Corporate Liability For Environmental Damage : A Critical Review Of Legal Principles
By: Jayshree Patnaik & Manshi
Abstract:
In India, an increase in the number of industries has resulted in pollution of the air, water, land, and noise. Rapid industrialization of this kind has had a negative impact on our nature. The Environmental Protection Act of 1986 and the Companies Act are two of the laws that the Indian legal system has established to address environmental challenges and under which corporations are held accountable.
Even if a firm doesn’t purposefully destroy the environment, they are nonetheless held accountable under the Indian legal system. This is a well-established strict liability principle that is included in Indian law. The industries that are now operating in India must take all required precautions to prevent environmental harm.
Be it Corporate infrastructure, the workers commuting to and fro daily ,the multimodal transport usage to transfer goods, each of them makes a significant contribution to ravage the environment. Here’s a wager, many of us are unaware that sending mail also emits carbon dioxide up to 50 grams per mail with large attachments. In this mixed-method research we present various viewpoints, case laws, existing policies to curb the environmental blight and aim to provoke your thoughts as an individual to combat the problem. Also, a few suggestions of what collaborative approach should the government enforce along with the existing ones.
Certain damages which can never be undone are the Plasticrust (when plastic melts and fuses with the natural materials like rock/corals, etc.), Nanomaterial pollution (comes from the paints, cosmetics, electronics, textiles, etc.) and the “forever chemicals”. All of these pollutants have been accumulated in the environment and the wildlife is now carrying these toxins in their tissues. How profound and urgent detoxification does the Earth require to restore itself?
Introduction:
The concept of holding businesses responsible for environmental damage has attracted a lot of attention worldwide, highlighting the growing recognition of businesses’ role in environmental deterioration and the need for accountability measures. The topic of corporate responsibility for environmental harm is particularly pertinent in India, a country dealing with complex environmental problems that range from deforestation and climate change to air and water pollution. This preamble establishes the framework for a comprehensive analysis of the legal rules governing Indian corporations’ liability for environmental damage. With laws like the Environment (Protection) Act of 1986 and the Companies Act of 2013 acting as pillars for monitoring business behavior with regard to the environment, India’s legal framework for environmental preservation has grown over time.
India’s legal framework for corporate accountability for environmental harm is based on the Water (Prevention and Control of Pollution) Act of 1974 and the Environmental Protection Act of 1986. The Environmental Protection Act establishes the legal framework for both environmental protection and pollution prevention and control laws. The law states that both the federal and state governments are empowered to take action to protect and enhance the environment and to prosecute violators.
The Indian judiciary has been essential in holding companies responsible for environmental harm by interpreting and enforcing the provisions of these Acts. In numerous instances, the courts have held companies liable for environmental damage, even when it was unintentional or the result of suppliers’ or subcontractors’ negligence. Furthermore, courts have ruled that companies must take steps to protect the environment or face liability for future damages.
Even though India has the required legal framework, it is nevertheless very difficult to hold corporations accountable for environmental harm. The absence of strong enforcement measures is one of the main problems. The Water (Prevention and Control of Pollution) Act is enforced by State Pollution Control Boards, however oftentimes they lack the resources to carry out this duty. Furthermore, the fact that fines imposed on companies that violate environmental regulations are usually insignificant means that there is insufficient deterrence. It is also difficult for citizens to hold corporations responsible for environmental destruction because of a weak legal system and a lack of public understanding of environmental issues.
“Greenwashing and Corporate Commitments: The Clash Between Sustainability Goals and Industrial Expansion”
Corporate industries in other words the “mega-polluters” take Sustainability-linked loans (SLL) in billions with a fake commitment to reduce carbon pollution and target sustainability. Shell, Enbridge and Drax are a few of many other companies which made it to the news for getting SLLs. Fossil fuel and mining companies have reaped billions in SLLs, many researches suggest that greenwashing in SLLs is widespread. Upon investigation, it was found that these loans are rather used in business expansion and not for reducing environmental harms. In India, Central Consumer Protection Authority (CCPA) issued the guidelines under the Consumer Protection Act, 2019 for prevention and regulation of “greenwashing” and “misleading environmental claims”. It was an addition to the guidelines for prevention of misleading advertisements and endorsements issued in 2022. These guidelines prohibit use of generic terms like ‘eco-friendly’, ‘green’, ‘cruelty free’, ‘carbon-neutral’, ‘sustainable’ and similar assertions without adequate substantiation by the manufacturers/industrialists.
Illustration 1: If a company makes a statement that “its growth will be based on sustainability principles”. For the purpose of these guidelines this will not be treated as an environmental claim. However, if a company further makes a statement that “that all its products are made in a sustainable manner”, then such an environmental claim will be examined for greenwashing.
Illustration 2: A marketer advertises on the bottle of its hand wash as “biodegradable” without qualification. The advertisement shall make clear that only the hand wash is biodegradable and not the bottle.
