Managing Pollution: PIL as Indirect Market-Based Tool

Author(s): Aparna Sawhney

Source: Economic and Political Weekly , Jan. 4-10, 2003, Vol. 38, No. 1 (Jan. 4-10, 2003),
pp. 32-37
Published by: Economic and Political Weekly

Stable URL: https://www.jstor.org/stable/4413042

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms

Economic and Political Weekly is collaborating with JSTOR to digitize, preserve and extend
access to Economic and Political Weekly

This content downloaded from

88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
 Perspectives

Managing Pollution
has been documented in Asian countries,
including Japan and Indonesia, between
local inhabitants and plant management
[O'Connor 1995, Pargal and Wheeler
PIL as Indirect Market-Based Tool 1996, Hettige et al 1996]. According to
a World Bank study, in India, however,
community pressures (in terms of proxy
Environmental public interest litigation and the resultant judicial
measures of better-educated and higher
activism in India during the late 1980s and 1990s have playedincome
the communities) do not seem to
role of indirect market-based instruments of pollution management.lower pollution [Pargal et al 1997],
induce
but communities do seem to have a sig-
While a purely judicial approach to environmental management is
nificant effect on the level of inspections.2
neither effective nor efficient, PIL has played a significant role This
in paper illustrates that community
defining India's pollution management system. pressure in India has played a significant
role, quite distinct from those documented
in other Asian countries like Indonesia,
APARNA SAWHNEY costs negligible, the optimal equilibriumthrough the environmental public interest
will be achieved.l Second, under a com-
litigation system and judicial activism.
E conomic development is sustain-mand and control (CAC) approach, the
The Indian citizen's constitutional right to
regulator can enforce the environmental
able as long as the true environmen- a clean, healthy life and the liability of
standards based on the optimal level of
tal costs of all inputs and products pollution damage on polluters have en-
are reflected in the market price. When couraged community action through
pollution (where the social marginal cost
markets and government policies fail to equals social marginal benefit of pollu-environmental public interest litigation
tion). As long as these standards are
factor in the true price of the ecosystem, (PIL), and subsequently judicial activism.
the communitycan induce the government/ enforced, the social optimum can be The rise of environmental PIL and judicial
industry to take action and correct for achieved. Third, the regulator can adoptactivism in the last 15 years has encour-
adverse effects in the system.Thus a com-economic or market-based instruments aged development of new and stricter
munity can potentially play a significant environmental legislation, and also
(MBIs) to abate pollution, and these cover
role in the environmental management instruments
of that harness self-interest of created incentive for the industrial pol-
an economy, besides the government (regu-economic agents for environmental goals.luters to increase abatement (as a result
MBIs include price-related instrumentsof both new regulations and threat of
lator) and the industry. In environmentally
conscious societies, governments adopt like pollution taxes and permits, as wellcommunity action). The establishment of
stricter environmental policies whenas indirect economic instruments like law the law of liability of environmental dam-
political support is determined by the of liability for damages, and environmen- ages (polluter-pays principle) endorsed by
environmental sensitivity of its policies
tal information disclosure systems [Paulus these cases has led to indirect market pres-
1995]. The use of economic instruments sure on polluting agents in India especially
(based on the voting communities' priori-
ties). Communities can also induce indus-
triggers the industry into innovating with during the 1990s. This in turn has helped
try to change its behaviour and producecheaper ways to cut down on pollution and in the growth of an environment market
environmentally friendly products in the encourages firm action that projects a more (including pollution abatement equipment
market (through cooperative or coercive environmentally friendly image in the as well as environmental consulting ser-
action) and thereby drive the market to market (through the information disclo- vices) in the country, which has begun
incorporate the true environmental costs sure system). attracting foreign investors.
of the system. Thus community partici- In most countries across the globe, CAC
pation in environmental management has measures including standards on emis- Environmental
gained importance across the globe in sions and effluents from different pollut- Management Regime
order to make economic growth more eco- ing sources (whether stationary point
logically sensitive. sources like firms or mobile point sources In India, the pollution control regime is
In theory, the optimal level of environ-like vehicles) define the pollution abate- almost purely of the CAC nature, supple-
mental quality can be achieved through ment regime. In developed countries, the mented by economic incentives, for ex-
different regimes, and three such regimes CAC regime is largely complemented by ample, subsidies on catalytic converters/
economic instruments: forexample, the US compressed natural gas for vehicles;
are popularly considered in the literature.
First, following Coase, property-rights has
of by far the most extensive use of trad- benefits for industrial pollution control
environmental resources can be defined able pollution permits in the world, and in equipment; and fines and/or imprisonment
and the economic agents can decide the Europe pollution taxes are more in vogue. for violation of environmental norms. The
desired level of pollution (given the trueEven developing countries have utilised domestic environmental legislation is well-
costs and benefits from pollution) througheconomic incentives to induce pollution developed and industrial pollution norms
mutual negotiations. As long as the num- reduction in industry. Coasian type of spell out effluent standards by source. Yet,
ber of players is small and transaction bargaining to control industrial pollution despite the existence of elaborate pollution

