<p>Nobody is ready to take the blame. <br /><br />There are seven checkposts between Bellary and Belekeri, manned by mines and geology (DMG) and forest department staff. DMG staff check mining lease and way permit at five points - Hospet, Koppal, Hubli, Yellapur and Ankola. Checking of the consignment, tonnage and forest permit is done by forest staff. No truck can miss these checkpoints as there are is no alternative route. But the Karnataka Forest Rules, 1969 put the onus of reporting to these checkpoints on the transporters passing through them.<br /><br />Forest officials say they cannot verify the authenticity of documents at checkposts. "It is difficult to differentiate between fake and valid permits. It is as difficult as identifying a fake currency note. Moreover, the checkposts are not provided with electronic weigh bridges to weigh the goods," noted a forest officer. Shouldn’t checkposts, by virtue of their name at least, be equipped to identify fake from real.<br /><br />Porters only?<br /><br />The port department plays a major role in the export of iron ore. It has leased out its area to registered shipping agencies and exporters to maintain stockyards. In return, the department gets a pittance as royalty - Rs 40 per tonne of ore exported.<br /><br />Port authorities, however, argue that they are not responsible for checking illegal permits. Group D (ministerial) staff man the entry points. Many of the staff do not understand English. There is no designated ‘custodian’ for the stockpiles. Hence, they cannot fix responsibility for the missing ore, they contend.<br /><br />Port Officer Capt Swamy says until March 20 the port officials were not required to check veracity of road permits or mining licenses. Only after 'illegal ore' was seized, the officials have begun checking the records. The department has no trained staff to verify documents. <br /><br />Customary amnesia<br /><br />The customs department comes under the Union Finance Department. Its duty is to take samples of cargo exported, assess its value and collect the customs duty accordingly. <br /><br />The Commissioner of Customs has written to the State government stating that the department has no role in the iron ore heist. According to the Customs Act, no goods in the department's notified area can be seized by any other department. Moreover, the department cannot stop export for more than seven days unless there is a direction from the Centre. The department officials point fingers at the forest department.<br /><br />The department was aware of the iron ore seizure. It should have been cautious while allowing the goods for export and verified the documents. <br /><br />How much was the illegal ore?<br /><br />Mine owners need road permit issued by the Department of Mines and Geology to transport extracted ore to the port. If the ore pit is located in forest area, clearance from the Forest Department is also must.<br /><br />The total quantity of iron ore that reached Belekeri and Karwar ports between November 2009 and February 2010 is 57,17,370 MT. Whereas, the Mines and Geology Department permit for the corresponding period was for transport of only 21,85,452 MT.<br />The differential amount of 35, 31,918 MT of iron ore was transported without valid permits. The cost of iron ore in the international market varies from $60 to $ 140 a tonne. Even if the lowest value is taken, the total worth of iron ore transported to the ports without valid permits is approximately Rs 953 crore.<br /><br />Loss of revenue<br /><br />As much as 35.31 lakh tonnes of iron ore was illegally exported from the State between November 2009 and February 2010. In other words, the State government did not earn any royalty for the exported ore.<br /><br />The Department of Mines and Geology (DMG) collects royalty of Rs 123.40 per tonne of fine ore (called fines) and Rs 121.5 per tonne for lumps. For ore extracted from reserve forest area, a forest royalty of Rs 18.60 per tonne is added on.<br /><br />The total loss of revenue to the government for the quarter in question is DMG royalty of Rs 43.48 crore and another Rs Rs 6.56 crore if extracted from reserve forests.<br /><br />The process of export<br /><br />»No goods can be either exported or imported without the clearance of the Customs Department. The goods are broadly divided into three groups - free goods (open general licensed goods), restricted goods and prohibited goods.<br /><br />Iron ore with grades up to 63.5 comes under free goods category. The ore of grade 64 comes under restricted goods category and cannot be exported by private people. The prohibited goods are those which the country does not export to other countries. In the year 2009-10, the Customs Department collected duty of Rs 116 crore from export activity through Karwar and Belekeri ports.<br /><br />The Customs officers say that they are not bothered about the source of the material arriving in their notified area. Particularly in respect of free goods, they need not check records or permits.<br /><br />The process<br />- Iron ore meant for export is unloaded in stockyards in the port, allotted to exporters on lease. The stockyards are also notified areas of the Customs Department. The department officials have powers in the areas.<br /><br />- International export agents contact their clients in Karnataka and strike a deal for export of iron ore. The sub - agents in the local area purchase the cargo from the licensed mine owners. And they book the ships for export.<br /><br />- The exporters prepare shipping bills, which consist details of the quantity and quality (grade) of iron ore meant for export. Superintendents of the Custom Department verify the documents and take samples of the ore. A representative each from the exporters, importers and the ship join the officers while collecting samples.<br /><br />- The Custom Department collects duty at the rate of five per cent of the total worth of the ore, from the exporter. The price of ore at international market varies from $60 to $ 140 per tonne. Currently iron ore of grade 56 to 63.5 is exported. On an average the duty would be anywhere between Rs 300 to 800 per tonne (varies with the value of $). Besides, Rs 1 per tonne is collected as cess towards labour welfare.<br /><br />- After collecting samples and the duty, the Customs Dept gives clearance for loading the cargo onto the ship. The Port department collects anchorage charges from the ship.<br /><br />- Ore samples are sent to the Customs Department's Lab in Cochin to verify the grade exported. If the grade is higher than what is stated by the exporter, the department serves demand notice on the exporter to pay the customs duty due. If the ore is of more than 64 Fe grade, the exporter is penalised.</p>
