel,
for achieving the environmental objectives.
9.
To achieve the above objectives, Coal India proposes the following strategies:
All mine planning and design should be environmentally acceptable and development shall be carried out in such a way
as to facilitate the maintenance of acceptable environmental
standard of quality during mining and eventually reclamation
of the land for the end use stipulated in the Environment
Management Plan.
*
Reclamation of mined out areas will aim to achieve a post
mining condition consistent with the proposed terminal land
use.
*
Progressive reclamation will be carried out as soon as the
mined out areas become dormant. In case of dragline mining,
where no further dumping is stipulated, reclamation will be
concurrent so as to minimise the delay between mining and
productive post-mining land use.
*
Reclamation technology will be developed to suit Indian
ecological conditions.
In new mines, environmental management will be fully integrated with mine design, planning and development. A compre-
-43Annex2.2
Page3 of7
*
*
*
hensive base line survey of environmental resources and
values will be undertaken to serve as a basis against which
the impacts will be measured and the success of environmental programme evaluated. The funds and equipment allotted
for environmental work will not be diverted to any other
work.
Over the next five years, priority areas of focus will be
the improvement of technical capability in reclamation, the
protection of air and water quality and development of
organisational capability.
The effect of mining on the hydrology of the area will be
monitored closely. If any adverse impact on the ground water
is noticed, immediate mitigatory measures will be taken. In
particular, the level of water in the nearby wells and its
quality will be regularly monitored.
The quality of mine water before it is discharged to the
natural drainage channels will be monitored. Necessary sedimentation ponds and water treatment plants will be constructed to ensure that the water pumped out from the mines
complies with the relevant Indian Standards.
19. Coal India proposes to give annual awards for achieving excellence in environmental programmes, paralleling the award programmes for
production and worker's safety. These awards will recognise the merit
in preparation and implementation of environmental management plan, in
land reclamation programme, in the protection of air and water quality.
The company's and the projects' compliance with the environmental laws
and EMP approvals will be added to the list of criteria, considered for
evaluating the overall performance of the company and individual
project officials.
Key areas requiring strengthening to achieve the objectives
Organisa
ti on
11. Coal India Limited intends to build environmental cells at all
decision making/operational levels in its structure. The six different
levels where the Cells will be built/strengthened are:
i.
CIL corporate level
ii.
Subsidiary company HQ level
iii. Area level
iv. Unit/Colliery level
v.
CMPDI (HQ) level
vi. CMPDI Regional Institute level
The environmental cells will be built at each level and manpower needs,
functional activities and interdependent links for each shall be spelt
out so that a cohesive organisation is developed with commitment to
-
44 Annex2.2
Page4 of7
achieve CIL's environmental objectives. Where available, appropriate
external assistance may be availed as an alternative to development of
in-house capability.
12. A separate environmental engineering cadre will be framed by Coal
India Limited. This will be to attract committed engineers from environment and other disciplines like mining and civil engineering.
13. The organisation envisaged to be developed, as aforesaid, shall
be built up in a phased manner. The priority in developing the cells
will be given to units which have environmental clearance accorded by
MOEF. Second priority will be for units having EMP cleared by Company/
CIL boards. Cells at levels (i),(ii), (v) and (vi) exist. Finally cells
at (iii) and (iv) would be in place by 2001-2002. These shall be structurally strengthened to undertake responsibilities for environmental
compliance.
Environmental Impact
Assessment
and mitigational
measures
14. Environmental Impact Assessment (EIA) and Environment Management
Plan (EMP) for all mines, washeries, Central and Regional workshops and
other industrial units causing environmental pollution, shall be formulated in a phased manner. This will be mandatory for all new projects.
For all reconstruction and modernisation projects also (covered under
the 1994 gazette notification), it will be mandatory. Existing projects
needing forestry clearance will also need the EIA/EMP. For other existing units also, EIA/EMP shall be formulated in a phased manner, over a
time frame consistent with overall priorities of the subsidiary companies. Until the EMP for the aforesaid projects are formulated, the
operations in these units shall be guided by the consent letters for
air and water, issued by the respective State Pollution Control Boards.
Implementations of EMPs
15. A half yearly report of the status of implementation of
mitigational measures shall be prepared by the concerned Area Cell for
each project cleared by the MOEF. This report shall be submitted by the
Company to the MOEF. Quarterly monitoring reports for air and water
quality and noise level for every project environmentally cleared by
MOEF, will be submitted by the Company (Hq) Cell to State Pollution
Control Boards. Annual environmental statements, required for each unit
for the concerned financial year shall be submitted by each unit to
concerned State Pollution Control Boards.
16. Action Plan with quarterly time frame, covering 3 years period
shall be prepared for implementing mitigational measures in each of the
units having an EMP. This shall be a rolling plan updated at the beginning of each year. For units with no EMP, activity plan for each finan-
-
45 Annex2.2
Page5 of7
cial year shall be prepared to bring the project in full compliance
with consent letters and statutory provisions.
Consul tation
17. Area Environmental cells will consult the project affected people
and local NGOs on environment matters while preparing the action plans
as mentioned in para 16.
Coal
washeries
The coal washeries involve lot of process water and disposal of solid
wastes after cleaning of raw coal. To mitigate the above adverse environmental impacts, following policies are proposed:
18.
LIQUIDEFFLUENTS:To minimise effects of liquid effluents, washeries
shall be operated on closed water circuit system. The water shall be
clarified / cleaned and recirculated. The process water shall not be
discharged to natural drainage without proper treatment to meet the
legal standards.
19.
SOLIDWASTE: The slurry management system in all washeries shall be
organised to ensure collection of fines. The fines shall be regularly
sold / disposed-off to avoid its flow into the natural drainage channels during the rains. The rejects produced shall be used for power
generation in fluidised bed combustion (FBC) plants, sold to brick
manufacturers or used as land or mine fills. Lastly, the left out reject dumps shall be suitably treated for bio- reclamation.
Mine fires
20. Annual Action Plan (AAP) for fire control projects/unit mine
fires shall be prepared to control and then extinguish the mine fires.
A nodal officer at company HQ level shall be nominated to prepare the
AAP in consultation with area/mines and expert agencies like the Directorate General of Mines Safety (DGMS). A monthly report shall be submitted to CMD of the subsidiary and a quarterly report to company board
for their information and directions for further actions.
Mined
land
reclamation
21. As a policy, Coal India is committed to minimising the needs of
forest land/agriculture land and maximising backfilling to reclaim
mined out areas. These considerations will be integrated with mine
planning as already discussed. An annual operational plan will be prepared for each Opencast mine, with production exceeding 2 million
tonnes per annum. This plan will be used to set right the deviations in
sequence of mining, backfilling, external dumping and reclamation.
-
46 Annex 2.2
Page 6 of 7
22.
Slopes of external dumps are an important area to be considered
for proper and effective reclamation. The slopes of external dumps are
to be suitably graded/terraced for plantation. Scientific studies shall
be undertaken for this purpose, wherever required.
23.
Top Soil is recognised as invaluable natural resource specially
for regeneration of regional ecology. The EMP prepared shall give due
consideration for its suitable use for regeneration of ecology. For
effective bio-reclamation of disturbed land, scientific studies will be
carried out to select suitable species for each coalfield and sustainable sequence of reclamation from grass to shrubs, to trees.
Coal
quality
24.
Coal India recognises the fly ash disposal problem in the country
and would take the following actions to assist the power utilities in
their ash management:
Removal of extraneous mineral matters at the pit head
Beneficiation of ROM coal for power plants located farther
than 750 Km from the mine, if
they are prepared to bear
the cost, in addition
*
Assist pit head power plants in a study of the feasibility
of ash disposal in mined-out area.
Environmental training & education
25. Courses on Environmental Protection Measures shall be organised
for project executives, at Company HQ, CIL Staff College or the Indian
Institute for Coal management (IICM) or at other institutes imparting
such training.
26. All Project Officers of mines/washeries, Staff Officers, General
Managers shall be exposed to courses on Environmental Protection Measures in a phased manner.
27. Environment week shall be celebrated and organised for all units
/ projects once every year on the pattern of Mines Safety Week. This is
to arouse awareness amongst field personnel. This will also promote the
importance of environment in the employees and inculcate a sense of
social responsibility for environmental protection.
Environmental research
and development
28. An Institute of Environment has been set-up at Ranchi under
CMPDI. One of the main functions of this Institute is to carry out and/
or organise research and development in the field of environment for
coal mines and related areas.
-47Annex2.2
Page7 of7
29. Following areas are identified for R&D studies at the first instance:
i.
Suppression and treatment of dust on the haul roads.
ii.
Selection of suitable species for plantation on the OB
dumps.
iii.
Settlement of solids from the washery effluents.
iv. Control of dust at the Blast Hole Drills and the crusher
house in the CHPs of opencast projects.
v.
Stability and vegetation of dump slopes.
vi.
Mitigation of impacts on water table due to mining.
vii. Mitigation of vibrational impacts on local habitats due to
blasting.
Funding the environmental activities
30. For projects having approved EMPs, the amount for the environmental activities is covered under capital & revenue provisions made in
its project report. For other units, provision of 2.50% of the production cost shall be kept in the revenue budget. The fund earmarked shall
be spent exclusively on environmental measures. For capital funding,
marginal schemes shall be prepared for each unit or each area to cover
the requisite capital expenses.
31. There is appreciable backlog of land reclamation, specially in
older coalfields like Raniganj, Jharia and Bokaro. A part of the backlog is inherited from private days. The effort needed to make up this
backlog is colossal. Coal India intends to spend 0.5% of its annual
turnover in reclaiming the old backlogs of land degradation. The total
reclamation period may span over nearly a decade.
Environmental
cost
code
32. Till now, there is no separate cost code for expenditure on environmental protection measures. As a policy, the cost code for environment will be put in place, for generation of data on expenses incurred
for environmental safeguards. This will help to monitor cost effectiveness of environmental control measures being applied.
Conclusion
33. The purpose of framing this policy and guidelines on different
facets of environment is to permeate this thought down to the lowest
level. These guidelines shall bring uniformity in planning, execution
and monitoring systems for ensuring environmentally sustainable mining
activities. Enclosed annexure summarises the potential environmental
effects caused by mining activities and suggested policy approach.
- 49 Annex 2.3
Page I of 9
Annex 2.3 RESETTLEMENT, REHABILITATION AND COMMUNITY DEVELOPMENT
1.
Because coal mining and associated power developments have generally been sited in remote rural
areas, the period of rapid expansion associated with the opening of coal mines has brought about some
fundamental changes, both positive and negative, to the lifestyles of local people, many of whom had lived
at subsistence level, are poorly educated, and are from traditional cultures. Resettlement projects fall
generally into two categories: voluntary and involuntary. Voluntary resettlement usually involves younger
people - natural risk-takers seeking new opportunities - who have made the decision to move on their own.
By contrast, involuntary resettlement usually expropriates the rights of people who may not want to move,
and involves whole communities of individuals who previously lived in interdependence: young and old,
healthy and sick, affluent and poor, landholders and landless, skilled and unskilled. Since compensation
has usually been tied to loss of land rather than loss of livelihood, displacement divides the community.
Often, with the break-up of the community, the wealthier and more highly-skilled move to pursue opportunities elsewhere, leaving behind a disproportionately poorer community with limited ability to adapt to
changing circumstances. In addition, increasing industrial activity typically attracts immigrants. Disadvantaged local people often either end up as exploited contract laborers trapped in perpetual poverty or they
simply leave the area - only to reappear in the slums of the city or as squatters encroaching on unoccupied
lands (often forest areas) in other parts of the region. The intrusion of industrial activity into traditional,
rural communities and the resulting adverse social impacts occur in nearly every country and no country
has yet dealt with them well. Therefore, there are no successful models of displacement and resettlement
that can guide the coal industry and the thermal power sector in their local rehabilitation programs.
2.
Coal production, whether it takes places in underground or opencast mines, requires access to
land. Unlike other industries, the coal industry has little choice in the location of its activities because coal
mines have to be developed where there are commercial reserves. In recent years, the social and environmental costs of developing coal resources have increased considerably, particularly in the densely populated areas of India's eastern States. Coal India finds it increasingly difficult to acquire land for the expansion of its operations. To deal with these challenges Coal India has changed the designs of new mines to
minimize the adverse effects of these operations on the environment; it has adopted resettlement and
rehabilitation policies that ensure that all people affected by its projects are compensated for their losses; it
has intensified the community development programs through which it aims to improve the living conditions in villages adjacent to its mining operations; and it is strengthening the organizational structure
within the coal companies to ensure effective implementation of these policies.
Social implications
3.
Coal mining has had a profound impact on communities living in areas where mines were established. Many of these areas, particularly in Maharashtra, Madhya Pradesh, Orissa and Bihar, were relatively isolated from industrial development and often had a tribal population with little contact with
outside society. The establishment of coal mines brought rapid modem industrial development to the area,
displaced people, offered employment and gave a new socio-economic profile to the area. These changes
include:
EMPLOYMENT
OPPORTUNITIES.
The opening of a coal mine brings employment into an area.
The relatively high wages of the coal industry (Rs45,000 a year, equivalent to US$1,33 1) are
far above the prevailing minimum wage (Rs6,600 a year, equivalent to US$195) and make
employment in the coal industry highly attractive. In almost all instances offers of employ0
-
50 -
Annex2.3
*
*
*
*
*
Page 2 of 9
ment remain the key to land acquisition and are the primary form of rehabilitation for
landowners. This makes it virtually impossible for the coal industry to transfer surplus labor
from other mines; not only would the local population resist, it would rob the coal company
of its most valuable bargaining chip in its efforts to acquire the necessary land. Construction
activities at the mine and the increase in purchasing power of those that find employment
with the coal company create numerous indirect employment opportunities. Since opportunities for employment in the mine are greater for men, the role of women changes drastically
from shared work and responsibilities to responsibility for domestic affairs and meeting
basic needs of the family. The local male population is often employed as unskilled labor.
IN-MIGRATION.
Numerous outsiders in-migrate to the area (officers and skilled laborers of
Coal India, contractors, workers and businesses to serve these groups).
HEALTH CARE. Employees of the coal company enjoy some of the best health care available in
India. In emergencies, coal companies make their facilities available to local people not
employed by them. In addition, coal companies construct 'dispensaries' at resettlement sites,
as part of the rehabilitation package for project-affected people. (State Governments are to
provide the necessary staff. However, in practice States frequently fail to do this.) As part of
the community development program, coal companies frequently construct dispensaries and
clinics in the surrounding villages, even if they are not directly affected by their operations.
EDUCATION. Besides providing educational facilities in the employees' colonies, schools are
also provided as part of the rehabilitation package to project-affected people. However, State
Governments are responsible for providing teachers, which they frequently fail to do.
ROADS, POWER, WATER, ELECTRICITY,
ETC. The coal companies provide these facilities, not
only to their employees, but also to project-affected people at resettlement sites.
CHANGE IN TRADITIONAL
LIFESTYLES.
The most significant change that occurs as a result of the
construction of a coal mine is the change in traditional lifestyles. The construction of a coal
mine inevitably introduces an element of modem lifestyle (characterized by salaried labor, a
money economy and a split between production and consumption) into a subsistance
economy, largely based on agriculture. This transition can be extremely painful and introduce new elements for conflicts into local communities. The disparity of monetary incomes
created by the employment provided by the coal industry can be perceived as creating new
inequalities and giving rise to dissatisfaction among those who have not found employment.
The change in lifestyles is significant where it affects people, such as tribals, who had
depended on forest for their livelihood and had little contact with the 'outside world.' While
the interests of tribals are protected by special laws, the loss of key resources, such as forest
access, may result in impoverishment, loss of identity linked to a specific lifestyle and the
disintegration of communities. Furthermore, the sudden influx of money tends to create
inflationary pressures in the local economy. This especially affects those who are on the
margin of the money economy, i.e. those who continue to pursue their traditional livelihood.
4.
Many social groups live and interact in mine areas. The original communities may be at a disadvantage in this induced development and may have difficulties getting a share in the benefits of the
development process. In order to address the social impacts outlined above, Coal India has adopted two
groundbreaking corporate policies: the Resettlement and Rehabilitation Policy which addresses the direct
and severe impact of land acquisition (Annex 2.4) and the Indigenous Peoples Development Plan which
outlines assistance that Coal India will provide to affected local communities near the mines (Annex 2.5).
- 51 -
Annex 2.3
Page 3 of 9
Coal India's resettlement and rehabilitation policy
Evolution of Coal India 's policy for resettlement and rehabilitation
5.
Before considering the present status of resettlement and rehabilitation activities within Coal
India, it is essential to appreciate the timescale and duration of mining projects and to recognize that many
existing mines were designed and put into operation several decades ago. Since then there have been many
progressive changes in the application of resettlement and rehabilitation in India and within the mining
sector. So the situation seen at an old mine should not be taken as representative of Coal India's current
approach to resettlement and rehabilitation.
6.
Standards and approaches have also changed because of the nature of projects, regional differences in policies and their implementation and variations in the approaches and applications taken by
project personnel. Because of the great number of opencast mines which have developed over the past 30
years, the current situation of resettlement and rehabilitation of project-affected people has become quite
complex. To appreciate the current situation, the timing of the resettlement and rehabilitation activity and
the situation at the time of project implementation must be taken into account.
7.
Coal India's decision to establish a policy for resettlement and rehabilitation of project-affected
people represents an effort to provide uniform guidance to subsidiary coal companies in response to the
persistent and growing discontent of project-affected people in many locations. The evolution of this
policy has been influenced by several factors. The driving motive has been the continuous and growing
need for land. Until the late 1980s, the coal companies dealt mainly with the landowners, and ensured their
cooperation by providing employment to families of landholders of a certain size (usually more than two
acres) in addition to paying the compensation for lost assets. With the increased mechanization of the coal
mines, the increase of population with smaller land holdings and increased political attention to involuntary displacement, it has become increasingly difficult for the coal companies to continue this practice.
While the demand for jobs in the coal companies for surrendering land has increased, the need for unskilled labor has declined with the increasing mechanization of mining operations. All coal companies
employ more labor than they need.
Efforts by States to shape resettlement and rehabilitation
8.
The State Governments of Madhya Pradesh and Orissa have responded to this situation by issuing
guidelines for rehabilitation measures, largely based on the size of the land expropriated. These are
formulated as entitlements for jobs in the coal company for the families of the titleholders. Although first
priority is given to those families losing both homestead and one third of agricultural land, the provisions
generally favor larger landowners by providing employment for one person coming from families losing
two or more acres of irrigated land or three or more acres of unirrigated land. The aim of these policies
seems to be based on the State Governments' wish to secure employment in the region.
Coal India 's Gulla Package
9.
In 1990 a circular (the so-called Gulla package) was given to all subsidiaries by Mr. O.P. Gulla,
Joint Secretary to the Government of India, Department of Coal, Ministry of Energy. This document was
the first attempt to formulate a corporate policy for resettlement and rehabilitation in Coal India and
provided the basis for resettlement and rehabilitation activities up to April, 1994. The circular stipulates
the following responsibilities for the coal company:
- 52 -
a)
b)
c)
d)
Annex 2.3
Page 4 of 9
All new employment opportunities for unskilled and semiskilled labor must go to land
losers.
Vocational training should be provided to upgrade project-affected peoples' skills for
employment in the coal company.
Cash compensation for land must be deposited by the coal company to the District Authorities before taking possession in order to avoid delays in payment.
A monthly allowance for 20 years, depending of the size of the lost land holding, should be
paid to the titleholder who did not get a job in the coal company.
10.
In addition to the provisions made in the Gulla Package, coal companies continued to follow the
State guidelines of providing employment for one person from each family which lost two or more acres
of irrigated land or three or more acres of unirrigated land.
11.
The provision of jobs is regarded by almost all project-affected people as the most desirable
rehabilitation option, since it results in an almost seven-fold increase in income for most (para. 3 above).
In addition, employment in the coal mine brings additional benefits, such as free medical care and subsidized housing. With the phasing out of Government support, Coal India can no longer afford the heavy
financial cost of employing more labor than it needs. Therefore, Coal India has imposed severe restrictions
on the hiring of new staff and, in parallel, adopted programs to reduce its manpower. This situation forced
Coal India to rethink its policy of rehabilitating project-affected people. Since the provision of jobs cannot
be taken for granted in the future, the coal companies have had to find other ways to restore the incomes of
people who are adversely affected by the acquisition of land.
12.
It has long been recognized by the coal companies that not all the people that live in communities
occupying or using land required by the mine are land owners. This group may include tenant farmers,
sharecroppers, squatters and agricultural laborers. Until Coal India's new resettlement and rehabilitation
policy, these people have not been entitled to any resettlement and rehabilitation assistance. However,
when resettling a village, the subsidiaries have often provided accommodation for some of these families
at the resettlement site.
13.
The salient features of the State guidelines, the Gulla package, and the new Coal India policy are
summarized in Box 2.3.1. Coal India's current policy (Annex 2.4) was approved by the Board on April 4,
1994. It represents the latest stage in a development brought about by the increased challenges confronting
the coal companies when acquiring land. The development is characterized by several trends:
*
from recognizing only the loss of land in the compensation process to considering the loss of
economic assets,
*
from considering only landowners/titleholders to be dealt with to considering the surrounding communities as the partner in the resettlement and rehabilitation process,
*
from considering landowning families as the unit of entitlement to considering every adult
individual as the unit of entitlement,
*
from acting on the basis of regional guidelines to acting of the basis of a corporate policy,
*
from provision of employment with the coal company as the major vehicle of rehabilitation
to multiple rehabilitation efforts,
*
from being mainly accountable to the coal company to being primarily accountable to the
project-affected people, and
*
from not involving the project-affected people in the planning and implementation to extensive consultation and participation of project-affected people in the process.
- 53 Annex 2.3
Page 5 of 9
Box 2.3.1 Evolution of Coal India's resettlement and rehabilitation policies
Category of
projectaffected people
MP package
(1991)
Orissa package
(1989)
Gulla package
(1990)
Coal India's
current policy
(1994)
Landowner
Compensation as per legal
norm.
a. Losing homestead land and
one third of the agricultural
land: one job to one member
of the family on first
priority.
b. Losing three acres
unirigated or two acres of
irrigatedland: one job to one
member of the family on
second priority.
c. Losing total agricultural
of the family on third
ptiority.
d. Losing at least two thirds of
agricultural land: one job to
one member of the family on
availability
Compensation asper legal
norm.
a. Losing house, homestead
land and at least one third of
the agricultural land:one job
to one member of the family
on first priority.
b. Losing at least three acres
unirrigated or two acres
irrigated land: one job to one
member of the family on
second priority.
c. Losing total agricultural
of the family on availability.
d. Losing one third agricultural
of the family on availability.
norm.
a. Losing land: all new and
semi-skilled and unskilled
jobs of the project reserved
for them.
b. Losing land: if no job is
given, pro-rate subsistenice
allowance every month for
20 years.
c. Suitable vocational training
to landlosers to upgrade their
skills for employment in
other categories of jobs in
the project, on a preferential
basis.
norm
a. If feasible, subsidiaries
will offer employment as
per their own policies.
b. Project-affected people
identify and purchase,
with the assistance of the
subsidiary, equivalent
replacement land using
their land compensation.
c. The subsidiary will assist
an affected person to
establish non-farm selfemployment.
d. If none of the previous are
available, a person losing
lessthan two acres whose
annual income is less than
Rsl2,000 will receive
rehabilitation assistance in
the form of a subsistence
allowance or grant to be
usedfor productive
investments
Adult members
of the
landowner's
family (> 18
years old)
No provision.
No provision.
No provision.
Adult males and females
entitled to be rehabilitated
through self-employment
schemes.
Homestead
owners
Losing homestead: one job to
one member of the family on
third priority and one plot of
land of 400ml.
Losing only homestead: one job
to one member of the family
andone plot of land up so
400ml.
Losing house: altemative house
site.
Replacement cost of
homestead and the structures
on it.
2
Onie plot of I OOm per
family, assistance in
designing the new house (if
desired) and shifting
allowance to cover full cost
of shifting to new site.
Rehabilitation through selfemployment schemes.
Membersof the
homestead
owner's family
Major sons on or before the
date of notification of intention
to acquireto be given a
separate plot.
Major sons separated from the
family on or before the date of
notification of intention to
accquire to be given a separate
plot and eligible for selfemployment.
No provision.
Adult members entitled to be
rehabilitated through selfemployment schemes.
Sharecroppers,
land lessees,
tenants, day
laborers, etc.
No provision.
No provision.
No provision.
Adults to be rehabilitated
through self-employmenit
schenies orjobs with
contractors.
- 54Annex 2.3
Page 6 of 9
Category of
projectaffectedpeople
MP package
(1991)
Orrssapackage
(1989)
Gulla package
(1990)
Coal India s
current policy
(1994)
Squattershaving
houses
No provision.
No provision.
No provision.
Replacementcostof house
and otherstructures.One
2
plot of lOOm perfamily,
assistancein designof new
house(if desired)and
shifting allowanceto cover
full costof shifling to new
site.Adults to be
rehabilitatedthrough self
employmentschemes.
Tribals cultivating
land under
traditional rights
No provision.
No provision.
No provision.
throughself-employment
schemesorjobs with
contractors.
Tribals residingin
villages in houses
not owned by
them
No provision.
No provision.
No provision.
Replacementcostof house
and otherstructures.
Oneplot of lOOmlper
family, assistancein
designingthe new house
(if desired)and shifting
allowanceto cover full
cost of shifting to new site.
Community to be shifted
in a groupwith provision
of facilities to meettheir
specific needs.
throughself-employment
schemes.
Infrastructurein
resettlement
colony
To be pmvided.
To be provided.
To be provided.
To be provided.
Shifting and
housinggrant
Housing grantof Rs2500
Housinggrantof Rs2000
Housinggrantof RsS000and
shifting grantof Rs2000
Full costof shifting.
Source:World BankStaff
Tribal issues
14.
The official classification of social and/or ethnic groups and the land where they reside rests on
principles established in 1890, which have not been changed substantially since. This means that what is
classified as forest area may have been converted into farming land; and that tribal groups, originally
living a migratory life, may have changed their way of living into a sedentary, agricultural lifestyle.
15.
With the exception of one mine (Jhingurdah), all the tribal project-affected population are settled
in mixed villages, among caste Hindus and scheduled caste Hindus. They are predominantly engaged in
agriculture on fixed plots (as opposed to slash and bum cultivation) or crafts related to agriculture (blacksmith, carpentry, etc.). As described in several of the baseline studies, several of the tribal groups have a
special affinity to the local environment, such as forest and hills, and use these in their daily lives, although this affinity to the local environment is often shared with other groups in the village. All the tribals
speak the local dialect of Hindi (except in Orissa, where they all speak Oriya, the majority language).
- 55 -
Annex 2.3
Page 7 of 9
16.
Most of the tribal population is integrated into the Indian rural society and has been exposed to
mining operations for the past 15-30 years. Their contact to the 'outside world' is not new and does not
constitute a threat to the survival of their identity. In places like Madhya Pradesh, tribals constitute the
majority of the local workforce in coal mines and have done so for more than 20 years. The Jhingurdah
mine started operating in 1965 and approximately 40% of the project-affected families have persons
already employed by NCL.
Laws and policies regarding scheduled tribes
17.
NATIONAL LAWS AND POLICIES.
Scheduled tribes are one of the weaker sections of the Indian population. The Constitution of India provides a framework for the socio-economic development of scheduled
tribes and prevention of their exploitation by other groups. In the Directive Principles of State Policy,
Article 46 directs the state to "promote with special care the educational and economic interests of the
weaker sections of the people and in particular, of the scheduled castes and scheduled tribes and shall
protect them from social injustice and all forms of exploitation". In Article 41, the state is required to
make effective provisions "for securing the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement, and in cases of undeserved want." The Fundamental
Rights of the Constitution are applicable to all Indian people, and ensure equality before the law (Article
14); prohibit the state from discriminating on the grounds of religion, race, caste, sex or place of birth
(Article 15); ensure equal opportunity for public employment (Article 16); abolish 'untouchability;' ensure
freedom of speech and movement; etc.
18.
Both the Fundamental Rights and the Directive Principles of State Policy apply to all peoples of
India. However, the Constitution also provides specific provisions to protect weaker sections of the
population from exploitation and ensure that they have access to educational and employment opportunities. Article 342 deals with a mechanism of scheduling tribes by the President of India in consultation with
the Governor of the State. The scheduling is done state-wise and tribes that are scheduled in one state may
not be in another.
19.
Scheduling in Orissa, Madhya Pradesh, Bihar and Maharashtra comes under the Fifth Schedule
which provides for:
*
An annual report to be presented by the Governor of the State to the President of India
regarding the administration of scheduled areas in that state;
*
The right of the Union Government to give directions to States as to the administration of the
area;
*
The establishment of a Tribes Advisory Council at the state level to advise on matters such
as the welfare and advancement of the scheduled tribes;
*
The right of the Governor to direct that any Act of Parliament or of the State Legislature may
not apply to the scheduled area or could apply with modifications;
*
Regulations to prohibit or restrict the transfer of land by or among members of scheduled
tribes in the area; and
*
Regulations to regulate money lenders to scheduled tribes.
20.
Article 275 provides for grants to be made to States by the Union Government to enable them to
meet the cost of government-approved schemes to promote the welfare of scheduled tribes or to raise the
level of administration of scheduled areas in the State. Other articles provide for reservation of seats in the
House of the People, the legislative assemblies of the States and local elected bodies (Panchayat) and
make a special provision for a Minister in charge of Tribal Welfare in Bihar, Orissa and Madhya Pradesh.
- 56 -
Annex 2.3
Page 8 of 9
21.
STATE LEVEL LEGISLATION. The states of Orissa, Madhya Pradesh, Maharashtra and Bihar have all
enacted similar legislation following the Fifth Schedule. In addition, several have legislation regarding
local issues. Below is a description of legislation pertaining to tribals in Orissa, which serves as an illustration of the state legislation in all four states:
22.
Under the powers vested under the Fifth Schedule the following regulations have been promulgated in the State of Orissa:
THE ORISSA
SCHEDULED
AREAS TRANSFER
OF IMMOVABLE
PROPERTY
(BY SCHEDULED
TRIBES)
1956, AS AMENDED IN 1993 prohibits alienation of tribal land to non-scheduled
tribes, unless permitted in writing by competent authority. Illegal alienation and unauthorized occupied tribal land shall be restored to the tribal owners. The competent authority,
now vested with the Tahsildar, has been authorized to initiate proceedings sui moto or on
application by any interested party and to evict unauthorized persons occupying tribal land.
In addition, Officers on Special Duty (Land Reforms) have been posted exclusively for
disposal of such land alienation cases.
REGULATION,
*
THE ORISSA
SCHEDULED
AREAS MONEY LENDER'S
REGULATION,
1967 controls and regulates
money lending operations in scheduled areas.
23.
Besides these two regulations specifically enacted by the Tribes Advisory Council, the following
Acts of Orissa have been made operative in scheduled areas:
*
THE ORISSA DEBT RELIEF ACT, 1980 provides relief to scheduled tribe debtors by making the
loans contracted by small farmers, rural artisans and agricultural laborers prior to the commencement of the Act as deemed to have been wholly discharged.
1976 aims at liberating and rehabilitating bonded
*
THE BONDED LABOR
*
laborers among the scheduled tribes.
THE ORISSA LAND REFORMS ACT, 1960 protects the scheduled tribe population living outside of
scheduled areas from land alienation.
*
THE ORISSA
SYSTEM
RESERVATION
ABOLITION
OF VACANCIES
ACT,
IN POSTS AND SERVICES
(FOR
SCHEDULED
CASTE AND
1975 makes provision for the reservation of posts for scheduled castes
(16.25%) and scheduled tribes (22.50%) for initial appointments and promotions in State
Government and other authorities under their control. The Act also reserves one third of the
posts in Classes II, III and IV for women from these scheduled categories.
SCHEDULED TRIBE ACT,
24.
Coal India has a history of providing relatively high standards of living for its employees. Not
only are salaries competitive, but security in employment is high and means access to staff quarters with
electricity, water supply and well functioning educational and health facilities. While this may not directly
affect the surrounding communities of people not employed in the mine, it may introduce a relative
depravation for those not having access to the facilities. In its efforts to develop Coal India as a modern
efficient operation run by socially responsible organizations, Coal India has adopted a framework stipulating the scope within which Coal India will assist the communities of the surrounding habitations to
minimize this process of differential access: Coal India's community development policy or General
Indigenous Peoples Development Plan. The Plan is included as Annex 2.5.
25.
In light of the fact that most tribals in coal mining areas live in 'mixed villages,' that is in close
proximity with other communities, Coal India proposed to meet the requirements of the Bank's Operational Directive 4.20 through the implementation of community development in the surrounding communities. This has two advantages. One is that a separate development plan, exclusively for tribals, would be
divisive in the present social context of the mine areas. By addressing the needs of tribals through devel-
- 57 -
Annex 2.3
Page 9 of 9
opmentefforts aimed at the communityas a whole, it will be easierto protect their special interestsand
meet their needs. However,CoalIndiarealizesthat tribalsmay be at a disadvantagein accessingthe
benefitsbroughtabout by the implementationof these communitydevelopmentprograns. The policy
thereforegives specialpriority to tribalsand women,and the mine specificIndigenousPeoples Development Plans were preparedwith this in mind.In the process,separatemeetingswere held with tribal
communitiesand women's groupsto elicit their needs,which were subsequentlygivenhighestpriorityin
the plans. A prioritizationof habitationssurroundingthe mineswasdone accordingto the proportionof
scheduledtribal population.The fund allocationfor activitiesamonghabitationswithin a mine area was
based on this. In addition.the mechanismsand committeesdesignedfor ongoingparticipationensuresthat
tribal communitiesare represented.The secondadvantageis that Coal Indiaalreadyhas a programof
communitydevelopmentassistance,whichhas not beenwell articulated,remainedat the full discretionof
mine managers,and was not transparentto the concemedcommunities.Thereforethis revisioncreatedan
opportunityfor firmning
up the guidelinesfor better utilizationof fundsand correctingthe abovementioned
weaknesses.
-59 Annex 2.4
Page 1 of 7
Annex 2.4 RESETTLEMENT AND REHABILITATION POLICY OF COAL INDIA
Preanble
1.
The location and quality of coal reserves, and their distance
from major consumers determine to a great extent the selection of mine
sites. For reserves that are close to the surface, opencast mining has
proven to be the most efficient mining method. While relatively inexpensive, opencast mines require large areas of land. Population growth,
particularly in India's eastern region, make it increasingly difficult
for the subsidiary coal companies (subsidiaries) to acquire the land
they need for expanding their operations.
2.
In the past, subsidiaries found it relatively easy to acquire
land, if they were able to offer jobs. Partly because of this practice,
subsidiaries have built up their labour force beyond their needs. This
has contributed to the heavy losses many mines incur and eroded the
competitiveness of the coal industry. The subsidiaries may still need
to hire people in selected locations and continue to give preference to
those whose livelihood will be affected by coal mining operations.
However, increasingly subsidiaries will need to develop other ways and
means to compensate land owners and others adversely affected by their
projects. Only proper resettlement and rehabilitation will elicit the
cooperation of project affected people, and make it possible for Coal
India to acquire the land it needs.
3.
The purpose of this statement is to set out the basic principles
for the resettlement and rehabilitation of people affected by coal
mining projects (PAPs). As such, this statement attempts to streamline
the different resettlement and rehabilitation practices being followed
by subsidiaries and to modify them in a way that allows subsidiaries to
deal more effectively with resettlement and rehabilitation issues.
4.
While Coal India's basic philosophy for compensating land-losers
and other project-affected people remains substantially unchanged, the
statement emphasizes the need to cultivate and maintain good relationships with the people affected by Coal India's projects starting as
early as possible; it also underscores that the subsidiaries have a
responsibility towards the landless, whose livelihood is often taken
away. On the other hand, subsidiaries need to protect themselves more
effectively against unjustified claims. To this end, the statement
proposes that subsidiaries prepare detailed resettlement and rehabilitation action plans (RAPs) that clearly identify, at an early stage,
the entitlements of the people affected by coal projects.
Note: This is the original text of the policy statement regarding Coal India's resettlement and rehabilitation policy which was issued in April 1994.
-
60Annex 2.4
Page 2 of7
5.
The resettlement and rehabilitation
policies followed by the subsidiaries have evolved over time and undergone numerous changes in
response to changing circumstances.
As and when the Central or State
Governments issue new guidelines for resettlement and rehabilitation,
Coal India will review and modify its resettlement and rehabilitation
policy taking into account the changing conditions in coal producing
areas. However, as a matter of principle, the compensation and benefits
offered to the people affected by coal projects of Coal India will be
at least equal to and not less than those prescribed by the laws and
guidelines of the Central and State Governments. However, in any case
Coal India's resettlement and rehabilitation
policy has to be approved
by the Ministry of Coal.
