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Verdict: The Supreme Court in a landmark judgment overturned the verdicts of the lower courts and cleared SD Eastern Bhutan Coal Company Ltd (SDEBCCL) of any wrongdoing in the excess excavation case worth more than Nu 1.14 billion in restitution money.

SD Eastern coal company cleared of illegal mining

Verdict: The Supreme Court in a landmark judgment overturned the verdicts of the lower courts and cleared SD Eastern Bhutan Coal Company Ltd (SDEBCCL) of any wrongdoing in the excess excavation case worth more than Nu 1.14 billion in restitution money.

The Supreme Court verdict stated that the Office of the Attorney General and the prosecuting agencies could not provide convincing evidence to prove that SDEBCCL had illegally carried out excess excavation.

OAG had filed a case against the SDEBCCL after the Anti-Corruption Commission (ACC) concluded its investigations.

The OAG charged the company of violating the Mines and Minerals Act 1995, specifically clause 1 of section 45 and 46, and the Environment Protection Act 2000’s section 49.1 and 50 for excess excavation.

OAG asked the court to make the company restitute Nu 1.14 billion as compensation to the government. The Samdrupjongkhar court and the High Court issued verdicts asking the company to restitute about Nu 16.72 million for excess excavation.

While the SDEBCCL was allocated 5.69 hectares, the ACC found and charged that the company had excavated 27.5 hectares without seeking prior permission.

The company submitted that its mines had environmental clearance from the Department of Geology and Mines (DGM) and that fragmentation was done since coal deposits was found only in pockets, which is a longstanding practice in coal mining.

The defendant argued that the OAG and ACC could not prosecute the case because there was no proven corrupt practices or allegations carried out by the company in collusion with the competent authorities.

Further, he argued that despite the mines being under regular monitoring of the competent authorities, the company was never issued a notice of violating the environmental or mining terms by way of excess excavation.

The Supreme Court in its verdict stated that the competent authorities such as ACC have the Constitutional mandate to initiate court proceedings through the OAG in the interest of preventing corruption.

The company’s attorney submitted that when the three pocket mines in Reshore, Dewathang indicated likelihood of merging, DGM directed the company on March 10, 2008 to re-demarcate and resurvey the additional areas and to prepare a final mine feasibility report and environmental management plan to apply for environmental clearance from National Environment Commission (NEC).

Subsequently, it submitted the documents to DGM, which in turn submitted it to the NEC secretariat for the issuance of the environmental clearance.

However, on November 27, 2008 NEC wrote to DGM of its inability to act on the FMFS report as the secretariat had an acute staff shortage. NEC directed DGM to allow the SDEBCCL to continue its mining operations based on the previous practice and environmental terms until it takes further actions. DGM conveyed the directives to the   mining company for compliance.

The Supreme Court verdict stated that since the NEC could not act on the FMFS because of shortage of staff, the company cannot be held accountable.

ACC had earlier written to the two agencies: “The commission is convinced that concerned institutions like DGM and NEC had refrained from exercising their regulatory powers and functions, despite having seen the mining carried out without the approved mine plan and valid environmental clearances.”

The Supreme Court verdict also rejected that SDEBCCL’s claim of Nu 56.96 million as loss in revenue when the ACC shut its mine operations in April 2009. The company challenged the suspension in High Court following which the suspension was lifted in July 1, 2009.

Tshering Palden

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