The story was reported as part of the 2nd TRC Investigative Reporting Fellowship.

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Jharkhand and Delhi: At a time when the world is pushing to phase down coal, the Indian government is busy handing out star ratings to showcase how responsible Indian coal miners are.  

The Union government’s star rating program, now in its sixth year, ranks coal and lignite mines, both private and state-owned, on how labour-friendly, environmentally, or socially responsible they are. 

An investigation by The Reporters’ Collective exposes how this star rating scheme has turned into a dubious exercise in greenwashing the Indian coal miners’ track record.

The rating process is designed in a way that lets 90% of participating mines get away with self-certifying their performance on key social and environmental fronts. The remaining 10% undergo what can only be described as a cosy review – conducted by the same government arm that promotes coal, and, believe it or not, by other coal miners.

Official documents accessed by The Collective and interviews with officials show that the star rating process, by design, produces a glossy picture that covers up violations of environmental, labour and land displacement laws – laws these miners are legally bound to follow.

Rather than holding companies accountable, penalising and prosecuting government-owned and private mining companies for violating laws, the Union Ministry of Coal’s rating process instead acknowledges self-reported violations and still awards them one to five gold stars once a year.

These stars, in turn, are used by mining companies to flaunt their ‘clean’ record to the public. 

And here’s the kicker: the evaluation process for these ratings, we found, doesn’t involve truly independent experts on either of the parameters under review – social responsibility, environmental integrity, labour rights or rehabilitation of project displaced. 

In some cases, the dubious star-rating program has even been insisted upon to greenlight the expansion of coal mines, The Collective found. 

Globally, rating systems are used as a stick-and-carrot method to push and incentivise industries toward better practices on environmental and social fronts – rewarding achievers and penalising laggards. This raises the bar over time with regularly enhanced standards weeding out those unwilling to improve. 

But the Indian government’s star-rating program does neither. It lets underperformers off the hook while offering no incentive for laggards to improve their track record, we found.

The Collective sent detailed queries to Marapallly Venkateshwarlu, Director, Ministry of Coal, Anandji Prasad, Project Advisor, Ministry of Coal and Sajeesh Kumar N., Coal Controller. While there were no written responses, we received an oral response.

Over a brief phone conversation, Anandji Prasad compared the self-assessment by coal mine owners with that of an individual performing their duties and being asked to provide a progress report of their work.

How it all started

In August 2018, the Union Ministry of Coal drafted its star-rating policy to evaluate coal mines based on what it called “objective” parameters – ones that wouldn’t rely on subjective opinions while assigning ratings to the mines.

This draft was shared with subsidiaries of Coal India Limited (CIL) for feedback. CIL, a government-owned behemoth and India’s largest coal miner, has increasingly outsourced its operations to private players such as BGR-Mining, Ashirvad Construction Limited and Essel Mining & Industries Limited. Inputs were also sought from two other public sector coal giants – Singareni Collieries Company Limited and NLC India Limited.

But here’s the catch. The Collective’s review of government files, accessed under the Right to Information (RTI) Act, reveals that no independent experts outside the coal and mining industry were consulted to review the design of the rating process. According to the file notings obtained via RTI, the draft was sent to Joint Secretary-level officers in the Ministry of Coal because the issue of star ratings was ‘listed in PM review meeting’. It was also uploaded on the ministry’s website for public comments. However, during the file inspection, the author did not come across any public comments received.

This draft became the basis for the final policy and rating template, which was launched in March 2019. The policy came into effect on April 1, 2019, and was accompanied by the launch of a web portal for the star rating of coal mines by the then Union Minister for Coal & Mines Pralhad Joshi. 

The coal mines were to be rated on seven fronts: 

1. Environmental standards.
2. Adoption of technology to improve mining.
3. Rehabilitation and resettlement of those displaced due to the coal mines. 
4. Safety record of mines.
5. How well the mines protected the rights of labour working in the mines. 
6. Financial performance of the mine.
7. Mine geometry.