Objective of Coal India's resettlement and rehabilitation policy
6.
In light of the growing difficulties many subsidiaries face in
land acquisition highest priority will be given to avoiding or minimizing disturbance of the local population. In their decisions to open new
mines or expand existing ones, subsidiaries will explore alternative
sites and project designs in order to minimize the need for resettlement. Wherever people are likely to be adversely affected by a project,
the subsidiaries will prepare resettlement and rehabilitation
action
plans for the project.
action
7.
Through the preparation of resettlement and rehabilitation
plans subsidiaries will safeguard that project-affected
people improve,
or at least regain, their former standard of living and earning capacity after a reasonable transition period. The transition period is to
in rebe kept to a minimum. However, the involvement of subsidiaries
settlement and rehabilitation
activities will continue until all the
actions specified in the rehabilitation plan have been completed.
8.
Involuntary resettlement is conceived and executed as a development programme with project-affected
people being provided sufficient
resources and opportunities
to share in a project's benefits. The efforts of subsidiaries are complementary to government schemes in rural
development. To the extent that this is necessary, the concurrence,
approvals and support from concerned Government authorities will be
sought. In parallel, subsidiaries will work closely with
non-governmental
organizations,
which are legally recognized and conpeople,
stituted and also have the confidence of the project-affected
in the preparation
and implementation
of rehabilitation plans.
Definition of project-affected persons (PAPs)
9.
Coal India recognizes that the acquisition of land in populated
areas for mining purposes greatly affects the lives and livelihood of
the local population. While the development of new mines brings along
-61Annex 2.4
Page 3 of 7
job opportunities with the subsidiaries, associated contractors and
ancillary industries, it also eliminates many traditional sources of
income. The rehabilitation
efforts of the subsidiaries are designed to
integrate the various groups of people affected by the project into the
regional development process. The development of a new mine or expansion of mining activities tends to accelerate this process. By informing the potentially
affected people, at the earliest possible stage,
about the project and options for resettlement and rehabilitation,
subsidiaries prepare the local population for the changes that are to
come and ease the transition to new lifestyles.
10.
It is Coal India's policy to recognize adult individuals as the
unit of entitlement. In their rehabilitation
efforts subsidiaries deal
with a wide range of project-affected
people. They fall into the following categories:
A. Land owners, including those with whom government land is
settled:
i)
Persons from whom land is acquired including tribals
cultivating land under traditional rights;
ii)
persons whose homestead is acquired; and
iii) persons from whom land and their homestead are acquired.
B. Landless, who derive their livelihood from the land to be
acquired for a minimum of three years prior to the date of
notification
(of intention to acquire land)
i)
Sharecroppers,
land lessees, tenants and day labourers;
ii)
tribals dependent on forest produce; and
iii) persons whose homestead is acquired.
Eligibility
and compensation
11.
The table below shows the compensation and rehabilitation
efforts
subsidiaries will offer for each person or family affected by one of
their projects. Evidence to the effect that a person is a legitimate
PAP will need to be provided in the form of a written legal document,
or reference to a record, such as a revenue officer certificate, electoral roll, ration card or school record.
Rehabilitation
Land
for
land
efforts
(Package
B)
12.
In many areas where subsidiaries expand their mining operations,
land is scarce. It has been the experience of these companies that few
project affected people opt for acquiring land. Wherever possible and
if so desired by the PAPs who are landowners, PAPs will identify and
purchase land with assistance from the subsidiary. The land and its
area should be such so as to provide better or at least the same income
to the PAP, which he was deriving from his original land. The following
- 62 Annex 2.4
Page 4 of 7
Compensation
and rehabilitation
policy
Category of persons affected by the project
A(i)
Persons(including tribals cultivating
land under traditional rights) from
whom land is acquired
Compensation & rehabilitation entitlement options
All landowners with titles will receive monetary
compensation for the land acquired from them.
The value of the land is determined on the basis
of prevailing legal norms. In addition,
(a) if feasible, the subsidiaries will offer
employment as per their own policies
(Package A);
(b) PAPs identify and purchase, with the
assistance of the subsidiary, equivalent
replacement land using their land compensation (Package s);
(c) the subsidiary will assist a PAP to
establish non-farm self-employment
through the provision of infrastructure,
petty contracts or formation of ccoperatives (Package C);
(d) if none of the other packages are available, a PAP with less than two acres
would receive rehabilitation assistance
in the form of a subsistence allowance or
grant to be used for productive investments provided that his income from other
sources does not exceed Rs 12000/- per
annum (Package D);
A(ii) Persons whose homestead is acquired
The PAP will
receive the replacement cost of his
homestead and the structures on it. In addition,
the subsidiaries acquiring his homestead will
provide (a) an alternate house site measuring
100 square meters per family, (b) assistance in
designing the new house, if so desired by the
PAP, and (c) a shifting allowance to cover the
full cost of transporting his belongings to the
relocation site. (Package E)
B(i)
Sharecroppers, land lessees, tenants and
day labourers
Package C or jobs with contractors. Contractors
will be persuaded to give jobs to eligible PAPs
on a preferential basis, where feasible.
B(ii)
Landless tribals
Package C or jobs with contractors. Contractors
will be persuaded to give jobs to eligible PAPs
on a preferential basis, where feasible. In
addition, the subsidiaries will shift the tribal
community as a unit and provide facilities to
meet the specific needs of the tribal community
that will allow them to maintain their unique
cultural identity.
B(iii)
Package E
source:Coal India Ltd.
-63Annex2.4
Page5 of7
modalities will be exercised to assist eligible project affected persons to acquire land, if they so wish.
i)
A PAP who chooses this option, will not be entitled to any
other rehabilitation option. However, shifting allowance at
market rate to cover the full cost of transportation will be
provided to the PAPs for moving to the new area; and
ii) the PAP may purchase land on a "willing buyer - willing
seller" basis within a limited geographic area and specified
time period.
Non-farm
self-employment
(Package
C)
13. For PAPs who opt for the non-farm self-employment package the
subsidiary will assist in developing such options as dairy and poultry
production, shops and petty contracts.
Rehabilitation
assistance
(Package
D)
14. If none of the other options are available to PAPs with less than
two acres of land, the subsidiary would provide rehabilitation assistance to ensure that the PAPs are able to regain their former standard
of living or earning capacity. The assistance would be in the form of a
subsistence allowance or a lumpsum grant to be used against productive
investments.
15. If the PAP chooses the lump sum grant, it will be calculated on
the same basis as the subsistence allowance. During a three-year period
following the preparation of the RAP, the PAP can select a productive
investment. Until the payment is made, the grant would be held in an
interest-bearing account.
Women
16. Special attempts will be made to ensure that women will be given
adequate access to income generating opportunities offered under this
policy.
Jobs
17. Jobs will be given to eligible landless PAPs on a preferential
basis when outside recruitment becomes necessary.
Connmity
facilities
18. The subsidiary will provide to the resettlement site a school,
road with street light, pucca drain, pond, dugwell and/or tubewell for
drinking water supply, community center, place of worship, dispensary,
grazing land for cattle and play ground. Similar infrastructural facil-
- 64 Annex2.4
Page6 of7
ity, if necessary, will be extended to the host locality. The community
facilities and services would be available to all residents of the
area, including PAPs and the host population.
19. The approach for operation of community facilities would be flexible and all efforts will be made to involve the State and local self
Government/Panchayat for operating the facilities. To achieve this,
subsidiaries will pursue with these agencies to ensure the same. The
planning of the community facilities and their construction should be
undertaken in consultation with the affected community.
Implementation, monitoring and evaluation, dispute mechanism
20.
The rehabilitation action plan will address the following:
i)
The project design, including an analysis of alternative
designs aimed at avoiding or minimizing resettlement;
ii) socio-economic survey and activities to ensure restoration
of incomes of PAPs in line with Coal India's resettlement
and rehabilitation policy;
iii) description of the institutional and other mechanisms for
provision of entitlements;
iv) time table for the acquisition and preparation of the resettlement site(s);
v)
the cost and budgets for the resettlement and rehabilitation
of PAPs;
vi)
project-specific arrangements to deal with grievances of
PAPs; and
vii) time tables, benchmarks and arrangements for monitoring the
resettlement and rehabilitation effort.
Socio-economic survey
21. A baseline socioeconomic survey will be carried out to identify
the PAPs to ensure restoration of incomes of PAPs in line with Coal
India's Resettlement and Rehabilitation Policy. This survey will be
conducted, prior to notification under the relevant land acquisition
Acts, by the subsidiaries with the help of reputed outside independent
institutional agencies, who are well versed with the social matrix of
the area.
22. The basic objective of the socio-economic study will be to generate baseline data on the social and economic status of the population
who are likely to lose their means of livelihood or homestead to the
acquisition of the land for the project. The data base will be used to
formulate a viable and practical RAP for the affected persons in line
with their entitlements.
-65
-
Annex2.4
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Schedule of census and formulation of Rehabilitation Action Plans (RAP)
23. Once the demographic and socio-economic data is available, the
RAP will be formulated in consultation with the PAPs and the State
Government. The RAP will be formulated as a simultaneous activity with
the land acquisition process.
Monitoring and evaluation
24. The RAP will be monitored and evaluated periodically after the
completion of the land acquisition process.
i)
The resettlement and rehabilitation activities are the responsibility of a separate group, both at the projects and
corporate level, which will be constituted for planning,
implementation, monitoring and evaluation of the RAP. At the
corporate level the group will be headed by a senior manager, whereas at the project, an executive of the rank of
manager will head the group. The project group should have
at least one member with social science experience and/or
skills.
ii) The project group will closely interact with the state authorities during the implementation of the RAP. Although the
subsidiaries will develop the plots and infrastructural
facilities in the resettlement colony and actively implement
the RAP, assistance of State authorities will be taken for
administrative services such as allotment of land. Implementation will be planned, monitored and corrective measures
will be incorporated in the RAP, if needed. In addition to
the State Government, the PAPs, the village leaders including the Pradhans and NGOs will be consulted and associated
with the implementation of the RAP.
iii) The Resettlement and Rehabilitation Cell at the corporate
level will evaluate the implementation of the RAP after its
completion.
Mechanism for dealing with disputes
25. A committee comprising nominee(s) of the State Government,
nominee(s) of the project general manager of the subsidiaries, a representative of the PAP and an independent party, such as a respected
community leader, a retired judge or principal of a reputed local institution of higher education, will be constituted to examine the
grievances of the PAP and propose corrective actions as required. The
subsidiaries will make arrangements for establishing the Committee and
bear the cost.
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Annex2.5
Page 1 of 7
Annex 2.5 COAL INDIA'S COMMUNITY DEVELOPMENT PLAN
Introduction
Coal mining has had a profound impact on the communities living
in the areas where coal mines were established. Many of these areas,
particularly in Maharashtra, Madhya Pradesh, Orissa and Bihar, were
relatively isolated from industrial development, often with a tribal
population, with little contact to the outside society. The establishment of coal mines brought rapid modern industrial development to the
area, took up large tracts of land, displaced people living there,
offered some employment, and gave a whole new socio-economic profile to
the area. It included influx of non-tribal people into the area.
The most obvious social effect on indigenous communities of the
mining activities has been the loss of land for living, agriculture,
grazing, collection of forest produce for food and fuel. The less obvious, gradual and long term, impact may be the change in traditional
lifestyles which was based largely on subsistence economy. Many such
changes, probably can not be ascribed directly to the loss of productive assets, but has more to do with the rapid introduction of competing ways of living (e.g. introduction of non-agricultural related occupations, money-economy, including salaried labor, etc.). This induced
development may leave the original inhabitants and the indigenous communities in a situation beyond their control, without the proper means
to take advantage of the opportunities and challenges that this development represented. Although original inhabitants were offered employment in the mines as rehabilitation measures for lost land, it is
largely outside entrepreneurs, attracted to the new opportunities, who
have been able to take advantage of the opportunities following the
establishments of the mines.
The aim of the Indigenous Peoples Development Plan is to present
a policy, an institutional framework and a strategy for implementation
of activities that will assist indigenous communities (i.e. communities
living in the mining area when the mine was established), allowing for
informed public participation in the formulation and implementation of
the plan, and ensuring that benefits reach the weaker sections of the
communities, in particular Scheduled Tribes and Scheduled Castes, on a
sustainable basis.
The Indigenous Peoples Development Plan of Coal India sets out
the basic features of this community development in Coal India in the
project. It sets out the scope, limitations and priorities of Coal
Note: This is the original text of the policy statement regarding Coal India's Community Development
which was issued in September 1995.
-
68Annex2.5
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India's commitment to community development in the areas of a mine's
influence. Attached are the guidelines for preparation of mine specific
The plan builds on the community development program, that Coal
India is already implementing in villages around the mines as part of
it's welfare activities. Community development in Coal India is done as
a contribution to the national Twenty Point Program for social
upliftment. The community development program of Coal India has had a
total budget of approximately 50 million rupees per year in the last
five years. The assistance given under the community development program is mainly in the form of infrastructural improvements.
The present plan is limited in scope, both in terms of coverage
and cost. The plan covers settlements (a cluster of dwellings) in close
proximity to the mines, and presents a frame budget, which makes the
setting of priorities by the communities a necessity. The reason for
this is the assumption that the people living nearest to the mine are
most affected by the mining activities, and the fact that the present
implementation and monitoring capacity, for such essential social
projects, is limited.
On the basis of the experience gained under this project, Coal
India will review the policy and its implementation and make a decision
on the settlements to be covered, the scope of the budget, and for
replication to all mines under Coal India.
The effects of coal mining on surrounding communities
Most of the subprojects are 15 to 25 years old and located in
already established coal fields. The coal fields are all located in
previous rural and forest areas. The communities inhabiting these areas, before the introduction of coal mining, were largely dependent on
a subsistence economy, based on agriculture and forest produce. Contact
to the 'modern' world was very limited. The indigenous communities
consisted both of tribal and caste communities, which have been in
contact and engaged in barter trade for centuries. The introduction of
a coal mine into this society represents the 'modern' world's entry
into the area and a new situation for traditional communities. This
change typically involves the following:
*
An influx of outsiders to the area. Officers and skilled
laborers of Coal India, contractors with workers, and other
businesses to serve these groups
*
Employment of male local population as unskilled labor
*
Large groups of households becomes economically dependent on
the coal mine and its wage labor, because of loss of agricultural and forest land, and employment in the mine, or
periodically with the contractors.
-
69 Annex 2.5
Page 3 of 7
*
*
*
With the shift from agriculture to wage labor, a shift of
economy from subsistence to money and market economy.
New differentiation's are introduced in the communities.
Between those who are employed in the mine and those who
still depend on a subsistence agriculture. Social ties are
disrupted and traditional institutions are weakened
Opportunities for employment in the mine is greater for men,
and the role of women changes drastically from one of shared
work and responsibilities to one, where women become responsible for domestic affairs, mainly related to meeting basic
needs of the family.
In the present day mine locality, a multitude of social groups
live and interact. The communities originally belonging to the area,
may be at a disadvantage in this induced development, and may have
difficulties in getting a share in the benefits of the development
process.
Indigenous peoples and community development in Coal India
Coal India has a history of providing relative high standards of
living for its employees. Not only are salaries competitive, but security in employment is high and means access to staff quarters, with
electricity and water supply, and well functioning educational and
health facilities.
Both with regard to adverse environmental impact, caused by the
production of coal, and adverse social impact, caused by land acquisition, Coal India has made major progress over the last decade by introducing policies and plans for minimizing and mitigating such impact.
Coal India wants to proceed in it's effort to create a modern,
efficient operation run by environmentally and socially responsible
organizations, by stipulating the framework within which Coal India
will assist the communities of the surrounding habitations.
Objectives and beneficiaries of indigenous peoples development
Coal India accepts that coal mining has contributed to deteriorating environment and social conditions by inducing a rapid industrialization' of the areas. The ultimate objective of Coal India's indigenous peoples development program is to contribute to a healthy and
well educated population, living in a rich natural environment, belonging to prospering communities. The immediate objective is to assist
indigenous local communities in the mine area to create, revive and
maintain relevant and functioning community assets, institutions and
services that can improve their choices and living standard in the
-
70 Annex2.5
Page 4 of 7
'modern' world, and maintain and develop traditional ways of living and
the social ties of the communities.
The intended beneficiaries of the Indigenous Peoples Development
Plan are communities, living within the mine's area of influence. This
plan has tentatively defined this as the area within one kilometer from
the boundary of the mine and all its infrastructure, i.e. the total
area which is or will be physically controlled by the mine, throughout
the life of the mine. All habitations within this area will be covered
by this plan, unless it is included under a resettlement action plan.
However this delineation should only be taken as a rough guide, and
justified reasons for extending this may exist in individual cases.
The benefits of the Indigenous Peoples Development Plan are open
to all communities, but will be especially aimed at tribal communities
and women and youth. The activities will primarily seek to address the
needs of these groups. In all-tribal villages the target group will be
the community as a whole. In the case of mixed villages, the Plan
adopts a poverty focus that will benefit all weaker communities (in
particular SC).
This development program is targeted to organization and groups
in the communities, and no individual entitlements are envisaged. However, individuals from the communities will benefit from the program
and, as organizers of development activities, they will play a critical
role in the successful implementation of this plan.
The indigenous peoples development program is a program of partnership between Coal India and the surrounding communities. Therefore,
project activities must be contributed to by both Coal India and local
communities, either in cash or in kind (materials/labor).
Components
of
Indigenous
Peoples
Development
Plan
It follows from the participatory approach to the preparation of
the Indigenous Peoples Development Plan that the specific activities
under the plan cannot be determined at the corporate level of Coal
India. However, Coal India has a particular responsibility for minimizing direct adverse effects on the communities from the introduction of
coal mining.
No community facility can be sustained without motivated and responsible social institutions/organizations. Therefore the program will
not only support the creation of physical assets to serve the communities, but also support community activities that will strengthen the
local capacity to operate and maintain these facilities and enhance the
communities' ability to take advantage of opportunities created by the
changed social and economical environment in the area.
-71Annex2.5
Page5 of7
Possible physical and institutional/organizational components for
support may include:
* Water supply and sanitation
* Educational facilities and activities
* Health facilities and health and nutrition activities
* Vocational training facilities and activities
*
Electricity supply
*
Improvement of roads
* Environmental management and improvements (e.g. afforestation)
* Cultural facilities and activities
* Additional community development activities may be taken up
The activities of the Indigenous Peoples Development Plan fall
within the following three broad categories: community assets (infrastructure); community activities; and training and capacity building:
Community assets include the following physical infrastructure:
school, community hall, link road, pathway, culvert, tubewell, dugwell,
small check dam, lift irrigation, PHC/dispensary, market place, temple,
village drains, etc. Community assets have been identified according to
the outcome of the preliminary Participatory Rural Appraisal(PRA) undertaken by consultants as part of the background study for the Indigenous Peoples Development Plan. The final decision on which assets to
implement will be determined through the baseline survey, PRA and village level planning. Implementation will be done under the authority of
the Community Development & Resettlement & Rehabilitation (CD&R&R)
officer of the mine. There will be NGO involvement (liaison/coordination/supervision) and community participation (through the established
village working groups) in all stages of implementation: site selection, design, civil works/labor contribution.
Community activities include: mixed plantation on hilly slopes,
agro-forestry, grazing land, cooperative marketing (e.g. milk), horticulture, fisheries, afforestation, catchment area/watershed management,
adult (especially female) literacy, Mahila Samities, preventive health
care, sports. Planning and implementation of these activities will to a
large extent depend on NGO and village initiatives, less on input from
Coal India and Government. However, linking up to relevant government
department, like forestry, horticulture and cooperatives is important
for availing of extension services and technical advise.
Training/skills development and capacity building of indigenous
communities will primarily be the responsibility of NGOs who will invite technical expertise for special skills development (e.g. agroforestry, literacy, health) from either government departments or external sources on a case by case basis. The objective of these activities is three-fold: (i) to develop technical skills for new productive
sectors or niches; (ii) to enhance existing production systems and
-
72 -
Annex2.5
Page6 of7
sustain traditional use of natural resources; and (iii) to raise awareness and develop organizational capacity and strength (empowerment) at
the community level, for leadership, generally and within village working groups and organizations like Mahila Samities and youth groups
Institutional arrangement for Indigenous Peoples Development Plan
The ultimate responsibility of community development of indigenous communities lies with the communities themselves. Coal India, the
State Government, and NGOs can only support and facilitate this development. Providing basic physical facilities to the communities, without
their active contribution and involvement in the planning, implementation and running of the facility, has shown to lead to under utilization, breakdown of services and a feeling of apathy and dependency.
To formulate community needs and actions which could improve life
in the community, focus group discussions will be held, facilitated by
an NGO, preferably with female field workers. A special effort to ensure women's participation in these focus groups will be made. They may
be held separately for each community in the area. The outcome of these
discussions would be a preliminary list of needs for the community, and
voluntary village working groups for each item on the list. These working groups would, with the assistance of NGOs, Coal India and the Block
Development Officer, formulate specific proposals for community development activities to be submitted to the area's Community Development
Council for financing. The proposals must include the contribution of
the communities themselves. It is envisaged that these working groups
will continue when a proposal is approved for channeling local contribution and monitoring of progress.
To reach consensus on development needs, set priorities for development of the communities, take decision on the implementation of
actual proposals, and monitoring progress of ongoing development activities, an overall Community Development Council will be formed. This
will include the Gram Sarpanch/Mukhia, Bongas/tribal chiefs and school
teachers from the community, the Block Development Officer from the
State government, the Community Development and R&R Officer (CD&R&R
Officer) of the mine as member/secretary, one local senior trade union
leader from the work force (if more than one union is present, the
trade union representative should be from the largest), and an NGO
representative. The Council will be chaired by the General Manager of
the area. In case the Council so wish, they may co-opt other representatives to participate in the council (e.g. important local voluntary
organizations, like Mahila (women's) Samity, etc.) The Council will
meet quarterly. The responsibility for the budget allocated to indigenous peoples development plan should rest with the Community Development Council.
-
73 Annex2.5
Page7 of7
In each mine a full time Community Development and R&R Officer
(CD&R&R Officer) will be posted for effective implementation, coordination and follow-up. This process has already started under the Resettlement and Rehabilitation Program. Close coordination to the welfare officer must be maintained to ensure that welfare measures for the
employees, where feasible, will be extended to the local population.
Training programs for staff in Coal India, connected to community development will be undertaken.
Coal India will not alone have the capacity to organize and facilitate the mobilization of focus groups and working groups. NGOs/
Community Based Organizations (CBOs) with experience from tribal communities and a proven track record in community development will be
needed to assist in facilitating the process. The NGO should preferably
have female field workers. Involvement and mobilization of local CBOs
will be encouraged. Thus, NGOs will have a key role as an intermediary
between communities and Coal India and the Government. NGO presence is
considered the most important prerequisite for successful planning,
implementation and hand-over of project assets, activities and results
to community management during the latter part of the five year project
period.
The institutional arrangement has also been designed in such a
way that it will not only facilitate continued orientation, training
and capacity building in the surrounding communities, but also provide
for institutional support to elected bodies, CBOs/voluntary organizations, relevant government officers and Coal India staff involved in
implementing this Plan.
The main role of Coal India is to provide financial support for
establishment of community infrastructure, and relevant community activities, and to provide for temporary outside assistance from NGOs/
consultants and others. In principle the operation, utilization and
maintenance of created community infrastructure lies with the communities, although Coal India may assist partly with initial operational
cost in a transitional period of no more than two years. The State
government should be pursued to deliver public services, and extend
development activities, according to state regulations, in the area.
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Annex2.6
Page 1 of 7
Annex 2.6 CONSULTATIONS AND PARTICIPATION OF PROJECT-AFFECTED PEOPLE
Dissemination
I1.
Coal India strongly believes in proper and timely dissemination of information related to its
policies on resettlement and rehabilitation and the environment among the various stake holders in coal
mining. Coal India is of the view that knowledge about the various provisions in the resettlement and
rehabilitation policy for the project-affected people will be to Coal India's advantage, as no one will be
then able to mislead the affected population. As part of this philosophy, Coal India has done the following:
*
Coal India revised its resettlement and rehabilitation policy.
*
Coal India, for the first time in the history of coal mining, had its policy on resettlement and
rehabilitation translated into all the local languages of the different major coal producing
states, including Bihar, Madhya Pradesh, Orissa, West Bengal and Maharashtra.
*
Translated versions of the policy have been made available in the headquarters of the subsidiaries and at Coal India headquarters in Calcutta.
*
In SECL, small booklets with information on the definitions of different categories of
project-affected people and their various entitlements as per the resettlement and rehabilitation policy have been prepared in Hindi, the local language, and distributed in the subprojects. Other subsidiaries are in the process of carrying out similar information campaigns.
*
Identity cards with the photograph of each project-affected person entitled to rehabilitation
and specifying his or her entitlements from the subproject authorities are being issued. Most
of the women, shedding their traditional shyness to the surprise of many a pessimist, have
been photographed for the issue of ID cards. In SECL this has been mostly completed. Other
subsidiaries have also taken steps to issue ID cards to the entitled people.
*
Six Public Information Centers have been established at Coal India Headquarters, Calcutta
and the headquarters of the subsidiaries at Nagpur, Bilaspur, Sambalpur, Ranchi and
Singrauli with the following addresses:
Note:
Coal India Limited
Library
15, Park Street, Calcutta 700016
West Bengal
Phone no. 3393421
General Manager (ENV)
Western Coalfields Limited
Coal Estate Civil Lines
Nagpur 440001, Maharashtra
Phone no. 0712 - 524381-85
Northern Coalfields Limited
Singrauli, Dist. Sidhi
Madhya Pradesh
Phone no. 07805-6640
Central Coalfields Limited
Darbhanga House
Ranchi, Bihar 334001
Phone no. 0651-201684
Chief General Manager (WBP)
South Eastern Coalfields Limited
Seepath Road,Bilaspur 495001
Madhya Pradesh
Phone no. 07752-23306
Mahanandi Coalfields Limited
Anand Vihar, UCE Burla
Dist. Sambalpur 768018
Phone no. 0663-31371
This annex was prepared by Coal India Ltd.
- 76 Annex 2.6
Page 2 of 7
In the Public Information Centers any interested person or organization has access to all the
(i) Baseline Socio-Economic Surveys, (ii) Rehabilitation Action Plans (RAPs) under implementation, (iii) Environmental Management Plans (EMPs) under implementation after
approval by Ministry of Environment and Forest, (iv) consent letters from State Pollution
Control Boards and (v) record note of consultations by the mine authorities with the various
stake holders.
Participation
2.
Coal India's interaction with the people living in the mining areas, albeit in a non-institutional
way, dates back to the late fifties (long before the loan from the World Bank for the Coal Sector Rehabilitation Project was sought) when the country's coal production started to grow. Even a very casual stroll
around any of the villages near any coal mine of Coal India will show the presence of some materials
donated by the nearby mine authority in use by the villagers. Water pumped out of coal mines has been
traditionally used by the nearby villages for irrigating fields. Used wire ropes are used for fencing; corrugated tin sheets donated by the mine have been used in the roofs of schools and "chandi mandaps" (community centers). The mine authorities sometimes provide dug wells, ponds, tube wells, or piped water
supply for the villages. Non-recurring grants are given to schools and colleges located in the vicinity of the
coal mines. Periodic child immunization camps are organized for the benefit of the population living in the
mining areas.
3.
The participation of the mine manager in the yearly festival of the tribals (celebrated in the
monsoon after sowing season) in the nearby villages is a regular feature in the village social life. The mine
authorities' participation in the "Durga Puja" of the neighboring villages is time tested and continues even
today.
4.
These interactions with the people of the neighboring localities of the mines were not institutionalized and mine managers adopted them to have a good neighborly relation with the population. This
practice has been given the garb of some institutional arrangement in recent times (from the late eighties)
by adopting yearly community development activities in the neighborhood of the mines. Only sometimes
the weaker sections of the villagers like the scheduled tribes and scheduled castes had a chance to express
their opinion or to indicate their choice of infrastructure to be constructed under the community development program. The community development program has usually been found to benefit the better off
villagers who generally manage to comer the benefits. The poor and illiterate villagers generally do not
and cannot approach appropriate mine authorities to get the benefits of community development.
Consultation
Rehabilitation Action Plans and Indigenous Peoples Development Plans
5.
Coal India did not have any structured system of consultation, though earlier the project-affected
people or their representatives, local political leaders or NGOs would approach project authorities for
settlement of their grievances. Importance was given only to the land losers. Nothing or very little was
done for the landless. Land was and still is acquired by following the Govermmentstatutes (offer of
employment based on certain norm, usually one job per two or three acres and monetary compensation for
land and structures).
- 77 -
Annex 2.6
Page 3 of 7
6.
There was a movement in which people having no or very little land agitated for employment or
some sort of compensation for livelihood, as they lost their traditional means of earning. Subsidiaries dealt
with this subject in various ways since some subsidiaries still needed additional laborers and offers of jobs
were possible for smaller land holdings.
7.
Some States issued guidelines through circulars or directives on the matter, thereby laying the
guidelines for giving employment to project-affected people under various categories. The valuation of the
land also mainly remained with the district or State authorities. In the case of Sonepur-Bazari, another
World Bank funded project, the Government of India, in discussion with State authorities, local politicians
and the affected people developed a package, popularly known as Gulla package, whereby persons having
very little land and not otherwise qualifying for job, were given a subsistence allowance each month for 20
years.
8.
However, this was not accepted by all the subsidiaries. In 1994, while the Coal Sector Rehabilitation Project was with the visiting World Bank Mission, it was conceived that a uniform policy on resettlement and rehabilitation should be drawn out for Coal India as a whole. After protracted discussions with
all concerned, including the World Bank, the resettlement and rehabilitation policy of Coal India was
drawn up and approved by the Board of Directors of Coal India and the Govemment of India.
9.
Coal India made a conscious effort to remedy this situation at the time of preparation of Rehabilitation Action Plans and Indigenous Peoples Development Plans as part of the Coal Sector Rehabilitation
Project and the Coal India Environmental and Social Mitigation Project. They are:
e
Coal India engaged nine consultants/NGOs to carry out Base Line Socio-Economic Surveys
of the population that will be affected by the execution of the 14 subprojects with projectaffected people in the immediate ten year time horizon. Based on the date of the baseline
surveys, Rehabilitation Action Plans have been prepared.
*
The consultants/NGOs conducted an extensive house to house census with a structured
questionnaire to elicit information about the affected people regarding their current socioeconomic condition. The adults were asked by the consultant to indicate their preferred
means of economic rehabilitation.
*
The consultants were encouraged by Coa! India to elicit information about choices of means
of rehabilitation if jobs in coal mines were not available.
*
Bids from 24 NGOs/consultants, including Bulu Imam of INTACH, Awdesh Kumar of SLS,
Madhu Kohli of PIRG, MARG, SANLET, CASS, PRERNA were called. Only six responded
and five were selected (AIMS, ORG, MODE, AFC and AICIRD) to prepare Indigenous
Peoples Development Plans for 25 mines. These consultants/NGOs adopted focus group
discussion, participatory rural appraisal and indepth interviews with the affected population
to elicit information about their felt needs for infrastructures in the villages to improve the
quality of life.
*
The consultants also elicited information from the villagers who will be available for "shram
dan" (voluntary labor) if the coal company comes forward with funds to build community
assets and conduct productive community activities for them.
*
The consultants have utilized the services of some of the NGOs/Community Based Organizations operating in the mining areas for this information. Services of LAJAR and CLEAR
were utilized by AIMS in SECL for the Indigenous Peoples Development Plans.
- 78 Annex 2.6
Page 4 of 7
Environmental Management Plans
10.
In pursuance of the Environment (Protection) Act, 1986, amended in May of 1994, the coal
project proponent is required to submit an application to the Secretary of the Ministry of Environment and
Forest (MoEF) for an environmental clearance and, if acquisition of forest land is involved, a forest
clearance. The application needs to include the project report as well as an Environmental Impact Assessment Report/Environment Management Plan prepared accordance with the guidelines issued by MOEF
from time to time. The reports submitted are evaluated and assessed by the Impact Assessment Agency
(MoEF) with the assistance of the Environment Appraisal Committee which includes NGOs and Member
of Parliament. The MoEF, at the advice of Environment Appraisal Committee, can call for hearings on
proposed projects with project-affected people, if they believe that this would be in the public interest.
Hearings are usually held if there is large-scale resettlement involved or environmental impacts. Projectaffected people and their elected representatives can convey their views or object to the MoEF before a
clearance letter is issued. If considered necessary, the Environment Acppraisal Committee visits the
project site. After they is fully satisfied with the Environmental Impact Assessment and the mitigation
measures to be taken up, the MoEF issues a clearance letter for the project with stipulations that would
ensure the implementation of the required mitigation measures.
l.
As stated earlier, a monthly meeting is held at subsidiary headquarters and at Area General
Managers' offices on a fixed day in each month, with the local NGOs and project-affected people. At the
time of preparation of draft Environmental Action Plans for the 25 mines, consultations were held at
subsidiary headquarters, Area General Managers' offices and at Coal India headquarters in Calcutta. The
finalization of the Environmental Action Plans were made with due consideration of the outcome of the
suggestions and recommendations obtained in these consultations:
A. A workshop was held of May 27-28, 1995 at Hotel Hindusthan, Calcutta, to discuss the draft
Sectoral Impact Assessment and Environmental Action Plans for the 25 mines. Representatives of subsidiary companies, representatives from different NGOs and environmental
organizations and project-affected people from subprojects attended the workshop. Each
participant from an NGO and each project-affected person came out with useful suggestions
for improvement of Sectoral Impact Assessment and Environmental Action Plans. However,
in general, they have given more stress on employment and the rehabilitation and resettlement problems. Project-affected people from SECL projects have indicated their satisfaction
with the rehabilitation and resettlement done in Gevra Opencast Project. They also indicated
that they have not faced any problem in meeting the project authority, to sort out the problems. Project-affected people from MCL said that they have received employment but the
resettlement problems are yet to be sorted out. Bulu Imam, NGO, has stressed the cultural
rehabilitation of the people affected and taking care for the upkeep of archeological sites in
the mining regions. Some of the recommendations were:
*
An awareness campaign for environmental and rehabilitation and resettlement issues
should be initiated.
*
Water conservation measures should be adopted as per site conditions.
*
Discharged water should be used for pisciculture and promotion of model farms.
*
Settling tanks should be provided before the water is discharged to the natural water
course.
*
NGOs should be involved in the environment management program from the planning
stage to implementation.
*
Periodic health camps should be organized in the neighboring villages.
*
Planting of fruit trees and bamboo should be promoted for economic benefits.
- 79 -
Annex2.6
Page 5 of 7
*
*
B.
C.
D.
Metal roads should be provided for coal transport.
Agro-forestry, in association with State Governments, should be made available to
project-affected people as employment and income generation work.
*
Surface overburden dumping should be stopped and plantation on it should be made.
*
Archeological sites including sites of religious worship should be mapped and protected.
*
A representative body of project-affected people should be involved in the selection of
the resettlement site. Studies should be conducted regarding availability of water and
fertility of soil before finalizing the site.
*
As far as practicable, entire blocks of villages should be acquired to prevent fragmentation of holdings.
*
The resettlement site should not be more than I Okmaway from the mine site.
*
A representative of NGOs should be involved for technical guidance.
*
The objective of rehabilitation should be to improve the standard of living.
*
To avoid bad blood in families, Coal India should deal with the representative body of
the project-affected people regarding employment.
*
A baseline survey should be made for the host community before the resettlement site
is selected for proper harmonization and assimilation.
*
Compensation should be paid timely.
Coal India should devise attractive area-specific selfemployment opportunities so that
the pressure on jobs can be reduced.
Mahanadi Coalfields Limited conducted a meeting to discuss the Sectoral Impact Assessment and Environmental Action Plans at Kalinga on May 23, 1995; at Jagamath on May 18,
1995; and at lb Valley on May 20, 1995 with NGOs and project-affected people. MCL
officers, project-affected people from all the sub-projects in MCL and Mr. R. K. Sahoo
(NGO), IDHP attended the meeting. project-affected people mainly discussed rehabilitation
and resettlement problems and site specific environmental problems.
Similar consultation was held at WCL Headquarters on June 16, 1995 with NGOs including
Dr. S. L. Lokre (NGO), Adimjari Sevak Sangha, Nagpur and Dr. R. D. Singh (NGO),
Sankalpa, Nagpur. With the project-affected people of Padampur, discussions were held on
June 22, 1995. At WCL Headquarters, a discussion was held on July 12, 1995 on the same
agenda with the project-affected people of Nilgai, Tiroda village, Mr. Pradeep Despande
(NGO) and Mr. A. S. Dhanwary (NGO), Society for Environmental Studies.
