WHAT IS POLLUTER PAYS PRINCIPLE?

Since its first appearance in 1972, the PPP is today understood in a much broader sense, not only covering pollution prevention and control measures but also covering liability, e.g. costs for the clean-up of damage to the environment, (OECD 1989 and 1992). Also, the field of application of PPP has been extended in recent years from pollution control at the source towards control of product impacts during their whole life cycle. The preventive function of the PPP is based on the assumption that the polluter will reduce pollution as soon as the costs which he or she has to bear are higher than the benefits anticipated from continuing pollution.

As the costs for precautionary measures also have to be paid by the potential polluter, he or she has an incentive to reduce risks and invest in appropriate risk management measures.

 Finally, the PPP has a curative function, which means that the polluter has to bear the clean- up costs for damage already occurred.

What is pollution?

The polluter pays principle does not only apply if there is a “real” pollution in terms of harm or damage to private property and/or the environment. As civil liability is not connected to the breach of administrative standards in most European legislations, the second concept is more consistent with traditional legal concepts. The weakness of this approach is that PPP cannot provide an answer to the question of whether an impact is harmful or has to be considered as damage; it remains a challenge to natural and environmental sciences to define relevant criteria that then also could be implemented by legal standards.

Who is polluter?

The term “polluter” refers to a polluting, harmful activity polluter pays principle has had the inevitable consequence that legislation today often defines the polluter in a more extensive way. Not only those polluters who, in a strict sense, actually “pollute” have to be considered as such, but also those who are causing risks for the environment and where pollution has not occurred. The question of whether the “user” could also be regarded as a “polluter” is relevant, particularly in the field of product control law. Users often pay indirectly when pollution control costs are internalised in the prices of the product.

Indian scenario:

National conservation strategy and policy statement on environment and development, 1992 recommends “operationalisation of ‘polluter pays principle’ by introducing effluent tax, resource cess for industry and implementation of standards based on resource consumption and production capacity so that environmental considerations could be integrated while encouraging industrial growth. National environment policy, 2006 is more specific in recognizing the polluter pays principle in order to achieve economic efficiency in environmental conservation. This Principle requires that the services of environmental resources be given economic value, and such value to count equally with the economic values of other goods and services, in analysis of alternative courses of action. In Indian environmental jurisprudence, the ‘polluter pays’ principle includes environmental costs as well as direct costs to people or property.

The Supreme Court of India has fleshed out the ratio by stating that the ‘remediation of the damaged environment is a part of the process of the sustainable development and as such the polluter is liable to pay the cost to the individual sufferers as well as cost of reversing the damaged ecology.’

LIMITATIONS OF (PPP):

1. Firstly, ambiguity still exists in determining ‘who is a polluter’. In legal terminology, a ‘polluter’ is someone who directly or indirectly damages the environment or who creates conditions relating to such damage. Clearly, this definition is so broad as to be unsupportive in many situations.

2. Second, a large number of poor households, informal sector firms, and subsistence farmers cannot bear any additional charges for energy or for waste disposal.

3. Third, small and medium-size firms from the formal sector, which mainly serve the home market, find it difficult to pass on higher costs to the domestic end-users of their products.

4. Fourth, exporters in developing countries usually cannot shift the burden of cost internalisation to foreign customers due to elastic demand.

5. Lastly, many environmental problems in developing countries are caused by an overexploitation of common pool resources. Access to these common pool resources (in line with the PPP) could be limited in some cases through assigning private property rights, however, this solution could lead to severe distributional conflicts.

WAY FORWARD:

Although the polluter pays principle has helped to mitigate the damage being caused to the environment to some extent, the provision remains an inadequate remedy as ambiguity persists regarding clear identification of the actual polluter. The polluter may a part of the production chain and it is difficult to impose the liability on such polluter when the courts consider the parameters of extent and contribution of causing pollution.

Polluter pays principle makes the polluter pay for the damages done to the environment. It comes from economics rather than environmentalism. This principle needs a strict interpretation from our judiciary with immediate effect and we just can’t afford any sort of delay in its proper implementation in developing country, like India.

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