Environmen

t Impact
Assessment
UNIT 14-16
 • Environment Impact Assessment or EIA can be defined as the
study to predict the effect of a proposed activity/project on the
environment.
• A decision making tool, EIA compares various alternatives for a
project and seeks to identify the one which represents the best
combination of economic and environmental costs and benefits.
• EIA systematically examines both beneficial and adverse
consequences of the project and ensures that these effects are
taken into account during project design.
• It helps to identify possible environmental effects of the
proposed project, proposes measures to mitigate adverse
effects and predicts whether there will be significant adverse
environmental effects, even after the mitigation is
implemented.

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 • By considering the environmental effects of the project and their mitigation
early in the project planning cycle, environmental assessment has many
benefits, such as protection of environment, optimum utilisation of
resources and saving of time and cost of the project.
• Properly conducted EIA also lessens conflicts by promoting community
participation, informing decision makers, and helping lay the base for
environmentally sound projects. Benefits of integrating EIA have been
observed in all stages of a project, from exploration and planning, through
construction, operations, decommissioning, and beyond site closure.
• EIA is one of the successful policy innovations of the 20th Century for
environmental conservation. Thirty-seven years ago, there was no EIA but
today, it is a formal process in many countries and is currently practiced in
more than 100 countries. EIA as a mandatory regulatory procedure
originated in the early 1970s, with the implementation of the National
Environment Policy Act (NEPA) 1969 in the US. A large part of the initial
development took place in a few high-income countries, like Canada,
Australia, and New Zealand (1973-74).
• The EIA process really took off after the mid-1980s. In 1989, the World
Bank adopted EIA for major development projects, in which a
borrower country had to undertake an EIA under the Bank's
supervision

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 History of EIA in India
• The Indian experience with Environmental Impact Assessment began over 20 years
back. It started in 1976-77 when the Planning Commission asked the Department of
Science and Technology to examine the river-valley projects from an environmental
angle. This was subsequently extended to cover those projects, which required the
approval of the Public Investment Board. Till 1994, environmental clearance from the
Central Government was an administrative decision and lacked legislative support.
• On 27 January 1994, the Union Ministry of Environment and Forests (MEF),
Government of India, under the Environmental (Protection) Act 1986, promulgated an
EIA notification making Environmental Clearance (EC) mandatory for expansion or
modernisation of any activity or for setting up new projects listed in Schedule 1 of the
notification.
• The MoEF notified new EIA legislation in September 2006. The notification makes it
mandatory for various projects such as mining, thermal power plants, river valley,
infrastructure (road, highway, ports, harbours and airports) and industries including
very small electroplating or foundry units to get environment clearance.
• However, unlike the EIA Notification of 1994, the new legislation has put the onus of
clearing projects on the state government depending on the size/capacity of the
project. Certain activities permissible under the Coastal Regulation Zone Act, 1991
also require similar clearance.

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 The EIA process
• The environment impact assessment consists of eight steps with each step
equally important in determining the overall performance of the project.
Typically, the EIA process begins with screening to ensure time and resources
are directed at the proposals that matter environmentally and ends with
some form of follow up on the implementation of the decisions and actions
taken as a result of an EIA report. The eight steps of the EIA process are
presented in brief below:
• Screening: First stage of EIA, which determines whether the proposed
project, requires an EIA and if it does, then the level of assessment required.

• Scoping: This stage identifies the key issues and impacts that should be
further investigated. This stage also defines the boundary and time limit of
the study.

• Impact analysis: This stage of EIA identifies and predicts the likely
environmental and social impact of the proposed project and evaluates the
significance.

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 • Mitigation: This step in EIA recommends the actions to reduce and
avoid the potential adverse environmental consequences of
development activities.
• Reporting: This stage presents the result of EIA in a form of a report to
the decision-making body and other interested parties.
• Review of EIA: It examines the adequacy and effectiveness of the EIA
report and provides the information necessary for decision-making.