In SECL, similar discussions were held at the Area General Manager's office. Discussions
were also held at Sohagpur on May 23, 1995 with project-affected people, Panchayat
Sarpanch and Counsilor; at Hasdeo on May 22, 1995 with project-affected people, Village
Tahaidar and a journalist; at Korba on May 22, 1995 with project-affected people, Village
Heads, Trade Union at Manikpur; at Kusmunda on May 23, 1995 with project-affected
people and State Government Representatives; at Bisrampur on May 23, 1995 with
Sarpanch, project-affected people, Representatives of scheduled tribe and scheduled caste;
and at Gevra on May 23, 1995 with project-affected people of Dipka, Gevra and Sarpanch.
Involvement of project-affected people and NGOs in implementation
12.
In the past as part of the legal procedure to acquire land, after paying compensation for the land
and assets of the project-affected people, nothing more was required to be done for their rehabilitation.
Rehabilitation of all the adult members of the family being affected by the acquisition of the land and also
the population indirectly dependent on the land being taken by the mine authority were never considered.
- 80 Amnx 2.6
Page 6 of 7
CoalIndia now has acceptedto implementas part of the CoalSectorRehabilitationProjectand the Coal
SectorEnvironmentaland SocialMitigationProjectthe conceptof entitlementof all the adult projectaffectedpeopleto differentrehabilitationoptions.
13.
Anotherremarkablynew concepthas been the acceptanceof the philosophyof activelyinvolving
the project-affectedpeople and theNGOs/CommunityBased Organizationsin the implementationof the
RehabilitationActionPlans and the IndigenousPeoplesDevelopmentPlans.As part of this concept,the
followinghas been done:
•
A two-dayworkshopwas held in Calcuttaon March 10-11,1995on "IncomeGenerationand
SelfemploymentAlternativesfor Resettlementand Rehabilitationin the Coal Sector" which
16 NGOsfrom Orissa,eightNGOsfrom Bihar,seven NGOsfrom MadhyaPradesh,ten
personsof high repute from other states,four StateGovernmentdepartmnents
of Orissaand
MadhyaPradesh(due to GeneralElectionin Bihar,no governmentdepartmentcouldcome)
and 12representativesof the nationalpress/TVin additionto officersof Coal India and the
subsidiariesparticipated(around150personsattendedthe workshop).Therewas lively
discussionon the variousselfemploymentoptionsthat the project-affectedpeople can pursue
as meansof rehabilitation.CoalIndia's invitedNGOsto come forwardto help in the search
of making this new approacha success(althoughsome of the NGOs brandedit as an attempt
to pass the responsibility),there wasa generalwelcomesinceCoal Indiaacceptedthat
adequateresourceswill be madeavailableto them.
* Workshopshavebeen organizedin the subsidiariesin Septemberand October1995where
NGOs and someof the representativesof the project-affectedpeopleparticipated.
*
Representativesof project-affectedpeople (includingone femaleaffectedperson)have been
taken in the coordinationand monitoringcommitteesin SECLand CCL. The coordination
committeeof each subprojectformulatessix monthlyimplementationschemesfor undertaking various activitiesas part of resettlementand rehabilitationmeasuresand is actively
involvedin their implementation.Themonitoringcommitteeat the subsidiarylevel approves
the budgets of the coordinationcommitteesand also resolvesthe grievancesof the projectaffectedpeople.
*
One NGO (CLEAR)was givena workorder in November1995to workamongthe projectaffectedpeopleas part of resettlementand rehabilitationmeasuresin KusmundaOpencast
Projectof SECL.
*
In CCL, similarworkwill be givento oneNGO (JagritiBihar)for workingamongthe
project-affectedpeopleof KD HesalongOpencastProject.
Main concerns of project-affected people and NGOs (and also Coal India)
14.
The project-affectedpeopleare rightlyconcernedabouttheir futureas they apprehendthe losing
of their traditionalmeansof livelihooddependenton agricultureand minorforest produce(however
meagerit may be). Like the saying "God must cometo a poor man in the shapeof a chapatti(country
bread)if he is to be listened;"the only meansof rehabilitationeagerlysoughtby each and everyaffected
individualin the miningareas is employmentin the coal mine which is causingthe displacement.
15.
The NGOs/CommunityBased Organizationsare also alarmedthat nothingtangiblehas, until now,
been done to institutionalizethe rehabilitationoptionsto be exercisedby the project-affectedpeople and
supportedby the coal mine.Coal Indiais concemedaboutthe delayin gettingsufficientland to continue
its coal productionand the problemsthat arise in the miningareasdue to agitationby the project-affected
people.
- 81 Annex 2.6
Page 7 of 7
Box 2.6.1 Background note summarizing Coal India's experience and issues raised by project-affected
people and others at the consultations
I. The concept of having formal and structured discussions/consultations with project-affected people, local State authorities, NGOs, etc. is
new to Coal India. Earlier, the project-affected people or their representatives used to discuss their grievances with the project authorities as
and when required.
2. As per the guidelines of the Bank, the projects covered under Coal Sector Rehabilitation Project were advised to hold regular monthly
meetingswith theproject-affectedpeople, NGOs, local state representatives, etc. They have also been advised tokeep the recordof themeetings.
3. The project authorities have started to hold such meetings/consultations. The meetings are chaired by General Manager of the area or his
nominated representative and attended by the officers of the environment, personnel, civil, estate, and legal departments. About 10-20 projectaffected people, NGOs, and others attend the meeting. The meetings include consultation on both social and environmental issues.
4. These meetings proceed without a fixed agenda. The project authority normally briefs the gathering about the progress of the project and
also about the constraints, if any, they are facing. The project-affected people and others normally raise the following social issues:
* The most common issue is the matter of employment of project-affected people. This reflects the current priority of the project-affected
people.
* The next most common issue regards payments of compensation and other benefits of resettlement and rehabilitation. The matter of delay
in payments has been discussed in many cases.
* Issues relating to facilities provided at the resettlement sites are alsodiscussed. These cover the malfinctioning of hand pumps, deepening
of ponds, electrification, schools, community centers, etc.
* Some issues conceming individual problems are also discussed.
* After the success of self-employmentgeneration schemes started in Kusmunda Areaof SECL, the demandformore suchschemes is raised
in the SECL projects.
The following major issues on environment are also discussed:
* The most important issue to the project-affected people of the dust problem due to movement of vehicles on public roads passing through
the village;
* The issue of road accidents due to the movement of vehicles;
* The issue of drinking water problem due to lowering of water table during dry season;
* The aspect of damage due to vibration due to blasting; and
* The issue of discharge of polluted effluents to the ponds/rivers.
5. The meeting takes the note of all these complaints and initiates preventive action. The management feels that the meetings are meaningful
and serve to bridge the communication gap, thus reducing resultant misgivings. The continued participation of the project-affected people and
others indicates that they believe that their grievances are heard and redressed. The management looks at the meetings as an opportunity to
inform about the progress of the project and the constraints to the people. The meetings also serve to build the mutual trust.
16.
The insistence that a job to be given to each and every adult project-affected person by the coal
mine will affect the implementation of the coal projects. As a result, there will be no jobs and people at
large will be deprived of the other opportunities that are normally created in the mining areas. The tracer
study in Block-II Opencast Project has established that there are no project-affected people below the
poverty line, although BCCL has not consciously implemented any rehabilitation measures exclusively for
them. When told that the coal mine would be willing to train them at its own cost at their own village so
that they can have a very decent and assured monthly earning, not only men, but women are found to be
favorably inclined towards training for self-employment.
17.
The self-employment option for the project-affected people is an uncharted territory for not only
Coal India but also for the other industries. No one has any experience in it. But with the funds envisaged
to be made available through the Coal Sector Rehabilitation Project and Coal Sector Environmental and
Social Mitigation Project, Coal India is waiting to take the plunge and make it a success in at least the 25
mines. It hopes to replicate the experience in the balance of mines in the next phase, provided its finances
permit.
- 83 -
Annex2.7
Page 1 of 10
Annex 2.7 COAL MINES SAFETY, HEALTH AND WELFARE
Introduction
1.
Concem for safety at the workplace and the health of coal mine workers in India has a long and
checkered history. The first framework of mining legislation, the Mines Act, came into force in 1901. This
Act mandated the employment of competent managers in mines and the appointment of Govemment
Mines Inspectors empowered to enter and inspect mines and to inquire into mining accidents. The Mines
Act and the subordinate legislation framed thereunder have been periodically updated to absorb technical
advancements and the recommendations of Intemational Labor Conferences, the findings of investigations
into mine disasters or the awareness about the causes of frequent accidents.
2.
Legislation goveming the safety and health aspects in the coal industry include the Mines Act
(1952), Coal Mines Regulation (1957), Mines Rules (1955) and the Indian Electricity Act (1956). The
Mines Act is the enabling statute for the establishment and enforcement of regulations and standards
governing the mines' safety and the workers' health and welfare. The Act defines the powers and responsibilities of mine inspectors, mine owners, owners' agents and managers; establishes constitution of
committees to recommend on rules, inquire into accidents, decide on appeals and health and safety prescriptions and hours and limitations of employment; establishes procedures for enforcement and penalties
for noncompliance; and has the power to make regulations and set standards. The Indian Electricity Act
sets standards for the safe use of electricity, safe electrical circuitry and flameproof enclosures in hazardous gassy atmospheres.
3.
The Coal Mine Regulations cover, among other things, competency certifications for mine managers and other supervisory staff; duties and responsibilities of various parties; maintenance of mine plans;
maintenance of safe access to and exit from the mines; safe transport of men and material; the regulation
of ventilation, lighting and us of explosives; and precautions against gas, dust, noise, fire, water inrush,
etc. The Mine Rules contain procedures for setting up committees, courts of inquiry, medical examinations, mine safety committees, etc. Besides the above, advisory circulars are issued time to time by the
Directorate General of Mine Safety on specific safety issues relating to the use of the plant and equipment
or mining practices. Specific measurable standards have been established for airbome dust, noise, and
lighting for both underground and opencast mines, and for ventilation in underground mines (Box 2.7.1).
4.
Application, inspection and enforcement of the Mines Act and its subordinate legislation are the
responsibility of the Director General of Mine Safety (DGMS) under the Ministry of Labor, Government
of India. Besides regular inspection of mines, DGMS officials organize inquiries into all fatal accidents,
collect a wide variety of statistics about the opening and closure of mines, manpower employment at
different places of work, cases of fatal and serious accidents, and occurrences of gas, explosion, fire and
inrush of water, etc.. Accident statistics are compiled from the notice of accidents submitted to the DGMS
and from the reports of its officials. Fatal accidents are defined as those in which at least one death is
involved and serious accidents are those which serious bodily injury to one or more persons resulting in
temporary loss of income for a specified period or permanently.
5.
Table 2.7.1 shows, in line with intemational norms, the trend in fatal and serious accidents in coal
mines expressed as frequency per 100,000 man shifts and 1000 persons employed, and also the fatality
rate per million tons of coal production. These statistics reveal that there has been an impressive decline in
- 84
-
Annex 2.7
Page 2 of 10
Box 2.7.1 Selected environmental standards for Indian coal mines
Respirable dust
Free silica in airborne respirable dust
Standard
lessthan5%
greater
than5%
3
3 mg/m
15%of free silica
Noise
Level
Exposure
Warninglevel
Danger
limit
Compulsory
protection
dB(A)
(8hr. exposure)
(8hr.,unprotected
ears)
8 hr.
impulse
impulse
No-worklimit
85
90
115
130
140
Lighting (opencast mines)
Place
Lux
General
workingarea
General
machinery
workingarea
0.2
5.0horizontal
10.0vertical
10vertical
10.0
5.0horizontal
5.0vertical
3.0horizontal
30.0
50.0
0.5horizontal
3.0horizontal
1.0horizontal
Drill rigarea(to full heightof rig)
Dozeroperating
area(attracklevel)
Manual
workareas
Unloading/transfer
points
Operators'
cabins
of machines
Handpickingareas
(surface
of conveyor)
Truckhaulroads/rail
haul
Roadway
andfootpaths
between
benchs
Permanent
pathways
Lighting (underground mines)
Place
Lumens/fte
Pitbottom
Mainjunctions
Roadways
Haulage
engines/haul
drums
controlgear,etc.
1.5to 3.0
1.25
0.4
1.5
Ventilittion (underground mines)
Air
Quantity
Quality
Temperature
Source: CoalIndiaLtd.
Standard
3
6 m /minute/person
or 2.5m3/minute/daily
on
output,whichever
islarger.
Oxygen:notlessthan20%.
Carbon
dioxide:notmorethan0.5%.
Inflammable
gas:notmorethan1.25%.
No noxiousgasin amounts
detrimental
to
human
health.
Not to exceed
wetbulbreadingof 33.5°C.If
greater
than30°C,airvelocitymustnotbe
lessthan1.0m/ec.
- 85 -
Annex 2.7
Page 3 of 10
Table 2.7.1 Trend in fatal and serious accidents
Year
No of accidents
Fatal
Accidentfreq.
Serious
Total
(per 1000
employees)
No. of persons
killed
Per 7000 employees
seriously death rate
injured
Death rate
serious
(per
injuries million tons)
1986
180
1,167
1,347
0.74
214
1,199
0.39
2.20
1.25
1987
162
910
1,072
0.63
176
946
0.32
1.72
0.93
1988
159
771
930
0.56
175
815
0.32
1.51
0.88
1989
156
899
1,055
0.63
177
946
0.32
1.73
0.86
1990
151
893
1,044
0.62
166
983
0.30
1.75
0.78
1991
138
803
941
0.56
143
854
0.26
1.54
0.60
1992
165
810
975
0.58
183
894
0.33
1.61
0.77
1993
159
792
951
0.57
181
934
0.32
1.50
0.75
Source:DirectorGeneralof Mine Safety,IndiaandCoal IndiaLtd.
terms of fatality rates per 1000 persons. More recent statistics between 1986 and 1993 show that the rate
per 100,000man shifts has not shown any improvement. The data would indicate that the accident rate
(per 1000 persons employed) for fatalities and serious injuries, has reached a plateau.
6.
Analysis of the causes of fatal accidents shows that roof/side falls at the production faces in
underground mines account for the largest number of accidents, followed by accidents caused by 'wheeled
trackless transportation equipment' in opencast mines and accidents caused by rope haulage and other
machinery. Although the fatalities from roof or side falls show a declining trend in absolute terms, they
still account for 42% of all fatal accidents. This shows clearly that greater attention needs to be paid to the
proper and adequate implementation of roof control measures, such as steel supports and 'roof bolting.'
7.
Table 2.7.2 presents data on safety in opencast mines between 1975 and 1993. Eighty percent of
accidents in opencast mines can be attributed to heavy earth moving equipment, and of those, about 75%
are caused by dump trucks and other transportation machinery. Nearly 90% of these accidents are accounted for by negligent or unauthorized driving, unauthorized riding and being hit by vehicles while
reversing or while crossing haul roads. Many of these accidents could be prevented through proper training, provision of audiovisual signals during reversing of trucks and walkie-talkie sets to dumper operators
and spotters, adequate illumination after dark and in smog, improved wide angle visibility from the
driver's cabin and adequate maintenance of brakes. Far too many accidents are attributed to 'human error'
such as poor judgment, misinterpretation of signals, forgetfulness, misadventure and other foolhardiness
which underscore the imperative need for safety education and training for behavioral change.
8.
Table 2.7.3 presents an overview of major causes of accidents, the current efforts of the industry
in combating them and recommendations for a strategy to improve mine safety.
9.
International comparisons of mine safety need to be interpreted with some care for several reasons. Definitions of 'serious injuries' vary from country to country; some countries express fatality or
injury rates in terms of man shifts worked, others in terms of man hours worked; there are also substantial
differences in the geo-mining conditions, extraction methods (longwall or bord and pillar), and the level of
- 86 Annex 2.7
Page 4 of 10
Table 2.7.2 Fatalities in opencast mines of Coal India
Year
Total no. of
fatalities
Fatalities in
opencast
mines
Fatality rate
per million tons
(opencast mines)
Opencast
fatality as %
of total
1975
1980
1985
1990
1991
1992
1993
233
129
153
131
120
150
132
6
25
29
27
36
42
33
0.288
0.779
0.412
0.226
0.225
0.189
0.162
3
19
19
21
30
28
25
Note: Coal India accountsfor almost95% of opencastcoal productionin the country
Source:CoalIndia Ltd.
Table 2.7.3 Major safety hazards in Indian coal mines and measures for combatting the hazards
Major Hazards by causes
Current measures
Recommended measures
1. Fall of roof (28% of all
accidents in 1992/93)
a. Progressive use of steel supports
supplanting timber.
b. Extended use of roof bolting.
c. Mechanisation of operations to
reduce the number of men at risk.
d. Safety audit for roof management.
a. Largescale adoption of roof bolting/rock
reinforcement systems.
b. Improved hardware and software for roof
bolting systems.
c. Development of diagnostic tools for roof/
rock quality.
d. Use of continuous miners for face
mechanisation.
e. Massive training programs and creation of a
cadre of Strata Control Engineers.
f Hazards mapping of roof using
clasification systems supplemcnted
by geophysical tools.
2. Hazards from wheeled transport
machinery (dumpers/trucks/
tippers) which account for
60% of opencast fatalities.
a. Enforcement of traffic rules.
b. Improved haul roads.
a. New training aids for operators using
simulators.
b. Audio-visual alarms on all vehicles.
c. Improved lighting.
d. Improved communication systems,
including provision of walkie-talkie
sets to driver and spotter.
3. Hazard from mine fires (17
cases of spontaneous heating
belowground in 1991 and New
Kenda disasters in 1994).
a. Compliance with the provision of
Coal Mine Rules (1957).
b. Efforts at combatting underground
fires by inertisation with nitrogen.
a. Urgent need to develop strategy for
combatting hazards of mine fires by
i.
management of spontaeous
combustion risk,
ii. development of diagnostic tools,
iii. classification of coal seams
according to risk, and
iv. use of Emergency Control
Advisory System) or similar
expert system package.
b. Emergency preparedness for dealing with
underground fires, including training
with simulation exercises.
Source:DirectorateGenerlof MineSafety.
- 87 -
Annex2.7
Page 5 of 10
training and experience of the work force. Accident profiles of European countries that employ predominantly the longwall system cannot be compared with bord and pillar systems in India because accidents
due to falls of roof have virtually been eliminated in longwall mining with the introduction of powered
supports for the last 30 years.
10.
In the Republic of South Africa, the rate is defined as the number of fatalities or injuries that have
occurred in one year among 1000 people 'at work', whereas in other countries it is 'on roll.' Such marked
differences in the statistical bases of computation of accident rates notwithstanding, it may be revealing to
compare the available fatality rates in different coal-producing countries of the world as presented in
Tables 2.7.4a, 2.7.4b and 2.7.4c. On an overall basis, the rates achieved in Indian coal mines compare
Table2.7.4a Fatality rates per 1000 persons employed
Year
1986
1987
1988
1989
1990
1991
Australia
(NSW)
0.40
0.10
0.18
0.18
0.23
n/a
France
India
US
W. Germany
United
Kingdom
0.25
0.14
0.34
0.20
0.09
0.26
0.39
0.32
0.32
0.32
0.30
0.26
0.47
0.37
0.31
0.43
0.41
0.38
0.26
0.20
0.17
0.21
0.23
0.17
0.12
0.09
0.21
0.26
0.18
n/a
Table 2.7.4b Fatality rates per 300,000 manshifts worked
Year
1986
1987
1988
1989
1990
1991
Australia
(NSW)
0.54
0.14
0.23
0.22
0.26
n/a
France
India
0.27
0.16
0.38
0.24
0.09
0.18
0.38
0.31
0.30
0.32
0.30
0.24
US
W Germany
United
Kingdom
0.58
0.46
0.30
0.40
0.38
0.35
0.51
0.41
0.35
0.43
0.29
0.30
0.15
0.12
0.24
0.30
0.21
n/a
Table 2.7.4c Fatality rates per million tons of coal produced
Year
1986
1987
1988
1989
1990
1991
Australia
(NSW)
0.10
0.02
0.04
0.03
0.04
n/a
France
India
0.42
0.26
0.60
0.38
0.15
0.33
1.25
0.93
0.88
0.86
0.78
0.58
US
W. Germany
United
Kingdom
0.12
0.08
0.06
0.07
0.06
0.06
0.48
0.39
0.34
0.41
0.26
0.32
0.17
0.11
0.21
0.24
0.15
n/a
Note:Figures
fortheUKrelateto financialyear.
in theformerFederal
Republic
of Germany.
Figuresfor Gernanyrelateto hardcoalproduction
Source:DirectorGeneral
of MinesSafetyandCoalIndiaLtd.
- 88 -
Annex 2.7
Page 6 of 10
favorably with most other major coal producing countries. Even though the fatality rate per million tons of
production may not be a valid measure of exposure to risk, Indian figures reveal that there is no room for
complacency.
11.
The background of mine workers in India and South Africa are similar. They come from rural
backgrounds and do not have a long tradition as mine workers. Most of them are semi-literate. Table 2.7.5
presents a comparative picture of fatality and injury rates per 1000 mine workers in Indian and South
African coal industries. Even though there are some basic differences in the definition of injury rates in the
two countries, the Indian coal industry shows a higher safety record. In the state owned mines in China,
the average number of mine workers killed per million tons of coal production in 1980 was 4.53; this
figure has been brought down to 1.43 in 1990, as safety has been given a high priority by the Chinese
Government. For the Indian coal industry, the fatality rate per million tons in 1990 was 0.78 and in 1993
was 0.75.
Mine safety organization in the Indian coal industry
12.
There are currently three main routes through which safety in the coal mines is being promoted:
(a) the enforcement agency of the Government, (b) the coal industry's own safety organization and (c)
various promotional measures and initiatives. For administering the provisions of the Mines Act, the
Government of India has set up the Office of the Director General of Mines Safety (DGMS), which is the
principal enforcement agency. For improvement of safety in mines, a number of measures have been
taken. They include:
Table 2.7.5 Fatality and injury rates in Indian and South African coal mines
(per 1,000 persons)
Year
India
Fatalities
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
0.36
0.35
0.36
0.32
0.36
0.39
0.32
0.32
0.32
0.30
0.26
0.33
0.32
South Africa
Injuries
2.36
2.23
2.18
2.24
1.92
2.20
1.71
1.51
1.73
1.79
1.54
1.61
1.50
Fatalities
1.05
1.15
1.56
0.71
0.46
0.36
1.58
0.57
0.50
n/a
n/a
n/a
n/a
Injuries
9.00
7.20
9.40
8.32
7.60
7.35
6.53
5.08
4.90
r/a
n/a
n/a
n/a
Note: The basisfor reporting injuries in India and SouthAfrica aredifferent. In SouthAfrica, 'an
injury that either incapacitatesthe injured personfrom performing his normalor similar occupation
for aperiod of 14 days or more,or that causesthe injuredpersonto suffer the lossof a limb or part of
a limb, or sustaina permanentdisability' is reportable.In India, 'any injury which involvesor in all
probability will involve, the permanentlossof, or injury to, the sight or hearingof any personor any
permanentphysicalincapacityor the fracture of one or morejoints or bonesor any phalangesof hand
or foot' is reportable.
Sourme:Chamberof Mines, SouthAfrica and Directorof Mine Safety,India.
-
a)
b)
c)
d)
e)
f)
89
-
Annex 2.7
Page 7 of10
drawingthe attentionof mine managementto violationsof mine safetyand health statutes;
withdrawalof statutorypermissionto operatea mine or part of a mine;
serving an improvementnotice;
impositionof a prohibitoryorder;
suspensionof the statutorycertificateof competencyheld by managerialand supervisory
personnel,in cases where theyhave beennegligentin the dischargeof their duties;and
prosecutionof person(s)responsiblefor accidents.
13.
Besidesoverseeingcomplianceof existinglegislationthrough inspections,inquiriesinto accidents
and dangerousoccurrencesand other safetypromotionalinitiatives,the DGMShas also the responsibility
of accordingapprovalof mine safetyequipment,materialsand appliances;developmentof safetylegislation and standards;and conductof examinationsfor the grantof competencycertificatesto mine managers, engineersand supervisorystaff. Amongnew initiativeslaunchedby the DGMSare the more intense
inspectionof accidentprone mines and identificationof correctivemeasures,extendingtechnological
supportthrough scienceand technologyresearchand humanresourcedevelopmentthroughstructural
training at the newly openedMines Safetyand HealthAcademyunder CMPDIat Ranchi.
14.
CoalIndia has a substantialsafetyorganizationintegratedinto the managementstructure.There
are also consultationand workers' participationthroughthe twin instrumentsof Pit SafetyCommitteeat
the mine level and the system of 'Workmen'sInspector'. At the subsidiarycompanylevel there are several
formal and ad-hoctripartitecommitteeswhich take stockof safetystatus on a regularbasis. The Coal
India SafetyBoard,with representativesof management,workmen,DGMSand a nomineeof the Ministry
of Coal,meets twice a year to reviewsafetyperformanceof the companies.There is additionallya standing committeeon safetyfor Coal Mineswhich is an apex committeeheadedby the Union Ministerfor
Coal.
15.
The Internal SafetyOrganizationof CoalIndia is the principalorganof the coal industryin matter
of safety.The thrust on safetyis supportedby the coal industry'smassiveprogramof trainingand retraining of supervisorystaff and workmen.Besidesthe statutoryinitial,refresherand specializedtraining of
mine workersat vocationaltrainingcenters,the coal industryhas an extensivenetworkof training institutions, supervisorydevelopmentinstitutesand minemanagementtrainingcenters.
16.
The trainingpolicy of Coal Indiaaimsto integrateoccupationalsafetyand health, and environmentalawarenessin all humanresourcedevelopmentactivities.New trainingmodulesfor basic trainingof
surface(opencast)and undergroundworkersvaryingfrom 12 to 48 days havebeen finalized,theyprovide
a comprehensivetraining of new mine workers.Amongotherpromotionalinitiativesfor spreadingthe
safetymovement,the industryconductsannualsafetycampaignsin differentcoalfieldsusing wide range
of techniquesto inculcatesafetyawarenessamongworkersand to stimulateinter-collierycompetition.
There are also first aid and mine rescuecompetitionsheld in differentcoalfieldto recognizethe importance of speed, efficiencyand preparednessin the event of emergencies.While strenuousefforts are being
made to upgradethe workplace safety,unlessthere is abilityto identifycurrenthazardsand the skill to
productivelydeal with them, the goals for highersafetycannotbe attained.
17.
Mine emergencyplans havebeen preparedat all minesas requiredunder CoalMine Regulations.
Technicalassistancewillbe providedunderthe proposedprogramto reviewand, if necessary,update
theseplans.
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Annex2.7
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Occupationalhealthhazards
18.
As some 80% of all diseases are environment-induced, if safe water supplies and good sanitation
facilities could be provided, a large majority of the environment induced diseases could be prevented.
Section 19 of the Mines Act (1952) stipulates the provision of adequate quantities of cool and wholesome
drinking water close to the workplace, and Section 20 lays down the requirements for sanitary conveniences. Under Section 25, the diseases which have been notified as being connected with coal mining
operations pneumoconiosis is the major scourge that has blighted the coal miners.
19.
The Coal Mines Regulations (1957) stipulate that the permissible standard of respirable dust at
3mg/m3 of air for coal dust containing up to 5% free silica. Table 2.7.6 presents the statistics of coal
workers' pneumoconiosis between 1978 and 1991. The apparently increasing number of cases is not due
to actual incidence, but because of the introduction of statutory medical examination since 1978 and
greater awareness amongst the workers to avail of the new medical facilities since 1985. Special efforts
are currently underway for diagnosis of pneumoconiosis among coal workers through radiological screening at 60 centers in different subsidiaries of Coal India.
20.
Changing technology has introduced new hazards in the mine environment such as noise, toxicological hazards and psychiatric problems. Noise, as a major health risk, has merited scrutiny in the coal
industry. Based on the ILO Code of Practice, the DGMS has recommended the following noise standards:
warning (action) level
85 dB(A)
danger limit for unprotected ears
90 dB(A)
entry only with ear protection
115 dB(A)
entry to be prohibited
140 dB(A)
Audiometry forms a part of mandatory medical examination for new entrants and for persons engaged in
operations/areas where noise level exceeds 90 dB(A). While noise surveys conducted in the coal mines
have confirmed that the noise problem is not a serious issue, medical examinations of mine workers
Table 2.7.6 Pneumonoconiosis cases reported in Indian coal mines
Year
No. of cases
1978
1979
1980
1981
1982
1983
1984
1985
5
24
21
70
86
72
60
96
1986
154
1987
1988
54
81
1989
1990
1991
96
33
29
Source:Director General of Mine Safety, India
- 91 -
Annex2.7
Page 9 of 10
showed that slightly more than 50% of the workforce seems to have some degree of hearing impairment.
The cause is more likely the relatively high average age of underground workers than noise at the workplace.
21.
Responsibilities for occupational health at the corporate level are shared by the Chief of Medical
Health Services, Coal India and the newly -created Institute of Occupational Medicine and Hygiene at
CMPDI, Ranchi. The roles of the Chief of Medical Health Services are to liaise with organizations of the
Central Government on national occupational health policy and to monitor the quality and implementation
of worker health programs in the subsidiary companies. The major responsibilities of the new CMPDI
institute will be to carry out extensive monitoring of worker health and maintain a medical data bank on
employees, to initiate long-term research into the health aspects of coal mining, and to provide advice and
consultancy services to coal companies on occupational health, industrial hygienic and ergonomics.
22.
An Occupational Health Wing, headed by a Deputy Chief Medical Officer, has been established at
the central hospital of each subsidiary company. The responsibility of these units is to provide regular
medical screenings and diagnostic examinations of company employees, to regularly report to company
management on the incidence of occupational diseases amongst mine workers, to train regional hospital
staff in the detection and treatment of occupational diseases, and to provide ongoing care for employees
requiring specialized treatment.
23.
All new entrants undergo a thorough medical check up before starting work. As per Mines Rules
about one-fifth of the employees are medically examined every year in rotation. Coal India has started a
computerized health record system, which will cover all employees by December 1996. Radiology,
cardiopulmonary, audiometry, ergonometry and psychiatric diagnostic capability will be strengthened at
both the corporate and subsidiary company levels.
Mine rescue program
24.
Subsequent to the assumption of mine rescue responsibilities by Coal India in 1985, two commissions were established by the Government of India to review existing mine rescue facilities and to recommend priorities for modemization rescue equipment. A comprehensive modemization plan for mine
rescue services has now been prepared and is being implemented based on the reports of these commissions. Four new mine zonal rescue stations are being established and equipped, and the two existing
stations upgraded to the same standard. Training facilities are being built to provide a more realistic
simulation of the actual environment encountered in actual rescue and recovery work.
Welfare measures Coal India as an instrument for socio-economic change
25.
In the pre-nationalization era (1975), the were a number of enactments aimed at providing a
modicum of facilities for health, water supply and other amenities in the coalfields. For instance, the
Mines Boards of Health were set up in major coalfields as municipal agencies for managing the civic
affairs of urban centers in coalfields and also for providing support services for improving support services
for improving the living conditions. Starved of funds, the impacts of such organizations were very marginal. The Coal Mines Labor Welfare Fund Act (1947) set up the Coal Mines Labor Welfare Organization
to provide an umbrella organization for medical facilities. There was also a plethora of welfare-related
legislative measures for canteens, creates, pinhead baths, etc., but hardly any progress was made in the
implementation of these measures due to lack of support from the mine owners as well as lack of enthusiasm to utilize the facilities by the workers.
- 92 Annex 2.7
Page 10 of 10
26.
After the nationalization of coal mines, there has been a sea change in the level of funding and
resource inputs for miners' welfare through the creation of a massive social infrastructure with vastly
upgraded facilities for housing, water supply and medical care. Over the last two decades, Coal India has
built a large number of workers' housing colonies with facilities for schools and colleges, canteens,
recreational facilities such as playgrounds, stadiums and gymnasiums, etc.. Coal India's expenditure on
workers welfare has registered a steep increase from Rs 200 million (US$6.5 million) in 1974-75 to Rs
5,000 million (US$ 160 million) in 1992-93 reflecting the industry's commitment to welfare activities.
Table 2.7.7 shows the achievements in physical terms since nationalization in improving the quality of life
in the coal mining areas.
Table 2.7.7 Social welfare facilities developed since nationalisation
At the time of
nationalisation
As of
1/11/93
21.70
(118,366)
54.36
(357,478)
227,300
2,186,497
Quantum of water
supply (mil gal/day)
12
92
Hospitals
49
87
1,482
5,333
Dispensaries
197
409
Ambulances
42
622
Schools & colleges
287
1,238
Canteens
210
405
Co-operatives
(provision stores)
177
305
Banking facitlities
0
226
Playgrounds
0
230
Stadiums
0
30
Gymnasiums
0
7
Housing Satisfaction
% of population
(Number of people housed)
Population covered by
potable water supply
Hospital Beds
Source:CoalIndiaLtd.
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Page I of 7
Annex 2.8 TECHNICAL ASSISTANCE: TERMS OF REFERENCE
This annex provides a brief description of the terms of reference for the major items included
under the technical assistance for this project:
1. Strengthening of Coal India's environmental and social management capacities
The objective of this task is to enhance Coal India's current capacity to deal effectively with the
environmental and social issues the company encounters in the operation and expansion of its mines. To
this end, a multi-disciplinary team of experts would work closely with Coal India's environmental and
social staff in a review of Coal India's current capabilities in these areas. Based on this review, the expert
team would then make recommendations to Coal India's management on how to enhance the effectiveness
of Coal India's environmental and social units. These recommendations would need to take into account
Indian laws and regulations, Coal India's respective policies, cultural factors and the experience with
similar efforts in India and abroad.
In its work the team would deal, inter alia, with the following issues:
*
the effectiveness of Coal India's current organizational setup,
*
the quality of Environmental Impact Assessments,
*
Coal India's capacity to deal with regional environmental and social issues,
*
the possibility of establishing corporate targets for pollution and waste reduction for areas
that are currently not covered by laws and regulations or exceed prevailing norms,
*
review the extent to which environmental and safety concerns are taken into account in mine
planning, equipment selection and mine operations,
*
auditing procedures,
*
staff training, and
*
consultations with the various stakeholders.
The team would need to include experts in the following areas:
*
sociology, resettlement and rehabilitation,
*
corporate environmental management,
*
mine planning and reclamation,
*
environmental impact assessment,
*
environmental monitoring,
*
GIS and computerized data management,
*
training and professional development programs, and
Indian environmental laws and regulations.
*
Coal India is expected to initiate the task within six months after the project becomes effective.
Completion of this task will take about 48 man-months, and is estimated to cost (including travel, office
support, etc.) US$775,000 of which US$590,000 would be in foreign exchange.
2. Study to assist power generation companies in ash disposal
The purpose of this task is to assist Coal India's power generation customers in efforts to find
environmentally acceptable and sustainable methods for ash disposal. To this end, Coal India (through
CMPDI) will assist their power generation customers in a study of the feasibility of disposing of ash in
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Annex2.8
Page 2 of 7
mined out areas. This study will build on the knowledge gained in previous studies conducted in concert
with the Indian power generation industry.
Coal India will research and make available to interested power corporations, the following
information:
*
potential mines for ash disposal;
*
battery limits for ash supply;
*
physical conditions of ash at supply point;
*
preferred mode of transport;
*
additional installations required at mine site to facilitate ash disposal;
*
estimated operating costs of ash disposal inside mine battery limit and cost of altemative
backfilling operations (if any); and
*
data on hydrological conditions at mine site and possible effect of ash leachate on underground water quality.
Coal India's study team would include members with expertise in mining and civil engineering.
The schedule of this task will be determined by the power generation industry study leader.
Completion of this task will take about 10 man-months and is estimated to cost (including travel, office
support, etc.) US$17,000 which will include no foreign exchange.
3. Study to determine best methods for disposal of oil and grease from workshop effluents
The objective of this task is for Coal India to develop practical solutions to dispose of oil and
grease from workshop effluents in order to improve ambient water quality in and around the 25 mines
included in the project. To this end, CMPDI staff (with the aid of local consultants) will review domestic
and international regulations and study reports documenting procedures for the proper disposal of oil and
grease. CMPDI will contact other industries and oil and grease recycling organizations with India to
obtain information. The various disposal technologies identified will be analyzed for applicability to Coal
India mine operations. Options to be studied include collection of oil and grease in barrels for incineration
in a professionally designed unit and selling of oil and grease to downstream users for use as fuel. The
study will also investigate the most economic mode of treatment and disposal for effluent water, including
reuse inside the mine battery limits and treatment to reduce oil content.
