The Environmental Compliance Landscape in India

The environmental compliance framework in India is multifaceted, presenting unique challenges due to uneven enforcement of laws. Industries that cause pollution or operate in sensitive ecological zones face heightened scrutiny, making it essential for businesses to be vigilant about compliance. Furthermore, major companies are now required to adhere to sustainability and Environmental, Social, and Governance (ESG) compliance under the Business Responsibility and Sustainability Report (BRSR) and BRSR Core mandates.

Legal Environment

India’s environmental regulatory structure is founded upon several key legislations:

• The Environment (Protection) Act, 1986
• Forest (Conservation) Act, 1980
• Wildlife (Protection) Act, 1972
• Water (Prevention and Control of Pollution) Act, 1974
• Air (Prevention and Control of Pollution) Act, 1981

Other significant laws include the Public Liability Insurance Act (1991), Biological Diversity Act (2002), and the National Green Tribunal Act (2010). These regulations collectively tackle diverse environmental issues including pollution control, biodiversity conservation, and sustainable resource management.

The National Green Tribunal (NGT), established in 2010, plays a crucial role in the enforcement and adjudication of environmental matters. This tribunal aims to expedite the resolution of environmental disputes while ensuring enforcement of laws relating to pollution.

Framework of the Environment (Protection) Act, 1986

This foundational legislation serves as an umbrella law allowing the government to introduce various rules aimed at enhancing environmental standards. Key rules emerging from the Act include:

• E-Waste Management Rules (2016 and amendments)
• Batteries Management & Handling Rules (2001)
• Plastic Waste Management Rules (2016 with amendments)

Among these, the Plastic Waste Management Rules enforce a framework that has been crucial in implementing India’s plastic ban, emphasizing proper management and disposal of plastic waste.

Plastic Waste Management

The introduction of Extended Producer Responsibility (EPR) in 2022 imposes ambitious recycling targets for plastic packaging. The Plastic Waste Management Amendment Rules (2021) instituted a ban on single-use plastic items, specifically focusing on those with high littering potential. Enforcement measures include penalties and infrastructure to monitor compliance via platforms such as the National Dashboard.

These regulations present significant opportunities for sustainable industries and eco-friendly product manufacturers, propelled by the certification of numerous compostable plastic producers. India’s federal initiatives, including support for solid waste management, further underscore the country’s commitment to sustainability.

Regulatory Environment

The Ministry of Environment, Forest and Climate Change (MoEFCC) is the primary federal agency overseeing the implementation of environmental laws. The Central Pollution Control Board (CPCB) formulates standards for industrial pollution, waste management, and emissions, collaborating with State Pollution Control Boards (SPCBs) for localized enforcement.

This decentralized approach can yield inconsistencies in compliance and enforcement, often hampered by transparency issues and lax regulatory practices.

Comprehensive Environmental Pollution Index (CEPI)

The CEPI serves as a quantifiable metric to classify industrial areas based on pollution levels. The CPCB and SPCBs monitor these areas to ensure accountability from polluting industries. Expansion proposals in designated polluted areas face rejection, strictly enforcing compliance.

Environmental Permits

India’s environmental permit system is integrated, requiring a combined application for Consent to Establish (CTE) and Consent to Operate (CTO). The E-Waste Management Rules introduced a simplified central application process for Extended Producer Responsibility.

Obtaining environmental permits may necessitate multiple approvals dependent on industry activity, categorized into red, orange, green, or white categories based on pollution risk levels. For example:

• Category A: Requires clearance from the Central Ministry.
• Category B: State-level clearance needed, with B1 projects requiring a full EIA.

Penalties for non-compliance include criminal and civil liabilities, emphasizing the necessity of adherence to regulations.

Environmental Impact Assessment (EIA)

Various projects trigger the need for an EIA, with rigorous processes in place to ensure environmental considerations are a priority. Projects range from mining to thermal power plants, each requiring detailed assessments categorized into either Category A (higher impact) or Category B (lower impact).

The EIA Notification (2006) outlines the process, including stages such as screening, scoping, and public consultation. Notably, projects like township developments may bypass public consultations, revealing discrepancies in public involvement in environmental governance.

Penalties for violations can be substantial, governed under the Environmental Protection Act and adjudicated by the NGT. The recent proposals for a star rating system aim to streamline the compliance process but may create tension between expedience and environmental protection.

Non-Compliance and Judicial Proceedings

Companies must uphold a multitude of standards to avoid civil and criminal liabilities. The non-compliance enforcement mechanism allows entities to rectify violations before facing severe penalties. In cases of violations, parties can pursue civil claims through the NGT or relevant judicial authorities, increasing accountability through defined legal avenues.

Appeals in Environmental Cases

Decisions made by regulatory bodies can be contested through an appeals process. Additionally, criminal cases associated with environmental violations are managed by relevant criminal courts, ensuring multiple layers of oversight.

ESG Reporting in India

The Securities and Exchange Board of India (SEBI) introduced the BRSR in 2021, which mandates ESG reporting for top listed companies. The report requires disclosures against nine principles, with an aim for improved transparency and sustainability.

Starting from FY 2023, companies are expected to present reasonable assurances on key ESG metrics. The additional BRSR Core guidelines, which include granular KPIs tailored to the Indian context, enhance the approach to ESG compliance, particularly in areas like gender wage parity and job creation.

Summary Points on Compliance

Businesses seeking to navigate the intricate compliance landscape in India should focus on several crucial aspects:

• Develop a comprehensive understanding of applicable laws and regulations.
• Conduct EIAs to proactively identify environmental risks.
• Foster an organizational culture that prioritizes environmental policies.
• Regularly monitor and report metrics related to ESG compliance.
• Implement waste management and energy efficiency measures.

By maintaining an adaptive mindset towards evolving environmental regulations and prioritizing sustainability, companies can ensure their operations align with national objectives and contribute positively to the ecological landscape.