The Lafarge case: 2011(7)SCALE242� �

​

Environmental Law

Facts of the case

• Lafarge Surma Cement Ltd. ('LSCL' for short) is a company incorporated under the laws of Bangladesh. It has set up a cross-border cement manufacturing project in Bangladesh.
• A captive limestone mine of 100Ha located at East Khasi Hills District in the State of Meghalaya was leased out in favour of Lafarge Umium Mining Pvt. Ltd. ('LUMPL' for short), which is an incorporated company which is a wholly owned subsidiary of LSCL.
• Lafarge started commercially operating a 100-hectare limestone mine in October 2006 at the East Khasi Hills district in Meghalaya. It sent the limestone across the India-Bangladesh border on a conveyor belt as raw material for its 2-million-tonne a year capacity cement plant in Bangaldesh.

The approval process

• Lafarge made representations that the limestone mines did not involve the diversion of forest land and in support provided letters from the Khasi Hills Autonomous District Council (“the KHADC”), the local authority with jurisdiction over the Khasi division, and a certificate from the Divisional Forest Officer (“the DFO”) of the Khasi Hills Division stating that the mining site was not in the forest area.
• Lafarge also stated that limestone mines had existed in Nongtrai since the 1850s and that several unorganised small players were already exploiting the limestone reserves.
• After several rounds of queries from the MoEF and consequent responses from Lafarge, the MoEF finally gave environmental clearance for the mines in 2001 and Lafarge commenced mining operations in Nongtrai

​

Trouble with the approval process

• Trouble started in 2006 when the Chief Conservator of Forests (“the CCF”) for Meghalaya wrote to the MoEF stating that he had visited the mining area and noted that the mining site was surrounded by thick natural vegetation.
• The CCF expressed the view that the land where the mine was located was forest land and accordingly Lafarge could not carry out operations without the necessary forest clearance.

The main problem

• The matter reached the Supreme Court when a group of 21 tribal activists under the banner of the Shella Action Committee filed a petition alleging that Lafarge was mining on forest land, and did not have the required clearances.
• Later, the court stayed Lafarge’s mining operations. Against this, a writ was filed and thus, it came before the SC.
• The crucial questions in the case were whether Lafarge had willfully subverted the process of getting clearance to mine on forest land, and whether it was aware of the fact that the land was classified as forest as per law.

​

Importance of the court’s decision

• The judgment is very important for two reasons.
• Firstly, it clarifies the extent of judicial review in a situation where environmental clearances had already been granted and where questions are subsequently raised with respect to the validity of the process.
•  Secondly, it lays down a set of comprehensive guidelines for future projects that involve both forest and environmental clearances

Contentions

• Lafarge maintained that both the KHADC and the DFO had certified that the land for the mine did not involve diversification of forest land and therefore there was no obligation on them to obtain clearance for forest land.
• Their opponents, specifically the Amicus Curiae appointed by the Court, and the counsel for the Shella Action Committee argued that the MoEF’s decision was vitiated by misinformation and non-application of mind and that the Court should order that the mines be closed. The SAC also argued that the forest cover in the mining area was tropical deciduous forest, and in terms of India’s Forest Policy, 1988, no development could be permitted in such forests.

Doctrine of proportionality

• The Court held that the constitutional doctrine of proportionality should apply to environmental matters as well .
• Therefore decisions relating to utilisation should be judged on the well established principles of natural justice, such as whether all relevant factors were taken into account at the time of coming to the decision, whether the decision was influenced by extraneous circumstances, and whether the decision was in accordance with the legislative policy underlying the laws that governs the field.
• If these circumstances were satisfied, the decision of a government authority (in this case the MoEF) would not be questioned by the Court.

Approvals in a bona fide manner

• The SC held that Lafarge had gone about getting its approvals in a bona fide manner, and that the company believed the land was not a forest land. 
• The court reasoned that the area was part of a traditional limestone mining belt which had become deforested.
• The situation before the bench was finally that Lafarge had done all that it could have on the regulatory front, but it turned out that the mining site was in a forested area. It also emerged that the state government had failed in certain respects—to notify the environment ministry, among other things.

Consent of the real custodians of the land

• The court said the company had taken the consent of the real custodians of the land—the Khasi Hills Autonomous District Council before it started mining in the area.
• It also reasoned that the existence of the mining operations had brought jobs, schools, healthcare and other benefits to the local communities.
• SC held that it was satisfied that limestone mining has been going on for centuries in the area and it was intertwined with the culture and the unique land holding and tenure system of the Nongtrai village
• SC held that it was satisfied with the due diligence exercise of the MoEF before it gave a clearance.

​

​

Guidelines 1/2

• More importantly, the Court has enumerated certain directives to be followed by judicial authorities as well as the MoEF in similar cases.
• It has promoted the need for a regulator to uphold the principles outlined in the National Forest Policy, 1988, when read together with both the Environment (Protection) Act, 1986, and the Forest (Conservation) Act, 1980
• it is also suggested that the number of such Regional Offices in the country be increased.

Guidelines 2/2

• Corporate entities have also been directed to evolve Corporate Environment Policies to guarantee compliance with the clearances granted to them.
• Public consultation has also been made a requisite for the process of obtaining environment clearance. This guarantees those among the indigenous population who are aggrieved by ideas of upcoming projects to voice their opinions and seek remedial measures, if necessary.
• The Court has made it mandatory for these guidelines to operate in all cases of forest and environment clearances, until a regulatory mechanism is instated.

Criticism of guidelines

• The Supreme Court presumes that setting up regulators is the ideal solution. The judgment does not discuss alternative reform scenarios.
• It does not consider the debates around introducing an autonomous regulator in a sector that affects a very wide array of stakeholders and interests.
• How will the regulator be designed, and empowered, to ensure independence?- This has not been mentioned in the judgment

Final Finding

• Overall, this judgment finds a balance between economic growth and environmental protection. (Sustainable Development)
• It lays down the specific scenarios in which a court can interfere with the decision of the MoEF.
• It also lays down guidelines which suggest that approval process must be improved. But, how it should be done is missing.

​