THE ICFAI LAW SCHOOL

“Polluter Pays Principle”

Under Supervision of: Submitted By

by:
Prof. Monica Kharola Aditya Singh

19FLICDDN01076
.

1
 DECLARATION

I Aditya Singh, Enrollment Number 19FLICDDN01076, hereby declare that this project work

entitled“Equidistance principlein International Law”has been originally carried out byme

undertheguidanceandsupervisionof Ms. Monica Kharola, Assistant Professor of Law, ICFAI

Law School, Dehradun.ThisworkhasnotbeensubmittedeitherinwholeorinpartofanyDegree

/Diploma atanyUniversity.

Place: Dehradun

Date: 14 - 08 - 2024 (--------------------------)

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 1:Introduction

The“Polluter Pays Principle” [hereinafter PPP] states that the ‘Polluter’, a person
whopollutes the environment; must pay for the harm and compensate the victim.This
principleimposes absolute liability as the polluter is not only liable to pay compensation to
the victimsbut also reinstate and restore the environment to its original position.Ultimately,
the burdenlies on the polluter to pay the costs and for its effects including remedial or
cleanup costs andothernecessaryexpenses.

The PPP was first mentioned in the recommendation of the Organization for Economic Co-
operation and Development [hereinafter OECD] of 26th May, 1972 and reaffirmed in
therecommendationof 14thNovember,19741.Itspecifiedthemainfunctionsof PPPas“allocation
of costs of pollution prevention and control measures to encourage rational use
ofscarceenvironmentalresourcesandtoavoiddistortionsininternationaltradeandinvestment”.The
European Community took up the OECD recommendation in its first‘Environmental Action
Program’ (1973-1976) regarding cost allocation and action by publicauthorities on
environmental matters.Since 1987, the PPP had been enshrined in the Treatyof the European
Communities.Although the principle of PPP was not in the future of 1972Stockholm
Declaration2, it was finally laid down under Principle 16 of the Rio Declaration,19923.

Thus, due application of PPP may protecteconomicinterests but excessive application ofPPP
may again lead to distortions.The major weakness of PPP is that it cannot provide ananswer
to the question of whether an impact is harmful or has to be considered as damage.Itstill
remains a challenge to natural and environmental sciences to define relevant criteria thatcould
be implemented by legal standards.Thus, the PPP does not only apply if there is a“real”
pollutionintermsofharmordamage totheenvironment.

1
OrganizationforEconomicCo-operation&Development,1972;Retrievedfromwww.oecd.org-
2013-05-30
2
Principle 22, Stockholm Declaration of the United Nations Conference on the
HumanEnvironment, 1972; Retrieved from http://legal.un.org/avl/images/ha/dunche/08-
l.jpg{Lastvisitedon4Marchat21:30,(N.T.M)}
3
Principle 16, Rio Declaration of the United Nations Conference on Environment
&Development,1992;UNCED Doc.A/CONF.151/5/Rev.1,31ILM874(1992);

3
ObjectivesofResearch:Theresearchhasthefollowingmainobjectives:

1. TothoroughlyunderstandtheconceptofPPPinits fullestsense;
2. ToexplorethevariousintricaciesofPPPinEnvironmentalLaw.
3. Tocriticallyanalyzethehindrances andloopholesinits applicabilityandextensioninIndia
andtootherjurisdictionslikeUK;
4. Tosuggest suitablealternativeremediesforitsbetterfunctioningand implementation.

ResearchQuestions:Theresearchbroadlydwells onthefollowingquestions:

1. Whatconstitutes“Pollution”,“Pollutant”,“Polluter”&“Damages”underPPP?
2. HowdoesPPPensurethatthepolluterdoesnotfurtherpollutetheenvironmentevenafterpayi
ngcompensation?
3. WhydoesPPPimposeanabsoluteliabilityonthepolluterbothfromeconomicandlegalstand
points?
4. HowdoesPPPcheckEnvironmentalpollutionbyprotectingitsresourcesthroughactiveinter
ventionbythegovernments?

