A big blow on mining Bill

What actually went wrong that the Mines and Mineral Bill is tossed and never inside the basket?

By Tashi Namgyal

The Parliament,even after a decade of asking, deferred the Mines and Minerals Bill (MMB)yet again. This time, they locked horns on whether the Constitution will be upheld while framing the MMB, and who should be benefitted from the profits.

It was full throttle debates and abates between the Upper House and the Lower House. Differing opinions were shared with the committee quizzed by the members who were choking with disagreements, but resulting in a consensus which the country and the people don’t need at all.

The NC wants ownership of mineral resources vested on the State so that wealth from the mining sector benefits the Bhutanese people and Bhutan and not just a handful of elites. This, they are doing it per se the Constitution.

Studies have proved that income inequalities are growing in the country, which directly contradicts NC’s modus operandi and Article 9.7 of the Constitution which clearly states that inequalities in income will wreck the society, undermine democracy and national security.

It is in the Upper House’s belief that the benefits accrued from mining sector should be first and foremost enjoyed by the government and people of Bhutan, not a select few. To prove their stance, the NC highlighted a Royal Audit Authority (RAA) report which pointed out that the mining business in Bhutan is under the grasp of elites.

However, the Upper House also made it clear that stone quarries, boulders, surface and river bed operations can be operated by private entities. This is in line with Article 9.7 of the Constitution which states that “The State shall endeavor to develop and execute policies to minimize inequalities of income, concentration of wealth, and promote equitable distribution of public facilities among individuals and people living in different parts of the Kingdom,” and Article 9.10 which states that “The State shall encourage and foster private sector development through fair market competition and prevent commercial monopolies.”

In view of the same Constitution, the NC also made it clear that the law must allow State-Owned Enterprises (SOEs) to operate strategic mining.

Their decision is backed by the government too, who expressed their support by allocating Khothakpa and Chunaikhola mines to the State Mining Corporation Limited (SMCL).

The Opposition Party has imbibed fair distribution of wealth since its inception back in 2008. It would ridicule their party manifesto if they don’t stand by NC’s decision.

Further boost is also being provided by the National Law Review Task Force which recommended that the Mines and Minerals Management Act (MMMA) 1995, which was enacted prior to the adoption of the Constitution, must be harmonised and amended based on the provision of the Constitution that vests ownership of the mineral resources in the State.

What the Constitution says

Article 1.12: “The rights over mineral resources, rivers, lakes and forests shall vest in the State and are the properties of the State, which shall be regulated by law.”

Article 9.7: “The State shall endeavour to develop and execute policies to minimise inequalities of income, concentration of wealth, and promote equitable distribution of public facilities among individuals and people living in different parts of the Kingdom.”

Article 5.4: “Parliament may enact environmental legislation to ensure sustainable use of natural resources and maintain intergenerational equity and reaffirm the sovereign rights of the State over its own biological resources.”

If the rights are allocated to SOEs, the State can reap multiple benefits such as higher export prices, greater profits, higher tax filing, and greater revenue, thus making sure that the resources which belongs to the people must benefit the people.

It also encourages private sector development. The NC considers private sector development as an integral part of economic development and national progress. The NC has supported policies for private sector development ranging from advocating policies, to reduce bureaucratic burden, to providing fiscal incentives.  NC is also aware that Article 9.7 mandates encouraging and fostering private sector development through fair market competition and preventing commercial monopolies.

On the other side, it does not mean that the Upper House is for nationalization of the sector. Individuals and private companies were just granted lease to operate the mines.