Polluter Pays Principle

"If anyone intentionally spoils the water of

another ... let him not only pay damages, but
purify the stream or cistern which contains
the water..." - Plato
• Polluter Pays Principle has become a popular
catchphrase in recent times. 'If you make a mess, it's your
duty to clean it up'- this is the main basis of this slogan.
It should be mentioned that in environmental law, the
'polluter pays principle' does not refer to "fault."
• Instead, it favors a curative approach which is concerned
with repairing ecological damage. It's a principle in
international environmental law where the polluting
party pays for the damage done to the natural
environment. 
• It is regarded as a regional custom because of the strong
support it has received in most Organization for Economic
Co-operation and Development (OECD) and European
Community (EC) countries. International environmental
law itself mentions little about the principle.

In recent days, the polluter pays principle is seen as a way

of internalizing pollution-related costs within the context
of the economic rationality of the enterprise. There is a
close relationship between a country's environmental
policy and its overall socioeconomic policy .
• Furthermore, under this principle it is not the
responsibility of government to meet the costs
involved in either prevention of environmental
damage, or in carrying out remedial action, because
the effect of this would be to shift the financial
burden of the pollution incident to the taxpayer. But
State practice does not support the view that all the
pollution costs should be borne by the polluter,
particularly where transnational dispute is involved. 
Historical Evolution of the PPP
• The first major reference to the PPP appeared 1972
in the OECD Guiding Principles. The PPP as a
guiding principle across countries became necessary
because some countries faced complaints by national
firms about rising costs and a loss of international
competitiveness following a national implementation
of the PPP within their borders. The OECD Guiding
Principles define the PPP as an instrument for "...
allocating costs of pollution prevention and control
measures"
• The range of costs to be borne by the polluter
has expanded over time. In 1989, the OECD
suggested extending the PPP in order to cover
the costs of accident prevention and to
internalize the environmental costs caused by
accidents. In 2001, the OECD Joint Working
Party on Agriculture and Environment stated
that according to the PPP.
• "... the polluter should be held responsible for
environmental damage caused and bear the
expenses of carrying out pollution prevention
measures or paying for damaging the state of
the environment where the consumptive or
productive activities causing the
environmental damage are not covered by
property rights." 
• Only one year later, the European Community
followed the example of the OECD Principles from
1972 by adopting the first Environment Action
Program (EAP). Since 1987, the PPP has been part of
European Law. It is included in Article 174 of the EU
Treaty (1997). Since 1990, when the International
Convention on Oil Pollution Preparedness, Response
and Co-operation was agreed upon by the
International Maritime Organization (IMO), the PPP
has been acknowledged as a " ...general principle of
international environmental law."
• In 1992, the Rio Declaration (UNCED)
included the PPP in Principle 16: "National
authorities should endeavor to promote the
internalization of environmental costs and the
use of economic instruments, taking into
account the approach that the polluter should,
in principle, bear the cost of pollution with due
regard to public interest and without distorting
international trade and investment."
 THE PRINCIPLE AS A FEATURE OF
CUSTOMARY INTERNATIONAL LAW
• The polluter pays principle was promoted by the
Organization for Economic Cooperation and
Development (OECD) during the 1970s when there
was a great deal of public interest in environmental
issues which resulted in demands on the
Governments and other institutions to introduce
policies and mechanisms for the protection of the
environment.
• The modem day principle of polluter pays was first incorporated
in Principles 21 and 22 of the Stockholm Declaration, 1973.
Thereafter, the European Charter on the Environmental and
Health, 1989and the Single European Act, 1986 made
provisions for applying the polluter pays principle.
• The United Nations Conference on Environment and
Development, 1992 in Principle 15 incorporates the polluter
pays principle.
• More recently the member states of the Council of Europe and
the European Economic Community adopted the Convention
on Civil Liability For Damage Resulting from Activities
Dangerous to the Environment.
• The fact that 153 states were signatories of the Rio Declaration does
not make the principle in the declaration one of international
customary law.
• What is required is a demonstrable willingness to adhere to it and the
practice of nations must alter according to the prescriptions of the new
norm for it to attain the status of international customary law.
• In the absence of any clear intent among nations, incorporating the
above two requirements of customary international law, one wonders
how the principle of polluter pays has been incorporated into
municipal law. Therefore, the principle of polluter pays stands on a
weak legal foundation, mainly because its salient features have yet to
be finalized by international law jurists.
 Flaws in the PPP
• It is true that polluter pays principle has a
positive effect to reduce pollution. The
principle seems quite relevant for pollution
that occurs during industrial activity,
although it remains inefficient in the case of
historical pollution. Most developing countries,
however, have not yet subscribed to the PPP as a
main environmental policy guideline. Legal
theorists discovered few loopholes of this rule.
• The flaws are as follows:
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.  