Hypotheses:Thefollowingarethehypothesesofthisresearch:

1. PPPimposesabsoluteliabilityonthepolluter.
2. PPPcannotbeimplementedthroughstrictlegalstandards.
3. ExcessiveapplicationofPPPleadstodistortionsonCostandMarketanalysis.

Research Methodology: The research is doctrinal in nature and the methodology adopted
isanalytical,comparativeanddescriptivewhichemploysdeductivelogicalreasoningtoelaboratethe
finerdetailsofPPPineachjudicialprecedentunderInternationalEnvironmentalLaw.

SourcesofResearch:Theresearchextensivelyreliedonstandardtexts,articles,commentaries,
digests, journals, landmark judgments, e-journals and official website of theOECD
amongstmanyothers.

Scope & Limitation of Research: The research is only limited to understanding the
conceptof PPP and its loopholes in applicability by critically comparing both the Indian and
UKperspectives&InternationalConventions underEnvironmentalLaw.

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 2: Evolution ofPPPinIndia&UK

“The‘PolluterPaysPrinciple’statesthatwhoeverisresponsiblefordamagetotheenvironmentshoul
dbearthecosts associatedwithit4”.

As a general rule, sound economic analysis of pollution and Environmental problems

mustalso be based on the Principle of Responsibility 5.Forcing polluters to bear the costs of
theiractivities is good economics too; it not only advances fairness and justice, but also
enhanceseconomic efficiency.“Polluters” are not necessarily those who, through their
production orconsumption activities, do damage to the persons or property of others.Polluters
are thosewho"damage"orimpose"costs"on theEnvironment.In
otherwords,a‘Polluter’issomeone who is simply using his own property and resources in a
way that is not approved ofby government officials or Environmentalists.In such cases, there
is no harm to be measuredandnorealvictimstocompensate.

Consequently, the amount to be paid is not determined by the extent of any actual
damagedone.Rather, it is set at a level that curbs the politically disfavoured activity to the
degreedesired by its opponents.On the other hand, a ‘Pollutant’ is a substance or energy
introducedinto the environment thathas undesired effects, or adversely affects the usefulness
of aresource.A Pollutant may cause long- or short-term damage by changing the growth rate
ofplant or animal species, or by interfering with human amenities, comfort, health, or
propertyvalues. Some pollutants are biodegradable and therefore will not persist in the
environmentin the long term.In most cases, the PPP is used as cover to promote a political or
ideologicalagenda rather than to ensure that real polluters pay compensation to real victims of
theiractivities6.

The PPP, originally an economic principle, was designed to correct improper cost
allocation.This improper cost allocation has resulted from the common belief that resources
such as airandwaterwerenotscarceand,asaresult,freelyavailable.

Bynottakingthecostof
theseresourcesintoaccountintheproductionorconsumptionofgoodsandservices,

4
TakingAction,Chapter2,p.3,PublishedbytheUnitedNationsEnvironmentalProgramme [sic], found at
www.rona.unep.org.action.02.htm{Last visited on 5thMarch at22:45,IST}
5
ChristopherMiller,EnvironmentalRights:CriticalPerspectives,(1stedition,Routledge
Publications,Oxfordshire,2015),p.37
6
Ibid,p.38
5
an ‘externality’ arises.An externality (or external cost) results when someone’s actions
causean uncompensated loss of welfare to others.This is generally referred to as a “Cost
onSociety”.Costs associatedwith pollution are consideredtobe “externalities” 7.PPP isincluded
in the United Nation’s 1992 Rio Declaration and Agenda 21 as part of a set of
broadprinciples to guide sustainable development globally 8.“The polluter is liable to pay the
costtotheindividualsufferers aswellas the costofreversingthedamagedecology9”.

