The Khyber Pakhtunkhwa Minerals and Minor Minerals (Temporary Permit) Rules, 2020 (the “Rules”), were notified by the Government of Khyber Pakhtunkhwa to regulate the temporary usage of minerals and minor minerals in public sector projects. These Rules, formulated under the Khyber Pakhtunkhwa Minerals Sector Governance Act, 2017, provide a framework for issuing temporary permits to contractors involved in government projects, ensuring proper management and usage of mineral resources.

Key Provisions of the Rules

  1. Short Title and Commencement
    The Rules are titled the “Khyber Pakhtunkhwa Minerals and Minor Minerals (Temporary Permit) Rules, 2020” and came into force immediately upon notification on 28th October 2020​​.
  2. Definitions
    The Rules define key terms such as “Act,” “contractor,” “form,” “person,” “project,” “schedule,” and “temporary permit.” These definitions are crucial for clarity and proper implementation of the Rules​​.
  3. Application Process
    Contractors seeking temporary permits must submit an application to the Licensing Authority using the prescribed form. The application must be accompanied by several documents, including:

    • Receipt of application fee
    • Sketch of the area
    • CNIC of the individual, directors of the company, or partners of the firm
    • Income tax registration certificate
    • Registered partnership deed or articles and memorandum of association
    • Copy of the contract awarded by the executing agency
    • Quantity of minerals required for the project, verified by the respective department
    • Certificate of financial soundness from a scheduled bank​​.
  4. Inspection and Verification
    The application is referred to a technical committee for inspection and assessment of the area and mineral requirements. The committee’s report and recommendations are then scrutinized by the Licensing Authority before granting the temporary permit​​.
  5. Issuance and Compliance
    Upon approval, contractors receive an offer letter and must comply with its terms, including depositing the first installment as a down payment. Failure to comply results in withdrawal of the offer. Once conditions are met, an allotment letter and transit challan book for mineral transportation are issued. Contractors are required to submit monthly production reports and pay permit fees based on production​​.
  6. Permit Duration and Termination
    The temporary permit is granted for a specific period, aligned with the project duration but not exceeding the project life. The Licensing Authority may terminate the permit with a fifteen-day notice if the contractor fails to pay dues, uses the area for unauthorized purposes, or disobeys instructions​​.
  7. Determination of Rates
    The rates for minerals and minor minerals are specified in Schedule II of the Rules. Contractors are required to pay all government dues, including withholding tax, royalty, and excise duty​​.

Critical Analysis

While the Khyber Pakhtunkhwa Minerals and Minor Minerals (Temporary Permit) Rules, 2020, provide a structured approach to managing temporary mineral permits, several areas require further improvement:

  1. Complex Application Process
    The application process involves extensive documentation and multiple steps, which can be burdensome for contractors. Simplifying the process and reducing the bureaucratic load could improve efficiency and compliance.
  2. Inspection and Verification Delays
    The involvement of a technical committee for inspection and verification can lead to delays. Ensuring adequate resources and streamlined procedures for the committee’s work is essential for timely permit issuance.
  3. Enforcement and Compliance Challenges
    The effectiveness of the Rules depends on strict enforcement and regular audits. Adequate training and resources must be provided to inspectors and Licensing Authority officials to ensure consistent compliance. Clear and enforceable penalties for non-compliance should be established.
  4. Environmental Considerations
    The Rules primarily focus on the administrative and financial aspects of temporary permits, with limited attention to environmental impact assessments and safeguards. Integrating robust environmental protection measures would enhance the sustainability of mineral resource usage.
  5. Limited Stakeholder Involvement
    The Rules do not adequately address the involvement of local communities and other stakeholders in the permit process. Engaging these groups can lead to more transparent and socially responsible mining practices.
  6. Technology and Data Management
    The Rules require regular data updates and compliance reports but do not provide detailed guidelines on the use of technology for data management. Incorporating advanced IT solutions for real-time monitoring and reporting could improve oversight and accountability.

Conclusion

The Khyber Pakhtunkhwa Minerals and Minor Minerals (Temporary Permit) Rules, 2020, are a significant step towards regulating the temporary usage of mineral resources in public sector projects. However, addressing the identified gaps and enhancing the framework through simplified procedures, strict enforcement, environmental safeguards, stakeholder involvement, and technological integration will be crucial for their successful implementation. For further assistance or legal consultation regarding compliance with these Rules, please contact Josh and Mak International.

By The Josh and Mak Team

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