Prior Environmental Clearance and Environmental Impact Assessment

Four stages. The notification's own scheme, and worth learning as four words.

1. Screening. Deciding whether a Category B project needs a full assessment, that is, whether it is B1 or B2.
2. Scoping. Settling the terms of reference: what the assessment must study.
3. Public consultation. A public hearing in the affected area and written responses from others concerned. This is the stage at which the people who will live with the project are heard, and it is the stage most often cut short.
4. Appraisal. Detailed scrutiny by the Expert Appraisal Committee of the assessment report and the outcome of the consultation, and its recommendation to the regulatory authority.

The output. A prior environmental clearance, with conditions, or a refusal. The conditions are enforceable, and breach of them engages the machinery in Module IV.

And the annual environmental statement. Rule 14 requires every person carrying on an industry, operation or process requiring consent to submit an environmental statement for the financial year to the concerned State Board. It is the continuing counterpart of the one-time clearance.

The leading case

Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC 157, Supreme Court of India, Dr D.Y. Chandrachud and Ajay Rastogi JJ, 1 April 2020.

Facts. The 1994 notification required prior clearance for thirty categories of project. The deadline was extended by circulars, and by a circular of 14 May 2002 the Ministry extended it to 31 March 2003 so that units which had already gone into production without clearance could apply for and obtain an ex post facto clearance, subject to a graded contribution to a fund based on the cost of the project. The circular was challenged, and the National Green Tribunal held it contrary to law, revoked the clearances granted under it and ordered the closure of industrial units. The units and the Ministry appealed.

Held. The concept of an ex post facto or retrospective environmental clearance is completely alien to environmental jurisprudence and is in derogation of its fundamental principles. The reason is that the notification requires a careful application of mind and a study of the likely consequences before the activity begins, through screening, scoping, public hearing and appraisal, and a clearance comes into force not earlier than the date of its grant. But on the facts the Court held that revocation of the clearances and closure of the industries was not warranted, and instead, applying the precautionary principle, directed the three companies to deposit compensation with the State Board under Article 142, in addition to the amount the Tribunal had ordered, and set aside the Tribunal's directions for revocation and closure.

Why it matters here. Two things, and both are examined. The principle: prior means prior, and a clearance cannot be issued for something already built. The remedy: the Court nevertheless allowed the units to continue on payment. A student who states only the first half will be caught out by the result, and the case is the cleanest illustration in this book of the difference between upholding a principle and granting the relief asked for.

A worked example

A company begins constructing a plant of a Category B1 kind without applying for clearance. Eighteen months later, with construction ninety per cent complete, it applies. Local residents object.

Can the authority grant clearance now? Not as a clearance for what has been built. Alembic Pharmaceuticals holds that the concept is alien to environmental jurisprudence, and the reason is structural rather than technical: the assessment is a decision-making process, and a process whose purpose is to decide whether to permit something cannot be run after the thing exists. The public consultation would be a consultation about a fait accompli, and the appraisal would be an appraisal of alternatives that are no longer available.

What actually happens. The construction is unlawful; the authority may act against it; environmental compensation may be levied; and the question for the Tribunal or the court becomes what to do about a building that exists. Alembic shows that demolition or closure is not the automatic answer and that compensation calibrated to the harm, with the precautionary principle applied to the continuing operation, may be.

And the lesson for the company. The saving from skipping the process is illusory. It has lost the chance to influence the terms of reference, it has no protection from the conditions the authority will now impose, and it will pay compensation on top.

What it does NOT mean

It does not mean every project needs clearance. The requirement attaches to projects in the Schedule to the notification, by category and above threshold. Most activity is outside it and is regulated through consent under the Water Act and the Air Act instead.

It does not mean clearance is permission to pollute. A cleared project still needs consent from the State Board, must meet the notified standards, and must comply with the conditions of the clearance itself.

It does not mean an unlawful project is always demolished. Alembic Pharmaceuticals is authority to the contrary on its facts, and the remedy is worked out case by case.

It does not mean the clearance is the end of the process. Rule 14 requires an annual environmental statement, and the conditions of the clearance are continuing obligations.

Limits and criticism

The assessment is prepared by consultants paid by the proponent, which is the standing criticism of impact assessment everywhere, and the answer, accreditation of consultants, is imperfect.

Public consultation is the stage that gets compressed. Notice periods, the language of the documents and the location of the hearing all determine whether the people affected can actually take part, and litigation about clearances is very often litigation about that.

And the categories and thresholds do the real work. Whether a project needs a full assessment at all is settled by a line in a Schedule, and a project just under a threshold escapes the process entirely.

Quick revision

• No section says "environmental clearance". The chain is section 3(2)(v) and section 6 of the EPA, rule 5 of the 1986 Rules, and the EIA Notification of 14 September 2006, which replaced the notification of 27 January 1994.
• Category A at the Centre, Category B in the State, B1 with a full assessment and B2 without.
• Four stages: screening, scoping, public consultation, appraisal.
• Rule 14: the annual environmental statement to the State Board.
• Alembic Pharmaceuticals, (2020) 17 SCC 157: an ex post facto clearance is completely alien to environmental jurisprudence, and a clearance comes into force not earlier than the date of its grant; but revocation and closure were not ordered, and compensation was directed instead under Article 142.

Test yourself

1. Why can an environmental clearance not be granted after the project is built? Because the clearance is the output of a decision-making process whose whole purpose is to decide whether and on what terms the project should proceed. Screening, scoping, public consultation and appraisal all presuppose that the answer is still open. Once the project exists, the consultation is about a fait accompli and the appraisal cannot compare alternatives that no longer exist, so the process cannot do the work the notification requires of it. Alembic Pharmaceuticals holds the concept to be completely alien to environmental jurisprudence.

2. What relief did the Supreme Court actually grant in Alembic Pharmaceuticals? It set aside the Tribunal's directions revoking the clearances and closing the industries, and instead directed the three companies to deposit compensation with the State Pollution Control Board under Article 142, in addition to the sum the Tribunal had ordered. So the principle was stated in the strongest terms and the industries were nevertheless allowed to continue on payment.

3. Name the four stages of the appraisal process and say which is most often litigated. Screening, scoping, public consultation and appraisal. The public consultation is the one most often litigated, because whether the affected people could in practice take part turns on the notice given, the language and accessibility of the documents and the location of the hearing, and a defective consultation is the commonest ground for challenging a clearance.

4. How does prior clearance relate to the precautionary principle? The precautionary principle places the onus on the developer to show that his action is environmentally benign. The impact assessment process is how that onus is discharged: the studies, the alternatives, the consultation and the appraisal are the evidence. It follows that a clearance granted without the process, or granted after the activity has begun, discharges nothing, which is why the two doctrines are always taught together.