As custodians of one of the world’s fastest-growing emergent economies with pressing development and infrastructure requirements, Indian lawmakers face unique challenges in balancing growth imperatives with environmental responsibilities. The government has sought to achieve this balance by creating a legal and policy landscape that facilitates ease of doing responsible business. In the past few years, the government has introduced a slew of environmental regulations in consultation with diverse stakeholders, ensured mandatory implementation of 24/7 real-time emission and effluent monitoring in industries, upgraded emission standards for polluting industrial sectors, and taken stringent action, including closure against polluting industries. The judiciary, be it the various benches of the National Green Tribunal (NGT) or even the Supreme Court of India, have been playing a more proactive role in the recent years. Recent judgments relating to fuel emission standards for automobiles and other industries, imposition of green cess on diesel vehicles, waste management, biological diversity, wetland and forest conservation, cleaning of rivers and compliance with environmental consents and clearances have ensured that environmental issues are paid much more attention compared to a few years earlier. The government, to support its initiatives such as ‘Make in India’ and ‘Invest India’, has introduced a series of strategic measures to streamline the environmental clearance process to tackle delays in crucial development and infrastructure projects. It has also revised some of the laws, including those relating to electronic, plastic, construction, biomedical and other kinds of waste management. In the past year or so, the collective consciousness regarding environmental issues has increased drastically owing to various instances of air and water pollution in cities and questions being raised about resource conservation and management. These have also resulted in increased environmental activism, thus ensuring that environmental issues are of strong concern for businesses in India. All of these have given environmental law and policy a prominent position in the India growth story.
Ii LEGISLATIVE FRAMEWORK
The Indian Constitution is among the few in the world that contain specific provisions on environmental protection.2 The Constitution embodies environmental protection and promotion as a fundamental right guaranteed to Indian citizens.3 That apart, Article 48-A, which forms part of the Directive Principles of State Policy of India, although not enforceable as an obligation of the state, acts as the guiding principle for policy formulation and mandates that the state should endeavour to protect and improve the environment and safeguard the forests and wildlife of the country. Additionally, Article 51-A(g) of the Constitution of India imposes a fundamental duty on every citizen of India to protect and improve the natural environment.
Apart from the general constitutional mandate on both the state and the citizens, a suite of statutes also exists that protects and regulates various environmental aspects. The Environment (Protection) Act 1986 (EPA) is the umbrella legislation that deals with environment protection in India.
Some of the other key specialised legislations include:
- a The Water (Prevention and Control of Pollution) Act 1974 (Water Act) – to provide for the prevention and control of water pollution and maintaining or restoring the wholesomeness of water.
- b The Forest (Conservation) Act 1980 (Forest Act) – to provide for the conservation of forests.
- c The Air (Prevention and Control of Pollution) Act 1981 (Air Act) – to provide for the prevention, control and abatement of air pollution.
- d The Biological Diversity Act 2002 (Biodiversity Act) – to provide for the conservation of biological diversity, sustainable use of its components and fair and equitable sharing of the benefits arising out of the use of biological resources, knowledge and for matters connected therewith or incidental thereto.
- e National Green Tribunal Act 2010 (NGT Act) – to provide for the establishment of the National Green Tribunal for the effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right related to the environment and giving relief and compensation for damages to persons and property and for connected or incidental matters.
These statutes, along with various rules, regulations and notifications, implement the statutory mandate to protect various other facets of the environment in India.
Two key notifications worth noting are the Coastal Zone Regulation Notification 2011 (CRZ Notification) and the Environmental Impact Assessment Notification 2006 (EIA Notification).4 These notifications regulate the grant of environment clearance to various projects in India. The CRZ Notification notifies the coastal stretches of the country and the water area up to its territorial water limit as a coastal regulation zone and primarily applies to developmental activities undertaken in such zones that impact the coastal environment. The EIA Notification, on the other hand, covers any new constructions or expansion of existing projects listed in the Schedule to the Notification. The Notification prescribes processes such as screening, scoping, public consultation and appraisal of the upcoming project prior to grant of the environment clearance for the project. The main purpose of the exercise is to assess the impact of a proposed project on the environment and the people in an attempt to abate the same. The onus to prove that a project is environmentally benign is on the project proponent.
