The Environmental Law Landscape in India: A Walk Through Consent and Compliance Requirements

Over the last 68 years, India has developed one of the fastest growing economies in the world. In the wake of such dynamic growth, however, India has also observed rapid urbanisation and widespread industrialisation, accompanied by various environmental concerns requiring immediate action.

During the early years of independence, India did not have any specific policy toward the regulation of the environment, even though attempts were made to formulate one.

Executive initiatives: Concerted efforts towards the redressal of environmental concerns finally took shape upon the setting up of the National Committee on Environmental Planning and Coordination in 1972, pursuant to the Government of India’s fourth Five-Year Plan specifically focusing on the development and the protection of the environment. Pursuant to such measures, proposals were made for the creation of a distinct and independent Department of Environment to coordinate issues arising out of economic development and social necessity. The Department of Environment was created in 1980 and the Ministry of Environment and Forests operating under the Government of India was subsequently established in September 1985. In the early 1980s, India experienced tragic industrial incidents such as the Bhopal gas leak and the Oleum gas leak, highlighting the need to develop a robust pollution control infrastructure and enforcement protocol. Thereafter, the government undertook several measures to reduce the gap between the country’s rapid industrial growth and the effective enforcement of pollution norms.

Legislative initiatives: Being a subject under the Constitution of India, environmental regulation falls under the state list as well as the union list, giving power to both the central and state governments to enact laws on the subject. With the underlying mandate according optimal protection to the environment, the Indian legislature enacted several regulations addressing the protection of various facets of the environment. These legislations also stem, in part, from the commitments that India has extended as a signatory to international conventions of the United Nations.

Judicial initiatives: The Supreme Court of India also contributed to the development of environmental jurisprudence by rendering several landmark judgments that set the standard for environmental legislation in the country. Namely, these principles included sustainable development, inter-generational equity, and polluter pays. The Supreme Court has, in several decisions, interpreted the right to life and personal liberty guaranteed by the Constitution of India to include the right to a clean environment. As an extension of this, the Supreme Court and the National Green Tribunal (a specialized environment tribunal that operates at the state level and the principal bench of which tribunal presides from New Delhi) have applied the “Precautionary Principle” and/or “Polluter Pays Principle” in adjudicating matters relating to the environment and the determination of penalty or compensation to be payable by violators accordingly. Despite these efforts and measures, major environmental damage has occurred over time. Instances include entire populations of fish being wiped out in the Noyyal River owing to pollution by hundreds of garment dyeing and bleaching units. This resulted in the Supreme Court handing down heavy fines and awarding compensation in 2009 to affected individuals or communities. Other issues concerning the environment, such as riverine pollution or air pollution (which the Supreme Court recently addressed by temporarily preventing registration of diesel vehicles above 2000 CC), continue to attract attention.

While broader discourse on these issues continue, the organized sector has little room for error in matters of environmental compliance. Industries operating in India are required to ensure compliance with water and air pollution norms through effective emissions control, the creation of effluent and sewage discharge treatment facilities, and the maintanance of an adequate record of conformity with the specific parameters laid down by environment regulatory bodies, such as the State Pollution Control Boards. This is critical as the regulatory bodies conduct a periodic sampling followed by detailed testing and analysis. In case of frequent variance from prescribed standards or consent terms, key permits, such as the consent to operate an industry, may even be withdrawn. Failure to comply can also lead to stoppage of electricity, water, and other utilities that attract various fines. Similar requirements of compliance apply to emissions into the atmosphere emanating from industrial processes.

Over the years, regulatory norms have covered a variety of facets from the transfer or disposal of hazardous wastes to limits over noise pollution levels. In keeping with global norms, the central government is tackling the effects of growing industrialization by framing regulations for specialized types of waste such as electronic waste, biomedical waste, and plastic waste. Operators and owners of industries (India-based as well as global companies with India-specific operations) need to ensure compliance to these and other regulations. Another recent development is the government’s decision to categorize an industry based on their environmental load, which will have a bearing on plant location and capital investment decisions.

