This Blog Post talks about various aspects of environmental clearances, corporate and industrial regulations and general practices behind the Engineering, Procurement, and Construction (EPC)-based projects. In light of the dynamic changes in the regulatory framework, it is essential to understand the interplay between developmental projects and the environment. Further, the purpose of this Blog Post is to understand how one can maintain international standards and practices and at the same time achieve sustainable development goals.
It is for this reason that government establishments around the world introduced the concept of Environmental Clearance, a process in which each project is required to maintain certain environmental standards prior to commencement of work. In fact, the Environmental Impact Assessment (EIA) Notification, 2006 mandates all mid and high-scale Infrastructural projects to take permission for activities like mining, generating energy through the thermal power plant, building infrastructure etc.
Objective of Environmental Clearance
The idea of certification/clearance is to ensure minimal environmental impact from the planned project and to create further a mechanism to regulate environmental clearances.
As per theEIA Notification, 2006 issued by the Ministry of Environment and Forest & Climate Change, Government of India, it is essential that each site/establishment identified for proposed development must get environmental clearance before the start of the project. However, in the draft EIA notification 2020, the concerned Ministry has proposed to allow all industrial projects to start operations without a valid environmental clearance and get post-facto approval. While some believe this would encourage investment and rapid growth, those advocating for sustainable development goals see the notification as detrimental to the environment and contrary to the objectives of Environmental Clearance. This draft is going to replace the EIA notification of 2006.
Procedure for Environmental Clearance
The applicant is required to furnish the conceptual plan along with the application in Form 1 and the supplementary in Form 1A. Thus, categorization has been done to streamline the process for different types of projects. The details are as follows:
|Area Development projects, Building, Construction projects and Townships;
|Building and Construction projects
|>20,000 sq. meters and <1,50,000 sq. meters
“Any project or activity specified in Category ‘B’ will be treated as built-up area# Category ‘A’ if located in whole or in part within 10 km from the boundary of:
(i) Protected areas notified under the Wildlife (Protection) Act, 1972;
|Townships and Area Development projects
|Covering an area > 50 ha and or built-up area ≥ 1,50,000 sq meters ++
(ii) Critically polluted areas as identified by the Central Pollution Control Board from time to time;
(iii) Eco-sensitive areas as notified under section 3 of the Environment (Protection) Act, 1986, such as Mahabaleshwar Panchgani, Matheran, Pachmarhi, Dahanu, Doon Valley and
(iv) inter-state boundaries and international boundaries.
Provided that the requirement regarding the distance of 10km of the inter-state boundaries can be reduced or completely done away with by an agreement between the respective states or UTs sharing the common boundary in the case the activity does not fall within 10 kilometers of the areas mentioned at item (1), (11) and (ii) above
|++All projects under Item 8(b) shall be appraised as Category B1
Indian Regulatory Regime
The recent proposal, i.e., thedraft EIA notifications, 2020, apart from encouraging industrialization, has also ushered in a new regulatory framework governing environmental clearances for various industrial projects. The range of projects covered by the new notification includes dams, mines, highways etc. Additionally, multiple actions earlier considered an offence have been legitimized. For instance, for some projects, no environmental clearance is needed before starting construction where the area is >20000 square meters.
It is believed that the new set of rules, apart from weakening the public consultation process, would be prejudicial to the stakeholders, including local people at the proposed development site. The concerned Ministry has even increased the list of projects where a public hearing is not required prior to environmental clearance(s) and exempted public hearings of projects that propose modernization. This is contrary to the view taken by the Apex Court in a catena of judgments where the Hon’ble Court has expressed concerns over industrial projects operating without the requisite permissions. While the Supreme Court of India has repeatedly harped upon balancing development alongside the environment, the introduction of the draft EIA notification 2020 may destroy the environment. In light of this, it is essential to adopt an “ecologically rational outlook” to balance the interests of all stakeholders.
Environmental Management Systems
What is an Environment Management System?
The Environmental Management System (EMS) is a robust platform that allows organizations to consistently review, evaluate and improve their environmental performance in sync with the environmental goals. The EMS assesses the environmental performance based on objectives and targets set by the organization(s). It addresses the regulatory requirements and helps evolve proactive approaches to minimize non-compliance and adopt safe practices for the organization. The EMS, in a nutshell, is a systematic regulatory framework which is cost-effective and user-friendly. It also helps in addressing the non-regulated issues, such as energy conservation, in addition to promoting strong operational control and employee stewardship.
Reasons to adopt EMS:
- It aligns the organization’s environmental goals with the environmental impacts of the proposed development plan;
- Lays down compliance obligations to minimize non-compliance and helps avoid regulatory/ legal hassles;
- Monitors and measures progress based on certain parameters;
- Enhances employees’ knowledge about the environment; and
- Provides effective tools to achieve objectives and targets.
What determines an effective environmental management system?
For EMS to become successful, each and every functionary from top to bottom in the organization must work in tandem with the company objectives and use the available tools on EMS efficiently to maximize the benefits of the stakeholders.
