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OFFSHORE AREAS MINERAL (DEVELOPMENT AND REGULATION) ACT, 2002
January 30, 2003
An Act to provide for development and regulation of mineral resources in the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India and to provide for matters connected therewith or incidental thereto Be it enacted by Parliament in the Fifty third Year of the Republic of India as follows:—
CHAPTER-I PRELIMINARY
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called the Offshore Areas Mineral (Development and Regulation) Act, 2002.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
SECTION 02: DECLARATION AS TO EXPEDIENCY OF UNION CONTROL
It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals in offshore areas to the extent hereinafter provided.
SECTION 03: APPLICATION
(1) This Act shall apply to all minerals in the offshore areas including any mineral prescribed by notification under clause (g) of sub-section (1) of Section 2 of the Atomic Energy Act, 1962 (33 of 1962) except mineral oils and hydrocarbons related thereto.
(2) Except as otherwise provided in this Act, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force in the offshore areas.
SECTION 04: DEFINITIONS
—In this Act, unless the context otherwise requires,—
(a) "administering authority" means an authority notified, in the Official Gazette, by the Central Government for the purposes of this Act;
(b) "atomic minerals" means the minerals included in atomic minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957);
(c) "Coast Guard" means the Coast Guard constituted under the Coast Guard Act. 1978 (30 of 1978);
(d) "exploration licence" means a licence granted under Section 12;
(e) "exploration operation" means any operation undertaken for the purpose of exploring, locating or proving the mineral deposits;
(f) "holder", in relation to any operating right, means the lessee, licensee or permittee, as the case may be, in respect of such operating right;
(g) "hydrocarbon" means very large group of chemical compounds composed of carbon and hydrogen;
(h) "Indian national" means a citizen of India and includes a firm or other association, if all the members of the firm or, as the case may be, the members of the association, is citizens of India;
(i) "lessee" means the person in whose name the production lease is granted;
(j) "licensee" means the person in whose name the exploration licence is granted;
(k) "mine" means any place in the offshore area wherein any exploration or production operation is carried on, together with any vessel, erection, appliance, artificial island or platform and premises in the offshore area used for the purposes of exploration, winning, treating or preparing minerals, obtaining or extracting any mineral or metal by any mode or method, and includes any area covered by an exploration licence or production lease where exploration or production operation has been, or is being, or may be, carried on under the provisions of this Act;
(l) "mineral" includes all minerals except mineral oil and hydrocarbon resources relating thereto;
(m) "mineral oil" includes natural gas and petroleum;
(n) "offshore area" means the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India under the Territorial Waters, Continental Shelf, Exclusive
Economic Zone and Other Maritime Zones Act. 1976 (80 of 1976);
(o) "operating right" means the right of holder of a reconnaissance permit, or an exploration licence, or a production lease;
(p) "permittee" means the person in whose name the reconnaissance permit is granted;
(q) "pollution of offshore environment" means the introduction by any person, directly or indirectly, of substances or energy into the offshore environment which results, or is likely to result, in deleterious effect on living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the offshore areas and impairment of quality of sea water for use and reduction of amenities;
(r) "prescribed" means prescribed by rules made under this Act;
(s) "production operation" means any operation undertaken for the purpose of winning any mineral from the offshore area and includes any operation directly or indirectly necessary there for or incidental thereto;
(t) "production lease" means a lease granted under Section 13 which confers an exclusive right for the purpose of undertaking production operation;
(u) "reconnaissance operation" means any preliminary geo-scientific survey undertaken for the purpose of searching or locating mineral deposits;
(v) "reconnaissance permit" means a permit granted under Section 11 for the purpose of
undertaking reconnaissance operation;
(w) "vessel" includes any ship, boat, sailing vessel or any other vessel of any description.
CHAPTER II-GENERAL PROVISIONS FOR ACQUISITION OF OPERATING RIGHTS IN THE OFFSHORE AREAS.
SECTION 05: RECONNAISSANCE, EXPLORATION OR PRODUCTION TO BE UNDER PERMIT, LICENCE OR LEASE
(1) No person shall undertake any reconnaissance operation, exploration operation or production operation in the offshore areas, except under and in accordance with the prescribed terms and conditions of a reconnaissance permit, exploration licence or production lease granted under this Act and the rules made there under : Provided that nothing in this sub-section shall apply to any reconnaissance operation or exploration operation undertaken by the Geological Survey of India, Atomic Minerals Directorate of Exploration and Research, the Chief Hydrographer to the Government of India of Naval Hydrographic Office of the Indian Navy, the National Institute of Oceanography, the National Institute of Ocean Technology of Department of Ocean Development of the Government of India, or any other agency duly authorised in this behalf by the Central Government.