IIi THE REGULATORS
Government agencies regulating and enforcing environmental and climate change rules in India include the following.
i The Ministry of Environment, Forests and Climate Change (MoEF&CC)
MoEF&CC, Government of India is the Ministry responsible for implementation of policies and programmes relating to conservation of the country’s natural resources including its lakes and rivers, its biodiversity, forests and wildlife, ensuring the welfare of animals, and the prevention and abatement of pollution.
ii Central Pollution Control Board (CPCB)
The CPCB is a statutory body responsible for (1) advising the central government on any matter concerning prevention and control of water and air pollution; (2) executing a nationwide programme for the prevention, control or abatement of water and air pollution; and (3) coordinating the activities of the state boards and resolving disputes among them.
iii State Pollution Control Boards and Pollution Control Committees
Each state has a State Pollution Control Board (SPCB) and each Union Territory has a Pollution Control Committee (PCC), which are entrusted with the implementation of the provisions of the Water Act and Air Act and for the overall enforcement of the provisions of the EPA and the Rules framed thereunder. The SPCB and PCC have been given wide powers that include issuing closure notices to polluting industries, imposition of penalties, implementation of remediation measures for restoration of the environment, etc.
iv Other authorities
Additionally, under Section 3(3) of the EPA, the central government is empowered to appoint various authorities to carry out the functions of the central government under the Act. One such authority is the Central Ground Water Authority, which regulates and controls groundwater development and management in the country. Another such authority is the Central Wetland Regulatory Authority, which is responsible for the conservation and management of wetlands in the country.
v Judicial role in environment regulation
India is one of the very few countries in the world that has a specialised quasi-judicial authority to deal with cases involving a ‘substantial question relating to environment’. The NGT constituted in 2010 and, comprising of both judicial and technical members, has been playing a very proactive role in the protection of environment. Environmental matters are also heard by the State High Courts and the Supreme Court of India in the form of public interest litigation or under their writ jurisdiction. Appeals from the NGT are heard by the Supreme Court of India.
i Public interest litigation (PIL)
Since the 1980s, PIL has been widely used as an effective tool in India to redress public grievances pertaining to unfair and unjust public policies, arbitrary actions of the government, human rights violations by the state and violation of fundamental rights guaranteed under the Constitution of India. A PIL can be filed in the Supreme Court or the State High Courts under Article 32 and Article 226 of the Constitution of India respectively, by any person in India seeking to petition a cause, which may affect a section of the society regardless of whether the petitioner has a substantial stake in the grievance complained of or not. PIL has been used as a very effective tool by public-spirited persons and activists in the environmental context. Some of the key principles that have been adopted for the adjudication of environmental disputes are the polluter pays principle,5 sustainable development,6 precautionary principle, public trust doctrine,7 strict liability and absolute liability.8
ii Statutory/legal remedy
In 2010, the Parliament of India enacted the much overdue NGT Act to provide for effective and expeditious disposal of cases relating to the environment. Ever since, the NGT has been playing a proactive role in ensuring enforcement of the environmental laws mainly through the imposition of heavy penalties on erring industries and injuncting industries from proceeding with development projects that do not have the requisite environmental consents and clearances.
The NGT Act is broadly worded and provides that ‘any person’ may approach the Tribunal if it is aggrieved by an environment clearance issued to an industry for any development project, directions issued by the Pollution Control Boards under the Water Act or the Air Act, any policy decision on benefit sharing by the State Biodiversity Board, etc.9 Further, any person who is a victim of environment damage and whose property has been damaged, or the central government/state government/Pollution Control Boards or any local authority constituted under the EPA may approach the Tribunal for grant of relief or compensation or settlement of a dispute relating to the environment.10 Because of the widely worded nature of the NGT Act, many environment activists and non-government organisations who may not be directly or substantially affected by the alleged grievance but who are generally interested in the restitution of the environment, have also been given the right to approach the NGT.
