Promoters' green policy to decide fate of big projects

Big industrial projects may face a hurdle in getting clearances if their promoters do not have a sound corporate environmental policy (CEP) in place.

The environment ministry has decided to link clearance to projects with a company’s CEP. A ministry official said just like an internal financial audit, a green audit would protect stakeholders.

The ministry has asked major companies, especially in coal, steel, cement and petroleum sectors, to have a CEP in place.

The ministry, in an internal note, has asked its statutory committees to check a company’s CEP before clearing its projects.

“For all project proposals at the appraisal stage, environment appraisal committees (EACs) and forest advisory committees (FACs) will deliberate on aspects related to CEP, especially its adequacy and comprehensiveness,” says the note.

An EAC grants environmental clearance, whereas an FAC clears projects in forest areas.

The note said CEP would have to be part of the initial approval for conducting impact studies of projects submitted for clearance.

“The move will reduce the number of violations,” said a ministry official, adding the idea behind the move was to integrate environmental concerns with corporate policies.

It would be a system of self-regulation, he said.

The official said companies would have to designate a person responsible for implementing its CEP as well as the conditions imposed by the government. The companies will have to report violations on their websites. Also, the board of directors will have to be updated on the company’s green policy and its violations, if any.

The Confederation of Indian Industry (CII) welcomed the move. “All ISO 14000-compliant companies have environment management policies. This will be an extra burden. Still, a direction from the government is welcome,” said Seema Arora, executive director, CII-ITC Center of Excellence for Sustainable Development.

The industry body said the government should recognise companies with good policies.

“While considering projects for approval, the government should fast-track clearance for companies with good policies,” she said.

Welcoming the initiative, the Chief Operating Officer of Vedanta Aluminum, Mukesh Kumar, said, “Most big organisations have environmental policies in place. The ministry should give weight to a company’s past performance while giving clearance. Companies which have been environmentally responsible should get faster clearances.”