32 nEconomic and Political Weekly January 4, 2003

This content downloaded from
88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
standards in India, the problem in control- environmental management procedures, Coupled with the increase in public
ling pollution arises from the poor enforc- incorporating compulsory environmentalinterest litigation, the role of the Indian
ing of standards. Attention has been fo- impact assessment and audit. Environmen- community in pollution control has in-
cused on initial compliance (installation of tal audit (under Environmental Protection creased' through public hearings on envi-
abatement equipment) rather than continu- Rule 14) became effective in 1993, and inronmental impact assessment procedures
ous compliance of actual effluent concen- 1994, environmental clearance was made for economic activities. Since 1997, de-
tration (and ensuring that the installed velopment activities including industrial
mandatory for industrial activities. In 1994,
equipment is actually operating). In effect, environmental impact assessment (EIA)projects, thermal power plants, mining
pollution would not reduce after installa- was made mandatory for 29 categories projects, river valley hydroelectric schemes
tion because pollution equipment is not (increased to 30 in the year 2000) of and infrastructure projects (30 categories
running. It is possible for a firm to be developmental activities including indus-in all) have mandatory public hearings in
compliant by installing abatement equip- trial projects, thermal powerplants, mining order to assess the environmental impact
ment but not operating it! Thus Pargal et projects, river valley hydroelectric schemescompletely before being granted clearance
al (1997) found that plant level pollution and infrastructure projects [MoEF 2001].by the state. However, the SSIs were exempt
is unaffected by formal inspections by EIA is designed as a management tool to from a public hearing under a draft noti-
state PCBs in India, since firms probably ensure that development options are en- fication issued 2001. The current trend of
activate the equipment only when inspec- vironmentally sound and sustainable. the active participation of Indian citizens in
tions are scheduled. The merits of using economic instru-pollution control management will con-
Also, since plant-specific standards arements like industrial pollution taxes were tinue to grow. Moreover, this trend per-
in terms of the concentration of effluent recognised in the 1992 policy statement onfectly matches with the 1992 national en-
and not volume, concentration compliance pollution abatement of the ministry of vironmental strategy and policy statement,
can be achieved by diluting the pollutant environment and forests and the imple- which recognised the important role of the
discharge while pollution load increases! mentation of market-based instruments in public and non-governmental organisations
Ambient and source standards are set India are in the pipeline.4 The government in protecting the environment while pur-
independently, unrelated in terms ofalso theissued the national conservation suing economic development.
volume of pollution generation; thus strategyit is and policy statement on environ- The increase in judicial activism thus
possible for environmental qualityment to and development in 1992 has thatbecome a significant threat to pollut-
deteriorate despite a high degree of com- recognised the role of non-government ing units in the country. While formal
pliance among individual polluters. organisations
The (NGOs), industries and enforcement
the remains weak in India, the
fines and penalties for non-compliancepublic are to preserve resources and protect constitutional right of the polluted agents
low in India, and the penalty structure the is environment while ensuring develop- has become an important instrument of
insensitive to the degree of default, since mental activities. Indeed, during thepollutionpast control. Two polluting sectors
the same penalty is charged for violation 15 years, the lack of enforcement haveofbeen under scrutiny of the judiciary
of environmental standards irrespective environmental
of norms and the rapid rise in the
in past decade: the industrial and the
the size of violation (whether smallpollution or levels has prompted public transport
in- sector, from which pollution
large) or the pattern of offence (occasional terest environmental litigation and the loads have been increasing. Since judicial
rise
or repeated violations). of judicial activism in India's environ- activism has been the most significant
The problem in achieving the optimum mental management. through the Supreme Court (SC) rulings,
arises from the difficulty of enforcing these
environmental standards.3 Monitoring by Table 1: Major Supreme Court Rulings on Vehicular Pollution, 1990-2001
the pollution control boards (PCBs) is poor
Case (Year of Ruling) Court Ruling
and the lack of comprehensive data/infor-
mation on polluting activities of industries
Seriousness of issues (1990) Rise in vehicles (petrol and diesel) m
exacerbates the problem (since, by law, the of defective vehicles to be suspended effective 1
Need for strategic action (1991) Delhi Transport Corporation identified
PCB has the entire burden of proof of any
the city (plying thousands of polluting buses). Cam
offence by an industrial unit). The PCBs pollution awareness among all automobile owners. C
often tolerate non-complying units due to pollution in Delhi to be constituted by 1991.
the work overload at the boards, lack Lead
of phase out of all Lead-free petrol to be sold in all outlets of
vehicles (1994) Kolkata and Chennai, and catalytic converters for petrol-driven cars made
staff, budget, equipment and facilities. available by April 1995. Order to supply low-lead petrol (maximum lead
About 65 per cent of the members in 17 content of 0.1 5g/l) in the entire country by December 1996.
Government vehicles (1996) All official government cars to be fitted with catalytic converters or a CNG
state PCBs were found to be technically
kit by August 1996.
incompetent to do a job that required high
Ban on old commercial/ All commercial and transport vehicles more than 15 years old (totalling
technical skill (Down to Earth, July transport
31, vehicles (1998) 15,511) not permitted to ply in the National Capital Region of Delhi after
December 1998.
2001). Since the boards are expected to
Buses to use natural
generate funds through consent fees, gas
and(2001) Commercial vehicles in Delhi should convert to single fuel mode of CNG,
other charges, lack of proper monitoring effective April 2001.
and implementation in turn translates Phasing
into out of diesel Diesel buses in Delhi be phased out at a rate of 800 diesel buses per
buses (2002) month starting from May 1,2002, till all the diesel buses are replaced. Fine
inadequate fund generation. Even when of Rs 500 per bus per day imposed on diesel bus owners operating beyond
cases are filed by the PCBs against erring January 31, 2002. Fine to increase to Rs. 1,000/day after 30 days of
firms, they remain pending for years in the operation of the diesel buses with effect from May 6, 2002. Director of
lower courts. Delhi Transport to collect the fine and deposit at the SC by the 10th day
of every month.
In the 1990s, the environmental regula-
tion for Indian industry began to focus onSource: Compiled from legal cases listed in Legal and Scientific Resources for Asia.

