If the salt loses its saltiness
by Sankara Narayanan on 07 Apr 2013 1 Comment

The Supreme Court on 2 April 2013 allowed the Sterlite Copper Smelter plant in Tuticorin to function in ‘public interest’, but asked the company to pay Rs. 100 crore compensation for violating environmental laws. The court did admit that the company had misrepresented and suppressed material facts in the SLP. The Bench noted that the plant contributed substantially to copper production in India. It has about 1,300 employees and also provides employment to a large number of people through contractors. A number of ancillary industries are also dependent on it. It generates huge revenue to the Central and State Governments. It also contributes to 10% of the total cargo volume of Tuticorin port. For these considerations of ‘public interest’, it did not want to refuse relief to the company.


It is not clear how the fine was computed by the court. Violations are established. But there is no punishment for the company’s willful criminality, fraud and cheating. Of course, Anil Agarwal’s Sterlite alone cannot be faulted for environmental degradations. The working partners in the State and Central Government who abetted/permitted these violations have been allowed to go scot-free. Why?


It is relevant that despite the constitutional provisions and the notices issued by the Supreme Court, the river Ganga was brazenly polluted by many tanneries in Kanpur. The Apex Court was constrained to issue directions for the closure of the tanneries. The court was conscious that closure of the tanneries might bring unemployment and loss of revenue. But it significantly ruled that, ‘life, health and ecology have greater importance to the people’. By this yardstick, the life, health and ecology of Tuticorin probably have lesser importance.


In the Tirupur Dying Factory case (2009), it was pleaded by the dyers that, ‘Tirupur is providing employment to 5 lakh persons. The country earns about 10,000 crore in foreign exchange annually. A large number of people have indulged in transport activities because of such heavy industries’. Yet the Supreme Court ignored these pleadings and upheld the Madras High Court verdict paving the way for closure of nearly 700 textile processing units. It would appear that the 700 dyers from Tirupur are no match to an alien Agarwal.


In the Oleum Gas Leak case, a five-judge SC bench unanimously ruled that “an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. Such hazardous or inherently dangerous activity for private profit can be tolerated only on condition that the enterprise engaged in such activity indemnifies all those who suffer on account of the carrying on of such activity regardless of whether it is carried on carefully or not.”  Has Sterlite indemnified all those who suffer on account of the carrying on of such activity?


In Vellore Citizens Forum case, the Apex Court held that “the Precautionary Principle and the Polluter Pays Principle are essential features of Sustainable Development. The absolute liability for harm to the environment extends not only to compensate the victims of 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.”


May we ask if the Rs 100 crore compensation ordered by the Court is good enough (adequate) to pay the cost to the individual sufferers as well as the cost of reversing the damaged ecology? The court noted that the company’s profit before tax for 2010-11 was Rs. 1,043 crore, 40 per cent more than the previous fiscal’s Rs. 744 crore. Based on the health of the balance sheet, compensation was fixed. Does that mean that if the company’s balance sheet was in the red, it could simply wave goodbye to the suffering people and the damaged ecology?


Last, but not the least. Rs 200 crore is a peanut for Vedanta. Yet Sterlite has been allowed to pay the compensation in installments spreading over to five years. Such windfalls are denied to ordinary farmers and other entrepreneurs by our banks. Will the apex Court shower such mercies on the ordinary citizens of this land? Manu, the Law Giver, dictates that the king, ‘Adopt any means to recover the debt in time; but in the case of a Brahmin debtor, you may recover it in installments.’


The leeway to a Brahmin debtor was given on the understanding that he would generally be poor; it was never extended to the commercial class which was expected to have the means to pay debts, or assets against which these could be recovered. The Indian Penal Code, however, has no such differential standard for different castes/varnas as the Indian Constitution enshrines the equality of the Individual before Law.


Yet the Supreme Court has disregarded the IPC and extended the yardstick of the Manu Smriti to a class for which it was never intended.

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