Prafulla Samantray vs Union Of India Through Secretary ... on 2 May, 2022

[Cites 5, Cited by 0]

National Green Tribunal

Prafulla Samantray vs Union Of India Through Secretary ... on 2 May, 2022

1. This appeal has been preferred against Environmental Clearance (EC) dated 20.11.2015 granted in favour of Respondent No. 3, Vedanta Limited (formerly Sesa Sterlite Ltd.), Bhubaneshwar, for expansion of Alumina Refinery (1 MTPA to 4 MTPA) and Captive Power Plant (from 75 MW to 285 MW) at Lanjigarh, Dist. Kalahandi, Odisha.

2. The impugned EC states that originally EC was granted on 22.09.2004 for 1 MTPA Aluminum refinery with a 75 MW Captive Power Plant (CPP). Alumina is being produced in the existing refinery using 1 Bayer's process. PP applied for TOR for further expansion from 1 MTPA to 6MTPA, subsequently ToRs were prescribed vide letter of even No. dated 12.03.2006. However, since the expansion project had already been established at the cost of about Rs 4000 crores, without prior environmental clearance, the proposal was deferred until legal action was initiated against the company. On the basis of decision of the MOEFCC, PP applied for TOR afresh on 22.07.2011 for expansion of the Alumina Refinery project from 1 MTPA to 6 MTPA along with expansion of CPP from 75MW to 285MW. Consequently, ToRs were prescribed by the Ministry vide letter dated 02.02.2012 along with conduct of Public Hearing. TOR prescribed on 02.02.2012 was revalidated and final ToRs were prescribed vide letter dated 26th May, 2014. The total project area is 1552.65 ha, of which the total land area for the existing project is 833.31 ha and the proposed expansion (from 1 MTPA to 6MTPA) would require an additional area of 719.34 ha. The break-up of the existing (1 MTPA) and proposed (6MTPA) proposed, project land in terms of agricultural, forest, water bodies, wasteland (as per revenue records), habitation (settlements), etc is as given below:

Land Use Existing Project (1 MTPA) Proposed expansion S. (in Ha) (6MTPA) No (in ha)

1. Agriculture 609.33 448.50

2. Wasteland 184.48 219:32

3. Habitation 7.69 46.63

4. GJJ Land 26.123 Nil (Forestland) 5 Water Bodies 5.69 4.89 Sub-Total 833.31 719.34 TOTAL 1552.65

3. The impugned order further mentions that Public Hearing was conducted on 30.07.2014. EIA Reports were submitted by the PP in the 2 office of the Member-Secretary, OPCB, Bhubaneshwar, MOEF RO, BBSR, District Collector, Kalhandi, GM (DIC), Kalhandi, Chairman, Jilla Parishad Kalhandi. BDO Lanjigarh Block. RO, SPCB Rayagada and the Executive Summary Reports of the EIA in both Odia and English were circulated by the SPCB in all the 21 Gram Panchayat Offices of Lanjigarh Block. The date and venue of the Public Hearing were published in the English and Odia daily namely "The Samaj" and the "Sunday Statesman" dated 29.06.2014. i.e. 31 days before the date of Public Hearing by the SPCB.

