This is the future we need
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Natural resources are our shared inheritance. It is our duty to ensure that we protect our inheritance for future generations. Only if we do that, may we consume the fruit. A loss is a loss to our children and all future generations.
Minerals are the natural resources most easily converted to cash. This drives rent seeking, illegal mining, bending of rules, turning a blind eye to violations, under and over invoicing and a variety of other malpractices that are widespread. This has been well documented in a number of states including Rajasthan, Karnataka, Goa, Odisha, Jharkhand.
For instance, the Supreme Court ruled that mining in Goa was fully illegal after 22-Nov-2007. Mining was finally stopped nearly five years later. Illegal mining is nothing but theft from our children. Estimates of the loss in Goa is Rs. 65,000 crores, Rs. 4.5 lakhs per person. This is a huge driver of corruption, poor governance and the resource curse.
More worryingly, it has been found that extraordinary amounts are being stolen from our mineral commons within the current system. In Goa, over an eight year period (2004-2012), 95% of the value of the minerals were lost. The per head loss from recent “legal” lease renewal was Rs.10 lakhs. Data for iron ore elsewhere, coal, oil and gas shows a similar trend. Everyone is losing equally, while a few are becoming super-rich. This is looting economics, not trickle down economics.
This underpricing of our minerals is clearly unfair. Miners have all incentives to extract as quickly as possible, before the people realize what is happening. This haste causes enormous damage to the environment and human rights. It leads to widespread corruption and uncaring governance. In turn, this often leads to conflict and civil war. But there is a way out, a logical, constitutional, moral and ethical way to looking at minerals.
We, the people of India, hereby adopt these principles:
- Natural resources are the commons and the state is the trustee for the people and especially future generations (public trust doctrine).
- The commons are inherited. We are only custodians. Our duty is to ensure preservation of the principal value. Only then may we enjoy the fruit of the commons (intergenerational equity principle).
- Any income from the commons must only be shared equally with everyone, as a right of ownership, a commons or Citizen's Dividend.
- If we decide to sell some commons, we must ensure preservation of the principal. This requires:
- a) When we sell, we must not suffer any loss. We must get the full economic value.
- b) Every paisa received must be saved in a new "inheritable asset" (a "non-wasting" asset). An inheritable asset is one which retains its value over multiple generations, potentially indefinitely.
These principles, implemented faithfully, will be a giant step towards achieving Justice, Liberty, Equality and Fraternity within our nation.
Specifically, we ask you to implement the following:
1. All mining must be on a zero loss basis. We cannot afford to lose any part of our children’s inheritance. This requires us to do the following:
(a) Illegal mining is simply theft from our children and must be punished severely
(b) The Government must prove that the terms of any fresh mining prevent a loss
(c) If there are any mines where we are losing any of the value of our children’s inheritance, the Government must pursue all legal avenues to cancel the lease
(d) In instances like the recent coal auctions that result in a subsidy for power consumers financed by selling the commons cheap, compensation for the full subsidy should be received from the Center.
2. All receipts from minerals should be treated as a capital receipt from the sale of our children’s inheritance. This should be deposited in a Future Generations Fund, with the state as the trustee on behalf of the present and especially future generations. This is already the practice in 50 countries & sub-national entities. The following steps must be followed:
(a) Any receipts from new leases must be deposited into the Future Generations Fund
(b) All auction premium from mineral auctions should be deposited into this Fund
(c) At present, royalty is treated as revenue and spent. This must stop, although it may take a few years to reduce the dependence. Within five years, all receipts from minerals must be deposited into the Fund
Any loss is a loss to everyone equally, effectively a per-head tax, highly regressive.
3. The Future Generations Fund should be managed by the National Pension Scheme. The primary investment goal is to maintain the real value of the corpus in the face of rising prices, and various other threats like corruption, expropriation, etc, and to earn real income. The real income must only be distributed to all the people as a Citizens’ Dividend. Any loss or diversion is effectively a per-head tax, immoral.
4. As minerals are some of our most valuable assets, the state must implement a cutting edge control system. This includes the ICGLR Regional Certification Mechanism, a whistleblower rewards and protection scheme, real time data feeds, satellite, drone and lidar imaging, etc. Mining entities should also be audited frequently.
5. The people, as the real owners, should be permitted to satisfy themselves at any time that their children’s inheritance is protected. This requires radical transparency including implementing EITI, the ability to conduct social audits, and open access to the public to all data (including the data feeds) in real time at no cost.
We, the people, instruct the government for the people to implement these principles faithfully in their domains within the next 12 months. This is fair, moral, ethical, just & right.
Let us be remembered as the generation that changed the course of history, not the one that destroyed the planet.
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