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What are Natural Resources?

Natural resources can be defined as ‘stocks of materials that exist in the natural environment which may either be scarce or economically useful, in production or consumption, in both i.e. their raw state or after minimal amount of processing’[1]. It should be noted that fish and forest products are also included in the definition of natural resources. India is considered to have resource wealth, including large coal, iron, and petroleum reserves.

[1] https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr10-2b_e.pdf (pg 46, para 4)

Natural Resource Law

Natural resources law governs how people can use the parts of the environment that have some economic or societal benefit. Generally, these benefits include air or wind, light, water, soil and plants, animals that occupy the land, and underground minerals or oil. The body of legal rules that promotes and controls uses of nature, mainly the parts of nature that are held to be valuable by the people is known as natural resource law. The law includes rules specifying how governments make ownership rights in nature. The law also includes resource-related transaction.

Polluter Pays Principle Worldwide

If anyone intentionally spoils the water of another, let him not only pay damages, but purify the stream or cistern which contains the water”- PlatoThe core of the principle that ‘the polluter should pay’ simply means that the polluters are responsible for the pollution they have caused. Therefore, they should bear the cost of measures aimed at preventing and reducing pollution. The negative environmental impacts of the use of our resources consist of both pollution and depletion of natural resources. The effect of economic globalization, such as privatization of natural resources is the reason for an increase in the use of this principle. It’s a principle in international environmental law where the polluter pays for the damages done to the natural environment.

Polluter Pays Principle in India

The judiciary in India has interpreted the Polluter Pays Principle as, for example, can be seen from the judgment conveyed by the Supreme Court of India in writ request of no 657 of 1995.[1] In its order dated February4, 2005, The Supreme Court held that " The Polluter Pays Principle implies that total obligation of harm to nature stretches out to repay the victims of pollution, as well as to the expense of reestablishing ecological corruption. Remediation of damaged environment is a piece of the procedure of sustainable advancement.”

In the case of Vellore Citizens Welfare Forum v. Union of India[2], the use of the polluter pays principle has been justified via the constitutional mandate[3], statutory provisions[4] and international law.

[1] Indian Council for Enviro-Legal Action v. UOI & ors., AIR 1996 SC 1446
[2] (1996) 5 SCC 647
[3] Under Article 21 and Article 47. The most relevant provision invoked was Article 48-A, which states that the State will endeavor to protect and improve the environment, and Article 48-A(g) which ensures the protection of the natural environment.
[4] The Water Act, 1974, the Air Act, 1981 and the Environment Protection Act, 1986.

The POSCO Case

There was a concern raised for the preservation of natural resources, especially environmental damage to the river Mahanadi, since it was affected by the project and it created a serious issue for the Cuttack city.

According to the polluter pays principle, the amount has to be justified to the carrier of the project and the amount has to be received from them through taxation expenditure[1]. The amount has to be obtained by charging the taxation principle, which was involved in the project.

Another, option is to regenerate the environment as it was before since, the environment has to be bought back to its prior form and the project involved cutting forests and polluting the river, so the Indian government can order POSCO to restore the environment back to its original form, since there was an loss of agriculture, betel leaf farming, river etc.

[1] Tax expenditures are one form of government funding used in order to encourage a change to a more environmentally beneficial impact.

Liabilities of POSCO

POSCO has two options,

(1) Either pay compensation to the Indian government, for the pollution and cutting forests, which adversely affected the economic interest of farmers, stopped the betel leaf farming, and contaminated the river Mahanadi?

(2) It has to restore the environment back to its original form, as it was before the project, by paying the taxation expenditure , which involved in the project, it is also one of the principle of Polluter Pay Principle, which involve paying back the compensation to the Victim.

Collective Exploitation by POSCO and the Indian Government

There was a Memorandum of Understanding (MoU) signed between the Indian Government and South Korean government. According to this agreement, it was the duty of the Indian government to further the development of Posco's steel plant, which ended up endangering thousands of lives.

