UNIVERSITY OF PETROLEUM & ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

BA.LLB (HONS.)
SEMESTER-VII
ACADEMIC YEAR: 2016

-17

SESSION: AUG -DEC

RESEARCH PROJECT
FOR
Environmental Law
Topic:- Precautionary Principle and Polluter Pays Principle:
An Analytical Study

Under the Supervision of: Dr. Azim B. Pathan

NAME:
SAP NO:
ROLL NO

ABHINAV
500028450
R450213006

Precautionary Principle and Polluter Pays Principle: An Analytical Study

Abstract
The Polluter Pays Principle (PPP) is an environmental policy principle which requires that the
costs of pollution be borne by those who cause it. In its original emergence the Polluter Pays
Principle aims at determining how the costs of pollution prevention and control must be
allocated: the polluter must pay. The normative scope of the PPP has evolved over time to
include also accidental pollution prevention, control and clean-up costs, in what is referred to as
extended Polluter Pays Principle. It is claimed that foreign companies are reluctant to invest in
India as they do not want to run the risk of having to compensate without a cap for a nuclear
accident on account of imposition of absolute liability. It is understood that the government to
appease the foreign investors proposes to introduce a Civil Nuclear Liability Bill whereby inter
alia the compensation payable in case of a nuclear accident is capped at $450 million. Any
legislation that attempts to dilute the Polluter Pays and Precautionary Principle and imposes a
cap on liability is likely to be struck down as it would be in blatant defiance of the Supreme
Court judgments. Moreover, it would be against the interests and the cherished fundamental right
to life of the people of India whose protection should be the primary concern of any civilized
democratic government.
Statement of Problem
In the course of evolution of environmental jurisprudence in India, there has not only been
enactment of environment protective legislations but also development of a virtual fundamental
right to clean environment that has been impliedly postulated in the Constitutional scheme. In the
socialistic scheme of public governance, as contemplated by the preamble, it is of utmost
importance to keep note that public concerns are given more importance over private concerns.
To conserve the above mentioned premise is most important goal of environment protection in
India. The objective of the study is to determine the object of precautionary principle and
polluter pays principle in India and its applicability.
Rational of the Study
The

objective

of

the

study

is

that

"The

Precautionary Principle"

and

"The Polluter Pays" principle are essential features of "Sustainable Development". The

Precautionary Principle, Polluter Pays principle, Obligation to assist and cooperate, Eradication
of Poverty and Financial Assistance to the developing countries.
Hypothesis
This study revolves around moral and legal principles surrounding the issues of sustainable
development, the obligations of people for the environment and the role of developing along
with the already developed countries. It is hoped that this study will provide a comprehensive
solution and a critic over the present policies of the government.
Review of literature
Environment Law by Dr. HN Tiwari
It provides basic information pathways for sustainable development, the role of developed
countries and the expectation form the developing countries towards the environment.
Environmental Pollution by Khopkar. S. M
It provides information about the polluter pay Principal (PPP). It has given information about the
evolution of the principal in India.
Environmental Law in India by Gurdip Singh.
It provides information about the environmental law applicable in india which talks about the
precautionary principal and polluter pays Principal
Research Questions
Definition of Pollution
What is Polluter Pay Principal?
What is Precautionary Principle?
How PPP evolve in India?
What are the remedial relief available as PPP?

Chapterisation

Introduction
In recent days, the polluter pays principle is seen as a way of internalizing pollution-related costs
within the context of the economic rationality of the enterprise. There is a close relationship
between a country's environmental policy and its overall socioeconomic policy
Evolution of PPP
The first major reference to the PPP appeared 1972 in the OECD Guiding Principles Concerning
International Economic Aspects of Environmental Policies (henceforth called OECD Guiding
Principles). The PPP as a guiding principle across countries became necessary because some
countries faced complaints by national firms about rising costs and a loss of international
competitiveness following a national implementation of the PPP within their borders.
Role of market based Instrument
The development of the polluter pays principle must also include mechanisms to safeguard
against its potentially harmful effects while at the same time reduce uncertainties about its
economic impact.
Judicial Pronouncements
In M.C.Mehta V. UOI, SC reffered the case of Enviro-Legal Action and Vellore Citizens case
and ordered the Calcutta tanneries to relocate and pay compensation for the loss of
ecology/environment of the affected areas and the suffering of the residents.
Conclusion
The judgements of the Supreme Court undoubtedly go a long way in reaffirming the
commitment of the judiciary in protecting the environment and remedying the ill-effects of
pollution. However, the court has erred in the manner in which it has adopted the polluter pays
principle, as one of international customary law without demonstrating how the principle
actually fits into the ambit of international law.