For each of the seven issues, specific parameters were laid down against which scores were to be given. 

For instance, to review how well the mine had done financially, the rating program reviewed whether it met its coal production targets, overall capacity utilisation, and coal despatch goals. 

Scores were assigned based on the percentage of these targets achieved, with each parameter carrying a preset range of minimum and maximum scores. 

Mines that scored above 90% in aggregate secured a 5-star rating. Those scoring between 81-90% earned 4-stars, while anything below 40% got zero stars. 

So far so good. On plain reading, this seemed like a fair process. The parameters were clear and transparent, and the rating criteria appeared objective, just as claimed.

But here is where it went off the rails. A catch. Actually, a deluge of them.

Transparent or token peer review?

For decades, the coal sector has been particularly difficult even for the government’s regulatory arms to regulate, monitor and check. Cases of illegal mining, unchecked pollution, violations of environmental and labour laws, and broken promises of fair and legal resettlement and rehabilitation of the poor, tribal, and other forest-dwelling communities displaced by mining operations remain the norm, not the exception. 

Ignoring this reality, the Union government decided that, this time, the coal industry would get to review and rate itself. Each mining company became its own assessor, tasked with scoring how well it performed. 

To give this process a veneer of legitimacy, the government decided that the miners’ self-assessment would be ‘validated’ by an arm of the Coal Ministry, the Coal Controller’s Organization (CCO), whose actual job is to oversee the volume and quality of coal produced in India, not environmental or social performance.

It was dubbed a ‘peer-review’ system. The nomenclature comes from the review of scientific research. But unlike scientific peer reviews – which rely on anonymised independent reviewers – the government picked the same name but set no firewall between the mine owners and their reviewers. 

Only 10% of the mines with the highest self-assessed score would be subjected to physical inspections under this purported peer review. For these selected mines, inspections were carried out by committees formed by the CCO, with each team made up of three members. 

Each committee consisted of a government officer from the CCO, one expert from a nearby ‘research institute’, and, a third reviewer, it was decided, would be from another coal mining company. 

“It would only serve a mine owner’s interest to give a good score to their peers in the hope of receiving the same in return,” said Sudiep Shrivastava, a Chhattisgarh-based lawyer and activist, who has tracked the coal mining industry for decades. 

It was set to be a friendly review process. 

For the other 90% of mines, validation didn’t even involve physical site visits by the CCO. They would be reviewed ‘online’, the guidelines said.

Prasad, the ministry official, had a peculiar take on this. In his view, the process is akin to buying potatoes or tomatoes, where one doesn’t check every piece but only a few for their appearance before taking a call. 

He admitted that no two mines are the same and that whatever the mines report is documented and evaluated by a reporting officer – a well-thought-out statistical process, he claimed. He further added that a random selection of 10% is done, based on a judicious call, to assess the actual reality of mines.

The conflict of interest baked into this perfunctory ‘peer-review’ process became even clearer upon closer reading of the fine details and reporting from ground, on how the review was actually being carried out. 

The CCO itself, tasked with the job, is severely short-staffed and often relies on personnel borrowed from Coal India Limited (CIL), the government-owned monolith responsible for over 80% of India’s coal production. 

Meanwhile, the travel and accommodation of the external ‘experts’ from a ‘nearby’ research institute are covered by the mine companies under review, dispensing with even a performative pretence of independence. 

When speaking anonymously to The Collective, CCO officials claimed that measures were in place to avoid conflicts of interest. 

“To ensure fairness, Delhi assigns mines to various regional offices for verification,” said an officer from one of CCO’s regional offices in eastern India. 

Responding to the above, Prasad claimed that while CIL personnel are deputed on CCO’s behalf, their review is generally not in favour of CIL, and they do what they are required to do as a CCO official. To put further checks in place, he claimed, the number of independent consultants has been increased and proposed that their stay and travel be funded by the ministry.