The latest in occurrence was the Biological Diversity Rules, 2024 which supersedes the 2004 rules. The Ministry of Environment, Forest and Climate Change (MoEF&CC) announced rules to make India’s waste management system more comprehensive; previously, liquid waste was not classified as a separate category. The Draft Liquid Waste Management Rules will become effective from 1 October 2025.
A bigwig tech company published that AI could help expedite decarbonization, simultaneously selling AI tools to ExxonMobil and Chevron for finding and developing new oil and gas reserves contradicting its own public commitment to reduce carbon emissions. Put simply, we have to see whose supremacy will shine in the future, the treaties like Net Zero coalition and The Paris Agreement or the industrialists.
Role of Indian judiciary in enforcing corporate liability:
To make sure that companies in India are held accountable for environmental harm, the legal system is crucial. In addition to having the power to interpret and carry out laws and regulations relating to corporate accountability for environmental harm, the judge is also in charge of overseeing legislative and administrative actions.
Legal framework
The foundation of India’s legal framework for corporate liability for environmental harm is the Environment Protection Act of 1986, the Water (Prevention and Control of Pollution) Act of 1974, and the Air (Prevention and Control of Pollution) Act of 1981. Companies are subject to environmental protection standards under these laws, and infractions result in fines. The legislative framework includes rules created by the State Pollution Control Board (SPCB) and the Central Pollution Control Board (SAJ). Additionally, legislation and regulations have been created by the Ministry of Environment, Forestry, and Climate Change (MKM).
Judicial decisions
Judiciary has played a vital role in enforcing the corporate liability, which can further be explained with the help of some relevant case laws or judicial decisions:
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M.C Mehta v/s Union of India
This is among India’s most well-known and significant environmental incidents. The case dealt with Kanpur, Uttar Pradesh, tanneries’ pollution. In order to lessen pollution, the Supreme Court mandated that the tanneries shut down until they had sewage treatment facilities. The creation of a commission to regulate urban pollution was one of the additional environmental protection measures mandated by the court for the federal and state governments.
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Vellore Citizens Welfare Forum v/s Union of India
The involvement of tanneries in Vellore, Tamil Nadu’s pollution was the focus of that court case. The Supreme Court ruled to punish individuals who ignored the order and to outlaw tanning parlors without a water treatment system. The court also ordered the federal and state governments to implement a variety of environmental protection measures, such as developing rules for the treatment of hazardous waste.
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Subhash Kumar v/s State of Bihar
In this instance, factory pollution in the Bihar city of Dhanbad was the issue. The Supreme Court ordered the closure of all businesses without sewage treatment plants and fined the offenders in its ruling. Additionally, the court mandated other environmental protection actions from the federal and state governments, such as the establishment of a commission to keep an eye on municipal pollution.
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Indian Council for Enviro-Legal Action v. Union of India
That case relates to industrial contamination in Bhopal, Madhya Pradesh. In its ruling, the Supreme Court ordered the federal and state governments to implement a number of environmental protection initiatives, one of which was the creation of a commission to manage urban pollution. The court also ordered the shutdown of all industries without sewage treatment plants and fined those who disregarded its rules.
Let’s play our parts perfectly
As an individual working in the corporate, here are some steps that should be taken to reduce corporate pollution:
Carpooling: it’s being practiced by many companies and the rest should also start the same.
Waste segregation: this step will reduce the volume of organic waste, and make recycling much easier.
Email Cleanup: deleting old emails reduces server storage needs and associated energy consumption. Also, using compressed file formats or using cloud storage instead of mail attachments will help save storage energy.
Opting for green hosting: several email service providers are committed to sustainability by powering their operations with renewable energy. Eg: Ecosend
What strategies can the government implement?
Government can make it mandatory for every company small or big to get ISO 14001 certification, it provides a framework for the organizations to design and implement an EMS (environmental management systems) to minimize their environmental footprint.
Government should encourage remote work to reduce travel related emissions.
Laws should be enforced for strict usage of pollution control devices like catalytic converters, scrubbers, precipitators, biofilters, etc.
Government should impose heavy penalties on companies which are not making any efforts to switch to renewable energy.
Conclusion
There’s betterment in growing concrete jungles along with the natural ones, many cities around the world are now adopting biophilic design principles, maybe we should too. Legal frameworks along with ethical responsibility should encourage corporations to contribute to environmental preservation.
References:
https://www.iso.org/standard/60857.html
https://www.plm-environmental.com/Air-Pollution-Control-Equipment-Types.html
https://ecosend.io/blog/what-are-ethical-email-providers
https://unfccc.int/process-and-meetings/the-paris-agreement
https://www.jetir.org/papers/JETIR2405323.pdf
https://www.ijlmh.com/wp-content/uploads/Corporate-Liability-for-Environmental-harm-in-India.pdf