(2) A permittee or licensee or lessee shall furnish—
(a) all data, as the case may be, relating to reconnaissance operation or mineral exploration or mining such as bathymetry, geomorphology, mineral distribution, anomaly maps, sections, core logs, location maps, plans, structures, contour maps, chemical analysis, data on current tides, waves, wind, other geophysical and geotechnical data and any other data collected during exploration operation or mining operation, to the
Director-General, Geological Survey of India. Kolkata and the Controller General, Indian Bureau of Mines, Nagpur;
(b) all information pertaining to atomic minerals collected, as the case may be. during reconnaissance operation or exploration operation or mining operation, to the Secretary to the Government of India dealing with the Atomic Energy. Director-General, Geological Survey of India, Kolkata and the Controller General, Indian Bureau of Mines, Nagpur;
(c) a six monthly report on the work done by him stating the number of persons engaged and disclosing in full the geological, geophysical, geochemical. geoenvironmental or other valuable data collected by him during the period under report, to the Director-General, Geological Survey of India, Kolkata and the Controller General,
Indian Bureau of Mines, Nagpur and the report shall be submitted within three months of the closing of the period to which it relates : Provided that in the case of investigations pertaining to the atomic minerals, such report shall also be submitted to the Secretary to the Government of India dealing with the Atomic Energy;
(d) a full report of the work done by him and all information relevant to mineral resources collected by him during the course of exploration operation of the areu covered by the licence within three months of the expiry of the licence, or abandonment of operation or termination of the licence, whichever is earlier, to the Director-
General, Geological Survey of India, Kolkata and the Controller General, Indian Bureau of Mines, Nagpur and shall also give therein reasons and indicate whether the whole or any part of the report or data submitted by him should be kept confidential.
(3) Notwithstanding anything contained in this Act, the Central Government may—
(a) authorise seaward artillery practice under the Seaward Artillery Practice Act. 1949 (8 of 1949);
(b) provide for, by notification in the Official Gazette, special measures to ensure public safety and interest, the defence of India and civil defence, conduct of the naval operations and exercises, national security and other strategic - considerations and the matters connected therewith during war like conditions or otherwise.
(4) No operating right shall be granted or renewed otherwise than in accordance with the provisions of this Act and the rules made there under and any reconnaissances permit exploration licence or production lease granted, renewed or acquired in contravention of the provisions of this Act or any rules made there under, shall be void.
SECTION 06: GRANT OF OPERATING RIGHT
The Central Government shall not grant an operating right to any person unless such person—
(a) is an Indian national, or a company as defined in Section 3 of the Companies Act, 1956 (1 of 1956); and
(b) satisfies such conditions as may be prescribed : Provided that no production lease for atomic minerals or prescribed substances may be granted without consultation with the Department of the Government of India dealing with the Atomic Energy.
SECTION 07: TERMINATION OF OPERATING RIGHT
(1) Where the Central Government, after consultation with the administering authority, is of the opinion that it is expedient in the interest of development and regulation of offshore mineral resources, preservation of natural environment and prevention of pollution, avoidance of danger to public health or communication, ensuring safety of any offshore structure or conservation of mineral resources, the Central Government may prematurely terminate any operating right in respect of any mineral in any offshore area or part thereof.
(2) No order for premature termination of operating right under sub-section (1) shall be made except after giving the holder of operating right a reasonable opportunity of being heard.
(3) Where the holder of any operating right fails to commence operation within the period specified in Section 14 or discontinues the operation for a period of two years, the operating right shall lapse from the date of execution of the lease or, as the case may be discontinuance of the operation :
Provided that the administering authority, on an application made by the holder of operating right and after being satisfied that such non-commencement of operation or discontinuation thereof, is due to the reasons beyond the control of the holder of operating right, may condone such non-commencement or discontinuation.
SECTION 08: RESERVATION OF AREAS
(1) The Central Government may, from time to time, by notification in the Official Gazette, reserve any offshore area not already held under any operating right, for the purposes of the Central Government and, where it proposes to do so, it shall, by notification in the Official Gazette, specify boundaries of such area and the mineral or minerals in respect of which such area shall be reserved.
(2) The Central Government may, from time to time, by notification in the Official Gazette, dereserve, any area reserved under sub-section (1), in the interest of development and regulation of the offshore mineral.
SECTION 09: POWER TO CLOSE AREAS
(1) The Central Government may, in the public interest, by order in writing and communicated to the permittee, licensee or lessee, as the case may be. close any area either in part or whole, covered under any operating right, for the preservation of natural environment and prevention of pollution, or to avoid danger to public health, or communication, or to ensure safety of any offshore structure or platform, or for the conservation of offshore mineral, or for national security or for any other strategic consideration.
