The (Indian) Central Pollution Control Board published the General Framework for Imposing Environmental Damage Compensation in 2022. A meaningful implementation of the “polluter pays” principle requires that the assessment of environmental damage compensation is realistic and that the compensation is commensurate with the extent of damage. The Framework will help to scientifically assess compensation and thus justify the costs imposed under this principle.
The Central Pollution Control Board published the General Framework for Imposing Environmental Damage Compensation in December 2022. Environmental damage compensation (“EDC”), according to this Framework, is the future expenditure for the restoration of environmental damage caused by human activity; either by release of pollutants in excess of permissible limits or unauthorised activity. A meaningful implementation of the “polluter pays” principle requires that the assessment of EDC is realistic and that the compensation is commensurate with the extent of damage. The Framework will help to scientifically assess the EDC and thus justify the costs imposed under this principle.
This Framework has been prepared in accordance with the observation made by the Hon’ble National Green Tribunal in its order passed in the case of Compliance of Municipal Solid Waste Management Rules, 2016 (State of ̌Mizoram). Through this order, the Tribunal observed that it is necessary to recover the cost of environmental damages from identified polluters based on the “polluter pays” principle by undertaking assessment of environmental damage.
Polluters are strictly and retroactively liable. But where two or more persons are liable for damage, they are jointly and severally liable.
The standard procedure for estimating damages due to polluting activities under the Framework includes the following steps:
1. Preliminary investigation;
2. Analysis of preliminary data;
3. Identification of EDC liabilities;
4. Assessment of direct, indirect liabilities;
5. Assessment of ecosystem damages
6. Detailed investigation of damaged site, if required;
7. Analysis of detailed data;
8. Determination of EDC;
9. Identify best achievable remediation and restoration methods
10. Directions/action plan imposing over-all EDC; and
11. Monitoring of implementation of plan by regulatory bodies.
Some of these are detailed below:
A. Preliminary investigation
The Framework contains a detailed scope of work and format for conducting a preliminary investigation of the damaged site.
B. Identification of direct and indirect liabilities
The Framework provides a broad overview of how to identify damages, assess damages and impose compensation for environmental damages. It does not prescribe a detailed methodology and does not cover all the possible contamination scenarios that may occur. However, it contains a checklist of directly impacted environmental components. It includes a table showing the possible scenarios that may occur due to anthropogenic activities resulting in environmental damage and applicable compensation scenarios. It also contains a checklist of applicable compensation for indirect impact.
C. Indicative methods for EDC assessment
The Framework lists indicative methods for damage quantification and EDC estimation methods for ambient air pollution, surface water pollution, groundwater pollution and soil pollution.
D. Detailed investigation
A detailed investigation builds on the findings of the preliminary investigation. Although the Framework says that detailed assessment should be carried out as per predetermined sampling protocol approved by the concerned authority, the Framework specifies the scope which can be followed for undertaking a detailed assessment of contaminated areas.
E. Determination of EDC scenario and cost
The EDC includes the cost of assessments, the cost of restoration and compensation for direct and indirect damages caused to humans, property, flora and fauna including ecosystem functions etc. The framework provides the following formula for calculation of EDC:
“EDC = Assessment Costs + Cost of remediating damages to environment & ecology + Compensation for damages to environment and ecosystem services”.
F. Remediation and restoration methods
Should a polluter be liable to undertake remediation and restoration activity, a remediation plan is to be prepared indicating the most applicable remedial technology and the estimated costs of remediation. The Framework includes a flow sheet on the indicative approach for arriving at an appropriate remediation option and restoration plan.
Once the remediation plan has been approved by the concerned agency, the responsible party must carry out the site restoration under the supervision of the concerned agency or any third party appointed for the same.
G. Monitoring of implementation of plan
The State Pollution Control Board or Pollution Control Committee may monitor the approved restoration plan and the recovery of environmental compensation for damages in accordance with the time schedules and phase-wise remedial targets specified in the assessment report.
Monetary assessment of environmental damage has been a matter of concern before the Tribunal. In fact, the Tribunal has been vocal about the lack of monetary assessment by official machinery of the adverse impact of polluting activities on public health and environment. The huge gap in steps taken and steps required to be taken to remedy the unsatisfactory state of the environment is an aspect about which the Tribunal has been concerned.
The implementation of this Framework will contribute to both environmental protection and sustainable development. The publication of this Framework is a sign that national authorities are keen to promote the internalisation of environmental costs and the use of economic instruments.
– Ashutosh Senger with inputs from Anirudh Rastogi
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