• Decision-making: It decides whether the project is rejected, approved

or needs further change.

• Post monitoring: This stage comes into play once the project is
commissioned. It checks to ensure that the impacts of the project do
not exceed the legal standards and implementation of the mitigation
measures are in the manner as described in the EIA report.

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 • The salient features of EIA Notification, 2006 inter alia include:
• The EIA Notification, 2006 has categorized the projects into two categories
namely; Category ‘A’ and Category ‘B’ based on their impact potential͘
• Category A projects require mandatory environmental clearance and thus they
do not undergo the screening process.
• Category B projects undergoes screening process and they are classified into
two types.
• Category B1 projects (Mandatorily requires EIA).
• Category B2 projects (Do not require EIA).
• Thus, Category A projects and Category B, projects undergo the complete EIA
process whereas Category B2 projects are excluded from complete EIA process.
• The stage of scoping for prescribing terms of reference by the Regulatory Agency
for the EIA studies has been incorporated in accordance with the International
practice. It is expected to improve the quality of EIA thereby improving the
quality of decision making and minimizing the delays.
• The public consultation process has been made more structured. It has two
components i.e. comments through correspondence and by public hearing at site.
Provision to videograph the proceedings of the public hearing has been made.
• NOCs ( No-Objection Certificates) from other regulatory agencies such as SPCB
etc. are not a prerequisite for considering application for environmental
clearance.

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 Stages of Environmental Clearance
• The environmental clearance process comprises of four stages, namely, Stage
• Screening Stage: Screening refers scrutiny of category ‘B’ projects seeking
prior environmental clearance made in Form-1 by the concerned State Level
Expert Appraisal Committee for determining whether or not the project
requires further environmental studies for preparation of EIA for its appraisal
depending upon the nature and location specificity of the project.
• Scoping Stage: What effects could this project have on the environment?
Which of these effects are likely to be significant and therefore need particular
attention in the environmental studies? Which alternatives and mitigation
measures ought to be considered in developing the proposal for the project
• Public Consultation stage: To ascertain views of local persons. Outcome of
public consultation, which is not a decision making process, to be included in
EIA and addressed.
• Appraisal stage: Appraisal means the detailed scrutiny by the Expert
Appraisal Committee or State Level Expert Appraisal Committee of the
application and other documents submitted by the applicant for grant of
environmental clearance.

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 • Distribution Of Category A And B Projects In EIA Projects
• The EIA Rules divide the projects into two categories, A and B,
based on their size and impact on natural and artificial
resources.
• Category A projects require permission on behalf of the Central
Government from the Ministry of Environment and Forests,
based on the opinion of an Expert Appraisal Committee (EAC)
created by the Central Government for this particular purpose.
For example- harbours, airports, nuclear power and related
projects, individual projects, construction or expansion of ports,
primary metallurgical industries (like steel, iron, copper), etc.
• Projects falling under Category B require the approval of a State
EIA, based on the opinion of a State Expert Appraisal
Committee (SEAC) formed in the EIA Notification 2006.

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 • Notification, 2006, For Category A And B Projects In EIA
• Category B includes initiatives that are less in size or capability and have more
minor consequences than Category A. Environmental clearances are provided
at the state level for Category B projects. As the law requires, each state has a
designated agency or board that grants the Clearance
• The objectives of the EIA Notification are as follows: –
• To build a transparent, decentralized, and effective regulatory structure to
integrate environmental issues into the development process to promote long-
term growth.
• Ensuring the implementation of appropriate environmental protections at the
planning stage of the project cycle to guarantee minimal effect on various
environmental components.
• To guarantee stakeholder participation in public consultation through public
hearings and to determine public opinion on the proposed project or activity.