The Collective also spoke to an official of an area office overseeing multiple mines that undertook self-assessment and will be given stars by the government. They claimed their self-assigned ratings are backed by documentary evidence. 

But till recently, The Collective found, no clear government guidelines existed on how miners should score themselves and what evidence they must muster to prove they did an honest self-validation. 

“Up until 2022-23, we uploaded documents as we deemed fit. Sometimes, we would not upload anything at all,” said an officer at one of the CIL subsidiary offices, who also preferred to remain anonymous. CCO officers corroborated this.

“Initially, mines used to complete the self-evaluation process against all mentioned parameters, sometimes without adequate supporting documents. During inspections, we would advise them on different supporting documents to be uploaded for those parameters,” explained Sudhir Kumar, Chief Manager (Mining) at the Indian Institute of Coal Mining, a government agency. Kumar was earlier deputed as the head at CCO, Ranchi until November 2023. 

The Coal Ministry has since issued detailed guidelines for the 2023-24 ratings, requiring mines to upload specific documents to support their self-evaluation. Yet, many of these documents are still to be certified by the mines themselves for their validity, with no independent verification other than the CCO. 

On being asked about the self-certification of supporting documents, Prasad points to mines filing annual returns and monthly returns, which he said, would leave little scope for any deviation between what they certify and what is actual.

High ratings vs ground realities 

In September, the Coal Ministry hosted a grand event at the Scope Convention Centre on New Delhi’s Lodhi Road to celebrate and award star ratings to coal mines for 2022-23. 

A total of 380 mines participated, and of these, 43 were awarded the coveted 5-star rating. Quite naturally, the five-star rated companies went to town about it. Several media outlets published these results as well.

But beneath the surface of this fanfare, these ratings hid crucial lapses – ones with serious economic, social, and environmental consequences.

The Collective found that among these top-rated 43 mines: 

• 19 had only partial or no compliance with certain legally mandated environmental safeguards.
• One recorded a fatal accident.
• Another fell short of its coal production target in 2022-23. 

A review of data from the past five years since the ratings began shows that this wasn't a one-off. Lapses have occurred in the past as well. Some of the previously 5-star-rated mines had a history of unmet rehabilitation and resettlement commitments, accidents and poor environmental compliance.

Take the case of Magadh coal mine, operated by Central Coalfields Limited, a subsidiary of Coal India Limited, in Jharkhand. In 2022-23, it received a five-star rating and was feted for being a top performer, getting a total score of 91 across the seven parameters.

But people living near the mine have another story to tell. 

“Dhool ke karan kheti mushkil hoti hai. Hamara dukan bhi girne wala hai. Gram sabha ne bola hai company ko marammat karane ko par abhi tak kuch nahi hua (Due to coal dust farming is difficult. Our shop is also about to collapse [due to blasting]. Gram Sabha has asked the company to repair but nothing has happened yet),” said Bahmuni Kumari of Devalgara village in Chatra district, Jharkhand, in August 2022. Kumari’s house is about 200 metres away from Magadh mine. 

A closer look at how the track record of a coal mine is reviewed under the star rating system shows why these ratings often fail to reflect ground realities. 

It starts with the flawed design of the review process. Of the 57 parameters in the scoring template for opencast coal mines, 41 allow mine owners to score themselves based on the percentage of compliance achieved. 

Take, for example, haul roads – specialised paths for heavy machinery and coal transport. The star rating system for opencast coal mines evaluates these haul roads based on the percentage of their length that meets prescribed gradients or slopes to reduce the risk of vehicle rollovers and accidents. The Coal Mines Regulations and the Directorate General of Mines Safety prescribe the required gradient for the haul road. 

The star rating template recommends a score of 1 if over 50% of the road meets the required standard, up to a score of 5 if over 90% does. 

But this approach tolerates (or rather celebrates) partial compliance, omitting essential details such as where the steep portions of the road are, how steep they are, the volume of vehicular movement, and surrounding risks.

