India: National Green Tribunal imposes a Penalty of INR 100 Crores on the Delta Group

October 10, 2016

In India, various environmental laws have been enacted for the purpose of protection and conservation of environment which is a trending global concern. Therefore, environment, in India, is regulated by these statutory laws as well as common law practices and principles. One such principle is the Polluter’s Pay Principle which is extensively discussed in the present case.

The slogan “If you make a mess, it’s your duty to clean up” is extremely appropriate for this Principle. In the earlier times pollution was not a concern. The release of gases or waste into the air and water was considered legal. Water and air were used as “sinks” and it was thought that neither air nor water was a limited resource and therefore, their use was free to all. However, when the side effects of pollution were felt, the apprehension for injury to the environment, human health, and property began. Pollution became a widespread anxiety and scientists were in the vanguard of those who were looking for solutions. The first real allusion to Polluter’s Pay Principle was in the OECD Guiding Principles Concerning International Economic Aspects of Environmental Policies recommendation of 26th May 1972.

Here, the Principal Bench of the National Green Tribunal, a special tribunal established in 2010 to handle the expeditious disposal of the cases pertaining to environmental issues, at New Delhi has ordered the Delta Group (including its Panama based holding company & 2 Qatar based subsidiaries) to pay compensation for the Oil Spill caused by Ship “M.V. Rak” around 20 Nautical Miles (1 Nautical Mile=1.852 Km) from the Indian Coast Line in August, 2011. The Principal Bench of the National Green Tribunal (hereinafter referred to as “NGT”) in Samir Mehta v. Union of India (O.A. No. 24 of 2011) vide its order dated August 23, 2016 ordered the Delta Group to pay a compensation of INR 100 Crores and also ordered Adani Enterprises Limited (hereinafter referred to as “Adani”) to pay INR 5 Crores as compensation for dumping of the cargo in the sea and then failing to take any precautionary or preventive measures.

  • A. Brief Background
  • The Ship, M.V. Rak’s (hereinafter referred to as “The Ship”) voyage started on June 14, 2011 from Lubuk Tutung, Indonesia with its destination being Dahej, Gujarat. The Ship had been chartered by Adani to carry 60054 MT of coal for use at its thermal power plant at Dahej, Gujarat, and was also carrying 290 tonnes of fuel oil and 50 tonnes of diesel. During the course of its voyage, the Ship sank approximately 20 Nautical Miles from the coast of South Mumbai on August 4, 2011 due to heavy flooding. The sinking of the Ship resulted in an oil spill with the impact of the oil spill be clearly noticed and visible on the mangroves of Mumbai with the lower portion of mangroves at Bandra turning dark because of a layer of oil and getting destroyed. Further, the NGT observed that the 60054 MT of coal which was being chartered by the Ship was still lying on the sea bed and was a continuous source of pollution. The NGT noted that Adani had taken no steps either to lift the coal or take any preventive steps to stop the pollution from the coal. In view of the pollution, an application was filed under Sections 14 and 15 of the National Green Tribunal Act, 2010 (hereinafter referred to as “2010 Act”) before the NGT asking for the imposition of penalties.

  • B. Judgment of the NGT
  • The NGT in its judgment made the following observations and issued the following directions:

    1. The NGT observed that on the true and purposive construction of the International Conventions and the statutory provisions that had been implemented under Indian Law, no party from any country in the world has the right/privilege to sail an unseaworthy ship to the Contiguous and Exclusive Economic Zone of India and in any event to dump the same in such waters, causing marine pollution, damage or degradation thereof.
    2. The NGT directed the constitution of a Committee which is responsible to carry out a study on whether the removal of the ship wreck and cargo from the present location should be directed, whether it was necessary to leave the wreck of the ship and/or it is not practically possible to remove the wreck of the ship and the cargo. The Committee was directed to present the report of the study before the NGT within one month. Further, the Committee was empowered to issue directions in regards of what compensation should be paid by the Delta Group and Adani at regular intervals for preventing and controlling the pollution.
    3. The NGT held that the liabilities to pay environmental compensation as directed are on account of and subject to adjustments, after the submission of the final report by the Committee.
    4. The NGT directed the Delta Group and Adani to remove the Ship and its cargo or they should cause the Ship and its cargo to be removed within a period of six months from the date of submission of the Committee’s Report before the NGT.
    5. The NGT held the Delta Group was liable for causing marine environmental pollution by sinking of the ship in the Contiguous Zone of Indian waters and directed the Delta Group to pay environmental compensation of INR 100 Crores to the Ministry of Shipping, Government of India in terms of Sections 15 and 17 read with Sections 14 and 20 of the 2010 Act.
    6. The NGT held that the amount of INR 100 Crores would include the expenses incurred by the Coast Guard and other forces for the prevention and mitigation of pollution in different ways caused by the oil spill and saving the crew onboard the Ship, etc. and a sum of INR 6,91,84,405/- shall be adjusted and paid to the respective agencies.
    7. Adani was held liable to pay a sum of INR 5 crores as environmental compensation in terms of Sections 15 and 17 read with Sections 14 and 20 of the 2010 Act for dumping 60054 MT Coal in the seabed and causing pollution of marine environment and for their failure in taking steps to pick the coal that had been left due to the sinking of the Ship.
  • Take Away
  • The sinking of the Ship had raised pertinent questions relating to pollution caused by the sinking of Ship and oil spill in the Territorial Water, Contiguous Zone and Exclusive Economic Zone of India , whether the NGT had the jurisdiction to entertain the application and what liabilities could be fixed. This judgment of the NGT holding the Delta Group and Adani liable for the pollution caused by the sinking of the Ship is likely to have significant implications on the powers of the National Green Tribunal and the applicability of its orders in international law.
    It is pertinent to note that appeals against this decision of the NGT lies with the Supreme Court. However, no such appeals appears to be filed yet.
    We shall update our readers in case of further developments.

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