The National Environmental Policy, 2006 highlights the importance of access to information in creating awareness amongst “environmentally conscious stakeholders” for evaluating “compliance by the concerned parties with environmental standards.” The stakeholders would thereby be enabled to stimulate necessary enforcement actions and motivate firms to comply with regulations. The information is also important for policymakers to monitor and enforce regulations across sectors.
It is important to note that the industrial pollution has been growing at a much faster rate than gross domestic product, which is mainly due to an increase in the share of polluting industries in the post liberalisation era. The industries contribute about 15% to the GDP; however, they contribute significantly to the pollution as well and account for 45% of the total commercial energy consumption in the country. The industrial and power generation sectors contribute in the range of 20%–40% to urban air pollution, and the industrial units which are located in the states of Gujarat, Maharashtra, Uttar Pradesh, Bihar, West Bengal and Madhya Pradesh are the most polluting. The iron and steel industry contributes 55% of the particulate matter load, while adding 16% to the total industrial output in the country.
India has a command and control regulation mechanism to control the pollution levels, which is mandated for all the industries depending on their pollution potential. To enforce CAC regulations, it is important for the regulator to maintain the firm level environmental information. In India, the firm level environmental information is privy to the regulators only. However, disclosure of this information can also be used as an alternative policy to complement the CAC regulations. This article aims at evaluating the current status of firm level environmental information available with the regulators and identifying areas that need to be further strengthened.
Information disclosure leverages the behavioural changes by making existing private markets work better. This policy has been effectively used in the United States (US) and the European Union through the disclosure of the toxic waste generated by the firms in the US and mandatory eco-labelling of the products in the EU. The environmental disclosure programmes are not confined to the developed countries alone, and even the developing countries have used them to complement the CAC regulations—for example, the Program for Pollution Control, Evaluation, and Rating (PROPER) in Indonesia, EcoWatch programme in Philippines, and Green-Watch programme in China.
Industrial Environmental Information
As per the National Environment Rules, 1986, each facility should submit an environment statement for the financial year to the State Pollution Control Board of the state in which it is located, using the format provided in Form V which is detailed in Table 1.
The polluting firm has to provide information on the use of natural resources and the quantity of environment pollutants generated per unit of the product along with details about the abatement action it undertakes to reduce the impact of pollution caused. The statement provides the regulator a clear insight into the environmental status and the actions undertaken by the firm to manage the environmental aspects of their production process. Hence, complete information in the environmental statement is very important for the regulator to monitor and enforce the regulations effectively. The statement can also act as a tool to implement the risk-based inspection which will reduce the pressure on the existing resources and thus making the CAC effective.
We needed firm level environmental information, contained in the annual environmental statement, for the purpose of our research.1 We contacted the SPCBs during 2013 to seek the annual statement of various firms under their jurisdictions for the year 2011–12. Due to the lack of timely response and non-cooperative behaviour of SPCBs, we were forced to seek the information using the Right to Information Act.2 As per the RTI Act, the SPCBs should make the information available to the public within a stipulated period of time regarding the effects of pollution, the need to prevent and control pollution, and to protect the environment.
We prepared a list of 477 facilities belonging to the power, cement, paper, aluminium, textile, chemical and fertiliser sectors spread across 23 states, which come under the red category of industries3 and have to mandatorily submit their environmental statement. The applications seeking the copy of the environmental statement using the provision of RTI were filed with each of the SPCBs with the list of the facilities coming under their jurisdiction. Each SPCB office forwarded the request to their respective zonal office under which the facility was located. We received responses from some zonal offices confirming the names of facilities for which they had a copy of the environmental statement and were asked to pay for photocopying of the documents. After submission of the required fees, the documents were send across by the respective SPCB offices.
Poor Response
We received environmental statements for 199 out of 477 facilities, which is about 42% of the total information that was sought from the SPCBs. Despite the fact that it is mandatory to share the environmental information held by the SPCBs with the public, two of the SPCBs withheld the information about some facilities, citing letters from these firms requesting them not to share the information. This reflects a nexus between the SPCBs and the polluters. The lack of availability of the annual statements at the SPCBs reveals the weak enforcement of mandatory regulations. If a polluter is allowed to get away without submitting the annual statement which is mandatory, then one can imagine what the level of compliance by the firm would be at the plant level. Moreover, it will be difficult for the regulator to enforce the CAC regulations in the absence of proper information.
