Orissa submits response on Mines ministry's guidelines on JVs, MoUs

Courtsey news via Business Standard Reporter / Kolkata/ Bhubaneswar December 18, 2010, 0:10 IST
Pitches for recommending mineral concession cases only on merit.The Orissa government has submitted its response to the Union ministry of mines on the draft guidelines on joint ventures (JVs) and MoUs (Memorandum of Understanding) issued in September this year by the ministry."In our response, we have stated that in non-notified mining lease areas, the mineral concession cases should be recommended only on merit rather than on 'first in time' basis. We have broadly agreed with the other points stated by the ministry in its draft guidelines on JVs/MoUs”, a top official source told Business Standard.On signing of MoUs, the official said, "There has been no indiscriminate signing of MoUs by the state government. While recommending mineral concession case for an MoU signed company, we have ensured that the company does value addition within the state. Besides, the interests of the state in general and the people to be displaced in particular are factored in”, the source added.Apart from Orissa, Goa is the only other state to have sent its response to the ministry's guidelines on JVs/MoUs.In its draft guidelines on JVs/MoUs, the Union ministry of mines had stated that the signing of a large number of MoUs indiscriminately and without considering what the other party is bringing to the table, is not compatible with the use of the MoU as ‘special reasons’ for the purpose of Section 11 (5) of the MMDR Act.An MoU for exploitation of a mineral resource at a specific location (i.e. specific lease area) in anticipation of a concession or a reservation will be deemed to be incompatible with principles of fair play and equity because it will give that MoU applicant an unfair advantage in relation to other MoU applicants who apply for the same area.The ministry was of the view that it would contradict the policy of ‘first in time’ for non-notified areas or ‘most meritorious’ for notified areas, as the case may be, the Ministry of Mines had stated categorically in its guidelines.In case MoU/JV is treated as special reasons, it is necessary to make its provisions enforceable, and as such the state government must send all details of the MoU/JV along with a proposal to make it relating to the MoUs/JVs in the context of their application in both reservation and concession cases.It may be noted that while the above guidelines elaborate the process and procedures, they do not specify the policy and content of the MoUs since they have to be state specific. In order to enable this to be done, it will be necessary for the states to issue a comprehensive circular and notify it, specifying the policy and content, and including therein the details of these guidelines in so far as procedures and consequences are concerned, subject to any variation that the state government may consider desirable."The state governments will also need to enter into supplementary MoUs with existing MoU companies to enable the conditionalities to be fulfilled, and while doing so may ensure that the process of entering into supplementary MoUs filters out routine MoUs that may have been entered into earlier. The list of all qualifying MoUs (including supplementary MoUs) may then be put up by the state government on its website", the ministry had stated in its guidelines.
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Tag : Orissa government, Union ministry of mines, MoU, MMDR Act