Are environmental clearances holding up industrial and infrastructure investment in India? India's manufacturing sector has struggled to increase its contribution to gross domestic product and infrastructure investments have not kept pace with the need. This economic stagnation is often blamed on, among other factors, hurdles in securing environmental clearances. How true are these perceptions? Which aspects need attention? How could these be addressed?
Clearances are sought under various regulatory provisions: environmental clearance for new activities or expansion of existing projects; forest clearance for any project involving diversion of forest land; wildlife clearance for projects falling within 10-kilometre radii of a "core zone" boundary.
While many argue that projects are being delayed, there is no clear definition of "delays". In the environmental-clearance process, the grant of terms of reference (TORs) from the date of submission of the project proposal is meant to take 60 days. Next, the environmental impact assessment (EIA) and other scoping studies are to be undertaken, while the TOR remains valid - for two years. This is followed by public consultations, for which 45 days are allocated. The recommendation from the expert appraisal committee (EAC) is meant to take up to 60 days with final clearance from the regulatory authority within another 45 days. If all stages took the maximum time allocated, securing an environment clearance could take 940 days.
In reality, however, clearances are often granted much sooner. The Council on Energy, Environment and Water analysed 11,174 proposals from 2003 until September 2014. Of these, 72 per cent had received environmental clearance. Of the remaining 3,119 pending applications, 89 per cent had been granted TORs. Further, among those granted environmental clearance, 90 per cent of projects in construction, hydropower and industry received clearance within a year of application.
If most projects get cleared and soon enough, why are there delays in other cases? The collection of baseline data, conduct of the EIAs and public hearings, and submission of relevant documents requires the most time and are the reasons for most delays across sectors. A review of the minutes of the EAC meetings during 2013-14 shows that a quarter of the projects applied for an extension of TOR validity, as they were unable to comply with the TOR conditions, or were found to have submitted incomplete or incorrect information.
We estimate that 40 to 60 per cent of projects in thermal power, hydropower, coal mining and nuclear power sectors are likely to face delays during the post-TOR stage of the clearance process. Land acquisitions were found to cause delays particularly in river valley, hydropower and infrastructure projects. Also, during 2003-14, while 53 per cent of applications (out of 10,403) had received forest clearances, within industry (which includes, among others, steel, cement, chemicals, paper and pulp), 90 per cent of projects were pending forest clearance.
Overall, three problems afflict the process of environmental clearances: (a) post-TOR delays in collecting data, conducting the EIAs and public hearings and submission of required documents; (b) poorly designed public hearings; and (c) poor information management.
What can be done? First, the quality of the EIAs has to significantly improve. An environment clearance service cell (ECSC) should act as a single window, to provide project proponents assistance to obtain necessary approvals and seek project-related information. By coordinating with the Quality Council of India, the ECSC can develop a cadre of accredited EIA consultants, reviewed by an international agency such as the International Association of Impact Assessment. Accredited consultants would be randomly allotted to appraise projects, to reduce the conflict of interest in promoters choosing their own consultants. Streamlining the process is not a guarantee of clearance. But a more credible and time-bound process can increase confidence on all sides.
Secondly, public hearings have to be revamped. They are held too late in the decision-making process to be meaningful. The EIA consultant should be required to prepare a ToR for the EIA and should get the same vetted by the public at the start of the scoping phase. Once the report is prepared, a second public hearing should be organised once the community has had a chance to deliberate for a month. If more than 50 per cent of the affected community votes against the sanctity of the EIA report, then it would have to be redone. However, public consultations are not decision-making forums; that authority rests with the ministry of environment, forests and climate change.
Thirdly, better information management is needed to establish baselines. An environmental clearance information system (ECIS), within the ECSC, could conduct a countrywide baseline mapping of environmental quality parameters (air, water, land use, meteorology, soil, biodiversity, social factors). Real-time information could flow from quality-monitoring stations (say, via the National Air Quality Monitoring Programme and National Water Quality Monitoring Programme). More granular data would eventually become available with monitoring agencies at regional levels. Finally, an "EIA follow-up" is a globally recognised practice and includes monitoring actual impacts, adaptive management and regular communication with communities. Over time, this should be integrated to strengthen the ECIS, provide updated data and adjust baselines.
The "Make in India" campaign aspires for "zero defect and zero effect". Raising the bar for quality products is imperative. Equally, lowering the resource footprint of India's growth recognises the benefits that the natural environment and calls for accounting for the impact of anthropogenic activities. Rather than viewing environmental clearances as a zero-sum game, they could be streamlined, made more credible, more informative, more inclusive and yet time-bound. It would reinforce the symbiotic relationship between the environment and human activities, which India's new manufacturing vision seeks to preserve.
