Why India Needs Decentralised Dispute Resolution Forums for Responsible Mining and Processing?

The economic growth potential of natural resources is often offset by conflicts between commercial interests, ecological preservation, and affected communities during extraction and processing. India’s mining and processing sectors are no strangers to these dynamics. From densely forested mining belts in Odisha to urban-adjacent mineral facilities in Tamil Nadu, resources vital for national growth often have a trail of conflict across their value chains.

 These disputes arise because institutional mechanisms embedded within the extractive and processing industries—public hearings, community consent, and regulatory oversight—have often faltered in maintaining their operational integrity.

What are these conflicts, and why do they arise? These are disputes over land acquisition, forest diversion, environmental degradation, community displacement, public health impacts, and, most importantly, ineffective attempts to secure community consent, which breeds dissent. These disputes arise because institutional mechanisms embedded within the extractive and processing industries—public hearings, community consent, and regulatory oversight—have often faltered in maintaining their operational integrity. Even if attributed to human and procedural lapses, the fallout includes a multigenerational decline in quality of life, irreversible environmental damage, and halted operations, leading to revenue shortfalls for investors and states. Consequently, stakeholders seek recourse through litigation, often the only avenue available to affected parties.

However, litigation is not a quick in-and-out process. It requires time, resources and patience, as legal processes can stretch into years or decades. Several conflicts, fuelled by procedural lapses on the part of both regulators and companies, have prolonged and amplified social costs. One such instance occurred in the hills of Niyamgiri in Odisha, where, after signing a Memorandum of Understanding with the Odisha government in 2003, Vedanta, a global natural resources conglomerate, faced legal battles for more than a decade over its proposed bauxite mine. The land inhabited by the Dongria Kondh tribe fell under legal protections for indigenous communities, requiring project proponents to obtain Free, Prior and Informed Consent (FPIC) from the resident tribe. Ultimately, the Supreme Court of India found FPIC to be coerced and decreed that the Dongria Kondh would have the final say; in 2013, 12 Niyamgiri Gram Sabhas unanimously voted against mining operations.

 The high social cost is borne almost exclusively by the affected communities, while other stakeholders move on to the next project.

In another case, the Sterlite Copper plant in Thoothukudi, Tamil Nadu, faced one of the most brutal industrial protests in recent history, driven by procedural failures in environmental compliance and regulatory oversight. In 2018, with Section 144 imposed to curb a protest against the plant’s capacity expansion, the police opened fire on protesters marching to the District Collector’s office, resulting in at least 13 documented deaths, including that of a minor. Further probing revealed long-standing grievances, such as in 1997 when 165 women fainted due to sulphur dioxide poisoning, and the 2013 toxic gas leak that released emissions double the permissible amount. This episode shows how extractive and allied sectors have been overwhelmingly conflict-ridden, with the communities often displaced from their land, stripped of livelihoods, and exposed to lasting environmental damage. The high social cost is borne almost exclusively by the affected communities, while other stakeholders move on to the next project.

Against this backdrop, the blog examines the long-standing policy gap in structured, sector-specific avenues for resolving disputes in India’s resource governance, in reference to global practices, potential roadblocks and the need for decentralised resource dispute-resolution forums for India.

Global Practices in Institutionalising Resource Mediation

Across jurisdictions worldwide, resource-rich economies have recognised the shortcomings of traditional court-led domestic legal processes and have responded by establishing institutionalised, sector-specific mediation and negotiation mechanisms that parallel formal adjudication. For international investments, the International Centre for Settlement of Investment Disputes (ICSID) pioneers mediation between foreign investors and governments, incorporating it into its dispute-resolution framework. ICSID mediation rules provide a structured, voluntary, and confidential process for negotiated settlements. They allow parties to appoint mediators, adopt flexible procedures, and explore non-adversarial outcomes—features relevant to the extractive sector, where long-term relationships between regulators, companies, and communities underpin project legitimacy.

For community-company conflicts, the World Bank Group’s Compliance Advisor Ombudsman (CAO) aids resolution in projects financed by the International Finance Corporation or guaranteed by the Multilateral Investment Guarantee Agency, enabling voluntary dialogue, joint fact-finding, and mediation to address environmental and social concerns at the project level before they escalate into litigation. In responsible business conduct, the OECD National Contact Points offer state-backed grievance and mediation mechanisms for alleged OECD guidelines violations, examining the merits of complaints and prioritising negotiated resolution over enforcement.

At the core of these resource mediation systems lie shared principles: neutral facilitation, sector-specific expertise, and monitorable outcomes.

Several countries have embedded mediation into their domestic resource governance policies. Australia’s National Native Title Tribunal conducts “future act” mediation for mining and other activities affecting native title rights, with tribunal members or accredited staff serving as mediators. Similarly, in the Philippines, the National Commission on Indigenous Peoples holds quasi-judicial and administrative authority over indigenous land and resource disputes, with ‘mediation before adjudication’ explicitly mandated in its Rules of Procedure. Canada has an equally impactful and interesting mechanism at play in the form of Impact Benefit Agreements—contractual, non-statutory, project-specific pacts wherein resource companies and indigenous communities embed dispute-resolution clauses, pre-emptively negotiated remedies, and engagement protocols that provide clear directives for resolving conflicts. At the core of these resource mediation systems lie shared principles: neutral facilitation, sector-specific expertise, and monitorable outcomes.

