Sterlite Industries V. Union Of India,

LAW MANTRA

THINK BEYOND OTHERS

(National Monthly Journal, I.S.S.N 2321 6417)

“Sterlite Industries V. Union of India” Introduction Indian Supreme Court recently took a very important environment related decision in Sterlite Industries case, relating to running of industries which lead to environmental degradation. Sterlite Industries is a public listed company which operates a copper smelting plant since 1996 at SIPCOT Industrial complex, Thoothukudi, Tamil Nadu. This case came up in the Supreme Court because of the contradicting claims by Sterlite Industries and the National Green Tribunal decision. Sterlite Industries had been following all prescribed conditions for running such an industry but due to the complaints by the public of that area enquiry was conducted and after an initial okay action was taken against it due to the huge adverse impact, of manufacturing process undertaken for production, on the environment. Consequently Supreme Court has imposed a penalty of Rs. 100 Crore but has allowed continued operations, with regular checks. Findings of the Court needs to be looked into to see why exactly the Bench came to such a conclusion and how. Also keeping in mind the past environmental jurisprudence which has come under the limelight due to the recent mining case controversy the somewhat lenient stand needs to be understood in its all entirety. First, the Court had to decide whether the High Court had the authority to interfere in the environment clearance processes provided by the Ministry of Environment and Forests. High Court reference to decisions of Supreme Court on Sustainable Development, Precautionary and Polluter Pays Principles and Public Trust Doctrine was seen to be futile as it failed to see decision like the three judge bench in Lafarge Umiam Mining (P) Ltd. v. Union of India & Ors. Where tests to be based on anvil of well recognized principles of judicial review. It was said if the environmental clearance granted by the competent authority is clearly outside the powers given to it by the Environment (Protection) Act, 1986, the Environment (Protection) Rules, 1986 or the notifications issued there under, the High Court could quash the environmental clearance on the ground of illegality. If the environmental clearance is based on a conclusion so unreasonable that no reasonable authority could ever have come to the decision, the environmental clearance would suffer from Wednesbury unreasonableness and the High Court could interfere on the ground of irrationality. And, if the environmental clearance is granted in

breach of proper procedure, the High Court could review the decision of the authority on the ground of procedural impropriety. Decision of the Central Government to grant the environmental clearance can see to be reasonable as same was provided after detailed examination of rapid EIA/EMP, NOC, and proper qualifications was ensured for operation. It was noted that authorities under the Environment Protection Act, 1986 and Rules, notification are to determine scope of project, extent of screening and assessment of cumulative effects. Also, as long as the prescribed statutory process for clearance is followed and EIA isn't found to be irrational to frustrate its very purpose the Court is not to interfere with the decision of the prescribed authorities under the veil of judicial review. The examination of the implications of Supreme Court’s innovations for environmental jurisprudence reveals that the application of innovative methods to resolve environmental disputes and implement Court orders is certainly a deviation from the usual adjudication function of the Court. While the procedural innovations have widened the scope for environmental justice through recognition of citizens’ right to healthy environment, entertaining petitions on behalf of affected people and inanimate objects and creative thinking of judges to arrive at a decision by making spot visit, substantive innovations have redefined the role of Court in the decision-making process through application of environmental principles and expanding the scope of environmental jurisprudence. Given the crisis within the executive and legislature in discharging their Constitutional duties, the Supreme Court’s innovative methods have attempted to arrest the dysfunctional trend of other organs and enable the effective enforcement of environmental laws. However, in reminding other organs about their Constitutional duties and enforcing fundamental right of citizens, the Supreme Court has at times, crossed its boundaries and started interfering in the very basic affairs of environmental management. In resolving more than 100 environmental cases since 1980, the Supreme Court has continuously engaged itself in the management and resolution of environmental conflicts and thereby increased the country’s dependence on the Court for environmental protection. This dependence on a judicial institution that has already exceeded the boundaries of its responsibilities has been further complicated by the lack of monitoring of the Supreme Court’s orders and the vagueness of the legislative and executive roles regarding environmental issues. With its intervention in the interpretation of environmental policy and implementation process, the potential for resolving environmental conflict is hardly over. The review of environmental cases shows that there has been no uniform cooperation from the implementing agencies to effectively implement the Court directions. It is also observed that most of the innovative methods introduced by the Court have neither been followed consistently nor been institutionalised to make a long term impact for the environmental jurisprudence process.

