Intergenerational Equity

The Indian cases

Two, and both are in the case bank.

Facts. State of Himachal Pradesh v. Ganesh Wood Products, AIR 1996 SC 149, arose out of the approval by the State of a number of katha manufacturing units, whose raw material is the khair tree, without any assessment of whether the State's khair forests could sustain them. The High Court had quashed the State's refusal of permission to three of the units and directed that two more be reconsidered; the State appealed.

Held. The approvals were vitiated. Granting them without assessing the available forest wealth was contrary to the public interest in preserving forest wealth, to the maintenance of environment and ecology and to considerations of sustainable growth and inter-generational equity, since the present generation has no right to deplete all the existing forests and leave nothing for the next and future generations. The obligation of sustainable development requires a proper assessment of forest wealth, a corresponding restriction on forest-based industry and close monitoring of its working, and there is no absolute or unrestricted right to establish a forest-based industry. The Supreme Court therefore set aside the High Court's judgment and sent the writ petitions back to it, froze the proposed units, directed an expert survey of the khair available, and barred approval of any new katha unit until the State had decided on it.

Why it matters. It is the clearest Indian statement of the principle, and it shows the principle operating at the point of licensing rather than at the point of felling, which is where it is most effective.

Facts. Goa Foundation v. Union of India, Writ Petition (Civil) No. 435 of 2012 decided on 21 April 2014, concerned iron ore and manganese mining in Goa carried on after the leases had expired, outside lease areas and without clearances, at a rate unrelated to what the State's ecology could absorb.

Held. The Court held that the leases had expired on 22 November 2007 and that mining after that date was illegal. It capped annual extraction pending an expert study of the State's carrying capacity, and directed that ten per cent of the sale proceeds be appropriated to a Goan Iron Ore Permanent Fund for the purpose of sustainable development and intergenerational equity, the remainder going to the State as owner of the ore.

Why it matters. It is the case in which intergenerational equity stopped being a phrase and became a percentage in a fund. For a non-renewable resource, which cannot be conserved in kind if it is used at all, a permanent fund is the only way to transfer part of the benefit to a generation that will not have the ore.

What it does NOT mean

It does not forbid use. Every formulation permits use and forbids exhaustion. Ganesh Wood Products did not stop katha manufacture; it required the number of units to be related to the sustainable yield of the resource.

It does not require identical conditions. The obligation is not to hand on the same forest but to hand on a resource base of no worse quality and no fewer options, which is why the substitutability question in the chapter on Brundtland matters.

It does not create a plaintiff. No future person can sue. The doctrine works only because a court is willing to apply it in a case brought by somebody living, which is why public interest litigation and intergenerational equity are connected.

Distinctions that carry marks

Worked example

A State has iron ore reserves it estimates will last forty years at the present rate of extraction. It proposes to double the rate, arguing that the revenue will build roads, schools and hospitals that will benefit everyone including future generations.

The State's argument is not frivolous, and an answer should say so. Converting a mineral into schools is converting one form of capital into another, and a school lasts longer than the ore.

The objection, in three parts.

The ore is finite and the conversion may not happen. Revenue enters a general budget and may be spent on anything, so there is no assurance that the depletion buys anything durable.

Some of what is lost cannot be converted. The forest above the ore, the aquifer the mine dewaters and the species in the habitat are not restored by a school.

And the future has no vote. The people who will not have the ore are not represented in the decision to take it now.

What the courts have said. In State of Himachal Pradesh v. Ganesh Wood Products the Supreme Court held that approvals for katha units granted without any assessment of whether the State's khair forests could sustain them were vitiated, the grant being contrary to the public interest in preserving forest wealth, to the maintenance of environment and ecology, and to sustainable growth and inter-generational equity, since the present generation has no right to deplete all the existing forests and leave nothing for the next and future generations, and that there is no absolute or unrestricted right to establish a forest-based industry.

And what a court actually did about it. In Goa Foundation v. Union of India the Supreme Court capped annual excavation pending an expert study of the State's carrying capacity, and directed that ten per cent of the sale proceeds be appropriated to a Goan Iron Ore Permanent Fund for the purpose of sustainable development and intergenerational equity, the remainder going to the State as owner of the ore.

Why the fund is the important part. Intergenerational equity is otherwise a sentiment. A fund converts it into a percentage of a revenue stream, ring-fenced from the general budget, and that is as close as Indian law has come to giving the future a seat at the table.

The answer to give. Cap the rate to the study, ring-fence a share, and require that what cannot be converted, the forest and the aquifer, be restored as a condition rather than compensated in cash.

Quick revision

• Each generation holds the resource base in trust, may use it, and may not exhaust it.
• Stockholm Principle 1: a solemn responsibility to protect and improve the environment for present and future generations. Rio Principle 3: the right to development fulfilled so as to equitably meet the needs of present and future generations.
• Three principles: conservation of options, conservation of quality, and conservation of access.
• The three disadvantages of the future generation: they do not exist, they have no representative, and their loss is invisible in the national accounts.
• Ganesh Wood Products: the present generation has no right to deplete all the existing forests and leave nothing for the next; approvals granted without an assessment of forest wealth held vitiated, and new units barred pending a survey.
• Goa Foundation: ten per cent of the proceeds of illegally mined ore to a permanent fund for sustainable development and intergenerational equity. The doctrine as a percentage.
• It permits use, does not require identical conditions, and creates no plaintiff, so it operates only through public interest litigation.

Test yourself

1. State the three principles of intergenerational equity and give the argument each supports.

Conservation of options, which supports the protection of biodiversity on the ground that eliminating a species removes a possibility nobody can yet evaluate. Conservation of quality, which supports the objection to degradation as distinct from consumption. And conservation of access, which links the doctrine to equity in the present and answers the objection that protecting the future while ignoring present inequality is not equity.

2. Why does the doctrine need public interest litigation to work?

Because no future person can be a plaintiff. Standing in the ordinary law follows injury, and the people the doctrine protects have not been injured yet and do not exist. The doctrine therefore operates only where a court is willing to apply it in proceedings brought by somebody living, which is what relaxed standing allows.

3. What did the Supreme Court hold in Ganesh Wood Products, and at what point in the process did the principle operate?

That approvals for katha units granted without any assessment of the State's khair forest wealth were contrary to the public interest and to inter-generational equity, since the present generation has no right to deplete all the existing forests and leave nothing for the next, and that there is no absolute right to establish a forest-based industry. The principle operated at the point of licensing rather than at the point of felling, which is where it bites hardest.

4. Why was a permanent fund the appropriate remedy in the Goa mining case?

Because iron ore is non-renewable and cannot be conserved in kind if it is used at all. Setting aside a percentage of the proceeds transfers part of the benefit to a generation that will not have the ore, which is the only form in which the principle can operate for an exhaustible resource.