Evolution of regulatory frameworks

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Environmental Issues

The environmental acts and notifications, as they evolved, initially, laws were enacted for environmental concerns related to water, air, noise etc, as and when they became areas of concern. Later, an integrated law was passed by the government. As the number of projects and private investments increased, bureaucratic delays became a concern. Laws were modified to overcome these delays. Between 1980 and 1998, nine Acts, Bills, and Amendments related to environment were enacted. These included the Forest Conservation Act 1980, the Environment Protection Act 1986, the National Environment Appellate Authority Act 1997, and the Coastal Regulation Zone notification 1991.The Environment Protection Act (EPA) 1986 came into existence soon after the Bhopal gas tragedy. It became umbrella legislation, and attempted to seal the existing gaps in the law. It empowered the central government to take measures to protect and improve

the quality of the environment, by setting standards for emissions and discharges, by regulating the location of industries, and by protecting public health and welfare (EPA,1986).The need for the Environmental Impact Assessment (EIA) was formally recognized at the Earth Summit held at Rio de Janeiro in 1992. In India, the EIA Notification was enacted in 1994, with the EPA as its legislative foundation (MoEF, 2008). The Act has been amended in 1997, 2006, and 2007. The process of getting the clearances as per the EIA Act is illustrated in Figure 3. Thirty-two categories of developmental projects require EIA approval (Table 2). In addition, all developmental projects, whether or not mentioned in the schedule, and if located in an environmentally fragile region, must obtain clearance from ministry of Environment and Forest (MoEF), a central government entity set up in 1985.

Prior to this clearance, they must also obtain clearance from the State Pollution Control Board (SPCB). If the location involves forestland, a No Objection Certificate (NOC) shall be obtained from the State Forest Department (SFD). Both SPCB and SFD are the state entities functioning in the geographical region where the project exists. Over the years, regulations have been simplified with an aim to reduce the total time required for the approval process. The simplifications include reducing the number of interfacing agencies and approvals, and allowing parallel activities for clearances. As per the EPA Amendment Act 2007, environmental clearance for project proposals were to be granted usually within the mandated time frame of 120 days from the date of receipt of complete information from the project authorities. The project clearances had been delayed due to non-submission of the requisite information.

Some of the steps taken to expedite the process included (Wildlife Protection Society, 2008):

  • A time limit of 90 days for completing appraisals, 30 days for communicating the decision, and 60 days for completing the public hearing by SPCB was fixed.
  • The investment limit for a project requiring MoEF clearance was raised from Rs 500million ($ US 10 billion) to Rs 1000 million ($ US 20 billion) for new projects.
  • The requirement of public hearing for Small Scale Industries (SSIs) located in industrial areas/estates. These include widening and strengthening of highways, offshore exploration activities beyond 10 km (6 mi) from the nearest habitat, mining projects of major minerals with lease upped 49 acres (20 hectares), modernization of existing irrigation projects and units to be located in Export Processing Zone (EPZ) and Special Economic Zone (SEZ).
  • The requirement of the EIA report for pipeline projects was dispensed with.
  • NOC/consent to establish was not insisted upon at the time of receipt of the application for environmental clearance.
  • Authority was delegated to the state governments for granting environmental clearance for certain categories of thermal power projects.

Land Acquisition Issues

The land acquisition policy has experienced less number of modifications in the Act. The prevailing laws related to land acquisition are: (i) Land Acquisition Act of 1894, (ii) The National Highways Act of 1956, (iii) National Policy on resettlement and Rehabilitation for Project-Affected Families of 2003, and (iv) State government policies (few state governments have special policies).

The Land Acquisition Act of 1894 empowered state governments to acquire land for any public purpose project. It provides three methods for arriving at the value of land, which were: (i) government approved rates, (ii) capitalized value of average annual income from the land, and (iii) prevalent market rate based on the land transactions data. The process of land acquisition under this Act is illustrated ion Figure 4. As the figure shows, much depended on the District Collector's satisfaction. The National Highways Act of 1956 had provisions for acquiring land through a competent authority (a person authorized by the central government by notification in the official Gazette). Under the Act, publication of the intent of the government to acquire land, surveys, hearings of objections, and the declaration of acquisition were to be completed within a year. This Act reduced the time frame significantly. This Act included provisions for compensation to only the title holders based on the market value of the land, additional payments for trees, crops, houses, or other immovable properties, and payments for damage due to severing of land, residence, or place of business. The National Policy on Resettlement and Rehabilitation for Project-Affected Families of 2003 provided additional compensation to project-affected families, over and above the provisions of the Land Acquisition Act. It recognized the multipurpose use of land by both title holders and non-title holders of the land. State laws varied in terms of their Compensation package and the definition of project affected people to some extent.