The PPP was first formulated in 1972 when the OECD promulgated the “Recommendation
oftheCouncilonGuidingPrinciplesconcerningInternationalEconomicAspectsofEnvironmental
Policies” (‘Guiding Principles’)10.In accordance with its mandate to furtherInternational
Trade, the OECD adopted the PPP as the recommended method for allocatingcosts of
production.No OECD member country formally ratified the Guiding Principles
orImplementation Recommendations11.However, the ‘Declaration on Environment:
Resourcefor the Future’ was adopted by the governments of OECD member countries (which
includedtheUK).12

While the 27 principles enshrined in the United Nations Rio Declaration on Environment
andDevelopment is legally non-binding, they were endorsed by the 178 countries meeting
there,including India and the UK13.In UK law, “Pollution” is defined as the release of harmful
orpotentiallyharmfulsubstancesintotheland,waterorair14.UndertheEnvironmentalProtection
Act, 1990 (EPA), it is the role of local authorities to identify ‘Contaminated Land’.Such land
is defined as being in a condition, caused by substances in, on or under the
land,firstlysoastocause,orhasthe‘significantpossibility’ofcausingsignificantharmor

7
JudithA.Layzer,TheEnvironmentalCase:TranslatingValuesintoPolicy,
(3rdedition,CQPress,WashingtonD.C.,2016),pp.86-87
8
Supranote3
9
JusticeTSDoabia,Environmental&PollutionLawsinIndia,Vol.1,
(2ndedition,LexisNexis,Nagpur,2010),p.174
10
OECD, ‘Recommendation of the Council on Guiding Principles concerning
International EconomicAspects of Environmental Policies’,(OECD Doc.C(72)128, 26May
1972)
http://acts.oecd.org/Instruments/ShowInstrumentView.aspx?InstrumentID=4&Lang=en&Book
=False{Lastvisitedon6Marchat23:30,IST}
11
NotedinOECD,‘Decision-RecommendationoftheCouncilontheCo-
operativeInvestigation and Risk Reduction of Existing Chemicals’ (OECD doc
C(90)163/Final, 31January 1991)
http://acts.oecd.org/Instruments/ShowInstrumentView.aspx?
InstrumentID=59&InstrumentPID=56&Lang=en&Book=False{Lastvisitedon15thSeptemberat22:30,IST
}
12
DeclarationonEnvironment:Resource fortheFuture; 20thJune,1985C(85)111
13
Supranote4,p.126
14
EPA,1990;Section1; SeealsoPollutionPreventionandControl Act, 1999;Section1

6
secondly, to cause, or likely to cause, water pollution.‘Harm’ is defined broadly to
coverhealth, environmental quality, sensory offences and damage to property.“The
CorporationTax Act, 2009” (hereinafter CTA, 2009), on the other hand, does not require that
the harm be‘significant’ or that the possibility of harm be significant.The CTA, 2009 also
makes it clearthat the substances must be the only cause of the contamination.Thus, in the
UK, the PPP isstrictly applied if contamination in any form is established on the polluter
under the relevantprovisions.

In India, the development of PPP was shrouded in uncertainty till the Enviro-Legal
Actioncase (Indian Council for Enviro Legal Action v. Union of India 15) where the principle
ofabsolute liability was affirmed.The same principle was reinstated in Oleum Gas Leak
case16.The principle of absolute liability and the concept of Sustainable Development for the
firsttime were invoked in Vellore Citizens Welfare Forum v. Union of India 17.Thus, the use
ofPPP has been justified via the Constitutional mandate, statutory provisions and
CustomaryInternational Law.Later on, with parallel developments in the international
paradigm withrespect to Environmental Policies, the burden to protect the environment
equally fell on thepersons who polluted it 18.As a result, unlimited exploitation of natural
resources came to anabrupt halt with the subsequent introduction of Environmental
Legislations to prevent theabuse ofEnvironment.

15
Indian Council for Enviro Legal Action v. Union of India, (1996) 3 SCC
21216Oleum Gas Leak Case, [M.C. Mehta v. Union of India] (1987) 1 SCC
39517VelloreCitizensWelfareForumv.UnionofIndia,(1996)5SCC647
18
PLeelakrishnan,EnvironmentalLawinIndia,(3rdedition,LexisNexis,Nagpur,2008),pp.138-139

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 3:PolluterPaysPrinciple&MarketBasedInstruments