Figure 1 provides the picture of responses received from the SPCBs. Amongst the states, MP, Odisha and Chhattisgarh have provided more than 89% of the requested statements, followed by Gujarat, which has provided 78% of the requested information. Odisha and Chhattisgarh have sponge iron and steel industries, while Gujarat and MP have a mix of chemical, steel, power, and cement industries. Maharashtra, Tamil Nadu, UP, Karnataka, and the undivided Andhra Pradesh provided only 20%–30% of the requested information. The states of Tamil Nadu, Maharashtra and Karnataka house manufacturing plants of several multinational firms. A point to note is that the Rajasthan and West Bengal Pollution Control Boards did not provide any information.
The Central Pollution Control Board had classified several locations as critically polluted zones4 based on the extent of air, water, land, health, and ecological pollution in that region. Any further industrial development will not be approved in these zones by the Ministry of Environment, Forest and Climate Change. Recently, however, due to pressure from the industry, the CPCB has proposed to amend the Comprehensive Environmental Pollution Index, based on which the critically polluted areas are identified. The new proposal suggests that instead of a complete ban, the project should be subjectively evaluated on the basis of the potential impact on critical parameters. However, considering the lack of data with the SPCBs, it would be a challenge for them to take a well-informed decision.
The response rate of firms at the sector level is as follows: aluminium 100%, steel 63%, paper 60%, cement 45%, chemical and fertiliser 44%, power 38%, and textile 19% . The aluminium sector is highly concentrated, and the size of the plants are large. Perhaps, this might be a reason why all the aluminium plants submit their reports on a regular basis. On the other hand, there is less regulatory pressure on the textile industry, as it is considered to be a relatively less polluting and more dispersed sector. Hence, we found that the least number of responses were submitted from this sector to the SPCB.
Incomplete Responses
It should be noted that though we received about 42% of the information requested, many statements submitted by the polluters were not complete. Therefore, we further scrutinised the completeness of the statement based on the information provided in each section detailed in Table 1. We categorised the information provided in the statement under three major groups—input, pollution and mitigation. Section B of the environment statement provides the information on water and raw material which we consider under the input category. Sections C to E detail the information on air pollution, water pollution, and solid waste which we count under the pollution category. The remaining sections F, G, H and I were considered under the mitigation category. The information provided under each section was checked for its completeness. If all the information was provided for each of the sections, we considered it as complete. While in cases wherein the information was not provided or provided in an ambiguous way, we considered it as incomplete.
We summed up each of these three categories and calculated the percentage of complete responses received. Moreover, we classified the information on the basis of sector, state, public/private partnership, and the vintage of the firm. The vintage of the firm was decided according to the date of the establishment of the companies. Firms which started their operations before the liberalisation policy in 1991 were put under one group and the firms which started their operation post liberalisation were put in another.
Figure 3 provides the information on the complete responses in the abovementioned three categories at the sector level. We found that almost all the sectors had disclosed their input information. The chemicals sector, which represented a combined group of chemical, fertiliser, and chloralkali industries, had provided 100% information on inputs followed by the paper, textile, steel, aluminium, and power sectors who had provided more than 90% information on inputs. The cement sector was the last, supplying only 86% of the required information. However, when it came to disclosing the pollution-related information, the aluminium sector was the last, providing only 52% of the complete statements. The paper sector was the highest providing 81% complete responses followed by steel (78%), chemical (76%), power (69%) and cement (62%) sectors. The paper sector provided maximum information on the mitigation actions, wherein 76% of the information was available. This was followed by the chemical (67%), steel (66%), cement (64%), aluminium (62%), and power (60%) sectors. The textile sector was the worst, with only 40% firms disclosing their information on the mitigation actions undertaken by them.
The summary of complete responses at the state level has been given in Table 2. The reporting of the input parameters are quite high amongst the industrialised states, excepting Karnataka. In Karnataka, only about 67% firms reported the complete input data as compared to the national average of 92%. The average reporting of the pollution information was about 65% only. However, we found that in industrialised states like Maharashtra, Gujarat, MP, and undivided Andhra Pradesh the percentage of reporting was higher than the national average, while the polluters in Chhattisgarh only provided 44% of their pollution information completely. The reporting of the pollution information is critical for the regulators, as it provides them the necessary information on the compliance level of the industry.
When we consider the vintage of the industry, we found that the older industries which had been established before 1991 provided more information on all the three parameters as compared to the firms established post liberalisation.
Moreover, we found that some firms submitted just the laboratory results of ambient air quality, stack emissions, and waste water instead of a detailed environmental statement. In many cases, the actual quantity of emissions was not mentioned despite the specific requirement of the environmental audit format. Surprisingly, these reports have been accepted by the respective SPCBs without any scrutiny. The low level and incomplete submissions of the environmental statement show a laissez-faire attitude of the regulatory authorities.
Date: July 24, 2016