Chapter 1
Introduction
Often available scientific evidence provides us cause for concern but does not give conclusive
information. In such scenarios risk assessment compels us to strike a balance between the need to
protect health and environment on one hand, and the foregone advantages of strict restrictions
that may turn out to be unwarranted. It is in this context the role for precautionary principle (PP)
emerges. While deciding the need and timing of the application of the PP, it is important to
clearly understand the principle and its consequences.
Concept and Definition of the PP
The term precautionary principle had its origin in the German word Vorsorgeprinzip1. Though
the principle had its roots in the German environmental policy, it has entered the center-stage of
the global environmental policy in the past two-and-half decades with several global
environmental treaties invoking the PP for decision making. In simple terms, the PP conveys the
common-sense based advice to err on the side of caution. The principle intends to prevent harm
to humans, environment, and eco-system at large. Before looking at some of the widely used
definitions of the PP, it would be helpful to understand the context and rationale.
When the impacts of a particular activity such as emission of hazardous substances are not
completely clear, the general presumption is to let the activities go ahead until the uncertainty is
resolved completely. The PP counters such general presumptions. When there is uncertainty
regarding the impacts of an activity, the PP advocates action to anticipate and avert
environmental harm. Thus, the PP favours monitoring, preventing and/or mitigating uncertain
potential threats.
There two widely referred definitions of the PP the first one, The Rio Declaration (or Agenda
21) of 1992, states that:
In order to protect the environment, the precautionary approach shall be widely applied by
States according to their capabilities. Where there are threats of serious or irreversible damage,
lack of full scientific certainty shall not be used as a reason for postponing cost-effective
measures to prevent environmental degradation.

This definition given primarily with environmental issues in focus is also extended to cover
health issues. The second definition is based on 1998 Wingspread Statement on the
Precautionary Principle and it states (Raffensperger and Tickner, 1999):
When an activity raises threats of harm to human health or the environment, precautionary
measures should be taken even if some cause and effect relationships are not fully established
scientifically. The process of applying the precautionary principle must be open, informed and
democratic and must include potentially affected parties. It must also involve an examination of
the full range of alternatives, including no action. In this context the proponent of an activity,
rather than the public, should bear the burden of proof.
Polluter Pays Principle
The Polluter Pays Principle (PPP) is an environmental policy principle which requires that the
costs of pollution be borne by those who cause it. In its original emergence the Polluter Pays
Principle aims at determining how the costs of pollution prevention and control must be
allocated: the polluter must pay.1
Bugge2 has identified four versions of the PPP: economically, it promotes efficiency; legally, it
promotes justice; it promotes harmonization of international environmental policies; it defines
how to allocate costs within a State.
The normative scope of the PPP has evolved over time to include also accidental pollution
prevention, control and clean-up costs, in what is referred to as extended Polluter Pays Principle.
Today the Principle is a generally recognized principle of International Environmental Law.
The first mention of the Principle at the international level is to be found in the 1972
Recommendation by the OECD Council on Guiding Principles concerning International
Economic Aspects of Environmental Policies, where it stated that: "The principle to be used for
1Vito De Lucia (Lead Author); Richard Reibstein (Topic Editor) "Polluter pays principle", In
Encyclopedia of Earth. Eds. Cutler J. Cleveland (Washington, D.C.: Environmental Information
Coalition, National Council for Science and the Environment). [First published in the Encyclopedia of
Earth August 22, 2008; Last revised Date October 17, 2010; Retrieved October 21, 2010
2 Bugge H. C., 1996. "The principles of polluter pays in economics and law", in Eide E. and van der Bergh R.
(eds)"Law and Economics of the Environment", Oslo: Juridisk Forlag, 1996.

allocating costs of pollution prevention and control measures to encourage rational use of scarce
environmental resources and to avoid distortions in international trade and investment is the socalled Polluter-Pays Principle." It then went on to elaborate: "This principle means that the
polluter should bear the expenses of carrying out the above-mentioned measures decided by
public authorities to ensure that the environment is in an acceptable state."3
The OECD emphasizes the necessity for removal of subsidies which would prevent polluters to
bear the costs of pollution which they caused, urging then those costs be internalized into the
prices of goods and services: the PPP should "... not be accompanied by subsidies that would
create significant distortions in international trade and investment." This is normally referred to
as weak or standard PPP.4
However, the PPP evolved into what is called extended or strong PPP. In 1989 OECD included in
the PPP costs related to accidental pollution; the Recommendation of the Council concerning the
Application of the Polluter-Pays Principle to Accidental Pollution states that: "In matters of
accidental pollution risks, the Polluter-Pays Principle implies that the operator of a hazardous
installation should bear the cost of reasonable measures to prevent and control accidental
pollution from that installation [...]".5
The PPP has also been reaffirmed in the 1992 Rio Declaration, at Principle 16: "National
authorities should endeavor to promote the internalization of environmental costs and the use of
economic instruments, taking into account the approach that the polluter should, in principle,
bear the cost of pollution, with due regard to the public interest and without distorting
international trade and investment.", and is mentioned, recalled or otherwise referred to in both
Agenda 21 and the World Summit on Sustainable Development (WSSD) Johannesburg Plan of
Implementation.6

3 See, supra fn 1.
4 http://www.eoearth.org/article/polluterpaysprinciple/
5 www.hubpages.com/hub/polluter-pays-principle
6 www.en.wikipedia.org/wiki/polluter-pays-principle

