Audit of reluctance

The ministry of environment and forests (MEF) has decided to postpone from May 15 to September 30 the date for industries to submit their first environmental audit. This corresponds to the date by which companies are expected to file annual reports.

The audit report requires companies to provide details of raw materials and energy sources used, and the products and waste generated. MEF hopes that such meticulous stock-taking will encourage industry to shift the emphasis of environmental management from pollution control to process efficiency.

Industry still voices misgivings on several counts regarding environmental auditing. On March 18, the Union cabinet cleared an amendment to the Companies Act, making it mandatory for firms to include environmental audit funding in their annual reports. However, industry is opposed to such public disclosure and is trying its best to block the amendment. Says Surinder Kumar, assistant general manager of Shri Ram Foods and Fertilisers in Delhi, “We do not believe the Indian public is mature enough to understand the implications of such data. It could lead to unnecessary litigation and harassment for companies in the guise of public interest litigation.”

But this is contrary to the situation in Europe where some companies publish environmental audits on their own to placate an increasingly environment-conscious public. Countries like the UK and the Netherlands have encouraged their firms to conduct audits since the mid-1980s, but it is not mandatory. Surinder Kapur, managing director of Sona Steering Systems Pvt Ltd in Delhi, offers a solution. “The government, for the time being, should restrict access to environment audit data to the State Pollution Control Board (SPCB) concerned and to an expert agency that could analyse the data—say, for example, the National Productivity Council or the National Environmental Engineering Research Institute.”

Industry is also apprehensive that the environmental audit data it supplies could be used by pollution control boards for prosecution at some future date. But a senior MEF official assures prosecution is not on the agenda, and adds, “Information about a company’s effluents is already being submitted to the SPCB concerned.

If the prescribed limits are exceeded, SPCB can prosecute the company. So the submission of audit results will not provide the board with additional opportunity to prosecute the company.” Another hitch that will be encountered is the lack of technically qualified environmental auditors. There are no more than three or four agencies that have the expertise to conduct environmental audits. MEF envisage solving this problem by setting up a committee of experts along the lines of the Institute of Chartered Accountants of India.

One year has passed since the government made environmental auditing compulsory, but the industry has done precious little. Given the industry’s reluctance to act on its own, it is up to MEF to ensure that the “valuable management tool” of environmental audits is used to its fullest advantage.

The Union Ministry of Environment and Forests now has Comprehensive Environment Pollution Index, which relies on assessment by the Central Pollution Control Board. But the Central government’s data on companies is not easily available to the public. Different state governments have different attitude towards public accessibility