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 • The Salient Features Of EIA Notification 2006 Are:
• The EIA Notification, 2006 divided projects into Category A and B
projects in EIA.
• Category A projects require environmental approval and do not
undergo the screening procedure.
• Category B projects undergo a screening procedure and are divided
into two groups.
• Category B1 projects require EIA (compulsory).
• Category B2 projects do not require EIA.
• As a result, Category A and B projects in EIA go through the whole EIA
procedure, whereas Category B2 projects are exempted.
• The public consultation procedure has been improved. It consists of
two parts: written comments and a public hearing on-site. A provision
has also been created to videotape the public hearing proceedings.
• NOCs (No-Objection Certificates) from other regulatory authorities,
such as the SPCB, are not required before applying for environmental
clearance.

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 The Key Proposals of the 2020 Draft
include
• Reduced Time for Public Hearings: One of the major steps of the EIA Mechanism is the public
participation. The 2020 draft proposes to reduce the notice period for public hearings from 30 days to
20 days.
• However, the MoEFCC has claimed it to be “in tune with the times”, given the growth of internet and
mobile telephony.
• Exemption of Projects: Furthermore, by classifying a number of projects into A, B1 and B2, a host of
projects are exempted from public scrutiny.
• Category B2 projects do not require mandatory Environment Clearance (EC), unlike the Category
A and B1 projects.
• Exempted Projects: The projects under this exempted category include: Offshore and onshore oil,
gas and shale exploration.
• Hydroelectric projects up to 25 MW.
• Irrigation projects between 2,000 and 10,000 hectares of command area.
• Small and medium cement plants.
• MSMEs in dye and dye intermediates, bulk drugs, synthetic rubbers, medium-sized paint
units.
• All inland waterway projects and expansion or widening of highways between 25 km and
100 km with defined parameters.

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 • Post-clearance compliance: It implies that once a project gets approved by the concerned
authority, the proponent projects are required to adhere to certain rules laid down in the EIA
report in order to ensure that no further environmental damages take place.
• Annual Submission of Reports: The new draft EIA, proposes the submission of compliance
reports annually whereas as per the 2006 notification, the compliance report was to be
submitted every six months. Environmental experts are of the view that allowing a longer period
for filling the compliance report will give an opportunity to project proponents to hide disastrous
consequences, which could go unnoticed.
• Report Prepared Solely by Project Proponents: Meanwhile, submission of the compliance
report will be solely prepared by the project proponents itself, which, without oversight and
review, may lead to inaccurate information submitted on the project.
• No Public Reporting for Non-Compliance: The EIA Notification 2020 excludes reporting of
violations and non-compliance by the public. Instead, the government will take cognisance of
reports only from the violator-promoter, government authority, Appraisal Committee or
Regulatory Authority.
• Post-facto Clearance: Another major proposal in the draft 2020 is granting ‘post-facto
clearance’ where a project that has been operating without environmental clearance, can be
regularised or allowed to apply for clearance.
• The judiciary has held, as in the case of Alembic Pharmaceutical vs. Rohit Prajapati in April 2020 that
“environment law cannot countenance the notion of an ex post facto clearance.”
• Penalty for Firms: Firms found violating the terms of their establishment, if they have to get
the clearance, however, will have to pay a penalty.

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 Environmental Audit
• An environmental Audit provides an assessment of the environmental
performance of a business or organization. The audit reveals details
about the activities of a company and its compliance with
environmental regulations. Audit information is presented to the
management team and employees.
• An environmental audit evaluates and quantifies the environmental
performance. It identifies compliance problems or management system
implementation issues.
• There are three main types of environmental audits:
• Environmental compliance audits
• Environmental management audits
• Functional environmental audits

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 • The environmental compliance audit reviews the company’s or site’s
legal compliance status.
• The environmental management audit helps the organization or
company understand how it is performing on its own environmental
performance standards.
• A functional environmental audit measures the effects of a particular
issue or activity. It investigates specific areas of concern such as air
quality monitoring, materials management, or wastewater management.
The functional environmental audit is less common and may be included
in an environmental compliance audit or an environmental management
audit.

