This Article is written by
Arpan Anand – 2nd Year of BBA LL.B.
Bharati Vidyapeeth,(Deemed to be University),New Law College Pune.
Keywords
Corporate Responsibility Environmental Management Vedanta Sterlite Issue Sustainable Growth Environmental Policy in India NGT and Supreme Court.
Abstract
Corporate accountability and environmental governance is at the core of sustainable development which we see play out in cases of industrial activity that directly affect ecological balance and public health. The Vedanta Sterlite Copper Plant is a key example of the interface between corporate action, environmental governance and the rule of law in India. The Vedanta Sterlite case based in Thoothukudi, Tamil Nadu brought to light serious issues of corporate accountability and compliance with environmental regulations. Allegations of toxic emissions, groundwater pollution and break of regulatory rules sparked large scale protest which resulted in the plant’s shut down in 2018. This article looks at the legal structure which governs environmental policy in India, reports on judicial action taken and looks at the accountabillity measures put in place in the Vedanta case. We also look at international practice and landmark Indian decisions too which we use to identify what is amiss in enforcement and put forth reform which ensures corporate compliance without at the same time damaging environmental integrity. We find that for strong environmental governance to exist and for we to prevent future environmental crises and to live up to the constitutional right to a healthy environment we require strong environmental governance structures which go hand in hand with strict corporate liability.
Introduction
Corporate accountability in environmental governance is a matter of more than just statutory compliance; out of constitutional principles it is a basic duty. Article 21 of the Indian Constitution which provides for the right to life has through the judiciary been interpreted to include the right to a clean and healthy environment. In this regard it is the responsibility of corporate entities which are into large scale industrial projects to see to it that they do not cause environmental damage.
The Thoothukudi based Vedanta Sterlite Copper Plant in Tamil Nadu was at the center of what may be considered the most serious corporate environmental issue in India’s history. We saw reports of continuous air and water pollution, violations of environmental standards, and the issue of the local community being pushed aside which in turn led to the Government’s decision to shut the plant down. This case also serves as a case study for the in depth review of India’s environmental governance structure which in turn includes issues of corporate responsibility, judicial review, and public input.
Background on the closure of Vedanta Sterlite plant.
The Sterlite Copper Plant of Vedanta Limited which began production in 1996 in Thoothukudi. It was a large scale producer of refined copper which in turn played a great role in India’s industrial growth. But the plant’s ops faced constant protest from local residents, NGOs, and environmental groups which reported that they .
Sulphur dioxide emissions exceeding permissible limits.
Ground water pollution which affects agriculture and drinking water.
Improper disposal of hazardous waste.
In 2013 we had large scale incidents which brought out into the open public anger. In March 2018 reports of Vedanta’s plan to expand the plant’s capacity set off protests. On May 22, 2018 report of police fire on to the protesters which left 13 dead broke out and drew national and international criticism.
In the wake of that which transpired the Tamil Nadu Pollution Control Board (TNPCB) did in fact order the shut down of the plant which was a result of violation of environmental laws and threat to public health.
Legal Structure for Environmental Accountability in India.
1. Constitutional Articles.
Article 21 Right to life also includes the Right to clean environment (M.C. Mehta v. Union of India, 1987 1 SCC 395).
Article 48A Procedural requirement for State to take measures which will protect and improve the environment.
Article 51A(g) Every citizen has the responsibility to protect the environment.
2. Statutory Rules.
Environment Protection Act of 1986 Framework legislation which gives the central government power to control industrial pollution.
Water (Prevention and Control of Pollution) Act of 1974 Regulates discharge of pollutants into water bodies.
Air (Prevention and Control of Pollution) Act of 1981 which controls air pollution from industrial sources.
In 2016 the issued rules on management of Hazardous Waste which put forth safe handling and disposal of hazardous materials.
3. Principles of Environmental Policy.
Polluter Pays Principle In Vellore Citizens Welfare Forum v. Union of India (1996) 5 SCC 647.
Preventive Principle which is to take action in advance when there is a threat to the environment.
State is the trustee of natural resources for public use.
Judicial actions and rulings.
National Green Tribunal (NGT)
The NGT at first put forth that the plant may open conditionally which included in particular the issue of environmental safety. But the Tamil Nadu government challenged that decision which in turn took the matter to the courts.
Supreme Court of India
The Supreme Court in the interim relief petitions put public health at therefore and supported the state’s right to regulate industry. Also it brought forward past cases like M.C. Mehta and Vellore Citizens to prove the point that environment takes precedence over business.
Other relevant cases: Other examples of which:.
In Sterlite Industries (India) Ltd. v. Union of India (2013) 4 SCC 575 we see the issue of previous pollution complaints.
Corporate Responsibility and Environmental Management in the Vedanta case.
The corporate compliance and regulatory enforcement were brought into question is that of the Vedanta case.
Corporate Social Responsibility (CSR) Though required by law Vedanta was accused of not doing enough regarding community issues.
Regulatory Audit TNPCB reported to see the same issues over and over.
Legal Responsibility which is the Polluter Pays Principle and environmental compensation rules requires companies to cover the cost of ecological restoration.
Analysis of Governing Structures.