Economic and Political Weekly January 4, 2003 33

This content downloaded from

88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
this paper considers some of the most March 2002, the Supreme Court clarified: the older commercial fleet was also phased
significant SC case rulings impacting Pollution as a civil wrong... a tort com- out in Delhi, and in 2001, conversion to
environmental, management in the trans- mitted against the community as a whole. single fuel mode of natural compressed
port and industrial sectors in India. A person, therefore, guilty of causing gas was ordered in the city. While the latter
pollution has to pay damages (compensa- measures have been implemented in Delhi,
Environmental Property Rights tion) for restoration of the environment which gained notoriety as being the most
and ecology. He has also to pay damages polluted Indian city in the early 1990s (and
to those who have suffered loss on account
Degradation of living conditions has the fourth most polluted city in the world),
of the act of the offender. The powers of these measures are bound to spread to
prompted Indian society to seek remedy
this Court under Article 32 are not re-
through civil action. A good environment other cities in the country.
stricted and it can award damages in a PIL
is a constitutional right of the Indian citi- Thus in effect, environmental standards
or a writ petition as has been held in a series
zen under the Right to Life (Article 21), for vehicles were introduced in India in
of decisions. In addition to damages afore-
and the protection of the environment is said, the person guilty of causing pollution1990, and subsequent notifications made
a fundamental duty of each citizen (Article can also be held liable to pay exemplary them more stringent in 1992,1996 and 2000.
51A). These provisions have been used Euro-I norms were implemented in 2000
damages so that it may act as a deterrent
especially by the Supreme Court in dealing for others not to cause pollution in anythroughout the country for all categories of
with environmental cases, and considering manner.
vehicles. Bharat Stage-II norms, compa-
environmental, ecological, air, waterpollu- (Ruling dated March 15, 2002, intoBeas
rable Euro-II, for vehicles were imple-
River Case of Mehta vs Kamal Nath
tion,as amounting to violation of Article 21. mented in a phased manner starting with
This interpretation of the fundamental right WP182/1996, reproduced in Legalthe
andNational Capital Region (including
to life entitles citizens to invoke the writ Scientific Resources for Asia).
Delhi) in 2000, and extended to other cities
like Mumbai, Kolkata and Chennai in 2001.
jurisdiction of the Supreme Court and high The increase in environmental public
courts. There has been a clear movement interest litigation and judicial activism
Another noteworthy aspect of the Su-
(prompted by individuals as well preme
towards public interest litigation to reduce as by Court rulings on vehicular pollution
is that
NGOs) during the past 15 years began
pollution in India, some of which have had to the health costs of vehicular exhaust
far-reaching consequences. This seeminglybe perceived as a significant threat
havebybeen explicitly recognised. In a re-
pseudo-Coasian approach in India polluting
has units across the country.cent
Theruling in May 2002 on vehicular
establishment
brought industries and industrial estates to of the law of liability has
pollution, the SC noted that the adverse
court in lieu of the negotiating table created
be- a deterrent effect on pollution by effect statistics, especially the sharp
health
tween polluters and victims of the Coasecreating an incentive for polluters to hike
limitin respiratory diseases among chil-
model, implemented with reasonable suc- the risk of environmental damages. dren,
Thus,indicate that the effect of 'continuing
cess in Indonesia [O'Connor 1995, World while formal enforcement remains weak air pollution' is more "devastating than
Bank 2000]. in India,the constitutional right of thewhat was caused by the Bhopal gas
Apart from the Indian Constitution, victims of pollution has become an impor- tragedy". The ruling quoted research that
environmental legislation also has provi- tant instrument of pollution control.In has indicated that cancer potency of diesel
sions for polluter prosecution. Under sec- particular, the civil action has helped to vehicles is more than two times that of
tion 16 of the Environment Protection Act focus the regulator's attention on an petrol vehicles in India. For example, the
1986 (EPA), a company is punishable for important pollutian sector like road trans-carcinogenic effect of particulate matter
an offence. The 'cognisance of offence'port (which is a major source of urban air from one new diesel car is equivalent to
clause of the EPA (section 19), Air Act pollution) and an usher in new environ- 24 petrol cars and 84 new CNG cars on
(amended 1987) and Water Act (amended mental regulations. the road (Parivesh, September 2001, p 34).
1988) allows any citizen to prosecute a Prior to 1990, India had no environmen-The SC ruled that diesel buses in Delhi be
tal standards for vehicles. The new rules
polluting firm, provided a notice of at least phased out at a rate of 800 diesel buses
60 days is given to the polluter. Citizens for cleaner vehicles on city roads largely per month starting from May 1, 2002, till
have a right to information on pollutersfollowed from Supreme Court rulings inall diesel buses are replaced.
from pollution control boards for the public interest litigation to reduce urban
purpose of prosecution (section 43 of Air air pollution. The original petition was Enforcing Pollution Control
Act, amended 1987, and section 49 of filed in 1985 (M C Mehta vs Union of India
Water Act, amended 1988). To grantWP 13029/1985), and a spurt of rulings As in other countries, the community in
compensation for environmental damages,followed in the 1990s. Some of the most India has also served as the informal regu-
the courts have used provisions under thesignificant rulings of the Supreme Court
lator given that monitoring (and hence
Public Liability Insurance Act (1991) andin vehicular pollution cases during 1990 probability of formal detection of pollu-
Factories Act (1995).5 through 2001, resulted in mandatorytion violation) is low. In particular, in India
Several of the public litigation casesmeasures to reduce pollution in city road public interest environmental litigation has
have resulted in polluting units been closedtransport. Table 1 lists some of the major
served as a proxy for formal implemen-
down or relocated away from residentialSC rulings on vehicular pollution. tation of pollution regulation during the
areas, and more importantly, ushering in In 1990-91, pollution generated by past 15 years (beginning in mid-1980s),
new regulations (in the road transportvehicles and the need for action was since enforcement of the CAC environ-
sector) during the last decade. Increas-recognised by the Supreme Court. During mental measures has been poor. The in-
ingly, the polluter pays principle has the mid-1990s, leaded petrol was phased dustrial environmental legislation in India
been evoked by the court, and damages toout first in the five metro cities of Delhi, has focused on the installation of pollution
restore the environment imposed on Mumbai, Kolkata, Chennai and Banga- abatement equipment in the industry (ini-
polluting units. In a recent ruling in lore,.and then its the rest of India. In tial
1999,
compliance) and effluent standards,

