The Legal Battle Over EIA Amendments: TNPCB's Response And The Way Forward

Under the 2006 EIA Notification, building and construction projects of more than 20,000 square meters and less than 1,50,000 square meters of built-up area have been mandated to obtain prior environmental clearance (EC). However, the 2014 Notification introduced exemptions for certain building and construction projects, viz. industrial sheds, schools, colleges, and hostels for educational institutions, and prescribed that they adopt sustainable management practices, rainwater harvesting and the use of recyclable materials such as fly ash bricks. This exemption significantly streamlined the approval process for such projects, allowing for faster development.

In One Earth One Life v. Ministry of Environment, Forests and Climate Change & Anr. (“Judgment”), the Kerala High Court quashed the 2014 Notification on the grounds of procedural lapses and a lack of public consultation. This in effect revived the applicability of the 2006 EIA Notification and its subsequent amendments, to all projects covered under item 8(a) of the Schedule to the 2006 EIA Notification and did away with the exemptions granted to certain categories of projects, under the 2014 Notification. On April 30, 2024, the MoEF published the Office Memorandum F. No. 3-85-2016-IA-III circulating the Judgment to the concerned divisions and departments for compliance.

The Judgment has raised the issue of whether the dictum would apply retrospectively thereby calling into question the projects that availed the exemption under the 2014 Notification and its subsequent clarifications, up until the Judgment, or prospectively and would apply to all building and construction projects as per the terms of the 2006 EIA Notification.

In response to the Judgment, the Circular provides instructions to the projects within the state of Tamil Nadu and guidance to the pollution control board for processing consent applications for both ongoing and future projects in view of the Judgment.

Key Points from the Circular:

1. Projects with Consent to Establish (CTE): The projects that have already been issued CTE by the TNPCB shall be processed for Consent to Operate (CTO) based on merits. As per the Circular, the Judgment does not impact such projects. However, the issue of EC is primarily one that is under the 2006 EIA Notification, and the TNPCB is not the competent authority to deal with a dispute over the interpretation of any clause thereunder. Hence, the consent accorded to such projects will be subject to any further order of a court or notification or proceedings that may impact the benefit of exemption as determined by the MoEF or the State Environment Impact Assessment Authority (SEIAA).
2. Pending Projects Under Exemptions: Projects such as industrial sheds, schools, colleges, and hostels for educational institutions, which have applied for consent to the TNPCB prior to the Judgment and which are pending, shall be processed further based on merits along with the specific condition as mentioned above.
3. New Projects Post-Judgment: In case new projects apply for CTE after the Judgment, the project will require an EC from the SEIAA before approaching the TNPCB for consent.

While the Circular provides temporary relief and guidance for projects within Tamil Nadu, the projects which are given consent by the TNPCB will be subject to any further decision taken by the Government or an order passed by a court. The absence of any directions or guidance from the Central Government following the Judgment creates a fragmented regulatory environment, with potentially different interpretations and implementations by various state authorities. These uncertainties are likely to cause delays and potentially affect investor confidence in new projects, and therefore, for the industry to regain confidence, the MoEF may issue a directive which could, at a very base level, standardize the approach to handling projects affected by the Kerala High Court's Judgment.

Ongoing dialogue with the MoEF and state authorities, and proactive engagement with regulatory authorities will be crucial in ensuring that the affected sectors can continue to grow with a certain degree of confidence.

A central-level clarification from the MoEF or, alternatively, an order from a court of competent jurisdiction on the retrospective or prospective effect of the Judgment would ensure that all stakeholders are operating under the same regulatory expectations, enhancing investor confidence and standardizing the EC application process across states. This directive would be pivotal in streamlining the approval of those categories of projects which were covered under the 2014 Notification, thereby reinforcing the Government's commitment to improving the ease of doing business in India. Such measures would help harmonize the regulatory landscape across states, streamline the EC process, and support the continued growth of the construction and building sectors in India.

Authors: Sunil Tyagi, Managing Partner and Divij Poddar, Associate, ZEUS Law Associates. Views are personal.