15.Environmental Law & Busines

7/31/2019 15.Environmental Law & Busines

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Environment Law & Business


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Why Environment Law for Business

managers Environmental Managers to environmental

management for managers Personal liability of managers

Fundamental Responsibility of Industry to protectenvironment New interpretation to Constitutional and statutory

rights and remedies- Linking EnvironmentalProtection with Right to Life (Art.-21)

Causing pollution is civil wrong and crime Legal Awareness leads to adoption for measures

to prevent and control pollution


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India is known for too many laws

More than 200 laws directly and indirectly are related to environmentalpollution . Some of them are.

The Oriental Gas Company Act,1857

The North India Canal and Drainage Act,1873

Indian Penal Code, 1860 (Sec 277,278) Civil Procedure Code,1908 (Sec 91)

Criminal Procedure Code, 1973 (Sec 133)

Explosive Substances Act,1908

Mines and Mineral Act,1947

Motor Vehicles Act , 1938 Factories Act,1948 as amended in 1987 and

Many more Central and State Enactments


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Basis of Law : Public opinion Vs. International Pressures

Specific Environmental laws

The Water (Prevention and Control Of Pollution) Act,1974

The Water (Prevention and Control Of Pollution) Cess Act,1977

The Air (Prevention and Control Of Pollution) Act,1981

The Environmental(Protection),1986

The Public Liability Insurance Act,1991

The National Environmental Tribunal Act,1995

The National Environmental Appellate Authority Act,1997


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Judiciary and PIL

A procedural innovation

An effort for co-operative/collaborative move

An access to public Justice

A source of law reform ideas

An instrument of educate public regarding theirlegal rights and their duties (for healthy

environment to protect natural resources forsustainable development)


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JUDICIAL ACTIVISM & PIL : TO SERVE THE CAUSE OF ANTI-POLLUTION

Municipal Council, Ratlam V. Vardhi Chand AIR 1980 SC 1622.

Justice Krishna Iyer-Discharge of pollutants by big factories isdetriment of poor Section

challenge to the Social Justice Component of the Rule of LawJudgement based on Sec. 133 of Cr. P.C., 1973. ( PublicNuisance)

Direction to Municipal Council to stop the discharge of effluentsfrom Alcohol Plant

Direction to the State Govt. to Stop pollution.


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ENVIRONMENTAL PETITIONS &SUPREME

COURT on ECOLOGICAL IMBALANCES Rural Litigation & Entitlement Kendra, D. Dun v.

state of Uttar Pradesh AIR 1985 SC652 (the firstreported Case)

Supreme Court ordered the closing of mining operation asblasting caused ecological imbalances and hazards tohealthy environment.

Issues relating to Rights to Pollution free/Environment &Ecological imbalance

Right to Life and Personal Liberty means Right to haveliving atmosphere congenial to human existence


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Closure of industries (and Installation ofenvironmental equipment).. is a price that has to

be paid for protecting and safeguarding the right of

the people to live in healthy environment withminimal disturbance of ecological balance.

Rural Litigation and Entitlement Kendra, Dehradunv. State of Uttar Pradesh AIR 1985 SC 652 at 656


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ENVIRONMENTAL POLLUTION & PRINCIPLE OF

LIABILITYM.C. MEHTA V. UNION OF INDIA

(SHRIRAM CHEMICAL CASE )

AIR 1987 SC 965 Leakage of Oleum gas resulted in injury to a large number

of public in Delhi

Threat to clean environment by large enterprise in thicklypolluted areas

What is status of the right to pollution free environment

Ambit & Scope of Art. 12, 21, 32 of the Constitution of Indiain relation to the principle & norms for determining Liability

Principles of Liability

Basis of Liability


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The Principal of Absolute Liability :

an enterprise which is engaged in a hazardous or inherentlydangerous industry which poses a potential threat to the health an

safety of the persons working in the factory and residing in thesurrounding areas owes an absolute and non-delegable duty tothe community to ensure that no harm results to anyone onaccount of hazardous or inherently dangerous nature of the activity

which it has undertaken. The enterprise must be held to be underan obligation to provide that the hazardous or inherentlydangerous activity ......must be conducted with the higheststandards of safety and compensate for such harm and it shouldbe no answer to the enterprise to say that it has taken all

reasonable care and the harm occurred without any negligence onits part.


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Rules of Strict and Absolute Liability

Till the Bhopal case : common law principle of No fault liability

for compensating the victims of pollution

The post-Bhopal period: principle of absolute liabilitydisapproving the application of exceptions to principle of strict

liability.

Law recognises the rule of No Fault Liability i.e. liability withoutfault:

If a person is held liable for some harm even though he isnot negligent in causing the same,or

Where there is unintentional harm, or

Where the person may have been made some positiveefforts to prevent the harm


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This is known as the Rule of strict liability or Rule in

Rylands v. Fletcher, (1868).

According to the rule: If a person brings on his land and keeps there any dangerous

thing i.e., a thing which is likely to do mischief if it escapes hewill be prima facie answerable for the damage caused by itsescape even though he had not been negligent in keeping itthere. The liability arises not because there was any fault ornegligence on the part of person, but because he kept somedangerous thing on his land and same has escaped from thereand caused damage.

Exceptions: if escape was due to plaintiff's own default; or act ofstranger or the consequence of vis major, or the act of God;


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No fault Liability for escape of dangerous thing even ifnot negligent

Exceptions

1. Plaintiffs own default

2. Act of God

3. Consent of Plaintiff

4. Act of third party

5. Statutory authority


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Measurement of liability

In case of enterprise engaged in hazardous industrial activities,

if by reason of an accident death or injuries are caused topersons,Court has only two options:

Either the rule in Rylands v. Fletcher with all its exceptions;or

New and more strict principle governing the liability should beevolved

In Shriram (leakage of Oleum gas ) case, the Supreme Court

thought that

Persons having hazardous and inherently dangerousindustries could escape the liability for the environmental andhealth hazards by pleading some exception to the rule in

Rylands.