The study team will include expertise in environmental engineering and/or waste management
engineering and appropriate administrative support. Completion of this task will take about 10 manmonths and is estimated to cost (including travel, office support, etc.) US$16,000 which will include no
foreign exchange.
4. Studies to determine the suitability of top soils for use in overburden dump reclamation
The objective of these studies is to characterize the soil horizons that will be removed at each of
the 25 mines in the project. Those soils found to be suitable for use in overburden dump biological reclamation can then be stored properly and reused. The major benefits of the study will be the development
and progressive improvement of the techniques used in biological reclamation overburden dumps and
more timely and effective reuse of mined out areas.
- 95 Annlexc2.8
Page 3 of 7
Coal India will hire local consultants with expertise in soil science and agronomy to characterize
the soil horizons that will be removed during mining operations at each of the 25 mines. The soils will be
analyzed for physical, chemical and biological parameters necessary for their use as suitable substrate for
overburden dump reclamation.
The studies will continue for five years as suitable soils are collected, stored and reused. Completion of the task will take about 20 man-months and is estimated to cost (including travel, office support,
etc.) US$34,000 which will include no foreign exchange.
5. Study to determine acceptability of septic field sewage disposal at mine colonies
Domestic sewage at most of the mine colonies is currently disposed through septic leach field
treatment (locally identified as 'soak pits'). World Bank staff have expressed concern that this treatment
technique might have an adverse impact on local ground and surface water resources if the leach field soils
are inadequate to provide proper treatment. Many of the colonies and surrounding villages depend upon
groundwater (wells) for domestic use, thus, inadequate sewage treatment and potential biocontamination
of groundwater might put these users at risk. Coal India has agreed to conduct a study at each of the mines
in the project where new leachfields are proposed in new or existing colonies. The major benefit of this
study will be the protection of the domestic water supplies of the mine colonies and nearby villages.
These studies will consist of soil borings and sampling to determine soil suitability for leach field
disposal. These studies will include a review of leachfield design to determine the adequacy of the
leachfield area, percolation rates, soil strata characteristics and proximity to groundwater resources. If
these studies determine that soil conditions at any of the sites are not suitable for septic system disposal,
the proper sewage treatment system will be designed and constructed to meet all Government discharge
standards.
The consultant study team would have expertise in sanitary and environmental engineering
specifically related to domestic sewage treatment. Completion of the task will take about 84 man-months
and is estimated to cost (including travel, office support, etc.) US$ 143,000 which will include no foreign
exchange.
6. Social Science Consultant to Resettlement and Rehabilitation Cell
The general objective of this consultancy is to add social science capacity and community development and rural income generating experience to the R&R Cell in Coal India, thereby ensuring that the
recently approved Coal India Policy on Resettlement and Rehabilitation is carried out effectively. This
additional capacity and experience will contribute to improved performance in resettlement and rehabilitation work, resulting in better relations with surrounding communities and more prosperous communities.
Coal India intends to hire a consultant to assist in building the necessary capacity and human
infrastructure at the project, area and subsidiary levels for the implementation of the resettlement and
rehabilitation activities.
The responsibilities of the consultant, who would be attached to the R&R Cell at Coal India
headquarters, would include:
*
assisting GM (R&R), Coal India in identifying and selecting NGOs for assistance in implementing the policy;
- 96 -
Annex2.8
Page 4 of 7
*
*
*
assisting GM (R&R), Coal India by advising the subsidiaries and the projects in how to
implement the policy, and by internal monitoring;
assisting the GM (R&R), Coal India in organizing workshops and seminars for Coal India
staff and NGOs involved in R&R implementation; and
identifying suitable research institutions, and drawing up Terms of References for studies
needed for improved implementation (e.g. market research, community studies, rapid
evaluation studies, etc.)
The successful candidate must have, educational background in social science, Sociology, Anthropology or Social Welfare; practical experience in income generating/self employment activities in rural
India; and practical experience in two or more of the following areas: rural community development,
participatory training techniques, management and monitoring of rural development, evaluation and
research of rural development.
The consultant will be assigned to the R&R Cell of Coal India for the entire project period.
Completion of the task will take about 60 man-months and is estimated to cost (including travel, office
support, etc.) US$102,000 which will include no foreign exchange.
7. Safety of overburden dumps
The objectives of this task are to determine the safety of the old overburden dumps of the 25
opencast mines included in the Bank's project and to design the resloping and regrading of unsafe overburden dumps. To this end, Coal India will form a study group with local consultants and perform a
comprehensive examination of the stability and safety of the overburden dumps and propose methods and
means for resloping any unsafe or unstable dumps. In addition, Coal India will review, with the help of
one local and one foreign consultant, the determination of the stability of overburden dumps and the
methodology for resloping and regrading recommended by the study group. The consultants and the study
group should include experts in civil engineering and mining engineering with relavent experience.
Coal India is expected to form the study group within one year of project effectiveness. Completion of the study will take 18 manmonths and is expected to cost US$52,000 (including travel, office
support, etc.) which will include no foreign exchange. The review of the results of the study will take
place within six months of the completion of the study and will take 4 manmonths. This task is expected to
cost US$45,000 (including travel, office support, etc.) of which US$40,000 will be foreign exchange.
8. Training for environmental personnel
The objective of this task is to ensure proper implementation of the Environmental Management
Plans and environmental legislation and compliance with consent letters. To this end, Coal India, with the
assistance of local consultants, will prepare training training modules for new recruits and refresher
courses for environmental personnel at all levels in Coal India and will train environmental personnel, as
well as personnel from other disciplines, at the National Institution and the staff college of Coal India.
Coal India is expected to initiate this task within six months after the project becomes effective.
Preparation of the training modules is expected to take 40 man months and is estimated to cost US$68,000
(including travel, local transport, etc.). The training is expected to continue for the entire project and will
take approximately 300 man months to complete. The estimated cost of the training is US$100,000. These
tasks will include no foreign exchange.
- 97 Annex 2.8
Page 5 of 7
9. Standardization of environmental monitoring
The objectives of this task are to identify the areas of Coal India's environmental monitoring
system, to improve Coal India's current system of monitoring for compliance with environmental standards, and to reduce the air pollution and bring the suspended particulate matter within permissible limits.
To this end, Coal India, with the help of local consultants, will study the existing environmental monitoring practices and develop standard procedures for application throughout Coal India. Coal India and the
local consultants will also identify colonies and villages affected by air pollution and formulate a mitigation plan for those communities.
The task is expected to take 34 man months and the cost is estimated at US$58,000 (including travel, local
transport, etc.) with no foreign exchange.
10. Facilitation of community participation in implementation of RAPs and IPDPs
The objective of this task is to pass on the maximum investment benefits of the Rehabilitation
Action Plans and Indigenous Peoples Development Plans to the local communities in the mine areas. In
order to achieve this, one or two NGOs or community based organizations at each of the 25 subprojects
will be selected to assist in organizing the communities so that they can participate in the activities intended to improve their communities. The organization will provide assistance to aid community residents
in bidding for the contracts and implementing them. The consultants will need to be resident in the community.
The team will study the current status of implementation of Coal India's development programs.
They will also interact with the community to identify their needs and discuss those needs with mine
management to obtain management's financial support.
The task will continue for the entire project period. The total effort required is expected to be 3000
manmonths (50 groups of two or three people for 60 months) and the cost is estimated at US$1.42 million
with no foreign exchange.
11. Assessment of implementation of RAPs and recommendations for improvements
The objectives of this task are to identify shortcomings and successes in the implementation of
Rehabilitation Action Plans and Indigenous Peoples Development Plans, to disseminate information about
these successes and shortcomings, and to help management improve on the social development policies
and their implementation. In order to achieve these objectives, an independent social research organization
will visit mines and discuss with project-affected people and other to assess the results of the implementation of the resettlement and rehabilitation and community development policies. The organization will
identify positive and negative impacts, recommend ways to improve implementation, monitor the results
and submit semi-annual reports to Coal India. The organization will sample at least one mine in each
coalfield once a year.
Coal India is expected to initiate this task approximately one year after the project becomes
effective. The task will then continue for the remainder of the project period. The total effort required is
expected to be 50 manmonths and the cost is estimated at US$96,000 (including travel, field
accomodations, etc.).
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Annex2.8
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12. Assistance in supervision of the project
The objective of this task is to assist the Bank in supervising the implementation of the project by
helping to focus the Bank's supervision missions on the subprojects with weaker records of implementation. To this end experienced local consultants will work with Coal India to visit each subproject at least
once in every quarterto reviewthe adequacyof environmentaland socialpolicy implementationstaff and
infrastructure facilities and the status of the implementation of the Environmental Action Plans, Rehabilitation Action Plans and Indigenous Peoples Development Plans.
The local consultants should have wide experience in mining project implementation and environmental and social issues facing coalfield areas. The supervision team should consist of one senior mining
engineer, two environmental specialists and two sociologists.
The task will continue for the entire project period. The total effort required is expected to be 6,700 man
days and the cost is estimated at US$413,000 (including local travel, accommodations, overhead, etc.)
with no foreign exchange.
13. Midterm review of environmental policies
The objective of this task is to improve performance in environmental pollution control measures.
To this end, Coal India will work closely with two international and two Indian environmental consultants
to carry out a midterm review of Coal India's environmental policies and recommend measures to improve
them.
Coal India is expected to initiate this task about mid way through the implementation of the
project. The total effort required is expected to be 12 man months and the cost is estimated at US$ 143,000
(including travel, accommodations, etc.) which includes US$130,000 foreign exchange.
14. Social and environmental review panel
The Social Team will be guided by OD 4.30 and OD 4.20, the Resettlement Actions Plans and the
Indigenous Peoples Development Plans prepared by Coal India, meetings with relevant project staff and
project-affected people, and is expected to carry out the following activities (i) review Coal India's
resettlement and rehabilitation policy and the Resettlement Actions Plans, assess the progress Coal India is
making in implementing the policies and the Plans, including identifying areas where improvements are
needed and evaluate the extent to which restoration of project-affected people's livelihood is achieved; (ii)
review Coal India's policy statements on community development and tribal development in particular,
assess the progress Coal India is making in implementing the indigenous plans and evaluate the effects on
indigenous communities in the project area; (iii) review public health issues; (iv) meet with projectaffected people, NGOs and interested parties in major coal fields; and (iv) guide Coal India in the planning, implementation, monitoring and evaluation of resettlement and community development programs.
The environmental team will be guided by the sectoral environmental assessment, Environmental
Action Plans, meeting with project teams and site visits. It will focus on environmental impacts related to
(i) air, water, land, noise and vibrations and (ii) coal mining environmental management.
-
99 -
Annex2.8
Page 7 of 7
The panel, in its reviewof the sectoralenvironmentalassessmentand EnvironmentalActionPlans
for the selectedmines,will make surethat implementationof the action plans would(i) bring the respective mines into full compliancewith Indianrules and regulations,as well as stipulationscontainedin the
permitsand consentletters issuedby the Ministryof Environmentand Forestsand the StatePollution
ControlBoards,respectivelyand (ii) meet the requirementsof the Bank's OD 4.01.
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Annex 2.9
Page 1 of 9
Annex 2.9 COAL INDIA LTD.
India's coal industry
1.
About two-thirds of India's commercial energy demand is currently met by coal. India's large
reserves of coal would suffice to meet the projected demand for the next 250 years. Current production
(1995/96) is around 240 million. In terms of energy this would be equivalent to about 110 million tons of
oil, almost four times the quantity of India's indigenous oil production.
2.
About 60% of India's coal production is used in power generation; 15% is consumed in the
production of steel; the remaining 25% are used by a large number of industries, such as cement, fertilizers, brick kilns, textiles, paper, glass, ceramic and metallurgical plants; in addition, households, particularly those located in close proximity of coal mining areas, consume large quantities of soft coking coal;
about 300,000 tons of coal are exported to Bangladesh.
3.
The pattern of coal consumption has changed over time in response to changes in the direction of
India's industrial and economic growth:
*
Until the 1960's, the Indian Railways were the largest user of coal. Replacement of steam
locomotives with diesel and electric locomotives sharply reduced the use of coal by the
railways.
*
With the emphasis on the development of core industries and the commissioning of large
integrated steel plants, the steel industry began to take the lead as the largest user of coal.
The demand for coal by the steel industry continued to grow until the end of the 1970's. By
then, the coal industry had reached its capacity of producing prime grade coking coal. The
steel industry had to rely on imported coking coal, which was usually mixed with lower
grades of indigenous coking coal, to meet its coal requirements.
a
The boom in the demand of coal in the 1970s was fueled by two important policy decisions
of the Government: one, to speed up the country's development though investments in heavy
industries, and two, to ensure 'equitable growth of all regions in India'. Both policies gave
rise to a dramatic increase in India's industrial base in almost all States. While the decision
to spread industrial development over wide area achieved the desired effect of creating
employment, poor access to rail and road transport made electric power the only alternative
for most industrial plants to meet their energy needs.
*
Along with the push to accelerate industrial growth, came pressures to protect India's
farmers from the 'vagaries' of the monsoon and to provide urban (as well as rural) households with access to electric power. The 'drought-proofing' of agriculture led to a surge in
the demand for subsidized credits (to finance tubwells, pumps and other agricultural machinery) and subsidized power (to run all this machinery).
4.
Initially, the Government tried to meet the growing demand for electric power from hydroelectric
power. However, the relatively long construction periods of hydroelectric power plants, riparian disputes,
increasing difficulties in the resettlement of people and growing environmental concerns shifted the
balance steadily to investments in coal-based thermal power plants. Currently, about 60% of coal production is consumed by the power sector.
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Annex2.9
Page 2 of 9
Nationalization of the coal industry
5.
Until the early 1970s coal production was mostly in the hands of privately owned mining companies. Easy access to high quality coal and the availability of inexpensive labor attracted a large number of
relatively small investors. Apart from the usual lease arrangements that entitled a company to mine coal in
a certain area, neither State nor the central governments exercised control over the industry. With the
dramatic growth in the demand for power and the expansion of coal-based thermal power generation, the
Government became concemed about the willingness and ability of the large number of private mine
owners to expand their operations. Two factors made private mine owners reluctant to make further
investments: one, was the possibility that the Government might nationalize their industry; and two, the
fact that coal prices were set by the Government at levels that barely covered costs. (The Government
controlled coal prices and the distribution of coal since 1939 as part of its efforts to meet the wartime
needs of the country.) The resulting decline in investments led to a drop in mine productivity; the squeeze
on profits, in turn, encouraged mine owners to 'cut corners'; the results were appalling labor conditions
and a disregard of sound mining practices in favor of short-term profits.
6.
To deal with the deteriorating situation, the Government decided in 1971 to nationalize all mines
producing coking coal, and in 1973, all mines producing thermal coal. Almost 1000 privately-owned
mines were combined into 325 mines and placed under the control of the Coal Mines Authority Ltd.
Bharat Coking Coal Ltd. continued to manage the mines of the Jahria coalfield, India's major source of
prime coking coal. The Government did not nationalize the 'captive' mines belonging to the TISCO and
IISCO steel companies, and it decided to share the ownership of Singareni Collieries Co. Ltd. (SCCL) the
Govemment of Andra Pradesh.
7.
In 1975, the Government consolidated its control over the industry by transferring the ownership
and management of all coal mines to Coal India Ltd., which was established for this purpose. Through its
seven (coal-producing) subsidiary companies, Coal India controls now more than 90% of India's coal
production. Lignite production, which amounts to about nine million tons, is in the hands of the Govemment-owned Neyveli Lignite Corporation, an integrated producer of lignite, power, fertilizer and briquettes (Figure 2.9.1).
Institutionalstructureand managementof the sector
Throughthe Departmentof Coal (DOC)in the Ministry of Coal
(MOC),the PlanningCommissionand the PublicInvestmentBoard,the Govenmment
controlsnearlyall
8.
THE ROLE OF THE GOVERNMENT.
facets of Coal India's operations. It sets production targets, approves operating budgets, decides on the
allocation of coal supplies to major consumers, coal prices, the investment program, new projects, wages
and the appointmentsof senior staff.
9.
TIIE ROLE OF COALINDIA. Coal India Ltd. is the apex holding company of the nationalized coal
industry It is fully owned by the Government. Important management decisions are taken by a Board of
Directors, which consists of three directors (Director (Technical), Director (Finance) and Director (Personnel), two senior civil servants from the Ministry of Coal, one member each from Railway Board and the
Central Electricity Authority, the Chairmen-cum-Managing Directors from the subsidiary companies, and
one or two well known management experts. The Chairman of Coal India chairs the Board meetings.
(Figure 2.9.2 shows the basic organizational structure of Coal India and its subsidaries. ) Board members
are selected by the Government and appointed by the President of India. They serve at the pleasure of the
President and retire upon attaining the age of 58.
- 103 Annex 2.9
Page 3 of 9
Figure 2.9.1 Coal India Ltd. and its subsidiaries,
Coal India Ltd. (1975)
Total mines 496
Total manpower 655,800
Total production 216 milion tons
Total profit Rs 3,609million
Bharat Coking Coal Ltd. (1973)
96' mies
Manpower 156,400
Production 29 million tons
Loss Rs 3,419million
4 At
litffiii
' 54
'Aa
54 'A
ttifikt
Central Coalfields Ltd. (1975)
72 mines
Manpower
RRRRRRRR
tttttt
95,800
Profit Rs 1,272million
Eastern Coalfields Ltd. (1975)
126mines
Manpower 171,600
Loss Rs 4,780million
Affi1Q1iffiIiffii
Mahanadi Coalfields Ltd. (1992)
20 mines
Manpower 22,100
kg
jjj
Profit Rs 2,070miUion
_
_
Northern Coalfields Ltd. (1986)
10mines
Manpower 16,200
tl
A __WAWNRUWAIUh,
South Eastern Coalfields Ltd. (1986)
88mines
Manpower 97,600
a it it v
tttttttttJ
__
Western Coalfields Ltd. (1975)
79 mines
Manpower 84,500
Profit Rs 842 million
tttttlj
_
-
Central Mine Planning & Design Institute Ltd. (1975)
Manpower 4,200
Profit Rs 26 million
I
Northeastern Coalfields (1975)
5 mines
Manpower 5,100
Loss Rs 303 million
4
1
m
_
- 104-
Annex2.9
Page 4 of 9
10.
Coal India's main functions are:
*
to advise the Government in framing on policy matters related to the coal industry, the
demand for coal, the investment program for the coal industry, coal production targets, and
the implementation of the coal pricing policy;
*
to prepare and implement a long-term corporate policy, annual corporate production plans
and budgets;
*
to oversee the operations of the subsidiary coal companies, control intercompany cash flows,
and administer the investment fund;
*
to negotiate with trade unions a national wage structure for coal miners, and liaise with them
to ensure harmonious industrial relations;
*
to negotiate coal supply contracts with major consumers, such as State Electricity Boards
and steel plants, to monitor the distribution of coal and coal products throughout the country,
and to liaise with State governments and coal consumers' associations;
*
to recruit, train and manage 'cadres' of all executive staff;
*
to approve investment projects valued at Rs200-500 million (US$6-16 million) and to review
and recommend exceeding these amounts for the Government's approval;
*
to monitor and review the progress of all projects with investment exceeding Rs200 million
(US$6 million) and submit progress reports to the Ministry of Project Implementation for
projects with investment of Rs one billion (US$30 million) and above.
*
to procure all goods and services from abroad, some specified heavy earth-moving equipment and other goods in short supply within the country;
to negotiate World Bank and bilateral foreign collaboration project loans and monitor their
implementation;
*
to plan research and development activities for the coal industry and to promote introduction
of new technology; and
*
to manage operations of mines in Northeast Coalfields and Dankuni Coal Complex near
Calcutta which produces smokeless fuel and coal gas.
Figure 2.9.2 Organizationalstructureof Coal India and its subsidiary companies
Chairman
Direater
C(Northeaste
Director
(Technical)
Director
(Vigilance)
Director
(Finance)
|
Director
(Personnel)
Chairman-cumManaging
Director
Director
(Phanning&
Projects)
Director
(Production)
Director
(Finance)
Director
(Personnel)
|
-
105 -
Annex2.9
Page 5 of 9
11.
Today Coal India has 450 mines and 15 washeries in production and 48 new mines and four new
washeries under construction. In addition, Coal India has five major central workshops equipped to
undertake all major repair and overhaul of mining equipment and to manufacture spare parts. The total
production from all mines in 1994/95 was 220 million tons of raw coal and [...] million tons of washed
coking coal. Coal India employed 656,000 people. Coal India's headquarters is located in Calcutta, which
is also the headquarters of the two principal railway networks that handle more than 70% of India's coal
shipments. Coal India maintains offices in Delhi and in almost all state capitals for liaison with Govemment agencies and for monitoring distribution of coal. It has a staff of 1,600 and an annual budget of Rsl .8
billion (US$60 million).
12.
THE ROLE OF THE SUBSIDIARY COAL COMPANIES. When Coal India was established in 1975, the
nationalized coal mines were managed by four coal producing subsidiaries: Eastern Coalfields Ltd. (ECL)
in West Bengal, Bharat Coking Coal Ltd. (BCCL) and Central Coalfields Ltd. (CCL) both located in Bihar
and Westem Coalfields Ltd. (WCL) in Maharashtra. A few small mines in northeast India were managed
directly By Coal India. Mine planning and design was carried out in a separate subsidiary company, the
Central Mine Planning and Design Institute Ltd. (CMPDI) located in Ranchi. Mining operations extended
over eight States and 18 coalfields. All of them located in the east-central part of India.
13.
With the steep increase in coal production, it became increasingly difficult to manage widely
dispersed mining operations and Coal India created new subsidiaries with fewer mines. Major coalfields
became the main operating area of a subsidiary. Northern Coalfields Ltd. (NCL) in Singrauli and Southeastern Coalfields Ltd. (SECL) in Central India and Korba were established in 1986 by splitting the
operations of CCL and WCL. Mahanadi Coalfields Ltd. (MCL), which manages now the mines in the
Talcher coal field and Ib Valley was started in 1992 by reducing the areas of CCL and SECL.
14.
Each subsidiary coal company is managed by a Board of Directors with a Chairman-cum-Managing Director as the Chief Executive, who reports to the Chairman, Coal India. He is assisted by four fulltime and 4-5 part-time Directors that deal with production-related matters, the implementation of new
projects, finance matters and personnel issues. The 'functional' directors report to the respective Coal
India Directors on subject-related issues, but are placed administratively under their respective Chairmancum-Managing Directors. The 4-5 part-time directors represent the Ministry of Coal, the local railways,
local State Electricity Boards, Coal India and provide advice on management-related issues. All directors
are nominated by the Government.
15.
The main functions of the subsidiary companies are:
*
to manage all mining and other operations under their control and to conduct mining operations with due regard to safety of life and property, conservation of resources, and the
workers' health and welfare;
*
to sell coal and realize the sale proceeds, royalties, cesses and taxes on behalf of the Government;
*
to manage all daily and monthly rated non-executive cadres;
*
to acquire land with due process of law and to attend to resettlement and rehabilitation and
environmental issues;
*
to liaise with local trade unions to maintain harmonious industrial relations;
*
to liaise with the representatives of State Governments, the Railways and Electricity Boards;
*
to approve projects with a capital investment of up to Rs200 million (US$6 million), and to
implement, monitor and review the progress of all investment projects and submit periodic
reports to Coal India;
- 106-
*
*
Annex 2.9
Page 6 of 9
to effect payment of wages and salaries to all employees, and the bills of contractors; and
to procure all capital and consumable goods (other than those procured by Coal India) and to
supervise their efficient distribution and storage.
16.
Subsidiary companies have three levels of management: Corporate level, area level and Mine level
management. Each company is divided into a number of areas and each area has a number of operating
mines and projects under implementation. The number of areas in a company varies from five in MCL to
18 in BCCL depending on the number of mines or project units, the type and complexity of the operations,
and the manpower deployed. Larger mines or projects are often treated as an 'area'.
17.
AREA MANAGEMENT.
Each area is managed by an Area General Manager, usually a mining engineer with about 25 years of operational experience. He is assisted by a team of 10-12 engineers and other
professional staff. They are responsible for the supervision and monitoring of all activities at the mine or
project level. The Area office is also in charge of land acquisition and the implementation of Coal India's
policy for resettlement and rehabilitation as well as its corporate environmental policy. The Area General
Manager reports to the functional directors on the respective functions, but administratively he is answerable to the chairnan of the subsidiary company.
18.
MINE MANAGEMENT.
Producing mines and mines under construction ('projects') are managed by
Mine or Project Managers, usually mining engineers with 15-20 years experience. He is the linchpin for
all production and project implementation activities. Each manager is assisted by a Pit Manager and a
number of assistants and undermanagers, all of them mining engineers. Their number is determined by
Coal Mines regulations and varies with the volume of production and the complexity of the operations. In
addition, each Mine Manager is assisted by a number of other professionals that assist him in matters such
as the implementation of environmental and rehabilitation action plans.
Financial management
Financial flows
19.
The financial flows between Coal India and its eight subsidiaries are akin to the practice followed
by a corporation whose operations are structured in divisions. One of Coal India's main finctions is to
transfer resources from profitable subsidiaries, such as MCL, NCL and SECL and marginally profitable
companies such as CCL, WCL to the two major loss-making companies, ECL and BCCL. This transfer of
resources is one of the main informal functions of the holding company, Coal India Ltd. While this crosssubsidization of subsidiaries saps profitable companies of resources to expand their operations, it drastically reduces the overall tax burden on Coal India and its subsidiaries.
20.
The following practices have been used to determine, regulate and manage the financial flows
between subsidiary companies and Coal India.
a
A retention price mechanism is in operation among the coal producing companies. The
Ministry of Coal specifies the retention price applicable for each subsidiary coal company.
This price is below that realized by the profit-making companies and higher than that of lossmaking companies. Profit-making companies are therefore required to contribute the excess
of the realized price over retention price on the total outside coal dispatches to the Coal Price
Regulation Account (CPRA) which is maintained centrally by Coal India. The aggregate of
these credits are then used to settle the claims of the loss-making subsidiaries under the
scheme. The contributions to, or claims against, the CPRA are regarded as tax deductible
- 107 -
Annex 2.9
*
*
*
Page 7 of 9
business expenditure or taxable income in the hands of the individual subsidiary companies
and have been used by Coal India to minimize the group's tax liability.
Coal India's aggregate interest liability is allocated to subsidiary companies on the basis of
the proportionate investment made by Coal India in each of these companies.
All financial transactions between Coal India and its subsidiaries are recorded through
current accounts. Adjustments for CPRA or interest, as well as capital expenditure incurred
by Coal India on behalf of subsidiaries, are made through credits/debits in this account.
Upon the receipt of equity capital from Government, Coal India issues equity to its subsidiaries. The current account balance at the end of each financial year, after adjustment, is considered as a loan from Coal India to its subsidiary companies.
21.
The magnitude of financial flows between Coal India and its subsidiaries for the year ending
March 1994 is summarized in Table 2.9.1.
Table 2.9.1: Financial flows between Coal India and its subsidiaries, 1994
Rs million
ECL
BCCL
CCL
WCL
MCL
NCL
SECL
4,465
3,098
-742
-1,840
-2,930
-5,755
-3,415
a. CPRA
4,076
3,634
-651
-526
-1,857
-1,673
-2,578
b. less interest
1,025
Financial flows from Coal India
Accounted by
c. net flow equity plus loan from Coal India 1,414
Total (a+b+c)
4,465
1,385
932
489
616
1,291
1,109
849
841
-825
-457
-2,791
272
3,089
-742
-1,840
-2,930
-5,755
-3,415
Source:CoalIndiaLtd.
Coal India's financial performance
Financial performance of Coal India and its subsidiaries
22.
The Govemment's primary objective for nationalizing the coal industry was to rapidly expand
India's capacity to produce coal. Initially, Coal India's main function was to serve as a conduit for massive
public investments to the coal sector. The primary objective of these investments was to accelerate the
expansion of India's capacity to produce coal. Investment decisions were driven primarily by domestic
demand and by technical and geo-mining conditions. The financial performance of these investments was
of little concem. As a result, Coal India has accumulated a huge portfolio of unprofitable mining projects
which are supported by an elaborate system of cross-subsidization. (Figure 2.9.3 shows the profits/losses
of each Coal India's mines. It illustrates the concentration of profits in opencast mines. )
23.
Two additional factors contributed to the persistent decline of Coal India's financial performance:
*
Coal miners were regarded by Government as having been neglected by the previous private
owners. To compensate them, a wage policy that ensured miners real wage increases was
adopted and perpetuated without any reference to the increases in productivity and efficiency; and
- 108
-
Annex 2.9
Page 8 of 9
Figure 2.9.3 Coal India's subsidiary companies' profits and losses, 1993
Rs million
+1000
1020iMderud
_min
+1000
0
291Opnc
pc
-1000
~~~~~~~
~~~~~~4
-2000
<
Underground,
3 Opencast mines
-3000
+2000
+7000
+6000
+1000
0
0
-1000
-
Underground niies
~~~~80
__
0~~~~~~~~~~~~N
3 i
-2000
-300S
^ 0-
4
=
-4
.-..............
..........
-I
-S4000
pencastmns_,
+4000
+3000
-
|
h
0
0
+5000-
3 Lt pnatmns+
Ul
-
f +20U0t-+1000
jjjjj
6 Underground,
9 Opencast mines
44000
+17000
+3000 -
+16000
0
+ ,15000- .:-
+2000
1_
-
+100D
+14000
0
=
;+12000
m
+16000
-100000
30
22
+15000
t
+13000
+11000
~~~~~~~~~~~~~~~~~~~~~
+10000
"+9000-
4
+11 .0
t+4000
+8M +10000~~~
+7000
+30008+10000
+8000
+3000
'
-
_+lOC
+00
!0
*^
:
:
+6000
i
+90
+11000
+500t0
.''
l.;:
.11,illill
.m.
_'
\3}}
-nlililltI;
.
+2000
33___
.____i_3_377
-1000
+4000
+7000
+4000
+8000
_
44
+7000
t wn
+4000
/):+4000
;,2-000 +1000
-100000
mines __.
is!Openicastmines~
+3000
iL
__
Sour&x,
Coal ndia
1- 1000
0
- 109
-
Annex 2.9
Page 9 of 9
In response to the perceived necessity to provide energy as cheaply as possible to the
economy, the Government controlled prices at levels below average costs. The coal industry
was regarded as a public utility whose sole function was to provide a service to the rest of
the economy.
24.
Consequently Coal India incurred losses right from its inception. Because financial retums assumed a low priority in the Government's investment strategy, the stage was set for a prolonged period of
rising losses and increasing dependence on the Government for funds to finance investments and cash
losses. While Coal India has achieved modest profits (rising from US$17.3 in 1989 to US$104 million in
1994), the financial performance for a company with total assets of US$4.8 billion (and equity of US$1.8
billion) remains weak.
25.
REFORM OF THE COAL INDUSTRY. In light of India's dependence on indigenous coal to meet its
energy needs in the short and medium term, persistent pressures on budgetary resources and a limited
capacity to import coal or other fuels due to capacity constraints in the existing transport infrastructure, the
Government and Coal India have no choice but to implement reforms that would enable the Indian coal
industry to operate on the basis of commercial considerations. Coal industries in other countries have
undergone similar reforms. Experience with these reforms has shown that this transformation will be
costly and take considerable time. The closure of uneconomic mines and the retrenchment of surplus labor
represent by far the most serious obstacle to the smooth implementation of reforms. The Government and
Coal India have therefore agreed on a reform strategy that would ensure that Coal India would
*
invest only in the most profitable mining operations;
*
phase out its subsidies to loss-making operations over a 5-7 year period;
'outsource' all activities that can be obtained cheaper from other companies;
improve the quality of its coal supplies;
make its operations environmentally and social sustainable.
The Government, on the other hand, would withdraw from the day-to-day management of the industry and
instead encourage the development of a competitive coal market:
coal pricing and distribution would be deregulated;
*
import tariffs would be reduced to a level where Coal India has no longer any effective
protection from tariffs; and
*
investments in the coal industry would be opened to private investors.
Once sufficient progress has been made in establishing an appropriate policy environment as well as in
closure of uneconomic mines and the retrenchment of surplus labor, the focus of the strategy would shift
towards creating a fully competitive market for coal in India by breaking-up Coal India into independent
coal companies that could be privatized and would compete against each other. At this stage, breaking up
Coal India would be counterproductive, since the holding company serves as the main conduit for the
implementation of reforms aimed at converting subsidiaries into commercially viable coal companies.
Annex 3.1
Page 1 of 27
Annex 3.1 PROJECT DESCRIPTION
Origin of the project
1.
Following the foreign exchange and budget crisis in 1991 the Government of India decided to
phase out its financial support to several public sector enterprises, including Coal India. Faced with
dwindling financial support from the Government, Coal India's management decided to put the operation
of its mines on a sound commercial footing, phase out loss-making operations, reduce surplus labor and
reduce 'receivables' from major coal consumers. Many of these steps are politically sensitive. Therefore,
the Government decided to implement these changes gradually, and to accept that it would take some time
before they had a significant impact on Coal India's financial performance. During this period, Coal India
estimates that it would need annual financial support of about US$200-250 million to finance its investment requirements of about US$800-1000 million a year. In January 1993, the Government approached
the Bank with a request to support Coal India's efforts to commercialize its operations.
2.
Coal India and the Bank agreed that the most effective way to assist Coal India would be by
financing a time-slice of Coal's investments. In line with Coal India's short-term financial objectives, the
Bank's financial support would be limited to investments in highly profitable mines that are economically
viable, have no major environmental problems and require the least number of people to be resettled.
Twenty-five opencast mines that met these criteria were identified. In the course of project preparation, an
agreement was reached with the Government on a reform program for the coal industry. Under the Coal
Sector Rehabilitation Project, as it was originally proposed, Coal India was to receive IDA financing for
remedial and mitigating actions to bring the selected mines in line with the requirements of Indian laws
and regulations and the Bank's Operational Directives. In May 1995, the Loan Committee, while reviewing the status of the Coal Sector Rehabilitation Project, came to the conclusion that environmental and
social components of the project should be packaged as a separate Environment and Social Mitigation
Project. The Government and Coal India agreed to the proposal in November, 1995.
Project description
3.
The project consists of:
a) the implementation of the Environmental Action Plans (EAPs), Rehabilitation Actions Plans
(RAPs) and Indigenous Peoples Development Plans (IPDPs) for 25 opencast mines of Coal
India that are slated to receive financial assistance under the proposed Coal Sector Rehabilitation Project (Investment component);
b) technical assistance to enhance Coal India's capacity to effectively deal with environmental
and social issues of coal mining operations (Capacity building component); and
c) a review (and if required, remedial action) of the resettlement and rehabilitation measures
taken by Coal India in implementing projects that have received Bank support in the past
(Social remedial action component).
Environmental Action Plans (EAPs)
4.
Since 1986, the Ministry of Environment and Forest has required preparation and submission of
Environmental Management Plans (EMPs) for investments in new coal mines or increases in production at
existing mines. Environmental Impact Assessments (EIAs) are an integral part of the EMPs. They include
- 112Annex 3.1
Page 2 of 27
preventionand mitigationmeasuresfor air,water,noise and vibrationpollution;landreclamation;and
waste disposal;and improvementsin the environmentand safetyof the workplace.If the acquisitionof
forest land is involved,a forest clearanceis also required.
5.
Coal India's EMPsmeet most of the requirementsof the Bank's OD 4.01. Areas not dealt in the
EMPs, such as environmentalpolicy,environmentallaw, institutionalarrangements,occupationalhealth
and safetyand public consultation,havebeen addressedin the Environmentaland SocialImpact Assessment. In line with their commitmentto self-policecompliancewith environmentallawsand regulations,
CoalIndia has reviewedthe statusof compliancewith environmentalapprovals,consentletters, etc. for
the 25 minesselectedfor the Coal SectorRehabilitationProject.To the extentthat mineswere not in
compliancewith the environmentalrequirementsissuedby Indianauthoritiesor the Bank's OD 4.01, they
preparedEAPs that wouldbring them into full complianceover the implementationperiodof the proposed
CoalIndia Environmentaland SocialMitigationProject.Eachof the EAPs containsa time-boundaction
programand brief descriptionsof the environmentalissuesand mitigationactions.The EAPs for the
selected25 mines havebeen includedin the EnvironmentalImpactAssessmentof the Indian CoalSector
(May 1995)preparedby CoalIndia.Table 3.1.1 providesa synopsisof the main environmentalissuesand
mitigatingactionsthat will be part of the proposedproject.