34 Economic and Political Weekly January 4, 2003

This content downloaded from

88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
not the flow of effluents over time. Thus under which tanneries in Kanpur were also Moreover, through the rulings, the SC
it is possible for a firm to be compliant closed down in the 1980s. has induced the pollution control authority
by installing abatement equipment, but not The most noteworthy feature of thetoSC undertake action like estimating damage
operating it! Also, since plant-specific rulings on industrial pollution is that cost the imposed on the economy by polluting
standards are in terms of the concentration 'polluter pays' principle has been adopted industries and recovering it (notably the
of effluent and not volume, concentration formally and the industries have been given Bichhri case in 1996). Much like inducing
compliance can be achieved by diluting the message that the adverseenvironmental vehicular environmental norms in India,
the pollutant discharge while pollution load costs of industrial activities have to be the SC asked the government to establish
increases!6 internalised. During the Tamil Nadu tan- coastal management authorities (both at the
Second, only medium and large-scale nery case in 1996, the precautionary prin-centre and state levels), to develop policies
industrial units are included in the regu- ciple and the polluter-pays principle wereto protect India's coastal ecosystem.
lation purview of the pollution control accepted as the law of the land, and stated The natural question that follows from
boards (PCBs). Small-scale industries as essential features of sustainable develop-
the observation of a significant number of
(SSIs), which are significant polluters (but ment. Articles 21, 47, 48A and 51A(g) of
environmental court cases during the 1990s
difficult to monitor) are excluded by the the Constitution of India have also been (and a few post-2000), is how important
authorities.7 According to one estimate, quoted by the SC as giving a clear mandate a role public interest litigation has really
SSIs in India (more than 3 million) con- to the state to protect and improve the
played in the pollution management re-
gime in India.
tribute to 65 per cent of the total industrial environment and safeguard the forests and
pollution load, and to 40 per cent of in- wildlife of the country. First, the instances of court rulings in
dustrial production (Down to Earth, July
Table 2: Selected Supreme Court Rulings on Polluting Industry, 1992-2002
31, 2001). Public interest litigation has
also targeted the illegal location of SSIs Case (Ruling Year) Court Ruling
in urban residential areas.
Delhi stone crushers (June 1992) Mechanical stone crush
Third, public reaction has come about effective August 15, 1992.
since effective formal monitoring andBichhri industrial pollution
enforcement by PCBs has been weak (the(February 1996) Sealirng of chemical factories in Bichhri. ministry of environment and
Forests asked to determine damage costs of toxic sludge in soil and
PCBs have the authority to cut off water water, and recoverthe cost from the industries to restore the environment.
and electricity or close down non-compli- A fine of Rs 50,000 on the industry to pay petitioner ICELA, to
ant plants). Yet the PCBs often tolerate encourage other voluntary bodies to bring in public interest litigation.
non-complying units due to the work Coastal Zone Case (April 1996) Pollution caused by industries in coastal regions (of Maharashtra and
Goa) to be dealt with by respective high courts. Central government
overload at the boards, lack of staff, budget,
suggested to set up state coastal management authorities and also a
equipment and facilities. national coastal management authority.
Not surprisingly, surrogate environmen-
Delhi hazardous industries

tal enforcement through judicial activism(July 1996) 168 industries asked to relocate from Delhi to any other industrial
estate in the NCR, and stop functioning in Delhi, effective November
became especially prevalent following
30,1996. Employees in these industrial units to be compensated forthe
public interest litigation. The high courts disruption.
(in Delhi, Chennai, Mumbai) as well as the
Tamil Nadu tanneries case

Supreme Court have made significant (August 1996) Central government asked to constitute an authority to estimate the
damage cost of pollution based on the precautionary principle and the
rulings. The filing of public interest en-
polluter pays principle. Tanneries (about 700) not paying these damages
vironmental litigation began systematically are to be closed down. A fine of Rs 10,000 each on the tanneries
in the mid-1980s, and a spurt of court to be paid by October 31,1996. Fine and damage revenue to constitute
rulings were observed in the 1990s. The Environment Protection Fund, and used for compensating people and
cases covered effluent pollution from rectifying the environment. Effluent treatment plants to be set up by
November 30,1996.
industries into air, water and land.
Delhi illegal industries
Table 2 highlights 11 such Supreme (October 1996) 39,000 illegal industrial units operating in residential areas of Delhi
Court rulings in urban industrial pollution ordered to close down.