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The Supreme Court evolved the new rule of Absolute

Liability

to deal with an unusual situation which has arisen or

which is likely to arise in future

on account of hazardous and inherently dangerous industries

which are concomitant to an industrial economy.It will not be subjected to any of the exceptions laid downunder the rule in Rylands.


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The Principal of Absolute Liability :

an enterprise which is engaged in a hazardous or inherentlydangerous industry which poses a potential threat to the health an

safety of the persons working in the factory and residing in thesurrounding areas owes an absolute and non-delegable duty tothe community to ensure that no harm results to anyone onaccount of hazardous or inherently dangerous nature of the activity

which it has undertaken. The enterprise must be held to be underan obligation to provide that the hazardous or inherentlydangerous activity ......must be conducted with the higheststandards of safety and compensate for such harm and it shouldbe no answer to the enterprise to say that it has taken all

reasonable care and the harm occurred without any negligence onits part.

as s o a ty


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as s o a tyThe enterprise must be strictly liable for causing harm as a part of

social cost for carrying on the hazardous or inherentlydangerous activity. The court observed:

If an enterprise is permitted to carry on a hazardous orinherently dangerous activity for its profit, the law must presumethat such permission is conditional on the enterprise absorbingthe cost of any accident arising out of it.It will indemnifyallthose who suffer from of such hazardous activity regardless ofwhether it is carried on carefully or not.

The enterprise alone has the resources to discover and guard

against hazards or dangers and to provide warning againstpotential hazards.


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The requirement of non-natural user or the condition ofescapeof a dangerous substance need not be prove inmatters of hazardous industries endangering environment

environment.

In Bhopal disaster case the Union Carbide was liable innegligence as

it has exclusive control over Bhopal plant

failed to take reasonable care to warn persons of the dangerinvolved in the hazardous process.

strictly and absolutelyliable for all gas leak damages becauseit created and maintained unreasonably dangerous an

defective conditions at its Bhopal plant.


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The doctrine of absolute liability may have played some role inpersuading carbide to reach a settlement and avoid a trail onthe merit but Supreme Courtlost an opportunity to confirm thedoctrine of Shriram case in the case of Bhopal disaster.

But S C reaffirmed the principle of Absolute Liability in

Indian Council for Enviro-Legal Action (1996)

Vellore Citizens Welfare Forum (1996)and held that

Precautionary Principle and Polluter Pay Principle are

essential features of Sustainable Development.


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ABSOLUTE LIABILTIY FOR ENVIRONMENTAL DAMAGE :

RULE IN SHRIRAM CHEMICALS

Enterprise engaged in hazardous activity & poses a potentialthreat to health & safety - owes an absolute and non -delegable duty to community if any harm results

Enterprise can not say - It had taken all care and harm occurredwithout any negligence on its part

Exception : Chairman/MD will be liable except in cases ofescape of hazardous chemicals/gas due to an Act of God orSabotage


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D - BASIS OF LIABILITY FOR HAZARDOUS ACITIVITY

Liability for causing harm- Part of Social cost for carrying on thedangerous activity

Law must presume the permission to run hazardous industry isbased on enterprise absorbing the cost of any accidental harm

Enterprise alone has resources to discover and guard againsthazards and to warn against potential hazards


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RIVER POLLUTION BY TANNERIES(M. C. MEHTA v. UNION OF INDIA, AIR 1988 SC 1037)

Life, health and Ecology had greater importance to peoplethan employment & Loss of Revenue

SC co-related the minimum wages to workers of a trade tothe importance of environmental protection in publicinterest

Just like an industry which cannot pay minimum wages toits workers cannot be allowed to exist similarly a tannerywhich cannot set up a treatment plant cannot permitted tocontinue because of adverse effect on public at large.


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Responsibility of Executives

In M/s.Gwalior Rayon Silk Manufacturing Co. the M.P. High Court heldthat the Chairman, Directors, President,Chief Executives and otherauthorities were not vicariously liable for the alleged offence of dischargingeffluents injurious to public health.

But in Shriram case S. C. put personal responsibility on Chairman and

others. The management of Shriram should obtain an undertaking from Chairman

and Managing Director of the Delhi Cloth Mills Ltd., and also from theofficers who are in actual management of the caustic chlorine plant that:

if there is any escape of chlorine gas resulting in death or injury to the

workmen or people living in vicinity, they will be personally responsiblefor payment of compensation for such death or injury.


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But on argument by Shriram Management that if such anundertaking is given by the officers

it would be impossible to secure the services of anycompetent officer due to imposition of absolute andunlimited liability

Limit on absolute unlimited liability of officers

Thus, Court limited personal responsibility of officer to theextent of his annual salary with allowances,for payment of

compensation for death or injury but if the officer shows that escape of gas took place as a

result of act of God or vis major or sabotage or

that he had exercised all due diligence to prevent such

escape of gas,


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But the Court attached the personal liability to the Chairman

and/or Managing Director and observed THEY WILL NOTBE LIABLE

if they can show that the escape of chlorine gas was due toan Act of God or vis major or sabotage.

But in all other cases the Chairman or Managing Directormust be held himself liable to pay compensation.

Thus, the judicial attitude appears to take the view that the

executives including the Chairman and Directors of acompany must bear direct responsibility for safety andenvironmental protection.

15.Environmental Law & Busines

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