The PPP is today one of the fundamental principles of the environmental policy of International
Community. "Community policy on the environment [...] shall be based on the precautionary
principle and on the principles that preventive action should be taken, that environmental damage
should as a priority be rectified at source and that the polluter should pay."7
Chapter 2
India and PPP
India launched a "green" court on October 19, 2010 to make polluters pay damages as it steps up
its policing of the country's environmental laws. Indian Environment Minister said this is the
first body of its kind (in India) to apply the polluter pays principle and the principle of
sustainable development, and also that India was only the third country in the world after
Australia and New Zealand to set up such a tribunal.
Anybody and everybody can approach the tribunal to claim civil damages arising out of
inadequate implementation of environment laws said Jairam Ramesh, the environment minister.
He also insisted that India's desire for fast economic growth must not come at the expense of the
environment. The tribunal, which will operate around India, is to be made up of members who
are environmental experts and has powers to try all matters related to and arising out of
environmental issues. The move to launch the tribunal was the latest sign of a tougher approach
by India to improving its green track record as concerns mount about the impact of growing
industrialization on air and water quality, forests and wildlife. 8 Let's see how effective that
anybody and everybody will work out in practice, as well as what sort of damages are actually
awarded.
The government proposes to introduce a Civil Nuclear Liability Bill to appease foreign investors.
Any legislation that attempts to dilute the Polluter Pays and Precautionary Principle and imposes

7 The Treaty Establishing the European Community, under Title XIX Environment, provides for PPP at
article 174.2 and in fact the same is also provided for the International Community as part of International
Environmental Jurisprudence
8 http://news.yahoo.com/s/afp/20101019/sc_afp/indiaenvironmentalpollution

a cap on liability will be in blatant defiance of Supreme Court judgments and is likely to be
struck down.9
One of the vital guarantees in our Constitution is the protection of the Right to Life enshrined in
Article 21. Our Supreme Court by creative interpretation ruled that the expression life does not
connote merely physical existence but embraces the right to live with human dignity and all that
goes along with it, namely, the bare necessaries of life such as adequate nutrition, clothing and
shelter over the head. Thereafter it further expanded the concept of the right to live with human
dignity to encompass within its ambit, the protection and preservation of environment, ecological
balance free from pollution of air and water.10
Our Constitution evinces great concern for environment. Article 48-A of the Directive Principle
mandates that the state shall endeavor to protect and improve the environment. One of the
fundamental duties prescribed in Article 51-A is, inter alia, to protect and improve the natural
environment.11
PPP as Remedial Relief
While the judiciary has used precautionary principle to provide for preventive relief to protect
environment, it has applied the polluter pays principle to give remedial relief to check and
control environmental degradation. Of these two principles which are the two sides of the same
coin of sustainable development, the polluter pays has been frequently used to control
environmental pollution. Thus, in a number of cases the higher judiciary has used this principle
not only to award ordinary damages/compensation to the victims of environmental degradation
but also to award exemplary damages/ compensation for the restoration of degraded
environment. Besides, the Courts have used this principle to invent the principle of absolute
liability in the case of environmental harm caused by hazardous industries.
The Polluter Pays Principle and the Principle of Absolute Liability

9 Soli J. Sorabjee, Capping nuclear liability is a non starter , published in www.thehindu.com

10 http://beta.thehindu.com/opinion/lead/article64688.ece
11 Ibid.

Thus, in MC Mehta v Union of India12, which is one of the land-mark decisions of the Supreme
Court, the Supreme Court enunciated a new proposition in regard to the liability of enterprises
engaged in hazardous or inherently dangerous activities.
The Court in this case transformed the concept of strict liability enunciated in Rylands v
Fletcher13 into absolute liability. In this case, the petitioner in his earlier PIL Petition 14, sought
the closure or relocation of Shri Ram Caustic Chlorine and Sulphuric Acid plants located in 76
acres industrial complex located in a thickly populated area of Delhi. Soon after the filing of the
original Petition there was a leakage of oleum gas from the Sulphuric Acid Plant of Shri Ram
Food and Fertilizers Industries ltd affecting several people and also causing death of one person.
Because of this incident, an order for closure of Shri Ram Food and Fertilizers Ltd was issued by
the Assistant Commissioner (Factories) under the Factories Act, 1948. Aggrieved by the order,
the Shri Ram Food and Fertilizers Ltd filed a writ petition questioning the closure order and also
sought an interim permission to re-open the caustic chlorine plant. Meanwhile, those who were
affected by the leakage filed petitions for compensation, which were the subject matter of
decision in this case.
Chief Justice Bhagwati who delivered the judgment of the Supreme Court, asserting its power
under Article 32 read with Article 21 of the Indian Constitution to award compensation to the
victims of oleum gas leak, explained the principle of absolute liability for enterprises engaged in
hazardous or inherently dangerous activities thus:15
We are of the view 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 nondelegable 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. The enterprise
12AIR 1987 SC 1086.
13 (1868) LR 3 HL 330.
14 AIR 1987 SC 965.
15 See, AIR 1987 SC 10865 at 1099

