The Mines and Mineral Development and Regulation (MMDR) Bill, 2011

The Mines and Mineral Development and Regulation (MMDR) Bill, 2011, that provides for sharing of profits and royalty with project-affected people has been cleared by Cabinet. The new MMDR Bill, 2011 will be replacing a more than half-a-century-old law under the same name.

The Government had earlier constituted a High Level Committee (HLC) in 2006, which suggested for evolving a mining code adapted to the best international practices, streamlining and simplifying procedures for grant of mineral concessions to reduce delays, etc. Based on the HLC recommendations, the Government had announced National Mineral Policy (NMP) on 13.3.2008.

After several rounds of consultation and workshop with all Stakeholders, including Central Ministries, State Governments, Industry associations and NGOs, the Ministry has prepared a Mines and Minerals (Development and Regulation) Bill, 2011, vetted by Ministry of Law and Justice, to replace the existing Mines and Minerals (Development and Regulation)  Act, 1957. The MMDR Bill, 2011 was referred to a Group of Ministers (GoM) on 14.6.2010 and which has now, after five rounds of discussion, had recommended the draft Bill to the Cabinet. The GoM in its meeting held on 7th July, 2011 has recommended the draft MMDR Bill, 2011 for introduction in Parliament. The Union Cabinet has approved the proposal to introduce the Mines and Minerals (Development and Regulation) Bill (MMDR Bill), 2011, in terms of National Mineral Policy, 2008 in Parliament and also to repeal the existing Mines and Minerals (Development and Regulation) Act, 1957.

Highlights of the Draft Bill are:

• States may call for applications in notified areas of known mineralization for prospecting based on technical knowledge, value addition, end-use proposed ore -linkage etc. and to invite financial bid;
• States may grant of direct mining concessions through bidding based on a prospecting report and feasibility study in notified areas where data of minerals is adequate for the purpose;
• State Government may set up a minimum floor price for competitive bidding;
• Special provisions for allowing mining of small deposits in cluster, where cooperatives can apply;
• National Mining Regulatory Authority for major minerals - State Governments may set up similar Authority at State level for minor minerals;
• Imposition of a Central cess and a State cess, and setting up of Mineral Funds at National and State Level for capacity creation;
• For the purpose of sharing the benefits of mining with persons or families having occupation, usufruct or traditional rights in mining areas, and for local area infrastructure, creation an amount equal to royalty in case of mineral other than coal, and 26% of net profits, in the case of coal, has been proposed to be credited each year to district Level Mineral Foundation;
• Sustainable and scientific mining through provision for a Sustainable Development Framework;
• Consultation with local community before notifying an area for grant of concession, and for approval of Mine Closure Plans;
• Enhanced penalties for violation of provisions of the Act, including debarment of person convicted of illegal mining for future grants and termination of all mineral concessions held by such person; and
• Establishment of Special Courts at the State level for speedier disposal of the cases of illegal mining.

The bill significantly provides for sharing of profits from minerals with the local communities and could make a serious difference in some of the backward areas of the country, according to an analysis by Centre and Science Environment (CSE). The profit-sharing concept has been introduced in the Bill for the first time in Indian mining law.

The new draft MMDR Act would have financial implications in the creation of an independent National Mining Tribunal and National Mining Regulatory Authority at the Central Level, and the expenditure involved in the capacity building of the Indian Bureau of Mines. The funds for this expenditure are likely to be met from levy of cess at the rate of 2.5% on the basis of Customs/Excise Duty.

The approval will help in developing the country's mining sector to its full potential so as to put the nation's mineral resources to best use for national economic growth, and ensure raw materials security in the long term national interest.

Clickhere to view the Highlights of the bill as provided in the Website of Ministry of Mines

Clickhere to view the Draft Bill

Only Rajnikanth can send the 101st SMS..!!!

-Telecom Commercial Communications Customer Preference Regulations (TCCCPR) 2010

The Telecom Commercial Communications Customer Preference Regulations (TCCCPR) 2010 came into effect on September 27, 2011. The press release by the Ministry of Communications & Information Technology enlists the key features of this regulation as -- options to customers to exercise his preference, separate number for telemarketers starting with 140, easy registration of the telemarketers, sharing of database, blacklisting provisions, filtering of calls and SMS by service providers, restriction on more than 100 SMS per SIM per day, effective complaint redressal system and financial disincentive on Access Providers. Shri Kapil Sibal, the Union Minister for Communications and Information Technology however clarified that messages involving transactions are not covered under these restrictions. This includes messages sent by schools to students, parents, financial institutions, banks, insurance companies, credit cards etc. 

