New Delhi | Jun 15, 2016: Mining companies are to be star rated for responsible mining so local communities in mineral-rich states, environmental activists and green investors can gauge the social and environmental impact of their activities, the government said.
Environmental activists, green investors and the local community in mineral rich states will soon be able to know how responsible mining companies are when exploiting natural resources by looking at their star rating.
Mining minister Narendra Singh Tomar will launch a scheme for independent verification of the sustainability credentials of mining companies in the first week of July in Raipur, Chhattisgarh, one such mineral-rich state. Leaders from the state will also attend the event, said an official from the mines ministry, who did not want to be named.
Mining companies will be star rated on the basis of verification by the Indian Bureau of Mines, an agency under the ministry, of measures taken by companies to mitigate the social and environmental impact of mining. A provisional rating will be granted based on self-declaration of the practices followed in specific performance areas, which will be verified through field visits.
The proposed star rating—from one to five—is based on the adoption of global best mining practices, welfare programmes being offered to workers, the way resettlement and rehabilitation requirements are addressed and restoration of the field after mining activities.
“The rating system, in future, may be useful in obtaining faster clearances from various regulatory bodies,” said a notification from the mines ministry issued on 23 May.
Experts said the rating system, if implemented earnestly, can create an environment of trust for investors in the extractive industry, which affects the environment and the local community the most.
“There are global investors who support only businesses which are ecologically conscious and have put in place a system of best practices. Implementation of the rating system will certainly help. Mines attaining the highest rating may, however, take time,” said Kalpana Jain, senior director, Deloitte India.
“Many international investors apply a criteria based on environmental, social and governance (ESG) factors to ensure their investments are responsible and contribute to the well-being of the environment and the society. A rating of mines based on their sustainable development credentials will be helpful to investors. Pension funds, commercial banks and international development finance institutions including the World Bank encourage sustainable development by following these parameters,” said Santhosh Jayaram, partner and head of sustainability practice, KPMG India.
83 leading banks in 36 countries have adopted what is called the “equator principles” to assess environmental and social risks in projects, while 1,500 asset owners and investment advisors from over 50 countries have adopted the United Nations’ Principles for Responsible Investment (UNPRI). Banks following the equator principles represent about 70% of international project finance debt in emerging markets, while the UNPRI members account for $60 trillion of assets, according to their respective websites.
(Source: http://www.livemint.com/)