Importance of Environmental Laws in Start-ups

There are some basic compliances which every company or an industrial unit has to follow such as compliances under Labor Law, Under Companies Act, Under Income Tax act, under GST act & also under the environmental laws. Knowledge of environmental laws is really necessary for the start-ups because these environmental laws contains certain policies & standards for how all the activities will be controlled & how the decisions regarding the control, assess, stoppage & approvals have to be made in the matters concerning the environment. Compliance with the relevant laws is essential since it ensure no penalty to be imposed.

Environmental Permits have to be obtained from the State Pollution Control Board. According to the Ministry of Earth Forest & Climate change (MoEFCC), now industries are classified into four different parts as per their Pollution Index (PI) score, depending on the utilization of resources & the pollutant waste such generated. The industries are namely white industry, Red industry, Orange industry, Green industry.

1. PI Score up to 20 will be classified as white industry which means that these are non-polluting companies or industries and these industries do not require a permit but just needs to inform the State Board. 

2. PI Score of 21 to 40 is classified as green industry, 

3. PI Score of 41 to 59 is classified as Orange Industry 

4. PI Score of 60 or above is considered as Red Industry. 

All the types of industries except the white industry requires a permit from the State Board & the time duration can be decided by the State Board.

Legislations regarding Environmental Protection

In India, with the increase in environmental awareness, the laws related to the environment has been made stricter & non-compliance with any such laws can lead to a much higher penalty. To startup any business, a new entrepreneur should know all the environmental laws & their relevant sections, since it is mandatory for any company or any business to comply with the environmental laws as there have been cases where the courts have imposed a high penalty or even closure of such companies who were not complying with the laws.

1. National Green Tribunal Act, 2010:–

As per Section 26 of the National Green Tribunal Act, 2010, which says that if any person including the companies fails to comply with any order or decision of the tribunal under the NGT Act, 2010, they will be liable to a punishment which can be extended to 3 years or fine up to 10 crores. In cases of a company the fine can be extended to 25 Crores with an additional fine up to 1 lakh per day if the company still fails to comply.

In the case were it was said that some industries are responsible for polluting Ganga, the SC asks the National Green Tribunal to close down all the industries which were responsible for polluting the river, if they fail to install adequate measures to treat industrial effluents.

As in the case of Sterlite Industries Ltd. vs. Union of India, AIR 2013 SC (Civil) 1699, Supreme Court imposed a penalty of 100 Crore on the Sterlite Industries for acting in contravention with the provisions of the Air (Prevention & Control of Pollution) Act & causing pollution beyond the permissible limits.

2. Environmental Protection Act, 1986:–

This act provides certain rules & regulations which every company or every industry has to comply with, and for a start-ups, these rules are really necessary since this act empowers the state or the government to inspect the place or the factory at any point of time.

Section 10:– Section 10 of the Environmental Protection Act, 1986 gives the power to the government to enter at any reasonable time & also has the power to inspect that the rules & guidelines as mentioned under this act are still complied with or the company is acting in contravention to the said rules.

Section 11:– This section empowers the central government to take samples for the purpose of analysis. Any sample for example a sample of Air, water, soil or other substance from any factory or any place can be taken.

Section 15:– This section provides for penalty in cases of default on the part of the companies to comply with the guidelines mentioned. This section provides for an imprisonment of up to 5 years or with a fine of 1 lakh for failing to comply.

3. The Air Act, 1981:–

This Act provides for the prevention & control of air pollution giving the state power to prohibit the use of any fuel if it thinks that the fuel can cause excessive pollution.

Section 19 (3) states that if the state feels that any fuel other than the approved fuel in any of the air pollution control area can cause air pollution. The state may by notification can prohibit the use of such fuels. This section also gives the right to the state to declare any area as air pollution control area.

Section 22 of this act provides for the restriction on the companies or the factories to emit air pollutants. This section states that no person running any of the industrial unit is allowed to discharge the emission of air pollutants in excess of the standards as are laid down by the state. 

Section 22A gives special powers to the board to make an application to the court for restraining any person or the company to cause excessive pollution above the standards mentioned.

Section 24 empowers the central or the state government, the right to enter at any reasonable time & inspect that the guidelines mentioned under this act are being complied with or not.

4. The Water Act, 1974:–

This act was enacted to provide for the prevention & control of water pollution & also to maintain & restore wholesomeness of water in the country. This act unlike the Air Act also provides for the establishment of boards to control the water pollution & lays down high penalties for not complying with the same.

Section 24:– Section 24 prohibits any person or any industrial unit to use any stream or well for the disposal of polluting matter which may have the effect to disturb the proper flow of water or likely to lead to substantial aggravation of pollution.

Section 25:– Section 25 restricts the person or the industrial units to make new outlets & new discharge systems without informing the state board.

Section 32:– This section gives the right of emergency measures in case any poisonous or noxious matter has entered into a stream or well by way of accident or any unforeseen event. The state is this case has the right to carry out certain operations to remove that matter from that stream or well. The state also has the powers under this section to prohibit or restrain any person or any industrial unit to discharge such polluting matter for time being.

International Environmental Law

International Environmental Laws (IEL) are the laws which attempts to control pollution & the depletion of natural resources within a framework of Sustainable Development. These international laws has helped India in the development & the enactment of legislations in the field of environment. IEL covers all the topic related to biodiversity, toxic & hazardous substances, air, land & water pollution, nuclear damage. The new Startups should keep a track of all the ongoing new laws in the international environmental laws since India has also adhered to some of these laws & is still adhering to it.

Conclusion

Increasing environmental awareness among the people has made the laws related to environment much more stringent & in non-compliance with such laws can lead to higher penalties. Complying with the relevant laws ensures no penalty to be imposed on the budding startup at any point in its growth & also in legal problems as well because the most obvious consequence of compliance is that it decreases the risk of fines or penalties or even the shutdown of business which the SC did by closing all the industries near river Ganga till they come with appropriate measures. 

Companies are constitutionally indebted to protect the environment & are much legally obligated to make certain that they abide the environmental laws & the corporations must comply with the provisions of these environmental laws. Generally, all these compliances are looked upon by the legal department of any organization but in startups the person is on his own so they need to follow all the laws on their own. 

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