Environmental Policy and Law, 45/1 (2015)
On achieving the future we want, participants noted
with great concern that in many countries across the world
people are still denied basic environmental information.
They recognised that products can significantly impact
the environment throughout and after their life cycle, and
considered that promoting greater transparency in relation
to information about products and product-related decision
making is an important topic that would merit further
consideration under the Convention and Protocol. They
recognised that moving to more sustainable lifestyles
implies substantially reducing consumption of resources
and ensuring availability of objective information about
the resource footprint of products and processes, and
stated that the Convention and Protocol provide a solid
framework for governments to engage effectively a wide
range of stakeholders in decision making, thereby leading
the way to effective environmental governance.
NATIONAL AFFAIRS
India
State Minister Jailed
– Illegal Mining in Bellari –
by Armin Rosencranz* and Titus James**
For the first time in modern India, an environmental
criminal has been put in jail for the illegal mining of iron
ore. This all happened in Bellari, a historic city in the state
of Karnataka, India. Once known for its sandalwood forests
and abundant wildlife, it also contains large deposits of fine
and coarse iron ore. India is among the largest producers
and exporters of iron ore globally.1 The iron ore industry
in Karnataka and neighbouring Andhra Pradesh is run by
a politically well connected mafia. The most powerful of
the mine owners of the region, former State Minister of
Tourism, Gali Janardhana (Anand) Reddy, has been in jail
for the last three years.
Between 2001 and 2006, the price for Indian iron ore
jumped from US$17 to US$55 per tonne. A triangular
piece of land enclosing the Ramandurga hills of Bellari
covers around 13,000 acres (5,200 hectares). This land is
estimated to contain more than 1.2 billion tonnes of iron
ore – 20 percent of India’s total.2 The spurt in increased,
uncontrolled and illegal mining activities has caused
the destruction of roads (due to trucks carrying loads
* Professor of Law and Public Policy, Jindal Global University, Sonepat,
India; and former Trustee of Stanford University.
** Fourth year law student at the National University of Juridical Studies,
Kolkata, India.
31
Notes
1 The Convention was adopted on 25 June 1998 in Aarhus, Denmark, at the
Fourth Ministerial Conference of the “Environment for Europe” process. It entered
into force on 30 October 2001 and according to its website currently has 47 Parties.
See http://www.unece.org/env/pp/ratification.html.
2 The MoP-5 webpage, including the final report and decisions of the meeting,
is available at http://www.unece.org/index.php?id=33913#/. The webpage of the
second Meeting of the Parties to the PRTR Protocol is available at http://www.unece.
org/index.php?id=35203#/. The webpage of the joint High-level Segment, including
the text of the Maastricht Declaration, is available at http://www.unece.org/env/pp/
aarhus/mop5&mopp2/hls.html#/. The IISD RS summary report of the meetings is
available at http://www.iisd.ca/unece/aarhus/mop5/html/crsvol190num2e.html.
3 For the deliberations and outcomes of the 45th meeting of the Convention’s
Compliance Committee, see Tsioumani, E. 2014. “The 45th meeting of the
Compliance Committee”. EPL 44(5): 450–451. The Compliance Committee held
additional meetings, which will be reported in EPL 45(2).
4 See http://www.unece.org/env/pp/introduction.html.
5 The Protocol on PRTRs was adopted on 21 May 2003 in Kiev, Ukraine. It
entered into force on 8 October 2009 and currently has 33 parties, including the
EU. See http://www.unece.org/env/pp/ratification.html.