cases. Therulings resulted from writ peti-Badkhal lake and Surajkund

(October 1996) No construction to be allowed within the green belt of Badkhal Lake and
tions filed by noted Supreme Court advo-
Surajkund, except a small area for recreational and tourism purposes.
cate, M C Mehta as well as NGOs. The Delhi hazardous industries
Delhi land-use cases were from the origi- (December 1996) Industries could not relocate unless they protected the workers and
nal petition in 1985 (Mehta vs Union of paid according to compensation terms of Industrial Dispute Act (1947)
India WP4677/1985). The Bichhri indus- the workers who refuse to relocate, plus one year's wages. Industries
closing down have to pay workers six years' wages.
trial case ruling was in response to a writTanneries case: Kolkata
petition filed by a non-government organi- (December1996) Tanneries in eastern Kolkata ordered to close down and relocate to a
sation ICELA (WP967/1989, plus other peti- new complex by September 1997. Pollution fine of Rs 10,000 imposed
tions WP94/1990, 824/1993 and 76/1994). on each tannery (total about 550) to be paid by February 1997, for
damage to the environment (under Environment Protection Fund).
Similarly, the Tamil Nadu tanneries case Workers unable to relocate t be paid six years' wages as compensation.
was filed by an NGO, Vellore Citizens'
Welfare Forum (WP914/199 1). The Kolkata Delhi brick kilns (August 2000) Brick kilns in the agricultural land to change over to fly ash technology
or close down.
tanneries ruling in 1996 is part of a set of
Beas River (March 2002) Damage cost based on polluter-pays principle of Rs 10 lakh impose
rulings against leather tanneries resulting on Span Motels for pollution in the Beas river area.
from an original writ petition filed in 1985
(Mehta vs Union of India WP 3727/1985), Source: Compiled from legal cases listed in Legal and Scientific Resources for Asia, and CSE (1999).

Economic and Political Weekly January 4, 2003 35

This content downloaded from

88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
both vehicular pollution and industrial strategy, has been dealt with quite clearly times not been implemented! Indeed, a
pollution discussed above indicates that in the SC rulings.. While recognising the pure judicial approach to pollution abate-
important legislation was initiated in In- hardship of industrial units going out of ment can never be economically efficient
dia, especially in terms of vehicular emis- business an SC ruling against polluting or effective,9 sincejudicial procedures can
sion standards that did not exist earlier. units noted that "it is a price that has to always be used in stalling remedial action.
Thus the community (as represented by be paid for protecting and safeguarding the For example, following the 1996 Supreme
individuals or NGOs) has helped in bring- right of the people living in a healthy Court closure notice, thousands of un-
ing about institutional change in terms ofenvironment with minimal disturbance of registered illegal industrial units in Delhi
sectors covered by environmental legisla- ecological balance and without avoidable (typically small) across residential areas
tion, besides being informal regulators. hazard to them, their cattle, homes and should have closed down by 1997.10 Yet,
Second, while in India Coase-style agriculture and undue affectation of air even three years after the court order was
negotiations have not taken place, as in water and environment."8 This reflects in passed the affected industries succeeded
countries like Indonesia [Pargal and essence the objective of environmental in stalling the process by court appeal.
Wheeler 1995], environmental cases have management programmes, that of allocat- Some industries (including Birla Textile
brought polluters to court to pay for the ing resources for production and consump- Mills and Swantantra Bharat Mills) ap-
damages/social costs imposed on society. tion according to their true social costs. pealed that the order violated their funda-
Indeed, most of the public interest litiga- The "purpose is to achieve important tar- mental rights based on existing laws, like
tions have typically been those involving gets for environmental quality... Where the Delhi Development Act, the Industrial
a large number (of polluters and pollutees). their adverse redistributional impact can Disputes Act and the Minimum Wages
The pollution cases involved a large num- be easily addressed, it is surely important Act, on the issue of compensation to
ber of dispersed polluters (SSIs in Delhi, to do so, but environmental measures displaced industry and workers. The
or leather tanneries in Kolkata and Kanpur, should not, in general, be side-tracked on industry's writ petition also questioned the
or mobile polluters like vehicles) as well redistributional grounds" (emphasis authority of the Supreme Court to declare
as large number of victims (the urban added, Oates 1994:129). surrendered land as green areas (The
population), where Coasian negotiations Yet, the scope of the judicial approachEconomic Times, September 12, 1999, p 1).
would not have been feasible due to high to achieve optimal pollution equilibriumThis anecdote highlights the inevitable
transaction costs. with property rights defined in favour ofdrawback of a judiciary regime of pollu-
Third, the equity issue, which poses a the victims is limited. In reality even the tion control in an economy: namely, that
major challenge in any pollution control orders of the Supreme Court have some- polluting firms can routinely obtain stay

