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THE OFFSHORE AREAS MINERAL (DEVELOPMENT AND REGULATION) ACT, 2002

Title : THE OFFSHORE AREAS MINERAL (DEVELOPMENT AND REGULATION) ACT, 2002

Year : 2002



(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 area 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 reconnaissance permit, exploration licence or production lease granted, renewed or acquired in contravention of the provisions of this Act or any rules made thereunder, shall be void.



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.



(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.



(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 the 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.



(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.



(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 therefor.

(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.



(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 under 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.



(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 (1), 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 (1).

(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 necessary so to do, it may, for reasons to be recorded in writing, permit any person to acquire an area in excess of the area specified in this sub-section.



(1) The administering authority shall grant a production lease 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 production operation based on such scientific parameters as may be prescribed;

(c) Submits a work programme for the systematic development of the mineral deposits of the area applied for, prepared in such manner and supported by such data as may be prescribed and obtained through exploration operation, setting forth the activities proposed to be carried out during the period of the lease including the resources assessment of the area, the intended schedule of commercial production, methods and technologies to be used for commercial production and processing, measures to be taken to protect the environment and to monitor the effectiveness of environmental safeguards;

(d) Undertakes not to deviate from work programme for production lease approved by the administering authority; and

(e) Has fulfilled, to the satisfaction of the administering authority, all the statutory obligations under any operating right previously-

(I) Granted; or

(II) Transferred in the prescribed manner,
to him:

Provided that a licensee shall have the exclusive right to a production lease over such part of the offshore area covered by his exploration licence as he may desire subject to the condition that the administering authority is satisfied that the licensee--

(i) Has undertaken exploration operation to establish mineral resources in such offshore area;

(ii) Has not committed any breach of the terms and conditions of the exploration licence; and

(iii) Has not become ineligible under the provisions of this Act.

(2) The administering authority may, if there is any reasonable cause to believe that any person, to whom a production lease has been granted, has violated any undertaking given under clause (d) of sub-section (i), terminate the production lease.

(3) The period for which a production lease may be granted shall not exceed thirty years.

(4) A production lease granted under sub-section (1) may be renewed for a period not exceeding twenty years, if, after a review, the administering authority is satisfied that the lessee has been conducting the production operation in accordance with the work programme approved by the administering authority regarding such lease.

(5) The area under a production lease shall not exceed a block of fifteen minutes latitude by fifteen minutes longitude:

Provided that if the administering authority is of the opinion that in the interest of the development of any mineral, it is necessary so to do, it may, for reasons to be recorded in writing, permit any person to acquire an area in excess of the area specified in this sub-section.



A holder of operating right shall commence operation within the period specified below after the grant of the operating right and shall thereafter conduct such operation in proper, skillful and workman-like manner, as follows:-

(a) Reconnaissance permit - six months;

(b) Exploration licence - one year; and

(c) Production lease  - two years.



Any person or agency authorised by notification in the Official Gazette, by the Central Government in this behalf, may conduct survey, research, diving operations and scientific investigations in the offshore areas, including any area covered under operating rights and the permittee, licensee or lessee, as the case may be, shall permit such person or agency to undertake the said investigations in their respective areas and to render such assistance as may be necessary for conduct of the investigations.



(1) A lessee shall pay royalty to the Central Government in respect of any mineral removed or consumed by him from the area covered under the production lease, at the rate for the time being specified in the First Schedule in respect of that mineral.

(2) The Central Government may, by notification in the Official Gazette, amend the First Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification:

Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years.



(1) A lessee shall pay to the Central Government, every year, fixed rent in respect of the area covered under the production lease, at the rate for the time being specified in the Second Schedule:
Provided that where the lessee becomes liable under section 16 to pay royalty for any mineral removed or consumed by him from the area covered under such lease, he shall be liable to pay either such royalty or the fixed rent in respect of that area, whichever is greater.

(2) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which fixed rent shall be payable in respect of any area covered under a production lease and such enhancement or reduction shall take effect from such date as may be specified in the notification: Provided that the Central Government shall not enhance the rate of the fixed rent more than once during any period of three years.



International Seabed Authority Every lessee, whose production operation extends beyond two hundred nautical miles from the baseline from which the breadth of the territorial sea is measured, shall pay in advance, in addition to other payments required under this Act, to the Central Government, the amount to be paid to the International Seabed Authority towards fulfillment of obligation of the Central Government under Article 82 of the United Nations Convention on Law of the Sea, 1982.



(1) The permittee, licensee, lessee or any other person undertaking the reconnaissance operation or exploration operation or production operation under sub-section (1) of section 5 or any agency undertaking the reconnaissance operation or exploration operation under the proviso to sub-section (1) of the said section shall be responsible to ensure that the concerned operation is conducted with due regard to the safety and health of persons including divers and safety and security of property engaged in the operation.

(2) The Central Government may, by notification in the Official Gazette, declare safety zones in respect of offshore activities as may be necessary and prescribe the norms for regulating the safety and health of persons and safety of property engaged in operations authorised under this Act, the implementation thereof and matters connected therewith.

(3) In the event of any contravention of provisions of sub-section (1) or the norms prescribed under sub-section (2) by the permittee, licensee, lessee or any other person undertaking the reconnaissance operation or exploration operation or production operation under sub-section (1) of section 5, or any other agency undertaking the reconnaissance operation or exploration operation under the proviso to sub-section (1) of the said section, shall also be deemed to be responsible for such contravention unless he or it proves that he or it, as the case may be, had taken all reasonable precautions within his or its means for enforcing those provisions, to prevent such contravention.



(1) Every holder of the operating rights shall carry out the operations authorised under this Act subject to the provisions of this Act and the rules made thereunder and any other law and the rules made thereunder, for the time being in force for the prevention and control of pollution and protection of marine environment.

(2) Every holder of an operating right shall be liable for any pollution of, or damage to, the marine environment resulting from his activities relating to his operating right in the offshore areas and shall pay such compensation, as may be determined by the administering authority keeping in view the extent of pollution or damage, as the case may be.

(3) The Central Government may prescribe measures to be taken for prevention and control of pollution and protection of marine environment due to activities in the offshore areas.


 
(1) The permittee, licensee or lessee shall comply with such directions as the Central Government or the administering authority may issue, from time to time, for the conservation and systematic development of offshore minerals, prevention of pollution, protection of marine environment, prevention of coastal erosion or prevention of danger to life or property including the marine life.

(2) The permittee, licensee or lessee shall comply with such directions as may be issued from time to time by the competent authority or Coast Guard regarding national security, safety and national integrity.
 
Explanation.- "competent authority" means the competent authority appointed for the purposes of sub-section (2) by the Central Government in the Ministry dealing with defence of India.

Last updated on August, 2016

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