Experts claim that the environment ministry introduced a star rating system on January 17, 2022 to incentivise countries to dispose of expedited environment clearance applications for development project. This, experts say will undermine the due diligence required to verify environmentally sensitive projects.
The Ministry of Environment, Forest and Climate Change (MoEF&CC), stated that the ratings will increase transparency, efficiency, and accountability and promote the “ease of doing Business”.
Kanchi Kohli, senior researcher at Delhi-based think tank, the Centre for Policy Research, said that the ranking system “reflects a twisted understanding about what environment impact assessments processes are designed to achieve.” It encourages faster decisions over detailed appraisals, before making decisions about whether projects should be approved/rejected.
IndiaSpend reported on January 2020 that the new system was being introduced at a moment when the ministry was accused of weakening environmental safeguards to promote ease-of-business.
“This is a perverse incentivizing for bureaucracy, other agencies, to push development projects, not following due procedure that will undermine democratic governance, resources, and rights of communities,” Tushar Dash, independent researcher on forest rights and environmental governance issues in India, said. “This isn’t an isolated incident. There have been a series if notifications, guidelines, and executive directions that were issued by the central governments to try to weaken the statutory safeguards that have been in place to protect the interests of communities as well as the environment.
On January 21, we wrote to the environment ministry asking for their opinion on the system’s implications. We will update this story when they reply.
New rule puts ease of doing business ahead of the environment
The new system proposes a star-rating system for the state (or union territory) Environment Impact Assessment Authorities (SEIAA), which rates them on seven criteria. For example, states get two marks if they clear a project in less that 80 days, one mark if it takes 105 days and zero if it takes more than 120. The ministry announced on January 24th that there will not be any negative marking for applications that take longer than 120 days.
The Environment Impact Assessment Notification of 2006 allows for a period of 105 days to grant EC. This includes 60 days for appraisal and 45 days for a regulatory authority decision.
Dash said that the rating system is a catalyst to undermine all the statutory procedures that are in place to protect the environment and respect the rights of communities.
The SEIAA reviews projects classified under Category B of Environment Impact Assessment Notification 2006. These projects include hydroelectric power projects and mining projects that have a smaller spatial extent and therefore have a significantly lower impact than Category A projects which fall under the authority of the central authority.
The process involves four stages of review: screening to determine whether the activity requires further environmental studies; scoping, where the expert committee addresses environment concerns and prepares a terms and reference; public consultation and appraisal for grant or rejection of environmental clearance.
“Such detailed assessments demand a careful review and analysis of all material and the outcomes of public hearings. IndiaSpend spoke to Kohli about the role of expert committees, which are appointed to provide technical and legal advice and conduct detailed scrutiny of any proposals that could have a negative effect on people or the environment. “Limiting the role and responsibility of expert committees, reducing the need for inquiry in favour of faster decisions, does not benefit either the environment or project operation.”
Kohli said that recommending approvals can lead to social conflicts and ecological disasters because of poor baselines and poor assessments. Valid concerns are relegated for post facto studies.
After a meeting in November 2021, where the cabinet secretary presided over the discussion about rating states based upon the time taken to grant clearances, the decision was made on the ratings. “Based on the speed and timeliness of granting EC, it was decided to incentivise states with a Star Rating system. The ministry stated that this is meant to be a way of encouragement and recognition as well as to promote improvements where necessary.
Kohli said that there is an inherent assumption in the market that quick decisions or approvals will benefit business operations, or will ease their investments flows, which will in turn help improve the economy. “However the current state is not due to environmental approval processes as very few projects are delayed.
There is a deeper problem and systemic issues with monopoly, corruption, and global investments flows that have had an adverse effect on India’s business.
IndiaSpend reported earlier in January 2020 that the government’s push for business freedom has led to a compromise in environment regulation. We also found that 70% of the rules for the pollution industry were repealed between 2014 and 2017, after the National Democratic Alliance government came to power.
Another attempt to weaken the environmental safeguards
The environment ministry has made rules that are against the environment before. Numerous such projects have been proposed in environmentally vulnerable areas in recent years. IndiaSpend reported May 2020 that more than 76 projects in the Western Ghats were granted approval or expedited between July 2014 to March 2020. This area is considered a critical forest area and ecologically fragile.
IndiaSpend reported in September 2020 that environmental clearances have become a paper stamping exercise due to amendments made over the past 30 years. In March 2021, the central governments amended the Environment Impact Assessment framework (EIA) of 2006. This exempted all projects from public hearing.
Between July 2021 and now, the 2006 notification has seen a total of 67 changes. The environment ministry also issued new standard operating procedure (SOPs), in July 2021, to address industrial projects operating without prior environmental clearance. These provisions will not be effective in deterring violations of environmental norms. They defeat the purpose of prior environmental clearances required by the EIA 2006. IndiaSpend investigation discovered that this was the case in August 2021.
“Demonizing the environmental approval process or lowering the environmental standards has not and won’t improve the economic performance of projects or overall economy. These projects will also lose social legitimacy, as has been the case in many other places,” Kohli stated.
Dash stated that many of these decisions made in favor of ease of doing business will increase potential conflicts over land or resources.
