CIL has a record of repeated violations of the environmental legislation, including refusing to shut down the Durgapur Rayatwari colliery, operating mines lacking environmental or forest clearances, and lacking operating licences. In 2010 a moratorium on new coal projects was imposed in several coalfields due to critical pollution levels. The Damodar river in the eastern state of Jharkhand, which flows through the Karanpura coalfields, has also been polluted due to the coal mining operations.

CIL's model relies for more than 90% on open pit mines, which entail clear-felling of forests, which impacts endangered species such as the tiger and elephant. In the Wardha, Singrauli, Talcher, North Karanpura, Ib Valley and Mandraigarh coalfields, CIL operations are impacting rich forest areas and endangered species such as the tiger and the Asian elephant.  Recent commitments from the company refer to its reforestation and land reclamation practices. However, only this July, an Indian government investigation found that half of the land Coal India claimed it had reforested was still barren.

CILs poor safety record has been the cause of labour unrest. In 2011 CIL reported 52 fatalities in their mines and 250 serious injuries. In 2010 there were 95 fatalities and between 2007 and 2009 there were 194 deaths arising from operational accidents. A report by the Haq Centre has reported child labour in CIL's mines.

The clear felling of forests for open cut mines impacts forest dependent communities, inlcuding Protected Tribal Groups. According to a 2014 report by Amnesty International the Coal India subsidiary SECL was forcibly evicting indigenous and Dalit families to expand one of its open cast mines.

CIL has a record of corruption at all levels, including senior management, which includes cases of unduelly favouring equipment suppliers, excessive payments and the dissapearance of coal. There is poor corporate governance and poor worker safety. Repeated legal violations have led to several penalties and closure notices for over 50 mines, in 2012 alone. It has also been accused of misleading investors and the public about the extent of its extractable reserves.

Coal India is majority-owned by the government of India, which has been targeting civil society organisations that are criticizing the coal industry, and has weakened environmental and human rights regulations. For such actions they have received public criticism from the UN Special rapporteur on the Freedom of Assembly and Association as well as the U.S. State Department.