Rehabilitation Action Plans (RAPs)
6.
Coal India is findingit increasinglydifficultto acquireland for the expansionof existingmines.
To minimizethe adverseeffectsof their miningoperations,CoalIndia is changingthe design of new
minesand has adopteda new resettlementand rehabilitationpolicy to ensure that all project-affected
people are compensatedfor their losses.CoalIndiahas also intensifiedits communitydevelopment
programwhich aims to improvethe livingconditionsin villagesadjacentto its miningoperationsand is
strengtheningits organizationalstructureto ensure effectiveimplementationof thesepolicies.
7.
CoalIndia has estimatedthat it will have to acquire322ha of new landduring the implementation
of the project in the selected25 mines.At the sametime it will haveto physicallytake intopossession
1,387haof landthat it has alreadylegallyacquiredand paid for. It has beenthe practice in CoalIndia to
legallyacquire all landrequiredfor a new mine projectbeforethe miningoperationsstart.Thoughthe land
and homesteadlosers are legallycompensatedat that time, but the peopleare not evicteduntil suchtime
the land is requiredfor miningoperations.
8.
In identifyingthe numberof project-affectedpeople,CoalIndia relied initiallyon estimates
preparedby mine managers.Sincefamilieswere the unit of entitlementfor compensationof the loss of
landin guidelinesprovidedby the Statesand thepolicies issuedby the Ministryof Coal,minemanagers
providedthe data in termsof families.In addition,datawas only providedfor familiesaffectedby land
acquisitionin the courseof project implementation.No countwas taken of familieswhoseland had been
acquiredearlier and who continuedto cultivate(and in some instanceslive on) this landwith the permission of the coal company.
9.
The revisionof CoalIndia's policy for resettlementand rehabilitationin April 1994changedthe
definitionand categoriesof project-affectedpeople and the data collectedearlierhad to be re-estimated.
Subsidiarycoal companieshiredconsultants,NGOsand researchorganisationsto carry out socio-economicbaseline surveysand censusesof the project-affectedpersons.
Table 3.1.1 Synopsis of EAPs, RAPs and IPDPs
Major subproject components
Environmental and social issues
The K-D. Hesalong mine is located in undulating terrain. Premining land uses of the 481ha
leasehold consisted primarily of low density forest. 170ha of forest land has been utilized in
past mining activities. 130ha of forest land (in proposed Quarry 11,where the work has yet
to start) has already been degraded by intermittent coal stocking and illegal felling by the
local villagers. Damodar river is the main drainage channel in the area and flows on the
north side of the project area. A cement factory at Khelari (5km from the project) was
working until 1992-93. There are other coal mines surrounding this project.
Environmental mitigating action includes:
* Improvements in environmental monitoring;
* Procurement of 3 water sprinklers, 6 dust extractors, and ear plugs and ear muffs;
* Plantation and fencing;
* Construction of sedimentation pond and garland drain and treatment of mine
discharge;
. Resloping and reclamation of overburden dumps; and
* Construction of offices.
There are four settlements within the 'area of project influence' with a combined
population of 1,952 including 522 tribals.
Community development actions include:
* Construction of 1.05 km roads, 4 hand pumps, 2 wells/tanks, I public/religious building
and I community latrine; and
* Installation of irrigation facilities.
There are 198 total PAPs (153 of these are tribal). 198 PAPs are to be resettled and 86 are
entitled to rehabilitation.
Resettlement and rehabilitation actions include:
* Verification of project-affected people;
* Issuance of ID cards to entitled project-affected people;a
* Information campaign;
* Identification of training needs of entitled project-affected people, design of training
courses and implementation of training;
* Provision of jobs with Coal India for 14 entitled project-affected people;
* Formation of coordination committee and monitoring commuittee;and
* Construction of infrastructure for resettlement village and shifting of project-affected
families.
The Parej East mine is located in undulating terrain. Bokaro nallah flows close to the
project area on the southern side and Chutua nallah flows on the northern side. Premining
land uses of the 395ha leasehold consisted of forest land (58ha), dry agricultural land
(74ha) and Government land, mostly waste land (263ha). Tapin colliery is to the west of the
mine and West Bokaro colliery is to the east.
Environmental mitigating actions include:
. Procurement of 2 water sprinklers and ear plugs and ear muffs;
* Plantation;
* Construction of settling pond, oil and grease trap, and catch and garland drains;
* Treatment of mine discharge;
* Resloping and reclamation of overburden dumps; and
There are eleven settlements within the 'area of project influence' with a combined
population of 2,913, including 2,078 tribals.
Community development actions include:
. Construction of 0.6 km roads, 6 hand pumps, 6 wells/tanks, I school and 1
public/religious building; and
. Installation of irrigation facilities.
-J
There are 818 total project-affected people. (382 of these are tribals.) 818 people are to be
resettled and 418 are entitled to rehabilitation.
* Issuance of ID cards to entitled project-affected people;
* Formation of coordination committee and monitoring committee; and
* Acquisition of land for resettlement village, construction of infrastructure and shifting
of project-affected families.
The Rajrappa mine is located in undulating terrain. The Damodar river flows to the north
of the project and its tributary, the Bhera River, flows to the east. Premining land uses of the
1417ha leasehold consisted of forest land (775ha), paddy land (16ha), dry agricultural land
(lOlha) and waste land (526ha). Rajrappa washery is located on the eastern side of the
project.
* Procurement of I water sprinkler, 12 dust extractors, and ear plugs and ear muffs;
* Plantation;
* Construction of settling pond, oil and grease trap, and catch and gaarland drains;
There are twelve settlements within the 'area of project influence' with a combined
population of 9,714 including 1,599 tribals.
Community development activities include:
* Construction of 0.2 km roads, I hand pump, 3 wells/tanks, 2 community latrines, 2
4
schools and 2 public/religious buildings; and
* Installation of irrigation facilities.
There are no project-affected people.
No resettlement or rehabilitation actions are required.
The Ananta mine is located on flat topography which slopes gently to the north. Surface
water flows to the northeast and drains into the Brahmani river, which is approximately
I Okm from the mine. Premining land uses of the 81Oha leasehold consisted of villages
(lOha), dry agricultural land (237ha), degraded forest and shrubland used for grazing and
fuelwood production (195ha), industrial area (228ha), bodies of water (I Iha) and
unoccupied land (129ha).
* Procurement of 4 dust extractors and ear plugs and ear muffs;
* Improvements in dust suppression;
* Black topping of roads;
* Fire fighting arrangements;
* Construction of sedimentation pond, settling ponds, oil and grease trap, and garland
and catch drains;
There are no qualifiying settlements within the 'area of project influence.'
No conmmunitydevelopment activities are required.
O _
There are 699 total project-affected people. (None of these are tribals.) No people are to
be resettled and 458 are entitled to rehabilitation.
* Provision of jobs with Coal India for 89 entitled project-affected people and with
contractors for 20 entitled project-affected people;
* Formation of coordination committee and monitoring cormmittee; and
* Acquisition of land for construction of infrastructure.
The Belpahar mine is located on a flat to moderately undulating plain, which slopes gently
to the east. The drainage of the area is controlled by Lilari nallah, which Joins the lb river
about 4km away. Pretnining, land uses of the 1601ha leasehold consisted of forest land
(277ha), agricultural land (518ha), home sites (21 ha) and unoccupied land (785ha).
*
*
*
*
.
*
There are fifteen settlements within the 'area of project influence' with a combined
Enclosing conveyors;
Plantation and fencing;
Construction of oil and grease trap and catch and garland drains;
Treatment of mine discharge;
Resloping and reclamation of overburden dumps; and
Construction of offices.
_
Commnunitydevelopment activities include:
* Construction of 2.34 km roads, 2 hand pumps, 6 wells/tanks, 7 health centers, 12
schools and 13 adult education centers.
There are 4,021 total project-affected people. (1,121 of these are tribals.) 3,360 people are
to be resettled and 2,410 are entitled to rehabilitation
contractors for 19 entitled project-affected people;
Cs
co
The Bharatpur mine is located on a flat plain which slopes gently to the north. Surface
water of the area drains into the Brahmani river, which is 12km east of the mine. Premining
land use of the 1237ha leasehold consisted of natural and degraded forest (258ha); dry
agriculture, rained paddy fields and bodies of water (895ha); small villages (34ha); and
industrial land and bodies of water (50ha).
* Construction of oil and grease trap and catch and garland drains;
There are five settlements within the 'area of project influence' with a combined
population of 3,238, including 317 tribals.
* Construction of I hand pump, 5 wells/tanks, I health center, community latrine/drain
(500m), I school and 3 adult education centers.
There are 2,547 total project-affected people. (None of these are tribals.) 1,294 people are
to be resettled and 1,531 are entitled to rehabilitation.
• Issuance of ID cards to entitled project-affected people;
contractors for 260;
. Acquisition of land for resettlement village, construction of infrastructure and shifting
The Jagannath mine is located on gently undulating, soil covered paddy fields. The area is
primarily flat and slopes to the north. The drainage of the area is controlled by the
Brahmani River which flows about 8km east of the mine. Premining land uses of the 793ha
leasehold consisted of forest land (60ha), dry agricultural land (690ha), village land (18ha),
bodies of water (2ha) and unoccupied land (23ha).
- Procurement of 10 dust extractors and ear plugs and ear muffs;
. Black topping of roads;
. Plantation and fencing;
*
*
*
*
There are six settlements within the 'area of project influence' with a combined population
of 7,688, including 260 tribals.
_
ON
Construction of oil and grease trap and catch drain;
* Construction and repair of hand pumps, wells/tanks, health center and public/religious
buildings;
* Construction of community latrines/drain and school; and
* Installation of irrigation facilities;
A
aw
There are 2,001 total project-affected people. (None of these are tribals.) 2,001 people are
to be resettled and I ,180 are entitled to rehabilitation.
contractors for 30;
• Acquisition of land for resettlement village, construction of infrastructure and shifting
The Lakhanpur mine is located on a plain which generally slopes toward the east and
drains into the lb River about 5km from the project through Lilari nallah. Premining land
uses of the 1414ha leasehold consisted of forest land (233ha), unoccupied waste land
(552ha), dry agricultural land (618ha) and homesites (I Iha).
* Procurement of 4 dust extractors, 2 water sprinklers, ear plugs and ear muffs, and fire
fighting equipment;
*
*
*
*
*
*
*
Black topping of roads;
Enclosing conveyors;
Construction of oil and grease traps and catch and garland drains;
* Construction of 0.105 km roads, 7 hand pumps, 4 wells/tanks, 2 health centers,
There are 1,030 total project-affected people. (159 of these are tribals.) 880 people are to
- Verification of project-affected people;
community latrines/drain (275m), I school and I adult education center.
. Issuance of ID cards to entitled project-affected people;
. Identification of training needs of entitled project-affected people, design of training
contractors for 61;
t
CS
I
The Samileswari mine is located on a generally flat area, which gently slopes toward the
southwest. Drainage of the area is controlled by Pondraine nallah in the southwest, which
discharges into Lilari nallah in the south. Lilari nallah, in turn, joins the lb River about 5km
from the mine boundary. Premining land uses of the 906ha leasehold consisted of forest
land (349ha), unoccupied waste land (238ha) and cultivated land and settlements (319ha).
Coal mines, a paper mill and a refractory factory are located near the mine.
Enviromnental mitigating actions include:
* Procurement of 6 dust extractors, ear plugs and ear muffs, and fire fighting equipment;
* Enclosing conveyors;
* Construction of oil and grease trap and catch and garland drains;
There are six settlements within the 'area of project influence' with a combined population
* Construction of I hand pump, 3 wells/tanks, 3 health centers, 3 public/religious
buildings, I school and 4 adult education centers; and
* Electrification
There are 1,687 total project-affected people. (235 of these are tribals.) No people are to
_
00
• Issuance of ID cards to entitled project-affected people;
contractors for 8 entitled project-affected people; and
* Formation of coordination committee and monitoring committee.
The Bina mine is located on hilly terrain which forms a plateau on the west and southwest.
East and northeast of the area is gently undulating. The mining area lies between Marrak
block and Kakri opencast project. The drainage area is controlled by seasonal streams
which discharge into Gorbanda nallah and ultimately drain into Gobinda ballav pant sager
in the south. There are four thermal power plants with a I Okm radius of the project.
* Procurement of 12 dust extractors, 6 water sprinklers, ear plugs and ear muffs, and
fire fighting equipment;
* Construction of settling pond, oil and grease trap, and oil storage facilities;
There are eleven settlements within the 'area of project influence' with a combined
Conununity development activities include:
* Construction of 7.2 km roads, I culvert, 10 hand pumps, I well/tank, I health center, 2
community latrines and I school.
co
00
O
t
.
The Dudhlblua mine is located in Singrauli coalfield on a low plataeu bordered on its south
side by a steep, approximately 60m high, escarpment. Colony areas and mine infrastructure
are located below the escarpment. Run off from the mine will flow into the Gobind ballabh
pant sager. The project is located between the Jayant and Khadia opencast mines. There
are four thermal power plants within a 10km radius. The premining land uses of the 1,694ha
leasehold consisted largely of forest (779ba) and unoccupied scrubland (805ha), which was
used for grazing, minor dryland cropping (9Oha) and dwelling sites (20ha).
* Procurement of dust extractors and 6 water sprinklers;
* Construction of a sedimentation pond; and
* Reclamation of overburden dumps.
There are eight settlements within the 'area of project influence' with a combined
* Construction of 4.2 km roads, 3 hand pumps, 9 wells/tanks, I community latrine, 2
public/religious buildings and I primary school;
* Electrification; and
* Forest access.
The Jayant mine is located on a plateau about 400m above sea level. The most important
stream around the area is Modwani nallah. The drainage of the area is controlled by
seasonal streams which discharge into Modwani nallah and ultimately into Gobind ballabh
pant sager in the south. The project is located between Dudhichua and Nigahi opencast
projects. There are four thenmal power plants in the region.
* Construction of settling pond, oil and grease trap, catch drains, and oil storage
facilities;
There are ten settlements within the 'area of project influence' with a combined population
* Construction of 3.5 km roads, II hand pumps and 3 primary schools
* Installation of 4 irrigation facilities; and
* Electrification.
The Jhingurda mine is located in the Singrauli coalfield. Chatka nallah, in the south of the
quarry, flows from east to west and joins Bijul nallah in the north. Bijul nallah ultimately
flows into the Sone River. There are four thermal power plants in the Singrauli coalfield.
* Procurement of 6 dust extractors, 2 water sprinklers, ear plugs and ear muffs, and fire
*
*
*
*
fighting equipment;
Construction of settling pond, oil and grease trap, catch drain, and oil storage facilities;
,
2
CS
O
* Construction of 6 km roads, 8 hand pumps, I well/tank, I conimunity latrine,
public/religious buildings and I primary school;
* Installation of irrigation facilities; and
* Electrification
There are 456 total project-affected people. (All of these are tribals.) 456 people are to be
• Information campaign;
contractors for 120;
The Nigahi mine is located on a hilly plateau about 400-500m above sea level. In the west,
the plateau is pronounced by a steep escarpment. To the south, the plateau turns into plain
land with elevations around 300m. The drainage of the area is divided into two sections: one
flowing toward the north into Bijul nallah through Mehrauli/Morwa nallah and the other
flowing toward the south into Gobind ballabh pant sager through Modwani and Amjhore
nallah. The mine lies between Jayant and Amlohri opencast projects. There are four
thermal power plants within a lOkm radius.
a Construction of settling pond, oil and grease trap, catch drain, and oil storage facilities;
There are seventeen settlements within the 'area of project influence' with a combined
* Construction of 6.3 km roads, 10 hand pumps, 2 wells/tanks and I primary school; and
* Installation of irrigation facilities
The Bisrampur mine is located on gently undulating terrain and is surrounded by several
nallahs. The Rehar River flows on the west side of the mine. The main drainage is Passang
nallah which flows east to west and is a tributary of the Rehar River. Premining land uses of
the 1472ha leasehold consisted of agricultural land (983ha), bodies of water (5ha) and
forest land (484ha).
. Improvements in environmental monitoring;
a Black topping of roads;
a Plantation;
* Procurement of ear plugs and ear muffs;
a
-Construction of 3 settling ponds, oil and grease traps, and catch and garland drains;
a Construction of offices.
°
I
ItJ
Environmentaland social issues
There are sixteen settlements within the 'area of project influence' with a combined
Major subprojectcomponents
* Construction of 30 km roads, I culvert, 20 hand pumps, 14 well/tank, 10 health centers,
6 schools and 4 public/religious buildings;
* Installation of irrigation facilities; and
* Electrification 10 km OH line.
There are 818 total project-affected people. (301 of these are tribals.) No people are to be
* Provision of jobs with Coal India for 47 entitled project-affected people; and
* Formation of coordination committee and monitoring comnnittee.
The Dhanpuri mine is located on gently undulating terrain which slopes to the southwest
toward the Baghaiya nallah, which is about 1.6km from the mine boundary. Premining land
uses of the 746ha leasehold consisted of dry agricultural land (1 70ha), irrigated agricultural
land (44ha), village land (I 3ba), bodies of water (6ha) and forest and shrub land used for
rough grazing and fuel wood production (513ha).
* Procurement of I water sprinkler, I water tanker, and ear plugs and ear muffs;
* Plantation;
* Construction of 5 settling ponds, oil and grease traps, and catch and garland drains;
There are nine settlements within the 'area of project influence' with a combined
* Construction of 12.5 km roads, 5 culverts, 10 hand pumps, 3 wells/tanks, I health
center, 2 public/religious buildings and schools;
* Forest access; and
* Development of grazing land.
There are 230 total project-affected people. (211 of these are tribals.) No people are to be
* Issuance of ID cards to entided project-affected people;
* Construction of additional infrastructure in resettlement village.
E
n
0
_.
Environmentaland social issues
Major subprojectcomponents
The Dipka mine is located on flat terrain which slopes gently to the southeast toward the
Lilagar River, which is about 2km from the mine boundary. Premining land uses of the
1745ha leasehold consisted of dry agricultural land (I 234ha), non agricultural land (1 54ha),
grazing land (205ha) and forest land used for rough grazing and fuel wood production
(147ha).
* Procurement of 4 water sprinklers and ear plugs and ear muffs;
* Plantation;
* Construction of 2 settling ponds, oil and grease traps, and catch and garland drains;
There are two settlements within the 'area of project influence' with a combined population
of 2,393, including 1,733 tribals.
* Construction of 7 km roads, 7 wells/tanks, 3 health centers, 3 community latrines and I
primary school; and
* Electrification (5km OH line).
There are 1,200 total project-affected people. (788 of these are tribals.) 1,100 people are to
* Acquisition of land for resettlement village, construction of infrastructure and shifling
The Gevrs mine is located on flat terrain which slopes very gently to southeast toward the
Laxman nallah, approximately 500m away from the mine. Premining land uses of the
2752ha leasehold consisted of agricultural land (1008ha), village land and ponds (800ha),
batren field/streams and public roads (599ha) and forest land used for rough grazing
(345ha).
* Installation of automatic water spraying;
*
*
*
*
_
Plantation;
Construction of settling pond, oil and grease trap, and catch and garland drains;
* Construction of 9 km roads, 3 culverts, I hand pump, 9 wells/tanks, 4 health centers, I
public/religious building and 2 schools;
* Electrification (4MV OH line); and
* Forest access (5ha)
O
re ettled and 204 are entitled to rehabilitation.
. Verification of project-affected people;
. Issuance of ID cards to entitled project-affected people;
. Provision of jobs with Coal India for 85 entitled project-affected people;
. Formation of coordination committee and monitoring committee; and
* Acquisition of land for resettlement village, construction of infrastructure and shfting
The Kusmnunda mine is located on flat to gently undulating terrain. It lies approximately
500m west of the Hasdeo River. Premining land uses of the 1544ha leasehold consisted of
dry and irrigated agicultural land (969ha) and Government waste land (575ha).
* Installation of automatic water spraying;
*
*
.
*
*
*
There are ten settlements within the 'area of project influence' with a combined population
of 16,333, including 8,977 tribals.
Procurement of ear plugs and ear muffs;
Black topping of roads;
Plantation;
Construction of 4 settling ponds, oil and grease traps, and catch and garland drains;
ti
* Construction of 13 km roads, 13 hand pumps, 8 wells/tanks, 4 health centers, 4
community latrines and 6 schools;
. Installation of 2 irrgation facilities;
• Electrification (4.5km OH line); and
• Forest access (5ha).
. Verification of project-affected people;
* Construction of infrastructure and shifting of project-affected families.
Cs3
0
--I
The Manikpur mine is located on gently undulated terrain about 280m above sea level.
Rapakhara nallah and Kachandi nallah flow northwest to west over the coal bearing area
of this block and ultimately meet the Hasdeo River, which is adjacent to the lease area and
is a perennial tributary of the Mahanadi River flowing to the south and forming the main
drainage outlet of the region. Premining land uses of the 1652ha leasehold consisted of
agricultural land (884ha), Government land (108ha), home sites (22ha), bodies of water
(25ha) and degraded and shrub land used for rough grazing and fuel wood production
(613ha).
. Installation of automatic water spraying;
Plantation;
. Construction of 2 settling ponds, oil and grease traps, and catch and garland drains;
* Construction of 5 km roads, 2 culverts, 12 hand pumps, 5 wells/tanks, 6 health centers,
2 public buildings and schools;
* Installation of irrigation facilities;
* Electrification;
* Forest access; and
. Development of grazing land
The Durgapur mine is located on a moderate plain in Chandrapur. Worker colonies are
concentrated between the minesite and Chandrapur thermal power station. Premining land
uses of the 821ha leasehold consisted of dry agricultural land (422ha), degraded forest
(273ha) and barren Government land (1 25ha).
. Procurement of ear plugs and ear muffs;
* Modification of existing sprinklers;
*
*
*
*
.
*
There are four settlements within the 'area of project influence' with a combined
Deployment of mobile spray system;
Construction of settling pond, oil and grease traps, and ctch drain;
. Construction and repair of roads, drains, and wells/water pipe lines;
. Construction of 14 hand pumps; and
. Construction and modification of 2 health centers.
-
0
IX
major part of
The Niljai mine is located on moderately undulating terrain in Yeomatal.The
of dry
consisted
leasehold
48ha
11
the
of
uses
land
Premining
HFL.
below
is
area
the
(68ha).
land
barren
agricultural land (1080ha) and Government
a combined population
There are two settlements within the 'area of project influence' with
the 557ha leasehold
The Padmapur mine is located on a flat plain. Premining land uses of
barren land
Government
and
(529ha)
land
agricultural
dry
consisted of village land (21ha),
Chandrapur
(7ha). Padmapur is adjacent to Durgapur mine and about 8km away from
thermal power station.
a combined
There are five settlements within the 'area of project influence' with
. Improvements in environmental monitoring;
* Modification of existing sprinklers;
* Deployment of mobile spray system;
. Construction of settling pond, oil and grease trap, and catch drain;
* Construction and repair of roads;
* Construction of 4 tube wells; and
* Construction and modification of I health center and school (add rooms).
- Modification of existing sprinklers;
* Construction of settling pond, oil and grease trap, and catch drain;
- Treatment of mine discharge;
* Repair of roads and wells/tanks;
* Installation of I hand pump;
* Construction of health centers, schools and community latrine; and
* Electrification
Xt
- I
0>
The Sasti mine is located on a flat to moderately undulating plain in Chandrapur. The major
part of the area is below HFL. Premining land uses of the 714ha leasehold consisted of dry
agricultural land (480ha), Government barren land (20ha) and unoccupied and
undeveloped land and small villages (214ha). The mine is located about 3km southwest of
the Wardha River.
. Modification of existing sprinklers;
*
*
*
*
*
There are three settlements within the 'area of project influence' with a combined
Construction of settling pond, oil and grease trap, and catch drain;
* Repair of roads and drains; and
* Construction of 6 wells and 4 health centers.
The Umrer mine is located on flat plains which slope gently to the Amb River which flows
along the southem boundary of the mine. Premining land uses of the 807ha leasehold
consisted of dry agricultural land (733ha) and Govenmment barren land (74ha).
- Procurement of ear plugs and ear muffs;
*
*
*
*
*
*
*
Modification of existing sprinklers;
Deployment of mobile spray system;
Construction of settling pond, oil and grease trap, and catch drain;
There are seven settlements within the 'area of project influence' with a combined
* Construction of 3.2 km of roads, I culvert, 3 wells/tanks, I health center, and 5
community latrines.
Cs
0
t.J
-1
- 127 -
Annex 3.1
Page 17 of 27
Table 3.1.2 Socialimpactof the Coal SectorRehabilitationProject, 1996to 2000
Company
Mine
Total
PAPs
Tribal
PAPs
Land to be
acquired (Ha)
Land to be
posessed (Ha)
Entitled PAPs
> 18 years
Persons to
be resetled
0
0
123
108
198
818
153
382
86
418
198
818
CCL
KD Hesalong
Parej East
MCL
Ananta
Belpahar
Bharatpur
Jagannath
Lakhanpur
Samleswan
0
13
0
0
9
0
0
585
165
18
47
41
699
4,021
2,547
2,001
1,030
1,687
0
1,121
0
0
159
235
458
2,410
1,531
1,180
572
998
0
3,360
1,294
2,001
880
0
NCL
Jhingurdah
0
0
456
456
238
456
SECL
Bisrampur
Dhanpuni
Dipka
Gevra
Kusmunda
300
0
0
0
0
300
0
0
0
0
818
230
1,200
412
193
301
211
788
189
4
408
131
520
204
106
0
0
1,100
145
193
Total
322
1,387
16,310
3,999
9,260
10,445
Source:CoalIndiaLtd
10.
The base line surveyconductedby variousNGOsestablishedthat only 14 of the 25 mines involve
resettlementand/orrehabilitationissues.DetailedRehabilitationActionPlanswere preparedfor these
fourteensubprojectsin 1994.CoalIndiapreparedaddendato these RehabilitationActionPlansin January
1996.These addendacontainupdatedresettlementand rehabilitationfiguresfor each of the 14minesas
well as detailedimplementationplans for each of the mines.In the 14 subprojects,a total of 17,632people
will be adverselyaffectedin the periodfrom 1996to 2005.Duringthe project period(1996to 2001)the
total numberof peopleadverselyaffectedwill be 16,310.Overall,10,445peoplewill lose their housesand
will haveto be physicallyresettledduringthe implementationof the project.The majorityof projectaffectedpeople (11,985people)are locatedin the Talcherand lb coalfieldsof Orissa.Overall,9,260
peoplewill be entitledto rehabilitationassistanceduringprojectperiod.
11.
Table 3.1.2 and 3.1.3providean overviewof the numberof peopleaffectedin the minesselected
for financialsupportunder the proposedCoal SectorRehabilitationProject.An overviewof projectaffectedpeople over 18 years of age and classifiedaccordingto the CoalIndiapolicy of entitlementsis
providedin Table 3.1.4.This table showsthat 2,572 landlesspeoplewhowould not havebeen entitledto
assistanceunder previousguidelines,are now entitledto rehabilitationassistance.Table 3.1.5 outline the
correspondingrehabilitationaction.
12.
A sumniaryof the RehabilitationActionPlans is providedin Table 3.1.5.For the projectperiod,a
total of 9,260personsare entitledto rehabilitationassistance.The provisionof jobs with the coal company
and contractorsis plannedto rehabilitate1,711people(18%)and 7,549people(82%) willbe entitledto
assistancefor self-employment.Somepeoplemay declinethe offer for reasonssuchas old age or because
they are marriedto personsemployedby the coal company;this will be determinedin the processof
- 128Annex 3.1
Page 18 of 27
Table 3.1.3 Socialimpactof the CoalSectorRehabilitationProject, 1996to 2005
Company
Mine
Land to be
acquired (Ha)
Land to be
posessed (Ha)
Total
PAPs
Tribal
PAPs
0
0
123
237
198
1,172
153
487
86
565
198
1,170
Entitled PAPs
>18 years
Persons to
be resettled
CCL
KD Hesalong
Parej
East
MCL
Ananta
Belpahar
Bharatpur
Jagannath
Lakhanpur
Sarnleswan
0
25
127
0
9
0
0
659
306
18
96
88
699
4,021
2,547
2,001
1,030
1,687
0
1,121
0
0
159
235
458
2,410
1,531
1,180
572
998
0
3,360
1,294
2,001
880
0
NCL
Jhingurdah
0
0
456
456
238
456
SECL
Bisrampur
Dhanpuni
Dipka
Gevra
Kusmunda
300
0
0
0
0
300
0
0
0
0
818
230
1,580
1,000
193
301
211
1,032
460
4
408
131
684
497
106
0
0
1,302
145
193
Total
461
1,827
17,632
4,619
9,864
10,999
Source:CoalIndiaLtd
implementingthe RAPs. If the rehabilitationentitlementhad beenprovidedunder the previousguidelines,
each family,generally,wouldhave beengiven one employmentopportunity.All male and femalepersons
betweenthe age 18to 60 are entitledto rehabilitationassistance.
13.
About25% of the project-affectedpeople(3,999people)are classifiedas tribals and an almost
equalnumberare classifiedas scheduledcastes.This covers a largevariation,from three mineswith no
tribal personsto one mine where 100%(456 persons)are classifiedas tribals(Jhingurdah).In Madhya
Pradeshthe five SECLmineswith residualresettlementand rehabilitationissuesproposedfor inclusionin
the project have a tribal populationvaryingfrom 2% to 92% of the project-affectedpopulation.Similarly
in Bihar,the two CCL mineswith residualresettlementand rehabilitationissuesproposedfor the project
have tribal populationsof 77% and 47% of the total numberof project-affectedpeople.Withthe exception
of Jhinguradahmine in Singrauli,the tribalpeople live with non-tribalsin mixedvillages,speak the same
local languageand are economicallyintegrated.Theyare engagedin agriculturein fixedplots of landor
persue craftsrelatedto agriculture.All of themhave beenin contactwith coal miningoperationsfor more
than 20-30 years and manyare employedin the mines.In MadhyaPradesh,tribals constitutemajorityof
the unskilledand semi-skilledworkforceand have beenso far morethan 20 years. The effectsof coal
rniningon tribal communityare discussedin Annex2.3.
14.
Resettlementand rehabilitationof project-affectedpeople are guidedby Coal India's Resettlement
and RehabilitationPolicy of 1994(Annex2.4). This policy supersedesvariousearlierpoliciesand practices followedby different subsidiariesfor the resettlementand rehabilitationof project-affectedpeople.
15.
The RAPshave been preparedby NGOson the basis of visitsto the householdsof project-affected
people and on surveyswhich containedquestionsregardingaffectedpeople's perceptionsof the issues
- 129Annex3.1
Page 19of 27
Table 3.1.4 Entitledproject-affectedpeopleaccordingto Coal Indiaclassification,1996 to 2000
Company
Mine
A. Landowners
losing agric.
land
CCL
KD Hesalong
Parej East
MCL
losing
homestead
B. Landless
losing
both
laborer,
tenants, etc
landless
tribals
losing
homestead
All entitled
PAP > 18years
0
0
0
0
86
197
0
4
0
0
0
217
86
418
Ananta
Belpahar
Bharatpur
Jagannath
Lakhanpur
Sarnleswari
458
0
657
0
0
654
0
0
104
10
0
0
0
1301
737
1170
486
0
0
9
33
0
29
291
0
87
0
0
6
53
0
1013
0
0
51
0
458
2410
1531
1180
572
998
NCL
Jhingurdah
21
10
6
175
0
26
238
SECL
Bisrampur
Dhanpuri
Dipka
Gevra
Kusmunda
112
99
12
25
0
0
0
6
8
0
0
0
355
159
15
296
19
125
2
76
0
13
19
0
0
0
0
3
10
15
408
131
520
204
106
2,038
138
4,512
1,059
178
1,335
9,260
Total
Source:CoalIndiaLtd
related to land acquisition, compensations, benefits from the mine projects causing their displacement,
relocation site(s) and the host community. Table 3. 1.1 contains a synopsis of the main elements of the
RAPs for the selected 25 mines.
Indigenous Peoples Development Plans (IPDPs)
16.
Most of the mines that have been selected for financial support under the Coal Sector Rehabilitation Project are in large coalfields where mining operations have taken place for several decades. Before
Coal India began to develop the coal deposits in these areas, the inhabitants subsisted on agricultural
activities and the gathering of forest produce. They had little contact with the 'outside world,' and whatever goods they needed they obtained through barter. The construction of coal mines led to a drastic
change in their lifestyles:
*
With the opening of coal mines came an influx of 'outsiders' (company officials, skilled
laborers, contractors with work teams and a host of small businesses to serve these groups),
who had little contact with the local population.
*
Land acquisition by the coal company and other industries that moved into the area because
of the ample supply of energy (power stations, smelters and other coal-based industries, as
well as industries that provided services to these industries, such as transport contractors,
ancillary industries and service facilities) reduced the opportunities for farming and forestbased activities. This had two distinct effects: an increasing number of households became
economically dependent on employment in the industries that had sprung up in the area and
since these industries employed predominantly men, women (who had traditionally worked
beside men in agriculture) found themselves without employment and income.
- 130 Annex 3.1
Page 20 of 27
Table 3.1.5 An overviewof rehabilitationaction- 1996 to 2000
Company
Mine
Jobs to be
soughtwith
contractors
Entitled to
self-employment
assistance
Persons
entitled to
rehabilitation
Jobs to be
provided
in mine
86
418
14
16
0
0
72
402
CCL
KD Hesalong
Parej East
MCL
Ananta
Belpahar
Bharatpur
lagannath
Lakhanpur
Samleswari
458
2,410
1,531
1,180
572
998
89
50
180
79
78
17
20
19
260
30
61
8
349
2,341
1,091
1,071
433
973
NCL
Jhingurdah
238
46
120
72
SECL
Bisrampur
Dhanpuri
Dipka
Gevra
Kusmunda
408
131
520
204
106
47
18
450
85
24
0
0
0
0
0
361
113
70
119
82
9,260
1,193
518
7,549
Total
Soue: CoalIndiaLtd
*
*
Withthe shift from subsistenceagricultureto industrialemploymentcame the shift from
barter to moneyas the main meansof trade.
The declinein agricultureand forest-relatedactivitiesled to the emergenceof new social
structuresin the communities.More specifically,there was a growingincome gap between
those employedin the local industriesand those still dependenton subsistenceagriculture.
17.
The ultimateobjectiveof Coal India's communitydevelopmentpolicy (Annex2.5) is to mitigate
the adverseeffectsof the constructionof coal mineson existingcommunitiesin the area. The immediate
objectiveis to assistthese communitiesto create,reviveand maintainrelevantand functioningcommunity
assets,institutionsand servicesthat can improvetheirchoicesand livingstandardin the 'modem' world,
and at the same time, maintainand developtraditionalways of livingand socialties of the communities.
18.
Coal India's policyaims to protect theweakersectionssuch as scheduledtribes,scheduledcastes,
women, etc, whilenot overlookingthe needs of others. In the tribalvillages (thereare not many),the
communityas a whole will derive the benefits.Theplan will help to buildinfrastructuresfor health,
education,economicdevelopmentand to help revive theirculturallife style.
19.
Coal IndiaengagedseveralNGOsand specializedlocal agenciesto study the developmentalneeds
of thecommunitiesliving in the vicinity(lkm from the miningleasehold)of the 25 selectedmines.The
studycovered 189villages with a populationtotal of about 186,000people.Of these, 30% belongto
scheduledtribesand an equal proportionto scheduledcastes.It also includessettlementsof peoplewho
have come from outsidethe regionin searchofjobs or business.See Table 3.1.6 for an overviewof the
IndigenousPeoplesDevelopmentPlans.
- 131 -
20.
Annex 3.1
Page 21 of 27
The studyshows that the main needs of thecommunitiesare the constructionof approachroads,
water supply facilities, afforestation and revegetation for fire wood and grazing, health clinics, communal
latrines,schools,and accessto electricpower.Implementationof the IPDPsat the 25 selectedmines will
cost about US$3.9million.Table 3.1.1providesa synopsisof the main elementsof the IPDPsand the kind
of facilitiesthat will be constructedunder the IPDP.
21.
While the expenseper mine appearsto be relativelysmall,CoalIndia cannotlimit the implementation of these facilitiesto the selected25 minesthat will be includedin the proposedCoal SectorRehabilitationProject.Communitiesof the neighboringmineswill demandaccess to similar facilities.Thiswill
significantlyraise the cost of the implementationof the CommunityDevelopmentPolicy.In addition,the
communitieswill turn to CoalIndia if theyneedmaintenanceor repairsof thesefacilities.Ideally, the
communityshouldtake responsibilityfor operatingand maintainingthese facilities.However,this requiresan organizationand a regularsourceof funds.Villagepanchayetsare not yet properly organized
and they have only limitedsourcesof revenue.
