Illegally Transferred Tribal Land Mortgaged to Foreign Banks?

By Dhananjay Mahapatra

New Delhi, Feb 6 : French cement giant Lafarge's $255 million cement plant in Bangladesh may run into rough weather, with the Supreme Court on Friday turning off the supply of raw material by temporarily suspending mining operations in eco-sensitive forest areas of Meghalaya.

The order completely stopping mining in East Khasi Hill district till March 19 came with a sense of outrage from the Forest Bench comprising Chief Justice K G Balakrishnan and Justices S H Kapadia and Aftab Alam.

It took strong exception to tribal land being allegedly transferred in violation of rules to the French company's subsidiary which mortgaged it to raise a loan of $153 million from a host of foreign banks.

Appearing for Shella Action Committee, a forum of villagers in Shella, senior advocate P S Narasimha pointed out that not only was the land, falling under Schedule VI of Constitution banning its transfer to non-tribals, illegally taken over in collusion with local officials, but the mining was started without the mandatory clearance from the ministry of environment and forest (MoEF) under the Forest Conservation Act (FCA).

Illegally depriving the scheduled tribes of their land, the same was mortgaged to a host of multi-lateral agencies and foreign banks -- Asian Development Bank, International Finance Corporation, Deustche Investetionaud Ent, European Investment Bank, The Arab Bangladesh Bank and the Standard Chartered Bank, Bangladesh, for obtaining a loan of $153 million, Narasimha said.

Amicus curiae Harish Salve and A D N Rao said not only was the eco-fragile area opened up without the mandatory forest clearance, the raw material was being sent to Bangladesh at cost price depriving India of huge revenue due from customs and other duties.

Additional solicitor general Harin Raval, appearing for MoEF, said that the ministry had clearly issued an order in May 2007 staying the mining operations, but the SC had allowed it to go on.

The Bench asked the French company to give details of its operation and the manner it started mining even as its counsel Mukul Rohtagi and Abhishek Manu Singhvi tried to soften the blow by offering to price the raw material at market price. But, the Bench sought a detailed response and posted the matter for further hearing on March 19. However, it allowed it to lift the already mined limestone from the site for export, but with prior intimation to the Central Empowered Committee (CEC) about the quantity of the mineral.

Lafarge Umuiam Mining Pvt Ltd (LUMPL) was mining the limestone quarry area spread over 100 hectares near the Indo-Bangladesh border for supply of raw material to Lafarge Surma Cement Project at Chhatak in Sunamganj, Bangaldesh.

Lafarge and Spanish cement producer Cementos Mollins had set up the state-of-the-art fully integrated cement plant at Chhatak with a captive power plant of 300 MW. In 2001, the Bangladesh high commissioner and then Indian foreign secretary Lalit Mansingh had singed an agreement for uninterrupted supply of raw material to the plant from the mines in Meghalaya.

After this agreement, Lafarge had claimed to have obtained relevant clearances from MoEF, the state government, the autonomous hill council and the chief conservator of forest for limestone quarrying in East Khasi Hills.