The Benefits associated with EMS are as follows:
- Improves environmental performance and encourages compliance;
- In certain cases, EMS is able to prevent pollution and conserve resources;
- Apart from boosting employee morale, the organization’s public image is enhanced, leading to new customers/markets;
- Increases efficiency and reduces costs for compliance purposes;
- EMS has helped improve employee awareness about environmental issues.
How does EMS conform to the International Standards?
- By self-determination and self-declaring policy framework;
- By considering the interests of all stakeholders in the organization;
- By allowing the external organization to certify/register the EMS.
Leadership, Commitment and Decision Making
The management of each organization must demonstrate commitment toward the environmental management system by:
- acting responsibly and taking accountability;
- ensuring the environmental policy is made compatible with the organization’s objectives;
- ensuring integration of the EMS requirements with the company’s business processes
- communicating effectively about environmental management;
- ensuring that the EMS achieves its intended outcomes and encourages improvement;
- Adopting relevant management roles for efficiency.
To protect the environment, the organization must take into account:
- The dynamic changes in the environment (both planned and unplanned);
- The conditions and reasonably foreseeable emergencies by using established parameters. The aspects possibly having a significant environmental impact must be considered.
- Documented information on the environmental impacts and criteria used to assess the significant environmental aspects.
The organization must:
- Identify and determine the compliance obligations related to environmental impacts due to the proposed development plan;
- Decide how to achieve organizational goals and compliance obligations applicable to the organization
- Establish, implement, maintain and improve the EMS.
- Maintain documented information for compliance purposes.
- Internally communicate information relevant to the EMS across the board of the management, including a proposal to change the environmental management system for effective compliance and efficiency;
- The organization must externally communicate information relevant to the EMS, as established in line with the compliance obligations of the organization.
The top management should regularly review the organization’s management systems to assess the effectiveness and efficiency of the EMS:
Review to include considerations of:
- The previous review of action taken, including the changes embraced in addressing the external and internal issues in the EMS
- The legitimate interest of stakeholders
- The extent of achievement of the environmental objectives
- Trends in non-conformities
- Monitoring and measurement of results
- Audit results
- Adequacy of resources
- Opportunities for continual improvement
Output of management review to include:
- Conclusions on continuing suitability
- Decisions related to continual improvement strategies
- Actions needed in case the environment objectives have not been achieved
- Opportunities to improve integration of environmental management systems
- Implication for strategic directions of the company
The organizations to determine opportunities for improvement and implement necessary actions.
In cases of non-conformity:
- Organization to react and take action to control it
- Mitigate the adverse environmental impact
- Review the non-conformities
- Analyze if similar non-conformities exist
- Review effectiveness of corrective actions
On a complaint preferred by the applicant stating commercial activities were being undertaken in residential areas of Nai Sadak, Delhi, contrary to the environmental norms, the National Green Tribunal took cognizance and directed the appointment of a Monitoring Committee to inspect the premises. As per the reports of Monitoring Committee and the Deputy Commissioner of Police, environmental compensation of INR 2 lakhs was imposed on each violator for running impermissible activities. Since no objection was filed by the applicant on the reported discrepancies, NGT directed the relevant authorities to ensure recovery of environmental compensation expeditiously, not later than three months.
As per the appellants, Madhya Pradesh Sand Mining Rules, 2019 was introduced on August 30, 2019 wherein every district was required to have its own contractor or a group of contractors to carry out sand excavation from the declared and demarcated sand queries.
The NGT, on February 22, 2022, directed the state of Madhya Pradesh to follow the guidelines issued inSustainable Sand Mining Guidelines 2016 (SSMG-2016) as well asEnforcement and Monitoring Guidelines for Sand Mining, 2020 (EMGSM-2020), in addition to preparing an environment management plan, replenishment plan, mine closure plan etc. Further, the State Government was to assess and propose strategies to recover compensation, seize and release vehicles involved in illegal mining and make other safeguards by providing grievance redressal, accountability of designated officers and periodical reviews.
In today’s world while on one hand it is essential to protect the environment, it is equally important to encourage economically viable projects. Therefore, in light of the above discussions, there is an urgent need to create a balance between engineering, structural marvel and power and protection of the environment.
Moreover, since the global EPC market is worth billions of dollars, each company/ government organisation spearheading these projects must follow both international and domestic protocols for protecting the environment.
Further, in order to avoid delays in executing projects and loss of revenue, the environmental management systems must be adopted to help mitigate the potential disasters. This will ensure timely execution of developmental projects in a safe environment. Thereby creating balance between development and environment.
The views and opinions expressed by the authors are personal.
About the Authors
Mr. Anuraag Mehta is a Corporate Commercial Litigator at Delhi High Court.
Ms. Swamini Chhibber is a global legal EPC and energy law practitioner.
Managing Editor: Naman Anand
Editors-in-Chief: Jhalak Srivastava & Muskaan Singh
Senior Editor: Hamna Viriyam
Associate Editor: Swadha Sharma
Junior Editor: Kaushiki Singh
Preferred Method of Citation
Anuraag Mehta and Swamini Chhibber, “Environment Clearances and Systems in EPC and Infrastructural Projects” (IJPIEL, 11 July 2022)