The Offshore Areas Mineral (Development And Regulation) Act, 2002

The Offshore Areas Mineral (Development And Regulation) Act, 2002 (Act No. 17 of 2003) was being the Act of Parliament received the assent of President of India on 30th January, 2003. The Act was enacted for making provisions as to development and regulation of Mineral Resources in the territorial Waters, Continental Shelf, Exclusive Economic zone and other Maritime zones of India.

The first Chapter of the Act, contains the Section 2 of the Act which makes provision as to declaration as to expediency of Union Control. The provision says that, in the public interest it is declared expedient that the Union should take control of the regulation of mines and development of minerals in offshore. Similarly, Section 3 of the Act under the same chapter, specifies that, the Act should be applied to all minerals in the offshore areas including any mineral prescribed by notification as per provisions of the Atomic Energy Act, 1962. But the mineral oils and hydrocarbons are excluded from the scope of this Act. Moreover, same chapter under Section 4 defines various terminologies including ‘Administering Authority, Atomic minerals, coast guard, exploration licence, hydrocarbon, offshore area, etc. which, are contained under the provisions of the Act.

Chapter II of the deals with provisions as to undertaking any reconnaissance operation, exploration operation or production operation in Offshore areas. Such processes could only be done by any person with due reconnaissance permit, exploration licence or production lease and under its terms and conditions. However, the reconnaissance or exploration operation if undertaken by Geological Survay of India, Atomic Minerals Directorate of Exploration and Research, the Chief Hydrographer to the Government of India of Naval Hydrographic Office of Indian Navy, etc. authorities provided under this provision, then such operations are permitted under this Act.  The person who has been granted licence or permit under this provision is required to provide every relevant data relating to such reconnaissance or mineral exploration operation, etc. to the Director General of Geological Survey of India and to the Controller General also. And information regarding atomic minerals so collected during such reconnaissance or exploration operations, etc., is required to be furnished to the Secretary of Government of India of the concerned department along with aforesaid two authorities. Similarly, such person is also required to provide half yearly report to the aforesaid two authorities, pertaining to work performed by him, which should provide for number of engaged persons and disclosure of whole geological, geophysical, etc. data which he has collected during work period. Further, the final report also required to be furnished by such person, stating all information as to collected mineral resources, within 3 months period on expiration of licence. Such report is also to be tabled before same two aforementioned authorities. Sub section (3) of the provision says that the provisions of this Act should not derogate the powers and authorities of the Central Government regarding seaward artillery practice under the Act of 1949, providing notification for taking special measures for ensuring public safety and interest, etc.

Similarly, Section 6 of the Act is important so far as it is connected to operating right, wherein the Central Government is required to grant an operating right to the person, if he fulfills the required qualification, i.e. if he is Indian national, Indian company under Act of 1956 or other prescribed conditions.

Section 7 of the Act deals with premature termination of such operating right by the Central Government, if on consultation with the concerned Department, it is of view that the termination of such operating right would be in the interest of development and regulation of Offshore mineral resources, preservation of natural environment and prevention of pollution, etc. However, a reasonable opportunity of hearing is to be given to the holder of such operating right before order of such premature termination. Even, failure to commence operation within specified period, or discontinuation of operation for the period of two years, is treated as ground for lapse of operating right.

Further, Section 8 of the Act makes provisions as to reservation of offshore area which is not covered by any operating right. Such areas are to be reserved by the Central Government by specifying boundaries thereof and also minerals. However, the Central Government can also declare that such reserved area is no more reserved in the interest of development and regulation of the Offshore mineral.

The Central Government is also empowered under section 9, as to closing of any area by order in the interest of public and also for the preservation of natural environment, pollution, etc. Such order is also required to be communicated to the persons having licence or permits, etc. thereof. The Central Government can close such area either partially or wholly, and any operating right over such area should be treated as taken away by such order.

Section 10 of the Act makes provisions as to making available the areas for granting such permits, licences, etc. within the period of 6 months from the date on which the Act brought into force, by the administering authority. Section 11 specifies provisions as to grant of permit for reconnaissance, wherein it is given that such permit to be granted as non-exclusive for the period not exceeding 2 years and with the right to renew it for further period of 2 years if administering authority satisfied to that effect. The extent of area and number of persons are also specified under subsequent sub sections of this Section. Similarly, section 12 specified provisions as to grant of exploration licence, wherein it is given that the person should be eligible under section 6 of the Act, to be granted with such licence, and there should be production of evidence to the effect that such persons possesses requisite technical ability and financial resources for undertaking such operations. And such persons further require to submit work programme for such area. Sub section 2 deals with termination of licence on ground of violation of undertaking given under previous provision of this Section. The prescribed period for such grant of licence is given as of 3 years with right to renewal thereof. A similar provision is given under Section 13, dealing with grant of production lease. The lease period is given of 30 years and the renewal can be given for 20 more years. The lessee is required to pay royalty as per terms of Section 16 as fixed by the Central Government. Moreover, a fixed rent is expected to be paid by lessee as on such rate provided under Second Schedule of the Act. Other provisions are dealing with health, safety of persons and property, and also as to issuance of direction by the Central Government or administering authority to such permittees, lessee or licensee.

The third chapter deals with entry, inspection and search, seizure powers in respect of such areas for one or several reasons prescribed under this Act. Moreover, chapter IV of the Act deals with penal provisions wherein section 23 is important so far as it is providing number of offences under this Act and also for punishments in that regard. And Section 24 of the Act specifies the offences by companies and the responsibility of persons thereof. The place of trial is to be directed by the Central Government.

The Chapter V of the Act specifies that the liability of person who is granted with licence or otherwise under this Act for breach of provisions terms and conditions required to be followed under Rules made under this Act, should be civil and such person should be imposed with penalty of 5 lakh or more up to 1 crore rupees. Besides, for breaching any particular conditions other penalty is given. Finally, Chapter VI being last chapter of the Act provides for miscellaneous provisions. Extension of any enactment by the Central Government to the offshore area or part thereof can be made under section 29 of the Act. Similarly, the chapter contains provisions for compounding of offences, recovery of certain given amounts or sums including fees, royalty as the arrears of land revenue. Moreover, the most important provision empowering the Central Government as to making of rules contained under section 35. As such the Act made provisions on all possible situations including above.

 by Faim Khalilkhan Pathan.