Major companies will be asked by Environment Ministry to have corporate environmental policy

NEW DELHI: All major companies and project developers will be asked to have a corporate environmental policy. The Environment Ministry aims to "promote environmental consciousness and secure compliance," by this measure.

The ministry is suggesting a system of self-regulation to ensure that projects and companies do not violate environmental laws and regulations.

The intent of the corporate environmental policy would be to "protect" the project stakeholders in a manner akin to the protection afforded to company stakeholders through financial systems and audit mechanisms. By integrating environmental concerns, it is hoped that the number of violations will be significantly reduced.

A senior ministry official said, "Unlike corporate social responsibility, environmental responsibility is backed by law. The government can take action under section 5 of the Environment Protection Act."

To begin with all central public sector undertaking, coal-based thermal power plants with generation capacities of 500MW, integrated steel plant projects with a capacity of 1 million tonnes per annum or more, and cement plants with a capacity of 3 million tonnes or more per annum, and petroleum refining industries will be required to put in place a corporate environmental responsibility policy.

This will be a requirement for consideration of clearance of projects. For all other projects, the respective expert appraisal committees and the forest advisory committee will decide, depending on the sector, location and size of projects if such a policy is mandatory.

The ministry is of the view that by integrating environmental concerns into the mainstream of corporate policies would be beneficial for companies. The policy could well operate as an early warning system, ensuring that projects are not held up on account of violations of conditions of environmental and forest clearances.

In the recent past, several companies, which have been found to be in violation of environmental laws and regulations, have argued that the stoppage of their projects has resulted in financial loss.

The ministry is of the view that a corporate environmental policy could help ensure that these laws and regulations are not violated.

A well-laid down policy would ensure adherence to the conditions of environmental and forest clearances, as well as make sure that the company functions in conformity with it. For this, it is suggested that the specific persons are designated to ensure adherence to the policy as well as compliance with environmental laws and regulations. The ministry's April 26 order suggests that deviations and violations of the law, as found by the ministry or other public authorities, should be reported to the company's board, and be reflected on the company website and annual report.