ENVIRONMENT and Forest Minister Jairam Ramesh-backed environmental activism has stalled many industrial, infrastructural and mining projects envisaging investment running into several thousand crore of rupees.
The projects stalled or rejected on environmental grounds include the ones for which the UPA expressed political resolve in the run-up to the Lok Sabha polls in 2009.
These projects are for reviving closed, public sector fertiliser plants at Sindri in Jharkhand, Durgapur in West Bengal and Talcher in Orissa. The investment on these three environment-friendly gas-based fertiliser plants alone is estimated at Rs 10,000-12,000 crore. The Cabinet had approved revival of these and certain other closed fertiliser plants in October 2008.
The projects stalled include the ones that would actually minimise the risk of pollution and are eco-friendly as compared to all other alternatives, if one takes a holistic view of environmental protection.
A case in point is the Chennai Petroleum Corporation Limited’s (CPCL’s) proposal to lay a new 17-kilometre crude pipeline from the Chennai port to its Manali refinery. The new pipeline would replace the existing one that was laid in 1969.
The old pipeline passes through roads, railway tracks, marshy areas and highly inhabited colonies. A number of structures including petrol bunks have come up above this underground pipeline system over a period of time. The coating condition of the pipeline is not satisfactory.
Public safety apart, CPCL needs new pipeline to sustain the operations of the refinery whose capacity has been expanded more than threefold to 9.5 million tonnes per annum.
The Ministry’s expert committee on Construction Projects, Coastal Regulation Zone, Infrastructure Development asked CPCL to indicate whether the proposed pipeline is outside the ambit of so-called “critically polluted” area of Manali.
Citing opposition from a fishermen’s association and certain other reservations, the committee decided in January-end 2010 to indefinitely defer a fresh call on the project. It asked the company to first address environmental concerns.
In certain cases, environmental approvals or rejections have been reduced to weirdness with one project getting approval and another getting rejected in the so-called “critically polluted areas” identified on the basis of comprehensive environmental pollution index, which has been introduced without any public consultation.
In January 2010, the Ministry’s another committee of experts dealing with industrial projects decided that IOC’s proposal for manufacture of synthetic rubber named styrene butadiene rubber (SBR) within its refinery-cum-petrochemicals complex should be returned as it located in Panipat, which is one of the 43 “critically polluted areas” across the country.
This labelling has been done on the basis of “comprehensive environmental pollution index” (CEPI) prepared jointly by Central Pollution Control Board (CPCB) and Indian Institute of Technology, New Delhi. This study has specified CEPI for 88 industrial clusters across the country.
On January 13, 2010, the Environment Ministry imposed a blanket ban on considering proposals envisaging expansion or setting up of new projects till August 2010. In the interregnum, State authorities would finalise time-bound plan for improving environmental quality in these areas.
This ban is addition to moratorium on issue of fresh mining licences in Goa and mining restrictions in Karnataka.
IOC’s proposal is basically a value-addition and import substitution project. The delay would force IOC to further delay extraction of butadiene from one of the streams of its naphtha cracker ready for start-up and recycle it within the complex.
IOC had strived hard to secure closely guarded SBR technology from a Taiwanese company by offering to make it a joint venture partner in the proposed plant.
In the same month, the Ministry’s experts committee dealing with construction projects, etc. decided to clear a mega project downstream to IOC’s Panipat Complex with direct raw material linkages at Panipat and Karnal!
The tentative clearance is subject to the condition that the proposed petrochemical hub is out of the boundary of critically polluted area of Panipat. This project of Haryana State Industrial and Infrastructure Development Corporation would house several plastic processing and polyester units.
In the same meeting, another industrial estate project in the “critically polluted” city of Faridabad was rejected without giving an opportunity to the project developer to explain why it would not cause pollution or whether it was out of the ambit of pollution zone.
The environmental activism has also delayed corporate restructuring of a few companies for which they merely applied split of early issued environmental change in the name of entities resulting from the demerger.
The companies, whose applications for change in the name of environmental approvals, has been put on hold pending clarifications include Essar Steel and ABG Cement. The regulatory mechanism for corporate restructuring is elaborate and is specified in the company law.
Ultra environmental activism is thus at a variance with the Prime Minister Dr Manmohan Singh’s public stance on environmental approvals that he indicated at the National Conference of Ministers of Environment and Forests in August last year.
Dr Singh stated: “I wish to draw your attention to the view that environmental clearances have become a new form of Licence Raj and a source of corruption. This is a matter that needs to be addressed head-on. There are trade-offs that have to be made while balancing developmental and environmental concerns. But the procedures must be fair, transparent and hassle free. Decisions must be taken within a specified time.”
The activism seeks to identify the corporate greed for growth and profit as the main culprit of environmental degradation. It turns blind eye to population explosion, which is root cause of environmental disaster in the making.
Short-sighted activism is completely contrary to the Environment Ministry’s National Conservation Strategy and Policy Statement on Environment and Development, which is available on the Environment Ministry’s website.
The Policy, issued in 1992, says: “Unabated population growth, as at present, not only adds to the economic burden for all developmental activities, but also reduces the impact of economic growth on our society. Therefore, for the success of our planning, population control becomes the most urgent necessity…. Population control should be a national mission for the next decade.”
UPA till today has not put in place a comprehensive strategy to break the vicious circle of poverty, population growth and environmental degradation.
Environmental activism is bound to give push further India’s dependence on imports, which is what some foreign donors to NGOs intend to achieve.
The soaring import of fertilizers, food, coal, petroleum and several other commodities and products has already blurred the urgency for food and energy security from the national agenda manipulated by vocal sections of the society.
As freeze on implementation of many projects reduces the growth of tax revenue and as the expenditure grows, the Government would have to resort to more borrowings just to meet its expenditure. International Monetary Fund (IMF) has already pressed the alarm button by pointing out that India’s public debt is already above the “debt intolerance” level.
It puts debt tolerance of emerging economies in the range of 45 per cent-75 per cent of gross domestic product. The public debt or the combined debt of the Centre and the States is 78.8 per cent of the GDP.
Both IMF and the 13th Finance Commission have made a strong case for reducing public debt, which, if left unchecked, can push India to hyper inflation, currency devaluation and economic depression.
Environmental activism would transform the current corporate rush to acquire mines, companies abroad into a herd instinct, smothering job opportunities for millions of young Indians.
It is ironically that wealth generated in India or mobilised abroad on Indian strength is being deployed abroad to create jobs abroad, leaving malnourish and unemployed to the mercy of the God.
In its zeal to make the companies environmentally responsible, the Ministry is selectively mandating companies to earmark five per cent of the project cost towards corporate social responsibility (CSR) activities such as poverty eradication, education and healthcare.
The Government has so far never legally forced any company to earmark upfront investment on CSR. It only encourages companies to set aside a part of its income from its operations for CSR.
If CSR expenditure has to be borne upfront, then the norm should apply to all companies including the ones such as telecom service providers that do not normally seek environmental approval. And the five per cent CSR cost of the project should be factored in the import duty to protect the domestic companies from unfair competition from imports.
Has the Cabinet delegated CSR regulations to Environment Ministry under the Business of Allocation Rules?
Regulatory issues aside, the public debate on environment versus growth has to shift to strategies for population control and sustainable development.
