This article is more than 6 years old

This article is more than 6 years old

A major investigation into India's illegal mining practices that led to the arrests of public officials for corruption was wound up last week without explanation, sparking concern about the extent of government complicity in illegal activities.

The investigation was set up by the government in November 2010 in response to public pressure to address India's escalating illegal mining practices.

Vijay Pratap, convener of the thinktank South Asian Dialogues on Ecological Democracy, is convinced it was closed due to the extent of corruption uncovered in the country's mining sector.

Pratap said: "The commission was exposing too much corruption at government level and risked undermining tightly woven corporate collusion with the political class, which has sadly become endemic in the mining industry. This is why the government aborted the investigation."

The commission was headed by Justice M B Shah, with a mandate to investigate financial transactions between exporters, traders and mining lease owners, as well as illegal practices, such as mining without a licence, mining outside lease areas, transporting minerals illegally and mining-related ecological destruction.

The government's ministry of mines terminated the commission on 16 October without offering an explanation.

"The government has not stated any reason for instructing us to end our investigations," said U V Singh, the commission's primary investigator.

The commission should have conducted investigations in seven resource-rich states where illegal mining has become widespread. But inquiries in Chhattisgarh, Maharashtra and Madhya Pradesh, where mining abuses have been reported, were not completed.

"A full inquiry was not possible," said Singh.

The commission has submitted two reports, one on illegal manganese and iron ore mining across the country and the other on illegal mining in Goa, the largest exporter of iron ore in the country. Following the report, the supreme court slapped a temporary ban on all mining activity in the state. The commission submitted its final report earlier this month, which was expected to reveal the extent of losses from financial irregularities across India's mining sector between 2006 and 2011, but is now expected to just focus on Goa.

The commission's reports on mining in Goa accused both the state and the ministry of environment and forests (MoEF) of allowing illegal mining in the state and putting the region's environment and ecology at risk. It reported that all 90 mines were functioning without the mandatory permission from the National Board for Wildlife, and 33 of them were located within 1.5km of wildlife sanctuaries.

Investigations into illegal mining have exposed high levels of corruption in the industry. Two former Congress chief ministers of Goa, Digambar Kamat and Pratapsingh Rane, have been indicted for involvement in illegal mining and failure to safeguard the environment from mining-related devastation.

The state's former director of mines and geology, Arvind Lolienkar, was also charged. Goa's state financial losses have been estimated at Rs 35,000 crore (US$5bn) as a result of large-scale mining scams.

M E Shivalinga Murthy, former director of Karnataka's mines and geology department, has been charged with issuing fake permits to Associated Mining Company (AMC), owned by jailed former minister Gali Janardhan Reddy.

After further investigation, the mines and geology department discovered six of its top officials were complicit in AMC's illegal iron ore mining. Karnataka incurred a revenue loss of Rs 2,976.26 crore between 2005 and 2011 due to illegal extraction and transportation of minerals.

In response to the commission's findings, the supreme court banned mining in Karnataka between July 2011 and April 2013, while in Odisha, the state government placed a temporary ban on iron ore exports in October 2012 until investigations had concluded. According to the Federation of Indian Mineral Industries (FIMI), iron ore exports dropped 70% during the ban on iron ore mining in Karnataka and Goa.

India lost an estimated $10bn in iron ore exports in the last financial year and is expected to become a net importer of the commodity.

The government's decision to end the investigation displays a failure to protect vulnerable tribal communities, said Madhu Sarin, honorary fellow of Rights and Resources Initiative.

"The commission's termination will have a direct impact on the rights of all those illegally displaced already and under threat of displacement in the future due to non-recognition of their forest rights and being denied the right to decide whether mining in their ecologically fragile homelands should be permitted or not," she said.