Anandji Prasad countered that the monitoring of safeguards and their violations is transparent. According to him, negative marks are given for accidents or zero marks if something is not complied with.

A broken incentive system 

Across the world, ratings are used to incentivise good social and environmental practices. And punish those who lag behind and fail to improve their performance over time. Ratings are useful only when they directly impact revenue – acting as a fiscal stick and carrot. 

If it is a consumer-facing product of the company, good ratings can enhance reputational gains or losses, potentially affecting a rise or fall in revenues. And if ratings are used by financial markets, strong ratings can lower borrowing costs for companies with potential reductions in interest rates, while weak ones can increase interest rates.

For instance, the government’s energy efficiency rating scheme for electrical appliances, called PAT or Perform, Achieve and Trade, ratings of appliances push manufacturers to improve standards periodically. Appliances that do not match up and improve their performance receive lower ratings than earlier. 

The rating scheme is well advertised for consumers. If they can afford it, they go for appliances that are rated to be more energy efficient and help save on the electricity bill. 

While imperfect – the ratings have partially failed in practice because the standards are set too low to incentivise the industry – it motivates better consumer choices.

But the government’s coal star-rating scheme fails on all these criteria. And, by design. 

The coal sector is not consumer-facing. Power producers have to buy coal regardless of coal miners’ environmental compliance. In fact, not following environmental standards keeps the cost of coal low – at the cost of the people around the mining areas. 

The coal rating system sets no bottom-line standards of performance, let alone ask the sector to improve their performance to sustain their ratings. A zero-star mine means zero loss of revenue to a miner. 

Individually, these factors may carry some weight, but under the star rating system, they do not lead to anything. For instance, for Coal India Limited-owned mines, their performance on coal production targets influences their future budget allocations. Environmental compliance too is considered before future expansions are granted. This likely explains why most mines fall in the 3- or 4-star range. It at least prevents physical verification!

Turning illegality into an award

Forget incentivising the coal sector to do better, the rating system shields the coal mining industry’s bad track record in complying with laws. 

The Coal Ministry’s own policy for the rating scheme is a giveaway. 

Right at the beginning of the policy, the ministry states, “Coal mining operations are expected to comply with many rules & regulations. These are mainly regarding safety, environment, rehabilitation of project-affected families, welfare of workers etc. Although all the mines are expected to comply with all the regulations, there are some digressions to varying degrees.”

The ratings assess coal miners on their compliance, in large part, with laws designed to safeguard the environment, project-affected people, and the mine workers. Failing to comply with these ‘rules and regulations’ is illegal. Specific environmental and other laws prescribe punishment for failing to do so, ranging from fines to jail terms. 

But the ratings, in essence, treat legal compliance as optional. Coal mines flouting environmental safeguards can still secure high ratings. In fact, many already have. 

Consider the rating of coal mines on rehabilitation and resettlement of people that a mine has displaced. These parameters affect the people directly, however, the ratings do not consult them.  For any complaints on the matter, it relies solely on grievance records received and addressed, ignoring how effectively grievances are resolved or if people are satisfied. 

“We depended on nearby nullahs and wells for water. Since the mine started and the construction of railway siding began, the water level in the wells went down. We were promised deep borewells and piped water supply. Woh CCL (Central Coalfields Limited) ka lollipop ashvasan tha. Hum abhi intezaar hi kar rahe hain (That was only a lollipop assurance from CCL. We’re still waiting),” Kaleshwar Manjhi of Urimari village told this author in April 2023. 

The village is surrounded by three CCL-run coal projects: Urimari, North Urimari and Sayal D. In 2022-23, North Urimari received 5 stars, while the others received 3. Yet, despite borewells being dug earlier this year, pipelines to every house are still only a promise, shared Sanjay Tudu from Urimari last week.

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Meenakshi Kapoor was awarded the 2nd TRC Investigative Reporting Fellowship. She is an environmental researcher and lawyer who writes on environmental laws, policies, and natural resource governance.