Market based or Economic Instruments (both are policies of PPP) are broken down into
twocategories, Taxes and Tradable Permits which are seen as attempts to "make the polluter
pay"by attaching a fee to the polluting activities 19. The tax would be paid eitherin the form
ofan emissions fee or an excise tax on the sales of products that are associated with
pollution.Thetradablepermitsapproachwouldfirsthavethegovernmentestablishanoverallaccepta
ble level of emissions for an Industry and would then distribute permits for that levelof
emissions to Companies within the Industry.The Companies could then buy and sell
theseemissionspermitsbasedon theirneedstoemitthepollutantand theirabilitiestofindpollution
abatement techniques.By these means, the polluters are made to "pay" for theirpolluting
activities either through a tax, through the purchase of permits from others in theindustry, or
through the use of their own assigned permits (foregoing the cash that could beearned by
selling them)20.In the first instance, the "payment" is established by and made tothe
government.In the latter cases, it is established by the supply and demand conditions inthe
marketforpermits.

While the presumed moral case for market based instruments is generally centered on
theconcept of making the polluter pay, the economic justification for these instruments is that
ofefficiency, i.e. using market based incentives to accomplish Environmental goals is
assumedto be more efficient than traditional command and control policies.As argued by the
WorldResource Institute’s Duncan Austin, ‘Economic Instruments’, which aim to control
pollutionby harnessing the power of marketincentives offer amore costeffective,flexible,
anddynamic form of regulation than conventional measures 21.This notion is tied directly to
thePPP.Theoretically,bymakingpolluterspay,thepollutioncostsassociatedwith their

19
R.Rajagopalan,EnvironmentalStudies:FromCrisis toCure,(3rd
edition,OxfordUniversityPress,New Delhi,2016),p.204
20
BradJessup&KimRubenStein,EnvironmentalDiscoursesinPublic&InternationalLaw,
(1stedition,CambridgeUniversity Press,Cambridge,2012),p.112
21
Ibid,p.113

8
production activities are taken intoaccount.This encourages the more efficientuse ofresources
overall, while providing an incentive for polluters to find the lowest cost
methodsforreducingemissions.

The problem with this theoretical approach is that, in advocacy and practice, the concept
ofcost is twisted to mean more than actual damage inflicted on third parties 22.Too
frequently,the payment that PPP advocates would impose or the degree of cutback that is
mandated iscalculated to reduce the activity in question to the degree desired by the
opponents of theactivity rather than to the extent warranted by the actual level of “external
costs” associatedwith the activity. Economics, being a behavioural social science, attaches
the concept ofcosts to human beings and individual decision making.“Cost” refers to what
must be givenup when a person chooses one course of actionas opposed to another, orwhen
someoneelse’s activities prevent a person from choosing one course of action rather than
another23.Economictheoryarguesthatefficiency,i.e.,socialwelfare,willbemaximizedwhenprodu
cers take into account all of the costs involved in making the product (including thecosts they
incur themselves and those they impose on other people) as they decide how
muchtoproduceandhowmuchtocharge.

Forexample,in thecaseof aCompany thatis

pollutingariver,thecostmightbetodownstreamrecreationaluserswhohavetogiveuporcutbackonc
ertainactivities:swimming, fishing, etc. Their cost would be the value that they place on the
activities thatthepollutionispreventingthemfrom pursuing.From
thisperspective,then,pollution"problems" arise because the polluter is imposing costs on other
human beings.It is thehumanusers oftheriverwhobearthecosts,nottheriveritself24.

The application of PPP that accurately reflects the economic theory of costs would have
toinclude the identification of a victim and compensation to that victim by the offending
party.An economic notion of "damage" would be directly linked to this view of costs.All
pollutiondamages would relate to costs that are imposed on others, either by directly causing
themphysical harm or by somehow depriving them the use of their property.Many advocates
ofmarketbasedinstrumentsandPPPmisappropriatetheeconomictheorybyredefiningthe

22
Supranote6,p.89
23
DharmendraS.Sengar,EnvironmentalLaw,(1stedition,PHILearningPvt.Ltd.,NewDelhi,2014),p.126
24
Ibid,p.128

9
concepts of cost and damage to apply to things rather than to people.Inanimate objects andthe
Environmentdonotincurcosts butpeopledo25.

