Sterlite's will be one of the highest compensations to be paid by an Indian company for causing environmental damage.
In May last year, the Himachal Pradesh High Court had asked Jaiprakash Associates to pay Rs 100 crore as damages for flouting environmental laws to build its cement plant in Solan district of the state. A special leave petition against the HC order is pending before the Supreme Court.
On Saturday, Sterlite's Tuticorin smelter was temporarily shut following an order from the Tamil Nadu Pollution Control Board (TNPCB) over a toxic gas leak.
The Rs 100 crore as compensation is for causing ecological damage to the villages around the plant, which lies in an ecologically fragile coastal area, for a long period from 1997 to 2012.
Welcoming the decision, Sterlite Industries in a press statement said it would continue to work in close association with the Tamil Nadu government and other regulatory bodies towards maintaining highest standards of health, safety and environment.
Central Pollution Control Board counsel Vijay Punjwani, who was one of the lawyers in the matter, said: This is neither a fine nor cost. Sterlite has spent around Rs 150 crore on taking remedial measures including putting in place pollution control devices and has also complied with all the recommendations. It is a compliance unit now. He added: Such rulings send a clear signal to the industry that if you comply with the environmental norms, then nothing will happen and if it doesn't, then any industry at any time will be closed down.
While setting aside the Madras High Court's 2010 order that directed closure of the the copper plant, which produces nearly 400,000 tonnes annually, an SC bench headed by Justice AK Patnaik said: ...we have only set aside the directions of the HC...and we make it clear that this judgment will not stand in the way of the TNPCB issuing directions to the appellant, including a direction for closure of the plant, for the protection of environment in accordance with law.
Considering the magnitude, capacity and prosperity of the company, we are of the view that the company should be held liable for a compensation of Rs 100 crore for having polluted the environment in the vicinity of its plant and for having operated the plant without a renewal of the consents by the TNPCB for a fairly long period and according to us, any less amount would not have the desired deterrent effect on the appellant-company, the bench stated.
Tuesday's judgement would, however, have no bearing on the TNPCB's direction of March 30 asking the company to shut down the plant in the wake of an alleged noxious gas leak from it. The leakage issue was not part of the issues dealt with in the judgment.
Sterlite has already challenged the state board's order before the National Green Tribunal, Chennai. The matter is listed for hearing on April 9.
Senior counsel CA Sundaram, who represented Sterlite, said that in any industrial development, be it setting up of a power unit or mining, some effect on environment is inevitable. Pollution may not be intentional, but any damage to nature should be compensated.
He further said that the courts have been following the polluter pays principle, which requires that the costs of pollution be borne by those who cause it, and have been asking various companies including miners or tanneries to pay before being allowed to continue operations.