Supreme Court Orders Sterlite Industries to Pay Rs 100 Crore for Polluting Environment


But sets aside 2010 HC order, allows copper plant to continue

NEW DELHI: In an important ruling, the Supreme Court on Tuesday (2 April 2013) ordered Sterlite Industries, a subsidiary of mining giant Vedanta, to pay Rs 100 crore as compensation for environmental damage around its Tuticorin-based copper smelting unit in Tamil Nadu.

Sterlite_PlantDirecting the company to deposit Rs 100 crore in three months, the court said the interest would be used to improve the water and soil in the vicinity of the plant that has been affected adversely over the years.

However, this judgment will not help the company revive operations that were suspended on March 30 by the Tamil Nadu Pollution Control Board following a gas leak.

The money will be deposited with the collector of Thoothukudi district and kept in a fixed deposit in a nationalized bank for a minimum of five years. “The interest will be spent on suitable measures for improvement of the environment… (it will be spent) after consultation with Tamil Nadu State Pollution Control Board and approval of the environment secretary of Tamil Nadu,” the court said.

The Rs 100 crore fine will not shield Sterlite against other damage claims. “We also make it clear that the award of damages of Rs 100 crore by this judgment against the appellant company for the period from 1997 to 2012 will not stand in the way of any claim for damages for the aforesaid period or any other period,” the court said.

A Bench comprising Justices A.K. Patnaik and H.L. Gokhale set aside an order of the Madras High Court, which directed closure of the plants in 2010. The order was stayed subsequently and the plant was in operation till its recent closure. The Bench went by a joint report by the Central Pollution Control Board and TNPCB, and noted that it had complied with 29 out of 30 directions given by the TNPCB.

The Bench made it clear that its verdict would not come in the way of the TNPCB issuing directions to Sterlite, including one for closure of the plant, for the protection of the environment in accordance with law.

Writing the judgment, Mr. Justice Patnaik said it was for the authorities functioning under various environmental laws and rules to determine the project’s scope, and the court would not interfere with their decisions so long as the statutory process was followed.

Referring to the contention that the company had obtained stay of the High Court order through misrepresentation, the Bench said: “There is no doubt that there has been misrepresentation and suppression of material facts in the special leave petition, but to decline relief to the appellants in this case would mean closure of the plant.”

The Bench noted that the plant contributed substantially to copper production in India. Copper is used in defence, electricity, automobile, construction and infrastructure. The plant has about 1,300 employees and provides employment to a large number of people through contractors. A number of ancillary industries are also dependent on it. It generates huge revenue to the Central and State Governments in terms of excise, custom duties, income tax and VAT. It also contributes to 10% of the total cargo volume of Tuticorin port. For these considerations of public interest, it did not want to refuse relief to the company.

It fixed the compensation for damage caused to the environment from 1997 to 2012 and for operating the plant without valid renewal for a fairly long period at Rs. 100 crore. It noted that the company’s profit before tax for 2010-11 was Rs. 1,043 crore. Anything less than Rs. 100 crore would not have the desired deterrent effect on the company, the Bench said.

The order comes just after the company approached the National Green Tribunal seeking relief against the closure order passed recently by the state authorities in the gas leak case.

The apex court ruling came in a case filed by MDMK leader Gopalasamy Vaiko before the Madras HC in 1996 against the company for running the country’s fourth largest copper smelting unit without proper mandatory clearances and in violation of green norms and conditions causing damage to the environment and public health in its vicinity.

The court held Sterlite guilty of polluting the environment in breach of environmental standards and later running the unit without consent orders after the state authorities withdrew its clearances for causing harm to the plant’s surroundings.

While the court noted the company suppressed facts by claiming it has run the plant with statutory consents, it refused to direct closure saying the plant contributed substantially to copper production and generated large revenue for the government.

“The plant of the appellants contributes substantially to copper production in India and copper is used in defence, electricity, automobile, construction and infrastructure etc. The plant of the appellants has about 1,300 employees and it also provides employment to large number of people through contractors. A number of ancillary industries are also dependent on the plant.”

Adding that the factory provided substantial revenue to the government, the court said, “It (the plant) also contributes to 10% of the total cargo volume of Tuticorin port. For these considerations of public interest, we do not think it will be a proper exercise of our discretion under Article 136 of the Constitution to refuse relief on the grounds of misrepresentation and suppression of material facts in the special leave petition.”

In reaction to the apex court order, MDMK leader Vaiko said in New Delhi that he would challenge the order and plead for complete closure of the plant. He said he was not agreeable to putting lives of people at risk just to bring revenue to the government.

(The Hindu/Times of India)

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