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MoEFCC seeks comments on the proposed amendments to the Environment (Protection) Act, 1986

MoEFCC seeks comments on the proposed amendments to the Environment (Protection), Act, 1986
Trade & Regulatory Compliance Practice | Rishikaa

The Ministry of Environment, Forest and Climate Change (“MoEFCC”), on 1st July 2022, sought comments and suggestions on the proposed draft amendments to some of the provisions of the Environment (Protection) Act, 1986 (“EPA”), particularly those related to penalty and imprisonment. The amendments were proposed due to the concerns raised regarding the penal provisions under the EPA, and for the purposes of decriminalization of the existing provisions of the EPA. Amendments along similar lines have been proposed to the Water (Prevention and Control of Pollution Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981 and the Public Liability Insurance (PLI) Act, 1991. The deadline for submitting comments and suggestions on the proposed amendments is 21st July 2022.

Some of the key draft amendments proposed by the MoEFCC to the EPA are as follows:

  • Removing imprisonment as punishment for less severe contraventions: As per the current provisions of the EPA, any non-compliance or contravention would lead to an imprisonment of up to five (5) years or with fine of up to one (1) lakh rupees or both. In case of continuation of the violation, an additional fine of up to five (5) thousand rupees for every day of such contravention would be levied and if the contravention continues beyond a period of one (1) year after the date of conviction then the contravener would be punished with imprisonment for a term which may extend to seven (7) years.
    Under the proposed amendments, the penal provision is limited to a penalty fee and no imprisonment. The amount of penalty is proposed to be increased to five (5) lakh rupees extending up to five (5) crore rupees. The penalty amount would be equivalent to the damage caused, in the event the amount of damage caused exceeds the amount of penalty. This provision is proposed to be applied to companies as well.
    The proposed amendments provide for provisions for imposing an additional penalty to the tune of fifty (50) thousand rupees for each day during the contravention which may extend to five (5) lakh rupees.
    The MoEFCC has removed the provision of imprisonment in the draft amendments, except in the event a defaulter fails to pay the penalty as well as the additional penalty amount(s). In such a case, the defaulter may be liable for imprisonment extending up to a term of three (3) years or a fine extending up to ten (10) crore rupees or both. Moreover, serious violations which lead to grievous injury or loss of life will be covered under the provisions of the Indian Penal Code, 1860.
    Further, the penalty and the additional penalty will be imposed by an ‘Adjudicating Officer’ (who will be appointed by the Central Government) and will be credited to an Environment Protection Fund.
  • Appointment of an Adjudicating Officer: The MoEFCC has proposed inserting a new provision for designating an Adjudicating Officer. This officer will be responsible for holding an inquiry and imposing penalty in case of any violation or failure of compliance of the provisions of the EPA. The Adjudicating Officer will also have the power to call upon any person who (i) may have contravened or failed to comply with the EPA and the Rules made thereunder, or (ii) has knowledge of the facts and circumstances of the case. Further, the Adjudicating Officer can require such a person to produce any record, register or other document which may be relevant to the subject matter of the case.
    After giving a reasonable opportunity of being heard to the contravener, and upon satisfaction, the Adjudicating Officer can impose a penalty that he/she may deem fit under the circumstances.
  • Appeal: A provision of appeal against the order of the Adjudicating Officer has also been proposed. As per this provision, any person aggrieved by the order of the Adjudicating Officer can file an appeal before the National Green Tribunal within sixty (60) days of receipt of the copy of the order. After hearing the parties, the National Green Tribunal may confirm, modify, or set aside the Adjudicating Officer’s order.
  • Creation of the Environment Protection Fund (“EP Fund”): The MoEFCC has also proposed to create the EP Fund where the penalty and the additional penalty imposed by the Adjudicating Officer on the contravener(s)/defaulter(s) will be credited. The Central Government will be responsible for prescribing the manner in which the EP Fund will be administered, money will be drawn, and other connected matters.
  • Accounts, Annual Report, and Audit of the EP Fund: In view of the proposed EP Fund, it will be the responsibility of the Central Government to maintain separate accounts for the EP Fund and prepare an annual report in consultation with the Comptroller and Auditor-General of India, who will be responsible for auditing the accounts of the EP Fund. As regards the Annual Report, the Central Government will give a full account of the activities of the EP Fund for each financial year. The Audit Report and the Annual Report, given by the Comptroller and Auditor General of India, will then be laid before each House of Parliament.

Our Take:

Keeping in mind the government’s push towards increasing the ease of doing business in India, the government’s objective of decriminalizing business and economic regulations that are of a technical nature and that do not hamper public interest in any manner appears valid and reasonable. While fee-based penalty provisions have the potential of imparting swift remediation, however, decriminalizing the provisions of the EPA may have the direct negative implication of harming the environment since a penalty fee-based compliance structure may lead to dilution of the seriousness of environmental offences. Whether the broad removal of criminal implications within the EPA will have the intended effect of weeding out the “fear of imprisonment” and incentivize environmental compliance, or not, will become clear in the fullness of time.

Links:
Link to the proposed amendments to the Environment (Protection) Act, 1986: https://moef.gov.in/wp-content/uploads/2022/07/EPA-Bill_compressed.pdf

Practice Contacts

Ameet Datta - Partner (Practice Lead) | ameet@saikrishnaassociates.com

Suvarna Mandal - Partner | suvarna@saikrishnaassociates.com

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