Issues raised in the Public Hearing held on 30.07.2014 covered sectors/ issues of education, provision of drinking water facilities, provision of electricity, health care, R&R issues, availability of bauxite for the refinery without having any captive mines and peripheral infrastructural development for the nearby villages. It was stated by the PP that the total manpower requirement for the existing-cum expansion project is about 1500 persons for direct employment in the factory and about 4000 for the associated partners of the project. There were complaints of pollution due to red mud. However, it was clarified that the nearest nallah is about 1 km away and is not being contaminated from the company's red mud generation. It was informed that an amount of RS 51.32 crores has been spent on various activities during the period of 2010-2013-14. PP is committed to spend an amount of 2-3% of total project cost over a span of 10 years over and above the 2% of the net retain profits to be spent on Corporate Social Responsibility (CSR) under the Companies Act. The EAC(I) considered the representations received on the project by an e-mail dated 17.09.2014 from Shri Prafulla Somantara, President, Lok Shakti Abhiyan, Bhubaneshwar along with a letter dated 17.09.2014, wherein issues such as bauxite linkage, water source from Tel River vis-à-vis competing users, illegal expansion of alumina refinery project, impact of 3 TPP, fly ash generation and land acquisition have been raised. An e-mail dated 13th November 2014 (one day before the EAC meeting) was sent to all EAC members by Amnesty International India raising issues regarding the project. Copy of their letter received by e-mail was also circulated to the EAC during the meeting and also handed over to the project proponent and considered in the EAC(I) meetings. The Ministry of Environment, Forest and Climate Change has considered the application based on the recommendations of the Expert Appraisal Committee (Industry) and on receipt of Stage - I Forest Clearance and hereby decided to grant Environmental Clearance under the provisions of EIA Notification dated 14th September 2006 to the above mentioned proposal for Expansion of Alumina Refinery (1 MTPA to 4 MTPA) and Captive Power Plant (from 75MW to 285MW) subject to strict compliance of the conditions mentioned in the Stage - I forest clearance letter No. 5-ORC264/2015-BHU dated 14th October, 2015 along with the Specific and General conditions appended to the EC.

Challenge in the Appeal and response of the PP and other authorities

4. Main objection of the appellant is that since the PP undertook expansion without necessary clearance, ex-post facto EC could not be granted. Further contention is that EIA report is inadequate and insufficient. The appeal came up for hearing on 01.03.2016. The Tribunal issued notice to the respondents - the PP, the MoEF&CC and the State PCB who have filed their respective replies.

5. Reply of the MoEF&CC is that while considering application for expansion filed in 2007, it was found that 50% of the expansion had already been completed without requisite EC. Show cause notice was issued to the PP for expansion of the project without EC. The PP filed fresh 4 application and TORs were accordingly issued on 02.02.2012. Draft EIA/EMP was filed. Project was considered in the meetings held on 18.11.2013, 29.01.2014 and 18.03.2014. Public hearing was conducted on 30.07.2014. Considering the presentation of the PP, expansion was recommended and EC was granted.

6. Stand of the PP is that there is no res-judicata to consider fresh application when the earlier application is not considered on account of expansion having been undertaken in violation of requirement of prior EC. For the earlier violation, prosecution has been initiated which is a matter to be dealt with separately. The PP has invested Rs. 50,000/- crore (perhaps 5000 crore) and undertaken all mitigation measures for the protection of environment. The PP has also complied with all statutory requirements. The capacity addition undertaken without prior EC was without any change in process or change in technology. Against proposed cancellation of expansion of the refinery, the matter was considered by the Hon'ble Supreme Court in Orissa Mining Corporation Ltd. v. Ministry of Environment & Forest, (2013) 6 SCC 476 and the matter was left to be considered by the MoEF&CC. All relevant factors have been duly taken into account while granting the EC.

7. It is considered appropriate to extract some averments from the affidavit of the PP which are as follows:

"i. The project proponent has its own captive source for Bauxite of 1.2 MMTPA and has potential to go up to 1.9 MMTPA in near future. This meets more than 60% of its current requirement and the rest is met from outsourced bauxite of Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Gujarat and Andhra Pradesh including some portion of it being imported from Guinea. Last three year production data shows production rate is consistently more than 80% as is evident:-

 Year        Cal           Number of   Month avg    Annual       Capacity
            Alumina       operating   production   production   utilization
            Production    months      in tonnes    based   on   proportionate
            Tonnes                                 month
                                                   average
                                                   Tonnes
2011-12     911621        12          75968        911621       91%
2012-13     527052        8*          70274        843283       84%
2013-14     524060        9*          61654        739849       74%
2014-15     976915        12          81410        976915       98%
2015-16     970893        12          80908        970893       97&

*Plant was not in operation due to reasons other than techno- commercial.

ii) Future Sourcing:

