MAC: Mines and Communities

India: Why did Environment Ministry withdraw Adani Ports fine?

Published by MAC on 2016-07-05
Source: Reuters

Or did it?

The notorious Indian company Adani was fined the unprecedented sum of 200 crore rupees (around US$ 43 million) to rectify damages caused when it was constructing a port in Gujarat in 2012.

The port is close to the massive Tata Mundra coal mine, financed partly by the World Bank's IFC. See: Indian Communities Suffering from Destructive Coal Plant Sue the World Bank in US Courts

According to a report published on 2nd July, the Indian environment ministry (MoEF) - headed by a newly-appointed minister - dropped the case, claiming the penalty was far higher than prescribed by law, and it couldn't be shown that Adani was the prime culprit in causing the destruction.

Nonetheless, the following day, 3rd July, a spokesperson for the MoEF said the penalty had not been waived - and may indeed be higher.

Why did Environment Ministry withdraw Rs 200-crore penalty on Adani Ports?


2 July 2016

After an investigation conducted in 2012, the UPA government had imposed a fine of Rs 200 crore on Adani Ports for damage caused by its Mundra port project in Gujarat.

The environmental ministry has quietly withdrawn the Rs 200-crore fine imposed on Adani Ports during the UPA government reign, a Business Standard report has said.

The government's move to overturn an earlier verdict where Adani Ports was found to be guilty of causing widespread damage to the environment act, was found when documents of the investigation between 2012 and 2016 were accessed through the Right to Information Act, 2016, by Kanchi Kohli of the Centre for Policy Research-Namati Program, the BS report says.

The documents show that some new senior officials, newly appointed, helped overturn the decision on Adani Ports.

What is the case?

At 200 crore, it is the biggest-ever fine levied on a company for causing damage to the environment.

The case pertains to the “destruction of local ecology, mangroves, creeks and illegal reclamation of land,” unearthed by the Sunita Narain Committee that was set up to investigate the company’s Mundra project in Gujarat," the report says.

After the investigation, the Committee recommended a ban on the Mundra project’s North Port, the report says, and sought a fine of Rs 200 crore or 1% of the project cost, whichever was higher. This was way beyond the Rs 1 lakh penalty that the Environmental Protection Act prescribes, the report says.

How did it happen?

Despite the company denying any wrongdoings and Gujarat government backing the project, the Ministry went ahead and imposed the Rs 200-crore fine on Adani Ports. However, a final decision on the matter was pending, the report says.

In the meantime, the Business Standard Report says, Jayanthi Natarajan was replaced Veerappa Moily as the environmental minister, and eventually by Prakash Javadekar of the NDA government.

The report says that Javadekar questioned how the damage to the mangroves was ascertained, the new senior officials said satellite data revealed the damage but it couldn’t be said for certain if Mundra project was responsible for the damage. It says, this explanation was accepted, and the Rs 200 crore fine was dropped by Javadekar.

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