The NGT is bestowed with the power to provide relief and compensation to victims of pollution, pass directions for restitution of damaged property and the environment and impose fines commensurate to the extent of the damage caused and even order imprisonment. The NGT can even punish the head of the government department for non-compliance with the orders of the Tribunal.11The Tribunal is guided by the principles of sustainable development, the precautionary principle and the polluter pays principle in its decision-making. 12
iii Remedies in criminal law
The Indian Penal Code 1860 and the Code of Criminal Procedure 1973 provide for remedies against public nuisance. Public nuisance is essentially an unreasonable interference with the general right of the public. On receipt of a complaint, the magistrate has the power to order the removal of the nuisance complained of within a time-bound period. For instance, in the case of a complaint regarding a company discharging contaminated water, the magistrate may direct the company to immediately stop such discharge, failing which the officials in charge of the company would be liable for imprisonment.
V REPORTING AND DISCLOSURE
i General reporting obligations
The Rules framed under the EPA mandate industries to submit a yearly environmental statement disclosing, inter alia, (1) the quantity of water and air pollutants discharged by the industry, (2) the concentration of pollutants in discharges, and (3) the percentage of variants from prescribed standards with reasons.13 The consent to operate or the environment clearance granted for the development activity to be undertaken by an industry also imposes reporting obligations on the person in charge.
ii Disclosure of excessive discharge or emissions
The EPA and the Rules framed thereunder also impose an obligation on the person in charge of the place to furnish information to the concerned authorities and agencies regarding occurrence or apprehension of occurrence of discharge of environmental pollutant in excess of the prescribed standards owing to any accident or unforeseen act or event.14 There is a similar obligation under Section 31 of the Water Act of furnishing information to the SPCB in the event there is discharge or likelihood of discharge of polluting matter in any stream pursuant to an accident or other unforeseen act or event. Non-compliance with the reporting and disclosure obligations attracts punishment in the form of penalties and imprisonment under the EPA.
Vi ENVIRONMENTAL PROTECTION
i Air quality
The Air Act in tandem with the EPA provides for the prevention, control and regulation of air quality in India. Under the Air Act, the CPCB and the SPCB are the designated authorities for this purpose.
The state government in consultation with the SPCB has the power to declare any area as ‘air pollution control area’.15 A consent to establish, followed by a consent16 to operate, has to be taken from the SPCB before establishing any industrial plant. Further, compliance is ensured through regular monitoring and imposition of fines and imprisonment for non-compliance.
The industry or operation-specific standards for emission or discharge of environment pollutants are revised from time to time by the MoEF&CC through the CPCB.
ii Water quality
The Water Act along with the EPA primarily deals with regulation of water resources in India. The Water Act is comprehensive and applies to streams, inland waters, subterranean waters and sea or tidal water.
There is a consent procedure whereby no industry that is likely to discharge sewage or trade effluent can commence operations without the previous consent of the SPCB.17
The Water Act generally prohibits disposal of polluting matter in excess of the standards established by the EPA or SPCB. Industry or operation-specific standards for the discharge of effluent or the quality of water are prescribed from time to time by the MoEF&CC through the CPCB, and is enforced by the SPCBs through the consents granted to the industries.18
The Manufacture, Storage and Import of Hazardous Chemicals Rules 1989 regulate handling and dealings in hazardous chemicals. The rules apply to industrial activities in which a hazardous chemical as specified in the schedule to the rules is involved. Any industrial activity in which there might be a threshold quantity of a hazardous chemical is not to be undertaken without approval from the relevant authority.19 The rules further cast an obligation on the entity who has control of such industrial activity to provide evidence to show that it has identified the major accident hazards and taken adequate steps to prevent major accidents or limit their consequences to persons (including persons working on the site) and the environment. The rules require the occupier to notify any major accident within 48 hours to the concerned authority and thereafter furnish a report relating to the accident in instalments in the format prescribed in the schedule to the rules. The authority concerned is in turn required to undertake full analysis of a major accident and send the requisite information to the MoEF&CC.20
iv Solid and hazardous waste
The waste management rules of the country were completely revamped in 2016.21 As a part of this initiative the government has notified the Solid Waste Management Rules 2016 (the SW Rules) and the Hazardous and Other Wastes (Management and Transboundary Movement) Rules 2016 (the HW Rules).