6 The full text of the Maastricht Declaration is available online at http://www.unece.
org/fileadmin/DAM/env/pp/mop5/HLS/SG_statement_Aarhus_MoP5_final.pdf.
over the permitted limits), illegal exploitation of forest
lands, widespread pollution, rampant corruption, and the
exploitation of child labour.3
Iron ore mining came to Bellari in 1999, after the
adoption of the 1993 National Mineral Policy which
allowed and encouraged private mining.4 Mining in the
region was further encouraged by the “Export Oriented
Development” element of the Karnataka State Mining
Policy in 2000.5 The final push came with de-reserving
11,620 km2 that had previously been earmarked for use
only by public entities.6 One of the most significant
causes for the dramatic increase in mining activities and
the rise in iron ore prices can be attributed to the growth
in demand for steel in China in the run-up to the 2008
Beijing Olympics.7
Illegal Mining in Bellari
The Lokayukta, the State’s Ombudsman/graft watchdog,
in its second report on illegal mining, cited the rapid rate
of increase in the cost of iron ore as one of the reasons for
the “allegations of large-scale corruption and complaints
of profiteering through illegal mining with the complicity
of the authorities in all levels of Government”.8 The report
was politically explosive as it indicated that members of the
state legislatures and the Cabinet, including the Karnataka
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32
Table 1. NEERI recommendations compared to actual production
Year Recommended
annual production in
the NEERI report in
million MT
2006–07 16
2007–08 16
2008–09 16
2009–10 16
Source: Comptroller and Auditor General of India. Performance Audit Report No. 2 of 2012, at 101. See http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/
Government_Wise/state_audit/recent_reports/Karnataka/2012/Revenue/Chap_8.pdf.
Chief Minister, had colluded so as to allow such large-scale
illegal mining to go unchecked.
The de-reserved land was distributed to private players
without regard to their professional, technical or business
abilities, going against the stated reasons for the de-
reserving, namely “to encourage mining-based industries to
create more employment opportunities in the private sector,
and to attract private capital and professional management
for optimal use of state mineral resources”.9
One aspect of the corruption was that it enabled
mine operators to mine on forest lands and to overload
trucks.10 The report also accuses miners of having entered
into Memorandums of Understanding with public sector
undertakings (PSU) that favour the private players.11 This
included non-revision of charges that drove the PSUs into
losses.12
The Lokayukta report also charged that both normal
and low-grade iron ore were mined in larger quantities
than permitted by licence, and were sold substantially
below the prevailing market price. The licences themselves
were issued arbitrarily and unconditionally, suggesting
blatant corruption in their issuance. The report also noted
that illegal mining spurred benami transactions, that
is, transactions involving property which is held by an
ostensible owner for the actual owner – in this case, former
minister Anand Reddy.
Damage to the Environment
The government ordered an inquiry into the
environmental damage to the region by the National
Environmental Engineering Research Institute (NEERI) in
2003.13 When it was submitted, the NEERI report observed
that mining activities caused increases in heavy metals
in the water, and particulate matter (dust) in the air. At
present, levels of these pollutants in Bellari’s air and water
far exceed the national health standards.14 The report also
drew attention to the significant loss in forest cover due
to mining activities.15 The region’s robust populations of
diverse wildlife (including sloth bears, leopards, monitor
lizards and white storks, all of which are threatened or
endangered species)16 have significantly diminished.
State Action
Following the submission of the first Lokayukta report,
the State Government of Karnataka talked about taking
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Environmental Policy and Law, 45/1 (2015)
Production of Excess Percentage
iron ore in production variation from
Bellary district in million the recommended
in million MT MT production
33.26 17.26 108
44.30 28.30 176
49.81 33.81 211
33.37 17.37 109
tough action in regard to illegal mining.17 The only visible
change, however, was the transfer of officials including
Bellari’s Deputy Commissioner, Deputy Conservator of
Forests, Superintendent of Police, and Director of Mines
and Geology.18 Although 800,000 metric tonnes of illegally
mined ore were ordered to be seized at the nearby Belekeri
port, all of it went missing after seizure.19
The Supreme Court and CEC Findings
Utilising the legal option of Public Interest Litigation,
an NGO called Samaj Parivartana Samudaya brought an
action concerning illegal mining in Bellari. The judgment
is hailed as a landmark ruling in regard to the jurisprudence
of environmental law. In pursuance of this ruling, the
Supreme Court set up a Central Empowered Committee
(CEC) to assess the situation and suggest ways to root out
illegal mining.20 In its report, the CEC stated that the State
Government had failed to act on the recommendations and
conclusions of the Lokayukta reports.21 The CEC found that
the reports had had no impact on illegal mining – it had, in
fact, substantially increased.22 In its attempt to assess the
situation on the ground, it used satellite imaging, which
demonstrated that the forest cover had been completely
wiped out.23
Arrests
The immediate result of the second Lokayukta report
was the resignation of the then Chief Minister of the State
of Karnataka, and the arrest of Anand Reddy, the then
Minister for Tourism, and his brother-in-law Srinivasa
Reddy by the Central Bureau of Investigation on charges
of conspiracy, forgery and violation of mining laws.24
The Reddy brothers were also charged under the Forest
Act for encroachment on forest land to carry out illegal
mining. Other charges against Anand Reddy include
criminal conspiracy to carry out illegal mining, theft of state
property, cheating, receiving property dishonestly, criminal
trespass and misconduct by a public servant as under the
Code of Criminal Procedure.25 In addition to these, he is
also charged under various provisions of the Prevention of
Corruption Act, 1988,26 India’s anti-graft law.
