Though Industrial and scientific development has positive effects like raising living standards, improving food product, improving health issues; but at the same time these industrial and scientific advancement has adversely effected the environment and thereby disturbing the balance of the nature. Industries discharge their pollutants and products continuously into the environment, the result of which is that our ecosystem has lost the capability of self maintenance and self regulation. The main cause of ecosystem imbalance is improper discharge of industrial waste and its unhygienic disposal.
With time it has been realized that the industries are also social units and they have rights and duties towards the society i.e. surrounding community and consumers. The duty of the industry is that they do not harm health of man and nature. Therefore it was necessary to devise some kind of measures to curb the industrial pollution. The World Commission on Environment and Development has suggested in its report that environment cost of the economic activity should be internalized-paid by the enterprises.
Thus it was in the form that enterprises were encouraged to invest in preventive, restorative and compensatory measures. But first time it was agreed by the Organisation of Economic Cooperation and Development (OECD) , to the base of their environmental policies on Polluter Pays Principle. Initially Polluter pays Principle which was recognized as economic and administrative measure to curb environmental pollution problem but recently it is adopted as strong legal measures to restrain the pollution problem.WHAT IS POLLUTION?The worldwide accepted definition or meaning of the pollution is the introduction by man, directly or indirectly, of substances or energy into the environment resulting in deleterious effects of such a nature as to endanger human health, harm living resources and ecosystems, and impair or interfere with amenities and other legitimate uses of the environment. If we look into the regional legislation then Water (Prevention and Control) Act, 1974 defines pollution as: contamination of water or doing some alteration to the physical, chemical or biological properties of the water. Further discharge of the sewage or industrial effluent into water whether directly or indirectly will be considered as pollution; or any act which is injurious to public health. The Environment (Protection) Act, 1986 also defines pollution as presence of environmental Pollutant (in any form) in the environment which are injurious to the environment. From the above regional as well as International definition it is clearly evident that pollution must have tendency to cause harm. Under common law pollution is treated as trespass to the property; if trespass is nominal then it will be tolerated. Hence pollution must have tendency to cause to some kind of harm.HISTORICAL EVOLUTION OF PPPThe first time Polluter pay Principle came to exist when OECD included recommendation in Guiding Principle Concerning International Economics Aspects of Environmental Policies. The OECD guiding principle defined Polluter pays Principle as an instrument for allocating costs of pollution prevention and control measure. This Principle was laid down to encourage the rational use of scarce environmental resources. Further OECD mentioned that Polluter must bear the cost so as to achieve the acceptable state of environment, and what will be the acceptable state of environment would be decided by the public authorities. The definition of Polluter pays Principle provided by the OECD does not cover the issue that polluter have to bear the cost of the accidental damages. Also it didn’t cover that the polluter has to pay for the residual pollution.In 1989, one other OECD Council recommendation asserted that private sector should bear the cost of the accidental pollution. But in case of accidental pollution the whole burden wasn’t put on the private sector. It also provided that when government may assist industry in prevention of accidental pollution. This principle changed to a sort of extended or strong Polluter Pays Principle. In 1992, Polluter pays Principle was reaffirmed in Rio Declaration, where Polluter Pays Principle was laid down as Principle 16 of the UN Declaration on Environment and Development, stating that National authorities should endeavor to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.Since 1987, the Polluter Pays Principle has become fundamental principle for European and International Community. This principle has also been enshrined in various treaties of European communities and national legislations world-wide. Now Polluter pays Principle has been widely recognised as a general principle of International Environmental Law, and, today, it is explicitly mentioned or implicitly referred to in a number of Multilateral Environmental Agreements.PHASES OF POLLUTER PAYS PRINCIPLE: DESCRIPTIONInitially Polluter Pays Principle was introduced as Economic principle’ but later on it evolved into both Environmental Principle’ and Legal Principle’.In Economic terms, the Polluter Pays Principle was introduced to curb the improper cost allocation problem. Improper cost allocation means that cost of air and water resources not taken into account in the production or consumption of goods because it was thought that these resources are free of cost. This result into externalities or external cost, generally referred as cost on the society.Failure to allocate the cost results into over-production, which, in economic theory, would result into market failure. In order to avoid this polluters should be made to bear the cost of the environmental damage. This would create an incentive to reduce the pollution. This was the basis of the Polluter Pays Principle. In economic theory, this may control the pollution but it does not reduce it. This has led to extend the interpretation of the Polluter Pays Principle. In Environmental terms, the interpretation of the Polluter Pays Principle has been extended whereby polluter has to pay not only damage cost but also control cost. From environmental perspective Polluter Pays Principle supports and establishes a system of fiscal charge, by which polluter finances public policy to protect the environment. The main focus is on how much should be paid instead of who should pay.As the meaning and function of the Polluter Pays Principle evolved, it has become widely recognized and accepted legal principle. It is hard to ascertain the precise legal definition of the Principle. From the legal perspective the core of the principle is derived from the principles such as Justice and Fairness, i.e. person or entity should be held responsible for their actions whether they were intended or not. From the above discussion it can be seen that Polluter Pays Principle has evolved from an Control cost (Economical) to damage cost (Environmental) to a compensatory cost (Legal).Polluter Pays Principle first time epitomised in International law in the United States v Canada case also known as Trail Smelter case. In this case Canada was made to pay compensation to the United States for the Trans boundary harm caused by the activities in its territory. The principle of strict liability was invoked here. The main reason for invoking the strict liability was that in environmental liability cases it is difficult to establish fault.DEVELOPMENT OF POLLUTER PAYS PRINCIPLE IN INDIAFollowing the Stockholm Declaration of 1972, India has developed a wide range of laws for the protection of the environment such as the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986 and the Forest (Conservation) Act, 1980. This goes to show that people around the world, including India, started showing the response to the need for protection of the environment.In India, this principle evolved from the rule of absolute liability’ which was laid down in the case of M.C. Mehta v. Union of India, where the Court had directed the polluters to pay a pollution fine which would be used to restore the living conditions and local environment of the affected place. This further evolved in the case of Indian Council for Environment-Legal Action v. Union of India (UOI) and Ors, where the court included the liability, compensation to the victims, arising out of the environmental degradation within the absolute liability for harm caused to the environment. The Polluter Pays Principle was impliedly incorporated in this case as the Court held that under Section 3 and Section 5 of the Environment (Protection) Act, 1986 the Court had the power to take measures for giving effect to such a principle. This was incorporated under the 1992 Rio Summit under Principle 16 which stated that the polluter should, in principle, bear the cost of pollution. Even though the Polluter Pays Principle has been judicially recognized in India, one does not seem to find its mention in the existing or upcoming legislations. The Court in the case of Vellore Citizens Welfare Forum v. Union of India and Ors. held that the principled is governed under Article 48-A and 51-A(g) of the Constitution of India and that this concept can be implied into the existing statutes. POLLUTER PAYS PRINCIPLE IN INDIAN CONTEXTWith respect to Indian Jurisprudence, Polluter Pays Principle includes both Environmental cost as well as direct cost to people or