Hitting ‘deep pocket’ polluters where it hurts

• Sunday, April 07, 2019

The casually irreverent manner in which state entities such as the Central Environmental Authority (CEA) and the Board of Investment (BOI) treat issuance of mandatory environmental approvals received a sharp reprimand by the Supreme Court in this week’s ruling on the pollution of ground water in Chunnakam as a result of a private company operating a power plant without conforming to statutory procedures.


Excellent warning to violators of the law

The polluter, (Northern Power Company (Pvt.) Ltd), was directed to pay an appreciably high compensatory award of Rs. 20 million to the affected communities. It was allowed to continue its operations on condition that it would take immediate steps to prevent contamination or pollution of the area and that it would adhere to criteria and standards stipulated in the National Environmental Act and Regulations made thereunder, subject to monitoring by the CEA/BOI. The approach taken by the Court is an excellent warning not only to state entities which renege on their duties but also private companies motivated by profit who flout the law with impunity, leaving communities and citizens helpless in the face of state apathy and/or collusion. This ruling hits those with ‘deep pockets’ precisely where it hurts the most. That is to the good.

Several innovative aspects of the judicial reasoning in this case merit scrutiny. It was considered by the Court that the project to construct and operate a thermal power station in Chunnakam was a “prescribed project”, requiring approval under the relevant provisions of the National Environmental Act(as amended), the relevant “project approving agency” being the CEA and/or the BOI. The company had contended that an Initial Environmental Examination Report [IEER] or Environmental Impact Assessment Report [EIAR] was not needed as the thermal power station in issue generated only 15 MW in its initial stage while the environmental reports were needed only in respect of projects generating an excess of 25 MW.

However, the Court dismissed this contention on examination of the documentation before it clearly indicating that the power generation capacity of the thermal power station had increased to over 25 MW during its operation. Despite this, the requisite environmental reports had not been done nor had they been called for by the CEA or the BOI.


CEA/BOI severely faulted by the Court

Further, the station had been operating on a commercial basis from 10th December 2009 even though an Environmental Protection License [EPL] had been issued by the CEA only on 20th May 2010 for one year. Thus, it had been operating in violation of the law for more than five months, with the CEA not activating itself in any manner whatsoever. It was cause for judicial concern that even thereafter, the company had been operating without an EPL in place, at specific points of time. The Court did not find the CEA defence that ‘subsequent EPLs were issued by the BOI…and the BOI is statutorily empowered to issue EPLs with the concurrence of the CEA’, convincing.

Both the CEA and the BOI were faulted for not looking into persistent complaints by Chunnakam residents that “noise, air emission and discharge of wastewater containing oil causing pollution to the surrounding environment” had been caused by the operation of the station. Following an exhaustive examination of several reports, including particularly the findings of the National Water Supply and Drainage Board, the contamination of groundwater from 2008 onwards with decreasing levels in the years thereafter but still ‘significant’ enough by 2016/2017 was ruled as being established.

Interestingly, though the company’s actions impugned in this case was determined not to be the ‘sole cause’ of oil contamination of groundwater and soil in the Chunnakam area, the Court’s position was that it ‘had been discharging oil contaminated wastewater onto an adjoining land’, its waste management treatments were thoroughly inadequate and leakages of oil from machinery were likely. The categorical declaration therefore by Prasanna Jayawardene J, writing for his colleagues on the Bench, that purely because there were other polluters, the impugned company could not be ‘given the licence to pollute’ and that the CEA/BOI could not be excused from performing their statutory duties is important.

Using the doctrine of public trust

The CEA position that pollution in the area could not be ‘definitively’ traced to the activities of the company in issue was dismissed with force. Using the well established public trust doctrine to good effect, the ruling emphasises ‘the duty placed on the State and its agencies to protect the environment and the fact that this duty is vested in the State and its agencies as the trustees of the public.’ Emphasising the right to clean water, the Directive Principles of State Policy in the Constitution were referred to not as ‘wasted ink’ but as a ‘living set of guidelines.’

Meanwhile the judicial direction to a wholly private company to pay compensation in a fundamental rights petition will undoubtedly lead to enjoyable points of contestation and debate. The reach of the Court is of course, limited to the violation of fundamental rights by executive or administrative action and/or private actors that ‘instigate’ the same. While acknowledging that ‘the acts or omissions’ of the offending company cannot be brought within the ambit of Article 17, the Court contented itself with a tantalizing reference to the effect that, even so, ‘this would not affect’ its jurisdiction to direct compliance ‘with an Order giving effect to a remedy for loss or damage’ which may have been caused by the acts or omissions of a private company. The order itself may have benefited from a more considered discussion on this particular aspect.

Regardless, the weight of this ruling must go beyond the facts of the particular case. First, this precedent may form a basis to initiate public interest litigation in respect of myriad other instances where environmental protections have been flouted by state and non-state entities. Second, public pressure must be exerted against the CEA and the BOI to ensure strict conformity with statutory environmental approvals as a matter of course. Its compliance in that regard must be publicly monitored.

Stopping the ‘blame game’

Moreover, where the concurrence of the CEA is needed for the BOI or indeed another state entity to issue the go-ahead for a project,the burden on the CEA must be as high as where it directly issues the approvals. This device of employing the term ‘concurrence’ to imply that the burden is somehow lighter in those cases is entirely unacceptable. The CEA is the primary state authority tasked with ensuring environmental protections are adhered to. Lapses thereto cannot be met with any indulgence whatsoever. And this ‘blame game’ between state entities must stop.

Third, in the context of the intense power crisis that has gripped the country, this week’s decision is a salutary caution to private power stations setting themselves up to sell power to the State that, they must adhere to the country’s law and regulations and must not take advantage of a desperate situation, brought about by the imbecility and culpability of Sri Lanka’s brawling politicians.

Indeed, this ruling could not have come at a better time.