(2) Any area, either in part or whole closed under sub-section (1) and included in any operating right, shall, from the date of such order, be deemed to be excluded for the purposes of the operating right and the holder of the operating right shall not undertake any operation in the area covered under such order from the date specified therein.
SECTION 10: AVAILABILITY OF AREAS FOR GRANT OF PERMIT, LICENCE OR LEASE
(1) Within six months from the date of commencement of this Act, and subsequently at such times as may be considered necessary in this behalf by the administering authority, it shall, by notification in the Official Gazette, declare the parts of the offshore areas which shall be available for grant of reconnaissance permit, exploration licence or production lease.
(2) Any application for the grant of reconnaissance permit, exploration licence or production lease in respect of any area not covered by a notification issued under sub- section (1) shall be deemed to be premature and no application shall be entertained there for.
(3) Operating rights shall be granted in standard block of five minutes longitude by five minutes latitude and such grant may cover more than one standard block which shall be contiguous.
SECTION 11: GRANT OF RECONNAISSANCE PERMIT
(1) The administering authority may grant a non-exclusive reconnaissance permit to any person eligible under Section 6 for grant of operating right.
(2) The period for which a reconnaissance permit may be granted under sub-section (1) shall be for a period specified in such permit which shall not exceed two years.
(3) A reconnaissance permit granted under sub-section (1) may be renewed for a period not exceeding two years if, after a review of the progress made during the period of such grant, the administering authority is satisfied that a further period is necessary to complete the reconnaissance operation.
(4) The area that may be granted less than one reconnaissance permit shall not exceed a block of two degree latitude by two degree longitude.
(5) The administering authority may grant reconnaissance permits to more than one person in respect of the same area for the same mineral deposits in the interest of offshore mineral development.
SECTION 12: GRANT OF EXPLORATION LICENCE
(1) The administering authority may grant an exploration licence to any person who—
(a) is eligible under Section 6 for grant of operating right;
(b) produces, to the satisfaction of the administering authority, evidence that such person possesses the requisite technical ability and financial resources to undertake exploration operation based on such scientific parameters, as may be prescribed;
(c) submits a work programme for the area applied for, prepared in such manner and supported by such data as may be prescribed, setting forth the activities proposed to be carried out during the period of the exploration licence including the intended exploration schedule and methods to be used, an estimated schedule of expenditure, measures to prevent pollution and protect the environment and to monitor the effectiveness of environmental safeguards subject to the modifications which the administering authority may make in such work programme;
(d) undertakes not to deviate from the work programme for exploration licence approved by the administering authority; and
(e) has fulfilled, to the satisfaction of administering authority, all his statutory obligations under any operating right previously—
(i) granted; or
(ii) transferred in the prescribed manner, to him.
(2) The administering authority may, if there is any reasonable cause to believe that any person, to whom an exploration licence has been granted, has violated any undertaking given under clause (d) of sub-section (1), terminate the exploration licence.
(3) All applications for the grant of exploration licence received within the prescribed time and which satisfy the conditions specified in sub-section (1) shall be considered together and while making a selection for the grant of exploration licence, the administering authority shall follow the procedure given below, namely:—
(a) where only one application is received in respect of an area, the administering authority may grant the exploration licence to the applicant;
(b) where two or more applications are received in respect of the same area or substantially the same area, the order of preference shall be as follows. namely:—
(I) preference shall be given to an applicant who requires the mineral for use in an industry either already owned by the applicant or who has taken sufficient steps to set-up such industry : Provided that where there are more than one application of such category, the administering authority may grant licence based on a comparative evaluation of the—
(i) nature, quality and experience of the technical personnel employed by the applicant;
(ii) financial resources of the applicant;
(iii) nature and quantum of the exploration work proposed by the applicant; and
(iv) nature, quality and quantum of data submitted along with the programme of exploration;
(II) in case of other applicants, not covered under sub -clause (I), the administering authority may grant licence based on a comparative evaluation of matters stated in items (i) to (iv) of the proviso to sub- clause (I).
(4) The period for which an exploration licence may be granted shall not exceed three years.
(5) An exploration licence granted under sub-section (1) may be renewed for a period not exceeding two years if, after a review, the administering authority
is satisfied that the licensee has been conducting the exploration operation in accordance with the work programme approved by the administering authority regarding such licence and longer period of renewal of the licence is considered necessary to enable the licensee to complete exploration.
(6) The area that may be granted under exploration licence shall not exceed a block of thirty minutes latitude by thirty minutes longitude: Provided that if the administering authority is of the opinion that in the interest of the development of any mineral, it is neces
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