Oxfam GB is an international humanitarian and development organisation working in more than 70 countries with others to find lasting
solutions to poverty and suffering. Oxfam GB has been working over the last 50 years in India and is also registered as Oxfam (India) Trust.
Oxfam GB currently implements its programme in India through a network of five programme offices based in Hyderabad, Bhubaneswar,
Kolkata, Lucknow and Ahmedabad with its head office in Delhi.
Oxfam GB invites candidates for the post of Policy Advisor - Trade & Labour to be based at its Delhi office.
As an active partner of Oxfam Intemational's global trade campaign, Make Trade Fair (www.maketradefair.com), Oxfam GB is aiming
to set up a Civil Society Resource Centre in India to focus on trade and labour issues. Oxfam GB believes trade, a powerful engine of
economic growth, can be made to work for the poor.
Responsibilities: The Advisor will develop Oxfam GB's Fair Trade Campaign strategy for India from the perspective of poverty alleviation.
S/he will identify key trade policy issues; delineate an advocacy agenda; undertake/supervise research on policy issues and impact of
international trade on the poor; and coordinate with civil society organisations, Government and the industry.
Qualifications: At least a Masters degree in economics/intemational trade and 10 years high-level experience of working on international
trade policy issues from the perspective of poverty alleviation; excellent and established research/advocacy experience; willingness to
travel and work with trade unions, the private sector and civil society organisations to promote dialogue, awareness and build their
capacities on these issues.

The post offers a 2 years renewable contract. Annual salary ranges from Rs 476,500 - 6,20,000/- plus there are benefits like
Fund, Gratuity, LTA and reimbursement of Medical Expenses. Salary negotiable for exceptionally qualified and experienced c
Applications need to be submitted in the standard Oxfam GB application form with a covering note of not more than 2 sides of
paper explaining "why you think you are the right candidate" for this post. The forms and job descripton would be available thro
email at Guestndelfoxfam.org.uk / could be collected personally from the Delhi office (address mentioned below). Please not
application form cannot be downloaded from the Oxfam GB website. Candidates who have applied earlier need not appl
Completed application forms should be sent to Oxfam GB, C-5 Qutab Institutional Area, New Delhi - 110 016 not later
January, 2003.

