Why MoEFCC’s new SoP on environmental violations must be withdrawn

The Ministry of Environment, Forest and Climate Change (MoEFCC) released an Office Memorandum (OM) on 7 July 2021 laying out the Standard Operating Procedure (SoP) for ‘identification and handling of violation cases’ under the EIA Notification 2006. On 15 July 2021, the Madurai Bench of the High Court of Madras, in response to a PIL filed challenging this OM, has stayed it. In this piece, I provide a context for the OM and briefly look at what it attempts to do. I then discuss three reasons why the OM is deeply problematic - first, the OM imposes penalties that the MoEFCC does not have the power to levy under the law; second, it introduces an open-ended amnesty scheme that will encourage environmental violations, not deter them; and third, the Ministry's reading of judicial orders to justify the OM is disingenuous. The OM will further undermine our weak environmental regulatory framework, and it should be withdrawn by the Ministry immediately.

CONTEXT

The EIA Notification 2006 requires certain categories of projects to obtain a prior environmental clearance (EC) before starting any construction work or preparation of land (or in case of expansion projects – work to add to existing capacity). The main objective is to properly assess likely adverse environmental and social impacts of projects, and then either prevent them from occurring or taking appropriate precautionary and mitigative measures. What happens if project proponents violate this requirement of prior EC is not clearly stated in the EIA Notification. But it is an offence under the parent Act – Environment (Protection) Act 1986 (EP Act), and therefore those responsible can be prosecuted under it. The EIA Notification does not envisage any form of retroactive action, regularisation of illegal work, or payment of damages.

Over the years, several instances of project proponents blatantly disregarding the need to obtain a prior EC have come to light. Previous attempts by the Ministry to regulate such violations in 2010, 2012 and 2013 were struck down by the National Green Tribunal as being ultra vires the law. In 2017, the Ministry issued an OM announcing an amnesty scheme with a six-month window during which projects without an EC as on 14 March 2017 could apply for an EC. The Madras High Court upheld the validity of this scheme as it was a one-time measure. In 2018, pursuant to an order of the Madras High Court, another month-long window to apply for regularisation was announced.

Then in 2020, the Environment Ministry proposed a new EIA Notification 2020 to replace the existing 2006 Notification. The proposal adopted the 2017 amnesty scheme as part of the notification. But this time there was no cut-off date – project proponents could approach the Ministry at any time for grant of an ex post facto EC and regularisation of illegal work. For this reason, among others, the draft Notification was severely criticised by the public and opposition parties. The Ministry received 1.7 million representations as part of the statutory public consultation and the draft is yet to be finalised.

What is the Office Memorandum about?

The 2021 OM states that it has been issued in compliance with the National Green Tribunal’s (NGT) order of 24.05.2021 in Tanaji B. Gambhire concerning illegal construction. In this case, a construction project had expanded beyond the scope approved in the EC. Subsequently, the project was granted an EC that legitimised the illegal construction. The NGT observed that the project was illegal as it was constructed without an EC and should therefore be either demolished or directed to pay compensation for restoration of damage. It also directed that ‘a proper SoP be laid down for grant of EC in such cases so as to address the gaps in binding law and practice being currently followed’.

The OM creates a procedural framework to deal with projects that have commenced work without first obtaining the mandatory EC, and make ‘the polluter pay’. It is an unusually detailed OM – refers to several judicial orders, sets out guiding principles for the implementation of the SoP, and identifies relevant legal provisions and principles before describing the framework.

Under the framework, projects that presently do not have an EC, but would otherwise have been eligible to obtain an EC, will be considered as new project proposals under the EIA Notification. The process for grant of EC in such cases will be like the usual process, with the notable difference being that public hearings are not mandatory. The EC, if granted, will be effective from the date of issue. Action for offences under the EP Act shall also be initiated against such projects. Further they will be required to pay penalty (calculated based on a given formula) and submit a bank guarantee equivalent to amount required for remediation and resource augmentation plans, as assessed by the appraisal committee.

The MoEFCC appears to have put more thought into drafting this document than in its previous attempts to deal with this issue. Yet, the OM must be withdrawn, and there are at least three reasons to do so

Why is it problematic?

First, the Central Government does not have power under the EP Act to impose pecuniary liability for an offence; and therefore, it cannot impose penalties as punishment for violation of the EIA Notification. It is settled law that the power to impose a penalty must be expressly stated in the statute. In the absence of such a provision in law, an authority cannot impose penalties with reference to its general powers to give directions. Penalties for offences under the EP Act can be in the form of imprisonment, or payment of fine, or both; and the power to impose these penalties lies with a criminal court pronouncing a guilty verdict at the end of judicial proceeding.  

The High Court of Delhi in a 2010 judgment had categorically struck down orders of the Delhi Pollution Control Committee levying penalties and directing bank guarantees to be furnished as:

… in the instant case levying penalty and requiring furnishing of bank guarantees and making the grant of consent to establish under the Water Act and consent to operate under the Air Act conditional upon payment of such penalties and furnishing of such bank guarantees are entirely without the authority of law and require to be set aside.

The Division Bench of the High Court upheld this position of law in appeal. The provisions of the Water Act and the Air Act under consideration before the Delhi High Court are analogous to those in the EP Act. Thus, the penalties envisaged in the OM are legally untenable and are likely to be struck down by a court of law. This is not to say that the polluter should not pay for its actions – but that this OM is not a suitable regulatory mechanism to do that.[i]

Second, the OM puts in place an amnesty scheme that has neither a start date nor an end date. Unlike under the 2017 scheme under which only projects that were operating without an EC before 14 March 2017 (i.e. the date on which the scheme came into force) were eligible for an EC and the scheme was open only for six months, under the 2021 OM all projects are eligible to apply. Even projects that did not apply under the 2017 scheme – and therefore missed the bus, as it were – are being given another shot at being legalised. What makes matters worse is that there is no cut-off date. The OM signals the Ministry’s willingness to condone illegalities, and thus encourage future violations. Projects can now ignore the law with the Ministry’s tacit assurance that they can apply for an EC subsequently at any time. It is indeed perplexing to see that provisions that were severely criticised during the public consultation over the draft EIA Notification 2020 are now being introduced in the legal framework not through an amendment to the law, but through an executive order and with no public consultation whatsoever.

Third, the Environment Ministry has disingenuously read the judicial orders that it has cherry picked to contextualise the OM. For instance, the Tanaji B. Gambhire case related to a construction project and the observation of the NGT (as cited in the OM) is clearly in the context of construction projects only – not for all projects requiring ECs under the EIA Notification. The paragraph in fact begins with the NGT lamenting ‘the continuous violation of environment norms in construction projects being completed without prior EC…’.

The OM cites the Madras High Court’s judgment in Puducherry Environment Protection Association. However, the OM does not mention the limited application of the judgment. The judgment upheld the 2017 amnesty scheme because it was a ‘one time relaxation’ (paragraph 28) and based on an assurance given by the Additional Solicitor General that it ‘shall clearly and certainly be only a one time measure’ (paragraph 4(i)).  The same judgment cannot be used to justify an amnesty scheme in perpetuity!

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The MoEFCC needs to initiate urgent reform in the environmental regulatory framework, keeping in mind the core objective of protecting our natural resources, while deterring future violations. Regulatory instruments that do not achieve either undermine the existing framework which can ill-afford further weakening.

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[i] The NGT has distinguished the position of law on bank guarantees as penalties (as was the case before the Delhi High Court) from those furnished to ensure compensation for/ restoration of environmental damage. According to the NGT, the latter is permissible. 

(Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.)

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