Secondly, the point of contention with respect to the location of the Industry and closure due to its proximity with population was taken into consideration. The reason given by the High Court in coming to conclusion was that the TNPCB had stipulated in the Consent Order that the appellant-company has to ensure that the location of the unit should be 25 kms. away from ecologically sensitive area and as per the report of NEERI, the plant of the appellants was situated at a distance of 6 kms. Of Vanthivu, 7 kms. Of Kasuwar and 15 kms. Of Karaichalli and Villanguchalli and these four villages is part of the twenty one islands in the Gulf of Munnar. Hence, the High Court directed closure of the plant because the appellant-company has violated the condition of the Consent Order issued by the TNPCB under the Water Act. Extract from the Consent Order dated 22.05.1995 of the TNPCB issued under the Water Act makes it clear that the appellant-company was given consent to establish its plant in the SIPCOT Industrial Complex, Melavittan Village, Tuticorin Taluk.Therefore, the appellants were given consent to establish their plant in the SIPCOT Industrial Complex, which as per the NEERI report is within 25 kms. Of four of the twenty one islands in the Gulf of Munnar. On the other hand, a condition was stipulated in the consent order that the appellants have to ensure that the location of the unit is 25 kms. away from ecological sensitive area. It thus appears that the TNPCB while granting the consent under the Water Act for establishment of the plant of the appellants in the SIPCOT Industrial Complex added the above requirement without noting that the SIPCOT Industrial Complex was within 25 kms. From ecological sensitive area. Since, however, the Consent Order was granted to the appellant-company to establish its plant in the SIPCOT Industrial Complex and the plant has in fact been established in the SIPCOT Industrial Complex, the High Court could not have come to the conclusion that the appellant-company had violated the Consent Order and directed closure of the plant on this ground. But the Supreme Court observed that for the preservation of ecology the plant could be asked to be shifted in some future time. Especially because concerned area, Gulf of Munnar, as per State statutes and material evidences are noted to be ecologically sensitive areas. Central Government being the prescribed authority may under Environment Protection Rules, 1986 prohibit or restrict of such area.

Finally the order of closure of Industry by the High Court was decided upon and as to whether the same could be done even after receiving NOC from Tamil Nadu Pollution Control Board for continued operation. There were certain conditions prescribed by the TNPCB which were later on relaxed but then same can't be contested against as it has been already seen earlier that over judicial activism would result in dilution of the powers of other organs of government.

But then we are at a loss to the fact as to why exactly could it not be enquired as to why this exemption from 250 m. to minimum 25 m. was allowed by the SPCB. The High Court in the impugned judgment has not recorded any finding that there has been any breach of the mandatory provisions of the Air Act or the Rules there under by the TNPCB by reducing the green belt to 25 meters. Nor has the High Court recorded any finding that by reducing the width of the green belt around the battery limit of the industry of the appellants from 250 meters to 25 meters, it will not be possible to mitigate the effects of fugitive emissions from the plant. The High Court has merely held that the TNPCB should not have taken such a generous attitude and should not have in a casual way dealt with the issue permitting the appellant-company to reduce the green belt particularly when there have been ugly repercussions in the area on account of the incidents which took place on 05.07.1997 onwards. It was for the TNPCB to take the decision in that behalf and considering that the appellant’s plant was within a pre-existing industrial estate, the appellant could not have been singled out to require such a huge green belt. Out of the 30 directions issued by the TNPCB, the appellant-company has complied with 29 directions and only one more direction under the Air Act was to be complied with. As the deficiencies in the plant of the appellants which affected the environment as pointed out by NEERI have now been removed, the impugned order of the High Court directing closure of the plant of the appellants is liable to be set aside. The NEERI reports of 1998, 1999, 2003 and 2005 show that the plant of the appellant did pollute the environment through emissions which did not conform to the standards laid down by the TNPCB under the Air Act and through discharge of effluent which did not conform to the standards laid down by the TNPCB under the Water Act. On account of some of these deficiencies, TNPCB also did not renew the consent to operate for some periods and yet the appellants continued to operate its plant without such renewal. For such damages caused to the environment from 1997 to 2012 and for operating the plant without a valid renewal for a fairly long period, the appellant-company obviously is liable to compensate by paying damages. In M.C. Mehta and Another vs. Union of India and Others, a Constitution Bench of this Court held: “The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to

say that it had taken all reasonable care and that the harm occurred without any negligence on its part.” The Constitution Bench in the aforesaid case further observed that the quantum of compensation must be co-related to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect and the larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it. Considering the magnitude, capacity and prosperity of the appellant- company, Supreme Court was of the view that the appellant-company should be held liable for a compensation of Rs. 100 crores for having polluted the environment in the vicinity of its plant and for having operated the plant without a renewal of the consents by the TNPCB for a fairly long period and according to us, any less amount, would not have the desired deterrent effect on the appellantcompany. The aforesaid amount will be deposited with the Collector of Thoothukudi District, who will invest it in a Fixed Deposit with a Nationalized Bank for a period of five years. The interest there from will be spent for improving the environment, including water and soil, of the vicinity of the plant after consultation with TNPCB and approval of the Secretary, Environment, and Government of Tamil Nadu. The very main point of concern after this particular case can be seen as to the limitation which the judiciary is imposing on itself. For separation of powers yes it is true that there should be minimum overlapping and clashes but then judiciary is the sole organ of government which can ensure the citizens their basic rights. In light of recent events where at one hand people are ensured right to unadulterated food through article 21 and such an instance where the very living condition of people was in plight the needs to be acknowledged. Valuation of loss to the environment caused is contestable for once our callous attitude gets imprinted on nature it’s very hard to set it right. Especially in light of the urgent relieve required as degradation of nature here in India has reached to very maximum and stringent measures are required to preserve I, even if not in its once pristine form. If political motivations are guiding these now then yet again loss would be suffered by us only as we would be the ones walking on barren lands, surrounded by metal pieces, looking for that last piece of shade and water eventually.

By: - Dafy George, 4thYear, B.A LL.B (Hons.) Amity Law School Delhi