Overview of the Khyber Pakhtunkhwa Mining Rules, 2017

The Khyber Pakhtunkhwa (KPK) Mining Rules, 2017, were established under the Khyber Pakhtunkhwa Minerals Sector Governance Act, 2016. These rules provide a comprehensive framework for the governance of mineral resources in Khyber Pakhtunkhwa, ensuring the regulated, efficient, and sustainable exploitation of both large and small-scale mining operations.

Scope and Application

The KPK Mining Rules, 2017, apply to the grant, conversion, assignment, amendment, surrender, partial surrender, cancellation, and renewal of mining leases. These rules cover both large and small-scale mining and came into effect immediately upon their notification.

Key Definitions

1. Act: Refers to the Khyber Pakhtunkhwa Minerals Sector Governance Act, 2016.
2. Assignee: A person, firm, or company to whom a mineral title is assigned.
3. Assignment: The transfer of a mineral title from one holder to another.
4. Directorate: The Directorate General, Mines and Minerals, Khyber Pakhtunkhwa.
5. Facilitation Desk: A counter established for receiving applications, managed by officers nominated by the Director General.

Application Process for Mineral Titles

An application for the grant, assignment, amendment, surrender, partial surrender, or renewal of a mineral title must be submitted on prescribed forms provided in Schedules I to XI. The application must be accompanied by a treasury challan or bank draft as specified in Schedule XII.

Procedure for Granting Licences

1. Publication of Invitations: The Licensing Authority will invite applications for licences through publications on the Department’s website and other media.
2. Submission of Applications: Applications can be submitted online via the Department’s website and must include a hard copy with all requisite documents.
3. Token Number: Each application must include a printed copy of the token number obtained from the Department’s website.
4. Scrutiny of Applications: Applications are scrutinized by regional and district committees notified by the Department.
5. Working Papers: Working papers are prepared after evaluating each application and are submitted to the Mineral Titles Committee for decision.

Conversion of Licences

1. Prospecting to Exploration: Holders of prospecting licences can apply for conversion to exploration licences at any time before expiry.
2. Exploration to Mining Lease: Holders of exploration licences must apply at least 180 days before expiry for conversion to a mining lease or mineral deposit retention licence. A fine is imposed for late applications.
3. Timely Submission: Applications for conversion must be submitted timely to avoid penalties and ensure processing within the designated period.

Assignment of Mineral Titles

1. Application for Assignment: Applications for assignment must be submitted on the prescribed form with a bank challan.
2. Inspection: The area will be inspected to ascertain the development work and investments made.
3. Approval and Execution: Upon approval, an assignment letter is issued, and a fresh agreement is executed based on the original terms.
4. Rejection: Applicants are informed in case of rejection, and the assignor’s obligations are transferred to the assignee upon provision of guarantees.

Surrender of Mineral Titles

Applications for surrender, either wholly or partially, must be made on the form provided in Schedule X. The process ensures that all obligations are met before the title can be surrendered.

Renewal of Mining Leases

1. Application: Lessees must apply for renewal at least six months before expiry using the form in Schedule XI.
2. Penalties for Late Applications: Fines are imposed for late applications, and they must be paid before the expiry date.
3. Inspection and Decision: The granted area is inspected, and working papers are prepared for the Mineral Title Committee’s decision.

Policy Framework

Subject to the provisions of the Act and the rules, the government may devise specific policies pertaining to particular minerals, ensuring that mining activities align with sustainable development goals and community welfare.

Critique of the Khyber Pakhtunkhwa Mining Rules, 2017

The Khyber Pakhtunkhwa (KPK) Mining Rules, 2017, while intended to regulate and streamline mining operations, present several areas of concern that warrant a thorough critique. Below are the critical points addressing the gaps and potential issues within these rules:

1. Ambiguity and Lack of Clarity

• Definitions and Terms: Several definitions and terms used in the rules are either vague or insufficiently detailed. For instance, terms like “development work” and “investment” are not clearly defined, leaving room for varied interpretations which can lead to disputes and inconsistent enforcement.
• Procedural Ambiguities: The procedures for application, inspection, and approval are not clearly laid out, particularly the specific criteria used by the Mineral Titles Committee to evaluate applications. This lack of clarity can lead to arbitrary decision-making and a lack of transparency.

2. Bureaucratic Delays and Red Tape

• Excessive Documentation: The requirement for extensive documentation, including hard copies and multiple forms, creates unnecessary administrative burdens. This can slow down the application process and increase the cost for applicants, potentially discouraging investment.
• Inspection Bottlenecks: The rules require inspection by a team comprising an engineer and surveyor, but do not specify timelines for these inspections or the availability of such teams. This can result in significant delays, particularly if there is a backlog or shortage of qualified inspectors.

3. High Costs and Financial Burdens

• Application and Renewal Fees: The fees associated with applications, renewals, and conversions are relatively high, especially for small-scale miners. This can be a significant financial burden, discouraging smaller entities from participating in the mining sector.
• Fines for Late Applications: The fines imposed for late applications, such as Rs. 10,000 per day for large-scale leases, are punitive. This can be particularly harsh on applicants facing unforeseen delays or those with limited financial resources.

4. Inadequate Support for Small-Scale Miners

• Complex Procedures: The complex application and renewal procedures are challenging for small-scale miners, who may lack the administrative capacity to navigate the process effectively. This can lead to a concentration of mining activities among larger, well-resourced companies, stifling opportunities for smaller operators.
• Lack of Technical Assistance: There is no provision for technical assistance or support for small-scale miners to help them comply with the regulations. Providing such support could enhance compliance and promote sustainable mining practices.

5. Environmental and Social Concerns

• Insufficient Environmental Safeguards: The rules do not provide detailed requirements for environmental impact assessments or mitigation measures. Given the potential environmental impacts of mining activities, this is a significant oversight that could lead to environmental degradation.
• Community Engagement: The rules lack provisions for meaningful engagement with local communities affected by mining activities. Ensuring community consultation and participation is crucial for addressing social impacts and securing social licences to operate.

6. Enforcement and Compliance Issues

• Weak Enforcement Mechanisms: The rules do not specify robust enforcement mechanisms to ensure compliance. Without clear penalties for non-compliance and mechanisms to monitor activities, the effectiveness of the rules is compromised.
• Corruption Risks: The discretionary power granted to the Licensing Authority and the Mineral Titles Committee can lead to corruption and favoritism. Implementing more transparent and accountable processes is essential to mitigate these risks.

7. Policy and Legal Gaps

• Policy Inconsistencies: The rules allow for the government to devise specific policies for certain minerals, which can lead to inconsistencies and confusion. A more unified and coherent policy framework would be beneficial.
• Lack of Integration with National Policies: The KPK Mining Rules should be better integrated with national mineral policies and environmental regulations to ensure coherence and avoid regulatory conflicts.

Conclusion

While the KPK Mining Rules, 2017, aim to regulate the mining sector in Khyber Pakhtunkhwa, they present several critical issues that need to be addressed to ensure they are effective, fair, and sustainable. Addressing these concerns through clearer definitions, streamlined procedures, reduced financial burdens, enhanced environmental safeguards, and stronger enforcement mechanisms will help create a more conducive environment for mining activities while protecting the interests of all stakeholders.

For further legal advice and detailed analysis, Josh and Mak International is equipped to provide expert insights and recommendations to navigate the complexities of the KPK Mining Rules, 2017.