The new HW Rules provide for a single window clearance for setting up a hazardous waste disposal facility and import of other wastes.22 Co-processing of waste has been given preference over disposal. The approval for co-processing of hazardous waste to recover energy has been streamlined on an emission norms basis.
The import or export of waste under the HW Rules was streamlined and the list of waste regulated for import or export has been revisited. Further, import of scrap metal, paper waste and various categories of electrical and electronic equipment for reuse purposes no longer needs the permission of the MoEF&CC. Since January 2016, new guidelines are in place to determine financial liability for causing contamination due to improper handling, storage, transport or disposal of hazardous substances.
The new SW Rules introduced the concept of segregating and storing the waste generated at source in three separate streams, namely biodegradable, non-biodegradable and domestic hazardous waste, in suitable bins before the same is handed over to authorised waste collectors.23 Further, spot fining for littering and non-segregation has been introduced.
v Contaminated land
The HW Rules together with the EPA, Water Act and the rules framed by the respective state governments for the regulation of ground water provide the regime for controlling and preventing contamination of land and groundwater by the disposal of hazardous wastes.
The rules impose the liability for damages caused to the environment or third party as a result of improper handling and disposal of hazardous waste on the occupier, importer, exporter and operator of a facility. The occupier and operator are also liable to financial penalties as may be levied by the SPCB in consultation with the CPCB.
VII CLIMATE CHANGE
With the second-largest human population of the world and around 30 per cent of the population without access to electricity, India is confronted with the serious challenge of balancing economic development and greenhouse gas emissions. In an effort to address climate change concerns and to promote sustainable development, the Indian government launched the National Action Plan on Climate Change (NAPCC) in 2008. There are eight national missions that form the core of the NAPCC. The eight missions represent multi-prong long-term and integrated strategies for achieving key goals in the context of climate change. The two most prominent missions are the Jawaharlal Nehru National Solar Mission, which seeks to promote solar energy by enhancing the capacity to 100GW by 2022 and the National Mission for Enhanced Energy Efficiency, which seeks to unlock the energy-efficiency market on a public–private partnership basis. Under it, specific energy consumption targets have been set for 478 designated consumers across eight sectors. Incentivising action through trading in energy-saving certificates is envisaged under this mission.
i Mitigation measures in the energy sector
The 12th Five Year Plan released by the central government for the years 2012–2017 included an agenda of sustainable development. A key highlight of the plan was the government’s initiative to facilitate development of ultra-mega power projects of about 4,000MW capacity. The projects are to use super critical technology, which is expected to achieve higher levels of fuel efficiency, resulting in fuel savings and lower greenhouse gas emissions.
Clean Coal Technology Initiative
Presently coal-based power accounts for about 60.6 per cent of India’s installed capacity and is expected to continue to dominate power generation in future. In order to reduce the carbon footprint of coal-based power plant the government has, inter alia, mandated all new large coal-based generating stations to use super critical technology. Further, 144 old thermal stations have been assigned mandatory targets for improving energy efficiency.
National Clean Energy Fund 2010 (NCEF)
NCEF was set up by imposing a statutory cess on coal. With effect from July 2014, the rate of cess was increased to 100 rupees per tonne and in the Union Budget of 2015–16 the cess was raised to 200 rupees per megatonne. The NCEF is to be used to promote clean energy technologies. The Energy Conservation (Amendment) Act 2010 was introduced to issue energy-saving certificates to designated consumers whose energy consumption was less than the prescribed norms and standards. A consumer whose energy consumption is more than the prescribed norms is entitled to purchase energy saving certificates to comply with the prescribed norms.