The key takeaways for in-house counsel with respect to Indian environmental laws are:

• Track industry-compliance in relation to pollution control laws and regulations.
• Institute a system of periodic reporting on environmental compliance, combined with surprise checks and testing of samples with accredited laboratories, given the extensive powers vested with the environment regulatory authorities in India. The entire process should be integrated into management reporting routines.
• Plant and site personnel should be trained on sample drawing protocols, including the use of prescribed forms and notices when carried out by environmental regulatory officials. This can have an important bearing in subsequent adjudication/litigation where the “due process” defense may be required.
• Develop and sustain positive relations with communities and local stakeholders in the area around plant operations.
• Keep a close watch on proposed legislation (including state-specific amendments) issued for public comment and vigorously safeguard interests by representations through industry associations.
• Interact with and instruct external counsel to update in-house legal teams on key court rulings concerning the environment to understand implications.
• When considering setting up Greenfield ventures, corporations need to conduct exhaustive environmental and social due diligence, keeping in mind the possibility of increasing urbanization in the future and proximity to water bodies, and other environmentally sensitive elements.
• For industries involved in processes that generate effluents and pollutants, a high level of compliance to environment laws is a sina qua non. Indeed, investing ahead of the curve on pollution control infrastructure makes good commercial sense (for example, online pollution control monitoring, now mandatory in certain states) combined with a focus on recycling and the reuse of water and other sustainable measures that build trust and credibility with the regulators and demonstrates responsible corporate behaviour.

Undertaking these measures that demonstrate adherence to the precautionary principles and sustainable development principles enunciated by the Supreme Court of India will serve a corporation’s best interest. Developing environmental jurisprudence coupled with legislation, such as the National Green Tribunal Act, provides courts and tribunals with wide-ranging powers to allow claims for compensation of damages, both direct and consequential.

With the background to India’s environmental initiatives and the requirement on the part of companies to uphold and maintain compliance with the regulatory landscape, the next section offers a brief background with reference to the emission and discharge standards for various pollutants, and the concomitant reporting mechanisms that are in place for addressing environmental pollution resulting from emissions and discharge.

Water Act

The Water (Prevention and Control of Pollution) Act (Water Act) of 1974, regulates the standards of water and water pollution. This act also led to regulatory authorities, such as the Central Pollution Control Board (CPCB) and the State Pollution Control Boards (SPCB) in the country.

Statutory authorities

CPCB was set up to improve the quality of water and to prevent, control, and abate water pollution in the country. The CPCB, which specifies the standards for quality of water, was established in 1974 to provide field and technical information to the environmental ministry by functioning as the apex wing of the Ministry of Environment and Forests. CPCB’s head office is located in New Delhi where it has many laboratories to carry out testing. The CPCB functions under the head of a chairman who is nominated by the central government. Similarly at the state level, the SPCBs are the bodies, which in consultation with the CPCB, that set guidelines for water pollutant emission standards. The respective SPCBs take care of state interests, and inter alia monitor compliance with the various rules and regulations introduced in the country for the control and abatement of pollution.

The Water Act also confers powers and stipulates functions on the CPCB in order to promote cleanliness of streams or wells. The CPCB and the SPCB work together to set standards and keep India’s water pollution free. The SPCB has three main functions under the Water Act:

1. Standards for the sewage and trade effluents;
2. Treatment of sewage and trade effluents; and,
3. Effluent standards of the discharge.

Water quality standard

The CPCB has laid down the water quality standards on the basis of its use, with the various categories of classification being:

• Drinking water (without conventional treatment but after disinfection; after convention treatment and disinfection);
• Outdoor bathing;
• Propagation of wildlife and fisheries; and,
• Irrigation, industrial cooling, and controlled waste disposal.

In addition, the CPCB has introduced the National Water Quality Monitoring Network to check on the ground water quality.

Note for in-house counsel

Reporting mechanism

The Water Act puts the onus on the “person-in-charge” of where the operation is being carried out to report any accident or unforeseen event in which any poisonous, noxious, or polluting matter is being discharged into a stream, well, or land that would result in the water body getting polluted.

Penalty

The failure, however, to intimate the concerned SPCB would amount to an offence under which there could be either:

• Imprisonment up to three months;
• Fine up to Rs 10,000; or,
• Both of the above.

Air Act

The Air and Pollution Control Act in the year 1981 (Air Act) aims at preserving the quality of air and keeping a check on air pollution.

Similar to Water Act, the Air Act also confers powers and stipulates functions on the CPCB for the prevention and control of air pollution in the country. The CPCB operates a nationwide programme for ambient air quality monitoring — called the National Air Quality Monitoring Programme (NAMP) — in order to minimize air pollution. The CPCB and the SPCB work in consonance to set these environmental standards.

The CPCB has three main functions under the Air Act:

• Advise the central government on any matter concerning prevention and control of water and air pollution and improvement of the quality of air;
• Provide technical assistance and guidance to the state boards, carry out and sponsor investigation and research relating to problems with air pollution, and for prevention, control, or abatement; and,
• Collect, compile, and publish technical and statistical data relating to air pollution and the measures devised for their effective prevention, control or abatement.