must be held to be under an obligation to provide that the hazardous or inherently dangerous
activity in which it is engaged must be conducted with the highest standard of safety and if any
harm results on account of such activity, the enterprise must be absolutely liable to compensate
for such harm and it should be no answer to the enterprise to say that it had taken all reasonable
care and that the harm occurred without any negligence on its partIf the enterprise is
permitted to carry on an hazardous or inherently dangerous activity for its profit, the law must
presume that such permission is conditional on the enterprise absorbing the cost of any accident
arising on account of such hazardous or inherently dangerous activity as an appropriate item of
its overheads. Such hazardous or inherently dangerous activity for private profit can be tolerated
only on condition that the enterprise engaged in such hazardous or inherently dangerous activity
indemnifies all those who suffer on account of the carrying on of such hazardous or inherently
dangerous activity regardless of whether it is carried on carefully or not. We would
therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous
activity and harm results to anyone on account of an accident in the operation of such hazardous
or inherently dangerous activity resulting, for example, in escape of toxic gas, the enterprise is
strictly and absolutely liable to compensate all those who are affected by the accident and such
liability is not subject to any of the exceptions which operate vis--vis the tortuous principle of
strict liability under the rule in Ryland v Fletcher. We would also like to point out that the
measure of compensation in the kind of cases referred to in the preceding paragraph must be
correlated to the magnitude and capacity of the enterprise because such compensation must
have a deterrent effect. The larger and more prosperous the enterprise, greater must be the
amount of compensation payable by it for the harm caused on account of an accident in the
carrying on of the hazardous or inherently dangerous activity by the enterprise.
However, the Court did not award compensation to the victims of the oleum gas leak in
this case. The Court left open the issue whether or not the Shriram Food and Fertilizer Company,
a private company, was a state. Obviously, it appears that in the opinion of the Court it is not a
State. Since Article 21 right read with Article 32 could be enforceable only against State action
and that since Shriram Foods and Fertilizer Company was not a State, compensation could not be
awarded under Article 32 of the Constitution.

Evidently, the Court applied the Polluter Pays principle without mentioning its name.
According to the Supreme Court the amount of compensation to be paid by the hazardous
industries must be correlated to the magnitude and capacity of the enterprise because such
compensation must have a deterrent effect. Therefore, the Polluter Pays principle, whenever it
is applied, serves two-fold purpose. One is to restore the damaged ecology to its original status
and the other is to have deterrent effect on the polluters so that they may not enjoy pollute and
pay dictum.
However, Supreme Court has made it clear that the mere fact that an industrial enterprise
has not followed the legal norms in its operations is no proof of environmental degradation
unless it is factually established by investigation and evidence. In other words the industrial
enterprise has to first become polluter before the Polluter pays principle is invoked against the
entity. In Deepak Nitrite Ltd. v State of Gujarat16, the Supreme Court, while approving the
Polluter Pays principle, gave this ruling. In this case, a PIL was filed before Gujarat High
Court alleging large scale pollution caused by industries located in the Gujarat Industrial
Development Corporations (GIDC) Industrial Estate at Nandesari. In the petition it was alleged
that effluents discharged by the said industries into the effluent treatment project had exceeded
certain parameters fixed by the Gujarat Pollution Control Board (GPCB) thereby causing damage
to the environment. The High Court appointed two committees to investigate and submit a report
in this regard.17 After the reports were submitted by these committees, the High Court without
giving a finding that the non-compliance with the legal norms by the concerned industries caused
environmental degradation in the area passed on order 18 3 which was questioned in this appeal.

16 MANU/SC/0482/2004
17The High Court appointed a committee to ascertain the position with regard to the extent of pollution
in the Nandesari Industrial Estate. The Committee made its report on 07-09-1996. The High Court also
appointed NEERI as a consultant to assess the treatment facilities and to provide suitable rectification
measures for upgrading the common Effluent Treatment Plant (CETP) which was erected by QPCB.
NEERI submitted its report on 30-10-1996.
18 The High Court order directed the Industries in question to Pay 1 percent of the maximum annual
turnover of any of the preceding three years towards compensation and betterment of environment within
a stipulated time.

Allowing the appeal, Chief Justice Rajendra babu, who delivered the judgment of the Court,
held19:
The fact that the industrial units in question have not conformed to the standards
prescribed by GPCB cannot be seriously disputed in these cases. But the question is whether the
circumstance by itself can lead to the conclusion that such lapse has caused damage to
environment. No finding is given on that aspect which is necessary to be ascertained because
compensation to be awarded must have some broad correlation not only with the magnitude and
capacity of the enterprise but also with the harm caused by it However, to say that mere
violation of the Law in not observing the norms would result in degradation of environment
would not be correct.

Chapter 3
Precautionary Principle
The precautionary principle or precautionary approach states that if an action or policy has a
suspected risk of causing harm to the public or to the environment, in the absence of scientific
consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on
those taking the action. This principle allows policy makers to make discretionary decisions in
situations where there is the possibility of harm from taking a particular course or making a
certain decision when extensive scientific knowledge on the matter is lacking. The principle
implies that there is a social responsibility to protect the public from exposure to harm, when
scientific investigation has found a plausible risk. These protections can be relaxed only if further
scientific findings emerge that provide sound evidence that no harm will result.
19 See, supra n. 17 Para 6. The court made a distinction between the fact situation that obtained in this
case and that in MC Mehata v Union India, MANU/SC/0396/2004 and Vellore Citizens Welfare Forum v
Union of India, MANU/SC/0686/1996

