What are the explicit economic costs of environmental compliance? What are the attendant costs of complying with environmental regulation? Are economic costs concomitant with environmental compliance? These and allied questions need to be borne in mind while reviewing and analyzing the trajectory of environmental compliance in India. It also must be understood that after clearing a project, if the Supreme Court in one deft blow cancels the permission and halts the construction midway, it would be giving an unfair and iniquitous cost to the project proponent. Thus this would cause ambiguity and uncertainty in the law and would necessarily constitute a bad precedent for other future entrepreneurs. Given this climate of legal uncertainty, can a project proponent really plan beforehand for ensuring environmental compliance for the project in question? Further even after gaining environmental clearance legitimately, the process is obviously not sacrosanct for it may-be completely thwarted or subverted by an order of the Supreme Court or the National Green Tribunal mandating the halting of the construction of the project on environmental grounds. Therefore conforming to the environmental regulation is no warranty against orders by higher authorities halting the project in question. The uncertainty that has crept into the law is highly questionable. Thus it is highly undesirable that this feature of legal uncertainty exists even after the project proponent legitimately obtains due environmental clearance for his/ her project.

If the State Authorities are responsible for giving environmental clearance to a particular project, should not then the State compensate the project proponent for costs, if a project is halted after the requisite environmental clearance is obtained? Otherwise the law would unfairly encumber the project proponent with huge and wholly extraneous costs of development. That it would be a colossal waste of investment to halt the project after the requisite environmental clearance has been obtained is obvious. What is less obvious is the vexatious litigation that often throws a spanner in the works and leaves the project development at a standstill after nearing completion and after virtually all the investment is made in the project. Although sometimes, these swift orders by the Court, are spurred by serious and legitimate environmental concern by the Judiciary, sometimes these moves are incited by vexatious litigation that seeks to merely thwart development. Genuine projects and genuine project proponents suffer in the process. If environmental compliance ensures conformity with environmental prerequisites and regulation, then, would the process of granting environmental clearance still be meaningful and sacrosanct, if this process can be superseded by the Judiciary stalling the project, post facto environmental clearance. What legitimacy would the process of granting environmental clearance have, if it can be arbitrarily undone by a unilateral order of the Judiciary? Certainty of law is a cornerstone of our Judiciary, why then is it absent from these orders of the Judiciary superseding the clearance procedure duly mandated by the law?

Environmental compliance has both hidden and overt economic costs. These costs both hidden and overt have to be factored in while planning environmental measures and ensuring environmental compliance by industry. These are also accompanied with environmental and social benefits which are traditionally and typically not evaluated in monetary terms. For example, an afforestation programme taken by an industry generates shade and cool air which are not typically quantified and taken into account in economic terms. Similarly the costs of cleaning up a river ensures better fish catch and more plentiful yields of crops of rice grown downstream, these might not be calculated as a real economic benefits while working out the economic costs of ensuring compliance by industries located along the river. Thus the cost and benefit analysis of compliance with environmental regulation has to be analyzed while initiating a discussion on promoting environmental compliance. We need to understand the socio-economic factors that impact the dynamics of environmental compliance. Additionally, we need to analyze the economic implications of environmental compliance.

A case in point is the Okhla Bird Sanctuary case. The Uttar Pradesh Government has reiterated to the Centre that the ecologically sensitive zone around Okhla Bird Sanctuary should be restricted to a 100 meter radius and not 10kms as the National Green Tribunal had suggested. Significantly the Ministry of Environment and Forests (hereafter the MoEF) has invited suggestions from the UP Government as it works out the contours of what the actual eco-sensitive zone should be. This would be pivotal for the fate of over 1 lakh home buyers in Noida who cannot get possession of their apartments. As a result of the NGTruling, no new building in that area can get a completion certificate. Till the MoEF makes a decision about the ecologically sensitive area, a 10kilometer area around the bird sanctuary will remain as the functional restricted ecological zone and builders must seek the approval of the state and national wildlife boards before undertaking any construction. Although a pro builder liberal construction of the provision would mean that the construction of the buildings would continue if a project has the National and State wildlife board approvals. The prevailing view is that no construction is possible until the final notification arrives from the Ministry of Environment and Forests. The process prescribed under the umbrella Environment (Protection) Act, 1986 is that MoEF would produce a draft notification establishing the final eco-zone. Objections or suggestions will be invited subsequently and the final notification will come into force thereafter.

Another case which illustrates how the MoEF orders might be deliberately thwarted is the case of construction of an illegal resort near the core area of Nagzira Wildlife Sanctuary. The said construction in question raised eyebrows as it was in sheer violation of the rule prohibiting construction activity within 10kms of the wildlife sanctuary. The construction of the said resort barely 5 meters form the core area of Nagzira Wildlife Sanctuary was successfully stalled after sustained effortsby green volunteers. An entrepreneur from Raipur had started construction work of a resort, taking advantage of dual jurisdiction of forest and revenue departments. However, Nisarga Mandal, the organization of green volunteers pursued the matter and the Forest Department finally stalled the resort work.

That legal uncertainty abounds while deciding the fate of these projects is apparent. Take for example the Lavasa Hill city project, after putting on hold Lavasa’s controversial township project on the hills near Pune, ironically, it was a criminal complaint filed by the Maharashtra government against Lavasa’s promoters for violation of green norms that finally paved the way for clearance by the MoEF. In its June order in 2011, the MoEF indicated that it was willing to clear Lavasa’s first phase, subject to five preconditions. Lavasa promised to meet four of these conditions, including an environmental restoration fund, profit percentage earmarked for the Corporate Social Responsibility (CSR) and a revised development plan. However, the first condition remained unfulfilled and that essentially was that the State Government would take “credible action” against the company for violation of environmental law. With the criminal case filed, the MoEF is now satisfied that credible action has been taken. Accordingly, the environment clearance has beengranted, subject to certain conditions. However, the National Alliance of People’s Movements (NAPM) which has been leading the opposition to the project, is sceptical of the loosely worded conditions listed in the order. They point out that one of the conditions stipulated is that hill cutting should be avoided as far as possible. What does this mean in exact terms?

Thus there is some apparent ambiguity in the loosely worded conditions listed in the order. Despite this, the order from the MoEF, has been viewed as a welcome measure by the Lavasa project authorities who claim that all the stakeholders including villagers and construction workers are delighted by the environmental clearance. Those completely opposing the project, have made reference to the KT Ravindran report which severely indicts the project developers for flouting environmental norms and destroying the ecology of the area. It said the flagrant violations of the norms were of such nature that the penalty of Rupees One Lakh prescribed and to be imposed under the Environment (Protection) Act was too paltry.

While deciding a case, Paryavaran Avam Manav Adhikar versus Union of India and Others, the National Green Tribunal held that when the initial permission has notbeen sought or granted, there cannot be a subsequent application only for expansion of the project and therefore, the party cannot now to carry on with their project.