Odisha has a Bauxite reserve of 1.8 billion tonnes and resource availability for the extended refining capacity is being targeted bauxite from Odisha. Besides above, as per the current bauxite scenario of the country an untapped potential source of about 3.4 MMTPA is available which is getting exported from the western coast. Our sourcing will be based on following: 1) BALCO captive mines, 2) Three Laterite deposits (Prospecting Licenses granted), 3) Memorandum of Understanding with Orrisa Mining Company. The company has its own captive source in Odisha, the laterite deposits (Prospecting Licenses granted), after grant of ML. The mines have potential to supply around 0.6 MMTPA, the net bauxite available for our procurement will be 8.15 MMTPA out of the expanded plant requirement. Rest of the bauxite requirement will be tapped from import sources.

iii. Coal Linkage details:

Coal for the expanded, refinery will be sourced from linkage with the CIL and imports. However, our pre 2012 linkage application has been stuck due to want of EC for the expansion project. Present coal linkage documents i.e. FSA with MCL is attached herewith. Currently Government is not considering linkage for CPPs. In case of no linkage, project proponent will go for import sourcing as being a co-gen plant as linkage will be limited to only 40% of the total coal requirement.

34. Save and except what are matters of record, the contents of para no. 2.11.2 are denied and disputed. It is vehemently denied that the EIA report does not contain assessment of the impact of the utilization of the raw material. It is submitted that the raw material used for the expansion of the project primarily concerns Bauxite and Coal, which has been identified and Impact Assessment of the same was also provided in the EIA report. Chapter 4.3 of EM Report IMPACT PREDICTION & ASSESSMENT deals with the same. Further, the office memorandum dated 05.02.2013 has also been considered in the EIA report for the project and Chapter 2.8.4 of the EM report, has categorically taken into account the raw material characterization. In chapter 4.5.1 of EIA report under impact prediction and assessment it has been clearly stated that "Sulphur dioxide emission is calculated on the basis sulphur content of 0.5 % in coal and 3 % in Furnace oil"

which is the fuel source clearly mentioned. Also the ash percentage of the Indian Linkage Coal is less than 43% and of the Imported Coal is around 5-7%.

6 In view of the above it is thus evident that the EIA report has taken into consideration all the possible environmental impacts of the raw materials. In any event there is a further safeguard since there is periodical monitoring of air quality parameters by the Environmental Authorities. If the quality of the raw material used is not within the prescribed limits it would translate into violation of the air pollution norms which is regularly monitored by the State Pollution Control Board as also the MOEF. Periodic reports in this regard are sent to the MOEF and in case of violation of the norms the project proponent would risk punitive action. It is pertinent to mention that the Khargone TPP of NTPC is a super critical Thermal Power Plant of capacity 2 x 660 MW which will require around 6.51 MTPA of coal and the unit will produce around 8000 Ton/day i.e. 2.60 MTPA of fly ash. Whereas the project proponent is a CGPP (i.e. Co-Generation Power Plant) of capacity 3x25 MW. In Financial Year 2015-16, the project proponent has consumed around 0.6 MTPA of coal and produced around 0.2 MTPA of fly ash. It is therefore clearly evident that both the power plants are not comparable w.r.t. generation capacity and technology.

35. Save and except what are matters of record, the contents of para no. 2.11.3 are denied and disputed. It is vehemently denied that the EIA report does not take into account all types and sources of air pollution. It is submitted that EIA report has taken into account all the information including impact prediction and assessment during construction, phase and operational phase, Air quality modelling of the sources of pollution and prediction has been described under chapter 4.5 of EIA report. In EIA under Chapter 4.5, Impact Prediction & Assessment, all types of source of pollution have been taken under consideration which are stated below:

"4.5 IMPACT PREDICTION & ASSESSMENT DURING OPERATIONAI, PHASE "With the expansion of the Alumina Refinery Plant along with Co-generation Power Plant, the impacts both beneficial and adverse are anticipated on Ambient Air Quality, Noise level, Water, Land Use, Soil, Ecology and beneficial impacts on Socioeconomic Environment, which is dealt in detail in subsequent paragraphs. The anticipated environmental impacts are predicted in Table-4.3".