Second, a large number of poor households, informal

sector firms, and subsistence farmers cannot bear any
additional charges for energy or for waste disposal. 
• 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. 

Fourth, exporters in developing countries usually cannot shift the

burden of cost internalisation to foreign customers due to elastic
demand.
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.
• During the two decades from Stockholm to Rio "Sustainable
Development" has come to be accepted as a viable concept to
eradicate poverty and improve the quality of human life while
living within the carrying capacity of the supporting eco-systems.
"Sustainable Development" as defined by the Brundtland Report
means "development that meets the needs of the present
without compromising the ability of the future generations to
meet their won needs". We have no hesitation in holding that
"Sustainable Development' as a balancing concept between
ecology and development has been accepted as a part of the
Customary International Law though its salient features have yet to
be finalized by the International Law jurists.
• Some of the salient principles of "Sustainable Development", as culled-out
from Brundtland Report and other international documents, are:
• Inter-Generational Equity,
• Use and Conservation of Natural Resources
• Environmental Protection
• the Precautionary Principle
• Polluter Pays principle
• Obligation to assist and cooperate
• Eradication of Poverty and Financial Assistance to the developing countries.

Hence the "The Precautionary Principle" and "The Polluter Pays" principle are
essential features of "Sustainable Development"
• "The Polluter Pays" principle has been held to be a sound
principle by this Court in Indian Council for Enviro - Legal
Action v. Union of India. The Court observed, "We are of the
opinion that any principle evolved in this behalf should be
simple, practical and suited to the conditions obtaining in this
country" . In this case the number of private companies operated
as chemical companies were creating hazardous wastes in the
soil, henceforth, polluting the village area situated nearby, and
they were also running without licenses, so an environmental
NGO, filed writ petition under article 32 of the COI, which
sought from the court to compel SPCB and CPCB to recover
costs of the remedial measures from the companies.
• The Court ruled that "Once the activity carried on is hazardous or
inherently dangerous, the person carrying on such activity is liable to
make good the loss caused to any other person by his activity
irrespective of the fact whether he took reasonable care while
carrying on his activity. The rule is premised upon the very nature of
the activity carried on".

Consequently, the polluting industries are "absolutely liable to

compensate for the harm caused by them to villagers in the affected
area, to the soil and to the underground water and hence, they are
bound to take all necessary measures to remove sludge and other
pollutants lying in the affected areas".
• The "Polluter Pays" principle as interpreted by the
Court means that the absolute liability for harm to
the environment extends not only to compensate the
victims of pollution but also the cost of restoring the
environmental degradation. Remediation of the
damaged environment is part of the process of
"Sustainable Development" and as such polluter is
liable to pay the cost to the individual sufferers as
well as the cost of reversing the damaged ecology.
• In Vellore Citizen's case , court held that:
• The precautionary principle and the polluter pays principle
have been accepted as part of the law of the land. Article 21
of the Constitution of India guarantees protection of life and
personal liberty & Article 47, 48A and 51A(g) of the
Constitution.
• In view of the above mentioned constitutional and statutory
provisions the precautionary principle and the polluter pays
principle are part of the environmental law of the country.
• In the Kamalnath's case , court by considering the PPP as the
law of the land, ordered that:
• "It is thus settled by this Court that one who pollutes the environment
must pay to reverse the damage caused by his acts." Court
disposed this matter by giving a show cause notice to the span
motels, that, why Pollution-fine and damages be not imposed as
directed by us.

This case subsequently came up in front of the court in the year 2000
and court directed to the span motels that: "The powers of this Court
under Article 32 are not restricted and it can award damages in a
PIL or a Writ Petition as has been held in a series of decisions".
• Henceforth, court directed a fresh notice to be issued to M/s.
Span Motel to show cause why in addition to damages,
exemplary damage be not awarded for having committed the
acts set out and detailed in the main judgment. Finally in 2002,
while granting exemplary damages court held that:
"Liability to pay damages on the principle of 'polluter pays' in
addition to damages, exemplary damages for having committed
the acts set out and detailed in the main judgment. Considering
the object underlying the award of exemplary damages to be to
serve a deterrent for others not to cause pollution in any
manner. So the quantum at Rs. 10 lakhs is fixed for the span
motels."