In order to curb unsolicited commercial communication, which are a major cause of disturbance and inconvenience for Telecom users, TRAI notified “Telecom Unsolicited Commercial Communication Regulations” in 2007, putting in place a framework for controlling unsolicited commercial communications. This Regulation was further improved through two amendments in 2008. As a result of this regulation, the number of unsolicited calls decreased but the number of unsolicited SMS increased. The Indian telecom customer demanded more from TRAI. 

After extensive deliberations and consultations with stakeholders, (TRAI) notified “The Telecom Commercial Communications Customer Preference Regulations, 2010, on 1st December 2010. All the provisions of the regulations have come into force on 27th September 2011. The Regulations at one hand empowers the customers to exercise the options to control unsolicited commercial communications (UCC), it also provides the easy way to Telemarketers to Register with TRAI and get telecom resources from Access providers from identified series. 

However, it is unclear as to how the TRAI arrived at the number 100 for the SMS restriction. The TRAI limit is encumbering particularly for those sects of the society whose monthly earning is known by the name ‘Pocket money’. In response to this infringement, the president of Shiv Sena's youth wing, Aaditya Thackeray will be filing a Public Interest Litigation (PIL) at the High Court in two days, protesting the move, as reported by Mid-Day.  “The government wishes to curb the endless and disruptive flow of messages, but instead of addressing the source of the problem, they are imposing limitations on the public. This goes against the basic rights of an individual,” said Thackeray.

Apparently TRAI is obsessed with inviting public wrath, after submitting a no-loss report in a Rs 65,000 Crore worth scam and the present Regulation. It is also to be noted that the Regulations came into effect almost immediately after the Anna Hazare Campaign which had relied heavily on SMS campaigning - something which won’t be possible post the aforesaid amended regulation.

Click here to view the Amendments

Click here to view the Principle Legislation

Exemption of Arbitral Tribunal from Service Tax

The Central Government has exempted the services provided by an arbitral tribunal to a business entity, in respect of arbitration from taxable services.  Notification No. 45/2011 (Click here to view) dated September  12, 2011 states that taxable services referred to under item (iii) of sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994 stands to exempted from service tax from the date of publication of the notification in the Official Gazette.

After the 2011 amendment of Section 65(105)(zzzzm) of Finance Act, taxable services included services provided or to be provided,

1. to any person, by a business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner;
2. to any business entity, by any person, in relation to representational services before any court, tribunal or authority;
3. to any business entity, by an arbitral tribunal, in respect of arbitration.

The said notification has removed item listed under item (3) listed above from the purview of service tax. However, the taxability of services rendered by lawyers in relation to arbitration or any ancillary taxable services rendered by arbitral institutions continues to be in vogue. 

Restriction of Entry of Ships Over 25 Years of Age at Indian Ports and Deployment of Armed Guards in Merchant Ships

The Government has decided to impose certain restrictions on entry of over 25 years old ships into Indian ports or territorial waters.

The Union Minister of Shipping, Shri G.K. Vasan in Lok Sabha on 29^th August 2011,  said that most of the ships involved in accidents like collision of MSC Chitra and M.V. Khalijia are very old. Therefore, the Government has decided to issue a notification under Merchant Shipping Act, 1958 that if the ships are more than 25 years old they will be allowed only if they satisfy the following conditions:

• They should be classed with Classification Societies which are full member of International Association of Classification Societies (IACS).
• Have adequate insurance coverage to liabilities including collision, wreck removal and salvage.
• Appoint an Indian Ship Agent to represent owner/charterer.
• The Indian agent should notify the Port authority and the customs collector at least 48 hours prior to the arrival of the ship about the details of the ship including insurance etc.

There are about 93 Indian flag ships which are above 25 years of age. However, they will not be affected as there are all classed with Indian Register of Shipping which is a full member of the International Association of Classification Societies.

Another significant change in Shipping Laws is the Guidelines issued by the Shipping Ministry has regarding deployment of armed guards in Indian Merchant Ships as a part of the various steps undertaken by the Government to combat the piracy in Gulf of Aden. The Ministry considered the fact that about 35% of the ship transiting in these waters deploy armed security guards and that the pirates generally don’t attack ships with armed guards on board.

As per these guidelines the ship owners are allowed to engage Private Maritime Security Companies (PMSC), who are properly selected and vetted. All Indian ships visiting Indian ports are to furnish details of security personnel on board, the fire–arms carried by them and the details of license issued etc. to the Port authority, Customs, Coast Guard & the Navy. Foreign merchant vessels visiting Indian ports with security guards are also required to follow similar procedure.

The Guidelines have accordingly been issued in consultation with DG (Shipping), MEA, MoD, MHA, D/o Revenue (CBEC), Indian Navy & Coast Guard.