THE TAMIL NADU NATIONAL LAW SCHOOL

2018-19
Final Draft
“Polluter Pays Principle”

Under Supervision of: Submitted

by:
Dr. S.K Balashanmugam Talin.V

Professor (Environmental Law) Roll- BA0140085

The Tamil Nadu National Law School, Semester- VII

Trichy.

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 DECLARATION

I TALIN.V, Registrar Number BA0140085, hereby declare that this project work entitled

“Equidistance principle in International Law” has been originally carried out by me under

the guidance and supervision of Dr. S.K Balashanmugam, Assistant Professor of Law,

Tamil Nadu National Law School, Tiruchirappalli - 620009. This work has not been

submitted either in whole or in part of any Degree / Diploma at any University.

Place : Tiruchirappalli

Date : 17-3-2018 (---------------------------)

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 1: Introduction

The “Polluter Pays Principle” [hereinafter PPP] states that the ‘Polluter’, a person who
pollutes the environment; must pay for the harm and compensate the victim. This principle
imposes absolute liability as the polluter is not only liable to pay compensation to the victims
but also reinstate and restore the environment to its original position. Ultimately, the burden
lies on the polluter to pay the costs and for its effects including remedial or cleanup costs and
other necessary expenses.

The PPP was first mentioned in the recommendation of the Organization for Economic Co-
operation and Development [hereinafter OECD] of 26th May, 1972 and reaffirmed in the
recommendation of 14th November, 19741. It specified the main functions of PPP as
“allocation of costs of pollution prevention and control measures to encourage rational use of
scarce environmental resources and to avoid distortions in international trade and
investment”. The European Community took up the OECD recommendation in its first
‘Environmental Action Program’ (1973-1976) regarding cost allocation and action by public
authorities on environmental matters. Since 1987, the PPP had been enshrined in the Treaty
of the European Communities. Although the principle of PPP was not in the future of 1972
Stockholm Declaration2, it was finally laid down under Principle 16 of the Rio Declaration,
19923.

Thus, due application of PPP may protect economic interests but excessive application of
PPP may again lead to distortions. The major weakness of PPP is that it cannot provide an
answer to the question of whether an impact is harmful or has to be considered as damage. It
still remains a challenge to natural and environmental sciences to define relevant criteria that
could be implemented by legal standards. Thus, the PPP does not only apply if there is a
“real” pollution in terms of harm or damage to the environment.

1
Organization for Economic Co-operation & Development, 1972; Retrieved from
www.oecd.org-2013-05-30
2
Principle 22, Stockholm Declaration of the United Nations Conference on the Human
Environment, 1972; Retrieved from http://legal.un.org/avl/images/ha/dunche/08-l.jpg {Last
visited on 4 March at 21:30, (N.T.M)}
3
Principle 16, Rio Declaration of the United Nations Conference on Environment &
Development, 1992; UNCED Doc. A/CONF.151/5/Rev. 1, 31 ILM 874 (1992);

3
Objectives of Research: The research has the following main objectives:

1. To thoroughly understand the concept of PPP in its fullest sense;

2. To explore the various intricacies of PPP in Environmental Law.
3. To critically analyze the hindrances and loopholes in its applicability and extension in
India and to other jurisdictions like UK ;
4. To suggest suitable alternative remedies for its better functioning and implementation.

Research Questions: The research broadly dwells on the following questions:

1. What constitutes “Pollution”, “Pollutant”, “Polluter” & “Damages” under PPP?

2. How does PPP ensure that the polluter does not further pollute the environment even
after paying compensation?
3. Why does PPP impose an absolute liability on the polluter both from economic and
legal standpoints?
4. How does PPP check Environmental pollution by protecting its resources through
active intervention by the governments?

Hypotheses: The following are the hypotheses of this research:

1. PPP imposes absolute liability on the polluter.

2. PPP cannot be implemented through strict legal standards.
3. Excessive application of PPP leads to distortions on Cost and Market analysis.

Research Methodology: The research is doctrinal in nature and the methodology adopted is
analytical, comparative and descriptive which employs deductive logical reasoning to
elaborate the finer details of PPP in each judicial precedent under International
Environmental Law.

Sources of Research: The research extensively relied on standard texts, articles,

commentaries, digests, journals, landmark judgments, e-journals and official website of the
OECD amongst many others.

Scope & Limitation of Research: The research is only limited to understanding the concept
of PPP and its loopholes in applicability by critically comparing both the Indian and UK
perspectives & International Conventions under Environmental Law.

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 2: Evolution of PPP in India & UK

“The ‘Polluter Pays Principle’ states that whoever is responsible for damage to the
environment should bear the costs associated with it4”.

