MAY 17, 2017

By Naresh Minocha, Consulting Editor

IF novelist Charles Dickens were alive & stayed in India, he would have turned his phrase 'law is an ass' into a hard fact. And he might have cited The Environment (Protection) Act (EPA), 1986 & its implementation to prove that law is indeed an ass. It kicks well in India.

Dickens might have cited many instances to show why EPA is a perfect ass. Discretion-driven EPA provides no penalty on slum lords (at least there is no case history of EPA enforcement on this count). It, however, does provide for penalty against a government entity such as Tamil Nadu Slum Clearance Board for starting work on pollution-preventing slum rehabilitation/housing projects without waiting for environmental clearance (EC).

EPA implementation has avoided levying any penalty on Naxalites? feted as Left Wing Extremists for destruction of forests through landmine explosions. It, however, does provide for penalty against miners including public enterprises for delay in getting EC for mines that have functioned much before enactment of EPA.

EPA is flaunted by eco-terrorists as overarching 'right to life' (RTL) protecting law. And RTL matters only when it is perceived through EPA. If a pharmaceuticals firm, for example alters its product-mix to produce a life-saving drug, then it becomes EPA violator – a threat to RTL of the masses. CIPLA Limited finds itself in dock precisely on this count.

This law is actually dead against any change in production process and excess production of any kind, even if that means a leg-up to Modiji's#Make In India. No wonder companies are queuing up before MOEF&CC to say 'I plead guilty'. Additional wealth, more jobs and enhanced revenue collection don't figure in the asinine enforcement of EPA.

EPA can also trigger penalty on a hospital that constructs an additional building within its approved complex to cope with rush of outpatients. RTL of patients protected through such healthcare efforts is irrelevant from EPA's standpoint.

The Act has now unleashed retrospective raj. Retrospective enforcement of a recent rule has transformed more than hundred EPA-compliant construction projects as technical violators of the Act as would be explained later in this column.

All these are unfolding stories whose number is growing by the day as project developers rush to 'admit' their role in infringing EPA and seek ECs under a notification issued by Ministry of Environment, Forest and Climate Change (MoEF&CC) on 14th March 2017. Public & private sector biggies figure in the list of violators whose number aggregated to about 200 on 14th May.

Public sector applicants include Indian Oil Corporation (IOC), Steel Authority of India Limited (SAIL), Central Coalfields Limited, a subsidiary of Coal India Limited (CIL) and Singareni Collieries Company Limited.

Private companies include Jindal Stainless Limited (JSL), Bharat Aluminium Company Limited (Balco), Micro Labs Limited, Raheja Developers Limited, India Cements Limited, Jupiter Lifeline Hospital and Orient Abrasives Limited.

Other entities that have applied for EC as violators include Army Welfare Housing Organization (AWHO), Gwalior Development Authority, Gujarat Housing Board and Tamil Nadu Housing Board.

The March 2017 notification has opened a six-month window as a one-time opportunity for alleged defaulters to apply for environmental clearance (EC). The defaulters are the ones that started construction work on the project site or ramped up production beyond approved ceiling or tinkered with their product-mix.

The infringers also include a few companies whose applications for ECs have been held up for several years. There is also a case of a realty company, Oorjita Projects Pvt. Ltd, which has ended up as defaulter because EPA notification was initially interpreted wrongly by Bhubaneswar Development Authority.

This is 2nd time that the Union Government has created 'last' window of opportunity for delinquent units to come clean! The first window was created on 5th November 1998 that allowed upcoming or operating units with EC to seek ex-post-facto ECs by 31 st March 1999. It was later extended to 30th June 2001 and later re-extended to 31 st March 2003.

In a policy circular dated 14th May 2002, Vajpayee Government had described the re-revised deadline as "last and final opportunity to obtain ex-post-facto environmental clearance". The 'last' never came as the Ministry periodically issued guidelines to accommodate defaulting units.

MOEF&CC never realized minor breach of its water-tight rules is unavoidable in business for varied reasons-some of which can be attributed to authorities. Information about the fate of norms for creation of eco-development fund (EDF) stipulated in this circular is not known. The circular, for instance, provided for deposit of 0.25% of project cost of over Rs 1000 crore or a maximum of Rs 5 crore in EDF.

EDF finds no mention in subsequent guidelines. One such guideline was issued on 5th November 2010, which was replaced with a new one on 12th December 2012, which was amended on 27th June 2013.

MOEF&CC kept granting such approvals to defaulting projects on case-to-case (C2C) basis. This was done under guidelines issued as office memorandum from time to time.

The Government, however, hardly made any effort to reduce delays in grant of ECs due to different reasons. Why EPA does not specify penalties for willful delay in grant of approvals by authorities? A case in point is deliberate delay by local authorities in holding public hearing on environment impact assessment (EIA) of projects.

