Polluter Pays Principle: Background

Out of 180 countries, India was ranked at 177th spot, in the recently released Environmental Performance Index (EPI). EPI is prepared jointly by Yale University and Columbia University in collaboration with World Economic Forum (WEF). These metrics provide a gauge at a national scale of how close countries are to established environmental policy goals. The EPI thus offers a scorecard that highlights leaders and laggards in environmental performance, gives insight on best practices, and provides guidance for countries that aspire to be leaders in sustainability.

The problem of environmental pollution started with the advent of men on earth and now has become extremely acute both in developed and developing places. From water management to air pollution, managing environmental problems efficiently requires well-designed public policies and coordination among various stakeholders. With rising concerns for climate change and population growth, the environmental issues are becoming more complex and precarious. This is when the “polluter pays” principle comes to the picture.

Plato, a Greek Philosopher observed,

“If anyone intentionally spoils the water of another … Let he not only pays damages but purify the stream or cistern which contains the water.”

Many countries have adopted the polluter pays principle. It basically renders the polluter responsible for the damage it causes to the environment. It requires that the costs of pollution should be borne by the entity which profits from the process that causes pollution. In order to satisfy the polluter-pays principle, the entity that pollutes should compensate those who suffer from this pollution for the damages it causes. This principle is well accepted in international law and in the municipal legal system. The environmental court of India also known as National Green Tribunal (NGT) functions primarily on this principle.

Two aspects are highlighted in this principle; on one side, it is used as a compensatory mechanism, on the other, and it is used as a preventive mechanism. Compensatory, because the polluter should pay for the harm inflicted by him on the health and environment and preventive, because heavy penalty may be imposed upon the polluters so that it creates the deterrence in the minds of other occupiers.

The polluter pays principle which founds the basis of many environmental laws in force in the priority countries applies for the SWM sector and constitute one of the fundamental principles of Sustainable Solid Waste Management (SSWM).

SSWM operates on the basis of four concepts:

  1. Waste minimization at the source.
  2. Optimization of waste collection.
  3. Encourage recycling.
  4. Aim at the best environmental waste treatment options for final waste.

Application of Polluter Pays Principle in India

Our judicial system has paid attention towards the concept of ‘sustainable development’ through various judicial precedents and necessarily acting positively through judicial activism upholding few principles like ‘polluter pays principle’ and ‘precautionary principle’ and so on marking it to be essential features of sustainable development.  The Indian Judiciary has incorporated the polluter pays principle as being a part of the environmental law regime is evident from the judgments passed in the past.

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

The Apex Court in another landmark judgment of Vellore Citizens’ Welfare Forum vs. Union of India 1996(5) SCC 647 interpreted the meaning of the polluter pays principle as the absolute liability for harm to the environment extends not only to compensate the victims of the pollution but also the cost of restoring the environmental degradation.

In another landmark judgment of M.C. Mehta v. Kamal Nath & Ors. (1997) 1 SCC 388, the Apex Court held that: “Liability to pay damages on the principle of ‘polluter pays’ in addition to damages, exemplary damages for having committed the acts set out and detailed in the main judgment.”

Judiciary has played a predominant role in comprising equilibrium between developmental advancement and sustainable development forming an environmental ‘justice’.

What’s next?

Although the polluter pays principle has helped to mitigate the damage being caused to the environment to some extent, the provision remains an inadequate remedy as ambiguity persists regarding a clear identification of the actual polluter and mechanism for deciding the amount of compensation. The polluter may be a part of the “production chain” and it is difficult to impose the liability on such polluter when the courts consider the parameters of extent and contribution of causing the pollution. Due to the absence of any straight jacket formula for calculating the losses, the adequacy of the compensation amount is another issue which has resulted in criticism of this environmental principle.

To reconcile the polluter pays principle with the goal of environmental conservation, it is necessary to re-examine the current understanding of harm, environmental costs, and human costs and benefits relating to the environment. A step in the right direction is the development of a new institutional and economic approach to legal analysis.

(Author is working with Research and Communications team at SDC Foundation. He tweets at stoic-gautamkr