The National Democratic Alliance (NDA) government allegedly cancelled a Rs 200-crore fine imposed on the Adani group as reparation for environmental violations at the Mundra Port in Gujarat, according to a report published in the Business Standard. The report also states that the decision to extend the project’s environmental clearance till 2019 was made in October 2015, despite the environment ministry issuing show a cause notice to the Adanis in 2013 for causing damage to local ecology (an earlier show cause notice was issued in 2010).

These facts have come to light owing to documents – some public, some procured through the RTI Act – released by Business Standard journalist Nitin Sethi. According to his report, apart from withdrawing its demand for Rs 200 crore, “the ministry also extended the environmental clearance” of the project and quashed “several stringent conditions the ministry had earlier issued notice for to Adani”.

In the wake of these revelations, the government has defended its actions. Sethi, who spoke to Newslaundry through email, is of the opinion that the government’s defence is “self-contradictory”.

“In one place the ministry says, ‘show cause notice for creation of Environment Relief Fund (ERF) was not backed by any law under EP Act, 1986 and is not legally correct’,” said Sethi. “In another it says, ‘It is amply clear that MoEF & CC has not withdrawn its demand for Rs. 200 crore restoration fund’. Does the ministry mean it has continued with an illegal penalty against the company and the company has not protested?” he asked.

A close look at the documents Sethi has procured reveals the numerous twists and turns by the Ministry of Environment, Forests and Climate Change (MoEF & CC), finally leading to Adani walking scot-free despite overwhelming evidence of environmental violations.

While environmental clearance (EC) was granted to Adani Port and Special Economic Zone Limited (APSEZL) for development of Phase II of the port at Mundra in 2009, the project soon ran into trouble. A show cause notice was first sent to the port authorities in 2010 following a site inspection by the ministry in which several violations — including the destruction of mangroves — were observed. In 2011, the Kheti Vikas Seva Trust (a trust set up by local farmers) filed a Public Interest Litigation (PIL) in Gujarat High Court alleging destruction of mangroves by port authorities, following which another enquiry was conducted. Based on the findings of this enquiry, the Gujarat HC stayed construction work at the port.

In light of repeated complaints of environmental violations against APSEZL from the Kheti Vikas Seva Trust, a five-member committee was constituted by the ministry in 2012, to conduct an inspection of the port area and assess the environmental damage. The committee, headed by Sunita Narain (Director General of the Centre for Science and Environment), found “incontrovertible evidence” that the Adani project – port and SEZ – at Mundra, Gujarat, has violated environmental clearance conditions. Key recommendations of the committee included cancelling EC of the North Port (part of Phase II of the development of the Mundra port) and setting up an Environmental Restoration Fund (ERF) to the tune of one per cent of the project cost or Rs 200 crore (whichever was higher) to be used for the “remediation of environmental damage in Mundra”. The ministry, in its show cause notice dated September 30, 2013, heeded the committee’s recommendations. It stayed the EC granted for the North Port (and sought an explanation from APSEZL asking why the EC shouldn’t be cancelled) and directed APSEZL to set up the ERF “as a deterrent for non-compliance and violations”.

The stand of the ministry as of September 2013 is made clear by the aforementioned show cause notice. In the internal deliberations of the ministry (released as a 94-page document by Sethi), one can see a shift, especially regarding the imposition of the ERF. A note (page 35) dated April 1, 2014 (the tail-end of the previous UPA administration) takes into cognisance APSEZL’s denial of environmental violations and their request for “creation of development fund of any substantially reduced amount”. The note – signed by E. Thirunavukkarasu, a scientist at the ministry – concluded that “the response of the PP (project proponent or APSEZL) that “there is no non-compliance or violation of the terms of EC are incorrect”, citing the findings of the Sunita Narain committee.

However, the next note, on April 2, 2014, (page 39) signed by Lalit Kapur (director at MoEF & CC) states that “as per the provisions of E(P) Act, 1986 [Environment (Protection) Act], this [imposition of ERF] needs to be decided by the concerned Judicial Court”. The note raises doubts about the MoEF & CC’s powers to impose the ERF and suggests that instead, the state government initiate legal action against APSEZL so the courts can take appropriate action.

The stance within the ministry changed again, when in December, 2014 (the first few months of the NDA regime) special secretary Shashi Shekhar submitted his views after taking more than three months to study the issue (page 58). In his deliberations, Shekhar concurred with the findings of the Sunita Narain committee and observed that “there are large scale and conclusive evidence of violation of environment conditions”. He then goes on to endorse the “creation of an Environmental Restoration Fund to ensure restoration of the ecosystem as far as practicable”. Importantly, he doesn’t question the legal validity of the ERF in his remarks.

Sethi told Newslaundry that while Shekhar made his recommendations under the NDA regime, “his views were overruled by the ministry while passing the final order”.

Shekhar was relieved of his post as special secretary on June 5, 2015 and moved to the Ministry of Water Resources, seven months after submitting his recommendations. Five days later, Prakash Javadekar, then the Minister of State (MoS) (Independent Charge) for MoEF & CC, intervened in the matter. In a handwritten note (page 62) dated June 10, 2015, the private secretary to the MoS asked two questions on behalf of the minister: “on what basis the comparative geo-mapping of 2005/2011 carried out” (satellite imaging was used to determine changes in mangrove cover) and “whether all the points raised in the proponents [APSEZL] have been addressed adequately?” The first query implies that the years chosen for satellite imaging are arbitrary, while the second suggests that APSEZL had somehow not been treated fairly.

Over the ensuing months there are repeated discussions over the course the ministry should take, culminating in August, 2015 when the ministry, for the first time, questions whether APSEZL can even be blamed for environmental damage. Despite the fact that the Sunita Narain committee found proof that APSEZL had not complied with the EC granted, joint secretary Biswanath Sinha wrote that “an indirect responsibility has been attributed to the PP [APSEZL]” and that it is not possible to say that APSEZL is “directly accountable for changes in the landscape of the area” (page 75). He also noted that “the existing legal provisions do not provide for any imposition of ERF on a PP by the Government”. There is no recommendation to the state government to take APSEZL to court in order to get reparations either, unlike Kapur’s recommendations from April, 2014.

The conclusion to the entire saga came in the form of a final order, in October, 2015, when the ministry declared that APSEZL’s EC has been extended till 2019 (barring the North Port). In the order, there is no imposition of ERF; in its place, APSEZL is directed to fund a “comprehensive and integrated conservation plan” to “maintain the fragile ecological condition”.

The government’s response aside, the flip-flops within the government are evident in the internal documents of the ministry. From the show cause notice of 2013 to the final order in 2015, the ministry went through a complete turnaround with respect to the ERF – from proposing it in the first place, to declaring that it did not have the legislative power to impose it. Whether the turnaround was a result of external pressure on the ministry or not, the Adanis have the EC extension in their pocket, and as things stand now, the only chance of a penalty may come from a separate case from the Gujarat High Court.

Newslaundry reached out to former Environment Minister Prakash Javadekar with a set of questions on the flip-flops and will update the story if and when we get a response.

According to Sethi, “it [the ministry] has said in future it shall carry out separate investigations or in case court finds anything amiss then the company can be prosecuted under the EPA at that point”. If found guilty, “the highest financial penalty it would be able to impose would be a mere Rs 1 lakh,” Sethi said. Clearly, one can get away with a lot if your name is Adani.