Govt proposes to amend pollution control norms to levy penalties, better compliance. Move to hit polluting industries
However, these proposed amendments in the Air (Prevention and Control of Pollution) Rules, 1982, by the MoEFCC are also likely to bring higher operational expenses and stricter oversight for companies in industries such as manufacturing, textiles and chemicals, among others, even as they work towards curbing various kinds of pollution in the country.
This may further impact the profitability of businesses.
The government has put the proposed amendments in the public domain and invited comments and feedback from the general public and interested parties before its roll out.
In the notification, the MoEFCC stated that the central government will enforce the amendments “on or after the expiry of 60 days from the issue date i.e. July 24. Any person interested in making any objection or suggestion on the proposals contained in the draft notification may do so in writing within 60 days.”
While amending the air pollution act; enhancing the disclosure requirements of the Environmental Protection Fund (EPF); and enabling the adjudicating officers to decide the penalty for violations, will lead to better long-term positive environmental outcomes by creating a robust deterrent against pollution, they will also add to the compliance cost of companies, especially smaller ones, said experts and lawyers.
Penal provisions
The recent move by the environment ministry comes in light of poor air quality across the country every summer, especially in cities such as Delhi-NCR, Mumbai, Kanpur, and Hyderabad, among others.
Under the proposed changes, the government plans to give quasi-judicial powers to bureaucrats in both state and central government’s environment and pollution control departments by inserting a new chapter on adjudicating officers.
This includes the conditions for their appointment, the procedure to conduct inquiries, issue penalties, and factors to consider before issuing the penalties.
“Under the Jan Vishwas (Amendment and Provisions) Act, the Air (Prevention and Control of Pollution) Act, the Environment (Protection) Act and the Public Liability Insurance Act have been amended. The rules involve several inferrents like section 39A, section 16 of the EP Act, which did not exist before amendments,” explained Sreeja Chakraborty, an environmental lawyer and founder of Living Environment Advocacy Foundation.
“Section 53 of the Air Act is being amended to include a provision that indicates the manner of holding an inquiry and imposing a penalty by the adjudicating officer. This is the sub-section under which those rules have been issued,” Chakraborty added.
Furthermore, Section 38 A of the air pollution act states that imprisonment of three months, or a penalty of ₹10,000, and an additional fine of up to ₹5,000 will be levied—for every day during which the violations continue to occur—on entities found violating the provisions of the law for the first time.
In case the violators fail to pay the penalty within 90 days, the act states that they shall be liable for imprisonment which may extend up to three years or pay a fine which may extend to twice the amount of the penalty, or both, as per the existing rules.
In the proposed amendments, imprisonment will be replaced by only a penalty. This is being done to ease doing business in the country, an official from the MoEFCC said.
The penalty amount is to be credited to the central government’s environmental protection fund.
Enabling adherence
The recently notified amendments require the adjudicating officers to direct the concerned state pollution control board (SPCB), or the pollution control committee (PCC) to initiate criminal proceedings against the person or entity found in violation of the rules, in the concerned district court within 30 days after the lapse of 90 days of the penalty being imposed.
It further directs the SPCB or PCC to initiate proceedings against the violators in the concerned district court within 30 days from the date of receipt of direction from the adjudicating officer.
The amendment further recognises the place of operation of a project, its size, category of industry, type of violation (such as operating without environment clearances), non-compliance with environmental safeguards, and emission standards, non-compliance of any directions issued under the air pollution act and by the commission for air quality management (CAQM), among others, and directs the adjudicating officers to factor in these variables before issuing penalties, as per the government’s notification.
“Additionally, the rationale behind these amendments is to enforce existing laws, which have failed to deter non-compliance by businesses”, the MoEFCC official cited above, said.
However, queries sent to the secretary and spokesperson of MoEFCC remained unanswered till publishing.
Between 2021 and 2022, the number of cases registered under the Environmental Protection Act increased by around 31% and those under the Air Pollution and Water Pollution acts went up by a cumulative 42%.
