FIT AND PROPER PERSON TEST

Petition For A Just Fit

The Indian government is committed to maximising the extractive industry’s potential. To that end, they recently permitted 100 per cent FDI in mining, particularly in coal. A sanction of this magnitude necessitates proper integrity due diligence to ensure the mining firm is financially, technically, environmentally, and socially capable. The Fit & Proper Person Test (FPPT) is a screening tool used in a variety of industries to screen candidates based on pre-determined criteria. The FPPT will regulate and eliminate the entry of incompetent, untrustworthy, and unethical mining candidates.

MIRA’s assessment of the Coal Auction Blocks in 2020 revealed the bidders’ questionable technical expertise and professional integrity. Based on the recommended FPPT parameters, all of the mining companies were found to be unfit. The majority of them are repeat offenders with a history of registered cases. Financial fitness, environmental fitness, and social fitness were the broad parameters. We also discovered companies with no prior experience bidding to mine in environmentally sensitive areas.

We have written to and met with various state governments in order to include FPPT as a selection criterion in mining auctions. The Rajasthan government recently added a provision requiring mining companies to state that they have not been blacklisted for illegal mining. Companies on the blacklist will no longer be able to bid on mining blocks. We are advocating that mandatory disclosure, integrity due diligence, and transparency be permanently incorporated into the extractive industry.

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