36 Economic and Political Weekly January 4, 2003

This content downloaded from

88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
All use subject to https://about.jstor.org/terms
orders against closure/shifting decisions
of the judiciary and stall action for years.
Judicial activism, however, has accom-
plished something else. It has given a clear
market signal that the polluting activities
of industry will not be tolerated, and that
the damage costs are far too large to be
ignored by the community. The endorse-
ment of the polluter-pays principle by the
court has made the polluter liable for
environmental damage from pollution. In
effect, public interest litigation has acted
as what the literature terms is an indirect
market-based instrument [Eskeland and
Jimenez 1992] and can be classified as a
suasive instrument or moral suasion in-
strument [O'Connor 1995, Sawhney 1997].
Typically suasive instruments include
environmental education or information
that can alter the behavioural pattern of
polluters, including public disclosure of
information on polluting activities of in-
dustries which creates market pressure on
manufacturers to adopt environmentally
friendly production processes or produce
greener products. The court rulings by
endorsing the polluter pays principle have
sent a signal to polluters that they now
have to pay up for the environmental and
health damages they impose on society.
As an indirect market-based instrument,
judicial activism imparts the signal that
dumping of wastes into the ecosystem is
no longer costless for the polluters. In fact,
even when implementation of judicial
orders is stalled in the appeals court by
polluters, it entails costs (in terms of time,
lost income and court fees) on the polluters.
Besides monetary costs, bigger corpora-
tions like to minimise the risk of an en-
vironmental litigation, which can damage
their reputation in the marketplace. To 5 The latter has been used to grant compensationDeterminants of Pollution Abatement in
ensure positive publicity, increase in judi- to displaced workers during closure of polluting
cial activism induces larger companies to
undertake pollution control measures.
The fact that public interest litigation
and environmental judicial activism have
had distinct market implication is borne 6
out by the growth of the new environment
market in India (including market pollu-
tion control equipment as well as environ-
mental consulting services). Indeed, the luters. The fines and penalties for non- Countries, Framework for Policy Planning
US department of commerce estimated the
current size of the environment market in
India to be $4 billion, growing at an annual
rate of 15 per cent, (while Indo-German
Chamber of Commerce estimated the
7 The SSI sector comprises a vast number of very environment and forests, 'Taskforce Report to
market to be almost double, at $8 billion).
Among the best prospects for foreign
informal
investment in India in 2002, the US depart-
For many SSIs even basic data on value added,
ment of commerce ranked the sector of
pollution control equipment at sixth place available, let alone abatement expenditure. A World Bank Policy Research Report, Oxford
(out of 14 investment sectors), and Since these units operate on small profit University Press.
Economic and Political Weekly January 4, 2003 37
88.106.246.108 on Wed, 05 Oct 2022 19:23:41 UTC
environmental judicial activism was con-margins, the cost of non-compliance is lower
sidered an important factor aiding thethan the cost of compliance (given the
regulatory and monitoring structure, as well
growth of the environment market in India. as corruption). There are fiscal incentives
Thus while direct market-based instruments
available for the SSIs which are expected to
for pollution control remain in thepipeline,help these units set up common effluent
public interest environmental litigation intreatment plants and thereby reduce pollution
from this sector.
the past decade has succeeded in transmit-
8 Cited in Delhi Land use: Badkhal lake and
ting indirect market signals to the industry
Surajkund (1996) from a Supreme Court ruling
to interalise environmental costs and evolve of Rural Litigation and Entitlement Kendra vs
a nascent environment market. IB State of UP (1986, SCC 517 and 1987 SCR614)
that can be said to be the harbinger of the new
Address for correspondence: trend. In the latter case, the SC ordered the
