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Blanket ban not the answer

The illegal mining and export of iron ore in Karnataka is, no doubt, a serious issue, yet the decision to impose a State-wide ban on the export of the ore is not justified.

Why should genuine exporters pay the price for lapses on the part of the administration?

The recent ban on iron ore exports by the Karnataka Government is akin to the proverbial rain dance of African tribal chiefs. To appreciate the logic behind this ban, it is necessary to understand the sequence of sleazy events that unfolded in Karnataka.
It may be recalled that in the recent Assembly session in the State, there was a huge uproar by the Opposition on the “illegal mining” and “export” of iron ore. What was exasperating for the administration was that the quantity permitted for export and the actual exports did not match.
Obviously, something was seriously amiss. This was cited as the immediate trigger for the ban order by the State government. Further, the administration “learnt” that the permits issued for the transportation of ore from the mines were recycled for movement of ore from the mines to ports.
Apparently, to check illegal export of the ore, the Karnataka Government plans to have computerised permits with holograms, and also Internet facilities at check-posts to monitor the ore movements effectively. Pending implementation of this plan, the State government has come out with this order. Among the 10 minor ports in Karnataka, the Karwar port is reported to have been exporting iron ore over the last 4-5 years. Amusingly, the Karnataka Government, in its ban order, admits that only recently had it come to its notice that Karwar has been operating without clearances from the “Karnataka State Pollution Board and other departments.” So much for the quality of administration in one of the better administered States of the country.

Loot and scoot

But more follows. The Deputy Conservator of Forests (DCF) of Karwar, in a letter dated July 24, 2010, to the Commissioner of Customs, Mangalore, had stated that the Belekeri Port Conservator had forwarded the stock statement aggregating 800,000 tonnes, indicating the quantity of ore seized and disclosing the names of the 58 exporters to whom the ore belonged.

Interestingly, eight of these exporters have approached the High Court, claiming ownership and release of approximately 200,000 tonnes, while the other 50 exporters (for the remaining 600,000 tonnes) have not yet come forward to lay claim on the seized ores. Isn't this bizarre?

Further, in a remarkable twist in the tale, on June 2, 2010, the local media had reported that huge quantities of iron ore were clandestinely removed from the Belekeri port area. These stocks, as per court orders, were to be seized and kept in the safe custody of the Port Conservator of Belekeri.
Commenting on this, the DCF, in his letter, states that “during the course of investigation, it is credibly learnt that the clandestinely removed quantity of seized iron ore appears to have been kept concealed at nearby locations/ destinations and possibly stored at unidentified pockets close to the ports and some minor ports on the West Coast, to be exported along with regular exports permitted through the Mangalore port officially.”
Meanwhile, on July 9, 2010, the Karnataka High Court directed the Commissioner of Customs, Mangalore, not to permit the eight petitioners (claiming ownership to 200,000 tonnes) to export iron ore of any kind from Belekeri, Karwar and Mangalore ports until further orders. Conveniently, the Karnataka Government has used all these cases as a ruse to ban the export of iron ore across Karnataka.
The State government must have realised that it is no longer a question of the 800,000 tonnes of illegal mining and 600,000 tonnes of ore smuggled out of the ports. After all, this constitutes less than one per cent of the quantity of iron ore exported from India. Obviously, it must be the tip of the iceberg. . But do all these justify the ban on iron ore exports?

Graver issues

It is certain that at this point in time, this order will be challenged in thecourt. Surely, questions will be raised on the legality of a State government to prohibit exports and interfere in the operations of the ports which, under the Constitution, are matters of the Union. Similarly, the tenability of the order under Article 14 (which guarantees equality) and Article 19 (on freedom to carry on business) will be tested in the courts.
But there is something more to debate and agitate. The fundamental rights of other iron ore exporters (those who have been legally mining and exporting) across the State to carry on their business have been suspended simply because the administration has failed to carry out its duty. That is indeed a sad commentary on the state of affairs.
Remember, what we are seeing is the stealthy removal of shiploads of ore from a port, which is a protected area, controlled both by the State and Central authorities. Recall that all this has unfolded even when a local court has intervened in the matter.
Trade and industry across the country are strangely silent on this crucial issue. If Karnataka today bans exports of iron ore owing to the failure of its own administration, other States can follow suit. It is unrealistic to believe that computers and holograms can improve the situation. Unfortunately, the rot in our administration is well and truly entrenched. The problem is that we, as a people, seem to be oblivious to it.
Article published in Hindu Business Line:

Last modified on Sunday, 07 July 2013 07:36

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