The development of PPP must also include mechanisms to safeguard against its
potentiallyharmful effects whileatthesametimereduceuncertainties aboutits
economicimpact.Economistshave expressedreservations abouttheeconomicviabilityofPPP:

1. The application of PPP in urban areas where the Industrial Sector is dominated by
medium,small and tiny enterprises operating in a highly competitivemarket is risky as any
highercostsfromemissionorothereffluentcleanupchargemightadverselyaffecttheircompetitiven
ess in relation to large firms that are capable of affording the installation
ofnecessaryequipment.

2. Even though PPP does not prohibit the polluter from passing on the additional costs that
hemight incur in terms of increased costs, thereby increasing price of his product, the reality
indeveloping nations (India) may not always be this way.These nations which rely heavily
onexports of primary commodities for which demand in the international market is elastic
mayfind that the costs are entirely borne by the producers in the form of damage to human
health,propertyandecosystems26.

3. RepresentingalargerobjectiontotheinclusionofPPPinIndianLawistheconsequencesit will
have in the realm of the common property resource.The application of the principlewill lead
to the appropriation of rights by wealthy landlords to the disadvantage of the smallland
owners, if curbs are imposed on the manner in which a resource can be used, in
thisinstance,land27.

4. The Court has not dealt with the fact that the level of charges to be imposed on the
polluterareextremelydifficulttoestimate andthereforewillgive rise todifficulties.

Tooffsetthepotentialeconomicharm,PPPmustbeimplementedviaMarketBasedInstruments.The
mainaimofthisistoinduceefficiencyinEnvironmentalmanagement

25
Dhandapani Alagiri & E Naveen Kumar, Environmental Issues in India: An Introduction,
(1stedition,IcfaiUniversityPress,Agartala,2007),p.137
26
Supranote21,p.133
27
MaheshRangarajan&K.Sivaramakrishnan,India’sEnvironmentalHistory:FromAncient times
to the Colonial Period, (1st edition, Permanent Black Publishers, Ranikhet,2014),p.225

10
through the use of market mechanisms 28.One of the suggested mechanisms to achieve
theabove mentioned goal is an Environmental Assurance Bond.This is a bond that
wouldprovideacontractual guarantee thattheprincipal
wouldperforminanenvironmentallybenign manner, butwould beleviedfor the
currentbestestimate of thelargestpotentialfuture Environmental damages.Funds in the bond
would be invested and would
produceinterestthatwouldbereturnedtotheprincipal.Thebondwouldbeheldtilltheuncertaintyor
some part of it was removed29.This would provide a strong incentive for the principal
toreduce the uncertainty of the Environmental impact of their activities as quickly as
possible,bychangingtechnologytobeingmoreEnvironmentsfriendly.Thebondscouldbeadminist
ered by an independent regulatory authority, similar to that of the Pollution ControlBoard.

A potential argument against such bonds is that it would favour relatively large firms
thatcould afford to handle the financial responsibilities of activities potentially hazardous to
theEnvironment.But this will prevent firms that cannot handle the financial imposition
frompassing on the cost of the Environmental damage to the public 30.This does not,
however,exclude small firms from the ambit of this principle.It is desired that these firms
bondtogether to handle financial responsibility for Environmental damage. They may also
feel itis more profitable to switch to less risky activities or technology that does not require
suchhighassurancebonds31.

28
O.V. Nandimath, Handbook of Environmental Decision Making in India: An EIA Model,
(1stedition,OxfordUniversityPress,New Delhi,2009),p.175
29
Ibid,p.177
30
SShantakumar,IntroductiontoEnvironmentalLaw,(2ndedition,LexisNexis,Nagpur,2005),p.137
31
Supranote26,p.180

