CSE disagrees with finance ministry: says no need for National Investment Board (NIB)

Puts out new data to prove that green clearances are not delaying infrastructure projects

• New assessment by Centre for Science and Environment (CSE) finds unprecedented scale of clearances being given by the ministry of environment to industrial projects 

• Findings trash the allegation that environmental considerations are proving to be an impediment in India’s growth

• CSE rejects the NIB, which has been proposed as a super-clearance agency

• Says present system of granting clearances clearly not working. Calls for better regulations and more effective monitoring

• Launches new website to track green clearances of each project real-time

New Delhi, October 20, 2012: Centre for Science and Environment (CSE) has strongly rebutted the Union ministry of finance’s claim that green clearances are leading to inordinate delays in infrastructure projects. CSE has also rejected the proposal to set up a National Investment Board (NIB), which will dismantle the regulatory systems for green clearances.

For some time now, industry, government and regulatory agencies have been persistently talking about how environmental regulations have throttled the country’s growth. They have raged on about how the system of forest and environment clearances has forced India’s credit ratings to its nadir. And they have bitterly complained about how environmentalists were holding the country and its people to ransom.

This has prompted the Union ministry of finance to propose a new super-clearance agency – the National Investment Board – to grant all clearances, especially green clearances, to large infrastructure projects. The ministry has proposed to “amend the business of transaction rules so that statutory clearances under various acts…… are given by the board”.

In a press conference here today, CSE released latest data on the scale and pace of environment and forest clearances given during the 11th Five Year Plan (April 2007-March 2012). The study looks at four key sectors – thermal power, cement, iron and steel and mining – and comes out with hard data to prove that the scale of clearances has been nothing less than “unprecedented”.

Says Sunita Narain, director general, CSE: “The analysis of this data clearly shows that the Ministry of environment and forests (MoEF) has not been an impediment to infrastructure development. Instead, it has granted massive numbers of clearances, which are today jeopardizing environmental security. This is also making a complete mockery of our regulatory systems. Why, therefore, do we need the NIB?”

CSE also unveiled a new website here today which will track the green clearances of each project on a real-time basis. To understand the magnitude of the clearances granted, the website compiles project information from April 2007 onwards. “This database, for the first time, reflects the true extent of project clearances. It also sifts the facts from the fiction,” says Chandra Bhushan, deputy director general, CSE.

What the assessment has found that during 11th Five Year Plan

• In the 11th Five Year Plan (FYP) period, 8,734 projects were granted forest clearance and 1.98 lakh hectares (ha) of forest land was diverted.

• This diversion is about 25 per cent of all forest land diverted for development projects since 1981. The pace of forest land diversion, therefore, has doubled during 11th FYP.

• The area of forest land diverted is about four times the area of a Panna or a Tadoba tiger reserve. This means every year forest area equivalent to one tiger reserve was diverted for developmental projects.

• About 34 per cent of this forest land (67,167 ha) has been diverted for mining and power projects.

• 119 coal mining projects were accorded forest clearance during this period, diverting 31,500 ha of forest land -- the highest number cleared in any five year plan since 1981. 65 per cent of all forest land diverted for mining projects was diverted for coal mining.

• 184 coal mining projects were given environment clearance with a production capacity of 589 million tonnes per annum – this is 50 million tonnes more than what India produced in 2011-12.

• 276 thermal power plants of 2.2 lakh megawatt (MW) capacity, 203 steel plants of 132 million tonnes per annum capacity and 112 cement plants with capacity to produce an additional 202 million tonnes cement every year, have been accorded environment clearance. This enormous splurge has led to a doubling of capacity in almost all sectors. However, bulk of this capacity remains unutilized.

Makings of a scam: do we need all this capacity?

The 11th Five Year Plan put a target of 78,700 MW of additional thermal power capacity; the 12th plan asks for 100,000 MW. In the past five years, till March 2012, the MoEF has granted environmental clearance to an astounding 2,17,794 MW of thermal power capacity -- in other words, 40,000 MW more than what has been proposed till 2017! Worse, the capacity actually added during 11th FYP was a mere 53,000 MW.

