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This article is written by Aditya Singh, from Symbiosis Law School, Noida. This article deals with the landmark case which emphasizes that the polluter pays principle. The article further analyses this principle with respect to its development and applicability.

Introduction

Being motivated from the 1972-Stockholm Declaration, a broad variety of environmental regulations have been developed by India which includes the Water Prevention and Control of Pollution Act of 1974, the Air Prevention and Control of Pollution Act of 1981, the Environment Protection Act of 1986 and the Forest Conservation Act of 1980.

An environmental policy was developed which mandated the polluter to face the costs and accountability with respect to the pollution caused and the consequences that are connected to such pollution, this concept came to be known as the Polluter Pays Principle. The above principle was expressly conveyed by the Organization for Economic Cooperation and Development in 1972, when there was a necessity to adopt policies or strategies which would discourage pollution and preserve the environment as well as the population at large from dangers posed by environmental pollution being caused due to industrial development. The concept of the Polluter Pays Principle was developed by the OECD on the Recommendation of the Council on Guiding Principles relating to Economic Aspects of Environmental Policies. With regard to both domestic and global environmental policies, this concept presently plays a very significant role.

Background facts

An environmental association called the Indian Council for Environmental Legal Action lodged a writ petition regarding this case. This Environmental group raised a particular issue to shed more light on the miseries of individuals residing in a village called Bichhri Village, which was occupied by chemical industries plants. This is a tiny village situated in the Udaipur district, Rajasthan. The village’s northern section is held by plants such as Hindustan Zinc Limited and several other Chemical Industrial Plants. The emphasis in this case was made that such businessmen see these opportunities which have the potential of causing pollution in the area as ways to increase their profit margins by encouraging industrialization and from exports.

The fourth defendant Hindustan Agro Chemicals Limited in 1987, began manufacturing a concentrated type of sulphuric acid called oleum together with a single super-phosphate, that posed a serious threat to the inhabitants of that specific region. The true crisis began when the fifth respondent TataSilver Chemicals began the manufacturing of ‘H’ acid within the very same compound as well, which was being produced for export purposes majorly. The eighth respondent Jyoti chemicals was situated in another compound which was producing ‘H’ acids mostly, along with several other toxic chemicals. Various other chemical industries were also created for production fertilizers as well as other such chemicals which were contributing in some or other way towards pollution. All the defendants, in this case, were generating hazardous waste-discharge in this specific region, which was not even being adequately treated by these industrial plants. Whether it be water, air, soil, or anything else as soon as it was coming in contact with these industrial effluents it was getting poisoned.

As per the submitted report which showed that there were about 2,500 tons of extremely poisonous sludge being generated along with that approximately 375 tons of ‘H’ acid was also being manufactured, which was intended solely for export purposes. Without any proper treatment, all the waste products were being dumped into the village region.

All such harmful materials polluted the soil, groundwater, and contaminated the underground water stream. Over the years, these poisonous substances have rendered all the wells as well as other sources of water extremely toxic and unfit for human consumption. The water sources utilized for drinking, irrigating, feeding cattle, and other such purposes, along with the soil fertility, which was the primary source of survival for many residents, was getting impaired because of contamination. Pollution caused by hazardous chemicals further leads to a variety of disorders, diseases, and deaths in the village and neighboring regions.

Even the Parliament has expressed concern over the severe damages done to the earth, with the ministers being worried about the environmental degradation of the area. They had ensured that appropriate action would be taken but nothing transpired. Therefore, as a consequence of this, there was a virtual protest by the inhabitants of that region, which led to the district magistrate enforcing Section 144 of CrPC in the area and closing of these plants.

Issues

  • Whether the industries involved in the manufacture of toxic chemicals had taken any environmental protection measures?
  • Whether the defendant would be legally responsible for paying the sum of money required to carry out the necessary corrective actions?

Arguments and proceedings

Arguments by petitioner

Defendant industries started the manufacturing of ‘H’ acid along with other chemicals in a plant situated in the same complex in the Bichhri village. The manufacturing process of which leads to the formation of large quantities of extremely poisonous industrial effluent, which are particularly iron-based and gypsum which mainly facilitates the generation of sludge. The waste products which mostly are sludge was never adequately treated and contributed to the development of air, soil, water pollution, and contamination of numerous other environmental resources.

This posed a significant danger to the nature of that region. It was further contended that because of the respondents’ industrial plants, greater levels of pollution were being created in the surroundings of that region and therefore the plants had to be closed down instantly. In addition, it was further asserted that, firstly, manufacturing should be suspended until the waste is adequately treated so as not to cause any damage to the environment and its resources.

Moreover, the petitioner claimed that industries of nearly all of the respondents had requested for a ‘No Objection Certificate’ regarding the manufacture of these hazardous chemicals and was refused and dismissed by the authorities which itself is a piece of evidence as it shows as to how the manufacture of such chemicals would only lead to environmental degradation of the neighboring area in numerous ways.

Arguments by respondent

For the purpose of counter-arguments, the defendants filed a counter-affidavit to sustain their statements. The assertions presented by them were:

Hindustan Agro Chemicals Limited: As per their affidavits this plant had already been granted by the Pollution Control Board a “No-Objection Certificate” for the production of sulphuric acid and alumina sulphate. The permission was given by the board, but with some terms and conditions. In response, the Board further issued a ‘No- Objection Certificate’ under the Water [Pollution Prevention and Control] Act, 1974 and Air (Pollution Prevention and Control Act) Act, 1981, which was again conditional in nature. After which they began with the production of Oleum and Single Super Phosphate [S.S.P.] rather than producing sulphuric acid. They further submitted that the treatment is quite difficult since most of the toxic substances found are resistant in nature.