limestone quarries in the Mussourie hills to
aparnas @iimb.emet.in
be closed since they were a hazard to the
environment.
Notes 9 Advocate M C Mehta, the main mover of the
Supreme Court rulings admits that judicial
1 How much compensation any party pays activism is not the answer, rather it is the only
depends on the bargaining power of the two. tool for citizens when formal enforcement fails.
2 The paper however reported that in the sample Interview published in Frontline, Volume 17,
of 250 Indian plants, 102 plants indicated that December 9-22, 2001.
abatement had been undertaken in response 10 The closure orders were to be effective January
to complaints from neighboring communities,
1997 for 39,000 illegal industrial tmits, and
and 51 plants had done so in response to NGO for 513 hazardous units around the city if they
pressure [Pargal et al 1997: 6]. failed to relocate within the allotted time. Down
3 A polluter has an incentive to abide by environ-
to Earth May 15, 1997, p 28.
mental standards, only if the marginal cost of
offence is greater than the marginal benefit
from violation. The marginal cost of offence References
is determined by the product of the probability
of detection times the probability of prosecution Bowers, John (1997): Sustainability and
(given detection) times probability of convic- Environmental Economics: An Alternative
tion (given prosecution) times the fine [Bowers Text, Addison Wesley Longman Publishers.
1997: 66]. As long as the probability of detection Coase, Ronald (1960): 'The Problem of Social
and conviction remain low in India, the com- Cost', The Journal of Law and Economics,
mand and control approach to pollution control October, reprinted in Dorfman and Dorfman
will fail to induce potential polluters to abate. (ed) Economics of the Environment (1995):
4 It should be noted however, that given political 109-38.
and technological constraints sometimes CAC Eskeland, Gunnar S and Emmanuel Jimenez
measures are better suited than economic (1992): 'Policy Instruments for Pollution
instruments for certain pollution problemsControl in Developing Countries', The World
[Hahn and Stavins 1992: 465]. For example,Bank Observer, Volume 7, Number 2: 145-69.
Hahn, Robert W and Robert N Stavins (1992):
when pollution is highly localised, with
'Economic Incentives for Environmental Pro-
threshold/non-linear damage functions, source-
specific standards may be more appropriate. tection: Integrating Theory and Practice',
Economic instruments are particularly desirableAmerican Economic Review, 82(2), May:
464-68.
when pollution is uniformly mixed over large
geographical areas. Hettige, Huq, Parg-al,- 'Wheeler (1996):
Developing Countries, World Bank.
Pargal, S M Mani, and M Huq (1997): 'Inspections
industrial units.Another legislation, the
National Environmental Tribunal Act (1995),and Emissions in India: Puzzling Survey
Evidence', Policy Research Division Working
introduced strict liability and is meant for
Paper 1810, World Bank.
large-scale accidents and damages involving
hazardous wastes and chemicals. Pargal, S and D Wheeler (1995): 'Informal Regula-
tion of Industrial Pollution in Developing
Ambient and source standards are set indepen-
Countries: Evidence from Indonesia', Policy
dently, unrelated in terms of the volume of pol-
Research Division Working Paper 1416,
lution generation, thus it is possible for environ- World Bank.
mental quality to deteriorate despite a high
Paulus, Stephan (1995): Market Based Instruments
degree of compliance among individual pol- in Environmental Policy in Developing
compliance are low in India, and the penalty and Institutional Development in Environment,
structure is faulty since the same penalty is GATE, Germany.
charged for violation of environmental
Sawhney, Aparna (1997): 'A Review of Market
standards irrespective of the size of violation Based Instruments for Pollution Control:
(whether small or large) or the pattern of offence Implications for India', NIPFP working paper
(occasional or repeated violations). No 2, and background paper for ministry of
small enterprises, many of which are in the Evaluate Market Based Instruments for
sector and may not even be registered. Industrial Pollution Abatement'.
World Bank (2000): Greening Industry: New Roles
turnover, employment, and capital stock, is not for Communities, Markets, and Governments,
This content downloaded from
All use subject to https://about.jstor.org/terms