Coal India Limited (CIL) produces over 90 per cent of India’s coal; it has under its control over 200,000 ha of mine lease, including 55,000 ha of forest area. The estimated coal reserves with CIL are 64 billion tonnes, and the company produced 435 million tonnes during 2011-12. Who is then responsible for the shortage of coal in the country?

Or are coal mining clearances just another way to facilitate access to captive coal mining by private companies? Today, many private companies have got coal mines, but have not started production. The Comptroller and Auditor General (CAG) report (2012) on Allocation of coal blocks and augmentation of coal production by Coal India Limited, actually proves that private companies are sitting on the coal blocks with all clearances and not producing. As per the CAG report, of the 86 coal blocks slated to begin production by 2010-11, only 28 had commenced production by March 2011. Still, the Union ministry of coal is asking for more clearances.

Asks Chandra Bhushan: “Why is the ministry giving so many clearances? Why are projects that are already cleared not being implemented first before more clearances can be given? This is a new kind of license scam to take over the natural resources, land and water of the people.”

Projects cleared, but not monitored
The worst part is that though clearances are being granted to projects with tens of conditions, there is no agency to monitor the implementation of these conditions. No data is available on the compliance to conditions.Says Chandra Bhushan: “Nobody knows how this monitoring system works. In the case of forests, there is some compiled information. But this only proves that monitoring is poor and worse, what little is monitored is found not to meet conditions.”

As per statistics compiled by the CSE study, of the 22,264 cases granted forest clearance, only 12,225 were monitored (90 per cent of which were in only two states); 5,091 of these were found to be non-compliant. There is no information on what action was taken against them.

What needs to be done: the CSE agenda
CSE has proposed a detailed reform agenda to strengthen the green clearance system so that it can work for people and the environment. “We believe this reform will not only reduce the high transaction costs and delays being caused to the industry, but will also make industries more accountable. It is not in the interest of the environment to perpetuate a corrupt system,” said Narain.

Reform the system:

• Consolidate all clearances – environment, forest, wildlife, coastal -- so that project impact is fully understood and decisions taken. Fragmentation is not only adding to delays, but also to poor decision-making.

• Prepare one comprehensive impact assessment document covering all aspects for all clearances.

• Track projects through one unique number so that all clearances are linked and impacts considered.

• Make project appraisal committees accountable for their decisions. Bad decisions must lead to consequences.

• Integrate the processes and procedures followed by the State Pollution Control Boards and the MoEF. Synchronise resources of all agencies; make local agencies responsible for monitoring and compliance.   

• Put all project documents in the public domain; transparency is crucial.

Forest clearances:

Says Narain: “The present system of granting forest clearance is clearly not working. Forest clearances are being granted without considering the impact of forest diversion on forests, wildlife, water and the community.”

She adds: “No impact assessment reports are prepared, nor is the ecological and economic value of forests evaluated. In fact, there is no system in place to check the veracity of information based on which forest clearances are granted. There is a need for fundamental reform in the forest clearance process if we want to safeguard the ecological integrity of the country.”

CSE has, therefore, recommended a complete stop to this process until a transparent and effective system is put in place.

Environment clearances:

• Ensure the EIA report is complete and correct. This will bring down the delays.

• Reject the project if the EIA is inadequate or wrong – a zero tolerance policy must be in place. Also, blacklist the EIA consultant.

• Move towards cumulative EIA so that projects are cleared on the basis of their carrying capacity.

• Track all projects in terms of district pollution load and river-basin impacts.

• Revise the MoEF’s EIA notification to stipulate that it will only clear projects after considering the cumulative impact.

• Ensure cumulative EIA by an independent agency, paid through cess or other public funds and not by industry.

• Deepen the process of public assessment and scrutiny by putting all data in the public domain.

• Strengthen the public hearing process.

• Set up systems for community monitoring and periodic reporting on the clearance conditions.

For more on this, please contact Souparno Banerjee (souparno@cseindia.org, 9910864339).