11
 4:PolluterPaysPrinciple- Indian&UKPerspective

The European Charter on the Environment and Health, 198932and the Single European
Act,198633madeprovisionsforapplyingthePPP.TheUnitedNationsConferenceonEnvironment
and Development, 1992 in Principle 16 incorporated the PPP.More recently,the member
States of the Council of Europe and the European Economic Community adoptedthe
‘Convention on Civil Liability for Damage Resulting from Activities Dangerous to
theEnvironment’34which specifically deals with transboundary pollution35.Every breach
ofInternational Law gives rise to an obligation to make reparations.As civil liability is
notconnectedtothebreachofadministrativestandardsinmostEuropeanlegislations,consistency is
more with traditional legal concepts.Environmental Legislation provides formeasures which
are taken to minimise risks – even in cases where there is a lack of scientificknowledge and
scientific cause–effect relationships cannot fully be established 36.Althoughtraditional norms
of State responsibility concern the treatment of aliens and their property, the‘Trail Smelter
Arbitration’ recognised that the principle of State responsibility is applicable ina field of
transfrontier pollution and consequently States may be held liable to private
partiesorotherStatesforpollutionthatcausesdemonstrabledamagetoEnvironment 37.The

32
The European Charter and Commentary, First European Conference on Environmentand
Health, Frankfurt, 7-8 December, 1989; WHO Regional Publications European
SeriesNo.35;Seealsowww.euro.who.int/en/.../policy.../european-charter-on-environment-and-health,-
1989{Lastvisitedon11Marchat22:00,IST}
33
Single EuropeanAct,17 Feb.1986, 1987OJ (L169)1
34
Convention on Civil Liability for Damage Resulting from Activities Dangerous to
theEnvironment; European Treaty Series No. 150, Lugano, 21.VI.1993, ETS 150,
Retrievedfromhttps://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?
{Lastvisitedon12Marchat23:30,IST}
35
RichardMoules,EnvironmentalJudicialReview,(1stedition,HartPublishersLtd.,
Oxford,2011),p.141
36
ShyamDivan&ArminRosencranz,EnvironmentalLaw&PolicyinIndia:Cases,Materials&Statu
tes,(2ndedition,OxfordUniversityPress,NewDelhi,2014), p.210
37
PLeelakrishnan,Environmental LawCaseBook,(2ndedition,LexisNexis,Nagpur,
2006),p.167

12
pertinent question is whether the mere presence of PPP in a few instruments can have
theeffectofgivingitthe statusofCustomaryInternationalLaw?

In the Erika Oil Spill Case,38the European Court of Justice held based on Art. 15 of the
EUWaste Framework Directive, 2006 that the producer of hydrocarbons whichbecame
wastedue to an accident at sea, could be held liable for the clean-up costs 39.In accordance
withPPP, however, such a producer is notliable unless he or shehas contributed through his
orher conduct to the risk of pollution stemming from the shipwreck.The question of
whetherthe “user” could alsobe regarded as a“polluter” becomes relevantasusers often
payindirectly when pollution control costs are internalised in the prices of the product.There
isyet a unanimous opinion as to whether PPP should be considered as a general principle of
lawor Customary International Law under Article 38 of the Statute of the International Court
ofJustice.40

The International Court of Justice in the North Sea Continental Shelf Case41delivered
alandmark judgment determining whether a particular provision in a treaty had acquired
thestatus of Customary International Law, thereby making it binding on those nations who
arenot signatories to the treaty concerned42.According to the decision, State practice and
opiniojuris can enable a treaty to acquire the status of Customary International Law.The
formerrequires that there be widespread acceptance by nations of the newnorm and the
lattersignifies that the practice must have been rendered obligatory by the existence of the
Rule ofLaw requiring it.The fact that 153 states were signatories of the Rio Declaration does
notmake PPP in the declaration one of Customary International Law.What is required is
ademonstrable willingness to adhere to it and thepractice of nations must alter according tothe
prescriptions of the new norm for it to attain the status of Customary International
Law43.Inthe absence ofanysuchclearintentamongnationsinincorporatingthe above two