As a result, several trees have been cut off by the POSCO authorities, but it was approved by the government, and it is also the government's responsibility to take care of natural resources.

Here, as per section (16) (2) of the Environment and Protection Act, it is stated that if the pollution occurred through the consent of the government officials, then the government alsohas to pay a similar cost of damages as the company.

Hence, there should be an amount recovered from the government, as a part of recovering the damage. The remaining amount should be then recovered from Posco through taxation expenditure.

As the river has been polluted, right through the city of Cuttack, the company should bear the cost of the pollution, under section 33(2) of the Water Pollution Act, and pay the full amount.

The Coca Cola Case

The acts committed by the Hindustan coca cola company has violated the rights of villagers of the Plachimada to a wholesome environment which is guaranteed under Article 21 of the Indian Constitution

The principle of “polluter pays” should be applicable in this case as they have not only damaged natural resources, but also made them unavailable to be used by future generations.

The company is liable for compensating the farmers and the citizens of Plachimada village as they there are the culprits for the damages caused to the citizens.

They should be held liable to pay for the damages caused to the reserve water resources and to the lands of the farmers.

What is the Company responsible for?

They should pay for the extra amount of water used by the company for manufacturing the product.

They should pay for the damages they have caused to people's lands in Plachimada village, through the spread of cadmium lead and chromium due to throwing sludge in the wells of the village and thereby affecting the water sources of the village.

They should pay the damages by either restoring the damaged flora and fauna and water reserves back to their previous state or by the paying for the damages caused to the citizens due to the release of toxic substances in the environment of Plachimada village.

Also by virtues of the case, the concept of “Precautionary principles”[1] should be added under Article 21 of the Indian Constitution.

[1] The precautionary principle is a tool for making better health and environmental decisions. It is a notion which supports taking protective action before there is complete scientific proof of a risk; i.e. action should not be delayed simply because full scientific information is lacking.

The Coca Cola Victims Compensation Bill

The protest letter to the PM, alleges a glaring breach of the national interest. This has been provoked by a letter from the Union home ministry to the Kerala government informing the latter that the President has been ‘pleased to withhold' consent to the Plachimada Coca Cola Victims Compensation Claims Tribunal Bill 2011.

The enactment of this Bill was a basic commitment to enforce the sustainable management of the rare resources of the nation as a public resource. It was in accordance to the Supreme Court judgment in the G2 scam along with Article 39b of the Constitution.

It fills a critical legislative gap and complements the Green Tribunal Act 2010, which puts a period bar of five years for filing cases for compensation.

Other Judicial Precedents

Prior to the judgment given in the case of Coco Cola and the POSCO there were other judgments, which threw light on the concept like “precautionary principle” and “Polluter pays”.

In the case of M.C. Mehta v Union of India the concept of “precautionary principle” and “Polluter pays principle” was introduced. In this case the issue was whether the accused was liable to pay damages and fines for the restoration of the damaged environment.

The Court held that the accused was guilty for damaging the ecosystem of the surrounding area and for the damaging the environment. As a result the court ordered the accused to pay the damages and fines for the restoration of the affected environment. The court also held that the aesthetic use and the pristine glory of our natural resources including the environment and ecosystem of our country cannot be eroded for private, commercial and any other use.

In the case of A.P. pollution control board v Prof M.V. Nayadu and others the court defined the concept of “precautionary principle”. Further in this case, the issue was on what basis should the “precautionary principles” be fixed and be referred.

In this case, the court held that, the concept of “precautionary principle” would be referred on the basis of “scientific uncertainty”.

In the case of Narmada Bachao Andolan v. Union of India and ors the applicability of the concept of “precautionary principle”. In the case the issue was whether the construction of the dam would have dire environmental consequences and whether the concept of “precautionary principle” would be applicable.

In this case, the court held that the construction of the dam has not lead to any environmental consequences. As a result, the concept of “precautionary principle” would not be applied.