Table 3.1.6 Overviewof IndigenousPeoplesDevelopmentPlans (IPDPs)
Company/Mine
No of Villages
(IPDP)
Total
population
Tribal
population
CCL
K.D.Hesalong
Parej East
Rajrappa
4
11
12
1,952
2,913
9,714
522
2,078
1,599
MCL
Ananta
Belpahar
Bharatpur
Jagannath
Lakhanpur
Samnaleswari
0
15
5
6
5
6
0
4,068
3,238
7,688
1,887
2,566
0
1,766
317
260
567
954
NCL
Bina
Dudhichua
Jayant
Ihingurda
Nigahi
11
8
10
8
17
3,929
2,513
3,795
10,843
8,513
87
941
946
3,184
1,123
SECL
Bisrampur
Dhanpuri
Dipka
Gevra
Kusmumda
Manikpur
16
9
2
5
10
8
32,347
16,243
2,393
12,688
16,333
8,133
13,909
3,639
1,733
6,090
8,977
3,906
WCL
Durgapur
Niljai
Padampur
Sasti
Umter
4
2
5
3
7
16,490
2,587
4,865
6,229
3,884
1,365
295
1,043
529
1,070
189
185,811
56,900
Totbl
Sowce: CoalIndiaLtd.
- 132Annex 3.1
Page 22 of 27
Technical Assistance
22.
Coal India is aware of shortcomings in the implemental of environmental pollution control measures, and social mitigation measures. Technical assistance would greatly enhance the chance that projects
are implemented properly, on time and in accordance with its environmental and social policy objectives.
Therefore, the project contains a number of technical assistance programs to remedy these deficiencies.
23.
Table 3.1.7 provides an overview of the technical assistance that would be provided under the
proposed project. More detailed terms of reference for the various technical assistance tasks are provided
in Annex 2.8.
Social remedial action component
24.
This component would provide funds for the preparation and implementation of social remedial
action programs for the four coal mine projects which have received Bank support in the past (Dudhichua
Coal Project [Loan 2393-IN], which provided financial assistance for the development of the Dudhichua
opencast mine, the Jharia Coking Coal Project [Loan 2498-IN], which provided financial assistance for the
development of the Jharia Block II opencast mine and the Pootkee-Bulliary underground mine and the
Coal Mining Coal Quality Improvement Project, which provided financial assistance for the expansion of
the Gevra opencast mine and the development of the Sonepur-Bazari opencast mine.) The Bank's support
to the development of the Pootkee-Bulliary mine was canceled, and the resettlement under the SonepurBazari mine has yet to commence. (Eastern Coalfields Ltd. has prepared a Resettlement Action Plan for
this mine, which has been reviewed by the Bank and found to be satisfactory.)
25.
Land acquisition for the three remaining opencast projects led to the resettlement of about 18,700
persons. Resettlement of project-affected persons under the Dudhichua and Gevra opencast projects has
been completed; while the resettlement sites for the Jharia coking coal project have been constructed, a
number of people refuse to leave their original homesteads until they have received employment with Coal
India. In line with the Bank's efforts to ensure that the incomes of project affected persons have been
restored under projects that have received financial support from the Bank in the past, Coal India has
agreed tocarry out a review of the resettlement and rehabilitation efforts of the Dudhichua, Jharia and
Gevra opencast mines and to identify project-affected persons whose incomes are below the poverty line
established by the Government.
Project cost
28.
Table 3.1.8 shows the detailed project cost estimate.
Alternative project designs
29.
The option to implement environmental and social mitigating action programs through a separate
Environmental and Social Mitigation Fund for the coal industry was rejected, since it would have deprived
Coal India of the incentive to build up its own capacity for dealing with environmental and social issues.
More specifically with regard to social mitigating actions, alternative designs were considered in the
context of consultations during the preparation for the Rehabilitation Action Plans and Community
Development Plans. The design of the Environmental Action Plans was dictated by the need to meet the
requirements of Indian laws and regulations as well as the Bank Group's Operational Directives in the
most cost effective way.
Table 3.1.7 Synopsis of technical assistance
Borrower's Objectives
Terms of
Expected Results
Timing
Implementing Agency
Reference
Estimated Man
month
Cost
USS
'000
PolicySwrt
mid-1999
CoalIndiawiththe help
of two intemationaland
two Indianenvironmentalexperts.
12manmonths,
plusintemational
and domestic
travel, accommodation,and per
diem expenses.
177
It willidentifyshortcomingsor
successin RAP andIPDPimplementationanddisseminate
informationon the degreeof successor otherwiseand to help
managementto improveupon the
socialdevelopmentpoliciesand
theirimplementation.
1997to
2001
Independentsocial researchorganizationas
consultantsfor a period
of 4 years,startingafter
one year from the beginning.
Fourgroupsof 2
or 3 persons
(includinga
woman)to visit
one or two mines
in each area. 50
manmonthsplus
travel,field accommo-dation,
etc.
114
Effectiveand successfulimplementationof EMP,environment
legislationand policies;effectively
deal with environmentand social
issues in the developmentand operationof minesCoalIndia,in
consistencewith locallaws and
regulations,and culture;and draw
experiencefrom similar efforts
elsewherein India and abroad
1996to
1998
CoalIndiawith two expatriateand two local
consultants.
48 manmonths
plusinternational
and domestic
travel, accom.
and per diemexpensesand office
support.
639
I. To carry out a midtermreviewof environmentpolicies
andto improveupon these
policies.
To reviewtheprogressin mitigation
and remedialactionprogramsas per
EnvironmentalActionPlans and recommendmeasuresto improvethe
policy.
Revisionof policiesto achieve
improvedperformancein environmentpollutioncontrol
measures.
2. To identifyimpactsand successesof rehabilitation
efforts;identifypositiveand
negativeimpactson individuals, householdsand
communities;andrecommendways and meansfor
improvedimplementation
in
problemareas.
To visitsampleminesitesand discuss
with proiect-affectedpeopleand
othersto assessthe resultsof resettlementandrehabilitationand
IndigenousPeoplesDevelopment
Planpolicyimplementation
on individualsandcommunities:to identify
positiveand negativeimpacts;to recommendways and meansto improve
implementation;
and to monitorthe
resultsand submithalf-yearlyreport.
Sampleto coverat leastone mine in
each coalfield oncea year.
3. StrengtheningCoal India's
current capacityto deal effectivelywith environment
and socialissues.
To studyand reviewCoalIndia's
capabilitieswithrespectto implementingenvironmentaland social
policies;dealwith regionalenvironmentaland socialissues;establish
corporatetargetsfor pollutionand
waste reductionnot coveredby laws;
incorporateenvironmentaland safety
concernsin mineplanningand design; establishenvironmentalauditing
procedures;set up environmental
monitoringlabs;anddevelophuman
resources.
X
UQ
o
Borrower'sObjectives
Termsof
Reference
ExpectedResults
Timing
ImplementingAgency
EstimatedMan
month
Cost
USS
'000
4. To developsocialscience
Toadviseandassist R&Rstaff
andcommunitydevelopment (i) in Calcuttato definethe eligibility
capability andrural income
of NGOs/othersand to select
generatingexperienceof resuitablepartiesandto organize
settlementand rehabilitation
workshopsand seminarsfor Coal
staff
India staff and NGOsor others
involvedinR&Rimplementation;
(ii) in subsidiariesand subproiectsto
implementthe policyand carry
out internalmonitoring;and
(iii)to identifysuitableresearchinstitutionsand prepareTermsof
referencefor studies neededto
improvedimplementationcapabilityof CoalIndiastaff.
It will contributeto improvedperformanceof R&Ractivities,
speedierland acquisitionprocess
and harmoniousrelationsbetween
the companiesand communities,
andamongstthecommunities.
1996to
2001
5. Preparationof trainingmodules and trainingof the
environmentand other personnel.
Properimplementation
of EnvironmentManagementPlans,
environmentallegislationand
compliancewith approvalconditions.
a) July96
to Sept97
a) Coal Indiaand local
consultants.
b) July96
to March
2001
b) Coal India and NationalInstitutions
EnvironmentManagement.
a) To preparetrainingmodulesfor
new recruits and refreshersfor
personnelat all levelsin environmentdiscipline.
b) Imparttrainingto environmental
personneland other disciplinesat
NationalInstitutionandStaff
collegeof CoalIndia.
6. Standardizationof Coal India's a) To studyexistingpracticesand
a) Toimprovethe monitoring
environmentmonitoringprodevelopstandardproceduresfor
systemfor complianceand
ceduresand managementof
applicationthroughoutCoalIndia.
identifythe situationsneeding
air and water quality,
remedial measures.
b) To identifycoloniesandvillages
affectedby air pollutionand for- b) To reducethe air pollutionand
mulatethe mitigationplan
to bringthe suspendedparticulatematterlevel to the
pemissiblelimit
a) July 96
to Dec 96
b) July 96
to June 97
Coal India and local consultantswith social
science,sociology,anthropologyor social
welfare backgroundand
experiencein rural communitydevelopment,
participatorytraining,etc.
a) CoalIndiawith the
help of local Consultants.
60 man months
plusdomestic
travel (75 days
per year), accommodation,
local transport,
per diem expenses and office
support.
115
a) 40 man months
plusdomestic
travel,local
transportand per
diemexpenses.
185
-
b) 300 man
monthsof training fees at Rs
12,000per man
month.
a) 10man months
plus travel,per
diemexpenditure and office
a) 19
b) 45
b) CoalIndiawith the
help of local consultants.
b) 24 man months
plus other
charges as
above.
o"
Borrower'sObjectives
Termsof
ExpectedResults
Timing
ImplementingAgency
EstimatedMan
month
Reference
Cost
USS
'000
7. Safe disposalof domesticsewage, preventionof biocontminstion of groundwater
and protectionof local drinking watersources.
To studysoilboringsandsamplesto
determinesoil suitabilityfor leachfield disposal;reviewleachfie]d
designto determineadequacyof
leachfieldareas, percolationrates,
soilcharacteristics,and proximityto
groundwaterresources;and accordingly,recommendappropriate
sewagetreatmentsystemsto meet
Governmentdischargestandards.
in
To eliminatebio-contamination
the naturalwater regime.
July96 to
March98
Coal Indiawiththe help
of local consultants.
84 manmonths
andsoil analysis
chargingplus
domestictravel
and per diem
charges.
157
8. Selectionof soilfor spreading over overburdendumps
for bio-reclamationand effectiveearlyvegetationof
minedout areas.
Soilsamplesat all 25 mineswillbe
studiedfor physical,chemicaland
biologicalparameters(includingsoil
texture,pH, fertilityand micronutrients)and theirsuitabilityfor bioreclamationof overburdendumps
and minedout areas willbe established.
Preservationand reuseof top soil
and bio-reclamationof overburdendumpsand minedout areas.
July 96to
Sept96
CoalIndia withthe help
of local consultantswith
expertisein soil science
and agronomy.
20 manmonths
plus other charges
as above.
37
9. a) Studyof safetyof old
extemal overburden
dumps.
a) To determinethe safetyof old
overburdendumpsof the 25 subprojectsand designreslopingand
regradingfor unsafe dumps.
a) To studythe stabilityand
safety of overburdendumps.
a) Feb 96
to July 96
b) To reviewthe abovestudy
report and to recommendsteps
to make overburdendumps
stable and safe.
b) Nov 96
to Dec 96
a) CoalIndia withthe
a) 18manmonths.
help of local consultb)4 manmonths
ants.
plusintemational
b) CoalIndia withthe
anddomestic
help of one local and
travel, accomone foreignconsultmodations,and
ant.
per diem expenses.
To preventindustrialeffluentfrom
contaminatingthe naturalwater
sourcesat the surfaceand underground
July96 to
Sept96
b) Stabilityandsafetyof
overburdendumps,confirmationof above
recommendation.
10. To determinethe best methods fordisposalof
oil/greasefromworkshop
effluent.
b) To review the determinationof
stabilityof overburdendumpsand
the methodologyfor resloping
and regradingrecommendedby
studygroup.
To studythe technologiesfollowedin
India and abroadfor proper disposal
of wasteoil and grease,including
incinerationor use as technicallysafe
fuel.Studyto investigatethe most
economicmode of treatmentand
disposalof effluentwater.
CMPDIandlocal consultants.
9 man monthsplus
as above for local
consultants.
a) 57
b) 50
18
o
0
Terms of
Reference
Expected Results
Timing
To assist pithead power
generation plants in their efforts to find environmentally
acceptable and sustainable
methods for ash disposal.
Coal India will identify potential
mines for ash disposal; preferred
mode of transport; additional installadons required at mine sites to
facilitate ash disposal; estimate Coal
India's costs in backfilling operations;
and estimate hydrogeological conditions at the mine to determine possible
ash leachates in groundwater.
To minimize the acquisition of
agricultural land for ash disposal,
in the overall interest of both mining and power Reneration
companies.
Time at the
instance of
power
plants
12. To facilitate community
participation in implementadon of Resettlement Action
Plans and Indigenous Peoples Development Plans and
pass maximum investment
benefits on to the local
community.
To study the current status of implementation of Coal India's
development programs; interact with
the community to identify their needs;
and discuss needs with the mine management and get mine management's
financial support.
To organize the communities to
participate in the bidding process
for the activities intended for the
improvement of the local community and help them win the
contracts and implement them.
13.
Independent local supervision ofthe implementation
of the project.
To visit each subproject at least once
in every quarter and review adequacy of environment and social
policy implementation staff; adequacy of infrastructure facilities; and
status of implementation of the Environmental Action Plans,
Rehabilitation Action Plans and Indigenous Peoples Development Plans.
14. Review of the implementadon of Coal india's social
and environmental mitigation policies.
Social team to review Coal India's
progress in implementing RAPs and
IPDPs; identify areas for improvement; evaluate the extent to which
proiect-affected people's livelihoods
are restored and assess the effects on
indigenous communities and public
health issues. Environmental team to
ensure that implementation of EAPs
would bring the mines in full compliance with Indian laws and the
requirements of the Bank's OD 4.01
Borrower's Objectives
I.
Implementing Agency
Estimated Man
month
Cost
USS
'000
Coal India with the assistance of local
consultants.
10man months
plus travel, per
diem expenses
and office support.
22
1996 to
2001
One or two NGOs or
community based organizations at each of
the 25 subproiects. The
consultants to be resident
with the community.
50 groups of 2 or
3 each for 60
months.
1,164
The consultants will submit quarterly independent reports to Coal
India and Bank. These reports will
help the Bank supervision missions
to focus attention on subprojects
with weak records.
1996to
2001
Coal India with local
consultants with experience in mining proiect
implementation and environmental and social
issues in coalfield areas.
Supervision team will
consist of I senior engineer, 2 mining engineers,
2 environment specialists
& 2 sociologists for 1340
mandays for 5 years.
6,700 man days in
5 years, local
travel, accommodation, per diem
and overhead
expenses.
454
Effective and successful implementation of EAPs, IPDPs and
RAPs; effectively deal with environment and social issues in the
development and operation of
mines Coal India in consistence
with local laws and regulations
and the Bank's OD's.
1996to
1998
Coal India with two expatriate and two local
consultants.
48 man months
plus international
and domestic
travel, accom.
and per diem expenses and office
support.
400
IQ
'-w
Annae 3.1
Page 27 of 27
Table 3.1.8 Project cost estimate
Cost components
Foreign
Local
Total
Foreign
Rupees million
Land
Coal mine development
Resettlementsites
Civil works
Buildings and laboratories
Dust suppression
Effluent treatment plants
Settling ponds and oiVgrease traps
Rainwater catchment
Plantation and afforestation
Fencing
Overburden dump reclamation
Nurseries
Resettlement site infrastructure
Community development infrastructure
Equipment,materials and vehicles
Dust suppression equipment
Laboratoryequipment
Environmental monitoring equipment
Furniture and finings
Earplugs and earmuffs
Firefighting equipment
Vehicles
Policy support
Miscellaneous
Incrementaloperating costs
245.1
246.4
20.8
17.4
3.5
0.0
Local
Total
USS million
93.7
38.2
55.5
1,447.0
10.4
142.3
55.5
72.9
97.2
121.5
20.8
812.0
3.5
65.9
45.1
204.7
142.3
6.9
3.5
24.3
6.9
10.4
10.4
208.2
13.9
3.5
190.9
333.1
312.3
13.9
6.9
93.7
38.2
55.5
1,447.0
10.4
142.3
55.5
72.9
97.2
121.5
20.8
812.0
3.5
65.9
45.1
449.8
388.6
6.9
3.5
24.3
6.9
10.4
10.4
229.0
31.2
6.9
190.9
333.1
312.3
13.9
6.9
7.1
7.1
0.6
0.5
0.1
0.0
2.7
1.1
1.6
41.7
0.3
4.1
1.6
2.1
2.8
3.5
0.6
23.4
0.1
1.9
1.3
5.9
4.1
0.2
0.1
0.7
0.2
0.3
0.3
6.0
0.4
0.1
5.5
9.6
9.0
0.4
0.2
2.7
1.1
1.6
41.7
0.3
4.1
1.6
2.1
2.8
3.5
0.6
23.4
0.1
1.9
1.3
13.0
11.2
0.2
0.1
0.7
0.2
0.3
0.3
6.6
0.9
0.2
5.5
9.6
9.0
0.4
0.2
Foreign
exchange
Percent
54.5
63.4
9.1
55.6
50.0
0.0
Basecost (196)*
Physicalcontingencies
Price contingencies
265.9
24.3
10.4
2,286.7
211.7
114.5
2,552.6
236.0
124.9
7.7
0.7
0.3
65.9
6.1
3.3
73.6
6.8
3.6
10.4
10.3
8.3
Total project cost
300.6
2,612.9
2,913.5
8.7
75.3
84.0
10.3
Financing requirements
300.6
2,612.9
2,913.5
8.7
75.3
84.0
10.3
Note:Bae costincludetaxesanddutiesof USS4.1millionequivalent
Souce: Bank,taffesfimtes
- 139Annex 3.2
Page 1 of 24
Annex 3.2 PROJECT IMPLEMENTATION
Introduction
1.
The subsidiary companies are responsible for the implementation of the EnviormmentalAction
Plans (EAPs), Rehabilitation Action Plans (RAPs) and Indigenous Peoples Development Plans (IPDPs)
for the selected 25 coal mines. The physical implementation of these plans will be carried out by the
managers and officers of these mines. Coal India's headquarters will guide the overall implementation of
this project. Coal India has setup a separate World Bank Projects Division at its headquarters in Calcutta
with an adequate number of experienced staff. It has strengthened the subsidiary company structure to
ensure effective implementation of the EAPs, IPDPs, RAPs and the remedial social action programs for
mines that have received financial support from the Bank in the past.
Borrower'sorganizationfor projectimplementation
2.
MINEDESIGN.All of Coal India's projects are planned and designed by Central Mine Planning and
Design Institute (CMPDI), one of the Coal India's subsidiary companies. It supports subsidiary coal
companies through regional centers located at the headquarters of these companies. CMPDI employs
1,300 engineers and other professionals. It is fully equipped to carry out virtually all activities related to
mine design including geological exploration; planning and design of opencast and underground mines,
coal beneficiation plants and workshops; monitoring of environmental pollution; and staff training.
3.
PHYSICALIMPLEMENTATION.
The actualphysicalimplementationis the task of subsidiarycompanies. There are seven such companies engaged in coal production, five of which are involved in this
project: Northern Coalfields Ltd. (NCL), Central Coalfields Ltd. (CCL), Western Coalfields Ltd. (WCL),
South Eastern Coalfields Ltd. (SECL), and Mahanadi Coalfields Ltd. (MCL). These companies have
extensive experience in project implementation. At present, these companies manage 118 opencast and
underground mine projects with a total investment of US$3 billion at various stages of implementation.
When completed, these projects will have an aggregate production capacity of 126 million tons per year.
4.
COMPANYORGANIZATION
sTRucTURE.
Each subsidiarycompanyis dividedinto a numberof Areas,
and each Area is managed by an Area General Manager, a senior mining engineer of about 25-30 years of
experience. Each Area has a number of mines under production and projects under construction. The
project officer, a mining engineer with 15-20 years of experience, is responsible for the physical implementation of a specific project and associated investments. Large projects, with investments exceeding
US$60 million or with production capacities exceeding three million tons per year, are placed under the
charge of senior mining engineers of the rank of General Manager, who report directly to the Managing
Director of the respective subsidiary company. General Managers have more delegated authority in
financial and administrative matters than managers of smaller projects. Most of the procurement, monitoring of project implementation and liaisons with the State Governments and local agencies are done by the
offices above the project level.
5.
Each project officer is assisted by a pit manager and a number of assistant and undermanagers,
who are government certified mining engineers. The number of such engineers is statutorily fixed and
varies according to the size of the mining operation. In addition, each project manager is assisted by
- 140 Annex 3.2
Page 2 of 24
several other professionals, such as excavation engineers (for opencast mines), electricallmechanical
engineers, civil engineers, finance managers, personnel managers, etc. Environmental and resettlement and
rehabilitation related matters are implemented by the Area Manager (Safety and Environment) and Area
Manager (Resettlement and Rehabilitation) respectively. Mining related environmental issues are dealt
with by the project manager. See Figure 3.2.1 for organizational arrangements for implementation of
World Bank Group projects.
6.
MONITORING ARRANGEMENTS. The Area General Manager and his staff carry out a thorough
monthly review of all activities with the project manager and other officers in charge of physical implementation of a project. Selected projects are reviewed monthly by the Director (Project and Planning) at
the subsidiary headquarters. Projects facing serious slippage are reviewed by the subsidiary company
Board of Directors which meets every two months.
7.
At the Coal India level, all progress reports are reviewed by the Chief General Manager (Project
Monitoring) who is assisted by a group of experienced professionals and reports to the Director (Technical). This group visits the projects and is responsible for timely procurement of all inputs that are dealt
with at the Coal India level. Projects facing major slippage are reported to the monthly meetings of all
Chairman-cum-Managing Directors. All problem projects are reviewed by the Board of Directors. Implementation reports of projects with investments exceeding US$33 million are sent to the Ministry of Project
Implementation in Delhi where they are reviewed when implementation problems arise.
8.
IMPLEMENTATION ISSUES. Despite this elaborate organization for project monitoring Coal India's
performance in implementing projects has been uneven. There have been both time and cost overruns. The
Bank has made three loans to Coal India: In 1984, a loan of US$151 million for the development of the
Dudhichua mine in Singrauli; in 1985 a loan of US$248 million for the development of an opencast mine
(Block II) and an underground mine (Pooktee-Bulliary) in Jharia coalfield; and in 1987, a loan of US$340
million for the expansion of an opencast mine (Gevra) in Korba coalfield, the construction of an opencast
mine (Sonepur-Bazari) and imports of coking coal. In 1992, the Board approved a credit of US$12 million
for a technical assistance project to deal with mine fires in the Jharia coalfield. The loan for the Jharia
Coking Coal project was closed on December 31, 1992, the loan for the Dudhichua Coal project on March
31, 1993 and the loan for Coal Mining and Coal Quality Improvement Project on September 30, 1995.
9.
Implementation of these projects has been uneven. While the construction of the Dudhichua coal
mine and the expansion of the Gevra coal mine proceeded without any major problems and ahead of
schedule, the opencast mine in the Jharia coalfield (Bihar) and Sonepur-Bazari in Ranigunj coalfield (West
Bengal) were plagued by land acquisition problems. This delayed not only implementation and disbursements of the loans, it also reduced the commercial viability of these projects. One component, the
Pooktee-Bulliary underground mine was canceled after it was discovered that the coal reserves at this
location could not support the original mine design, and the subsidiary coal company was unable to come
up with another commercially viable proposal.
10.
Two lessons stand out from the experience with the implementation of these projects:
Technical assistance greatly enhances the chances that a project is implemented properly and
on time. The Dudhichua mine is rightly regarded as one of the most successful mines in the
Singrauli coalfield. This is largely due to the fact that the construction of the mine had,
during its initial years, considerable assistance and guidance from an international mining
consultant.
- 141 Annex 3.2
Page 3 of 24
Figure 3.2.1 Organizational arrangements for implementation of World Bank Group projects
_Vr
- _
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~~~~Technical
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t
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|Chief General Manager
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world Bank Projects
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echnicalDirector
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resindicate
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- 142 Annex 3.2
Page 4 of 24
Project implementation units need to be strengthened, in particular with regard to skills
required for the implementation of environmental and social action programs.
11l.
SPECIAL MONITORING SETUP FOR WORLD BANK GROUP PROJECTS.
CoalIndiais aware of its shortcom-
ings in project implementation and has sought technical assistance from the Bank to strengthen its project
implementation and monitoring capacity. Coal India has already set up a separate organization (World
Bank Projects Division) to monitor the projects. It is headed by a Chief General Manager, a senior mining
engineer with over 28 years of experience in project planning and implementation and mine management.
He is assisted by 14 professionals of various disciplines and a team of local and expatriate consultants.
The World Bank Projects Division consists of five cells:
*
Project Monitoring Cell
*
Procurement Cell
*
Environmental Cell (which also deals with mine safety)
*
Resettlement and Rehabilitation Cell (which also deals with IPDPs)
*
Economic and Financial Evaluation Cell
The organizational structure of these arrangements is shown in the Figure 3.2.1. The Chief General
Manager reports the activities of the first four cells to the Director (Technical) of Coal India. For activities
of the Economic and Financial Evaluation Cell, he reports to the Director (Finance). Coal India has also
agreed to review the staffing of these cells with the Bank as the implementation of this project progresses.
12.
MONITORING
CELL. This cell is responsible for the:
assessment of the technical feasibility of each subproject,
preparation of equipment and civil works specification and procurement schedules, and
monitoring and implementation of subprojects.
PROJECT
*
*
*
The Bank has already provided technical assistance for better monitoring of subproject implementation
through the Project Preparation Fund (PPF). (Coal India refers to each of the selected 25 mines as a
subproject.) Implementation schedules have been prepared for all subprojects. The schedules for inviting
bids, awarding contracts and completing contracts for procurement activities of all the subprojects and
statements of the number and average value of procurement contracts have been prepared. The implementation schedule also includes resettlement and rehabilitation and social remedial action programs. Coal
India has installed Microsoft Project in Calcutta and subsidiary company headquarters and at area levels.
A time-bound detailed implementation plan for each project component, including technical assistance,
training and a schedule of procurement actions with target dates for each step, has been prepared. Already
25 stations are operational and engineers and other professionals engaged in monitoring activities have
been trained. Coal India has established a direct electronic mail link between its World Bank Projects
Division and Washington.
13.
Coal India also has a satellite based communications network linking Coal India headquarters with
subsidiary company headquarters and some area offices for the transmission of data. Additional satellite
stations are proposed to link all Bank financed projects with Coal India headquarters. This will facilitate
regular monitoring of the work in progress and greatly assist in the timely decision-making by the management, should slippage occur.
14.
PROCUREMENT
CELL. The Procurement Cell is responsible for the procurement of all goods and
consultancy services under ICB and some selected items by NCB. It prepares the bid documents (in line
with the Bank Group's guidelines) for all subprojects and monitors procurement activities.
- 143 Annex 3.2
Page 5 of 24
15.
ENVIRONMENTAL AND R&R CELLS. These cells assist the subsidiary coal companies in the review of
all environmental, resettlement and rehabilitation and IPDP issues for all subprojects. They also monitor
the implementation of EAPs, RAPs and IPDPs.
16.
ECONOMIC AND FINANCIAL EVALUATION CELL. This cell is responsible for the financial and economic
evaluation of subprojects and for confirning their commercial viability.
Strengthening of Coal India's capacity to deal with environmental and social issues
17.
To ensure the timely implementation of this project and the Coal Sector Rehabilitation Project,
Coal India has:
*
arranged for support from its environmental experts in CMPDI to strengthen the Environmental Cell;
*
signed a contract with the Indian Institute of Social Welfare and Business Management,
which provided a team of social science professionals to support the work and training
activities for the Resettlement and Rehabilitation Cell; and
*
hired a team of three expatriate consultants to assist the Procurement Cell.
18.
Since environmental management is recognized as a separate management function within Coal
India's corporate structure, appropriate positions have been created at subsidiary headquarters, areas, and
mines. These positions have been staffed with executives trained in Coal India's Staff College or outside
the company. While all these executives have backgrounds as mining or civil engineers, the additional
training on environmental management ensured that they are now qualified to implement environmental
mitigation programs.
19.
Resettlement and rehabilitation and community development programs were traditionally dealt
with by Welfare Officers posted at each mine. With the shift to opencast mining and the resultant need for
more land and subsequent increase of land 'oustees', the role of these officers has become increasingly
important. Coal India is currently in the process of setting up an organizational structure for the management of social issues, in particular resettlement and rehabilitation and community development. While the
positions have been created, the staffing with properly trained personnel has yet to be completed. Coal
India has agreed to post, by December 31, 1996, full-time social science professionals (CD/R&R officers)
at each of the 25 mines to assist in the implementation of the IPDPs and RAPs. In mines where resettlement and rehabilitation officers have not yet been posted, Welfare Officers will deal with the implementation of these plans in the interim. Coal India has agreed to provide these officers with training in participatory community development by June 30, 1996.
Stakeholders
20.
Coal India and its subsidiaries are dependent on several entities for mine development and operation (approval of the projects, acquisition of land, supply of electricity, recruitment of work force, transport of goods, dispatch of coal, social welfare for the local community, etc.). Several ministries of the
Government of India, Indian Railways, the State Governments, State Electricity Boards, various local
organizations and project-affected people are the stakeholders in this project and are involved in many
ways from formulation to implementation and operation. The responsibilities of the main stake holders are
discussed below.
- 144Annex 3.2
Page 6 of 24
21.
GOVERNMENT OF INDIA. Coal India falls under the purview of the Ministry of Coal. The Ministry
sets the annual and 5-Yearly Plan production targets in consultation with the Planning Commission,
Railways and the Ministries of Steel and Power. Coal India's annual budget, flow of the Government
funds to the company and repayment of loans to the Government are also processed by the Ministry. The
other important subjects dealt with at the Government level are wage and salary structures of workers,
supervisors and executives; pricing and distribution of coal; and appointment of all full time and part time
directors in Coal India and its subsidiary companies and the chief executives of all companies. The
Ministry is also responsible for acquisition of all virgin coal bearing land and for assigning coal mining
blocks to the private sector. The Ministry of Labor is responsible for labor employment laws and exit
policy processes. It finances the National Renewal Fund and oversees mine safety and worker's welfare.
The Ministry of Environment and Forests (MoEF) is responsible for the environmental pollution control
policy. It enacts rules and regulations and oversees their implementation, approves Environment Management Plans, releases forest land and oversees implementation through the Central Pollution Control Board
(CPCB). Indian Railways plays an important role since it transports about 70% of Coal India's coal
output.
STATE GOVERNMENTS. In the State sector, companies are dependent on district officials for mining
22.
leases; acquisition of land for mining; related jobs not covered by the Central Government; resettlement
and rehabilitation of project-affected people; development of social infrastructure, roads, and communications; and maintenance of law and order. The State Pollution Control Boards (SPCBs) supervise implementation of approved EMPs. The local State Electricity Boards (SEBs) ensure adequate power supply
and are also the major coal consumers.
23.
LOCAL COMMUNITIES. People that live in communities surrounding coal mines have a particular
stake in these operations. They affect their lives in many ways. For many of them the opening of a coal
mine led to a drastic change in traditional lifestyles. Some were able to find jobs with the coal company;
others had to look for employment with contractors or decided to move away. Quite a few had to give up
their accustomed homesteads and move to a resettlement site. In the context of this project Coal India has
implemented a number of steps that should make the adjustments to new lifestyles easier. Coal India
provided the people affected by the 25 mine projects, their representatives and local NGOs with information about the EAPs, RAPs and IPDPs and consulted extensively with them about these plans and their
implementation (Annex 2.6).
Role of the Bank duringprojectimplementation
24.
The Coal SectorRehabilitationProjectis a complexprojectwith 25 miningsubprojects,some of
which are as big as normalBank projectsin termsof investmentrequirements.The subprojectsare spread
over 11 coalfieldsin five Statesin the east centralpart of India.It takesmorethan two days rail journey
from Calcuttato reach some of the mine sites, so it will not be possiblefor the Bank mission to visit every
project evenonce a year. The role of the Bank will mainlybe to monitorthe implementationof policy
supportthat CoalIndia is to receivefrom the Governmentand the implementationof technicalassistance
for institutionbuildingand to superviseselectedsubprojects.Local consultantswill assist in the supervision of the subprojects.
- 145 Annex 3.2
Page 7 of 24
Implementation arrangements
Environment Action Plans(EAPs)
25.
The immediate objective of the EAPs is to improve environmental conditions in the selected
mines in order to maintain environmental performance in full compliance with Indian rules and regulations
and the Bank Group's Operational Directive 4.01. The targeted environmental parameters are: water
quality and hydrology, air and noise quality and land reclamation. The main objectives of this project are
to enhance Coal India's capacity to manage environmental issues effectively and extend environmental
compliance to their other mines and to enhance Coal India's capacity to respond to regional environmental
issues that stretch beyond the boundaries of its mines. Some of the activities at the mine level are preceded
by studies at Coal India level and the subsidiary company level to quantify the extent of the mitigating
activity required at each mine.
26.
In all the subprojects, the mitigation measures are similar in nature and differ only in magnitude.
The EAP at mine level can be, therefore, described in a generic mode, and need not be repeated for each
mine.
27.
WATER QUALITY MANAGEMENT.
Surface and underground water at and around the mine site may be
contaminated from the uncontrolled release of water from the mining area, coal processing plants and
workshops. Runoff water from overburden dumps and coal piles, if not collected and controlled, may also
contribute to contamination. Discharge of effluent from inadequate sewage treatment plants or scattered
soak pits in colonies is a potential source of contamination to drinking water wells and other sources.
Cutting through the water table during mining operations and removal or dumping of overburden may
affect the water shed and change the hydrology of the mine area. This may cause a reduction in the water
flow, deplete drinking water wells, change the water table and damage the aquifer. The following mitigating actions would be taken:
a) All surface water collections and effluent management systems will be reviewed and no
uncontrolled, untreated water will be released after June 1997.
b) Specific mitigation plans will be developed for each mine. Storm water, mine water and
other effluents from the industrial area will be collected and treated (if required) to meet
discharge standards. Recycling and reuse will be maximized before discharge takes place.
Effluents will be discharged only if they meet CPCB standards.
c) Monitoring of groundwater levels and quality in nearby village wells will be required only
within the hydrogeological impact area of the mine Technically acceptable environmental
monitoring programs should be in place by January 1997.
d) Water quality sampling kits will be provided at each mine site to test the parameters needing
instant testing (e.g. pH, conductivity, turbidity, etc). Sufficient lab facilities will be developed to test all parameters required in the Consent Letter and the water quality analysis
schedule of Indian industrial discharge standards. Water quality sampling and analyses will
be performed once each quarter, or more frequently if required by regulatory bodies. All
analyses will be performed according to standards and methods approved by the SPCB and/
or CPCB.
e) Water in wells will be analyzed to determine the impact of sewage soak pits on groundwater.
To understand the impact on groundwater due to the sewage system of a township, the
quality of ground water at a point between the sewage system and the nearest drinking water
wells will be monitored.
- 146 Annex 3.2
Page 8 of 24
f)
g)
For new soakpits, studies will be undertaken by a sanitary engineering consultant to determine soil suitability for septic leachfield disposal. The study will include a review of
leachfield design to determine the adequacy of the leachfield area, percolation rate, soil strata
and proximity to groundwater resources.
Based on the above surveys, CMPDI will identify unsuitable soil characteristics in the
colonies and design sanitary wastewater treatment systems and secondary treatments for
disinfecting the effluent. A facility should be provided with a discharge flow measurement
device. Contractors will perform start up and stabilization operations and demonstrate that
the treatment systems comply with Indian standards for discharge of sanitary effluent.
h)
SURFACE WATER CONTROL AND TREATMENT SCHEMES.
i)
Thedesign of mine effluenttreatment
systems will ensure compliance with Indian industrial discharge standards. The design
process should begin with an assessment of the quantity of water to be discharged from each
mine. Designs will maximize recycling of collected surface water. The following elements
will be included in the treatment system designs:
*
Collection drains will be provided where fixed dust suppression sprays are employed
(i.e. coal loading points, coal handling plants, wash plants and along paved haul roads).
Drains will be properly sloped to avoid ponded water and will be lined with vegetation,
gravel, or cement according to erosion potential and slope.