Renewable energy targets
The target renewal energy capacity has been revised upwards to 175,000MW until 2022, comprising 100,000MW solar, 60,000MW wind, 10,000MW biomass and 5,000MW small hydro. While the NAPCC technical document recommends renewable portfolio standards of 15 per cent by 2020, the State Electricity Regulatory Commissions (SERCs) have set year-wise targets in their respective states.
Renewable purchase obligations
Further, the SERCs also issued a Renewable Purchase Obligations Regulation specifying the share of renewable energy in the electricity mix. In order to assist in meeting renewable purchase obligations, the Central Electricity Regulatory Commission has set up the renewable energy certificate mechanism enabling the obligated entities to purchase renewable energy certificates to meet their commitments.
ii Mitigation measures in the building sector
Residential and commercial buildings currently account for 29 to 30 per cent of the total electricity consumption in India, a significant part of which goes into heating, cooling and lighting. Some of the measures taken by the government to promote energy efficiency in the building sector are as follows.
The Bureau of Energy Efficiency has developed the Energy Conservation Building Code, which prescribes the minimum standard for energy use in new commercial buildings and major retrofits. The code is voluntary at the national level and the Ministry of Urban Development and state governments are responsible for its implementation and enforcement.
LEED India is the localised version of the international rating system and is administered by the Indian Green Building Council. In 2014, there were 2,760 LEED India-registered buildings and 524 LEED certified buildings, representing 2.19 billion square feet of registered green building footprint.
A Green Rating for Integrated Habitat Assessment (GRIHA) is the national rating system for green building design, developed and implemented by the Energy and Resources Institute and the Ministry of New and Renewable Energy. All new central government and public sector buildings in India are to comply with the requirement of at least three star GRIHA ratings.
Mitigation measures in the telecommunication sector: To address climate change concerns, the Department of Telecommunication issued the following directions to licensees for implementation:
- a At least 50 per cent of all rural towers and 20 per cent of the urban towers were to be powered by hybrid power (renewable energy technologies and grid power) by 2015, while 75 per cent of rural towers and 33 per cent of urban towers are to be powered by hybrid power by 2020.
- b All telecom products, equipment and services in the telecom network had to be energy and performance assessed and certified green passport by 2015.
- c All service providers have to declare to the Telecom Regulatory Authority of India (TRAI) the carbon footprint of their network operations in the format prescribed by TRAI.
- d Service providers should adopt a voluntary code of practice encompassing energy efficient network planning, sharing of infrastructure, deployment of energy-efficient technologies and adoption of renewable energy.
- e Service providers should evolve a ‘carbon credit policy’ in line with carbon credit norms, with the ultimate objective of achieving a maximum of 50 per cent over the carbon footprint levels of the base year in rural areas, and achieving a maximum of 66 per cent over the carbon footprint levels of the base year in urban areas by 2020.
iii Mitigation measures in the transport sector
To deal with climate change, the Director General of Civil Aviation issued five circulars addressing the use of aircraft power supply, fuel efficiency, single-engine taxi and data reporting. One of the most important initiatives is the Circular No. 2 of 2013 requiring airlines and airports to submit fuel and electricity consumption data on a regular basis and managing their own carbon footprint.
Auto fuel policy
A major initiative in the transportation sector has been the upgrading of vehicular emission norms. As a part of its initiative to curb air pollution, the government has made BS-IV emission norms mandatory for all new two wheelers, four wheelers and heavy vehicles. The government has also set an ambitious target to implement BS-VI norms by 1 April 2020, thereby completely skipping the BS-V stage. In light of the frequent instances of bad air quality in the National Capital Region (NCR), the government has decided to prepone the implementation of BS-VI in Delhi to 1 April 2018 and in the NCR to 1 April 2019.
In an ambitious move, the government has decided that by 2030 all vehicles on Indian roads will be electric. In furtherance of this initiative, it has already ordered 10,000 electric vehicles for use in government offices.
iv Other initiatives to combat climate change
The new Companies Act 2013 directs companies incorporated in India with a certain level of profit to spend 2 per cent of the annual profit on corporate social responsibility activities including for environment-related causes.
