Internal Audit Of Ecology Standards To Be Mandatory

The Union environment ministry is planning to make it mandatory for private companies to set up an internal audit committee to monitor environmental norms.

The ministry is also planning to fix responsibility regarding the environment norms at the board of director level in the company.

The ministry is also contemplating on making changes such as in the companies act for initiating this process. The board of directors would have to be regularly informed (say on a quarterly basis) on the progress of the project.

The policy would effect the environmentally sensitive industries such as chemical, cement, paper, oil and power companies which are responsible mainly for the bulk of pollution in the country.

 

Some private power producers have already been asked to set up such a committee with neutral members in anticipation of such a policy.

The ministry is also working on a package of incentives for companies which comply with the norms laid down by the government. The company would be bracketed in the fast-track category, if it satifies the minimum environmental criteria for the existing project. Under this provision, clearances for future projects would be accorded faster. The incentive package offered to a company would be based on a green rating which is to be industry-specific.

The term fast-track would be accorded only if the standard set by the company comply with the green rating concept.

The ministry wants to play a proactive role whereby it wants the industry to voluntarily come out with information by which its performance could be rated. The ministry expects the companies to disclose their performance by announcing it in their shareholders meeting. The ministry feels that this would increase the credibility of the company, which, in turn, would make industry-government interaction much easier.

Once information flows on a regular basis to the board of directors, they would be in a better position to assess and monitor the environmental impact of the project. The ministry also intends nominating representatives at the board of director level for very sensitive projects.

Proposals from the cement industry have also been invited by the ministry for laying down norms and set efficiency standards in the industry.