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 • Environmental Audit Steps
• The environmental audit process includes the following steps as a minimum:
1.Planning the audit, including activities to be conducted and responsibilities for
each activity
2.Review the company’s environmental protection policy and the applicable
requirements, federal, state, and local requirements.
3.Assessment of the organization, it’s management, and equipment
4.Gather data and relevant information
5.Evaluate overall performance
6.Identify areas needing improvement
7.Report findings to management

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 • When an Environmental Audit is Necessary?
• Environmental audits are an important part of a company’s
environmental policy and performance. However, many companies
either don’t do them or do them improperly.
• If you are not an expert on environmental compliance and regulations,
you need an environmental audit. When an inspector arrives at your
work site, you’ll know that you are in compliance and be able to provide
documentation that outlines everything you are doing to stay in
compliance.
• Conduct an Environmental Audit
• There are three main Environmental Audit Stages or Phases:
• Pre-Audit
• Audit
• Post-Audit

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 • Common Cause v. Union of India, Writ Petition (CIVIL) No. 114 of 2014
• In 2012, a petition was filed by the non-profit organization Common Cause, calling for legal action to halt all
mining leases in Odisha, citing the findings of the report produced by the Justice M.B. Shah Commission. The
commission was established by the Central Government in 2010 to investigate illegal mining of iron ore and
manganese ore in the country, and had found widespread illegal mining in Odisha. The Supreme Court took
notice of these illegal mining activities, which were causing significant harm to the environment and forests, as
well as potentially causing hardship for the local tribal population, and issued an order to suspend these
activities.
• “There is no doubt that the grant of an EC cannot be taken as a mechanical exercise. It can only be granted after
due diligence and reasonable care since damage to the environment can have a long term impact. EIA 1994 is
therefore very clear that if expansion or modernization etc. of any mining activity exceeds the existing pollution
load, a prior EC is necessary and as already held by this Court in M. C. Mehta even for the renewal of a mining
lease where there is no expansion or modernization of any activity, a prior EC is necessary. Such importance
having been given to an EC, the grant of an ex post facto environmental clearance would be detrimental to the
environment and could lead to irreparable degradation of the environment” the Apex Court observed.
• Residents Welfare Association & Anr. v. The Union Territory of Chandigarh & Ors., Special Leave Petition
(Civil) No. 4950 of 2022
• The Supreme Court in this recent case observed “we observe that it is high time that the Legislature, the
Executive and the Policy Makers at the Centre as well as at the State levels take note of the damage to the
environment on account of haphazard developments and take a call to take necessary measures to ensure that
the development does not damage the environment. It is necessary that a proper balance is struck between
sustainable development and environmental protection. We therefore appeal to the Legislature, the Executive
and the Policy Makers at the Centre as well as at the State levels to make necessary provisions for carrying out
Environmental Impact Assessment studies before permitting urban development.”

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 • The SC on April 1, 2020 {Alembic Pharmaceuticals Ltd. v. Rohit
Prajapati & Ors.} held that the concept of an ex post facto EC is
in derogation of the fundamental principles of environmental
jurisprudence and is an anathema to the EIA notification dated
27 January 1994.
• It was held that it is detrimental to the environment and could
lead to irreparable degradation. It was also held that the reason
why a retrospective EC or an ex post facto clearance is alien to
environmental jurisprudence is that before the issuance of an
EC, the statutory notification warrants a careful application of
mind, besides a study into the likely consequences of a proposed
activity on the environment. It was further held that allowing for
an ex post facto clearance would essentially condone the
operation of industrial activities without the grant of an EC.

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 ESG (Environmental, Social and Governance)

• ESG is a framework that helps stakeholders understand how an

organization is managing risks and opportunities related to
environmental, social, and governance criteria (sometimes
called ESG factors).
• ESG takes the holistic view that sustainability extends beyond
just environmental issues.
• ESG has changed how capital allocation decisions are made by
many of the largest financial services firms and asset managers
in the world.
• An emerging class of ESG specialists is stepping into the
industry and supporting both net zero and carbon neutrality
goals.

