Natural Resource Damage: Experience and Challenges in India

1. Natural Resource Damage: Experience and Challenges in India Justice Anil Kumar India November 26, 2008

2. India Situation • No policy on Natural Resource Damage (NRD) • No legislation to enforce Responsible Parties (RPs) to conduct clean up action or pay/reimburse trustees (MoEF/ DoEs) for cleaning up NRD

3. Contd. • Limited Regulatory Agency actions imposing bank guarantee (BG) and in some cases even pollution cost to restore environmental damage; assessment arbitrary

4. Contd. • One Indian state (Andhra Pradesh) created Environmental Fund with forfeited BG for remedial actions/reversal of damage to NR • Needs policy and legal support and scientific procedure for assessing amount of compensation for BG

5. Judicial Actions • Supreme Court (SC) in several judgements recognized the importance of principle of international laws such as “Polluter Pay”, “Precautionary Principles” and “Absolute Liability” • SC declared them as law of the land in view of Article 47,48A of the Constitution and the EPA of 1986

6. Case Study I • In Bichhri (Rajasthan), industry produced toxic oleum and H acid • Highly toxic effluents and sludge damaged the land (unfit for cultivation) and water (unsuitable for irrigation)

7. Contd. • Local administration directed closure but large quantity of toxic sludge still remained accumulated in the area • NGO filed a writ for remedial action

8. Contd. • Court held that industry engaged in hazardous activity has liability to compensate all affected by accidents and also liable to pay cost of remedying damage caused to NR and health

9. Contd. • Court directed MoEF to assess amount required for removal of sludge lying in the area (transportation, treatment and storage in accordance with the Haz Waste Rules,1989) and the responsible industry to pay this amount

10. Contd. • Court further directed that local community can file suit in civil court on loss suffered by villagers • Finally, Court ordered the industry to pay USD 1,000 by way of cost to the petitioner who fought this litigation over six years with his own resources

11. Case Study II Sriram Oleum Gas Leak on Strict Liability: • Writ Petition seeking court direction for closure of Sriram industry (SI) as hazardous to community • Court allowed SI to continue with certain conditions ;only dispute related to its relocation to another place where no danger to health and safety of people

12. Contd • While writ petition was pending, there was oleum gas leak • NGO filed application for compensation to affected people

13. Contd. • SI contested the compensation claim arguing it was not included in the Writ or the Writ was not amended; but court rejected this contention • The Court applied the expanded concept of Absolute Liability wherein no defense is available to the violator to escape liability.

14. Contd. • Court observed that enterprise engaged in hazardous or inherently dangerous industry posing threat to the health/safety of workers & surrounding community owes a non delegable duty to ensure that no harm is caused and has absolute liability to compensate those who were affected

15. Contd. • Court also held that amount of compensation should be directly correlated with degree of damage & capacity of enterprise and it must have deterrent effect

16. Contd. • Court further directed that the NGO should take up the cases of those who were affected and file actions on their behalf in appropriate court for claiming compensation from SI

17. Case III Pollution by Tannery in Tamil Nadu: • Writ petition that tanneries/other industries discharging untreated toxic effluents into agriculture field, open land and waterways and finally into the river which is main source of water supply to Vellore city

18. Contd. • The effluents contaminated ground water and destroyed physico -chemical properties of soil • NGO survey found 350 of 467 wells used for drinking/irrigation are polluted and about 59 villages were affected

19. Contd. • Court observed that despite state PCB effort, most tanneries were operating without any treatment facility • Court therefore, directed National Environmental Engineering Research Institute to submit feasibility report for Common Effluent Treatment Plants

20. Contd. • Court also directed the Central Govt to constitute a Authority under EPA with power to invoke Precautionary Principle and Polluter Pay Principles

21. Contd. • This Authority should determine compensation to be recovered from the polluters as cost of reversing the damaged environment and direct closure of non paying industries

22. Contd. • MoEF constituted Loss of Ecology (Prevention and Payment of Compensation) Authority headed by a retired Judge • This Authority after detailed study awarded a compensation of USD 5.5 ml to 29,193 families as pollution damage

23. Case Study IV • Case involved encroachment of forest land and attempt to change the course of river to facilitate the construction of a motel by a company

24. Contd. • Court took notice of a news item and proceeded to quash the approval of the govt to lease forest land for motel construction • Court directed the govt to take over the entire area and restore it to its original state

25. Contd. • The Company was directed to remove the construction made on the river bed, to pay compensation by way of cost of restoration of the environment and ecology and to ensure that the river is not polluted by effluents from the motel

26. Contd. • Court used Public Trust Doctrine as part of the law of the land that provides a framework to courts in deciding cases related to environment where a major community resource has been diverted for purpose and use other than those for common enjoyment and benefit.

27. Case Study V • Writ petition: Diversion of forest land for non forestry purpose • Centrally Empowered Committee (CEC- constituted by the MoEF under EPA pursuant to Court Order to monitor forestry related matter)

28. Contd. • CEC recommended that while approving diversion of forest land for non forestry purpose Under Forest Conservation Act: -realize from user agency fund for compensatory afforestation /reforestation and net present value (NPV) of forest land diverted for non forest purpose

29. Contd. -create Compensatory Afforestation Fund (CAF) for depositing all money -establish CAF Mgt and Planning Authority for Mgt of this fund

30. Contd. • Court accepted the recommendations of CEC and directed MoEF to : -create a Special Purpose Vehicle to develop a plan and restore ecological balance through reforestation; and

31. Contd. - constitute an Expert Committee to develop a methodology to calculate the NPV based on economic principles (replacing the World Bank developed methodology that adopts USD 12,000-18,000 per ha as NPV)