Bharat emission standards framed

Following the model of the European Standards, India came up with the Bharat emission standards, which regulate the output of air pollutants coming from internal combustion engines including motor vehicles. Other standards subsequently implemented were the following:

• The National Auto Fuel policy, which was adopted in 2003, and based on the European standards. Key features to the policy include issues of vehicular emissions and vehicular technologies by applying fuel quality standards updated in the National Auto Fuel Policy of 2015.
• The Bharat Stage IV norm, based on the Euro IV norms and implemented in 2010 in many urban cities in the country also addresses various facets (such as emission standards in 13 urban cities) in order to control air pollution caused by the vehicles.
• As stated earlier, the next proposed standard is the Bharat Stage VI12 based on Euro VI standards, which will take effect in 2020, as India has decided to skip the Euro V emission norms. The standards classify and set out the standard of emissions for heavy-duty vehicles, light vehicles, engines (diesel and non-diesel), and carbon dioxide emissions in India. The Motor Vehicles Act and the Central Motor Vehicle Rules enforce the Bharat standard emission norms. The Ministry of Shipping, Road Transport & Highways (MoSRT&H) is the nodal agency that is tasked with the formulation and implementation of various provisions of the Motor Vehicle Act and CMVR.

Note for In-house counsel

Reporting mechanisms

Under the Air Act the “person-in-charge” of a premise where there is any discharge or emission of air pollutants has the duty to intimate the relevant SPCB if there is an apprehension of an accident or any unforeseen event where the emission exceeds the standards which have been laid down.

Penalty

The failure, however, to intimate the concerned SPCB would amount to an offence that could result in:

• Imprisonment up to three months or fine of Rs 10,000/-; or,
• Both of the above, simultaneously.

EPA (Environment Protection Act)

In the wake of one of India’s largest environmental disasters in Bhopal and the limited apportionment of liability in regard to the defaulters, India took stringent steps toward enacting a landmark legislation — the Environment Protection Act of 1986. The EPA is a national environmental legislation that protects the relationship between water, air, and land by regulating the interactions between human beings, other living creatures, and plants. The EPA gives power to the central government to set standards for emissions and pollutant discharge from various sources.

Note for In-house counsel

Reporting mechanisms

The EPA also provides for the “person responsible” or the “person-in-charge” of a place where the discharge of any environmental pollutant* takes place, to prevent or mitigate the pollution and notify the appropriate authorities.

* For the purposes of the EPA, as well as rules framed there under, the phrase “environmental pollutant” has been defined under Section 2 (b) of the EPA to mean any solid, liquid, or gaseous substance present in such concentration as may be. Or tend to be injurious to the environment.

Penalty

The EPA with its legislative intent to protect India’s already degrading environment has imposed a stricter responsibility on the occupier or the person-in-charge with punishments amounting to:

• Up to five years;
• Fine up to Rs.1 lakh; or,
• Both the above.

The EPA also sets out various penalties for companies in the event of default.

The Ministry of Environment, Forests and Climate Change has recently proposed an amendment bill to raise the fine amount from one lakh to five crores for environmental damage, which would help in setting a stricter imposition of rules and regulations.

Environment Protection Rules

The Environment Protection Rules (EP rules) provide the standards for emissions and for the discharge of environmental pollutants from industries, operations, or processes that have been specified under the Schedule I to IV of the EP rules.

The earlier standards mentioned under the Air Act and the Water Act have been classified on the basis of medium, which implies classification according to air, water, and other mediums. The standards under the EP rules are, however, industry specific, which implies classification on the basis of industry. For example, these include the petroleum, leather, iron, and steel industries, etc. The EP rules also specify for the general standards that have been prescribed for discharge of environmental pollutants provided under the Schedule VI of EP rules. The schedule specifies the following:

Waste water generation standards;
Load based standards; and,
General emission standards.

It is also important to note that EP rules provide SPCB the power to specify more stringent standards for the relevant parameters provided under the EP rules, with respect to specific industry locations after recording reasons therefore in writing.

Manufacture, Storage, and Import of Hazardous Chemicals Rules, 1989 (MSHIC rules)

Apart from the general effluents or pollutants, the hazardous chemicals that are either manufactured or used in several industries pose a great risk to the environment. These hazardous substances can have devestating effects that lead to life-threatening injuries when mixed with any medium, such as air or water. The recent examples of the methyl isocyanide leak from the Union Carbide India Limited factory, or the Oleum gas leak from the Shreeram Food and Fertilizers Limited factory premises near Delhi, have proven deadly. In such a scenario, the need to account for optimal precaution cannot be overemphasized. The MSHIC rules have been formulated under the provisions of the EPA to make sure that the hazardous chemicals that are being manufactured, stored, and imported into the country are done following certain specific standards or rules. MSHIC rules apply to an industrial activity in which a hazardous chemical is involved or is in the isolated storage of a hazardous chemical. The MSHIC even has a specific list of hazardous substances and standards, which have been prescribed.