Poor compensation and undervalued market price of land have led to many disputes by the affected population. The undervaluation was as high as four to ten times, due to both regulatory arbitrage (government has to provide clearance for land use change) and information asymmetry (title holders may be difficult to identify due to poor record keeping) (Morris and Pandey 2007). As of November 2008, the central government was considering the modification of the prevalent Land Acquisition Act by modifying the definition of “public purpose,” increasing the compensation package, imposing restrictions on non-used land, and simplifying the process of dispute resolution.

Direction of Movement

Both environmental and land acquisition Acts were moving in the direction of process simplification and speedier response. However, the Acts also tried to retain enough restrictions so that no compromise was made on the environment and the livelihood of the affected people. In the next section, we provide details of two projects to better understand the implementation aspects, derive key findings, and to suggest steps for further Improvement.

The Process of Land Acquisition

The difficulties that come in the process of Land Acquisition in India are immense, given the population density and the type of land use in the country. This is evident from the fact that the fundamental issue in a number of top stories in the past few years has been the Process of Land Acquisition; be it Narmada Bachao Andolan or the recent Nandigram issue. With number of State Governments demarcating lands as Special Economic Zones the problem just is going to get worse. The evolution of Law of Land Acquisition as it exists today in various forms in different statutes in India has undergone an evolution in the last decade. Originally the wishes of owners of property were totally irrelevant, but at present, the law tries to provide various provisions for objections and alternative remedies in case of inadequacy of compensation.

In English Law the concept is known as the Law of Compulsory Purchase and under the United States Law it is known as the Power of Eminent Domain. This law empowers the state, (as an exception to the general rule) to compel an owner of the property to submit the property to the state or any agency or an entity authorised by the state because the same is required for the use of the state or such an agency or entity of the state. The concept that underlines such an act and the rationale behind such an act lies in the concept of Utilitarianism which emphasis on the fact that community good is paramount to the right of individual to hold property. The underlining principle of Land Acquisition, Power of Eminent Domain or the Law of Compulsory Acquisition whatever it may be called can be summarised by the legal maxim salus propuli est suprema lex, meaning welfare of the people is paramount in law.

Compulsory acquisition of property involves expropriation of private rights in the property, it is a restraint on the right of private owners to be able to dispose off property according to their wish. The Law of Land Acquisition is intended to legalise the taking up, for public purposes, or for a company, of land which is private property of individuals the owners and occupiers, and pay equitable compensation therefore calculated at market value of land acquired, plus an additional sum on account of compulsory character of acquisition.

The Constitutional Framework

Originally the Constitution of India consisted of provisions under Article 19(f) and Article 31 which constituted Right to Property. But there were number of difficulties that the state was confronted with, Right to property, Articles 14, Articles 19 and Article 31 read in tandem by the Courts proved to be anti developmental, as the courts struck down various acts of the state. In a number of cases the courts declared the reforms initiated by the state as being ultra vires, which hampered the development by means of growth of infrastructure which was essential for development soon after the independence. It was because of the difficulties in the functioning of the right to property that had been brought to light by the judicial decisions the Constitution (First) Amendment Act, 1951 was enacted and the Right to Property was done away with. Article 31(A) which was enacted categorically states that no law which provides for acquisition by the state of an estate can be held void as being ultra vires Article 14 or Article 19. It also provided for payment of compensation at a rate not less than market value of the property. Acquisition and Requisition of property falls in the concurrent list, which means that both the centre and the state government can make laws on the matter. There are a number of local and specific laws which provide for acquisition of land under them but the main law that deals with acquisition is The Land Acquisition Act, 1894. The law was enacted by the British government and by virtue of The Indian independence (Adaptation of Central Acts and Ordinances) Order, 1948 continues to exist as the law of land acquisition in India. Given the fact that Land Acquisition falls under the concurrent list both the State Government and the Central Government have amended the law, evolving it with time and according to the local needs.

Land can be acquired either by the state or the central government for the purposes listed under state and central list respectively unless the central government delegates the task to the state government under article 258(1) of the Constitution. The term “appropriate government” in the act would imply the government weather centre or state that issues a notification under section 4 to acquire the land.

Constitutionality of various sections of the Land Acquisition Act has been considered as being in violation of Article 19 and 31 of the constitution as being confiscatory in nature and it is sought to deprive appellants of their lands.

Public Purpose

Article 31(2) categorically states that a land can be acquired by the state only for Public Purpose. Broadly speaking, public purpose would include a purpose, in which the general interest of the community, as opposed to a particular interest of the individual, in generally and vitally concerned. In a generic sense the expression public purpose would include a purpose in which where even a fraction of the community would be involved. It has been identified as a work from which public in general would derive benefit or be benefited. Anything which is useful to the public, in the sense that it confers some public benefit, or conduces to some public advantage, is a public purpose.

