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Has Adani’s non-compliance of law been condoned by the Environment Ministry?

July 4, 2016


The recent news regarding the cancellation of a fine imposed on the APSEZ (Adani Ports and Special Economic Zone Limited) for environmental non- compliance by its Waterfront Development project (WDFP) in Mundra, Gujarat has set off a series of clarifications by the Ministry of Environment, Forests and Climate Change.

The Ministry’s institutional response to this project will have a bearing on how corporate non- compliance of environment law is legally treated by environmental regulators.

However, this issue and the clarifications offered by the Ministry cannot be understood without the history of the project’s violations that have been recorded by several teams as well as official authorities.

The CPR-Namati Environment Justice Program works on understanding the regulatory and institutional challenges to enforcement of environmental laws. As part of its ongoing work, it has tracked the regulatory history of this project, which is shared below:​

The conditions under which this project came to be set up in this part of the Kutch coast have been reported as a favour to the company by the then political party in power in the state. The project was granted environmental clearance under the Environment Impact Assessment Notification in 2009. After the project was established, the Environment Ministry issued two show cause notices in 2010 and 2013. These raised issues of mangrove destruction, illegal siting of project staff’s residential township and non-compliance of other conditions of the environmental clearance.

In 2012, the CPR- Namati Environment Justice Program, that works on issues of environmental compliance, collaborated with the Mundra Hitrakshak Manch (Forum for the protection of Mundra) to undertake a research study of the environmental compliance of the project. The report titled ‘Closing the Enforcement Gap: Findings of the Community Led Groundtruthing of environmental violations in Mundra, Kutch’ was published in 2013. The report presented detailed evidence on non-compliance using satellite images, photographs, impact studies and local testimonies. This was officially submitted to the Environment Ministry.

Even as the study was being done, the Central government set up a committee headed by Centre for Science and Environment’s Sunita Narain in September 2012. It was to look into the complaints received by the ministry on environmental violations and the “severity of issues involved”. From what is known publically, the Committee undertook field visits and spoke to affected people as well as the APSEZ officials. It put out its report in 2013 which stated on page 81 that ‘there is incontrovertible evidence of violation of EC condition and non-compliance…’. The report took the stance that ‘it is not possible or prudent at this stage to halt or cease its operations.’

Articles in The Hindu and The Economic Times pointed out that the report did not provide any methodology or legal basis for calculating the fine of Rs 200 crores and it called this fine an ‘Environment Restoration Fund’. The damage caused due to the violations was not only to the environment, but also to fishing families, coastal pastoralists and farmers who had suffered livelihood and economic hardships for years. Along with being major legal offences, violations of environment law lead to social, economic and psychological costs borne by scores of poor and vulnerable citizens in whose neighbourhoods these projects operate.

This WFDP is located within Adani’s SEZ (Special Economic Zone) in Mundra. On 13 January, 2014, the Gujarat High Court (HC) observed that the operations of the SEZ were being carried out without an environment clearance. The HC questioned the Adanis’ stand on operating with a ‘deemed clearance’. The High Court also directed the Ministry to take a decision on whether environment clearance should be granted to the SEZ post facto. In July, 2014, this approval was granted.

Setting aside the two show cause notices and the observations of the Committee regarding repeated violations, the Ministry raised doubts over whether the violations had ever occurred.

In file notings received through a Right to Information (RTI) application in 2015, the Ministry concluded that the APSEZ is not a violator. The Ministry concluded that while mangrove destruction and other damage had taken place it could not be attributed to the company. The RTI documents reveal that the Company disagreed with the violations observed by the Committee. The RTI documents can be accessed here.

The recent article that stated that the Ministry has ‘dropped’ the penalty has sent it into a huddle. The Ministry is reported to have issued a statement that they will impose an ‘open ended financial commitment’ that could be greater than the Rs 200 crores fixed by the Narain Committee as well as ensure that restoration of the landscape is undertaken

It remains unclear how this fine will be computed and whether it will be legally tenable when the 2009 project approval letter emphatically states that non compliance of clearance conditions can lead to the revocation of the environment clearance.