Principle 15 of the Rio Declaration states, In order to protect the environment, the precautionary
approach shall be widely applied by states according to their capabilities. Where there are threats
of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for
postponing cost effective measures to prevent environmental degradation.
Thus, the precautionary principle got international recognition in the Rio Conference on
Environment and Development 1992 and it has been reiterated in Rio Declaration, 2012 also. In
Indian Council for Enviro-Legal Action v. Union of India case discussed above accepted this
principle along with the polluter pays principle as part of the legal system. In Vellore Citizens
Welfare Forum v. Union of India20 and Andhra Pradesh Pollution Control Board v. MV Nayudu21,
the Supreme Court applied the precautionary principle directly to the facts of the cases. In
Vellore Citizens Welfare case the Supreme Court was appraised of the pollution caused by the
enormous discharge of untreated effluent by tanneries and other industries in the state of Tamil
Nadu. The petitioner highlighted the evil on the strength of reports from Tamil Nadu Agricultural
University Research Centre, an independent survey conducted by nongovernment organizations,
and a study by two lawyers deputed by the Legal Aid and Advice Board of Tamil Nadu. The
main allegation was that the untreated effluents contaminated the underground water resulting in
non-availability of potable water, thereby causing immense harm to agriculture. Despite the
persuasion of the Tamil Nadu Government and the Board, and despite the Central Governments
offer of subsidy to construct common treatment plant, most of the tanneries hardly take any steps
to control pollution. The court referred to its earlier orders. It also quoted extensively from the
report of NEERI to bring to light the seriousness of the problem.
Petitioner, the Vellore Citizens Welfare Forum, filed this action to stop tanneries in the State of
Tamil Nadu from discharging untreated effluent into agricultural fields, waterways, open lands
and waterways. Among other types of environmental pollution caused by these tanneries, it is
estimated that nearly 35,000 hectares of agricultural land in this tanneries belt has become either
partially or totally unfit for cultivation, and that the 170 types of chemicals used in the chrome
tanning processes have severely polluted the local drinking water. It was considered by the court

20 AIR 1996 SC 2715.

21 AIR 1999 SC 812.

that the industry is a Foreign Exchange Earner. It does not mean that this industry has the right to
destroy the ecology, degrade the environment or create health hazards.
Also it was considered that one moot point is whether all the cost of the lives of lakhs of people
with increasing human population the activities of the tanneries should be encouraged on
monetary considerations. They found that the tanners have absolutely no regard for the healthy
environment in and around their tanneries. The effluents discharged have been stored like a pond
openly in the most of the places adjacent to cultivable lands with easy access for the animals and
the people. Sustainable development, and in particular the polluter pays principles and the
precautionary principle, have become a part of customary international law. Even though
Environment Protection Act22 allows the Central Government to create an authority with powers
to control pollution and protect the environment, it has not done so. Thus, the Court directed the
Central Government to take immediate action under the provisions of this act.
The Court ordered the Central Government to establish an authority to deal with the situation
created by the tanneries and other polluting industries in the State of Tamil Nadu. This authority
shall implement the precautionary principle and the polluters pays principle, and identify the
(1) Loss to the ecology/environment;
(2) Individuals/families who have suffered because of the pollution; and then determine the
compensation to reverse this environmental damage and compensate those who have suffered
from the pollution. The Collector/District Magistrates shall collect and disburse this money.
If a polluter refuses to pay compensation, his industry will be closed, and the compensation
recovered as arrears of land revenue. If an industry sets up the necessary pollution control
devices now, it is still liable to pay for the past pollution it has generated. Each tannery in the
listed district is subject to a Rupees 10,000 fine which will be put into an "Environment
Protection Fund". This fund will be used to restore the environment and to compensate affected
persons. Expert bodies will help to frame a scheme to reverse the environmental pollution. All
tanneries must set up common effluent treatment plants, or individual pollution control devices,
and if they do not, the Superintendent of Police and the Collector/District Magistrate/Deputy
Commissioner in each of the respective districts is authorized to close the plants down. No new
industries shall be permitted to be set up within the listed prohibited areas.

22 Section 3(3) of Environment Protection Act, 1986.

The court also explained the Precautionary Principle in the context of the municipal law as
under
Environmental measures by the state government and statutory authorities. They must anticipate,
prevent and attack the causes of environmental degradation.
Where there are threats of serious and irreversible damage, lack of scientific certainty should not
be used as a reason for postponing measures to prevent environmental degradation.
The onus of proof is on the actor or developer/ industrialist to show that his action is
environmentally benign.
It was directed that a Green Bench would be constituted to deal with this case and other
environmental matters. In Andhra Pradesh Pollution Control Board case23 the court relied on the
Vellore case24 before pondering over the various dimensions of the precautionary principle. The
court pointed out that earlier, the concept was based on the assimilative capacity, which
assumed that science could provide the information and means necessary to avoid encroaching
upon the capacity of the environment to assimilate impacts, and that relevant technical expertise
would be available when environmental harm was predicted. In the UN General Assembly
Resolution on World Charter for Nature, the emphasis shifted to the precautionary principle25.
This was reiterated in the Rio Declaration in its Principle 15 26. The principle of precaution
involves the anticipation of environmental harm and taking measures to avoid it, or to choose the
least environmentally harmful activity. It is based on scientific uncertainty. Environmental
protection should not only aim at protecting health, property, and economic interest, but also
protect the environment for its own sake; precautionary duties must not only be triggered by the
suspicion of concrete danger, but also by (justified) concern or risk potential27.
23 Andhra Pradesh Pollution Control Board v. MV Nayudu, AIR 1999 SC 812.
24 Vellore Citizens Welfare Forum v. Union of India, AIR 1996 SC 2715.
25 Principle 11 of the UN General Assembly Resolution on World Charter for Nature, 1982
26 Principle 15 of the Rio Declaration: In order to protect the environment, the precautionary approach
shall be widely applied by States according to their capabilities. Where there are threats of serious or
irreversible damage; lack of full scientific certainty shall not be used as a reason for proposing costeffective measures to prevent environmental degradation.
27 Andhra Pradesh Pollution Control Board v. MV Nayudu, AIR 1999 SC 812, pp 820, 21.