Table 4.3 Anticipated Environmental Impacts:-

Operation Potential Negative Impacts Probable Source Impact Air Quality Increase in S02, NOx and Alumina Plant and Co-

                   PM10,PM       2.5   level    in generation plant.
                   ambient air.

Water quality      Deterioration    of    surface Discharge     from     plant
                   water quality.                 rejects, filter   backwash,
                                                  service water waste and
                                                  effluents.




                                                                              7
        Noise           Increase in noise levels in the Equipment in main plant and
                       plant area.                     auxiliaries.

       Terrestrial     Impact on plant species.       Emissions from stacks.
       Ecology

       Aquatic         Impact on aquatic species.     Wastewater, if any, from
       Ecology                                         Alumina     plant,      heat
                                                       exchanger, cooling tower,
                                                       power plant etc.
      Demography    Strain on existing amenities like Influx       of       people
      and    Socio- housing, water sources,           (employees    as well as
      Economics     sanitation,     medical    and contractor's
                    infrastructure facilities.        employees/ Labourers)


      Land             Depletion of cultivable area, if Land acquisition for red mud
      environment      any.                             pond,   ash     pond     and
                                                        township.

In the said EIA report under Chapter 4.5.4 Impact of Solid Waste (Red Mud 86 Fly Ash) it has been mentioned that :-

"The run-off from the red mud pond will be collected and stored in a holding pond, which is located near the toe of the mud storage area. The stored run-off will be used for sprinkling during dry season. To divert rainwater from outside the mud storage area, suitable garland drains will be provided. Similarly, the constituents of the red mud indicate less solubility of red mud with the water. It can be inferred that the leaching problem is likely to be minimal. Similarly, the overflow from the ash pond area will be collected and reused. Thus, the impact on surface and ground water quality from these areas will be minimized. The wells surrounding the red mud pond and ash pond will be monitored under post project monitoring. Based on the data generated during the study period it can be seen that there is no impact on the water environment due to the operation."

From this it is clear that special consideration has been taken up during preparation of EIA report regarding the dust from water ponds. The reliance on the report of the Saxena Committee is totally misconceived and malafide. It was a report based on a single day visit to the project site. Vague and general observations were made. No specific details or cases the purported harmful effects were given. This now stands replaced by an Environmental Clearance given after detailed consideration by a body of experts of a detailed Environmental Impact Assessment Report It is further stated that the expertise of Dr. Saxena, Member of National Advisory, is known in the area of forests. is generalized views cannot take precedence over the view of experts who are involved in the area of grant of environmental clearance namely EAC's Chairman- Mr. M. Raman, IAS, Secretary Department of Chemicals & Petrochemicals, Ministry of Chemicals 86 Fertilizers, Govt. of India."

8. The PP has also stated that if the project is to be stopped, following loss will be caused:

"i). Loss to State exchequer: The cost of production of Alumina is Rs. 20,100/T which is too high as compared to other competitors.

Vedanta Ltd. is incurring Rs. 2. Crores loss per day and accumulated losses has reached to Rs. 4700 Crores which is more than the company's existing investment in refinery. The Company is contributing Rs. 590 Crores every year through Central and State Exchequer in form of Custom duty, TDS, Service tax, Railway freight etc. With double stream operation, this will further go up. In the same region, Alumina is being manufactured by Utkal, NALCO, Hindalco and their cost of production is Rs. 11,300/t- Rs. 11,700/t. The conversion cost for these plants is approx. Rs 8900-Rs 9200/t. Vedanta's bauxite cost is around Rs 12,000/t of alumina, whereas in case of Utkal and NALCO, it is Rs. 2300-Rs. 2400/t of alumina. Since the COP of competitors are very less as compared to LNJ hence the project is completely unviable due to non- availability of captive mines. Vedanta has invested Rs 8362 Crores at Lanjigarh. This investment was made in 2 phases viz. 2 MMTPA refinery of Rs. 4168 Crores and expansion of the refinery from 2 MMTPA to 5 MMTPA -of Rs. 4194 Crores. Further an amount of Rs. 3,500 Crores is required to be spent for completing the balance expansion work.

