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The Central Pollution Control Board issues a General Framework for Imposing Environmental Damage Compensation

The Central Pollution Control Board issues a General Framework for Imposing Environmental Damage Compensation

The Central Pollution Control Board (“CPCB”) has issued a document titled General Framework for Imposing Environmental Damage Compensation (“EDC Framework”) on 23 December 2022.

Background: The EDC Framework has been prepared pursuant to the directions of Hon’ble National Green Tribunal (“NGT”) via order dated April 24, 2019 in O.A. 606/2018.

In the said directions, the NGT noted that it was necessary to recover cost of environmental damages from identified polluters based on polluter pays principle, by undertaking assessment of environmental damage. Environmental Damage Compensation (“EDC”), has been explained in the EDC Framework as a quantifiable and reasonably estimable future expenditure as on date, for restoration of environmental damages caused due to anthropogenic release of pollutants in excess of permissible limits or unauthorised activity.

The highlights of the EDC Framework are as follows:

Identifying Damages and Calculating Compensation: The EDC Framework is stated to help in identifying direct and indirect damages caused to environment due to anthropogenic activities and retroactive application of Environment Compensation (“EC”) charges. However, it does not specify a date on which the retroactive implementation would take effect. It also details a standard procedure for damage assessment including preliminary investigation, analysis of data, identification of EDC liabilities, assessment of direct & indirect liabilities, assessment of ecosystem damages, detailed investigation of damaged site, analysis of detailed data, determination of EDC scenario and cost, identification of best achievable remediation and restoration methods, action plan imposing over-all EDC and monitoring of implementation of plan by regulatory bodies. The EDC Framework does not prescribe detailed methodology for assessing environmental damages. However, an indicative checklist of possible types of damages and parameters indicating indirect impacts on environment is given at Appendix II & III of the EDC Framework.

The EDC Framework broadly prescribes that EDC can be calculated as per the formula below:

EDC = Assessment Costs + Cost of remediating damages to environment & ecology + Compensation for damages to environment and eco-system services

Identification of direct and indirect EDC liabilities: Step-wise approach shall be adopted for activities such as preliminary assessment, identification of direct and indirect liabilities, detailed environmental and ecological studies, assessment of damages, calculation of compensation for direct and indirect liabilities.

The direct liabilities which will be eligible for assessment and restoration are: (i) Soil and sediment contamination (ii) Groundwater contamination (iii) Contamination of surface bodies (iv) Damages to eco-systems. The direct liabilities with respect to Air pollution are (i) Compensation for release of air pollutants in excess of permitted quantities (ii) Compensation for release of toxic gases from process.

Indirect damages are those damages which are not directly accountable to an action and may either be fixed or variable

Activities that Damage Ecology: A non-exhaustive list of some activities that may cause ecological damage has been provided. This includes sand mining, mining activity, industrial discharge of wastewater, dumping of hazardous wastes and chemicals, deforestation and release of air pollutants.

Responsibility for Implementation and Monitoring: The EDC Framework recognizes that it would be the concerned State Pollution Control Board (“SPCB”) / Pollution Control Committee (“PCC”) which will be responsible for the implementation and monitoring of EDC and remediation.

Strict Liability: The EDC Framework lays down that the principle of strict liability shall be exercised on the polluter while implementing EDC. Strict liability has been explained as the imposition of liability on the polluter without finding a fault such as exceedance of standards, negligence or ill intention.

Joint and Several Liability: The EDC Framework further states that in cases where two or more persons are liable in respect of damage, principle of joint and several liabilities may be imposed. Accordingly, a State may pursue obligation of EDC against any one party as if parties were jointly accountable and it becomes responsibility of the defendants to sort out their respective proportions of obligation and payment.

Forms and Checklists: A standard format for preliminary investigation of damaged area is provided along with instructions. Two checklists of direct and indirect liabilities for 19 types of anthropogenic hazards are also provided in the EDC Framework. Indicative methods of damage quantification and EDC estimation have been provided at Appendix IV of the EDC Framework.

Our Take

The Polluter Pays principle has been previously interpreted by the Supreme Court to mean that the absolute liability for harm to the environment extends not only to compensate the victims of pollution but also the cost of restoring the environmental degradation. The EDC Framework recognizes this. However principle of joint and several liabilities, under which it becomes the responsibility of the joint polluters to sort out their respective proportions of obligation and payment may lead to ambiguity, disputes and litigation between one or more parties alleged to be jointly responsible for pollution. This may in effect lead to delays in payment of compensation and completion of remediation efforts. Additionally, since the SPCB/PCC will be monitoring the implementation of the approved restoration plan and recovery of environmental compensation for damages, an absence of specific guidelines in this regard may lead to confusion and potential overreach by authorities.

General Framework For Imposing Environmental Damage Compensation : https://cpcb.nic.in/openpdffile.php?id=TGF0ZXN0RmlsZS8zNjBfMTY3MTc5MjY0NF9tZWRpYXBob3RvMjk1MjYucGRm

Order of the Hon’ble National Green Tribunal dated April 24, 2019 in O.A. 606 /2018 : https://greentribunal.gov.in/gen_pdf_test.php?filepath=L25ndF9kb2N1bWVudHMvRWZpbGluZ19kb2N1bWVudHMvbmd0ZG9jL2Nhc2Vkb2MvMDcwMTEwMjAwMzQ1MjA



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