In an article28, it is commented that the precautionary approach is a principle meant to avert

environmental disaster. The Supreme Court was of the view that it is better to err on the side of
caution and prevent environmental harm than to run the risk of irreversible harm. The principle
involves anticipation of environmental harm, adoption of preventive measures, and In order to
protect the environment, the precautionary approach shall be widely applied by States according
to their capabilities. Where there are threats of serious or irreversible damage; lack of full
scientific certainty shall not be used as a reason for proposing cost-effective measures to prevent
environmental degradation. Choice of the least environmentally harmful activity. The
commentators went on to say that the Stockholm Declaration in 1972 laid emphasis on the
assimilative principle, which assumed that the environment has the capacity, to some extent, to
assimilate substances so as to render harmless the much quoted epigram the solution to
pollution is dilution. The Rio Conference in 1992 has recognized the precautionary approach as
a norm for various nations to pursue.
The precautionary approach is said to promote development of clean technology. Looking at its
acceptance in the past, the precautionary approach is said to be a principle born before it was
conceived. Indian courts started tending the principle with great care and enthusiasm as soon as
it was born. As early as in 1993, reclamation of wetlands for building a trade Centre was
prevented as the benefits of wetlands to the society could not be weighed on mathematical nicety.
Extensive, semi-intensive, and intensive aquaculture was ordered to be dismantled to prevent
possible disaster on coastal eco-system. Closure of tanneries in certain districts of Tamil Nadu
was directed with a view to preventing, among other things, serious damage to groundwater29.
In Vijayanagar Education Trust v. Karnataka State Pollution Control Board, Karnataka 30 the
Karnataka High Court accepted that the precautionary doctrine is now part and parcel of the
Constitutional mandate for the protection and improvement of the environment. The court

28P Leelakrishnan et al, Environmental Expertise and Judicial Review: Need for Strategy Shift and Law
Reform,Journal of the Indian Law Institute, (1999), vol 41, pp 357, 362-63.

29 P Leelakrishnan, Environmental Law Case Book, Second Edition, 2006, second reprint 2013, Lexis
Nexis, p 362.
30 AIR 2002 Kant 123.

referred to Nayudu cases31 which laid down that the burden to prove the benign nature of the
project is on the developer if it is found that there are uncertain and non-negligible risks.
However, Andhra Pradesh High Court made an attempt to distinguish Nayudu case32 from
Vijayanagar case.33 In Nayudu case, the Apex Court had every reason to believe that the potential
dangers to be environment were non-negligible. In the present case, the Board had not examined
whether the risk involved could be said to be non-negligible. In applying the precautionary
principle, it is absolutely necessary to identify the nature of the pollutant, and to find out whether
it would cause non-negligible environmental risk. When it refused consent, the Board did not
adopt such an analysis, nor did it make a reference to any pollutants that be emitted by the
hospital, which would have caused non-negligible risk. The court held that it is impossible to
draw inference of non-negligible danger to the environment.
Precautionary Principle and Sustainable Development:
In Narmada Bachao Andolan v. Union of India34, the precautionary principle came to be
considered by the majority judges in this case. The court took the view that the doctrine is to be
employed only in cases of pollution when its impact is uncertain, and non-negligible. The
majority is of the view that the doctrine has to be put on back burner when the impact of a
development project is certain and can be quantified. Sustainable Development means what type
or extent of development can take place, which can be sustained by nature/ecology with or
without mitigation. The Court noted that the question in the Narmada Bachao Andolan case 35 is
not concerned with the polluting industry, and the effects of the project are already known.

31 Andhra Pradesh Pollution Control Board v. MV Nayudu, AIR 1999 SC 812.

32 Ibid.
33 Vijayanagar Education Trust v. Karnataka State Pollution Control Board, Karnataka, AIR 2002 Kant
123.
34 AIR 2000 SC 3751.
35 Ibid.

