India’s Supreme Court has cancelled 214 of the 218 coal mining licences awarded by the government since 1993 in a corruption scandal, dubbed ‘Coalgate’, that has reputedly cost the country tens of billions of dollars.
The licences were all awarded between 1993 and 2010, but the Supreme Court ruled on 24 September that they had been awarded illegally. It has allowed four units linked to major state power projects to continue.
In August, the Supreme Court said the licences were illegal since they were allocated in an ‘arbitrary’ manner. The court ruling now finds that the application process for the licences was illegal and unconstitutional owing to ‘arbitrariness, lack of transparency’ and ‘lack of objectivity.’ As well as cancelling the licences, including Essar and Hindalco’s Mahan Coal block in the forests of Mahan, the home of large forest-living communities, it has also ordered heavy fines for offending companies amounting to £100 million. All the cancelled licences must go through a fresh auctioning process
Those companies that have already started coal mining have been given six months to wind down their operations. The court also ordered mine owners who were yet to start operations to pay a fine to the government for "non-operation".
In 2012, federal auditors claimed that India had lost $33bn because coalfield rights were sold off too cheaply, triggering a corruption scandal that has rumbled on to this day.
India is one of the largest producers of coal in the world and more than half of its commercial energy needs are met by coal. The ruling has major implications for the country’s energy sector.
Greenpeace called the verdict ‘a victory for the environment and the people of India against rampant corruption and crony capitalism rife in the resource extraction industry.’