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Business News/ Politics / Policy/  India is at a tipping point in terms of investments: Melanie Stutsel

India is at a tipping point in terms of investments: Melanie Stutsel

Minerals Council of Australia director suggests that a stable regulatory framework is important for India to attract foreign investors

Stutsel says the Indian mines ministry is open to adopting the best practices. Photo: Indranil Bhoumik/MintPremium
Stutsel says the Indian mines ministry is open to adopting the best practices. Photo: Indranil Bhoumik/Mint

New Delhi: Melanie Stutsel, a director with the Minerals Council of Australia, is an expert on sustainable mining. She met Indian mines ministry officials and suggested that a stable regulatory framework with clear expectations on business with a broad development approach was important to attract foreign investors, including those from Australia. Edited excerpts from an interview:

You had a meeting with mines ministry officials. What were the issues that you discussed with them?

Most of the discussions were around the planning framework and how you incorporate social and environmental considerations into the planning process. But also a lot of interest around closure outcomes, significant discussion on coal technology, including coal washing, improvement of coal, reduction of fly ash.

The ministry is open to adopting best practices. They certainly have the commitment for a strongly regulated sector. And there are stark examples of where the Indian government is working with the Australian government in technological transfer. And now there is a bigger opportunity for that. We certainly hope that we will be able to continue some of the programmes that we are running with the Indian government.

Which are some of the major concerns that the ministry has?

They are most interested in how you can get the planning right, and if you get the planning right, then how can you have regulatory approvals that are effective and efficient and provide public confidence and can be done in an expeditious way to support business growth and development. So that’s really balancing environment and social outcomes on the one hand and economic and business on the other.

What are some of the issues on which you plan to engage with the Indian government?

Some programmes that the Australian government runs on international mining and development and it’s on how mining can be a canvas for social and economic development, strictly with a focus on the Indo-Pacific region. Given that the trade relationship between Australia and India is significant and both are highly resource-reliant countries, we think that there is an opportunity to have more technological transfer in that area, to ensure that there is regulatory capacity on both sides to work collaboratively.

Are Indian mining companies open to these ideas?

I think they are ready for it. It’s about how you frame the argument. But it’s not fair to expect Indian companies to get to a comparable level, as it has taken Australian companies 20 years to get there. There’s a real opportunity to expedite that process.

From the point of view of Australian and international investors in the mining industry in India, what are some of the additions that you would like to see in the new mining Bill?

Provided that it’s a stable regulatory framework with clear expectations on business with a broad development approach, we will be very attracted. India is in a bit of a tipping point in terms of investments. What can it do to incentivize investments in the country and at the same time ensure that there is no fall in standards? There are some benefits in opening up the Indian mining industry to bigger global players. They have greater consistencies in environment and social standards on an international scale. That could be a good co-contributor to the Indian economy and also drive innovation and performance domestically.

There’s a huge environment versus development debate in India when it comes to mining. What are your views?

First of all, we need to recognize that the world needs minerals, and if it cannot be grown, it has to be mined. So then the question is how do you mine in a way that is most consistent with the environmental and social values of the community in which the mining is taking place. For this, we require a good regulatory and good enforcement mechanism and good engagement and communication with the communities in making sure the standards are appropriate for the biggest risks associated with mining. Secondly, there is a clear role for industry to bridge that gap between community expectations and regulations. So, we support a co-regulatory framework, one which says that regulation is the minimum floor in performance, but then the industry needs to work proactively with the community.

What are some of the lessons from Australia in the mining sector?

We have been very lucky that we have not had an illegal mining industry in Australia. We had unregulated mining for a long time, particularly during the Gold Rush era, but we have had very strong mining regulations since that period. So I think the lesson is that regulation is absolutely critical for setting a minimum floor and the government needs to take a stronger stand around unregulated mining. How you do that is a complex issue because obviously there are social consequences associated with moving people out of their only livelihood. So we have been advocating that the government work with those sectors to bring them into the mainstream regulation.

How does Australia deal with traditional communities near mining zones?

In Australia, mineral ownership is with the crown or the state and not actually with the traditional owners of the land. The important thing is the conversation we have. So if you work with the principle that those who are most impacted by our operations should be those that most benefit, it leads to a different kind of conversation with traditional owners. So what we see now are agreements being signed even where there are no legal rights because they have been potentially resettled due to historical policies of our government. In most agreements, everything from compensation money to education, employment and training, and maternal and child health programmes (is covered). They are about how can we create a sustainable and viable community even in an area like remote Australia where mining is one of the few economic activities.

How do you deal with end-of-life mines?

We don’t have the same population as India and we are not resettling people off land. In fact, if you have an open-cut mine, leaving a hole in the ground is an acceptable practice. We don’t require all of our mines to be back-filled. What we do require is that if we do leave a void, that it is safe and stable and communities are protected from any physical harm or environmental impact like seepage (of minerals) into the water, or wildlife is not affected. We also require at the mine development phase that the lodge of a mine closure plan and companies outline what are the closure outcomes.

How can India improve its monitoring of mining activity?

Enforcement and compliance monitoring is a very resource-extensive exercise.

India has the opportunity to use satellite monitoring to actually get a better handle of the level of deforestation versus the load on the current mine. Similarly, we have been having a conversation about the reporting processes that are used in Australia and initiatives such as the global reporting initiative, which is an emerging global standard on public disclosure.

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Updated: 21 Jul 2014, 11:30 PM IST
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