ii) CSR activities:- From year 2003-04 to till date the project proponent has incurred Rs. 164 Crores in CSR initiatives. Majority of the amount has been invested in health, education 8s infrastructure.

iii) Loss of employment: The Project proponent has 500 direct employees and 90% are from Kalahandi, Rayagada and rest are from different parts of the State of Odisha. Around 3000 employees are working directly with the associate companies and 95% are from Kalahandi, Rayagada and rest from the State of Odisha. iv. Looking into excellent environmental performance of the existing plant and measures envisaged in the expansion, employment and livelihood opportunities to be created by the expansion to nearly 20,000 people in one of the most backward area of the country resulting into sustainable development and for eradicating poverty and contribution to the national exchequer to the tune of Rs 2100 Cr per annum and specially when expansion activities has not caused any environment damage or pollution. Such expansion project will give a boost to overall development of this most backward and isolated area of the country and will help in bringing the most deprived society of the country into main stream."

9. Reply filed by the State PCB is that there is fair compliance of the consent conditions by the PP.

Consideration of the issue and finding 9

10. We have heard learned Counsel for the parties and perused the record. Main issue for consideration is whether in law illegal expansion without prior EC will be a total bar against grant of EC for expansion and whether on facts grant of EC is against the interest of environment.

11. As held inter-alia in Alembic Pharmaceuticals Ltd. v Rohit Prajapati & Ors.1, requirement of prior EC is mandatory for commencement or expansion of a project, attracting such requirement, including the present case. However, in certain situations, applying the doctrine of proportionality, closing of a project is not the only option available nor there is any absolute bar to grant of EC at ex post facto stage or when the project is partly commenced or is partly expanded. Though general rule is to require prior EC, in exceptional situation, 'violation' cases can be considered subject to suitable conditions. Relevant observations of the Hon'ble Supreme Court are quoted below:

"42. In this backdrop, this Court must take a balanced approach which holds the industries to account for having operated without environmental clearances in the past without ordering a closure of operations. The directions of NGT for the revocation of the ECs and for closure of the units do not accord with the principle of proportionality. At the same time, the Court cannot be oblivious to the environmental degradation caused by all three industries units that operated without valid ECs. The three industries have evaded the legally binding regime of obtaining ECs. They cannot escape the liability incurred on account of such non-compliance. Penalties must be imposed for the disobedience with a binding legal regime. The breach by the industries cannot be left unattended by legal consequences. The amount should be used for the purpose of restitution and restoration of the environment. Instead and in place of the directions issued by NGT, we are of the view that it would be in the interests of justice to direct the three industries to deposit compensation quantified at Rs 10 crores each. The amount shall be deposited with GPCB and it shall be duly utilised for restoration and remedial measures to improve the quality of the environment in the industrial area in which the industries operate."

(2020) 17 SCC 157 10

12. In the present case, prosecution has been initiated for illegal expansion. Liability for compensation on polluter pays principle is assessed at Rs. 25,00,00,000/- (Rupees Twenty Five Crores only) having regard to the clear violation and financial capacity of the unit2 to be used for restoration of environment in terms of environment plan to be prepared and executed as per direction in later part of this order. Principles for fixing environmental compensation are laid down inter-alia in M. C. Mehta & Anr. v. Union of India, (1987) 1 SCC 395, Sterlite Industries (India) Ltd. v. Union of India, (2013) 4 SCC 575 and Goel Ganga Developers India Pvt. Ltd. v UOI (2018) 18 SCC 257. The PP may deposit the amount with the State PCB within one month to be kept in separate account to be utilised for restoration of environment, as is being directed.