Note for in-house counsel

Reporting mechanism

The MSHIC rules specify that the occupier must submit a report to the concerned authority regarding any potential accidents. Moreover, the MSHIC rules require the occupier to notify the authority about the steps that have been taken to avoid any repetition of the accident in the future. The person-in-charge has to further notify the District Emergency Authority in case of accidents, and also include the nature of the major accident hazard. The MSHIC rules outline important safety measures and “do’s” and “don’ts” that should be adopted in the event of a major accident.

These regulations empower the concerned authority to serve the occupier an improvement notice requiring the occupier to remedy the contravention that has been caused within 45 days. However, if the occupier fails to report a major accident, then that would constitute an offence.

Rule 15 of the MSHIC Rules specifies the stakeholders who could be affected by as a result of major accident.

Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (HW rules)

The Hazardous and Other Waste Rules (HW rules) were brought about by the Ministry of Environment, Forest and Climate Change in 2008 in an attempt to replace the MSHIC rules. The new regulation has been formulated under the EPA for the purpose of ensuring and upholding safe and environmentally sound management of hazardous and other wastes. The HW rules have laid down simple distinct steps such as:

• Prevention;
• Minimization;
• Reuse;
• Recycling;
• Recovery, utilisation including coprocessing; and,
• Safe disposal of waste.

Note for in-house counsel

Reporting mechanism

The reporting for any kind of accident that occurs because of hazardous wastes can be done in a format that has been specified in Form 11 provided in the act.

Penalty

The HW rules specify that if a particular accident has been caused because of hazardous wastes and it has not been notified to the concerned authority, then the SPCB has the power to levy financial penalties on both an “occupier” and the “operator” after having consulted the CPCB in that particular matter.

Emergency Response Plan Measures (ERP)

Note for in-house counsel

The latest amendment to the new HW rules was adopted in 2016, which mandate that either ERP measures or in-house emergency plan measures are required to be in place should any kind of hazardous waste emergency occur. In such an event, all the stakeholders — be it occupiers, transport operators, or importers — are required to put in place emergency response measures and report them in the form 14. Moreover, the stakeholders are also required to immediately inform the authorities (the fire and police departments and other agencies). The HW rules, however, have certain exceptions to which it would not apply:

• Waste water and exhaust gases covered under Water Act and Air Act;
• Wastes arising out of ships beyond 5km of baseline covered under the Merchant Shipping Act of 1958;
• Radioactive wastes covered under the Atomic Energy Act of 1962;
• Biomedical wastes covered under Bio-Medical Wastes (Management and Handling) Rules, 1998 made under EPA; and,
• Wastes covered under the Municipal Solid wastes (Management and Handling) Rules, 2000 made under EPA.

The HW rules have further classified the term “wastes” to include hazardous wastes, other wastes,* and waste oil.** Specific standards have been set for each category.

* Rule 3(23) of the HW Rules define it as wastes specified in Part B and Part D of Schedule III to the HW Rules for import or export and includes all such waste generally indigenously within the country.

** Rule 3(39) of HW Rules defines it as any oil which includes spills of crude oil, emulsions, tank bottom sludge, and slop oil generated from petroleum refineries, installations, or ships.

Penalty

Penalty under the ERP for not being able to inform the authority about the accident would entail liability of not less than Rs.10 lakhs. Moreover, one could also be held liable under the general mandate of Section 25 of the EPA.

Disclosure requirements under the environmental laws

Under the relevant environmental legislations in India, an “occupier,” the operator or a person-in-charge of an industrial operation, establishment, or a premise where the industrial activity occurs, is required to disclose any incidents or accidents that have caused — or are likely to cause — environmental pollution to the concerned authorities. Absence of disclosure may result in various fines and sanctions, as indicated in this article.

Table 1 recaps the disclosure requirements under the respective legislations that are required to be taken note of by corporations having business operations in India. Table 1 indicates:

• Mandatory disclosure to the relevant authorities;
• As regards accidents/unforeseen acts and events; and,
• That specifically result in discharge/emission (or the apprehension of such discharge/emission) in excess of the standards prescribed.

Table 1 also indicates that the provisions of the said laws mandating disclosure are preventive in nature, and contain a view to uphold mitigation/redressal of the damage to the environment that has occurred or is apprehended to occur.

In view of the requirements and for the reasons set out in greater detail in beginning of this the article, it is advisable for any company that has operations in India to uphold compliance with the environment laws by ensuring the requisite disclosures, in the event of any accident or unforeseen occurrence that results (or could result) tin pollution or damage to the environment.