November 16, 2014

Coal Ordinance and Workers’ Strike

J S Majumdar

DECEPTION and dishonesty have become the trade mark of the Modi government at the Centre. A willing press is being used by the government to disseminate half truth or give distorted version of the facts to mislead the people. This they did meticulously at the time of issuing coal ordinance. On 20 October, the cabinet approved the coal ordinance and the media was briefed. Next day, the press published the government’s version as if the coal ordinance was compelled by the Supreme Court’s judgment of 25 August and 24 September, declaring earlier allotments by the screening committee as “illegal” and cancelling allocations of those coal blocks; and that the ordinance provided transparent allotment through competitive bidding in e-auction. The only contentious issue was about commercial sale of coal by the private companies from the allocated coal blocks. Even, when asked by the press, Union finance minister Arun Jaitley vehemently said that there was no question of amending the Coal Mines (Nationalisation) Act, 1973. The Modi government’s half-truth on coal ordinance was successful when trade unions and political parties issued statements, based on 21 October media reports, announcing their respective positions and preparing for struggles on that basis. However, on 21 October after the Presidential signature when the Coal Mines (Special Provisions) Ordinance, 2014 was promulgated, it showed that through this ordinance, Modi government amended the Coal Mines (Nationalisation) Act, 1973 also. Section 28 of the ordinance reads as, “On and from the date of commencement of this Ordinance, the Coal Mines (Nationalisation) Act, 1973 and the Mines and Minerals (Development and Regulation) Act, 1957 shall stand amended in the manner provided in Schedule IV.” In Schedule IV, Part A amended the Coal Mines (Nationalisation) Act, 1973 by adding Section 3A; and Part B amended the Mines and Minerals (Development and Regulation) Act, 1957 by substitution of Section 11A of the Act. Both the amendments reads as, the companies “may carry on coal mining operations in India, in any form either for own consumption, sale or for any other purpose in accordance with the permit, prospecting license or mining lease, as the case may be.” The companies, inserted in the amendments, mean (a) central and state government companies or PSUs; or any other company incorporated in India; and (b) “a company or joint venture company formed by two or more companies”. Thus, the Coal Mines (Special Provisions) Ordinance, 2014 amended the Coal Mines (Nationalisation) Act, 1973 itself for the entire coal industry to be opened for the private companies to carry on mining operations in India, in any form either for own consumption, sale or for any other purpose. Public sector Coal India Ltd (CIL) will be one of the companies. It is true that it is an ordinance and it has to be placed in Parliament within six months. Deception will also play a role there as if it was just an approval of the ordinance for de-allocated coal mines necessitated by the Supreme Court’s judgments. We may see the spectacle of BJP-Congress joint operation in Rajya Sabha for the approval of the ordinance as we had the experience during such maneouvres during the UPA regime. About de-allocated coal blocks, the ordinance made three Schedules. Schedule-I is the list of non-operational 204 coal blocks; Schedule-II is the list of 42 operational coal blocks, for which the Supreme Court has allowed six months grace period; and Schedule-III is the list of 32 coal blocks which are in various stages of development. The bidding is open for all the coal blocks in Schedule-I. However, the central government empowers itself to allot (outside bidding) these coal blocks to PSUs/government companies or to the Ultra Mega Power Project companies. Bidding for coal blocks in Schedule II and III will be open to companies, engaged in specified end uses of power, cement and steel. Even before the Supreme Court’s judgment, the stage was set by Union coal minister Piyush Goyal directing the CIL to supply coal to private power companies in cheaper rate. Immediately after taking charge, in the very first meeting with the officials of CIL on 19 June in Kolkata, Goyal issued directive to cut CIL’s e-auction and supply coal to private power plants at the notified price. Notified coal price is for power producing PSUs, not to private players. In financial year 2013-14, CIL sold 57 MTs through e-auction and earned around Rs 6,000 crore which was 40% of its total earnings. The minister directed CIL to cut e-auction to 25 MTs this year and completely from next year; and divert 32 MTs this year and all 57 MTs of cheap coal to private power plants of Adani, Reliance, Tatas, Essar, etc, although these companies had been allocated captive coal blocks for power production. “Large amounts of coal are being sold through e-auction. This is not in public interest. Coal India’s primary duty is to supply to power plants,” Goyal said in the Rajya Sabha. He announced CIL would cut its e-auctions by about half to 25 million tonnes (mt) in 2014-15 from 58 mt last year. According to Goyal’s briefing in Parliament, 22 coal-based power plants, monitored by the Central Electricity Authority, had stocks for less than four days as of July 29. CIL, however, contradicted this saying, “Most have huge dues. Unless the payment is made, CIL cannot go on supplying.” Days after Union coal and power minister Goyal announced in Parliament that CIL would cut by half its e-auction sales to make more coal available to the private power sector, the board of CIL decided against the move. “This is a rare instance of a public-sector entity defying the directive of its nodal ministry,” Business Standard wrote in its 20 August, 2014 edition. It may be recalled that the Comptroller and Auditor General (CAG) of India had pointed out that non-auctioning of coal blocks led to a loss of Rs 1.86 lakh crore to the exchequer. CIL earn an additional Rs 600 on every tonne of coal sold through e-auction. The minister’s directive would cause loss to CIL of about Rs 3,486 crore, if CIL sold coal at notified prices to Ambani, Adani et. all. It is in this background, the Supreme Court’s judgment of 25 August and 24 September became useful for Goyal and the Modi government to go for privatisation of coal industry through the coal ordinance. The Supreme Court declared all coal-block allocations since 1993 as illegal on the ground of lack of transparency and fairness, arbitrariness, violation of guidelines and causing huge loss to public exchequer. The irregularities and corruption began since the legislation amending the Coal Mines (Nationalisation) Act permitting allocation of coal blocks to power, steel and cement industries for captive use opening floodgate of corruption in allocation of coal blocks. The coal federations of CITU, AITUC, INTUC and HMS have issued joint notice for a day’s strike on 24th November in protest against betrayal and as a warning signal to the government against the black ordinance. BMS remained absent from meeting and the joint notice for strike. Recognised coal workers federations of five central trade unions issued notice of agitation after their Nagpur convention on 31 August. A meeting was held in New Delhi on 15 November between the management and trade unions withdrawing the agitation (except CITU) on the basis of an agreement and written assurance of a meeting with the government on policy related issues by end of September. As per its character, the Modi government deceived the trade unions and gained time to prepare for the ordinance. The coal workers are preparing for strike on 15 points demands mainly on policy issues related to the ordinance and privatisation of coal mines.