It is the requirement of public purpose that is determining factor on the question weather or not a particular land should be acquired, and the considerations of hardships to the individuals cannot outweigh the question of public demand. Section 3(f) of The Land Acquisition Act defines public purpose as the expression “public purpose” includes- (i) the provision of village-sites, or the extension, planned development or improvement of existing village-sites; (ii) the provision of land for town or rural planning; (iii) the provision of land for planned development of land from public funds in pursuance of any scheme or policy of Government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned; (iv) the provision of land for a corporation owned or controlled by the State; (v) the provision of land for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities, or to persons displaced or affected by reason of the implementation of any scheme undertaken by Government, any local authority or a corporation owned or controlled by the State; (vi) the provision of land for carrying out any educational, housing, health or slum clearance scheme sponsored by Government or by any authority established by Government for carrying out any such scheme, or with the prior approval of the appropriate Government, by a local authority, or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any corresponding law for the time being in force in a state, or a co-operative society within the meaning of any law relating to co-operative societies for the time being in force in any State; (vii) the provision of land for any other scheme of development sponsored by Government or with the prior approval of the appropriate Government, by a local authority; (viii) the provision of any premises or building for locating a public office, but does not include acquisition of land for companies.

The expression Public Purpose is not to be strictly construed under Section 3(f) of Land Acquisition Act, it is an inclusive definition of public purpose and from time to time the courts have held different purposes to be Public Purpose. It is not possible to give an exact and all-embracing definition of public purpose.

Public Purpose includes the following aims:

  1. In which general interest of the community, or a section of the community, as opposed to the particular interests of the individuals, is directly or vitally concerned;
  2. Which would preserve or promote public health, comfort or safety of the public, or a section of it, weather or not the individual members of public may make use of the property acquired;
  3. Which would promote public interest, or tend to develop the natural resources of the state;
  4. Which would enable department of the government to carry on its governmental functions;
  5. Which would serve the public, or a section of it, with some necessarily or convenience of life, which may be required by the public as such, provided that the public may enjoy such service as of right; or
  6. Which would enable individuals to carry on a business, in a manner in which it could not be otherwise be done, if their success will indirectly enhance public welfare, even if the acquisition is made by a private individual, and the public has no right to any service from him, or to enjoy the property acquired; or
  7. If the use to which the property would be put, is one of the widespread general public benefit not involving any right on the part of the general public itself, to use the property or;
  8. Which would result in an advantage to the public; it is not necessary that the property, or the work upon it, should be available to the public as such; the acquisition may be in favour of individuals, but, in furtherance of scheme of public utility, which would result in enhancement of public welfare.

One of the test of public purpose is if the purpose would satisfy the expenditure of public funds and in number of judgements courts have said that government is the best judge of public purpose. The declaration of public purpose by the government is final except if there is a colourable exercise of power. To allege mala fide or colourable exercise of power of eminent domain the facts or grounds should be pleaded in support, which would show at least some nexus between the party for whose benefit the power is sought to be exercised and the authorities of the state which could support a reasonable suspicion that there has been an improper exercise, of such power exceeding the ambit of eminent domain as to constitute a fraud. The power to select the lands is left to reasonable discretion of the government and the courts cannot interfere in this regard. The view held by court is that a declaration under Section 6 is a conclusive evidence of public purpose and unless it is shown that there has been a colourable exercise of power courts cannot go on to look weather it is a public purpose or not.

With the march of civilization, the notions as to the scope of the general interest of community changes and widens, with the result that old and narrower notions as to sanctity of private interest or individual no longer stem the forward flowing tide of time and give way to broader notions of general interest of the community.

The Process of Land Acquisition

For the purposes of Land Acquisition Act of proceedings is carried on by an officer appointed by the government known as Land Acquisition Collector. The proceeding under the Land Acquisition Collector is of an administrative nature and not of a judicial or quasi judicial character. When a government intends to occupy a land in any locality is has to issue a notification under Section 4 in the official gazette, newspaper and give a public notice which entitles anyone on behalf of the government to enter the land for the purposes of digging, taking level, set out boundaries etc. The notification puts forward the intention of the government to acquire and entitles government officials to investigate and ascertain weather the land is suitable for the purpose.

The section also makes it mandatory for the officer or person authorised by the government to give a notice of seven days signifying his intention to enter any or building or enclosed court in any locality. This is a mandatory provision of the process of land acquisition. An officer or authorised person of the government has to tender payment for all necessary damage, and dispute all disputes to insufficiency of amount lie to the collector. Under Section 5(a) any person interested in land which is notified under section 4 (who is entitled to claim an interest in compensation) can raise an objection, in writing and in person. The collector after making inquiry to such objections has to forward the report to the government whose decision in this respect would be final. After considering such report made by the collector under section 5(a) the government may issue a declaration within one year of the notification under section 4 to acquire land for public purposes or company, this declaration is a mandatory requirement of the acquisition.