Analysis of polluter pays principle

In this case, the Principle of “Polluter Pays” was expressly implemented, as the Court ruled that, under Section 3 and Section 5 of the Environment (Protection) Act, 1986, the Court has the authority to undertake steps to put such a rule into effect. It was introduced under Principle 16 of the Rio Summit of 1992 which specified that the polluter must principally pay for the pollution charges.

This principle in the Indian context was a result of the continued evolution of the ‘absolute liability’ principle which was set down in the M.C. Mehta v. Union of India case, in which the court-mandated that the polluters must pay a penalty for causing pollution, which will be used for improving the environmental and residential conditions for the inhabitants of the regions affected. The concept developed further with the case of Indian Council for Environment-Legal Action v. Union of India (UOI) and Ors, in which the Court also included accountability, remuneration to the people affected from the environmental deterioration with the absolute liability rule for the damage caused to the environment of the region.

Although the principle of Polluter Pays was accepted by the courts in India, however, its reference does not seem to be included in the prevailing or prospective laws. The Court established in the Vellore Citizens Welfare Forum v. Union of India and Ors, case that this principle was regulated by Articles 48-A and 51-A(g) of the Indian Constitution and that the principle may be inferred with the prevailing legislation. In many cases even where the pollution created was well within the limitations which were placed on them, the Courts have still made the polluters pay adequately. For instance, in the case of Oleum Gas Leak, in which even though Shriram Factories complied with applicable laws like the Air Act of 1981, the Supreme Court found them responsible for the leakage of oleum gas and for the deterioration of the environment.

There is also a debate about whether only a civil action against the polluter is satisfactory or whether there is a necessity to make the polluters criminally liable as well. The provisions of Sections 268 and 290 of the Indian Penal Code were already being utilized to declare the accused criminally responsible for public nuisance in relation to environmental disturbance, which was way before the adoption of the Stockholm Declaration in 1972. Following the Stockholm Declaration, the Water Pollution Prevention and Control Act of 1974, and the Air Pollution Prevention and Control Act of 1981 contain the provisions for the initiation of criminal proceedings against such polluters.

The environmentalists generally describe a ‘polluter’ in a broader sense and not just as an individual who causes harm to others but rather as people who use their own assets and resources in such a manner that damages the environment. Since, there are no victims requiring compensation in such situations, the payment amount is generally assessed by the degree that it would further discourage such kinds of conduct. The reimbursement, irrespective of the presence of real victims, is generally made in the form of a tax to the government. In these kinds of situations, the Polluter Pays Principle is applied to support an environmental program instead of ensuring that the true polluters pay remuneration for their activity to the actual victims.

Judgment

Upon considering the facts and findings of this case, Judges ruled that the industries will have to deposit the penalty, as ordered by the Court vide its judgment dated 11 April 1997, along with compound interest. Since 11 April 1997, the respondent industries have intentionally failed to comply with the court’s directions. A significant amount of residents have already been seriously impacted as there have so far been no effective corrective measures taken. The respondent industries have accomplished in their strategy with respect to refusing to comply with the decision of the court by maintaining the case going on for more than fifteen years by submitting interlocutory requests that were absolute without any substance and therefore, were subsequently rejected with costs.

As a result, following 11 April 1997, the respondent industries were ordered to pay Rs. 37,385,000 INR together with a compound interest of 12 percent per annum until the sum would have been fully paid or compensated. In addition to this, the respondent industries were mandated to pay the litigation fees for deliberately wasting the court’s time and resources, as the case was carried on for nearly fifteen years, long after the Court’s final decision and for all these years the applicants were forced to carry on the case. Taking into account the sum total of the facts and findings of the case, regarding both the interlocutory applications, the court ordered the respondent industries to pay a sum of Rs.10,00,000 INR as costs. This sum of money would also be used, under the direction of the respective authorities, for performing corrective actions around the Bichhri village and neighbouring regions within the Udaipur district, Rajasthan, India.

Basically, the court implemented the concept of polluters pay, which implies, as per the court, that if an activity carried out, is of a harmful nature, then the individuals conducting these very activities will be required to compensate to make up for the damage caused to any other person irrespective of whether appropriate precautionary measures were taken or not while carrying out such an activity.

Conclusion

It is an irrational interpretation of the polluter as somebody who results in harm to, not anyone, but perhaps the environment.  As the environment can not really be actually recompensed, this allows for a justification to levy taxes upon guilty entities along with the assurance that the sum will be utilized to reverse the harm done. But in practice, these “polluter penalties” mainly help to boost the earnings of the government officials, advisors, and attorneys, most of whom profit from the method. As presently interpreted, the polluter pays concept actually winds up as just a mechanism for transferring money from polluters to non-victims who are politically very well connected.

They accurately interpreted that the polluter pays principle draws attention to the fact that on one side there is almost no stress between individual liberty, economic prosperity, and private ownership of a property, and on the other, adequate environmental sustainability. As per the Indian scenario, legislation with respect to the imposition of criminal liability against defaulting corporations is still not found. Some even have commented that the principle of ‘polluter pays’ has now degenerated into the concept of ‘pay and pollute’, as a result of delay and insufficiency in providing executive action in such cases. The punishment given to industries ought to be such as to reimburse the victims as well as repair the damaged environment and somehow also discourage the polluters from performing such an act again.

Reference

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