<p>Nobody is ready to take the blame. <br /><br />There are seven checkposts between Bellary and Belekeri, manned by mines and geology (DMG) and forest department staff. DMG staff check mining lease and way permit at five points - Hospet, Koppal, Hubli, Yellapur and Ankola. Checking of the consignment, tonnage and forest permit is done by forest staff. No truck can miss these checkpoints as there are is no alternative route. But the Karnataka Forest Rules, 1969 put the onus of reporting to these checkpoints on the transporters passing through them.<br /><br />Forest officials say they cannot verify the authenticity of documents at checkposts. "It is difficult to differentiate between fake and valid permits. It is as difficult as identifying a fake currency note. Moreover, the checkposts are not provided with electronic weigh bridges to weigh the goods," noted a forest officer. Shouldn’t checkposts, by virtue of their name at least, be equipped to identify fake from real.<br /><br />Porters only?<br /><br />The port department plays a major role in the export of iron ore. It has leased out its area to registered shipping agencies and exporters to maintain stockyards. In return, the department gets a pittance as royalty - Rs 40 per tonne of ore exported.<br /><br />Port authorities, however, argue that they are not responsible for checking illegal permits. Group D (ministerial) staff man the entry points. Many of the staff do not understand English. There is no designated ‘custodian’ for the stockpiles. Hence, they cannot fix responsibility for the missing ore, they contend.<br /><br />Port Officer Capt Swamy says until March 20 the port officials were not required to check veracity of road permits or mining licenses. Only after 'illegal ore' was seized, the officials have begun checking the records. The department has no trained staff to verify documents. <br /><br />Customary amnesia<br /><br />The customs department comes under the Union Finance Department. Its duty is to take samples of cargo exported, assess its value and collect the customs duty accordingly. <br /><br />The Commissioner of Customs has written to the State government stating that the department has no role in the iron ore heist. According to the Customs Act, no goods in the department's notified area can be seized by any other department. Moreover, the department cannot stop export for more than seven days unless there is a direction from the Centre. The department officials point fingers at the forest department.<br /><br />The department was aware of the iron ore seizure. It should have been cautious while allowing the goods for export and verified the documents. <br /><br />How much was the illegal ore?<br /><br />Mine owners need road permit issued by the Department of Mines and Geology to transport extracted ore to the port. If the ore pit is located in forest area, clearance from the Forest Department is also must.<br /><br />The total quantity of iron ore that reached Belekeri and Karwar ports between November 2009 and February 2010 is 57,17,370 MT. Whereas, the Mines and Geology Department permit for the corresponding period was for transport of only 21,85,452 MT.<br />The differential amount of 35, 31,918 MT of iron ore was transported without valid permits. The cost of iron ore in the international market varies from $60 to $ 140 a tonne. Even if the lowest value is taken, the total worth of iron ore transported to the ports without valid permits is approximately Rs 953 crore.<br /><br />Loss of revenue<br /><br />As much as 35.31 lakh tonnes of iron ore was illegally exported from the State between November 2009 and February 2010. In other words, the State government did not earn any royalty for the exported ore.<br /><br />The Department of Mines and Geology (DMG) collects royalty of Rs 123.40 per tonne of fine ore (called fines) and Rs 121.5 per tonne for lumps. For ore extracted from reserve forest area, a forest royalty of Rs 18.60 per tonne is added on.<br /><br />The total loss of revenue to the government for the quarter in question is DMG royalty of Rs 43.48 crore and another Rs Rs 6.56 crore if extracted from reserve forests.<br /><br />The process of export<br /><br />»No goods can be either exported or imported without the clearance of the Customs Department. The goods are broadly divided into three groups - free goods (open general licensed goods), restricted goods and prohibited goods.<br /><br />Iron ore with grades up to 63.5 comes under free goods category. The ore of grade 64 comes under restricted goods category and cannot be exported by private people. The prohibited goods are those which the country does not export to other countries. In the year 2009-10, the Customs Department collected duty of Rs 116 crore from export activity through Karwar and Belekeri ports.<br /><br />The Customs officers say that they are not bothered about the source of the material arriving in their notified area. Particularly in respect of free goods, they need not check records or permits.<br /><br />The process<br />- Iron ore meant for export is unloaded in stockyards in the port, allotted to exporters on lease. The stockyards are also notified areas of the Customs Department. The department officials have powers in the areas.<br /><br />- International export agents contact their clients in Karnataka and strike a deal for export of iron ore. The sub - agents in the local area purchase the cargo from the licensed mine owners. And they book the ships for export.<br /><br />- The exporters prepare shipping bills, which consist details of the quantity and quality (grade) of iron ore meant for export. Superintendents of the Custom Department verify the documents and take samples of the ore. A representative each from the exporters, importers and the ship join the officers while collecting samples.<br /><br />- The Custom Department collects duty at the rate of five per cent of the total worth of the ore, from the exporter. The price of ore at international market varies from $60 to $ 140 per tonne. Currently iron ore of grade 56 to 63.5 is exported. On an average the duty would be anywhere between Rs 300 to 800 per tonne (varies with the value of $). Besides, Rs 1 per tonne is collected as cess towards labour welfare.<br /><br />- After collecting samples and the duty, the Customs Dept gives clearance for loading the cargo onto the ship. The Port department collects anchorage charges from the ship.<br /><br />- Ore samples are sent to the Customs Department's Lab in Cochin to verify the grade exported. If the grade is higher than what is stated by the exporter, the department serves demand notice on the exporter to pay the customs duty due. If the ore is of more than 64 Fe grade, the exporter is penalised.</p>