Chapter 4
Judicial Pronouncement
Polluter Pays Principle: The Concept of Compensatory Damages
In Vellore Citizens Welfare Forum case36, the Supreme Court applied Polluter Pays principle
rigorously and directed polluting tanneries for payment of compensation to the affected persons
and also for payment of cost for restoring the damaged ecology.37 In this connection, Justice
Kuldip Singh, who delivered the judgment of the Court, observed:38
There are more than 900 tanneries operating in the five districts of Tamil Nadu. Some of them
may, by now, have installed the necessary pollution control measures; they have been polluting
the environment for over a decade and in some cases even for a longer period. This Court has in
various orders indicated that these tanneries are liable to pay pollution fine. The polluters must
compensate the affected persons and also pay the cost of restoring the damaged ecology.
His Lordship also explained the import of Polluter Pays principle as under:39
The "Polluter Pays Principle" as interpreted by this Court means that 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.
The case of Indian Council for Enviro-Legal Action v Union of India40, which is called the
Bichhri case, provides a typical occasion for the application of the Polluter Pays principle,
although the Supreme Court declined to award damages and advised the affected villagers to
institute civil suits in appropriate civil courts. 41 In this case a writ petition was filed under Article
36 See, AIR 1996 SC 2715.
37 Id at p 2725.
38 Ibid.
39 Id at p 2721.
40 AIR 1996 SC 1446.
41 Id at p 1468 (item no 3 of the directions issued by the Court).

32 of Indian Constitution seeking not only remedial relief against certain polluting industries
which caused pollution by toxic effluents produced by them in the course of production of H
acid, but also directions to the Central and State Governments and the State Pollution Control
Board to perform their statutory duties. It was alleged that untreated toxic waters were allowed to
flow out freely and that the untreated toxic sludge was thrown in the open and around the
complex of the industries, due to which the substances percolated into the soil, polluting the
aquifers and sub-terrainan supply of water. It was alleged that as a consequence, water in the
wells and streams had become unfit for animal and human consumption and for irrigation and
that the soil had become unfit for cultivation. The Court, having found that the allegation was
well founded, ordered closure of plants / factories / units of respondents. The Court held that the
respondents were absolutely liable to pay compensation for the harm caused by them to the
villagers of Bichhri village and surrounding areas. The Court also found that the respondents
polluting industries were operating in violation of law and orders issued by the lawful authorities
and courts.
In S Jagannath v Union of India42, the Supreme Court, relying upon the ratio laid down in Vellore
Citizens Welfare Forums case, applied the Polluter Pays principle when it required the
authority to be constituted under s 3(3)43 of the Environment (Protection) Act, 1986 to implement
the Precautionary Principle and the Polluter Pays principle. The Court directed such
authority shall, with the help of the expert opinion and after giving opportunity to the polluters
concerned to asses the loss to the ecology / environment in the affected areas and shall also
identify the individuals/ families who have suffered because of the pollution and shall asses the
compensation to be paid to the said individuals / families. The authority shall further determine
the compensation to be recovered from the polluters as cost of reversing the damaged
environment. The authority shall lay down a fair procedure for completing the exercise.44

42 See, (1997)8 SCC 462.

43 Section 3 (3) of Environment (Protection) Act, 1986, states: (1) Subject to the provisions of this Act,
the Central Government shall have the power to take all such measures as it deems necessary or expedient
for the purpose of protecting and improving the quality of the environment and preventing, controlling
and abating environmental pollution.
44 See, 1995 (6) SCALE 578 at 149.

In MC Mehta v Union of India45, which is known as Calcutta tanneries case, the Supreme Court
was called upon to issue directions to the polluting industries in Calcutta to stop discharging
untreated effluents into the river Ganga. Justice Kuldip Singh, who delivered the judgment of the
Court, relying on the ratio laid down in Vellore Citizens Welfare Forum and Indian Council for
Enviro-Legal Action cases, declared that one who pollutes have to pay to reverse the damage
caused by his acts. His lordship ordered, among other things 46, the State government to appoint
an authority who should, with the help of the PCB and other expert opinion and after giving
opportunity to the polluting tanneries concerned to asses the loss to the ecology / environment in
the affected areas. It was also ordered that the said authority should further determine the
compensation to be recovered from the polluter-tanneries as cost of reversing the damaged
environment47. The learned judge held that notwithstanding the fact that the concerned tannery
might have let up the necessary pollution control device at present, it was liable to pay for the
past pollution generated by the said tannery which resulted in environmental degradation and
suffering of the residents of the area. He issued appropriate directions for its recovery48.
In MC Mehta v Kamal Nath49, the Supreme Court applied the Polluter Pays principle and
awarded not only damages / compensation50 for the restoration of damaged environment but also
imposed exemplary damages on the respondent M/s Span Motel which disturbed and degraded
ecology by construction of the motel on the riverbed of River Beas. Justice Kuldip Singh, who
delivered the judgment of the Court, ordered M/s Span Motel to pay compensation by way of
cost for the restitution of the environment and ecology of the area 51. His Lordship directed the
NEERI, through its director, to inspect the area, if necessary, and give an assessment of the cost,
45 (1997) 2 SCC 411.
46 The Court ordered unconditional closure of all Calcutta tanneries at the present site and ordered for
their relocation.
47 See, supra fn 35 at p 433.
48 Ibid.
49 (1997) 1 SCC 388.
50 Id at p 415.
51 Ibid.