13. In view of above, grant of EC for expansion by the MoEF&CC, though the PP had partly undertaken expansion without prior EC is not liable to be quashed but the PP must be held accountable for the violation. While under the EIA Notification dated 14.09.2006, prior EC is a mandatory, violation thereof is actionable by way of prosecution as well as invoking 'Polluter Pays' principle as observed earlier. Thus, we are unable to interfere with the impugned EC merely on the ground that expansion had commenced prior to seeking EC. This will however not amount to exoneration of the PP for the violation either in criminal proceedings or in proceedings to recover compensation on polluter pays principle as per above assessment.

14. Coming to the merits, the EAC, in recommending the project for expansion, has taken into account the environmental aspects as well as cost benefit analysis of the project as a whole. The 'Specific' and 'General' 2 As per information in public domain, the Net worth of the Company is Rs. 487,440,000,000/- and Turnover is Rs. 371,200,000,000/- for the Financial Year 2020-21. 11 conditions have been laid down after due appraisal of impact on the environment. The issues dealt with include fly ash management, green belt development, rehabilitation and resettlement plan, control of air and water pollution, maintaining water bodies in the area, rain water harvesting and source of water.

15. However, it appears that some issues remain unaddressed for which we need to issue directions. First such issue is of drawal of water from River Tel. Para 19 of EC is as follows:

"19.0. For the existing 1 MTPA project, the State Government has sanctioned a total, quantity of 30,000 m3/d from River Tel, of which the present project is utilising only 14,000 m3/d and the balance is being met by various water conservation measures. The Expansion project will require a total quantity of 56,250. nt3/d for which as agreement is in place. The additional water requirement for the project is 26,7.50m3/d, which will be sourced from River Tel. It was stated that the State Irrigation Dept has prepared a Report as per which the total drawl of water from River Tel during lean season is less than 1% of the total flow of the river. As per the Data furnished by the Central Water Commission vide their letter No. TD/905/CE/Vol. IV/2014/2043 dated 10.11.2014, the average discharge water flow in River Tel at Kantamal during lean period is 133.74 cumecs, and the maximum water requirement would be only 4% of the total water discharge flow."

16. Though it is stated that the drawal of water may not affect flow of the river, considering the increasing need for water from the river not only by the PP but also by others, permissibility of drawal of water should not remain static and unconditional forever. Its impact should be considered from time to time and provision by way of additional condition made to safeguard this aspect. It needs to be linked to the impact being studied considering over all needs such as drinking purposes, agricultural purposes and other requirements. Further, in addition to the management of fly ash, proper utilisation and disposal of Red Mud needs to be provided. Control of fluoride and forage fluoride emissions is also necessary. The above Committee may address the said issues also. It will be open to the Committee to take assistance from any other expert/Institutions, if 12 required. These aspects are also required to be addressed by way of additional conditions.

17. To formulate such additional conditions and approve restoration plan for utilising compensation amount fixed above, we consider it appropriate to constitute a Committee comprising of Secretary, Irrigation Department, Orrisa, Central Water Commission, State PCB and Regional Offices of MoEF&CC and CPCB. The State PCB will be the nodal agency for coordination and compliance. The Committee may hold its first meeting within one month and formulate additional condition based on for periodical impact assessments. First such assessment may be undertaken within three months. Additional condition may provide for appropriately mitigation of the adverse impact of drawal of water in changed conditions. The Committee may also address other issues mentioned in para 16 above. It may also prepare restoration plan utilising the compensation amount. Decision of the Committee will be subject to any further order of the Tribunal in such a situation. If any party is aggrieved by the decision of the Committee, it will be open to the aggrieved party to take remedies.

The appeal stands disposed of accordingly.

M.A. No. 1275/2016/EZ will also stand disposed of. A copy of this order be forwarded to the Secretary, Irrigation Department, Orrisa, Central Water Commission, State PCB, MoEF&CC and CPCB by e-mail for compliance.

Adarsh Kumar Goel, CP Sudhir Agarwal, JM 13 B. Amit Sthalekar, JM Saibal Dasgupta, EM Prof. A. Senthil Vel, EM May 02, 2022 Appeal No. 01/2016/EZ M.A. No. 1275/2016/EZ AB 14

Unlock Advanced Research with PRISMAI

National Green Tribunal