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Trending: Call for Papers Volume 3 | Issue 2: International Journal of Advanced Legal Research [ISSN: 2582-7340]

Why Is There A Need To Reassess The Polluter Pays Principle In The Indian Context?

A. INTRODUCTION

“We have to evolve new principles and lay down new norms, which could adequately deal with the new problems which arise in a highly industrialized economy.” [1]

Earlier this year, to curb the massive spread of COVID-19 and to flatten the infection curve, nations across the world were compelled to put themselves in lockdown. Consequently, industries came to a grinding halt, automobiles stopped, tourism was heavily affected, and anthropogenic activities, more or less, came to a standstill—resulting in the formation a temporary “healing window” for the environment,[2] and it sure was a joy to behold; however, as great as it may sound, this episode of repair was only temporary.[3] 

Furthermore, it also brought to fore the apparent “efficiency” of the “pollution control framework” of various countries across the globe. The current framework is inefficient, if not completely incompetent to combat pollution, and begs to us to question: 
  1. “If a legislative framework was put in place, why did it take a global pandemic to see its inefficiency”? ;
  2. “Why was this inefficiency not acknowledged earlier?” ; and more importantly, 
  3. “After the pandemic, would we still continue to use it?” 

These questions are pertinent, and have to be answered—especially in the Indian context. With Unlock 4.0 in process, the probability of levels of pollution getting restored to pre-lockdown levels is exponentially high, and would not take much time to become the post-diwali bulletin; therefore, we need to rethink our approach towards pollution; more precisely, the reassessment of one of many key principles to the pollution control framework of this country, i.e., The Polluter Pays Principle. Ergo, the following article would examine why there is a need to reassess the application of this principle in the Indian context.

B. WHAT IS THE POLLUTER PAYS PRINCIPLE? (PPP)

Polluter Pays Principle, as the name suggests, creates a financial liability over a polluter, say a factory, to pay for any pollution caused by them, which exceeds the permissible limit. First introduced in 1972 by the OECD,[4] the polluter pays principle has gained international significance as one of the most recognized doctrines under environmental law. The object of the principle is to shift the responsibility of any financial default from a government to the polluting entity.[5] It also extends the liability of the polluter to cover any costs required in repairing any damage done to the environment. Furthermore, it serves as an extension of the principle of absolute liability and broadens the ambit of its application.[6]
Importance of this principle is that the damage caused to the environment may be remedied and this is extremely essential to sustainable development. The polluter is liable to pay the cost to the individual sufferers as well as the cost of reversing the damaged ecology.[7]

C. WHY IS RE-ASSESSMENT NECESSARY?

An industry is a social unit.[8] It has rights and duties towards its employees, its surrounding, and other stakeholders, too; therefore, any act or omission on its part should also be dealt with accordingly. These defaults, especially in environmental matters, where substances being dealt with, because of their toxic, persistent and corrosive properties can destroy the already existing capacity of nature to rehabilitate itself,[9] should be given more weightage for their propensity to cause harm is high. In this regard, the polluter pays principle comes into play—but with a shade of ambiguity about its application.

Ascertainment of Environmental Damages

In Vellore Citizens Welfare Forum v. Union of India[10] the Hon’ble Supreme court instructed the defaulting enterprise to pay fine and compensation under ‘Environment Protection Fund’ which would have been utilized for compensating the affected and restoring the environment.[11] Herein, comes the first flaw. In order to restore the environment and charge the defaulter, ascertainment of damages caused is imperative. The question is:

How does one ascertain the damages caused to the environment?

This is one of the most unheeded question appended with this principle, because fixing liability of an enterprise would require an investigation into the intensity of damages caused, and the absence of any standard set by a relevant authority for this regard would be inequitable. In fact, the absence of these requisite standards in the Indian environmental legislative framework has already been emphasized.[12] Additionally, ascertainment of damages would be arduous on all land, water, and air; however, it could be argued otherwise for the damages caused on land—as it is easier​ to visually look at the ruination caused. This, however, ​would not be ​the case for water and air​ pollution​. The recent Mauritius oil spill is the most cogent illustration for this because determining the liability of an enterprise in huge areas, as literal as an ocean, would be both tricky and dangerous. Furthermore, determining liability in cases of air pollution would be equally hard. Pollutants squandered out into the water or on land could be contained, to a certain extent, and liability could be determined—the Chernobyl power plant disaster and Clean Ganga Mission serve as the right illustrations—but how does one contain and determine liability in cases of air pollution? Once emitted, there is no way to ascertain the damages caused, and without this ascertainment, no liability could be charged.
Lastly, in addition to the task of ascertainment, the task of providing a remedy to the ruination would​ also​ be particularly challenging—if not impossible. It has been rightly contended that there is no such thing as “away”. When we throw anything away it must go somewhere.”[13] But how do we remedy something which is denser than water, or worse off, not visible at all?