Then, in 2022, over 88,400 environment-related cases were filed under seven acts, including 78 cases under the air and water pollution acts, while 55 cases were pending trial in India in 2021, according to the latest data released by the National Crime Records Bureau, last December.
Funding environment protection
“The creation of the new adjudicating authority will lead to speedy disposal of cases, which is a positive move. Under the new forum, an order should come within six months for every matter heard, which is faster than any existing mechanism. This is a positive move, but not for companies and businesses,” said Chakraborty.
Explaining the possible impact on corporates, Anjal Prakash, research director and clinical associate professor at the Indian School of Business, said that the amendments are expected to create a significant impact on industries with high pollution footprints, such as manufacturing, textiles, and chemical sectors.
Companies in these industries may face higher operational expenses, that would potentially impact their profitability, while it would also bring heightened scrutiny and potential penalties, compelling them to reevaluate their operational processes and compliance strategies.
“Firms may need substantial investments in cleaner technologies and sustainable practices, leading to increased operational costs. Compliance may disproportionately affect small and medium enterprises that lack the resources to adapt swiftly. Conversely, it could stimulate innovation by fostering a competitive market for green technologies. The long-term benefits may outweigh the initial challenges, driving a cleaner economy,” noted Prakash.
Meanwhile, Raja M. Shanmugham, former president of the Tiruppur Exporters Association, said the amendments could become a cause for concern among businesses.
“The intended amendment is going to cause difficulties and create confusion, because the clash between state and central government is visible in it. Further, the delegation of power to the officials is going to cause much more concern. The reason is that now this amendment will create more advantages for the officials who are going to implement it. Further, the MSMEs are going to face more difficulties,” he noted.
“My suggestion is, they have to first implement the same prospectively. Then they have to educate and guide the existing industries to equip themselves to adhere to the norms in a phased manner,” Shanmugham added.
Focus areas
When any business pays a penalty levied by the adjudicating officer for violating the provisions of the country’s environmental laws, those penalties are to be remitted to the Environment Protection Fund (EPF).
Further, the Central Pollution Control Board (CPCB) must disclose the amount present in the fund at the beginning of every financial year, the additional pay-ins via penalties, and the disbursal to various state and central government bodies from the fund.
The EPF is primarily utilized to finance initiatives geared toward environmental conservation, pollution control and climate change mitigation.
Funds allocated from the EPF can be spent to support technology upgrades, pollution management projects and community engagement programs aimed at sustainability.
Additionally, increased liquidity in the EPF can further enhance funding for research and development in pollution-combating technologies. Expanding funding utilization into wider environmental initiatives is also likely to aid in comprehensive approaches to pollution control, which will consequently benefit ecosystem services and public health, while reinforcing legal compliance among businesses, environmental experts explained.
Keeping track
The government’s proposed disclosures regarding the funds disbursed from the EPF comes against the backdrop of the central and state governments sitting on funds marked for spending on environmental causes.
For context, as per disclosures made in the Rajya Sabha, the government had spent only about 17% of its Compensatory Afforestation Fund till FY18.
“The proposed enhanced disclosure requirements regarding the EPF will promote transparency and accountability in its management and utilization. Clear reporting on how the fund is allocated will help the public monitor governmental actions and hold authorities accountable for misuse or inefficiencies,” Prakash said.
This transparency would engender public trust and encourage both public and private investment in sustainable projects. Moreover, it could spur innovation as businesses seek to align with the stated priorities of the government’s strategy, along with the overall funding opportunities within the EPF.
Further, these measures have the potential to strengthen the operational integrity of businesses and bolster the societal commitment to environmental sustainability and climate action.
“While the amendments aim to strengthen enforcement mechanisms, whether they will lower cases under the air pollution act remains uncertain. Stricter regulations may deter some firms from engaging in illegal activities due to the fear of penalties. However, their effectiveness also depends on the clarity of these amendments and the government’s capacity to enforce them,” Prakash explained.
“If companies recognize the stringent consequences, they may invest more in compliance. Ultimately, while there may be a short-term spike in recorded violations as companies adjust to the new rules, a long-term decrease would depend on robust regulatory support and enforcement capabilities,” he added.
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