If convicted, Anand Reddy is facing up to 10 years in
prison (in cases involving multiple charges, the law states
that the maximum punishment in regard to the charges shall
be imposed). These arrests were preceded and followed
Environmental Policy and Law, 45/1 (2015)
Gali Janardand Reddy behind bars Courtesy: Sirulu.com
by other arrests, including of four members of the State
Legislative Assembly27 and four bureaucrats from the
Indian Administrative Service and the Indian Forest Service
– unprecedented in India.28 All were charged with criminal
offences related to illegal mining in the Bellari region.
In India, it is very rare that anyone in political or
bureaucratic office – let alone a sitting State minister –
would face arrest and prison sentences. Anand Reddy has
repeatedly applied for bail, and has apparently tried to
bribe (with a whopping 100 crores – 1,000 million rupees
or US$163 million) the judges who were to hear his bail
plea. Although one judge did grant bail, the payment of
the bribe was later exposed and Reddy’s relative, Dasarath
Rami Reddy, was arrested for attempted bribery.29 The three
judges who accepted the bribe are also being prosecuted.30
In addition, of course, the High Court of the state of Andhra
Pradesh cancelled the bail and Anand Reddy remains in jail
today.31 His seven subsequent petitions for bail have been
rejected when they have come up for hearing.32
Anand Reddy today faces four cases, viz indulging in
illegal mining by his firms, illegal transportation and export
of iron ore through Belikeri port, the theft of seized iron
ore at Belikeri port, and the cash-for-bail case.33 It seems
unlikely that Reddy will be acquitted of the many serious
charges against him.34
As of 1 November 2014, Anand Reddy has been in jail
a little over three years.35 Assets worth 37.86 crores (378.6
million rupees)36 have been seized in regard to the illegal
mining scandal under the Prevention of Money Laundering
Act in a bid to prevent the accused from benefiting from
his ill-gotten wealth.37 The case will be closely watched by
the entire country as a test of the will of the government
in power to stem corruption and environmental crimes in
dealing with individuals of the political class.
Notes
1 The website of the Ministry of Mines, Government of India, at http://mines.
nic.in/writereaddata%5CContentlinks%5C1ed4a15b370646d7be2c6defb2ecf6c9.
pdf.
2 Chin, J. 2006. “Mining frenzy in Bellary”. Frontline 23(11), at http://www.
mmpindia.in/minenews/miningfrenzy.htm.
33
3 Ibid.
4 “Mining in Bellary – A Policy Analysis”, at http://adrindia.org/sites/default/
files/EPW_Mining_Article.pdf.
5 Ibid.
6 Ibid.
7 Ibid.
8 Karnataka Lokayukta. 2011. “Report on the Reference Made by the
Government of Karnataka under Section 7(2-A) of the Karnataka Lokayukta Act,
1984 (Part – II)” [Second report on illegal mining], at http://www.rediff.com/
news/2011/jul/28mines-partii.pdf.
9 Ibid.
10 Ibid.
11 Ibid.
12 Ibid.
13 Supra, note 2.
14 Ibid.
15 Ibid.
16 Ibid.
17 Supra, note 4.
18 Ibid.
19 Ibid.
20 Samaj Parivartana Samudaya and others v. State of Karnataka and others
(2013) 8 SCC 154.