India has seen great development in its environmental governance structures over the years, in the meantime the closure of the Vedanta Sterlite Copper Plant brought to light deep seated issues. A look at the present state is that we have pros and cons which require immediate attention.
1. Regulatory Hijacking.
Regulatory capture is when which is supposed to act in the public best interest, instead it supports the industry it is supposed to be looking at. In the case of Vedanta we saw that environmental clearance was given out even as independent agencies reported non compliance.
Example: Expansion of the Sterlite plant was looked at without the benefit of full Environmental Impact Assessments which in turn caused public doubt.
Implication: This erodes the trust in environmental governance and sees to it that corporate interests dominate community well being.
2. Prolonged legal system process.
While the judiciary in India has been at the forefront in developing environmental law which it put forth through its rulings, the timeframes within which these cases are heard tend to water down the which which the court’s intended remedies are to play out.
Case Reference: In the case of Sterlite Industries against Union of India (2013) environmental issues which were put forth took years to be resolved.
Impact: At the time of the verdicts’ delivery that which is environmental in nature may be beyond repair.
3. Poor Community Input.
The Environment Impact Assessment (EIA) of 2006 which provided for public hearings saw in practice that these were often poor in quality, not well advertised, inaccessible, or very superficial.
In Vedanta’s case: Locals reported that they were either left out or had their issues put aside at the hearings.
Best Practice Gap: International examples of this include the Aarhus Convention which puts forth the right of communities to access environmental info and play a large role in decision making.
Critical Observation: Main Point:.
In the case of the Vedanta closure we see a contradiction strong action to shut down the plant which came very late, and also very slow measures which could have prevented years of environmental damage. This duality which is present in the case of the Vedanta closure underlines the need for early intervention in environmental issues.
International Comparison of Environmental Governance Models.
Studying global models is a value add for India which is in the process of improving corporate accountability.
1. OECD Principles of Multinational Enterprises.
These rules call for companies to put in practice initiatives which support sustainable development at the same time they adhere to environmental and social standards. They also put forward:.
Environmental risk management systems.
Regular public disclosure of environmental performance.
Outreach to local stakeholders before project growth.
Relevance to Vedanta: If only we had seen to it that these disclosure and consultation practices became institutionalized in India we may have prevented much of the conflict.
2. UN Framework on Business and Human Rights.
The UNGPs report that businesses have a duty to support human rights which includes environmental rights also States must put in place proper regulatory frameworks to protect these rights.
They push for care in the identification, prevention, and reduction of environmental issues.
Had Vedanta done extensive research, long term pollution issues could have been prevented.
3. European Union Environmental Liability Directive (EULD).
The ELD implements the polluter pays principle which reports strict liability for environmental damage from some industrial activities.
Distinct Feature: It calls for return to the natural state.
Application for India: Adoption of that which is of a like nature could see companies take on both financial and action oriented responsibilities for environmental restoration instead of just fine payment.
Illustration of Examples.
1. Parallel in IPC.
The Indian Penal Code has provisions which may be compared to environmental crimes:.
Section 268 (Public Nuisance): Environmental pollution that which affects a community’s health.
Industrial discharges that go beyond what is allowed may be prosecuted under this section.
Illustration: In that which a factory puts out toxic gases which in turn cause respiratory illness in a town, liability under Section 278 may be pursued along with environmental laws.
2. Environmental information related to Vedanta.
Before the plant closure it was reported that:.
Air Quality: Sulfur dioxide levels often exceeded what the Central Pollution Control Board (CPCB) has set as the limit.
Water Quality: In some areas heavy metal contamination of groundwater has surpassed WHO safe levels.
Health Impact Studies: In areas nearby we see higher incidence of.
3. Legal Examples.
In the case of M.C. Mehta v. Kamal Nath in 1997, the Supreme Court introduced the public trust doctrine as a tool to deter corporate abuse of natural resources a principle which is also very much at play in the Vedanta situation.
Conclusion
In the Vedanta Sterlite Copper Plant case we see a turning point in India’s environmental governance history which reports that corporate responsibility is a must for sustainable development.
From a policy perspective the closure order was an example of strong state intervention for public health, but the long term non compliance which prompted that action brings to light regulatory and procedural flaws. The case also puts forth key principles which:.
1. Precautionary Principle: Before damage occurs.
2. Polluter Pays Principle: Corporations to pay full cost of ecological repair.
3. Public Trust Doctrine: Natural resources are held in common, and the state is the trustee.
For the future, India must: In the future India should:.
Institute open and participatory decision making in environmental clearances.
Adopt global best practices for instance strict liability in environmental cases (EU ELD model).
Intensify corporate environmental due diligence as per UNGPs.
Speed up the resolution of environmental disputes.
Finally in the case of Vedanta what we see is that the issue is beyond that of a plant’s closure it is a very clear that environmental governance and corporate responsibility must go together for us to have economic progress at the expense of nothing in terms of the environment. In this fine balance is the growth of India’s environmental justice system.
References
1. M.C. Mehta v. Union of India, (1987) 1 SCC 395
2. Vellore Citizens Welfare Forum v. Union of India, (1996) 5 SCC 647
3. Sterlite Industries (India) Ltd. v. Union of India, (2013) 4 SCC 575
4. OECD Guidelines for Multinational Enterprises
5. UN Guiding Principles on Business and Human Rights