Ascertainment of Human Damages

If ascertainment of environmental damages is tricky, ascertainment of damages caused to human beings is a totally different ball game. The authorities would have to calculate the loss caused to a human, and as we know, there is no adequate compensation for human suffering, so:
How can we put a price on human life, loss of limb, or suffering etc?
For the sake of the argument, for a brief moment, let’s even consider that we can. Here comes another question:
How do we ensure an equitable and timely distribution of such compensation?
In Indian Council for Enviro Legal Action v. Union of India,[14] The court offered no compensation to the residents of the village and illiterate villagers were unable to count their woes.[15] Bhopal Gas Tragedy victims, 37 years after the catastrophe, are still aching for adequate compensation and the matter is pending in front of the SC.[16] 

Setting standards for pollution

Upon deciding liability for an action, one also has to define the threshold to abide, for not incurring such liability; therefore, authorities would have to define permissible pollution limits. Now, the question arises:
What is the lowest level of pollution an enterprise is allowed to make?
The fact of the matter is that the permissible levels of pollution are already put in place—but then again, they have not been enough to “slow down” pollution so to speak. The obvious solution is to lower them further, but this would not be practicable as it would also slow down the economy and the opportunity cost would be huge, and raising them any further is out of the question. Thus, it remains a challenge for the legislature and the judiciary to define the relevant criteria.[17]

Deep pockets

The Union Carbide group, the company responsible for 1983 Bhopal Gas Tragedy, was instructed to pay an initial sum of 460 million of the Hon’ble Supreme Court.[18] Even after 37 years and countless legal battles, the company continues to operate at a global scale. In fact, some of the biggest and most powerful enterprises on the planet have caused the most pollution than anyone.[19] The level resources that these companies possess give them a certain level of dominance to exert over the economy—this dominance is both regressive, but also paramount for the nation’s growth; therefore, a small sanction cannot hurt them, and a bigger one would be counterintuitive, as it has also been contended that these companies, if charged for their default, may increase the prices of their products causing repercussions for the economy.[20] Conversely, however, it is noteworthy to point out that in urban areas where the industrial sector is heavily dominated by medium, small, and tiny enterprises—the price of clean up and other penalties may adversely affect their competitiveness[21] and put them out of business in relation to a larger firm. So money, herein, is the dominating factor. This makes the PPP principle biased towards larger firms.

Failing altogether?

In M.C. Mehta v. Union of India[22] (Taj Trapezium Case) the Hon’ble SC reiterated the polluter pays principle. It instructed companies around the Taj Mahal to wind down and shift their production elsewhere. Additionally, it also gave a new dimension to this principle by taking into consideration the rights of workers; but, nevertheless, the yellowing of Taj Mahal has not deterred.[23] As a matter of fact, even though the judiciary has done all in its power[24] and called a spade a spade, the levels of pollution have not ceased to exist; infact, they have continued to go up.[25]

C. CONCLUSION

At this point, it should be noted that the scrutiny conducted above presents a one-sided perspective of the PPP. The usage and interpretation for it is undoubtedly huge—but has not rendered the anticipated results insofar pollution is concerned. PPP was thought of as a deterrent to pollution, but it is, in fact, a weak deterrent. Apart from the flaws present within the principle, economic prosperity has led enterprises to have deep pockets with insurmountable wealth to spare—and should a disaster ever strike, it could be passed on by paying the default. Furthermore, advancements in technology and the constant care required towards the economy has put the PPP in a precarious position.
However, this is not to say that the principle is not useful at all. The Hon’ble Supreme court has declared that this principle has become ‘a part of the environmental law of the country,’[26] and has been a key principle in the pollution control framework.[27] Then, what is the solution here? Inclusion of financial intermediaries appended with the enterprise[28] and usage of environmental assurance bonds[29] has already been contended. India, in fact, has already taken the first right step under the Public Liability Insurance Act which dictates that every industrial plant should take out insurance policies under the act before the commencement of operation, so should an accident happen, the company is in a position to pay relief.[30]
The post COVID world, with an incessant rise in pollution, would become a world of trauma if necessary actions are not taken. This, in itself, should be enough reason to reconsider the environmental policy framework. Finally, looking back, India, parting from the western concept of strict liability, has accepted the rule of absolute liability and Bhagwati, C.J. clearly indicates in his judgment that his view is a departure from the law applicable to western countries.[31] We have, for our own best interest, made laws in the past. This time is also no exception because time for precaution has gone; it is the time to prevent.