21 Supra, note 4.
22 “Interim Report dated 15.04.2011 of the Central Empowered Committee of
the Supreme Court in WP Civil No. 562 of 2009 by Samaj Parivartana Samudaya
regarding illegal mining and other related activities in forest areas of Karnataka”,
at 19–20.
23 Ibid.
24 Ibid. See also “In pre-dawn swoop, CBI arrests Janardhan Reddy, kin in
Bellary”. The Hindu, 5 September 2011, at http://www.thehindu.com/news/
national/karnataka/in-predawn-swoop-cbi-arrests-janardhan-reddy-kin-in-bellary/
article2426436.ece; and Rahman, M. 2011. “Indian mining magnates arrested for
alleged corruption offences”. The Guardian, 5 September 2011, at http://www.
theguardian.com/world/2011/sep/05/indian-mining-magnates-arrested.
25 Sri G. Janardhan Reddy vs CBI on 5 December 2012, at http://indiankanoon.
org/doc/5444600/.
26 Ibid. See also Nanjappa, V. 2011. “Why Janardhana Reddy may not be able
to get off lightly this time”. Rediff News, 6 September 2011, at http://www.rediff.
com/news/report/why-janardhana-reddy-may-not-be-able-to-get-off-lightly-this-
time/20110906.htm.
27 Two independents, B. Nagendra and Satish Sail, as well as Suresh Babu of
the BSR Congress, former minister B. Sriramulu (a close aide of mining baron and
former minister G. Janardhana Reddy) and Mr Singh, are now in jail, in the illegal
mining case. “Former Karnataka minister arrested in iron ore export scam”. NDTV,
17 October 2013, at http://www.ndtv.com/article/south/former-karnataka-minister-
arrested-in-iron-ore-export-scam-433647.
28 Ibid.
29 “Bail-for-sale: Inside jail, Janardhana Reddy worked on plot to bribe judge”.
NDTV, 24 July 2012, at http://www.ndtv.com/article/cheat-sheet/bail-for-sale-inside-
jail-janardhana-reddy-worked-on-plot-to-bribe-judge-246823.
30 Ibid. See also a letter written by former judge in Janardhana Reddy case,
available at http://www.ndtv.com/article/south/read-letter-written-by-former-judge-
in-janardhana-reddy-case-246856.
31 Ibid.
32 Supra, note 25. See also “Former Karnataka minister Janardhana Reddy’s
bail plea rejected in illegal mining case”, at http://www.ndtv.com/article/south/
former-karnataka-minister-janardhana-reddy-s-bail-plea-rejected-in-illegal-mining-
case-382107.
33 The chargesheet against Janardhan Reddy in regard to illegal mining was
filed in May 2013. “Karnataka: Gali Janardhan Reddy chargesheeted in illegal
mining case”. IBN Live, 27 May 2013, at http://ibnlive.in.com/news/karnataka-
gali-janardhan-reddy-chargesheeted-in-illegal-mining-case/394374-62-129.html.
34 Ibid.
35 1,152 days, as of this writing in November 2014. Malagi, S.G. 2014. “Three
years in prison but Gali Janardhan Reddy’s troubles are only growing”. The Deccan
Chronicle, 5 September 2014, at http://www.deccanchronicle.com/140905/nation-
crime/article/3-yrs-prison-gali-janardhan-reddy%E2%80%99s-troubles-are-only-
growing. See also Ahiraj, M. 2013. “Janardhan Reddy still in jail after 730 days”. The
Hindu, 7 September 2013, at http://www.thehindu.com/todays-paper/tp-national/
tp-karnataka/janardhan-reddy-still-in-jail-after-730-days/article5102758.ece.
36 Approximately US$5 million.
37 “Karnataka mining scam: Rs 37.86 crore assets of Reddy attached”. IBN Live,
18 August 2014, at http://ibnlive.in.com/news/karnataka-mining-scam-rs-3786-
crore-assets-of-reddy-attached/492718-62-129.html.
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