Case for a National Resource Dispute Resolution Forum in India

In both Niyamgiri and Thoothukudi, all stakeholders involved spent years appealing to tribunals and courts, while the conflicts continued to fester and escalate. Could such prolonged judicial processes have been avoided had there been a credible, sector-specific forum for early and local dispute resolution through structured mediation and negotiation?

A 2016 analysis by the Rights and Resources Initiative and the Bharti Institute of Public Policy shows that out of the 40,000 investment projects examined in India, 5,780 projects, around 14%, were stalled, tying up ₹42.6 lakh crore. The analysis further noted that land-related conflicts were a major cause for this: 21 of 80 large projects faced land-related disputes, placing ₹1.92 lakh crore at risk. According to Land Conflict Watch, as of January 2026, the mining sector alone has 86 ongoing conflicts, affecting 7,41,216 people and ₹2,73,697 crore in investments.

The need for decentralised resource dispute resolution forums has been further accelerated as India expands its mineral extraction strategy. In the Union Budget 2026–2027, Finance Minister Nirmala Sitharaman announced support for establishing Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu. Within 10 days of the budget speech, Kerala had advanced towards executing the first phase of the proposed rare earth corridor, estimated to be worth ₹42,000 crore; bids closed for a pilot extraction facility processing 180,000 tonnes of monazite residue, with six companies, both domestic and overseas, expressing interest. Whilst the government takes these measures to safeguard India’s economic interests, especially to curb India’s rising rare earth imports, which have gone up from US$14.1 million in 2014 to US$17.5 million in 2024, with over 45% imported from China, the mining and processing sector is yet to have sufficient safeguards to protect the interests of all stakeholders involved: safeguards that might help save investors and communities years spent in litigation, safeguards that ensure timely mediation, and safeguards that secure investor and community confidence in the project.

Decades of resource conflicts in India reveal recurring drivers across cases, states and regions. Foremost is the deep-rooted power asymmetry among stakeholders.

Structural Roadblocks to Effective Resource Dispute Resolution

Decades of resource conflicts in India reveal recurring drivers across cases, states and regions. Foremost is the deep-rooted power asymmetry among stakeholders. The State and project proponents wield greater legal, financial, and technical capacity compared to communities. Despite unresolved community claims, judicial records show how statutory authority and documented procedural sequencing have allowed projects to advance. Unequal bargaining power often renders crucial mechanisms, such as Gram Sabha consent, open to coercion.

Second, knowledge asymmetries undermine meaningful participation. Essential documents, such as environmental impact assessments and mining plans, are prerequisites for mining and processing projects. These documents detail effects on local ecology and livelihoods, yet their technical density makes them rarely accessible or intelligible to forest-dwelling communities. A University of Groningen study on ‘Barriers to local community participation in mining Projects’ notes that affected communities fail to identify project-related risks or even emergency response measures, despite legal mandates, reducing consultations and meaningful participation to mere procedural compliance.

Finally, uncertain land records and the non-recognition of forest rights perpetuate vulnerability. As of May 2025, the Ministry of Tribal Affairs reports that, out of 51,23,104 claims filed at the Gram Sabha level under the Forest Rights Act, only 25,11,375 titles (49.02%) were granted, leaving 18,62,056 claims (33.35%) rejected and 7,49,673 claims (14.63%) pending across tribal areas. With nearly half of the claims rejected or pending, uncertainty over land rights in the communities’ areas festers, leaving them open to eviction without compensation. Recognised land titles empower these communities to stand on equal footing with all stakeholders, without which they fall into cycles of litigation to claim their rights, are exposed to power asymmetries, and face barriers to timely, negotiated dispute resolution.

Along with drawing on best practices worldwide to effectively address mining disputes, it is also important not to lose sight of the fact that each mineral presents its own environmental, social, and regulatory challenges and requires tailored resolutions.

Designing a Resource Dispute Resolution Mechanism for India

India requires a nuanced approach to establishing a nationally recognised Resource Dispute Resolution Forum for decentralised, effective mediation and negotiation. India already has a record of creating sector-specific dispute tribunals, such as the Telecom Disputes Settlement and Appellate Tribunal for disputes in the telecommunications sector involving service providers, consumers and regulators; the Insurance Ombudsman for grievances of policyholders against insurers and intermediaries; and several others across domains. However, mediation in India has largely been court-mandated rather than a necessary prerequisite to dispute resolution.

Along with drawing on best practices worldwide to effectively address mining disputes, it is also important not to lose sight of the fact that each mineral presents its own environmental, social, and regulatory challenges and requires tailored resolutions. To achieve this level of fluidity, the systems envisioned and designed should strive to adopt the following parameters:

• Project-level grievance redressal channels similar to the World Bank Group’s CAO, with voluntary dialogue and joint fact-finding.
• State-backed stakeholder-neutral tribunal/panels similar to OECD National Contact Points to investigate violations and prioritise negotiations.
• Integrate accredited mediators, including those specialising in indigenous rights, into existing mining regulations. Local civil society organisations with experience in working with indigenous communities should be empowered to help establish mediation channels. Such empowerment will ensure the protection of indigenous communities’ rights under laws specifically designed for them, rather than them being subsumed into general resource disputes.

The above recommendations aim to set a collaborative tone. Equitable stakeholder participation must be non-negotiable, ensuring that communities, companies, and regulators have balanced voices. Such procedures would prevent power asymmetries and further conflict, leading India closer to converting the extractive and allied sectors into a responsible, sustainable, and equitable space for business.

Note: The author would like to thank Dr Rajesh Chadha, Senior Fellow, CSEP and Karthik Bansal, Research Associate, CSEP,  for their feedback.