issues on environment

In this article Aditya Shrivastava, Content Marketing Manager at iPleaders, talks about the five Environment Law Compliance For Business In India which you just cannot ignore.

India is touted as one of the fastest growing economies of the world. As per a report by LiveMint, India could regain its position of the fastest growing economy in the world in 2018. However, in the scripting of its growth, there are certain ink spots which cannot be ignored. While the Indian manufacturing sector has been given the necessary impetus time and again and the National Manufacturing Policy is trying it’s best to reach its objective of increasing the sectoral contribution to the GDP by 25%, the government is also giving more initiatives to foster the ease of doing business in India a significant push.

Initiatives like Make in India, Startup-India-Standup-India, E-Biz Project, Skill Development programmes and other reforms in various sectors are few such examples of the government trying to push in reformative agendas. However, due to this “development,” India is slowly running behind in the sector of environment protection. In fact, while the 2013 amendment to the Companies Act went ahead in carefully bringing Corporate Social Responsibility (CSR) into the regulatory ambit, little or no efforts were put in to accelerate environment protection.

While the capitalists argue that the pre-existing environment laws are sufficient, the truth remains the same. In spite of tribunals like National Green Tribunal being functional, the corporates are non-compliant with environmental permits.

The liability might initially seem to be petite, however, there are numerous examples of cases where companies have suffered massively because of non-compliance to such laws. For example, in the Sterlites Industries case (2013), a penalty of 10% of Profit Before Depreciation, Interest, and Taxes (PBDIT) was imposed on one of the largest copper smelter plants in India for operating without a valid environmental consent permit. The penalty imposed was that of INR 1 Billion.

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It is important to note that after the enactment of National Green Tribunal Act, 2010 which seeks to align all other environmental laws to itself, the penalties have been significantly increased. For example, under the Section 26(1) of the Act, the tribunal can award a punishment of 3 years or a fine up to INR 10 Crore for non-compliance with the order of the NGT.

For a business to be absolutely functional and work without any hassle, it is quintessential that it is operated in strict adherence to all the legal compliances. Right from the registration of the company, everyday transactions, labor and employment practices, following safety measures and, last but not the least, environment regulations need to be consciously adhered to. If I start writing about each one of them I will have to prepare a separate course for it. Thankfully this course covers it all and manages to save me from the burden.

Here is a crisp overview of certain aspects of the environmental law that most of the people don’t know about and bear the consequences later:

Regulations And Legislations

There is an enormous list of legislation that you need to look at in order to ensure that you don’t miss out any compliance. I will keep the necessary compliance checklist for the next article. Here is a comprehensive list of legislation you need to abide by:

  1. Water (Prevention and Control of Pollution) Act, 1974 (Water Act)
  2. Air (Prevention and Control of Pollution) Act, 1981 (Air Act).
  3. Environment (Protection) Act, 1986 (EP Act) – This is the umbrella act which entails the following rules:
    a) E-Waste (Management) Rules, 2016;
    b) Bio-Medical Waste Management Rules, 2016;
    c) Construction and Demolition Waste Management Rules, 2016;
    d) Hazardous and Other Waste (Management and
    e) Transboundary Movement) Rules, 2016;
    f) Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989;
    g) Coastal Regulation Zone Notification, 2011; h) Environment Impact Assessment Notification, 2006; and
    i) Plastic Waste Management Rules, 2016).
  4. Wild Life (Protection) Act, 1972
  5. Forest (Conservation) Act, 1980
  6. Public Liability Insurance Act, 1991
  7. Biological Diversity Act, 2002
  8. National Green Tribunal Act, 2010

It is a very tedious job to go through each and every legislation and figure out the necessary compliances. To avoid it you can take this course to ensure that you don’t only have a comprehensive list of environment law compliances but are also aware of other important compliances which are required for the business.

Environmental Permits (Single or Separate)

Beginning March 5th 2016, the Ministry of Environment, Forests, and Climate Change has adopted a new method of classifying each type of industry. A concept of “white industries” has been introduced for classifying “non-polluting” companies. They do not need a permit or consent and just require to notify the relevant State Pollution Control Board.

For all the others (red, orange and green industries), there are certain environmental permits that are required to be obtained. You might require multiple numbers of permits depending on what kind of activity your business is delving into and the size of the business. Your company will be given a Pollution Index (PI) score, depending on the utilization of the resources, the air emissions, water effluents, and hazardous waste generated. You will be required to obtain consents and permits from the apt board. As per this article, the PI score is allocated in the following manner:

  • Red category: PI score of 60 and above. Including but not restricted to asbestos, nuclear power plants, shipbreaking, oil and gas extraction, etc.
  • Orange category: PI score of 41 to 59. For example, food processing, printing ink manufacturing, paint blending, and pharmaceutical formulations.
  • Green category: PI score of 21 to 40. 63 sectors have been identified under it. For example sawmills, tyres/rube retreating, polythene and plastic products.
  • White category: PI score up to 20. For example solar power generation through solar photovoltaic cells, wind power, and mini hydro-electric power less than 25 megawatts. 

Environmental Integrated Permits

In India, there exists an integrated permit system where a single permission suffices for a lot of consents and permits. For example, a combined consent application to the relevant State Pollution Control Board can be submitted to obtain the ‘consent to establish’ and subsequently the ‘consent to operate’ under the Water Act, Air Act and Hazardous and Other Waste Rules, 2016.

Technology has made the process easy. For instance, the recently adopted E-Waste (Management) Rules, 2016 has introduced only one centralized and pan India application form by the Central Pollution Control Board instead of the State Board in order to get an authorization for the producers.

How Long Does A Permit Last For?

Generally, it is the State Pollution Control Board which has the discretion to determine the duration of consents and permits. In the past decade, efforts have been made to streamline the validity of each industry. Typically, an initial ‘consent to establish’ has a validity for a year which needs to be renewed, but it is dependable on the scale of the project. Other consents and validities such as ‘consent to operate’ under various air and water laws can vary from 3 to 5 years.

In case of renewal is required, an application is generally granted 60 to 120 days before the date of expiry of the ‘consent to operate’. In case there has been any non-compliance, the State Board can also cancel the renewal or only grant consent in case the non-compliance has been rectified.

The latest laws have a provision for longer permits. For example, the E-Waste Rules or Hazardous and Other Waste Rules, 2016 provide a validity up to 5 years. Again, it is extremely dependant on which industry you are operating in.

Restriction On The Transfer Of Permits

If you are is trying to restructure an organization or selling your business to someone else or perhaps acquire a business, this information might be useful for you. Most of the consent orders, licenses, and environmental clearances can be readily transferred if they are obtained under the Environmental Impact Assessment (EIA). Here is the standard procedure for it:

  • The new acquirer/transferee/buyer needs to submit an application to the relevant regulatory authority with an undertaking that he would comply with all the pre-existing conditions in the consent order/license grant/permit.
  • The owner needs to provide a no objection certificate to the relevant regulatory authority.
  • A list of supporting documents (explaining the underlying reason for the transfer, change of name, change of management, and so on), as applicable, must be presented.

Needless to say, businesses, big or small, have an equal liability to protect and safeguard the environment. In this case, their liability increases perhaps a little more because their actions are of greater magnitude and have far-reaching consequences. This is exactly why they are more than obligated to ensure that these compliances are adhered to.

There is no denying the fact that such regulations and compliances can be cumbersome and tedious and it might not be possible for everyone to keep a track of them. An easy way to do that is by subscribing to an online course which can provide you with ready checklists and guide you to run your business without any hiccup.

The task might be a rigmarole but it can be easy.

All the luck.


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