Cement firms up against 2% of project cost for wildlife funds; Centre relaxes policy

The India Express, 3 Nov, 2015

In a policy revision that is likely to benefit companies seeking to expand existing projects close to national parks and wildlife sanctuaries, the Centre has eased the burden of shelling out at least 2 per cent of the project cost for impact mitigation and conservation.

According to an advisory issued by the environment ministry on October 28, developers will spend 2 per cent of the project cost or the actual cost of project-specific impact mitigation and conservation measures, whichever is less. Till now, user agencies paid 2 per cent of project cost or the actual impact mitigation cost, whichever was more.

The decision follows representations from Jaypee Himachal Cement Plant and Ambuja Cement that challenged the National Board of Wildlife’s (NBWL) decision to charge 2 per cent of their project cost for impact mitigation as a condition for wildlife clearance in August 2014. Together, the two companies were to deposit approximately Rs 70 crore.

Jaypee contended that the company had already paid the Himachal forest department Rs 54.12 lakh for wildlife management in compliance of environmental clearance conditions and sought relief from shelling out 2 per cent of its project cost of Rs 1500 crore. Similarly, Ambuja Cement said that it had already paid Rs 1.55 crore for wildlife management in lieu of the forest clearance for its Rs 2,000-crore project. 

The NBWL took up the issue this June and set up a five-member committee to work out policy recommendations. The panel’s report were discussed and accepted in the August meeting of the NBWL. Subsequently, the ministry modified its mitigation funding policy on October 28, a week ahead of the next NBWL meeting. 

“Normally, the projects for expansion or capacity augmentation or plant optimisation have less incremental impact on flora and fauna and their habitat compared to new project of the same nature and size. In such case therefore, the agency would pay 2 per cent of the project cost or cost of Impact Mitigation and Wildlife Conservation Plan for 10 years, whichever less,” said the advisory issued by the environment ministry. 

For new projects, developers will continue to pay 2 per cent of the project cost or cost of the actual mitigation plan, whichever more. In case of linear projects such as roads and canals, the advisory clarified that proportional cost of the project within the regulated zone will be taken into consideration for calculating the 2 per cent amount. This will benefit agencies such as National Highway Authority of India which has repeatedly rejected mitigation plans as too costly in the recent past. 

According to sources, both the Union ministry and the state forest department were under pressure to ease the financial burden on affected companies. In the June meeting of the NBWL, then Himachal chief wildlife warden JS Walia insisted that the 2 per cent of the project expenditure for wildlife management was “a small cost when considered against the colossal damage caused by the unit to the wildlife sanctuary.” He was the senior-most officer in the state department when the post of the head of forest fell vacant in July. Walia retired in August as CWLW.