*
Settling ponds and polishing ponds will be designed with adequate size flow through
characteristics and retention time for settling of fine and compliance with Indian
standards for industrial discharge. Discharge channels will be equipped with flow
measurement devices.
*
Maintenance shop oily water treatment facilities will include collection, physical
separation (API separator), and secondary treatment (physical/chemical or biological)
facilities. These will be supplied with discharge flow measurement devices.
HYDROLOGY. Nearby villages wells will be used to monitor groundwater levels, flow and
water quality to determine impact of mine operations. The top of each well will be professionally surveyed to accurately plot the location of the well and the aquifer level, from a
national datum, on a topographic map. The water samples will be collected as per standard
procedures for sampling and analysis of drinking water. Such samplings and analyses shall
be performed once each quarter. Should wells be adversely affected due to mining operations, Coal India will arrange the regular supply of adequate quantity and quality of water to
the villages.
28.
FUGITIVE DUST MONITORING AND CONTROL. Opencast mine activities may increase the level of
suspended particulate matter, which includes respirable particulate matter (smaller than 10 microns). The
dust is generated from the crushing, handling and transport of coal and from drilling and blasting operations. The health effect of suspended particulate matter, mainly 10 microns and smaller, are bronchial
problems, lung diseases and nuisance. The following activities will be taken to monitor and improve air
quality:
a) Existing air monitoring data will be analzed and a dust control plan will be developed.
*
Analyses of existing air monitoring data will be undertaken for all colonies to identify
problem areas and for the preparation of remedial management plans. Analyses are to
be carried out by CMPDI, which is familiar with mine fugitive dust mitigation techniques. CMPDI will prepare a dust mitigation plan to cover all villages currently
situated within core zones and on the fringes of buffer zones. The plans will encompass
areas inside and outside of the active mine, as appropriate.
- 147 Annex 3.2
Page 9 of 24
b)
c)
d)
A technical analysis of the existing dust suppression program will be undertaken at
each mine, in conjunction with the above study of monitoring data. As a result of this
technical review a dust control plan for each mine will be developed, using one of the
techniques selected from those detailed below under 'dust suppression on haul roads.'
Ambient air contamination monitoring will be undertaken in all villages currently situated
within core zones and on the fringe of buffer zones to determine compliance with environmental standards. The mines will have high volume samplers, analysis equipment and
vehicles for collection of ambient air samples.
Dust suppression on haul roads will be improved.
Existing watering equipment on haul road will be retrofitted as required, to include
pressure water spray nozzles for more efficient use of water and improved dust suppression. Water tankers will be outfitted in sufficient numbers to keep haul roads wet
during the operation hours and more watering stations will be provided for spray trucks
to reduce transit time and maximize equipment effectiveness. Wherever cost effective
fixed sprayers will be installed along haul roads. Haul roads that will be used heavily
over long periods will be paved.
Other dust suppression techniques will include regular cleaning of haul roads of
spillage, prevention of overfilling of trucks and use of dust extractors for blast hole
drills.
Designs of spray systems will include pumps, pipelines nozzles and runoff water collection
systems, and also cover coal stockyard and truck and railway loading points. Runoff water
will be collected and treated in mine runoff settling basin systems or provisions will be made
for settling basin treatment prior to recycling.
29.
LAND RECLAMATION. Mining operations impact the land and soil in many ways. Excavation of
rocks and coal damage land and vegetation and cause voids. This can be best mitigated by backfilling the
voids, provided no lower seams are to be mined later. Overburden dumps and rejects piles degrade land
aesthetics and the resultant fugitive dust and run-off water cause air and water pollution. Agricultural,
residential, industrial or forest lands are sometimes lost to opencast mines. Spontaneous combustion of
coal or reject piles lead to surface fires which cause air pollution and land sterilization. Top soil is lost to
overburden dumps and coal stockpiles. The erosion of overburden dumps due to rain and wind lead to loss
of soil and siltation of water drainage system. Loss of forest land hinders animal migration and reduces
vegetation cover. The following mitigation measures are included in this project:
a) An engineering study will be carried out to determine the physical safety and slope stability
of overburden dumps and recommend remedial actions (study in progress).
b) A panel of experts will review the above report and recommend the measures for implementation.
c) A study will be undertaken to identify the most suitable strata for use as substrate for fertilizer application and to develop and progressively improve the technical and biological
reclamation of the spoil dumps. The study should continue throughout the project duration.
d) The work of revegetation of reclaimed areas, overburden dumps and afforestation of waste
land will continue with the State forest departments who have the requisite experience. The
reclaimed areas should be permanently fenced to prevent grazing by livestock.
e) The companies will establish nurseries to develop suitable saplings and research soil improvement needs.
- 148 Annex 3.2
Page 10 of 24
f)
The companies will have five-year establishment programs to monitor and manage the soil
and vegetation, replace failed vegetation, repair erosion damage, monitor continued soil
fertility and repeat fertilizer application, and control damage to vegetation due to grazing.
Strengthening of environmental management at the corporate level
30.
Coal India will undertake the following activities:
a) In each of the subprojects, Coal India will develop monitoring programs for air, water and
hydrology and will supply mobile instruments and field testing kits to determine the scope of
the routine monitoring program at each mine.
b) Coal India will establish seven laboratories in specified locations fully equipped with instruments, furniture, computers and vehicles to carry out environment sample analysis
c) Coal India will conduct a study concerning safe disposal of oil, grease and water effluent
from workshops in full compliance with government regulations. The oil content in water
should not exceed 10 mg/liter unless recycled in coal processing facilities.
d) At present, vibration monitoring is required every six months, when changes in explosive
type or charge are introduced or when the distance from residential areas is less than 300
meters. Monitoring frequency will be enchanced after studying local conditions.
e) A minimum acceptable coal quality, based on the geo-mining conditions and operational
practices, will be set for each mine. Quality control procedures will be developed as appropriate. Alternative techniques for upgrading coal quality of the run mine coal should be
explored if adequate compensation for improved coal quality can be assured.
f)
Coal India will assist pit head power plants in a study of the feasibility of ash disposal in the
mined out areas.
g) In areas of concentrated industrial development activities, Coal India will participate in
regional planning to develop a regional approach to environmental monitoring, management
and land use planning.
h) As part of the technical assistance program, a team of international experts will study
environment management capability from the corporate to the mine level to find ways and
means to strengthen it in order to better implement the EAPs.
Resettle,nent, rehabilitation and community development
31.
Implementation of the new resettlement and rehabilitation and community development policies
will be a difficult process that will require substantial attention and support. These represent new directions, to both project-affected people and mine managers. The policy on resettlement and rehabilitation
limits the rehabilitation assistance for land owners from life-long employment in the coal company to
assistance during a limited period. During this period the project-affected people have to contribute to their
own successful rehabilitation. The policy on community development will make assistance to surrounding
communities a participatory and transparent process, thus limiting the discretionary powers of the mine
managers and making them more accountable to the surrounding communities.
32.
The resettlement and rehabilitation policy and the community development policy are corporate
policies, and are meant to be implemented throughout Coal India. The following section describes Coal
India's organizational arrangements for the implementation of these policies under this project. These
should be considered examples of the arrangements that must be in place, and the issues that must be dealt
with in all the mines of Coal India. The present project is a leaming ground, and as such a pilot and
demonstration project in an area that is relatively an unchartered territory for Coal India.
- 149Annex 3.2
Page 11 of 24
Institutional arrangements
33.
In order to ensure effective implementation of Coal India's resettlement and rehabilitation policy,
Coal India has agreed to strengthen the implementing organisational structure. It is envisaged that institutional strengthening takes place at the Coal India level and at the mine level. Coal India has agreed to
provide the General Manager (Resettlement and Rehabilitation) at its World Bank Projects Division with
sufficient resources and manpower to guide, support and monitor the implementation of the new Coal
India policy. In addition, Coal India has hired one consultant, with a social science background and
'hands-on' field experience in community development and income generation, for the whole project
period. Additional use of external consultants may be required for specific tasks, such as periodic evaluation surveys, case studies to identify self-employment opportunities and diagnostic studies to identify
problems of integration at resettlement sites.
34.
The major responsibility for implementation of the Resettlement Action Plans lies with the
subsidiary and mine level management. Dedicated resettlement and rehabilitation staff are present in
several subprojects and/or at area levels. Coal India has agreed to ensure that they will receive necessary
and relevant training in area where this is needed.
35.
Coal India has agreed to a hire social scientist at each of the 25 selected mines to be responsible
fulltime for resettlement and rehabilitation activities and community development activities. In addition,
Coal India will post 6 General Managers (R&R): one at the corporate level and one at each of the five
subsidiary companies involved in the proposed project.
36.
The staff and officers of Coal India and it's subsidiaries will be trained and in place by September
1, 1996. Coal India has agreed that the key resettlement and rehabilitation staff will, as a general rule, not
be transferred within the first three years of project implementation.
37.
NGOs and specialized local organizations will be engaged to assist in specific tasks, such as
training for self-employment and community development work. The selection of the NGOs is crucial and
has to be done with great care. The NGO must have a proven record of dedicated community development
and income generating activities. The Resettlement and Rehabilitation Cell of Coal India must be involved
in the selection procedure and must approve the selected NGO. The Non-Governmental Organization
(NGO) or consultants, who will assist Coal India in the implementation of the RAPs and the IPDPs, must
have the following qualifications:
*
Be a registered society (or company) under the Registration of Societies Act or any such acts
that are relevant to the state in which the mine is located. It should fulfill the mandatory
regulations of such acts, including the annual audit of the statement of accounts.
*
Have appropriate professional and language skills and experience in tribal, community and
rural development and also for training in community organization, leadership and skills
improvement.
*
Have an understanding of gender and poverty aspects in the communities in the area, and
have the ability to address the needs of women and other vunerable groups, and ensure their
full participation so that the benefits reach them.
*
Have adequate administration and staff structure (including women field workers) to undertake the field tasks.
*
Priority will be given to local NGOs, and NGO with staff from the area of operation. If such
NGOs are not available, professional social workers from that state, with the above qualifications will be engaged to carry out the plans.
- 150-
Annex 3.2
Page 12 of 24
38.
During the preparation of the Rehabilitation Action Plans, the affected people were consulted in
various ways:
*
Since every household was visited by the interviewers, this created an opportunity for
consultation. The survey contained questions regarding affected people's perceptions of
issues related to land acquisition, compensation, benefits of the project displacing them, and
the relocation site and the host community.
*
All consultants had more unstructured interaction with the project-affected people than the
officials of Coal India. Most of the consultants organised focus group sessions for various
groups in the villages, such as women, landless and tribals. This information was used to
formulate a strategy for involvement of the project-affected people in the Rehabilitation
Action Plan, and for their active participation in the resettlement and rehabilitation process.
39.
As a further step in informing the project-affected people of their entitlements, both the policy of
Coal India and the Rehabilitation Action Plans are in the process of being translated into relevant local
languages. Generally Coal India has issued press statements to newspapers in the affected areas and in the
major cities for the wider dissemination of the policy change.
40.
COMMUNITY DEVELOPMENT.
Coal India has some experience in community development. The major
challenge in implementing the IPDPs is an organizational one. The ultimate responsibility of implementing community development schemes lies with the communities themselves. Coal India, the State Government, and NGOs can only support and facilitate this development. Providing basic physical facilities to the
communities, without their active contribution and involvement in the planning, implementation and
operation, has led to under utilization of the facilities, breakdown of services and a feeling of apathy and
dependency.
41.
These community development plans are demand-based and community-initiated. In the interest
of project sustainability and to achieve the social objectives of the project, all efforts will be made to invite
participation of local communities and local NGOs/Community Based Organization (CBOs) in order to
increase the utilization of local know-how and materials, and to employ local labor.
42.
To the extent possible, all community development contracts will be reserved for the local communities. If local communities are not able to organize themselves to participate in the bidding procedure,
Coal India will invite and finance eligible local NGOs/CBOs to help the community to do so. NGOs/
CBOs could also manage the contracts with the consent of an elected village council, or train the eligible
people in the village to share some of the activities. Coal India has agreed to introduce necessary flexibility in its contract award procedures to accommodate the communities' desire to participate either directly
or through NGO intermediaries.
43.
Since the community will have inadequate capacity to receive and manage funds, it may be
necessary to employ a suitable intermediary or agent to conduct procurement and account for the funds on
behalf of the community. Such an agent could be a NGO, private entity or others who will act through
intense participation of the community.
44.
Coal India alone will not have the capacity to organize and facilitate the mobilization of focus
groups and working groups. NGOs/CBOs experienced with tribal communities and with proven track
records in community development are needed to assist in facilitating the process. The NGOs should
- 151 -
Annex 3.2
Page 13 of 24
preferablyhave female field workers. Involvement and mobilization of local CBOs will be encouraged.
Thus, NGOs will have a key role to play as an intermediary between the coal mine management and the
community.
45.
The main role of Coal India is to provide financial support to establish community infrastructure
and relevant community activities, and to provide for temporary outside assistance from NGOs/consultants
and others.In principle, the operation, utilization and maintenance of created community infrastructure
lies with the communities, although Coal India may assist with initial operational cost in a transitional
period of no more than two years. The State Government should be pursued to deliver public services, and
extend development activities, according to State rules and regulations.
The implementation of the Indigenous Peoples Development Plan will follow a participatory
46.
approach,and will involve the following steps at the village level:
a) Participatory Rural Appraisal and framework planning at village level for identification of
felt needs and required actions. The TOR for this exercise is attached. This initial activity
will be undertaken by Consultants.
b) Formation (or boosting/reviving) of voluntary working groups, particularly among women
and youth, to initiate, support and monitor local activities and improvements. To facilitate
this organization, the assistance of local NGOs/CBOs will be sought and partly financed by
the project
c) Preparation and Submission of proposals by the working groups to the Community Development Council. They will have to include:
i)
Scope and justification of the project
ii) Contribution and commitment of community/group for participation in implementation
and responsibilities for operation and maintenance
iii) specification of who will carry out the project, and
iv) Assistance sought from the Community Development Council, to be financed by Coal
India
d) Implementation of selected project activities with participation of working group and periodic review/planning meetings.
47.
Overall the activities of the Indigenous Peoples Development Plan can be classified into nine
steps/phases,some of which will overlap, and some of which will be repeated during the project period:
*
PREPARATION
AND MOBILIZATION
(3 months), involving the posting of full time CD&R&R
Officers in each mine under the project, and the identification of suitable NGOs in the
vicinity of the mines.
*
BUILDING IMPLEMENTATION
CAPACITY (3 months, repeated at intervals), involving training and
orientation of Coal India staff, NGOs, and the establishment of Community Development
Councils in the mine-areas.
*
INFORMATION
AND CONSULTATION
(3-6 months, repeated at intervals), involving meetings and
publications to inform and consult government officials (DC/BDO), local elected leaders and
communities about the scope and possibilities of the plan, and elicit feed back for improved
implementation, and ensuring that government is fully informed and involved.
*
BASELINE SURVEY AND PARTICIPATORY
RURAL APPRAISAL (3-6 months), involving identification
(reassessment) of community needs and possible projects, leadership and community workers.
- 152
-
Annex 3.2
*
*
*
*
*
Page 14 of 24
VILLAGE LEVEL PLANNING (3 months, repeated annually), involving establishment of village
working groups, the preparation of draft annual community plans, and village consultative
meetings and consequent adjustments of final draft.
ANNUAL INDIGENOUS PEOPLES DEVELOPMENT PLAN (3 months, repeated annually), involving the
consolidation of mine-specific plans, submitting to Coal India, approval by Coal India, and
disbursement of funds for implementation.
VILLAGE LEVEL IMPLEMENTATION (ongoing for the project period), of community assets for
one fiscal year at a time, according to plan and budget. The majority of the community assets
will be implemented during the first three years of the project. Some community activities
will be implemented over one fiscal year, others will be ongoing throughout the entire five
year period.
MONITORING AND FOLLOW UP (quarterly), involving ongoing feed back from village working
groups to NGOs, quarterly reporting from NGO to CD&R&R Officer and R&R Cell, on
which the Community Development Council will report quarterly and formally to the
subsidiary and R&R Cell. The CD&R&R Officer will submit a separate report to R&R Cell,
who will consolidate these into a comprehensive half-yearly report, including accounts. An
independent evaluation will be carried out after two years and four years of implementation,
and an ex-post evaluation will be carried out two years after project completion.
TURN OVER TO COMMUNITYMANAGEMENT (after year 2-3, then ongoing), involving the hand
over of physical assets for maintenance and management. Although government responsibilities for staffing and maintenance of major assets will be vigorously pursued, community
involvement will also be promoted. Similarly, assistance to community activities will be
phased out once the technical and management expertise has developed in the community.
At the outset (planning stage) of each activity, the NGO and the community will agree on a
tentative time for hand over of assets and activities to community management.
48.
The implementation arrangement has been kept simple, as indicated in Table 3.2.1, where the
different responsibilities are described at the major levels.
Implementation
issues
49.
The major challange for the implementation of the new policy is to make the self-employment
option an attractive and viable alternative to a job with the subsidiary. There is no global solution to this.
One lesson that has been learned is that training in itself is not enough, even when it is followed by loans
or grants. The majority of project-affected people are farmers or agricultural laborers, and the transition
into another profession probably requires a great deal of follow-up involving business planning assistance
and extension services.
Table 3.2.1 Implementation arrangements for RAPs and IPDPs
Level
National
Mine
Village
Source: Coal India
Implementation
Resettlement and Rehabilitation Cell (Coal India)
Community Development/Resettlement and Rehabilitation Officer
Communities
Supportfor implementation
Consultants
NGOs and Block Development Officers
NGOs
- 153 Annex 3.2
Page 15 of 24
50.
One of the first activities to be taken up in the subprojects is determining the persons who are
eligible for rehabilitation assistance, popularly know as 'the closing of the list.' The censuses carried out
by the consultants and NGOs for preparation of the Rehabilitation Action Plans are fairly accurate, and
will forn the basis on which the list of entitled persons is to be determined. In order to ensure that nobody
takes undo advantage of the situtation, and that every entitled person is informed of his or her entitlements,
information campaigns will be carried out on a house-to-house basis by the Resettlement and Rehabilitation Officer of the subsidiary with the assistance of NGOs. This will include the distribution and reading
of a brochure explaining who is entitled to what assistance. A simple identity card (with a photo of the
entitled person) will be issued by the subsidiary. The details of this procedure have been developed. This
procedure is adopted in order to ensure that people are aware of the scope and limitations of the entitlements. From the operational plans for resettlement and rehabilitation it is clear that the impact of land
acquisition for the majority of the project-affected people will take place in 1996-97.
51.
Technical guidelines for the implementation of the policy will be produced by the Rehabilitation
and Resettlement Cell of Coal India based on the initial experience in the subprojects. They will contain
operational details, such as rationale and procedures for verification of the identities of project-affected
people, how to conduct information campaigns, how to carry out the alternative rehabilitation entitlements,
and the time limitations of the entitlements.
52.
Technical assistance, mainly by local consultants and intense supervision by the Resettlement and
Rehabilitation Cell of Coal India, is of prime importance to the successful implementation of the resettlement and rehabilitation policy.
53.
Coal India has agreed to ensure that each mine has a full-time Community Development/ Resettlement and Rehabilitation Officer (CD/R&R Officer) who will oversee the implementation of Rehabilitation
Action Plans and Indigenous Peoples Development Plans. Since it may not be possible for Coal India to
recruit an adequate number of qualified social scientists for these positions, Coal India has agreed to
properly train and deploy its Welfare Officers for this purpose. This would have two advantages: it would
help ensure that at least some of the welfare measures Coal India's employees enjoy might be extended to
the local population (where feasible) and it would permit Coal India to maintain the time schedule for
implementation of Rehabilitation Action Plans and Indigenous Peoples Development Plans.
54.
One of the prime activities being undertaken in the subprojects is the identification of the persons
eligible for rehabilitation assistance, popularly known as 'the closing of the list'. The census carried out by
the consultants/NGOs for preparation of the Resettlement Action Plans are fairly accurate, and should
form the basis to prepare the list of entitled persons. In order to ensure that nobody takes undue advantage
of the situation, and that every entitled person gets informed of his/her entitlements, information campaigns will be carried out on a house to house basis by the CD/R&R Officer of the subsidiary, with the
assistance of NGOs. This will include the distribution and reading of a brochure explaining the entitlements. A simple photo-identity card will be issued to each entitled person by the subsidiary. The details of
this procedure have been developed, and tested in one of the subsidiary coal companies. This procedure
will be adopted to ensure that people are aware of the scope and limitations of their entitlements.
55.
The community focus and the emphasis on alternative rehabilitation options to jobs in the mines
are complex and difficult tasks. In order to ensure that experiences gained are subsequently utilized,
implementation of the new policy will be done under close supervision and guidance of the Resettlement
and Rehabilitation Cell of Coal India and the social science consultants. This is currently being implemented. The General Manager (R&R) and the consultants visited all areas under the project where resettlement is ongoing.
- 154Annex 3.2
Page 16 of 24
Table 3.2.2 Summary of procurement arrangementsa
USS million
Project components
ICB
Procurement method
NCB
N.B.F.b
Land
Coal mine development
Resettlement sites
Civil works
Buildings and laboratories
0.35
(0.32)
4.91
(4.42)
1.76
(1.58)
2.45
(2.16)
3.25
(2.93)
4.03
(3.63)
0.72
(0.65)
27.00
(24.17)
0.07
(0.06)
2.15
(1.94)
0.54
(0.62)
Dust suppression
Effluent treatment plants
Settling ponds and oil/grease traps
Rainwater catchment
Plantation and afforestation
Fencing
Overburden dump reclamation
Nurseries
Resettlement site infrastructure
Community development infrastructure
Equipment, materials and vehicles
Dust suppression equipment
Laboratory equipment
Environmental monitoring equipment
Furniture and fittings
Earplugs and earmuffs
Firefighting equipment
Vehicles
Policy support
10.12
(8.02)
Total
Other
1.18
1.18
1.76
1.76
1.40
(1.12)
0.35
(0.32)
4.91
(4.42)
1.76
(1.58)
2.45
(2.16)
3.25
(2.93)
4.03
(3.63)
0.72
(0.65)
27.00
(24.17)
0.07
(0.06)
2.15
(1.94)
1.94
(1I.74)
0.33
(0.27)
12.80
(10.12)
0.22
(0.18)
0.13
(0.11)
0.80
(0.64)
0.29
(0.23)
0.30
(0.24)
0.33
(0.27)
0.94
(0.94)
0.29
(0.29)
6.11
(6.11)
0.94
(0.94)
0.29
(0.29)
6.11
(6.11)
2.68
(2.10)
0.22
(0.18)
0.13
(0.11)
0.80
(0.64)
0.29
(0.23)
0.30
(0.24)
- 155 Annex 3.2
Page 17 of 24
Project components
ICB
Procurement method
NCB
N.B.F.b
Total
Other
Miscellaneous
Incremental operating costs
9.55
9.55
0.40
0.40
Social remedialaction
Total
(IDA Credit)
0.27
(0.27)
10.12
(8.02)
51.65
(45.98)
9.34
(9.00)
0.27
(0.27)
12.89
84.00
(63.00)
Figuresin parentheses are the respective amounts financed by the IDA credit.
Not financedbythe Association
56.
Technical assistance, mainly by local consultants, and intense supervision by the Resettlement and
Rehabilitation Cell of Coal India is very important to the successful implementation of the resettlement
and rehabilitation and community development policies.
57.
Unlike the implementation of the RAPs which will be the sole responsibility of Coal India's
subsidiaries, the implementation of the IPDPs will be shared with the communities that will ultimately
benefit from these plans. The purpose of this arrangement is to ensure that the projects that will be financed under these plans have the full support of the communities.
Procurement organization
58.
Coal India's annual budget for the procurement of goods, civil works and services exceeds US$ 1.5
billion. There is a large procurement organization at the corporate headquarters in Calcutta, at the subsidiary headquarters and at lower levels (with clearly defined delegated authority). Coal India also has past
experience in procurement of Bank Group financed goods. The World Bank Projects Division in Calcutta
will be responsible for procuring all goods under ICB and the equipment required for environmental
monitoring and laboratory analysis under NCB procedures. Subsidiary headquarters will procure all other
goods and the areas/subprojects will handle the civil works contracts. Schedules which include invitation
for bids, award of contract and start and completion of work have been prepared for all major procurement
actions. Standard bid documents, in line with Bank Group procurement guidelines and standards, have
been prepared for all types of procurement and will be followed at all levels. Since the procurement
activities are spread over a number of points, Coal India will submit a quarterly report about the status of
procurement and statement of expenditures.. All levels involved in procurement actions will maintain
separate accounts of expenditure for EAPs, RAPs and IPDPs which will be audited separately by an
auditor approved by the Bank Group. Procurement details are shown in Table 3.2.2.
Schedule of disbursements
59.
The phasing of disbursement, detailing proposed IDA financing and the borrower's counterpart
funding, is shown in the Table 3.2.3. The disbursement schedule is based on the assumption that the credit
will be effective during the fourth quarter of FY 1996, and that it will be fully disbursed by the final
- 156Annex 3.2
Page 18 of 24
quarter of FY200 1. The schedule indicates that during the early period, as the bids are invited and contracts signed, disbursement remain low. But during the second, third and fourth year disbursements peak.
Specific actions required
60.
In recognition of its past inadequacy, Coal India has agreed to strengthen its organization and
infrastructure to implement its environment and social development policies. It accepts that technical
assistance could greatly enhance the chances of the project being implemented properly and in time.
Project implementation units need to be strengthened, in particular with the level of expertise in the
implementation of environmental and social action programs. Coal India is ready to identify the weak
areas and to take time bound remedial actions. Coal India recognizes its responsibility in regional environmental monitoring and in land use planing. It is aware that it needs cooperation of NGOs or other community based organization to facilitate community participation in the implementation of its resettlement and
rehabilitation and community development policies. Table 3.2.4 shows the actions being taken by Coal
India to achieve some of the important development objectives.
Table 3.2.3 Estimated schedule of disbursements
USS million
IDA
IBRD FY
Coal India
Quarter
Amount
disbursed
Cumulative
disbursement
1997
Ql
QII
QIII
QIV
1998
Ql
Qll
Qlil
QIV
1999
Ql
Qll
Qlll
QIV
2000
Ql
Qll
Qlil
QIV
2001
Qi
Qll
QIll
QIV
0.86
3.25
0.02
0.02
4.15
7.54
3.73
2.19
4.71
18.17
5.30
1.64
7.41
4.25
18.60
1.60
3.47
2.82
3.83
11.72
1.70
1.65
2.91
4.10
10.36
0.86
4.11
4.13
4.15
4.15
11.69
15.42
17.61
22.32
22.32
27.62
29.26
36.67
40.92
40.92
42.52
45.99
48.81
52.64
52.64
54.34
55.99
58.90
63.00
63.00
Source: Bankstaffand CoalIndia
Amount
disbursed
0.76
0.53
0.06
0.07
1.42
1.56
0.80
0.63
2.81
5.80
1.04
0.56
1.66
2.03
5.29
0.58
0.71
0.66
1.58
3.53
0.98
0.96
1.03
1.99
4.96
Cumulative
disbursement
0.76
1.29
1.35
1.42
1.42
2.98
3.78
4.41
7.22
7.22
8.26
8.82
10.48
12.51
12.51
13.09
13.80
14.46
16.04
16.04
17.02
17.98
19.01
21.00
21.00
- 157-
Annex 3.2
Page 19 of 24
Table 3.2.4 List of specific actions
Developmental
issues
Specific actions to be taken
I.
Coal India's capability to implement EAPs, RAPs and IPDPs.
A panel of intemational and domestic experts will review the organization
and submit recommendations for itnplementation by Decembcr 1997.
2.
Shortage of trained staff.
Pending the above study, recruitment and training of additional staff are in
progress and will be completed by December 1996. Consultants for
strengthening procuremcnt ccll and social development ccll are in placc.
3.
Weak project monitoring capability.
Implementation schedules have been prepared in Microsoft Project.
Schedule for inviting bids, awarding contracts, and completion of
contracts for all procurement activities have been prepared. Implementation schedules also include R&R and social remedial action program..
Microsoft Project has been installed in Calcutta and subsidiary company
headquarters and Area offices, and professional stafftrained.
4.
Procurement delay.
All bid documents above an agreed threshold, required during the first
year operation have been prepared. Standard bid documents have been
prepared (as per Bank guidelines) for many jobs which are repetitive in
nature.
5.
Lack of procedures to implement EAPs, and intemal
organization to implement RAPs and IPDPs.
Coal India has agreed to set up procedures (with assistance from outside
experts) to monitor all elements of environmental pollution, set up labs to
analyze the samples, to take remedial steps as required by law, augment
the personnel strength and seek assistance from NGOs/other organizations
for the implementation of RAPs and IPDPs by December 1996.
6.
Safety of OB dumps and outside disposal system.
An engineering study is in progress to identify the safety issues and
recommend remedial steps to be taken in the study report will be available
by August 1996. A panel of intemational and domestic experts will
review the findings and recommended measures for implementation
7.
Improvement of coal quality.
Coal India has agreed to declare its run-of-mine coal quality parameters
and enter into supply contracts with major consumers and to introduce
bonus/penalty clauses to ensure quality. It has also agreed to beneficiate
coal according to the specific need of customers if it is adequately
compensated.
8.
Disposal of ash from the pit head power plant.
Coal India agrees to assist pit head power plants to study the feasibility of
ash disposal in the mined out areas.
9.
Regional environmental planning.
Coal India agrees to participate in regional planning to develop a regional
approach to environment monitoring and in land use planning.
10. Recognition of project affected people.
Coal India has agreed to issue photo identity cards covered by base line
surveys by June 1997
11, Community participation in RAPs and IPDPs.
Coal India has agreed to engage NGOs/Community Based Organizations
to facilitate community participation in its social development projects.
They are expected to be in place by December 1996.
Source: Bankstaff
- 158Annex 3.2
Page 20 of 24
Supervision plan
61.
The project will require intensive multi-disciplinary monitoring and supervision. Besides the
special monitoring set up described at paragraphs I1-16 in this annex, extensive reviews would be be
carried out by two panels of experts.
Panel of expertsfor overburden dunmpsafety
62.
One of the main concems of the Association relates to the stability and safety of about 150 overburden dumps in the 25 mines. The slopes of the dumps exceed the safe angle recommended by MoEF.
Though some of the dumps have been standing unchanged for 10-15 years, experts assisting in the appraisal of this project recommended that every dump should be studied for its continued safety. Coal India
has engaged the Indian School of Mines, a leading geo-science institution in the country, to carry out a
safety engineering study of all dumps in the project. Their report is expected to be submitted to Coal India
by the end of June 1996. The Association has further asked that their report should be reviewed by an
expert panel consisting of one foreign and one local expert and the panel's recommendations should be
implemented by Coal India, after review by the Association.
63.
To establish the panel, Coal India will invite proposals for experts from a list of reputed consultants/universities in India and abroad acceptable to the Association. The selection will be made in line with
Bank Group procedures. The experts must have extensive experience in opencast mining and be familar
with geo-mining conditions in Gondowana rock formation in India. The panel is expected to be constituted
by July 31, 1996. It will submit its report by December 1996.
Panel of experts to review the policies and implementation of environment and social mitigation plans
64.
This project is viewed by the Bank as environmentally contentious. OD 4.01 requires that the
implementation should be supervised and guided by a panel of environmental and social experts, that
would assure full adherence to project objectives and the Bank Groups Operational Directives. Considering that enviromnent and social impacts are strongly interdependent, the Association has recommended to
integrate the expertise in these two fields into one panel . The panel will consist of two social science
experts and two environmental experts, of which one for each subject will be expatriate and one local. The
panel would convene at regular intervals, not exceeding six months, to review the status of work in
progress against the respective policy and plans. Coal India would implement the recommendations of the
panel, after they have been reviewed by the Association.
65.
For the selection of experts, Coal India will follow the same procedure as indicated in para 63
above. The social experts must have expertise in issues related to resettlement of rural population including indigenous peoples, rural finance (micro credit), public health, and should be familiar with NGO
activities in India. It is preferred that one member of the social group be a woman. Preference would be
given to prominent NGOs. Environmental experts must have wide experience in coal mining technology
and management and environmental management in coal mine operations. All panel members should be
recognized experts in their respective fields, exposure to international experience is preferred. The panel
will operate for about four years from early 1997.
66.
In addition to the above panels, the project would require intensive multi-disciplinary supervision
and monitoring. The different disciplines involved are mining engineering, civil engineering, environmen-
-159-
Annex 3.2
Page 21 of 24
Box 3.2.1 Social andenvironmentalreviewpanel:Termsof Reference
A. Social Team
The panel will be guided by OD 4.30 and OD 4.20, the Resettimcent Actions Plans and the Indigenous Peoples Development Plans prepared
by Coal India, meetings with relevant project staff and project-affected people, and is expected to carry out the following activities (i) review
Coal India's resettlement and rehabilitation policy and the ResettlementActions Plans, assess the progress Coal India is making in implementing
the policies and the Plans, including identifying areas where improvements arc needed and evaluate the extent to which restoration of projectaffected people's livelihood is achieved; (ii) review Coal India's policy statements on community development and tribal development in
particular, assess the progress Coal India is making in implementing the indigenous plans and evaluate the effects on indigenous communities
in the project area; (iii) review public health issues; (iv) meet with project-affected people, NGOs and interested parties in major coal fields;
and (iv) guide Coal India in the planning, implemcntation, monitoring and evaluationof resettlement and community development programs.
B. Environmental team
The panel will be guided by the sectoral environmental assessment, Environmental Action Plans, meeting with project teams and site visits.
It will focus on environmentalimpacts related to (i) air, water, land, noise and vibrations and (ii) coal mining environmental management.
The panel, in its review of the sectoral environmental assessment and Environmental Action Plans for the selected mines, will make sure
that implementation of the action plans would (i) bring the respective mines into full compliance with Indian rules and regulations, as well as
stipulations contained in the permits and consent letters issued by the Ministry of Environment and Forests and the State Pollution Control
Boards, respectively and (ii) meet the requirements of the Bank's OD 4.01.
tal engineering, agronomy and forestry, and anthropology and sociology. During the first two years of
project implementation, six supervision missions are scheduled. The supervision missions would consist
of Bank Group staff and consultants to review afforestation of waste land and biological reclamation of
overburden dumps. In order to make this pioneering project successful, the Bank will have to allocate
more staff resources and consultants than is usually budgeted. Table 3.2.5 shows the estimated Bank staff
and consultant inputs during the 11 supervision missions between July 1996 and June 2001, which would
be equivalent to about 34 staff weeks per year. This is in addition to 10-12 Bank staff weeks required for
the review of progress reports, financial reports, and processing and prior review of over 250 procurement
documents.
Borrower's contribution to supervision
67.
Close supervision and monitoring will be the responsibility of the office of Director (Project &
Planning) at the subsidiary companies, which is fully equipped with staff assigned to land acquisition,
resettlement and rehabilitation, environment, forestry, inining and mine safety. (See Figure 3.2.1) At
corporate headquarters in Calcutta, supervision and internal monitoring will be the responsibility of the
Project Monitoring Cell of the World Bank Projects Division. The main tool is a computerized project
management system which has been developed by the Cell. It will pennit the monitoring staff to follow up
on implementation activities on a regular basis and to discover potential delays early on. Based on the
yearly operational plans and quarterly mnonitoringreports from the field, they will guide and focus assistance to the non-performing subprojects and companies. The Division experts will visit the field for
verification and feedback. Coal India will provide the Association with quarterly progress reports in a
standard format that track the physical implementation of various project components, procurement and
disbursement.
- 160Annex 3.2
Page 22 of 24
Table 3.2.5 Bank staff inputs for project supervision
Approx. Date
of supervision
Mainfocus
Staff requirement
Staff inputs
(SW)
July 1996
Start up workshop for the project. Start process
of local supervision.
Task Manager
Procurement specialist
Environment specialist
Sociologists
2.5
2.5
2.5
3.5
October 1996
Review of procurement action, implementation
of EAP, RAP and IPDP.
Task Manager
Sociologists
2.5
2.5
2.5
3.5
January 1997
Review of procurement, implementation of EAP,
RAP and IPDP at selected subprojects, and financial
issues.
Task Manager
Sociologists
Financial Analyst
2.5
2.5
2.5
3.5
2.5
April 1997
Review of overall implementation and EAP, RAP
and IPDP at selected subprojects.
Task Manager
Sociologists
2.5
2.5
2.5
3.5
August 1997
Review of selected subprojects.
Task Manager
Sociologists
Afforestation specialist
2.5
2.5
2.5
3.5
2.5
December 1997
Review of selected subprojects.