which is likely to be incurred for reversing the damage caused by the motel to the environment
and ecology in the area52.
Re: Bhavani River case Sakthi Sugars Ltd 53 illustrates the callousness on the part of Tamil Nadu
Pollution Control Board in granting consent to a sugar industry without caring for the grave
environmental consequences. In this case the Supreme Court also deprecated the Madras High
Courts hastiness in disposing of the writ petition under Article 226 of the Constitution merely on
the consent of the Pollution Control Board. The Court remanded the petition to the Madras High
Court for fresh disposal in accordance with law. In this case the Tamil Nadu Pollution Control
Board granted its consent to M/s Sakthi Sugars Ltd under s 25 of the Water Act, 1974 which was
questioned in a writ petition before the Madras High Court. The High Court disposed of the
petition merely on the consent of the Tamil Nadu Pollution Control Board. In appeal, the
Supreme Court deprecated not only the action of the PCB in giving consent without caring for
the grave environmental dangers but also the hasty disposal of the petition by the High Court.
The Court also issued interim direction for the closure of the operations of the industry.
Polluter Pays Principle: The Concept of Exemplary Damages
In MC Mehta v Kamal Nath54, the Supreme Court imposed on M/s Span Motels exemplary
damages, which were in addition to the compensation, which the motel was required to pay for
the restoration of the damaged ecology. In this context, Justice Raju, who delivered the judgment
of the Court, observed:55
Pollution is a civil wrong. By its very nature, it is a Tort committed against the community as a
whole. A person, therefore, who is guilty of causing pollution has to pay damages
(compensation) for restoration of the environment and ecology. He has also to pay damages to
those who have suffered loss on account of the act of the offender. The powers of this Court
under Article 32 are not restricted and it can award damages in a PIL or a Writ Petition as has
been held in a series of decisions. In addition to damages aforesaid, the person guilty of causing
52 Ibid.
53 AIR 1998 SC 2578.
54 AIR 2002 SC 1515.
55 Id at p 1517

pollution can also be held liable to pay exemplary damages so that it may act as a deterrent for
others not to cause pollution in any manner. We direct a fresh notice be issued to M/s. Span
Motel to show cause why in addition to damages, exemplary damage be not awarded for having
committed the acts set out and detailed in the main judgment. This notice shall be returnable
within six weeks. This question shall be heard at the time of quantification of damages under the
main judgment.
Polluter Pays Principle: Pollution Fine
It may be interesting to note that while in a few cases the Supreme Court imposed Pollution
Fine which was in addition to payment of compensation for the restoration of the damaged
environment, and damages for the victims of environmental degradation, in one case the same
Court refused to impose such a fine under Article 32 of the Constitution on the ground that fine
was imposed only as a punishment for the proved commission of an offence. Thus in Vellore
Citizens Welfare Forums56 case, Justice Kuldip Singh without bothering about technicalities
imposed pollution fine on the respondent industries.57 In a similar vein, the same Court in MC
Mehta v Union of India58, speaking through the same judge, imposed Pollution Fine which was
additional59. However, in MC Mehta v Kamal Nath 60, the same court declined to impose
Pollution Fine under Article 32 of the Constitution. Similar is the ratio laid down in MC Mehta
v Kamal Nath61.
Polluter Pays Principle: Its Socio-Economic Dimension
In Pravinbhai J Patel v State of Gujarat62, the Gujarat High Court gave new dimension to the
Polluter Pays principle as judicial tool for environmental protection. In this case several
56 See, supra, fn 39.
57 Id at p 1460.
58 See, AIR 1996 SC 2715.
59Id at p 432.
60 AIR 2000 SC 1997.
61 AIR 2000 SC 1997.
62 1995 (2) Gu LR 1210.

hundred of industrial units were found polluting the Kharient Canal, which in turn leads to Khari
River for about 15 years by discharging untreated industrial effluents into the canal. It was
alleged that due to water pollution caused by the said industries, the water in the Khari river was
no longer suitable for agriculture and that in around 11 villages in Kheda district, whose only
source of water for the purpose of agriculture was from that river, not only agriculture operations
were adversely affected by reason of pollution of the river but also the animals like cattle, sheep
etc., were also adversely affected due to consumption of the said polluted water. In the writ
petition before the High Court the petitioner further alleged that in spite of several
representations to the Gujarat Pollution Control Board (GPCB) and other authorities no action
had been taken against the polluting industries. The petitioners sought a writ of mandamus
against the State of Gujarat, the GPCB, the Gujarat Industrial Development Corporation (GIDC),
Ahmadabad Municipal Corporation (AMC) and the Gujarat Electricity Board to compel them to
perform their statutory duties and to take steps to control and curb water pollution in the Khari
river on the ground that the remiss in the performance of their duties resulted in violation of the
petitioners rights to life and personal liberty guaranteed under Article 21 of the Constitution. 63
The petitioners also claimed, among other things, compensation for the loss suffered due to air
and water pollution.

CONCLUSION
Summing up, economic solutions to the problems of externality are to internalize the external
costs of pollution. This solution became the basis of the PPP. This is the combined name of the
various economic instruments of pollution reduction. However, in economics the emphasis is on
the cost of pollution prevention and control measures while, in law the focus is on the damage
cost. Adopted by the OECD and the EC and mentioned in a number of regional and international
conventions the PPP remains as a principle of environmental policy.
63 Article 21 of the Constitution states: No person shall be deprived of his life or personal liberty except
according to procedure established by law.

The judgements of the Supreme Court undoubtedly go a long way in reaffirming the
commitment of the judiciary in protecting the environment and remedying the ill-effects of
pollution. However, the court has erred in the manner in which it has adopted the polluter pays
principle, as one of international customary law without demonstrating how the principle
actually fits into the ambit of international law.