Draconian draft

OUTLOOK/ LOOK BEFORE YOU LEAP

Proposed environment legislation will hurt SSIs.

The proposed legislation is in fact likely to create an environment exactly opposite of its own stated objectives. It is likely to threaten the competitiveness of industry especially SSI units, with a cumbersome procedure and that too now involving them more and more in having to deal directly with Delhi rather than their respective local State governmental pollution control agencies!

The draft Gazette notification (No. 992) dated September 15, 2005, whenever finalised, will supersede the Environment Impact Assessment (EIA) notification of January 27, 1994. The industry all across India as well as all sectors without exception have opposed these provisions.

The objective of changing the earlier 1994 notification was to & I quote: Cut delays in processing the project proposals for environmental clearance (EC); To simplify the process; To bring in greater transparency; To professionalise environmental scrutiny; and To decentralise decision-making.

The most contentious proposal is that for any changes in the product mix of an existing unit manufacturing scheduled items, one has now to seek prior environmental clearance from MoEF, GoI Delhi, which may take eight months or more!

This will affect SSIs particularly in view of their managerial limitations in dealing with aspect. In today's competitive global business environment, frequent changes in product mix or improved formulae are essential for remaining competitive.

Clearly this single most draconian provision will decapitate the competitiveness of Indian industry. Life periods of products are getting shorter and shorter and this dynamics is a reality in today's intensely innovative world.

Likewise for undertaking modernisation or expansion activities, prior EC is required and this has the potential to affect the entire industry as it upgrades, modernizes and remains technologically competitive.

The assumption that modernisation and marginal expansions will result in greater adverse environmental repercussions is based on a totally wrong premise. The ground reality is quite the opposite. Almost all the modernisation efforts, lead to abatement in pollution through improved processes, improved yields, waste reduction and more efficient use of raw materials and resources.

The current approval system exempts all changes arising out of modernisation and expansion plans from seeking prior EC if the pollution load discharged into the environment does not exceed the existing norms and levels. For whatever inexplicable reasons such an environmentally sound provision has been done away with. It should be restored.

Several NGOs have also criticised the draft proposals on grounds that the implicit assumption is that delays are due to a laborious process involving community participation and tedious public hearing.

However, their view is often that the delays are the result of "bureaucratic centralisation of the entire process at MOEF Delhi, the poor quality of EIA reports, lack of transparency in the process and lack of administrative and technical capacity within the government to assess projects promptly".

The fundamental reason why the current EIA process fails is that it is designed to justify projects irrespective of their social and environmental impact. It is no different in the proposed notification.

Till the time EIA reports remain what they are, one can be rest assured that public protest and litigation will remain an inherent part of the process, and hence, lead to more delays. Unless this structural change is bought in our regulatory regime, implementation will remain poor and ineffective. Either way, the industry and custodians of the environment will continue to suffer.

The writer is advisor, Crisil, Zydus Cadila and Suzlon