Damage to environment: Modi govt cancels Rs 200-crore fine on Adani

New Delhi, Jul 2: The Union environment ministry has withdrawn its demand for a Rs 200 crore restoration fund from Adani Ports & SEZ for damage to the environment imposed during the United Progressive Alliance (UPA) government, the biggest penalty for green violations.

The ministry also extended the environmental clearance issued in 2009 to the company's waterfront development project at Mundra in Gujarat. Several stringent conditions the ministry had earlier issued notice for to Adani have been withdrawn as well.

These decisions were made in September 2015. The environmental clearance was extended in October 2015.

The Adani waterfront development project includes four ports with berths for dry and liquid cargo, container terminals, yards, a rail siding and 700 hectares for additional construction. It is part of the larger port, SEZ and township complex at the site.

Neither Adani nor the environment ministry replied to questions sent by Business Standard on the matter.

In a case against the project before the Gujarat high court, the Union environment ministry in 2012 constituted the Sunita Narain Committee to investigate allegations of destruction of the environment at the Mundra project site.

The committee found multiple violation of regulations, large-scale destruction of the local ecology, including damage to creeks and mangroves, and illegal reclamation of land.

It recommended a ban on the project's north port where wide-scale damage had been caused and sought Rs 200 crore (Rs 2 billion), or 1 per cent of the project cost, whichever was higher, as reparation. This was beyond the maximum Rs 1 lakh fine the Environment Protection Act allows.

The ministry accepted the committee's recommendations in 2013. It issued a show-cause notice to Adani Ports & SEZ and Gujarat officials why action should not be taken against the project developer for the violations.

Adani Ports & SEZ denied all claims of wrongdoing and the state administration largely supported the company. After reviewing the replies, the ministry officials concluded the original decision for action against the company, including imposition of the penalty, was valid.

But a final decision was delayed as Jayanthi Natarajan was replaced as environment minister by Veerappa Moily and eventually by Prakash Javadekar of the National Democratic Alliance.

Ministry records between 2012 and 2016 accessed through the Right to Information Act by Kanchi Kohli of the Centre for Policy Research-Namati Program show some newly appointed senior officials in the ministry reversed the opinion on Adani Ports & SEZ.

In the course of this reversal, Javadekar also questioned how blame for damage to the mangroves had been ascertained and if all the points raised by Adani in their representation had been addressed adequately.

Officials reconfirmed the damage to the mangroves near the project site was proven by satellite data but they now said there was no proof that project was to blame. This finding was approved by Javadekar and the Rs 200 crore penalty was dropped.