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3P's Pollutor Pay Principle

 Historical Background:

The World Commission on Environment and Degradation on its report, Our Common Future stated that the cost of repairing the environment can be paid by internalisation of an enterprise. Herein, internalisation in economic context means that the polluter bears the costs himself and does not delegate the work to an agent. The report mentioned that the enterprise would be encouraged to invest in taking preventive, restorative and compensatory measures.

The polluter pay principle was first introduced by the Organisation of Economic Cooperation and Development(OECD) in 1972. The report stated that the polluter is responsible for the controlling and prevention of pollution associated with the process of the factory. Pollutants were soon recognised by the World Commission on Environment and Development as a form of waste. Hence, dissemination of the pollutants into nature was considered as an inefficiency of industrial production. So the implementation of ‘polluter pays principle’ was used as a strong economic, administrative and legal tool to restrain the pollution problem.

Concept of Polluter Pay Principle

The Polluter Pays Principle imposes liability on a person who pollutes the environment to compensate for the damage caused and return the environment to its original state regardless of the intent.

Today, the Polluter Pays Principle is one of the core principles of sustainable development. It is also one of the fundamental principles governing modern environmental law and policy, underpinning most of the regulations imposed on potential polluters affecting land, water and air. The Polluter Pays Principle is often applied as a liability and compensation mechanism which can also act as an incentive for potential polluters to implement whatever measures deemed necessary to prevent potential pollution, comply with regulations, and avoid additional costs.

View of the Indian Judiciary

The Indian Judiciary has incorporated the Polluter Pays Principle as being a part of the Environmental Law regime is evident from the judgments passed.

Indian Council for Enviro-Legal Action vs. Union of India 1996 (3) SCC 212

The Court held 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.

Vellore Citizens’ Welfare Forum vs. Union of India 1996(5) SCC 647

The Court interpreted the meaning of the Polluter Pays Principle as the absolute liability for harm to the environment extends not only to compensate the victims of the 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 the polluter is liable to pay the cost to the individual sufferers as well as the cost of reversing the damaged ecology.”

The Oleum Gas Leak case (M.C. Mehta vs. Union of India) AIR 1987 SC 1086

The Court laid down that an enterprise engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of persons working in the factory and to those residing in the surrounding areas, owes an absolute and non-delegable duty to the community to ensure that no harm results to any one on account of hazardous or inherently dangerous nature of the activity which it has undertaken.

The enterprise is absolutely liable to compensate for such harm and irrespective of all reasonable care taken on his account. The larger and more prosperous the enterprise, greater must be the amount of the compensation payable for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.

M. C. Mehta vs Kamal Nath & Ors (1997)1SCC388

The Court held that pollution is a civil wrong and is a tort committed against the community as a whole. Thus, any person guilty of causing pollution has to pay damages (compensation) for restoration of the environment and ecology. Under the Polluter Pays Principle, it is not the role of Government to meet the costs involved in either prevention of such 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.


It is pertinent to mention that Polluter Pays Principle in no form, a pass for industries to cause pollution. It is rather a way to prevent environmental degradation. The need of the hour is to protect the environment and not exploit our mother nature in the name of development. We must endeavour to achieve sustainable development without compromising our surroundings.

NGT must strive to create a sense of fear among the industries and quick action should be taken against whosoever is polluting the environment. Relevant steps should be taken to ensure that aggrieved people are being paid enough compensation. And lastly, we must not treat PPP solely as a principle which deals with compensation but as a principle which would help us safeguard our environment for the future generation.


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