This blog is authored by- Sanchit Sharma

[1] M.C. Mehta v. Union of India AIR 1986 SC 1086 Bhagwati, C.J. at 1099
[2] Snehal Lokhandwala, Pratibha Gautam, ‘Indirect impact of COVID-19 on environment: A brief study in Indian context’ (2020) 188 Environmental Research <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7299871/> accessed 9 September 2020
[3] Qiang Wang, Min Su, ‘A preliminary assessment of the impact of COVID-19 on environment – A case study of China’ (2020) 728 Science of The Total Environment <https://www.sciencedirect.com/science/article/pii/S0048969720324323> accessed 9 September 2020.
[4] OECD, ‘Recommendation of the Council on the Implementation of the Polluter-Pays Principle’ OECD Legal Instruments https://legalinstruments.oecd.org/en/instruments/11 accessed 5 September 2020
[5] Bradley J. Condon, Tapen Sinha, ‘The Role of Climate Change in Global Economic Governance’ (1st ed, Oxford University Press 2013)
[6] Indian Council for Enviro-Legal Action v. Union of India, (1996) 3 SCC 212 at 215.
[7] Id.
[8] Satish C. Shatri, ‘“The Polluter Pays Principle” and the Supreme Court of India’ (2000) 42(1) Journal of the Indian Law Institute <http://www.jstor.org/stable/43951740> accessed 5 September 2020
[9]Javed Talib, ‘The Liability and Compensation Models Incorporated in Indian Legal Regime Pertaining to Hazardous Substances-An Evaluation’ (2007-08) 18 ALJ <http://www.scconline.com/DocumentLink/mcvt01eV> accessed 4 September 2020
[10] AIR 1996 SC 2715
[11] Id.
[12] Shyel Trehan, Shuva Mandal, ‘The Polluter Pays PrincipleThe Polluter Pays Principle’ (1998) 10 The Student Advocate <https://nlsir.com/wp-content/uploads/2020/07/The-Polluter-Pays-Principle.pdf> accessed 5 September 2020
[13] Shreya Mishra, ‘Extended Producer Responsibility: Possibilities in Indian Context’ SCC Online (May 31, 2019) <https://www.scconline.com/blog/post/2019/03/31/extended-producer-responsibility-possibilities-in-indian-context/#:~:text=This%20is%20the%20idea%20behind,extended%20producer%20responsibility%20(EPR).&text=The%20E%2DWaste%20(Management%20and,for%20the%20waste%20production%20management.> accessed 7 September 2020
[14] (1996) 2 JT (SC) 1996
[15] Shastri, Supra note 8, at 111.
[16] PTI, ‘Bhopal gas tragedy: SC to hear Centre’s plea for additional Rs 7,844 cr fund to compensate victims’ (New Delhi, 27 January 2019) https://www.indiatoday.in/index/story/bopal-gas-tragedy-union-carbide-dow-chemicals-compensation-1640690-2020-01-27 accessed 5 September 2020
[17]Workshop on EU Legislation, ‘Principles of EU Environmental Law’ European Commission (2012) <https://ec.europa.eu/environment/legal/law/pdf/principles/2%20Polluter%20Pays%20Principle_revised.pdf> accessed 3 September 2020
[18] Sanjoy Hazarika, ‘Bhopal Payment by Union Carbide Set at $470 Million’ The New York Times (NYT, February 15, 1989) https://www.nytimes.com/1989/02/15/business/bhopal-payments-by-union-carbide-set-at-470-million.html#:~:text=Ending%20a%20legal%20battle%20over,toxic%20gas%20leak%20at%20Bhopal. Accessed 4 September 2020
[19] Matthew Taylor, Jonathan Watts, ‘Revealed: the 20 firms behind a third of all carbon emissions’ The Guardian (9 October, 2019) <https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions accessed 8 September 2020
[20] Shyel, Supra note 12, at 71.
[21] Id., at pg. 67
[22] AIR 1997 SC 734
[23] News Desk India, ‘Taj Mahal Turning Yellow For Pollution; Special Air-Purifier Van Deployed’ (3 November 2019) https://www.india.com/news/india/taj-mahal-turning-yellow-for-pollution-special-air-purifier-van-deployed-3830071/ accessed 9 September 2020
[24]Gurdip Singh, Amrita, ‘Sustainable Development: International and National Perspective’ (2008) 31(1) RMLNLUJ http://www.scconline.com/DocumentLink/UKvYDg5X accessed 8 September 2020
[25] Umair Irfan, ‘Why India’s air pollution is so horrendous’ Vox (31 October, 2018) <https://www.vox.com/2018/5/8/17316978/india-pollution-levels-air-delhi-health> accessed 3 September 2020
[26] A.P. Pollution Control Board v. Prof. M.V. Nayudu, AIR 1999 SCW 434
[27] The Air (Prevention and Control of Pollution) Act, 1981;
The Water (Prevention and Control of Pollution) Act, 1974;
The Environmental (Protection) Act, 1986; and
The Public Liability Insurance Act, 1991.
[28] James Boyd and Daniel E. Ingberman, ‘The “Polluter Pays Principle”: Should Liability be Extended When the Polluter Cannot Pay?’ (1996) 21(79) Palgrave Macmillan Journals <https://www.jstor.org/stable/41954091> accessed 7 September 2020
[29]Attilio Bissio and Sharon Boots (Ed.), The Wiley Encyclopedia of Energy and the Environment, 685 (1997). As cited in Shreya, Supra note 20, at pg. 72. 

[30] Section 4, Clause 2, Subclause A, The Public Liability Insurance Act, 1991.
[31] Union Carbide Corpn. v. Union of India (1991) 4 SCC 584. At 608

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