Facilitating a trust-based business

Guneet Mayall , Upamanyu Banerjee

September 26, 2023

Facilitating a trust-based business environment: Changes to environmental laws under the Jan Vishwas Act, 2023

The Jan Vishwaas Act, 2023 (“JV Act”) aims to improve India's business environment by decriminalizing multiple statutes' penal provisions in 42 laws in the country across various sectors. The law removes imprisonment as a punishment for offenses under multiple laws and converts monetary fines to simple penalties as well as revising fines and penalties as provided in various laws. improve the overall business environment in the country by removing the fear of imprisonment for simple violations amongst businesspersons. The reduction of criminalization provisions on one hand may improve the overall business environment in the country by removing the fear of imprisonment for simple violations among businesspersons and on the other hand, may reduce the growing pendency of cases in courts thereby ensuring that the justice system can concentrate on more serious violations of laws. In this article, we will divulge the changes introduced by the JV Act, 2023 under the environmental laws.

Amendments to environmental laws

The JV Act amends four environment-related acts: The Indian Forest Act, 1927 (“IFA”); Environment (Protection) Act 1986 (“EPA”); Air (Prevention and Control of Pollution) Act 1981 (“Air Act”); and Public Liability Insurance Act 1991 (“PLI Act”) which includes substantial reduction in the monetary penalty for offences and amendment of the process of adjudication of penalties under the three environmental legislations (EPA, Air Act and PLI Act). Complaints may also be made by a person.

Changes to the consent mechanism under the Air Act

The JV Act provides for the amendment of the Air Act to give the Central Government the power to issue guidelines in partnership with the Central Pollution Control Board relating to the granting, refusal, or cancellation of consent by any State Pollution Control Board for establishing or operating industrial plants in an air pollution control area. The guidelines may also include the mechanism for time-bound disposal of applications made under the Air and may further specify the validity period of such consent so provided.

Changes to the adjudicatory mechanism under the EPA and the Air Act

The earlier version of these laws provided for the prosecution of violators before a competent court upon a complaint made by the applicable authorities which in the case of the Air Act was the respective Pollution Control Board under the Central Government or the State Government while for the EPA the applicable authorities were the notified authorities under the Central Government.

The JV Act amends the Air Act and the EPA to provide for Adjudication Officers (“AO”) of the rank of Joint Secretary to the central government or above, or an officer with the rank of Secretary to the respective State government to file complaints under the EPA before applicable courts and decide penalties under both laws. Appeals against orders passed by such appointed AOs lie before the National Green Tribunal (“NGT”) whose decisions may be appealed before the Supreme Court. The JV Act further provides the power to the AOs to file complaints before the courts in case of contravention or offences of the EPA which leads to the creation of a parallel process of enforcement and unduly broadens the power of the AOs in the process of combatting contravention of such environmental laws. The primary point of contention which arises in this framework is the purported independence of the AOs while deciding against the course of action in case of violation of environmental laws by government agencies and public sector companies. Additionally, the determination of the contravention of the Air Act requires a certain technical competence of the adjudicating authorities which the AOs may lack and the technical analysis in such cases which earlier was performed by the respective Pollution Control Board under the Central Government or the State Government and the reports of their analyses were used as evidence before courts. The JV Act states that the procedure for technical determination under the Air Act will be provided under rules which will be made for this purpose.

The JV Act, by virtue of the wide nature of responsibilities granted to the AOs also provides them with a judicial role including the power to decide the penalties which can go up to INR 15,00,000 (Fifteen lakh rupees) in case of contravention of EPA.  The JV Act mandates that the AOs base their decision regarding the contravention of the EPA on the following factors:

  • the area of the region affected by the violation and the population of such area;
  • the term of the violation as well as frequency in case of multiple violations;
  • the vulnerability of the affected population;
  • the gain of the violator from the purported violation.

Establishment of an Environmental Protection Fund

Separately, the JV Act provides for the establishment of an Environmental Protection Fund education, awareness, and research for environmental protection, as well as the expenses of implementing these laws. This fund is in addition to the funds established under the respective Pollution Control Boards under the Central Government or the State Government for purposes of expanding environmental awareness and implementing environmental laws in India. Additionally, there exists no indication from the relevant governmental authorities regarding the shortage of finances within the corporations of these funds so established. Thus the question which arises in this instance is the purported requirement of the establishment of an additional fund with overlapping responsibilities which may only lead to confusion regarding the financial basis for conducting environmental protection activities within regulatory circles.

Amendment to the nature of penalties under the Indian Forest Act

Another environmental law which is amended by the JV Act is the Indian Forest Act, 1927 (“IFA”). The earlier version of the IFA criminalised actions of unauthorised access to areas protected under the IFA as well as court-mandated compensatory reforestation in areas affected by unauthorised felling of trees. The JV Act as part of efforts to streamline the process of allowing access to protected areas has done away with the provision of imprisonment and has replaced the penalty with a summary fine for such instances of contravention. The primary concern with this change is that such summary fines may lead to weakening protection against the contravention of the IFA, such as the unauthorised felling of trees in protected areas.

The JV Act also changes the scope of policies required to be undertaken under the terms of the PLI Act as well as decriminalising the penal provisions of the law in case of minor non-compliance such as the non-filing of reports. The JV Act also provides for the creation of a corpus fund for depositing penalties under the PLI Act and the Water Act as received from violators which will subsequently be disbursed amongst those affected by the violation of the norms.

Conclusion

With an aim of ease of doing business and ease of life, it would be interesting to see how the newly introduced statute will strike a balance between improving the business landscape in the country without compromising the protection of environmental resources in the country.

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