Clearances are sought under various regulatory provisions: environmental clearance for new activities or expansion of existing projects; forest clearance for any project involving diversion of forest land; wildlife clearance for projects falling within 10-kilometre radii of a "core zone" boundary.
While many argue that projects are being delayed, there is no clear definition of "delays". In the environmental-clearance process, the grant of terms of reference (TORs) from the date of submission of the project proposal is meant to take 60 days. Next, the environmental impact assessment (EIA) and other scoping studies are to be undertaken, while the TOR remains valid - for two years. This is followed by public consultations, for which 45 days are allocated. The recommendation from the expert appraisal committee (EAC) is meant to take up to 60 days with final clearance from the regulatory authority within another 45 days. If all stages took the maximum time allocated, securing an environment clearance could take 940 days.
In reality, however, clearances are often granted much sooner. The Council on Energy, Environment and Water analysed 11,174 proposals from 2003 until September 2014. Of these, 72 per cent had received environmental clearance. Of the remaining 3,119 pending applications, 89 per cent had been granted TORs. Further, among those granted environmental clearance, 90 per cent of projects in construction, hydropower and industry received clearance within a year of application.
If most projects get cleared and soon enough, why are there delays in other cases? The collection of baseline data, conduct of the EIAs and public hearings, and submission of relevant documents requires the most time and are the reasons for most delays across sectors. A review of the minutes of the EAC meetings during 2013-14 shows that a quarter of the projects applied for an extension of TOR validity, as they were unable to comply with the TOR conditions, or were found to have submitted incomplete or incorrect information.
We estimate that 40 to 60 per cent of projects in thermal power, hydropower, coal mining and nuclear power sectors are likely to face delays during the post-TOR stage of the clearance process. Land acquisitions were found to cause delays particularly in river valley, hydropower and infrastructure projects. Also, during 2003-14, while 53 per cent of applications (out of 10,403) had received forest clearances, within industry (which includes, among others, steel, cement, chemicals, paper and pulp), 90 per cent of projects were pending forest clearance.
Overall, three problems afflict the process of environmental clearances: (a) post-TOR delays in collecting data, conducting the EIAs and public hearings and submission of required documents; (b) poorly designed public hearings; and (c) poor information management.
What can be done? First, the quality of the EIAs has to significantly improve. An environment clearance service cell (ECSC) should act as a single window, to provide project proponents assistance to obtain necessary approvals and seek project-related information. By coordinating with the Quality Council of India, the ECSC can develop a cadre of accredited EIA consultants, reviewed by an international agency such as the International Association of Impact Assessment. Accredited consultants would be randomly allotted to appraise projects, to reduce the conflict of interest in promoters choosing their own consultants. Streamlining the process is not a guarantee of clearance. But a more credible and time-bound process can increase confidence on all sides.
Secondly, public hearings have to be revamped. They are held too late in the decision-making process to be meaningful. The EIA consultant should be required to prepare a ToR for the EIA and should get the same vetted by the public at the start of the scoping phase. Once the report is prepared, a second public hearing should be organised once the community has had a chance to deliberate for a month. If more than 50 per cent of the affected community votes against the sanctity of the EIA report, then it would have to be redone. However, public consultations are not decision-making forums; that authority rests with the ministry of environment, forests and climate change.
Thirdly, better information management is needed to establish baselines. An environmental clearance information system (ECIS), within the ECSC, could conduct a countrywide baseline mapping of environmental quality parameters (air, water, land use, meteorology, soil, biodiversity, social factors). Real-time information could flow from quality-monitoring stations (say, via the National Air Quality Monitoring Programme and National Water Quality Monitoring Programme). More granular data would eventually become available with monitoring agencies at regional levels. Finally, an "EIA follow-up" is a globally recognised practice and includes monitoring actual impacts, adaptive management and regular communication with communities. Over time, this should be integrated to strengthen the ECIS, provide updated data and adjust baselines.
The "Make in India" campaign aspires for "zero defect and zero effect". Raising the bar for quality products is imperative. Equally, lowering the resource footprint of India's growth recognises the benefits that the natural environment and calls for accounting for the impact of anthropogenic activities. Rather than viewing environmental clearances as a zero-sum game, they could be streamlined, made more credible, more informative, more inclusive and yet time-bound. It would reinforce the symbiotic relationship between the environment and human activities, which India's new manufacturing vision seeks to preserve.
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