Task Manager
Sociologists
2.5
2.5
3.5
June 1998
Midterm review.
Task Manager
Financial Analyst
Sociologists
3.0
3.0
3.0
3.0
3.0
2.5
December 1998
Review of overall implementation of EAP, RAP,
IPDP.
Task Manager
Sociologists
2.5
2.5
2.5
3.5
October 1999
Review of cnvironment and financial issues.
Task Manager
Sociologists
2.5
2.5
2.5
2.5
2.5
August 2000
Review of overall implementation of EAP, RAP,
and IPDP.
Task Manager
Sociologists
2.5
2.5
2.5
3.5
June 2001
Preparation for the project completion report.
Task Manager
Sociologists
3.0
3.0
3.0
4.0
2.5
Total
168
Source: Bankstaff
- 161 Annex 3.2
Page 23 of 24
Project Monitoring Consultancy
68.
The subprojects are widely scattered in 11 coalfields in five States. It is evident that the Bank's
supervision mission will not be able to visit all the subprojects even once a year, even larger projects
cannot be regularly covered. Therefore, it is proposed to engage a local consulting company with requisite
staff experienced in coal mining, mining environment, resettlement and rehabilitation of people affected
by involuntary displacement and rural development to visit all the subprojects at least once in every
quarter. Its reports will be made available to the World Bank Projects Division, the Government and the
Association. The costs of consultancy would be financed out of the proposed credit. The above arrangements would be maintained for the duration of the project with the composition of experts and responsibilities assigned in consultation with Association. The consultants will be selected following the Bank's
procurement guidelines on the subject for the employment of local consultants.
Performance Indicators
69.
Table 3.2.6 summarizes the performance indicators and benchmarks that will be used to monitor
the implementation of this project.
- 162 -
Annex 3.2
Page 24 of 24
Table 3.2.6 Performance Indicators
Indicators
FY96/97a
Benchmarks (%ocomplete)
FY97/98
FY 98/99
FY 99/00
FYOO/01
Project input indicators
Environtnental component
Preparation of EAPs5
completed1994
Framing of environment policyb
completed 1995
Standardi7ation of monitoring procedures
100
Study of air quality
25
Study of water quality
25
Identification of villages affected by air, water
and noise pollution and explosive vibration
Study of bio-contamination of subsoil water from
10
domestic effluents
Overburden dump safety and stability stidy, review
of study and recommendations for safety measures
100
Study of workshop effluent disposal arrangement
100
Social component
Preparation of R&R policy'
Preparation of RAPs5
Framing of community development policy'
Preparation of IPDPs5
CD/R&R officers posted in 25 mines
GM (R&R) of five subsidiaries trained
Mine managers for 25 mines trained
Consultant hired for R&R cell
Proposals invited from NGOs for 25 mines
NGOs trained for 25 mines
Monitoring/grievance committee formed at
subsidiary or area level
R&R coordination commitees formed in 14 mines
IPDP CD council formed in 24 mines
Village working groups formed and functioning
in 24 mines
Social component
Consultation with representatives of projectaffected people, local communities and NGOs
List of project-affected people verified in 14 mines
Photo ID cards issued in 14 mines
Information campaign carried out in 25 mines
Detailed IPDP implementation plan prepared
Training and support for self employment
Community infrastructure initiated
Community infrastructure completed
Hank fiscalyear
[PPFassisted
Source: Coal tndiaLtd.
100
30
70
10
10
5
70
100
25
100
20
10
-
completed
completed
completed
completed
100
100
100
100
100
100
Results of project implementation
Environment component
Installation of sevcn environment laboratories
Construction of 20 plant nurseries
Installation of dust suppression system
Construction of catch and garland drains, drains
to catch mine water, and settling ponds
Construction of domestic effluent treatment plants
Rcshaping overburden dumps for stability & safety
Tree plantation for noise and dust suppression
Vegetation of overburden dumps and
mined-out areas
100
100
100
1994
1994
1995
1995
100
100
100
100
Ongoing
100
100
100
100
25
30
50
75
100
100
10
15
35
35
40
60
70
70
85
100
100
100
10
35
70
100
Ongoing
Ongoing
Ongoing
Ongoing
50
60
30
75
80
60
100
100
80
100
- 163 Annex 4.1
Page I of 10
Annex 4.1 FINANCIAL AND ECONOMIC ANALYSIS OF THE COAL SECTOR
REHABILITATION PROJECT
I.
This annex summarizes the methodology and assumptions that were use to estimate financial and
economic rates of return of the individual mine-specific investments and the Coal Sector Rehabilitation
Project as a whole. The risks each mine-specific investment faces were taken explicitly into account.
Methodology
2.
The financial and economic analysis of each subproject was carried out based on constant December 1995 prices. Cost and revenue streams were estimated for the project implementation period 1997 to
2001. The major variables affecting the cash flows are, inter alia, the capital cost, operating cost, annual
production and the selling price of coal.
3.
Based on the available information on the nature of the variables and also on judgement, a probability distribution for each of the variables was selected to reflect its uncertainty. A Monte Carlo simulation was then carried out to generate a range of likely values for the different variables. The aim was to
arrive at a realistic estimate of the financial and economic rates of return for each subproject taking the
mine-specific investments' specific risks into account. The simulation yielded a range of possible financial
internal rates of return (FIRRs), enconomic internal rates of return (EIRRs) and net present values (NPVs),
and the likelihood of achieving each of them.
Assumptions
4.
Table 4.1.1 summarizes the assumptions that were used for carrying out the financial and economic analysis of the mine-specific investments.
Risk analysis
5.
The financial and economic returns of the proposed investment program are subject to several
uncertainties. To the extent that these uncertainties can be foreseen and quantified, they have been taken
into account in the financial and economic evaluation of the individual mine-specific investments. The
results of this analysis provide an indication of the risks that are associated with the investment program.
In addition, this analysis highlights areas where the implementing coal company can take steps to reduce
known risks. The following variables were taken into account in carrying out the risk analysis:
*
changes in price of coal,
*
delays in the implementation of the projects,
*
changes in the capital cost,
*
changes in the operating cost,
*
changes in coal output, and
*
non-realization of revenues.
Based on the current socio-economic environment in which the various implementing subsidiary coal
companies operate, a probability distribution characterizing each of the variables mentioned above was
selected for the Monte Carlo simulation. Table 4.1.2 summarizes the details of the probability distribu-
- 164Annex 4.1
Page 2 of 10
Table 4.1.1 Assumptions underlying the financial and economic analysis
Item
Financial analysis
Economic analysis
Capital cost
The capital cost is based on Coal India's
and the mission's estimates of the cost
components in the subprojects. The cost
estimatesof the equipment are based on the
standard price list which is published by
CMPDI every year. This price list is a
compilation of information based on the
latest purchases made by Coal India. However, in
cases where no such purchases were made,
budgeted prices from the suppliers fonned the
basis of the estimates. The base month for the
estimate is December 1995. The capital cost of the
individual subprojects includes applicable taxes
and duties, but does not include and physical
contingency. All costs have been converted to
their equivalent in 1996 US dollars.
The financial costs were converted to
economic costs by netting out duties
and taxes, expressing the input
content at c.i.f prices and adjusting
local cost components by applying
the standard conversion factor of 0.8.
Operating cost
The operating costs are based on Coal India's
estimates of the operating costs for each
subproject. These estimates have been derived
from the schedule of additional coal
production, overburden removal, and
deployment of the machines and also taking
into account fixed and variable components
of unit operating cost. The unit operating cost
estimates, i.e. cost/m3 are comparable with the
mines of similar nature currently in production
in Coal India For replacement projects, however,
a variable cost/incremental operating cost of Rs 19.5/m'
(USSO.61/ml)has been taken uniformly for all projects.
This cost reflects the present variable cost/m3 in the
opencast mines of Coal India. Interest on working capital
is based on historical levels of working capital requirements
equivalent to 4 months operating cash expenses.
The cost was derived from the financial
cost by excluding all taxes and duties
and a standard conversion factor of 0.8
was applied to the local cost component.
Coal production
For the new coal mines, mines under construction
and the expansion mines, the expected increase of
coal output was taken as the major benefit from
the subprojects. For projects where replacement
equipment is proposed to be financed, the likely
shortfall in coal output that would occur if equipment
was not replaced was taken as the major benefit. The
assessment of the shortfall in production was based
on the recent average annual productivity of each
type of equipment in Coal India.
Coal price
Expected revenues are based on ex-mine selling prices
authorized as of December 1995 and additional coal
production attributable to the investment in the project.
Benefits were calculated on the basis of
the additional coal production, valued at
cif import prices of coal at selected
Indian ports plus inland freight costs to
consumers and adjusted for equivalent
heat values, less the freight charges for
delivery of coal from mine mouth to the
same consumers.
- 165 Annex 4.1
Page 3 of 10
Table 4.1.2: Selection of probability distribution
Variable
Selectedprobabilit.y
distribution
Reasonsforselection
Coal price
Normal
The current selling price is the most likely value and any small increase or decrease
above or below the current price is equally likely. In constant terms the price is more
likely to be in the vicinity of its current value than far away from it.
Project implementation delay
Triangular
In the present analysis, delay has been defined through a factor which slows down the
pace of the year-wise capital investment and as a result, in extreme case, the coal
production program is deferred by one year. This factor can thus have a minimum,
maximum and most likely value. The values near the minimum and maximum are less
likely to occur than those near the most likely value.
Capital cost
Custom
This variable cannot be described by any known distribution. There is a higher
probability of completing the project at an investment lower than the estimated capital
cost. This assumption was based on the earlier experience of Coal India where
procurements were made through ICB.
Operating cost
Normal
At constant prices, the present cash cost of production is the most likely value, and a
small increase or decrease about this mean is equally likely. Though the overall cost of
production in Coal India has been falling at 2% annually in real terms for the last three
years, it is felt that this downtrend may be offset by higher costs of working deeper
reserves of coal.
Production
Custom
Because of the uniqueness of each project and different factors affecting production,
this variable could not be defined through any known distribution. Therefore, a custom
distribution was chosen to reflect the specific nature of the variable. In all cases
production lower than the target was assigned a much higher probability compared to
production above the target.
Non-realization of revenue
Triangular
Based on the experience of realization of coal sale dues, it is seen that the total
realization, when expressed as a percentage of total sales, can have a minimum,
maximum and most likely value. Individual values are expected to fall within this
range.
Source: CoalIndia Ltd.
tions for different variables and the rationale for selecting them. These risks and their statistical properties
will be discussed in the following paragraphs.
Project-specific risks
6.
Box 4.1.1 summarizes the specific risk conditions each of the mine-specific investments faces.
These conditions were taken into account as far as possible in the calculation of the rates of return and net
present values by modifying one of the respective functions described above through selection of appropriate parameters.
Results
7.
Tables 4.1.3 and 4.1.4 summarize the results of the financial and economic analysis, respectively,
taking into account the risks described above.
- 166 Annex 4.1
Page 4 of 10
Impact of the Coal Sector Rehabilitation Project
8.
It is apparent that significant external inputs are needed to transform Coal India into a commercially viable enterprise. These comprise an infusion of external finance of about US$1 billion, decontrol of
domestic coal prices, phasing out of subsidies to loss-making subsidiaries, reduction of surplus labor, and
conversion of arrear loans and interest liabilities into equity by Government. These measures work in
tandem to ensure that the end objective is achieved. None of these measures in isolation can produce the
desired effect. Projections of production, profit before tax and the debt service coverage ratio are illustrated in Figure 4.1.1. The effect of capital restructuring, coal price decontrol, and the Coal Sector Rehabilitation Project are also shown. It is clear that without the Coal Sector Rehabilitation Project Coal India's
production will stagnate, its profits will decline and its ability to service its debt will be undermined. The
proposed project, together with the other measures, is necessary and needs to be implemented soon to
enable Coal India to achieve long-term financial stability. Coal India will in turn need to revise many of its
internal policies and practices if the beneficial effect of these measures are to be sustained.
9.
A major objective of the Coal Sector Rehabilitation project is to ensure that each of Coal India's
subsidiaries is financially viable. This will require that:
*
cross-subsidization through the mechanism of an artificial retention price is phased out,
l
capital and other investments are made on the basis of commercial considerations,
*
operating efficiency is significantly improved, and
uuneconomic operations are identified and closed.
The fundamental change in strategic direction assumes added importance in view of the Government's
intention to completely phase out all budgetary support to Coal India in the near future.
Coal India's base case financial projections
10.
The financial model is structured to provide an income statement, balance sheet and funds flow in
current prices for a 10 year period, the base year being 1995. The statements are generated for each coal
producing subsidiary. The results are consolidated to reflect the overall financial position of Coal India
(except for small units directly managed by Coal India and CMPDI). The financial model is based on:
*
Estimated production capacity, manpower, stripping ratio, labor productivity, average coal
price realized, wage cost per employee, variable and fixed operating expenses, interest and
depreciation, and a provision for compensation per person for accepting early retirement.
The average coal price includes the value added resulting from washeries and other downstream operations. Production capacity is identified separately for underground and opencast
mines and includes, in some cases such as ECL, uncommissioned capacity created through
substantial investments in prior years.
*
Assumptions have been made regarding likely trends of physical performance, manpower
reduction, the cost of creating new capacity and servicing of existing capacity through
replacements, working capital management and likely enhancement of bank credit, various
sources of borrowing and other financial assumptions relating to the impact of the expected
change in average quality of production on realizable price, tax adjustment for depreciation,
and the notional capital restructuring.
*
Coal prices which will be progressively deregulated: coking coal and superior grade noncoking coal by September 1996 and other grades by September 1997. Price increases due to
- 167Annex 4.1
Page 5 of 10
Box 4.1.1 Mine specific risks
Company/mine
Mine specificrisks
Action takento reducerisks
CCL
KD Hesalong
Of 198 PAPs, 198 are to be resettled and 86 rehabilitated.
Rehabilitation Action Plan (RAP) has already been prepared
and will be implemented to take care of the R&R issues.
Parej East
RAP has already been prepared and will be implemented
to take care of R&R issues.
Rajrappa
Difficult mining conditions may affect achievement
of the target output.
Deployment of better quality equipment and improvement
of maintenance and supervision.
The property is beset with geological disturbances which
affect mining operations.
WCL
Durgapur
Niljai
None.
Padampur
The property is beset with geological disturbances which
affect mining operations.
Sasti
None.
Umrcr
None.
SECL
Bisrampur
Of 818 PAPs, none are to be resettled and 408 rehabilited.
RAP has already been prepared and will be implemented
to take care of the rehabilitation.
Dhanpuri
Of 230 PAPs, none are to be resettled and 131 rehabilitated.
RAP has already been prepared and is being implemented
to take care of the rehabilitation.
Dipka
Of 1,200 PAPs, 1,100 are tobe resettled and 520 rehabilitated.
Kusmunda
Achievement of target output is affected by aging
equipment.
Manikpur
None.
Gevra
Of 412 PAPs, 145 are to be resettled and 204 rehabilited.
NCL
Nigahi
to take care of the R&R issues.
None.
Dudhichua
None.
Bina
None.
Jayant
Problenmof overburden backlog may affect output.
A scheme costing RO4B3million has been sanctioned by
Coal India to make good the OB arTearby 1998.
Ihingurda
- 168 Annex 4.1
Page 6 of 10
Company/mine
MCL
Lakhanpur
Mine specific risks
Action taken to reduce risks
Samleswari
Of 1,687 PAPs, noneare to be resettledand 998 rehabilited.
RAP hasalreadybeenpreparedand is being implemented
to take care of rehabilitationissues.
Ananta
Of 699 PAPs,none are to be resettledand 458 rehabilitated.
RAP has alreadybeen preparedand is being implemented
to take care of rehabilitation issues.
Bharatpur
Of 2,547 PAPs, 1,294are to be resettled and 1,531
rehabilitated.
RAP hasalready been prepared and is being implemented
Belpahar
Of 4,021 PAPs,3,360 are to be resettled and 2,410
rehabilitated.
RAP has alreadybeen prepared and is beingimplemented
Jagannath
Of 2,001 PAPs, 2,001 are to be resettled and 1I,180
rehabilitated.
*
a
Coal India's potential ability to capture part of the existing market premium for coal quality,
has been assumed for each subsidiary company in the event of price decontrol.
Cross-subsidization has been phased out over a period of six years. The success of these
measures, such as the release of grants for implementing Coal India's voluntary retirement
program, debt forgiveness, price increases due to decontrol, and the intemal steps initiated
by Coal India to improve efficiency, should enable ECL and BCCL to reduce their dependence on cross-subsidization over this period.
It has been assumed that the borrowing capacity for each subsidiary, besides being subject to
a limit of 60% of debt to total capital, will be constrained by an annual borrowing limit
which will be significantly lower if the coal sector loan does not take place.
The model provides for estimates of domestic and foreign inflation, inflationary adjustment
of coal price, and a wage index reflecting adjustment for inflation and the possible outcome
of wage negotiations which are held once every four years. Further exchange rate depreciation arising from differential rates of inflation has also been taken into account.
11.
The base case financial model demonstrates the possibility of all the companies attaining longterm financial viability, provided sufficient loan capital is made available and a number of reforms and
remedial measures are taken by the Government and Coal India. These measures are summarized below:
ACTION BY THE GOVERNMENT
i.
ii.
iii.
iv.
conversion of liabilities of loan and interest into equity by March 1995;
deregulation of coal price - coking and superior grade non-coking coal by September 1996
and other grades by September 1997;
continuing support by way of grant for implementation of VRS in ECL and BCCL over the
period of 1995-96; and
Ensure noninterference in Coal India's efforts to regulate coal supplies on commercial
considerations, i.e. timely payment and insistence on inventory buildup by consumers.
- 169 Annex 4.1
Page 7 of 10
Table 4.1.3 Financial analysis
FIRR in % and NPV in USS million
Company/mine
CCL
KD Hesalong
Parcj East
Rajrappa
WCL
Durgapur
Niljai
Padampur
Sasti
Umnrer
SECL
Bisrampur
Dhanpuri
Dipka
Kusmunda
Manikpur
Gevra
NCL
Nigahi
Dudhichua
Bina
Jayant
Jhingurda
MCL
Lakhanpur
Samaleswari
Ananta
Bharatpur
Belpahar
Jagannath
Total
Base case
Risk analysis (at 80% prob)
FIRR
NPV
at 16%
FIRR
NPV
at 16%
31.3
37.0
261.0
24.5
25.8
55.8
28.6
28.9
189.0
19.3
15.9
44.1
62.8
57.2
53.2
34.8
158.3
17.8
6.8
7.8
2.7
30.2
52.7
53.7
44.4
28.8
155.0
13.9
6.0
5.9
1.9
27.7
24.3
19.7
47.3
116.6
98.5
819.3
1.6
0.7
99.3
75.0
19.6
64.9
19.2
16.9
39.3
94.0
90.8
598.1
0.6
0.2
68.1
58.4
17.5
59.3
20.9
21.8
19.2
90.2
80.5
38.8
49.1
0.7
69.4
25.8
17.9
18.9
16.8
72.2
66.1
14.3
23.6
0.2
54.4
20.7
70.5
636.4
304.7
70.7
39.8
456.4
58.0
55.4
25.8
37.8
5.0
18.4
816.7
32.0
215.4
84.0
40.1
34.9
37.5
30.4
43.5
20.2
19.9
3.7
16.7
586.4
ACTION BY COAL INDIA
i.
ii.
ensure the independent operation of each subsidiary and eliminate cross subsidization;
devise and implement a time bound action plan for improving equipment utilization to level
of 95% for each company;
ii. regulate coal supplies and ensure payment of dues by entering into legally enforceable
supply contracts with penalty/bonus provisions;
iv. enforce inventory buildup by consumers;
v. adopt a system of identification and disposal of non-moving items in stores and spares on a
continuous basis;
vi. enter into long-term contracts with equipment manufacturers for supply of spares on a 'as
and when required' basis; and
vii. enforce improved system of project implementation.
- 170
-
Annex 4.1
Page 8 of 10
TEable4.1.4 Economic analysis
USS miliomn
(.!'i,'}>llti
0
'SU'/!'
sD Hctsa a.lig
j'; Il-. I " IIS80.2
I.ljr ,
l.r
l'
Z| 1:l
. WZ;
^;Il,
H
' .}
''iiir'
':I:.<.
o: ,>1 ' i
,N;
V
NO;;:.klGlt.
Risk analysis (az 80%oprob)
NPV
at 16-
ANP
V
at 16%
197.5
r _'t I
lm.0 ,
Bast' cas''
,
140.2
174 3
55.4
114.9
93.0
35.0
43,4
25.3
79.2
72.4
32.4
36.0
23.4
73.6
11.0
23.9
1.102.8
369.2
126.8
313.7
7.8
20.8
921.3
305.2
117.4
299.7
'1..
Ng >i '
994.4
'.u.Ilia
1,210.5
31.7
274.6
154.1
,,]
'rdJi
.11.t.)
-I .r
1.S',a
l ,lur
.o
do,i.s: :;!
I.
442.5
146.2
92.0
14.6
44.2
b4.2
.:iM
6,610.2
., .
J z2
Tie deialjied
883.4
947.2
27.9
228.9
133.6
320.7
124.4
71.5
11.9
35 6
59.4
5,099.1
i .'Lk
(,'Ats
filiis analysis are contained in the project file and summarized in Figure
4.1!.2.
13.
rh.
iThcSc
a, arX UibC.! .t FCesent
relr
the major determinants of Coal India's financial health (profits,
ser;*cnzl, and(oper.ntinpefticiciv .'). ITheyalso outline the possible distribution of these results, in culTent
terins. for eacii ye, r o,sech neun fcm 1996 to 2004. From this it may be concluded that, within 90%
confidence limits, the
. .' ''ill he able-fo:
*otVxiths1and T.i!.g.
Tl, wviderange of outcomes, sustain the profitable trend which was establisheonfrom ic)W' , 4"Q with a reasonable degree of confidence;
gerieneatcand w;ifvist s'.ff'cient internal resources to meet its debt obligations by maintaining
a,
et-,L&,K.. wo o i4least 1.5 and sustain a reasonable capital expenditure program; and
-
171 Annex 4>,
Page 9 of
ftu*r-4.1.1 Summarizedoutput from financial model
30 Profitbefore a
t
ilhinx
l
_
Debt e-_we cover-ageraoti
6
,i
Prodiaction(mnilliontons)
300
199419961998200200
1994
200
WUthcapital reatricucing enly(
_~
Isio_.
__-o
t
t
_
2004
.
ratio
-
TT-
Se n -ce covenBe
,
7
_---L-
1-_
-'.0------a94 t,9Y)c
1994 1996
10
-V--1998 2000 2002 2004
tax(Risio)
_Debt
--
2u3Xt 2(:22 2004
9S
ser v
coverageratio
---
_
--
10
2002 2004
1994 1996 1998 2000
250
lOOt)
20( 0(2
_,
(milliontons)
200
3
--
W-thcoalch
price decoProfitbefore
300 Ptodueio
'3%
I
1------i
-20
1994 1996 1998 2000 2002 2004
k
-
-10
-
1q94
R
20014
ARs billion) _-30-Profitl
20 efore tax
. kuin~~~ewJ
is.
30
200W
2002
2000
19i1998
.0
1994 1996 1998 2000 2002 2004
--
0~~~~~~~~~~~~~~~~2
-20
]1944 A996 W9S 2000 2002 2004
With refoms
pricedcotr
30
Profit before tax (Rsbillion)
u501 fa
(n-illio tons)With
300|
/
1
l
1
projet
2-
-
-
---I
-20
1994 1996
1998
2000
2002_2004n1994
1998
2000
2002
2004
T-- -1994
-
.0
--
.
1996
CG rerage ra.
e> zeic
s
19-
~
---)~~S
_- . !__
-
2000
2002
2004
10
- 172 -
Annex4.1
Page 10of 10
improve its operating ratio from existing
levels, although the chances of achieving
a target of 0.8 are somewhat remote in the
short to medium term. This target will
remain difficult to achieve as long as the
excessive labor levels and operating ratios
of greater than 1.0 are maintained at ECL
and BCCL. In the absence of further
restructuring, these operations will
continue to struggle and undermine the
financial performance of Coal India.
Figure 4.1.2
Conofidated netprofits (Rsbillion)
35
30
Upper limit
;
I
_
. 0.
~~~~~Lower
liniit
-15
N
1996
1998
2000
2002
2004
2002
2004
2002
2004
Consolidateddebt serviceratio
:3.0 1
Upper limit
2.5
2.0
0.5
1996
1998
2000
Consolidatedoperatingratio
1.0
-Upper
limit
i-..!..
.
0.8
Lower limit
0.7
_
1996
1998
2000
Note:All data90% confidencelimits
- 173 Annex 5.1
Page I of 6
Annex 5.1 DOCUMENTS AVAILABLE IN PROJECT FILE
Miscellaneous documents
Coal India Ltd. Addendum to 14 RAPs (to reflect change of date of start ofproject). Calcutta, India,
updated January 1996.
Coal India Ltd. Addendum to IMCL 's Report on the Resettlement and Rehabilitation of Proposed Mining
Projects of Coal India. Calcutta, India, July 1994.
Coal India Ltd. A Brief Report of the Workshop on Sectoral Environmental Assessment for the Coal Sector
Rehabilitation Project (held at Hotel Hindustan International on 27th & 28th May 1995). Calcutta,
India, n.d.
Coal India Ltd. Coal Sector Rehabilitation Project Environmental Impact Assessment of the Indian Coal
Sector. Calcutta, India, May 1995.
Coal India Ltd. Coal Sector Rehabilitation Project. A Note on Mine Emergency Plan. Calcutta, India.
April 1995.
Coal India Ltd. Resettlement and Rehabilitation Policy - 1994. Calcutta, India, February 1995.
Coal India Ltd. Resettlement and Rehabilitation Policy (Bengali Translation)- 1994. Calcutta, India,
December 1995.
Coal India Ltd. Resettlement and Rehabilitation Policy (Hindi Translation)- 1994. Calcutta, India, February 1995.
Coal India Ltd. Resettlement and Rehabilitation Policy (Marathi Translation)- 1994. Calcutta, India,
February 1995.
Coal India Ltd. Summary of an Environmental and Social Impact Assessment of the Indian Coal Sector.
Calcutta, India, May 1995.
International Mining Consultants Ltd. Final Report on the Environmental Assessment of Proposed Mining
Projects for Coal India. Calcutta, India, February 1994.
International Mining Consultants Ltd. Final Report on the Resettlement and Rehabilitation of Proposed
Mining Projectsfor Coal India. Calcutta, India, April 1994.
Operations Research Group. A Report on the Proceedings of the Workshop on Income Generation and Self
Employment Alternatives for Resettlement and Rehabilitation in Coal Sector. Calcutta, India, 1995.
- 174 -
Annex 5.1
Page 2 of 6
Agricultural Finance Corporation. Indigenous Peoples Development Plan Jbr Bina Open Cast Project
(NCL). November 1995.
Agricultural Finance Corporation. Indigenous Peoples Development Plan for Dudhichua Open Cast
Project (NCL). November 1995.
Agricultural Finance Corporation. Indigenous Peoples Development Plan for Jayant Open Cast Project
Agricultural Finance Corporation. Indigenous Peoples Development Plan for Jhingurda Open Cast
Project (NCL). November 1995.
Agricultural Finance Corporation. Indigenous Peoples Development Plan for Nigahi Open Cast Project
All India Centre for Urban & Rural Development. Indigenous Peoples Development Plan for Durgapur
Open Cast Project (WCL). New Delhi, India, November 1995.
All India Centre for Urban & Rural Development. Indigenous Peoples Development Plan for Niljai Open
Cast Project (WCL). New Delhi, India, November 1995.
All India Centre for Urban & Rural Development. Indigenous Peoples Development Plan for Padmapur
Open Cast Project (WCL). New Delhi, India, November 1995.
All India Centre for Urban & Rural Development. Indigenous Peoples Development Plan jbr Sasti Open
All India Centre for Urban & Rural Development. Indigenous Peoples Development Plan for Umrer Open
Asian Information Marketing and Social Research Ltd. Indigenous Peoples Development Plan for
Bisrampur Open Cast Project (SECL). Calcutta, India, November 1995.
Asian Information Marketing and Social Research Ltd. Indigenous Peoples Development Plan for Dipka
Open Cast Project (SECL). Calcutta, India, November 1995.
Asian Information Marketing and Social Research Ltd. Indigenous Peoples Development Plan for Gevra
Open Cast Project (SECL). Calcutta, India, November 1995.
Asian Information Marketing and Social Research Ltd. Indigenous Peoples Development Plan for
Kusmunda Open Cast Project (SECL). Calcutta, India, November 1995.
Asian Information Marketing and Social Research Ltd. Indigenous Peoples
Manikpur Open Cast Project (SECL). Calcutta, India, November 1995.
Development
Plan for
- 175 Annex 5.1
Page 3 of 6
Coal India Ltd. Generic Indigenous Peoples Development Plan of Coal India. Calcutta, India, November
1995.
MODE Research Pvt. Ltd. Indigenous Peoples Development Planfor Dhanpuri Open Cast Project
(SECL). November 1995.
Operations Reseach Group. Indigenous Peoples Development Plan for Belpahar Open Cast Project
(MCL). Calcutta, India, November 1995.
Operations Reseach Group. Indigenous Peoples Development Planfor Bharatpur Open Cast Project
Operations Reseach Group. Indigenous Peoples Development Plan for Jagannath Open Cast Project
Operations Reseach Group. Indigenous Peoples Development Plan for KD Hesalong Open Cast Project
(CCL). Calcutta, India, November 1995.
Operations Reseach Group. Indigenous Peoples Development Planfor Lakhanpur Open Cast Project
Operations Reseach Group. Indigenous Peoples Development Planfor Parej East Open Cast Project
Operations Reseach Group. Indigenous Peoples Development Planfor Rajrappa Open Cast Project
Operations Reseach Group. Indigenous Peoples Development Planfor Samleswari Open Cast Project
Resettlement and Rehabilitation Action Plans
Central Mine Planning and Design Institute Ltd. Rehabilitation Action Plan for KD Hesalong Opencast
Project of Central Coalfields Ltd. Ranchi, India, updated to December 1994.
Central Mine Planning and Design Institute Ltd. Rehabilitation and Resettlement Action Planfor Parej
East Opencast Project of Central Coalfields Ltd. Ranchi, India, updated to December 1994.
Coal India Ltd. Addendum to 16 (Sixteen) Resettlement and Rehabilitation Action Plans (RAPs) of Proposed Mining Projects of Coal India Ltd. Calcutta, India, November 1994.
Department of Business Administration The University of Burdwan. Rehabilitation and Resettlement
Action Plan: Dipka Open Cast Project (for World Bank Assistance) of SECL. Burdwan, India, updated
to December 1994.
Department of Business Administration The University of Burdwan. Rehabilitation and Resettlement
Action Plan: Kusmunda Open Cast Project (for World Bank Assistance) of SECL. Burdwan, India,
updated to December 1994.
- 176Annex 5.1
Page 4 of 6
Dept. Of Sociology, Faculty of Social Sciences, Banaras Hindu University. Rehabilitation and Resettlement Action Plan for Jhingurdah Opencast Project of Northern Coalfields Ltd. Varanasi, India,
updated to December 1994.
Institute for Development and Habitat Projects. Rehabilitation and Resettlement Action Plan (under World
Bank assistance) Mahandi Coalfields Ltd.: Ananta OC Expansion. Bhubaneswar, India, updated to
December 1994.
Bank assistance) Mahandi Coalfields Ltd.. Bharatpur OC Expansion. Bhubaneswar, India, updated to
December 1994.
bank Assistance) Mahanadi Coalfields Ltd.: Jagannath OC Expansion. Bhubaneswar, India, updated
to December 1994.
Operations Research Group. Rehabilitation and Resettlement Action Plan of Project Affected Persons for
Mining Projects of SECL: Bisrampur OC. Calcutta, India, updated to December 1994.
Mining Projects of SECL. Dhanpuri OC. Calcutta, India, updated to December 1994.
Mining Projects of SECL. Gevra OC. Calcutta, India, updated to December 1994.
Vivekananda Palli Agragami Seva Pratisthan. Rehabilitation and Resettlement Action Plan: Lakhanpur
OCP (under World Bank assistance) of Mahanadi Coalfields Ltd. Sambalpur, India, updated to
December 1994.
Vivekananda Palli Agragami Seva Pratisthan. Rehabilitation and Resettlement Action Plan - Belpahar
OCP (under World Bank assistance), Mahandi Coalfields Ltd. Sambalpur, India, updated to December
1994.
Vivekananda Palli Agragami Seva Pratisthan. Rehabilitation and Resettlement Action Plan: Samaleswari
OCP (under World Bank assistance) of Mahanadi Coalfields Ltd. Sambalpur, India, updated to
December 1994.
Environmental Management Plans
Central Mine Planning and Design Institute Ltd. (Regional Insitute III). Environmental Management Plan.
KD Hesalong Opencast Project (4.5 MTY) (CCL). Ranchi, India, February 1988.
Central Mine Planning and Design Institute Ltd. (Regional Insitute III). Environmental Management Plan
(Revised). Parej East OCP (1.75 MTY) (CCL). Ranchi, India, November 1991.
Central Mine Planning and Design Institute Ltd. (Regional Institute IV). Environmental Management
Plan: Dhanpuri Opencast Project (WCL). Nagpur, India, May 1985
- 177 Annex 5.1
Page 5 of 6
Plan: Kusmunda Opencast Project (WCL). Nagpur, India, April 1985.
Plan: Niljai Opencast Project (WCL). Nagpur, India, September 1985.
Plan. Sasti Opencast Project. Nagpur, India, September 1988.
Plan: Umrer Opencast Project (WCL). Nagpur, India, January 1993.
Central Mine Planning and Design Institute Ltd. (Regional Institute VI). Environmental Management
Plan: Bina Opencast Project (NCL). Sidhi, India, February 1990.
Plan: Dudhichua Opencast Project (10 MTY) (NCL). Sidhi, India, July 1993.
Plan: Jhingurdah Opencast Project (NCL). Sidhi, India, July 1994.
Plan: Nigahi Opencast Project (8.0 MTY) (NCL). Sidhi, India, February 1994.
Central Mine Planning and Design Institute Ltd. (Regional Institute VI). Environmental Management Plan
(Recast). Jayant Opencast Project (NCL). Sidhi, India, November 1989.
Central Mine Planning and Design Institute Ltd. (Regional Institute VII). Comprehensive Environmental
Management Plan: Samaleswari OCP (3.00 MTY), lb Valley Coalfield (MCL). Bhubaneswar, India,
December 1992.
Central Mine Planning and Design Institute Ltd. (Regional Institute VII). Environmental Management
Plan: Ananta OC Expansion (5.5 MTY), Talcher Coalfield (MCL). Bhubaneswar, India, August 1993.
Plan. Belpahar OCP (2.0 MTY), lb-Valley Coalfield (SECL). Bhubaneswar, India, June 1991.
Plan. Bharatpur OC Expansion (5.00 MTY), Talcher Coalfield (MCL). Bhubaneswar, India, February
1994.
Plan. Jagannath OC Expansion (3.0 MTY), Talcher Coalfield (SECL). Bhubaneswar, India, January
1990.
Plan: Lakhanpur OCP (5.00 MTY), lb Valley Coalfield (MCL). Bhubaneswar, India, June 1992
- 178 Annex 5.1
Page 6 of 6
Enviroprotection, Division of Development Consultants Ltd. Environmental Management Plan. Rajrappa
OpencastMine. Calcutta, India, 1990.
Nircon Engineering Consultants. Addendum. Sasti Opencast Project. Madras, India, n.d.
Nircon Engineering Consultants. Environmental Management Plan: Durgapur Opencast Project (WCL).
Madras, India, December 1989.
Nircon Engineering Consultants. Environmental Management Plan (Refinement).:Padmapur Opencast
Project (WCL). Madras, India, February 1990.
Nircon Engineering Consultants. Updated Environmental Management Plan. Dipka Opencast Expansion
Project (SECL). Madras, India, April 1991.
Action Plans
Ce-ntralMine Planning and Design Institute Ltd. (Regional Institute V). Environmental Action Plan.
BisranmpurOpencast Project (SECL). Bilaspur, India, September 1994.
C'entral Mine Planning and Design Institute Ltd. (Regional Institute V). Environmental Action Plan:
GevraOpencast Project (SECL). Bilaspur, India, September 1994.
Central Mine Planning and Design Institute Ltd. (Regional Institute V). Environmental Action Plan:
MAanikpurOpencast Project (SECL). Bilaspur, India, September 1994.
" --
-
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World Bank Document

Transcription

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