Energy Conservation Bill irks chemical sector

Vijay Trivedi in Mumbai

Even as the Rs 125,000-cr chemical industry has welcomed the Government’s efforts to set up a new task force to give a fillip to the industry and make it more competitive, a cross section of players in the industry seem to be united in opposing the proposed Energy Conservation Bill 2000, passed by the Cabinet and is currently being debated in the Parliament.

It was last month that the Centre announced the setting up of the ‘The Task Force on Chemical Industry’ which would study various facets of the chemical industry and major policy issues and make recommendations to enhance its competitiveness and growth.

The 10-member task force to be headed by ICI India chairman Dr AS Ganguly, is expected to submit its report by November 2001.

However, at this juncture, the industry feels disturbed, especially by the possibility of Parliament passing the proposed Energy Conservation Bill 2000, cleared by the Cabinet earlier in February 2000. While the Government feels the Bill will help better energy utilisation in the industry, the industry feels otherwise and feels it would create more hassles for the players in the industry as also ‘unleash the dreaded inspector raj’.

Through the Bill, the Government wants to set up Energy Efficiency Bureaus and enforce energy efficiency measures. The Bureaus of Energy Efficiency would be a nodal agency for networking with different organisations on various action points, like preparing the curriculum for the accredited energy audit course; preparing minimum energy performance standard guidelines for appliances, equipment and the appliance labelling programme, and as well as preparing guidelines for energy efficient design of buildings and utility systems.

Furthermore, through the energy conservation methods, the Government feels that it would help the country in consuming less oil - around 7-12 m tn of industrial oil, majority of which
has to be imported. This will save foreign exchange.

Indian Chemical Manufacturers’ Association (ICMA) has already opposed this Energy Conservation Bill. ICMA president Mr Rajiv Pandia said “The passing of this Bill will have a negative impact on the chemical industry. There are fears of formalities for registration, inspector raj and money changing hands for fulfilling various requirements”.

Mr Pandia further said that, the particular issues of Energy Conversation Bill, which matters to the industry are right to specify process/equipment used by industry; inspection; possibility of removal of the proposed Act from the Judicial Review; and heavy penalty till norms are observed.

Industry alleges that the Government is still unclear on implementing the provisions of the new Solvent Order 2000, which was passed in June 2000 and they further plan to introduce new Energy conservation bills. Hence, industry is protesting the new proposed Bill.

Therefore, the chemical industry has decided to invite players from the small scale industry (SSI) sector as also the trading community to oppose this Bill. There are around 7,000 SSI in the chemical industry having sales of around Rs 30,000 crore.

The Chemical & Alkali Merchant‘s Association (CAMA) too has welcomed the move initiated by the ICMA for inviting SSI. However, CAMA has urged that this should include merchants, traders and dealers who have promoted 25,000 small and big SSI units.

CAMA, president, Dhimant Shah, said: “There is a need to bring all the players in the chemical industry under one umbrella to improve prospects of a stronger force to meet the emerging competition.”
Meanwhile, the various objectives of the task force will be:
1. Identify the areas of competitive advantages of the Indian chemical industry, in context of the emerging global scenario.
2. Formulate policy initiatives required to further strengthen areas of competitive advantages.
3. Examine the issue of dumping in the chemical sector and suggest remedial measures, including appropriate levels of tariffs.
4. Suggest strategies for sustained growth of export from the chemical sector.
5. Suggest steps to be taken for introducing changes and measures to enable the industry to become and remain competitive in the post WTO environment.
6. Suggest ways and means of strengthening R&D in the chemicals sector.
7. Identify measures such that Indian scientits in the chemical sector could take advantage of India’s strength in the IT sector to create intellectual property.
8. Identify appropriate institutions, in close cooperation with which, training and skill development for human resource in the chemical sector could be undertaken.
9. Suggest machinery which could, on a continuing basis, identify areas of further growth and work in close coordination with the industry.
10. Identify steps to be taken for providing infrastructure for the synergistic development of the chemical industry.
11. Suggest ways of promoting workers’ safety, health and environment and responsible care.