Strict Liability v. Absolute Liability vis-a-vis the Visakhapatnam Gas Leak Tragedy: Why the NGT order is cause for concern

On the morning of May 7, 2020, a major leak of Styrene gas occurred near Visakhapatnam, from a polymer plant owned by LG Polymers India Private Limited. The mishap claimed the lives of 11 people and affected thousands in the area.

The chilling scenes at the place of disaster brought back grim memories of the 1984 Bhopal GasTragedy. However, in comparison, the casualty toll of the Visakhapatnam Gas Leak is considerably lower.

The gas leak, as per the prima facie findings, is a result of failure by the company to comply with the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989, that requires the company to maintain on-site and off-site emergency plans to ensure prevention of damage.

The Principal Bench of the National Green Tribunal (NGT), taking suo motu cognizance of the fatal incident on May 8, constituted a five-member Committee to inspect the site and submit a report within ten days. Vide this interim order, the NGT also directed the company to forthwith deposit a sum of Rs. 50 crore with the District Magistrate, Visakhapatnam.

The NGT observed that apart from statutory liabilities, the company is also liable to restore the damage caused to the environment. It thus reiterated the position that, even in the absence of any statutory recognition, the ‘Polluter Pays Principle’ is well enshrined in the jurisprudence of Indian environmental law.

However, the observations made by the NGT in the interim order that the situation attracted the principle of “strict liability” and not “absolute liability”, has raised certain concerns. The principle of Polluter Pays and “absolute liability vs. strict liability” are detailed herein below:

Polluter Pays Principle

The Polluter Pays Principle is a well-recognized and much celebrated environmental law principle. It places the responsibility of paying damages on persons who ought to pay it and also who have the ability to pay it. The principle implies that he/she who damages the environment should bear the cost of rectifying that damage. The principle has played an important part in mitigation of environmental degradation.

Since its introduction in 1972, the Polluter Pays Principle has been given a much broader sense. Therefore, not only does it cover pollution prevention and control measures, it also covers liability such as costs for the clean-up of damage to the environment.

The Polluter Pays Principle was for the first time explicitly applied and defined in the case of Indian Council for Enviro Legal Action v. Union of India. In this case, five chemical industries in Rajasthan were producing H Acid. An azo dye and untreated toxic sludge were discharged into the open compound which, in due course of time, flowed through a canal across the entire area and the rainwater washed the sludge deep into the bowels of the earth. It caused pollution of river water and underground water and left the fields nearby infertile, as a result of which residents had to migrate out of the village.

The Supreme Court in its judgment declared that the redemption of the damaged environment is a part of the process of sustainable development, and as such, the polluter is liable to pay the cost of the individual sufferers as well as the cost for reversing the damaged ecology.

In Vellore Citizens Welfare Forum v. Union of India a PIL was filed against tanneries and similar industries in Tamil Nadu for pollution which was being caused by the massive discharge of untreated effluents. The pollution of water had risen to such a distressing point that drinking water was not available for the residents.

The Apex Court held that the polluting tanneries were liable to pay for the past pollution generated by them that had resulted in environmental degradation and suffering to the residents of the area. In this decision, two noteworthy principles, namely, the Polluter Pays and the Precautionary Principles were further entrenched into the environmental laws in India.

In December 1985, leakage of oleum gas from one of the units of Shriram Foods and Fertilisers Industries in Delhi resulted in the death of one advocate practising in the Tis Hazari Court, and affected several others.

In the matter of MC Mehta and Anr. v. Union of India, the Supreme Court held that it was not bound to follow the 19th Century English rule of strict liability laid down in the case of Rylands v. Fletcher. The Court evolved a rule which is suitable to prevail in the social and economic India of the present times.

The Supreme Court evolved a new rule, creating absolute liability for harm caused by a dangerous substance. The following statement of Bhagwati, CJ which laid down the new principle may be noted:

"We are of the view that an enterprise, which is engaged in hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegatable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous activity which it has undertaken.

The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity the enterprise must be absolutely liable to compensate for such harm and it should be no answer to enterprise to say that it has taken all reasonable care and that the harm occurred without any negligence on its part."

Absolute Liability vs. Strict Liability

From the above, it is evident that the principle of strict liability laid down by the House of Lords in the matter of Rylands v. Fletcher has evolved as far as Indian jurisprudence is concerned. The rule of absolute liability as laid down by the Supreme Court applies the principle of no-fault even in cases of accident, without any limitation or exception.

In a highly developing economy like India, where hazardous or inherently dangerous industries are necessary to carry out development, it was important to modify the rules as per the present requirements.

Following are certain differences between the principles of absolute liability and strict liability:

• Whereas strict liability allows exceptions if the liability has been accrued by an Act of God, act of third party etc., absolute liability offers no exception to industries involved in hazardous activities, which are liable for the damage so triggered notwithstanding adherence to the highest safety norms.

• Under absolute liability, the extent of damages depends on the magnitude and financial capability of the organisation. However, under strict liability, compensation is payable as per the nature and quantum of damages caused.

• Under the doctrine of absolute liability, the element of escape is not essential. In other words, rule of absolute liability shall be applicable to those injured within the premise and persons outside the premise. However, the same is not the case under the doctrine of strict liability.

NGT’s Interim Order: A step backward?

In MC Mehta, the Supreme Court after arriving at a conclusion that the principle of strict liability is woefully inadequate to protect citizens’ rights in an industrialised economy like India, formulated the principle of absolute liability.

However, the interim order passed by the NGT, by using the words “strict liability”, has not only presented an opportunity to the company to build its defence by showing that there was no negligence on its part, but has also acted ultra vires Section 17 of the National Green Tribunal Act, 2010 which directs the NGT to apply the principal of no-fault even in cases of accident.

The author is a lawyer currently working with the dispute resolution team of the Mumbai based law firm, M/s Crawford Bayley and Co.