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Lafarge judgment stabilises environmental clearance process

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Deepto Roy,

First published in  www.mylaw.net

Link: http://mylaw.net/Article/Lafarge_judgment_stabilises_environmental_clearance_process/

Published on: July 18,2011

 The recent decision (July 6, 2011) of the Supreme Court of India relating to Lafarge Umiam Mining Private Limited (“Lafarge”) (T.N. Godavarman Thirumulpad v. Union of India, Interim Applications 1868, 2091, 2225 to 2227, 2380, 2568, and 2937 in W.P. No. 202 of 1995) has been a breath of fresh air in the increasingly murky world of Indian environmental jurisprudence. In fact, the Ministry of Environment and Forests (“the MoEF”) of the Government of India has hailed it as a “landmark judgment which has set the stage for further reforms in environmental governance”.

The facts of the case are complicated, and I would attempt to summarise them in brief. Lafarge through a subsidiary had set up a two million tonne per year cement plant at Chhatak in Bangladesh. The limestone for the cement plant was proposed to be delivered from limestone mines in Nongtrai, which is in the East Khasi Hills district in Meghalaya. The limestone would be sent across the India-Bangladesh border on a conveyor belt (7.2 km of which was in the Indian side of the border).

Process of obtaining environmental approvals

Lafarge accordingly commenced the process of obtaining the necessary environmental approvals from the various authorities in 1997. As part of these applications, Lafarge made representations that the limestone mines did not involve the diversion of forest land and in support provided letters from theKhasi Hills Autonomous District Council (“the KHADC”), the local authority with jurisdiction over the Nongtrai division, and a certificate from the Divisional Forest Officer (“the DFO”) of the Khasi Hills Division stating that the mining site was not in the forest area. Lafarge also stated that limestone mines had existed in Nongtrai since the 1850s and that several unorganised small players were already exploiting the limestone reserves.

After several rounds of queries from the MoEF and consequent responses from Lafarge, the MoEF finally gave environmental clearance for the mines in 2001 and Lafarge commenced mining operations in Nongtrai.

Trouble commences

Trouble started in 2006 when the Chief Conservator of Forests (“the CCF”) for Meghalaya wrote to the MoEF stating that he had visited the mining area and noted that the mining site was surrounded by thick natural vegetation. The CCF expressed the view that the land where the mine was located was forest land and accordingly Lafarge could not carry out operations without the necessary forest clearance.

Despite Lafarge’s protest that no forest land had been diverted for mining purposes, the MoEF directed Lafarge to obtain forest clearance under the Forest Conservation Act, 1980 (“the FCA”), and the interim applications before the Supreme Court arose from Lafarge’s application for forest clearance.

The essential question before the Court was whether Lafarge had obtained the initial environmental clearances by misrepresenting the nature of the forest land, and if such were to be the case, whether the application for forest clearance was being presented as a fait accompli and should be rejected.

The Court’s judgment

The judgment is very important for two reasons; firstly it clarifies the extent of judicial review in a situation where environmental clearances had already been granted and where questions are subsequently raised with respect to the validity of the process, and secondly it lays down a set of comprehensive guidelines for future projects that involve both forest and environmental clearances. It would not be possible to examine both aspects in one post, so this post will deal with the Court’sdetermination on judicial review. My next post would examine the guidelines that the Supreme Courthas laid down for future projects, in particular, the interesting concept of a national environmental regulator.

Going back to the question of whether the project involved the use of forest land, and as such whether Lafarge had misrepresented the nature of the land in obtaining the various clearances, Lafarge maintained that both the KHADC and the DFO had certified that the land for the mine did not involve diversification of project land and therefore there was no obligation on them to obtain clearance for forest land. Their opponents, specifically the Amicus Curiae appointed by the Court, and the counsel for the Shella Action Committee argued that the MoEF’s decision was vitiated by misinformation and non-application of mind and that the Court should order that the mines be closed. The SAC also argued that the forest cover in the mining area was tropical deciduous forest, and in terms of India’s Forest Policy, 1988, no development could be permitted in such forests.

The Court held that the protection of the environment is an ongoing process and therefore “across-the-board” principles cannot be applied. Courts would have to examine the facts of each case on whether the project should be allowed or not. The Margin of Appreciation Doctrine would apply in cases of deciding whether a governmental authority had erred in granting environmental clearance.

The Court placed great emphasis on the rights of locals to determine the value of conservation of the environment and the KHADC’s letters as well as subsequent findings that the Lafarge project resulted in significant gains for the local community were to the Court’s mind, evidence that the local community had taken a conscious decision to support the Lafarge project.

Extent of judicial review

The Court held that the constitutional doctrine of proportionality should apply to environmental matters as well and therefore decisions relating to utilisation should be judged on the well established principles of natural justice, such as whether all relevant factors were taken into account at the time of coming to the decision, whether the decision was influenced by extraneous circumstances, and whether the decision was in accordance with the legislative policy underlying the laws that governs the field. If these circumstances were satisfied, the decision of a government authority (in this case the MoEF) would not be questioned by the Court.

On the basis of these principles, the Court concluded that the accusations of misrepresentation and fraud by Lafarge were unfounded. The Court also concluded against the contention that there had been no application of mind on the part of the MoEF. Lafarge was allowed to continue mining operations.

The importance of this section of the judgment is that the Court lays down a clear principle that if a project developer complies with the specified procedure for obtaining environmental clearances and there is evidence on record that the entity granting the clearance had done so after due consideration, such clearances would not be reversed to the prejudice of the project developer. This gives some much needed stability to the environmental clearance process and both project developers and environmental activists would definitely benefit from this consistent approach.

My post next week will examine the guidelines laid down by the Supreme Court for future projects looking for environmental and forest clearance.


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