CSE lauds new amendments in Chhattisgarh District Mineral Foundation (DMF) Trust Rules that uphold the rights of mining-affected people

• Chhattisgarh amends District Mineral Foundation (DMF) Trust Rules, 2015,to make them more people-centric
• Becomes the first state wheregeneral Gram Sabhamembers from mining-affected areas will be part of the DMF Governing Council – an important step to empower mining-affected people
• Emphasizes on identification of mining-affected people(DMF beneficiaries) and delineation ofmining-affected areas by experts
• Asks districts to develop five-year visiondocument for DMF Trusts through need-based approach, which will guide yearly investments
• Mandates spending of at least 50 per cent of the total DMF funds on directly-affected areas to ensure that the worst hit areas and people are prioritised
• Advocates spending on sustainable livelihoods – becomes the only state to recognise forest-based livelihoods as a high priority issue for DMF investment
• For better public accountability and independent assessment of DMFs, elaborates on the social audit process 

July 8, 2019, New Delhi: Centre for Science and Environment (CSE) has welcomed the amendments made by the government of Chhattisgarh in the State District Mineral Foundation (DMF) Trust Rules (2015).  The amendments mandate inclusion of general Gram Sabha members from mining-affected areas in the DMF Governing Council, besides other significant changes introduced to make DMF more people-centric. A press note issued by the state overnment on July 4states that the amendments have been approved in a Cabinet meeting chaired by chief minister Bhupesh Baghel.  

The amendments call for inclusion of 10 Gram Sabha members from directly mining-affected areas in the DMF Governing Council. For Scheduled Areas, at least 50 per cent of the Gram Sabha members must be from Scheduled Tribes (ST) category. It also states that women’s participation will be ensured. Earlier, only two Sarpanch’s from directly-affected areas wereincluded in the Governing Council. 

“This is an extremely significant step in empowering the common mining-affected people,” said Chandra Bhushan, deputy director general, CSE. “DMF recognises the rights of people to benefit from natural resource extraction. However, rights can only be fully exercised if one also has a representation and voice in decision-making,”Bhushan added. 

DMF has been instituted as a non-profit Trust under the Mines and Minerals (Development and Regulation) Amendment Act, 2015. It comes with the precise objective to ‘work for the interest and benefit of persons and areas affected by mining-related operations’. Recognising that people’s participation is crucial for DMFs to perform effectively and remain relevant, the law specifies that DMF Rules of various state governmentsshould be guided by three people-centric laws -- Article 244 read with Fifth and Sixth Schedules of the Constitution of India, the Panchayats (Extension to Scheduled Areas) Act (PESA), 1996, and the Forest Rights Act (FRA), 2006. 

The Chhattisgarh Rules have been modified to improve the scope of DMF investments and to strengthen the institution’s accountability. This is significant, considering that Chhattisgarh is one of the top states in terms of DMF accrual with a total collection of more thanRs 4,000 crore currently. This creates a huge scope for mining districts in the state to improve the lives and livelihoods of those affected by mining. 

As a key step to make DMFs efficient in their operations and fund use, the amendments have asked districts to identify the mining-affected people and delineate the mining-affected areas with precision. Districts receiving more than Rs 25 crore annually in their DMF Trusts should engage expert agencies for this purpose. 

Provisions have also been introduced to improve DMF planning and achieve outcomes in a targeted and time-bound manner. For instance, districts have to develop five-year visiondocuments for DMF Trusts through a need-based approach to capture people’s needs and aspirations. This will also guide yearly DMF investments. Furthermore, it has been emphasized that at least 50 per cent of the DMF funds must be spent on directly-affected areas. This is in addition to the requirement that at least 60 per cent of DMF funds must be used on certain high-priority issues such as drinking water, livelihood, healthcare, women and child development, education etc. 

“These are much needed steps to prevent ad hoc spending of DMF funds,” said Srestha Banerjee, programme manager heading the DMF programme in CSE. “Our analysis of DMF investments of various mining districts have shown that in the absence of a proper planning process and a clear emphasis on the fact that funds must be used for the worst-affected areas and people, DMF was increasingly being treated as any other general development fund. For instance, money was being spent on city parking lots, airport strips, convention halls etc. The chief minister has also taken note of this and stopped such constructions,” she added. 

The revised Rules have also put emphasis on local resource-based sustainable livelihoods to strengthen the economy and improve the standard of living. In a first of its kind move, enhancement of forest-based livelihoods through DMF funds has been made a high priority issue. Funds will be used for livelihood opportunities for people whose forest rights have been recognized. The amendments also emphasize on investments in sustainable agriculture and developing resources to facilitate market linkages. 

The revisions specifically state that DMF funds must be used to build soft resources such as having staff in health centers and educational institutions, providing coaching and tuition fee for students from mining-affected areas etc.As a means to ensure better public accountability of DMFs and ensure effectiveness of the works, mechanisms such as social audit has been emphasized on. 

“The government has made crucial changes in the DMF Rules to maintain the inclusive nature of the institution and improve its performance. The Chhattisgarh Rules must also guide other states to consider similar measures so that mining-affected people get a voice in DMF decision-making in all districts, and their best interests are served as the MMDR Amendment Act envisages,” said Bhushan. 

A Hindi translation of this Press Release is available on our website – www.cseindia.org. 

For more details, please contact Sukanya Nair of the CSE Media Resource Centre,

sukanya.nair@cseindia.org / 8816818864.