After the declaration under Section 6, collector has to take order from the appropriate government weather state or central for the acquisition of land under section 7. The next step in the process of acquisition is that collector has to cause land to be marked out, measured and appropriate plan to be made accurately, unless it is already done. Requirement of this section deals only with approximation and does not require exact measurement. An important process that takes place under this section is demarcation which consists of marking out boundaries of land to be acquired, either by cutting trenches or fixing marks as posts. Object is to facilitate measurement and preparation of acquisition plan, but also let the private persons know what land is being taken. It is to be done by requiring body that is the government department or company whichever be the case. Obstruction under Section 8 and Section 4 are offence punishable with an imprisonment not exceeding one year and with fine not exceeding fifty rupees.

Section 9 requires the collector to cause a public notice at convenient places expressing government's intention to take possession of the land and requiring all persons interested in the land to appear before him personally and make claims for compensation before him. In affect this section requires collector to issue two notices one to the locality of acquisition and other to occupants or people interested in lands to be acquired, and it is a mandatory requirement.

Next step in the process of acquisition requires a person to deliver names or information regarding any other person possessing interest in the land to be acquired and the profits out of the land for the last 3 years. It also binds the person by requiring him to deliver such information to the collector my making him liable under sections 175 and 176 of the Indian Penal Code. The object of this step is to enable the collector to ascertain the compensation by giving him a vague idea.

The Final set of collector's proceedings involve an enquiry by the collector into the objections made by the interested persons regarding the proceedings under section 8 and 9 and making an award to persons claiming compensation as to the value of land on the date of notification under section 4. The enquiry involves hearing parties who appear with respect to the notices, investigate their claims, consider the objections and take all the information necessary for ascertain the value of the land, and such an enquiry can be adjourned from time to time as the collector thinks fit and award is to be made at the end of the enquiry. The award made must be under the following three heads:

  • Correct area of land
  • Amount of compensation he thinks should be given
  • Apportionment of compensation

Section 11 makes it obligatory on the part of the collector to safeguard the interests of all persons interested, even though they might not have appeared before him. In awarding compensation the Land Acquisition Collector should look into estimate value of land, give due considerations to the other specific factors. Value of the property in the neighbourhood can be used as criteria. The award should be made within 2 years.

Environmental Acts and Notifications in India

The first environment related Act was the Easement Act, 1882 which allowed private rights to use groundwater. The Indian Forest Act, 1927 was enacted to consolidate the laws related to forests. The Factories Act, 1948 ensured the welfare of workers and its application in hazardous processes. The River Boards Act, 1956 enabled the setting up of a central government advisory River Board to resolve issues in inter-state cooperation. Subsequently, the following acts were passed: Wildlife Protection Act, 1972; Water (Prevention and Control of Pollution) Act, 1974; Air (Prevention and Control of Pollution) Act, 1981; Forest (Conservation) Act, 1980; and Atomic Energy Act, 1982.The Environment (Protection) Act, 1986 (EPA) authorized the central government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting up and operation of any industrial facility on environmental grounds. Under this umbrella Act, rules were passed to control handling of different types of waste: hazardous, hospital, municipal, biomedical, and municipal solid; to regulate activities in the coastal area; to provide incentives by branding environmentally-friendly products; to prescribe pollution emission norms for new non commercial vehicles; to regulate the production and consumption of ozone depleting substances; to reduce noise pollution; and to provide for the conservation of biological diversity.

Under the EPA, many projects required an environmental impact assessment (EIA). The EIA process (Figure 3) begins with whether EIA is required and if so, impact analysis and mitigation before final clearance have to be reported and approved. Possible mitigation measures include: change in project sites, routes, processes, raw materials, operating methods, disposal methods, disposal routes or locations, timing or engineering designs;introducing pollution controls, waste treatment monitoring, phased implementation, landscaping, personal training, special social services or public education; offering (as compensation) restoration of damaged resources, money to affected persons, concessions on other issues, or off site programs to enhance some other aspects of the environment or quality of life for the community. Thirty two categories of projects require the EIA clearance. They include projects related to nuclear power, river valley projects (hydel-power, irrigation, flood control etc), thermal power plants, mining, highways, ports, and airports. Setting up manufacturing industries like petroleum refineries, chemical fertilizers, pesticides, petrochemical complexes and intermediates, bulk drugs and pharmaceuticals, synthetic rubber, asbestos and asbestos products, hydrocyanic acid, pulp and paper, dyes, cement, and paints. Heavy industries like; primary metallurgical industries (iron and steel, aluminium, copper, zinc, lead and ferro alloys), electric arc furnaces and electroplating. Exploration, production, transport and storage of oil and gas, and new construction projects and industrial estates would also require clearance. In order to facilitate speedy redressal of environment related disputes, the National Environmental Tribunal Act, 1995 and the National Environment Appellate Authority Act, 1997.

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