38
MVErika,
(1999);TheERIKAOilSpill:EnvironmentalcontaminationandeffectsintheBayofBiscay(200
4),SpecialIssueofAquaticLivingResources,Volume17,Number3,July-
September2004,EDPSciences;SeealsoTheErikaOilSpill:TheBirdRescueResponse,
LeDrean-Quenec'hdu,S.,Jacques,J-P.,Lamy,A.(2001),ProceedingsofInternational Oil
Spill Conference 2001, American Petroleum Institute, Washington DC, USA39Supranote 37,p.171
40
Article 38 of the International Court of Justice, Retrieved from www.icj-
cij.org/documents/?p1=4&p2=2{Lastvisitedon12Marchat23:45,IST}
41
North Sea Continental Shelf Cases; Germany v. Denmark & The Netherlands, [1969]
ICJ1;Seealso1969ICJ Reports4,50
42
Supra note35,p.167
43
DonaldK.Anton&L.Shelton,EnvironmentalProtection&HumanRights,
(1stedition,CambridgeUniversityPress,Cambridge,2011),p.194

13
requirements of Customary International Law, the concerning question is how PPP has
beenincorporated into municipal law.Therefore, PPP stands on a weak legal foundation
mainlybecauseitssalientfeatureshaveyet tobefinalised byInternationalLawjurists.

In Oleum Gas Leak Case44, where Oleum gas leak from ‘Shriram Food and Fertilisers Ltd’.,
acomplex at Delhi killed many innocents and a practising lawyer in a nearby Court in
Delhi,the principle of Strict and Absolute Liability was imposed where the defendants were
forcedto pay compensation to the victims.Similarly, in the case of Vellore Citizens Forum v.
Unionof India45, where industrial pollutants and other toxic substances were released into a
nearbyriver which affected a large number of people who depended on the river as a source
ofdrinkingwater,theCourttookseriouscognizanceanddirectedthepolluterstopaycompensationby
reiteratingtheconceptofSustainableDevelopment.Also,inIndianCouncil for Enviro-Legal
Action v. Union ofIndia46,a PIL was filedagainsteconomicdegradation in coastal areas and for
protection of the same.The Court upheld “PrecautionaryPrinciple” by stating that polluters
should compensate if adequate precautionary measuresaren’ttaken toprotectthe
environment.Thus,the abovelandmarkthree cases setthebenchmark by preventing polluters
from taking environment for granted and by imposing
adutyandresponsibilityinequallyprotectingtheenvironment.

Thus, both India and UK adopted PPP on a different footage. In UK, the development of
PPPcame as a redress mechanism to Land Contamination and as a counter rehabilitative
measure.Hence, the polluter was forced to compensate the damage caused.UK, being a
member ofvarious International Conventions and Treaties including OECD recognized the
need of PPPto curb the growing menace of Environmental pollution.On similar lines, India
(being a non-member of OECD) also adopted PPP as inevitability to primarily protect
Environmentaldegradation from unscrupulous polluters as the costs to repair the Environment
each time wasaverygreatburdentotheIndianGovernment47.

44
Supranote16
45
Supranote17
46
Supranote15
47
Supranote31,p.143

14
 5:Conclusion &Suggestions

The idea that polluters should be made to pay for damages that they cause to health
andproperty in a free society based on Rule of Law should be the guiding principle for
allenvironmentalpolicies.ThenotionthatEnvironmentalproblemsareessentiallyaboutinterperson
alconflictsovertheuseofresourceshasbeentakencompletelyoutof theequation.A correctly
construed PPP would highlight the fact that there is no tension betweenliberty and economic
efficiency on the one hand and sound environmental stewardship on theother.Finally, the PPP
ends up as a device in effectively monitoring by making those
liableforEnvironmentalpollutionbysettingthestageforefficiencybasedEnvironmentalmanageme
nt through the proper use of market mechanisms.PPP can also be made moreeffective by:

1. Adjustingincentivessothatthepolluter paysthecostofuncertainty;

2. Developing scientific methods to determine the potential costs of uncertainty vis-a-

visEnvironmentaldamage;

3. ImplementingthelawsstrictlylaiddownbytheGovernmentforpreventingpollutionthrough
regularmonitoring;

4. InducingefficiencyinEnvironmentalmanagementthroughproperuseofmarketmechanis
ms;

5. Offeringappropriateincentivestoreducethedetrimentaleffectsofhighriskactivity.

15