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 • . Environmental
• Environmental factors refer to an organization’s environmental impact(s) and risk
management practices. These include direct and indirect greenhouse gas emissions,
management’s stewardship over natural resources, and the firm’s overall resiliency
against physical climate risks (like climate change, flooding, and fires).
• 2. Social
• The social pillar refers to an organization’s relationships with stakeholders. Examples of
factors that a firm may be measured against include human capital management
(HCM) metrics (like fair wages and employee engagement) but also an organization’s
impact on the communities in which it operates.
• A hallmark of ESG is how social impact expectations have extended outside the walls of
the company and to supply chain partners, particularly those in developing economies
where environmental and labor standards may be less robust.
• 3. Governance
• Corporate governance refers to how an organization is led and managed. ESG analysts
will seek to understand better how leadership’s incentives are aligned with stakeholder
expectations, how shareholder rights are viewed and honored, and what types of
internal controls exist to promote transparency and accountability on the part of
leadership.
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 • Evolution of ESG Disclosures in India
• The Companies Act, 2013 introduced one of the first ESG disclosure requirements for
companies. Section 134(m) mandates companies to include a report by their Board of
Directors on conservation of energy, along with annual financial statement
• In addition to this, companies are mandated to include disclosures on opportunities,
threats, risks and concerns as part of their annual reports under Regulation 34(3) of the
SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 (“LODR
Regulations”).
• In 2017, SEBI issued a circular on ‘Disclosure Requirements for Issuance and Listing of
Green Debt Securities’, to introduce the regulatory framework for issuance of green debt
securities in India and enhance investor confidence.
• In addition to this SEBI circular, the Indian Banks’ Association (IBA) has also released the
National Voluntary Guidelines for Responsible Financing, laying down broad and general
principles towards ‘integrating ESG risk management into Financial Institution’s (FIs)
business strategy, decision-making process and operations.’ [
• Introduction of the BRSR framework (BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING FORMAT) in 2021 by SEBI
• BRSR is an effective compliance and communication tool for a company's non-financial
disclosures and is the next step in mandatory ESG reporting in India

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 CONDUCTION OF ESG
1. Conduct assessment.
2. Establish the baseline.
3. Set ESG goals.
4. Analyze performance gaps.
5. Create an ESG plan.
6. Implement the ESG plan and measure key performance indicators (KPI)
7. Perform regular ESG reporting

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 • Global regulations and best practices in relation to ESG
• One of the major European Union laws is the Non-Financial
Reporting Directive 2014/95/EU ("NFRD") which requires public-
interest entities with more than 500 employees to prepare and
disclose a 'non-financial statement' (relating to diversity and non-
financial information) in their yearly management report. Further,
the directive applies on a "comply or explain" basis which requires
companies to provide clear and reasoned explanations for any
non-compliance.
• On 21 April 2021, the European Commission adopted a package
of measures, which includes a proposal for a Corporate
Sustainability Reporting Directive ("CSRD").
• The CSRD expands the scope of NFRD to all listed companies,
including SMEs and introduces mandatory EU sustainability
reporting standards for environmental, social and governance
• While NFRD has been in effect since 2018, CSRD is yet to come
into effect.
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 • In Asia, the Singapore Exchange has also made climate reporting
mandatory for certain sectors, and all issuers are required to provide
climate reporting on a "comply or explain" basis in their sustainability
reports.
• In USA, on 21 March 2022, the US Securities and Exchange
Commission (SEC) proposed rule changes that would require
registrants to include certain climate-related disclosures in their
registration statements and periodic reports, including information
about climate-related risks that are reasonably likely to have a
material impact on their business, results of operations, or financial
condition, and certain climate-related financial statement metrics in
a note to their audited financial statements.
• Another sustainability reporting instrument by the New York Stock
Exchange (NYSE) mandates that listed companies adopt and disclose
a code of business conduct and ethics for directors, officers and
employees.

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