History:

The Polluter Pays Principle was first introduced in 1972 by the Organization for Economic
Cooperation and Development (OECD) Guiding Principles concerning International Economic
Aspects of Environmental policies where under the polluter was held responsible for the
environmental damage and pollution. Subsequently, the Rio Declaration laid down the
guidelines for sustainable development meaning thereby a strategy to cater the needs of the
present generation without compromising the needs of the future generation. In furtherance of
the aim of sustainable development Rio Declaration Principle 16 of the Rio Declaration
enshrined the Polluter Pays principle stating that the polluter should bear the cost of pollution.

The Concept and Meaning:

The ‘polluter pay’ principle essentially holds the polluter liable for the pollution caused to the
environment. The polluter is liable for every damage caused to the environment. So according
to the ‘polluter pay principle’, the polluter has to not only compensate the victims of pollution but
also compensate for the restoration of environmental degradation caused Under 1972 and 1974
OECD Recommendation(1)(2), the measures to be taken by the polluter for controlling the
pollution is decided by public authorities so that the environment is in acceptable state post the
industry operation. Therefore, the polluter bears the cost of health hazard caused to the public
as well as the cost of restoration of the environment. In other words, the costs of the measures
should reflect on the cost of the goods and services, the production and/or consumption of
which led to pollution. The cost of the measures should not be accompanied by the subsidies as
it would lead to distortion in international trade and investment.

In short,

Polluter Pays and NGT: In India according to Section 20 of National Green Tribunal Act, the
tribunal can apply for the principles of sustainable development, the polluter pays principles and
precautionary principle while passing any order, award or decision for balanced development
without harming the mother earth.

Landmark Judgements:

The Indian Judiciary has incorporated the Polluter Pays Principle as being a part of the
Environmental Law regime is evident from the judgments passed.

Indian Council for Enviro-Legal Action vs. Union of India 1996(3) SCC 212
The Court held that once the activity carried on is hazardous or inherently dangerous, the
person carrying on such activity is liable to make good the loss caused to any other person by
his activity irrespective of the fact whether he took reasonable care while carrying on his activity.
The rule is premised upon the very nature of the activity carried on.

Vellore Citizens' Welfare Forum vs. Union of India 1996(5) SCC 647
The Court interpreted the meaning of the Polluter Pays Principle as the absolute liability for
harm to the environment extends not only to compensate the victims of the pollution but also the
cost of restoring the environmental degradation. Remediation of the damaged environment is
part of the process of 'Sustainable Development' and as such the polluter is liable to pay the
cost to the individual sufferers as well as the cost of reversing the damaged ecology.

Criticism on the principle:

First, absence of appropriate formula for determining the compensation i.e. resorting to
‘guesswork’ for calculating compensation.
Second, the sufficiency of the fines which have been imposed on the polluters.
Third, the difficulty of identifying a ‘polluter’ in numerous cases.

Case laws on Criticism:

Krishan Kant Singh v. Triveni Engineering Industries

The use of ‘guesswork’ when arriving at compensation was explicitly mentioned by the NGT. In
this regard it should be considered that the very absence of a logical basis for imposing fines
reflects a lack of direction in the broader scheme of environment jurisprudence.

Manoj Mishra v. Union of India & Others dated 11/09/2019

Another challenge which is being faced at present is the problem of identifying the polluter.
Reference in this regard can be made to the rampant discharge of industrial and household
waste and effluents in the Yamuna River.
The NGT passed an order stating that whoever dumps waste matter in the Yamuna River shall
be ordered to pay a fine of Rs. 50,000. However, the implementation of this order could not be
made possible because of the presence of a large number of polluters and hence difficulty in
polluter identification.