India has taken action to eliminate petroleum subsidies and impose substantial taxes on petroleum products. As per the Economic Survey 2014–15, p. 38, these actions have taken India from a carbon subsidisation regime to one with a significant carbon taxation regime (i.e., from a negative price to an implicit positive price on carbon emissions).
Indian industry has also participated in voluntary carbon disclosure programmes whereby the industries report their carbon management strategy and greenhouse gas emissions. A report by the Carbon Disclosure Project India indicates a reduction of 165 million megatonnes of carbon dioxide equivalent by Indian industries.
VIII OUTLOOK AND CONCLUSIONS
India has ushered in an era of more stringent environmental norms and stricter enforcement. The new laws focus on self-regulation, while imposing severe penalties for misrepresentation or suppression of facts and providing for environmental offences being cognisable and non-bailable. The proactive role of the judiciary, especially the NGT, has ensured that compliance is mandatory. Forfeiture of bank guarantee by SPCBs, imposition of heavy fines on violators, issuance of closure notices and other such stringent steps are the order of the day. Invoking the ‘deep pocket principle’ and the ‘last man standing principle’ is a common practice. Assessing and addressing environmental risk is material to doing business in India. Regulations are being revised rapidly. Environmental risk is no longer a technical issue but has to be seen in light of public perception and community expectations. The focus will gradually shift from compliance and operational risks to sustainability risks involving water, waste, climate change, energy efficiency, product safety and regulatory changes. Environmental issues will soon determine business strategy in India.
1 Sanjeev Kapoor is a senior partner and Nawneet Vibhaw is an associate partner at Khaitan & Co.
2 Shyam Diwan and Armin Rosencranz, Environment Law And Policy In India, 2nd Edition.
3 The right to a clean environment has been recognised as an integral part of right to life guaranteed under Article 21 of the Constitution of India.
4 These notifications have been issued by the central government under Section 3 of the EPA.
5 The Supreme Court of India in the case of Indian Council for Enviro-Legal Action v. Union of India AIR 1996 SC 1446 has held that, ‘The polluter pays principle means that absolute liability of harm to the environment extends not only to compensate the victims of pollution, but also to the cost of restoring environmental degradation. Remediation of the damaged environment is a part of the process of sustainable development.’
6 In Vellore Citizens Welfare Forum v. Union of India, AIR 1996 SC 2715 the Supreme Court held that, ‘The traditional concept that development and ecology are opposed to each other, is no longer acceptable. Sustainable development is the answer.’
7 M.C. Mehta v. Kamal Nath (1997) 1 SCC 388: The SC used this doctrine for the first time in this case in the context of protection and preservation of natural resources and held that the state is under a duty to protect natural resources and they cannot be converted into private ownership.
8 M.C. Mehta v. Union of India, AIR 1987 SC 1086: The Supreme Court departed from the English law of strict liability and evolved the principle of absolute liability. It held that an enterprise engaged in an inherently dangerous activity owes an absolute duty to the community to ensure that no harm is caused by the activities undertaken by it. Since the pronouncement of this judgment, the defence of reasonable care and absence of negligence are no longer valid defences for enterprises engaging in inherently dangerous activities to avoid liability.
9 Section 16 of the NGT Act.
10 Section 18 of the NGT Act.
11 Sections 26 to 28 of the NGT Act.
12 Section 20 of the NGT Act.
13 Rule 14 of the Environment (Protection) Rules 1986.
14 Section 9 of the EPA read with Rule 12 of the Environment (Protection) Rules 1986.
15 Section 19 of the Air Act.
16 Section 21 of the Air Act.
17 Section 25 of the Water Act.
18 Section 24 of the Water Act.
19 Rule 7 of the Manufacture, Storage and Import of Hazardous Chemicals Rules 1989.
20 Rule 5 of the Manufacture, Storage and Import of Hazardous Chemicals Rules 1989.
21 While the rules relating to electronic, biomedical, plastic, solid and hazardous wastes were revised, new rules relating to the management and handling of construction and demolition waste were brought into effect in 2016.
22 Rules 6 and 13 of the HW Rules.
23 Rule 4 of the SW Rules.