The Ministry has, however, acted against a few violators on C2C basis. A notable case in point is cancellation of Ist stage environmental nod called terms of reference (TOR) for EC granted to Vedanta Aluminium Limited (VAL).

TOR's cancellation during October 2010 resulted in withdrawal of permission to expand aluminum refinery and its captive power plant in Odisha as penalty for starting construction work without waiting for EC.

What is MOEF & CC's criterion for selecting defaulters for imposition of severe penalty? Why did it not make the order issued to Vedanta as standard penalty against alleged violators? Why has it not standardized penalties and exemptions? The Ministry has thus implemented EPA as a discretionary law instead of amending it to balance RTL mantra with other human rights such as the right to earn a living through work.

MOEF&CC's C2C governance has suffered a huge blow after judicial authorities gave stinging verdicts.

On 28th November 2014, Jharkhand High Court held that certain conditions stipulated in office memorandum dated 12th December 2012 were illegal and unconstitutional. It ruled that that EC proposal must be examined on its merits, independent of any proposed action for alleged violation of the environmental laws.

On 7th July 2015, National Green Tribunal (NGT) quashed the same memorandum and another one dated and 24th June, 2013. NGT contended that memoranda could not amend the provisions of the EIA notification, 2006. This certainly calls for crash refresh course for green experts in law implementation.

Acting on these verdicts, MOEF&CC opened a six-month window on 14th March 2017 for alleged EPC violators to apply for TORs or ECs as the case may be.

This notification is silent on another NGT verdict issued on 8th January 2016, In January 2016, NGT had declared MOEF&CC policy circular dated 14th May 2002 on ex-post-facto approvals as illegal and void. NGT also ordered closure of four units in Gujarat that received such permits. This verdict was later stayed by Supreme Court following an appeal filed by Alembic, whose unit was affected by the order.

In a letter dated 25th May 2016, Alembic told MOEF&CC that though NGT verdict was issued against four companies that were mentioned as accused in public interest litigation, over 400 units were issued ex-post facto approvals under the expunged policy circular.

"We do not know what would be the stand of MOEF for all four hundred units," added Alembic.

Consider now a few cases of entities that have filed applications via this channel and have thus become victims of retrospective raj.

Take the case of UltraTech Cement Ltd (UTCL). It operates a captive limestone mine for its cement plant located in Ariyalur district of Tamil Nadu. The mine became operative from August 2006.

As put by UTCL, "The extent of mine is only 4.985 Ha, with low key operations involved. The mine was not under the purview of EIA Notification when was started. Only after June 2013, the mines under 5Ha were brought into consideration and by that time the mine was already in operation. As per the instructions from Department of Mines & Geology, Government of Tamilnadu (TN), the Environmental Clearance process was initiated ".

Several other companies that operate mines of size of up to 5 hectares (exempted under EIA notification of September 2006) have also emerged as violators due to enforcement of retrospective raj.

Another instance of retrospect governance is Coimbatore-based PSG Hospitals that has been in operation since 1989. In the year 2003, PSG had started to construct a new building named OPD Block to improve the outpatient services and completed it before May 2006, that is, before MOEF&CC notified its comprehensive EIA notification dated 14th September 2006. And it has documentary proof such as TN's Electrical Inspectorate's completion report for electrical installation in OPD.

The company ran into trouble when it applied for EC with State Environment Impact Assessment Authority (SEIAA) to increase the bed strength from 450 to 800 by utilizing a part of OPD block and another existing building. The Authority considered it a violation case under MOEF & CC's March 2017 notification. On 27th March 2017, PSG thus applied for EC as a violating company.

A standard explanation given by defaulting real estate project reads as: "As this project falls under Category 8(a) there is no need for Environmental Impact Assessment Study. Hence no Terms of Reference (TOR) is required. But as per the procedure prescribed by MoEFCC in its Notification dated 12.03.2017, we are making application to get specific TOR as the project is in violation".

Even as the unfolding saga of defaults becomes more gripping by the day, there is lull in the Centre-Supreme Court tussle over setting up of an independent environment approvals authority.

On 6th July 2011, Apex Court directed Government to appoint a National Regulator under Section 3(3) of EPA for appraising projects, enforcing environmental conditions for approvals and to impose penalties on polluters. The UPA Government did not act on this directive.

On 6th January 2014, Supreme Court again ordered the Government to appoint a Regulator with offices in as many States as possible as directed in its earlier order. The former asked the latter to file an affidavit along with the notification appointing the Regulator in compliance of this direction by 31st March, 2014. Updates on this case are hard to come by in public domain.

All said and done, EPA requires complete revamp as it has become a major stumbling block in the way of economic growth, wealth generation and jobs creation. EPA has turned out to be a dreaded tool in the hands of judicial and eco-terrorists to stop India's march towards sustainable development under the garb of RTL protection.

Can there be sustainable development without population control (which is not EPA's concern) & without wealth generation, which is required for removal of pollution-creating poverty and for financing environmental resurgence?