As a general rule, sound economic analysis of pollution and Environmental problems must
also be based on the Principle of Responsibility5. Forcing polluters to bear the costs of their
activities is good economics too; it not only advances fairness and justice, but also enhances
economic efficiency. “Polluters” are not necessarily those who, through their production or
consumption activities, do damage to the persons or property of others. Polluters are those
who "damage" or impose "costs" on the Environment. In other words, a ‘Polluter’ is
someone who is simply using his own property and resources in a way that is not approved of
by government officials or Environmentalists. In such cases, there is no harm to be measured
and no real victims to compensate.

Consequently, the amount to be paid is not determined by the extent of any actual damage
done. Rather, it is set at a level that curbs the politically disfavoured activity to the degree
desired by its opponents. On the other hand, a ‘Pollutant’ is a substance or energy introduced
into the environment that has undesired effects, or adversely affects the usefulness of a
resource. A Pollutant may cause long- or short-term damage by changing the growth rate of
plant or animal species, or by interfering with human amenities, comfort, health, or property
values. Some pollutants are biodegradable and therefore will not persist in the environment
in the long term. In most cases, the PPP is used as cover to promote a political or ideological
agenda rather than to ensure that real polluters pay compensation to real victims of their
activities6.

The PPP, originally an economic principle, was designed to correct improper cost allocation.
This improper cost allocation has resulted from the common belief that resources such as air
and water were not scarce and, as a result, freely available. By not taking the
cost of these resources into account in the production or consumption of goods and services,

4
Taking Action, Chapter 2, p. 3, Published by the United Nations Environmental
Programme [sic], found at www.rona.unep.org.action.02.htm {Last visited on 5th March at
22:45, IST}
5
Christopher Miller, Environmental Rights: Critical Perspectives, (1st edition, Routledge
Publications, Oxfordshire, 2015), p. 37
6
Ibid, p. 38

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an ‘externality’ arises. An externality (or external cost) results when someone’s actions cause
an uncompensated loss of welfare to others. This is generally referred to as a “Cost on
Society”. Costs associated with pollution are considered to be “externalities”7. PPP is
included in the United Nation’s 1992 Rio Declaration and Agenda 21 as part of a set of broad
principles to guide sustainable development globally8. “The polluter is liable to pay the cost
to the individual sufferers as well as the cost of reversing the damaged ecology9”.

The PPP was first formulated in 1972 when the OECD promulgated the “Recommendation of
the Council on Guiding Principles concerning International Economic Aspects of
Environmental Policies” (‘Guiding Principles’)10. In accordance with its mandate to further
International Trade, the OECD adopted the PPP as the recommended method for allocating
costs of production. No OECD member country formally ratified the Guiding Principles or
Implementation Recommendations11. However, the ‘Declaration on Environment: Resource
for the Future’ was adopted by the governments of OECD member countries (which included
the UK).12

While the 27 principles enshrined in the United Nations Rio Declaration on Environment and
Development is legally non-binding, they were endorsed by the 178 countries meeting there,
including India and the UK13. In UK law, “Pollution” is defined as the release of harmful or
potentially harmful substances into the land, water or air14. Under the Environmental
Protection Act, 1990 (EPA), it is the role of local authorities to identify ‘Contaminated Land’.
Such land is defined as being in a condition, caused by substances in, on or under the land,
firstly so as to cause, or has the ‘significant possibility’ of causing significant harm or

7
Judith A. Layzer, The Environmental Case: Translating Values into Policy, (3rd edition,
CQ Press, Washington D.C., 2016), pp. 86-87
8
Supra note 3
9
Justice TS Doabia, Environmental & Pollution Laws in India, Vol. 1, (2nd edition,
LexisNexis, Nagpur, 2010), p. 174
10
OECD, ‘Recommendation of the Council on Guiding Principles concerning
International Economic Aspects of Environmental Policies’, (OECD Doc. C(72)128, 26
May 1972)
http://acts.oecd.org/Instruments/ShowInstrumentView.aspx?InstrumentID=4&Lang=en&Book
=False {Last visited on 6 March at 23:30, IST}
11
Noted in OECD, ‘Decision-Recommendation of the Council on the Co-operative
Investigation and Risk Reduction of Existing Chemicals’ (OECD doc C(90)163/Final, 31
January 1991)
http://acts.oecd.org/Instruments/ShowInstrumentView.aspx?InstrumentID=59&InstrumentPI
D=56&Lang=en &Book=False {Last visited on 15th September at 22:30, IST}
12
Declaration on Environment: Resource for the Future; 20th June, 1985 C (85) 111
13
Supra note 4, p. 126
14
EPA, 1990; Section 1; See also Pollution Prevention and Control Act, 1999; Section 1

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secondly, to cause, or likely to cause, water pollution. ‘Harm’ is defined broadly to cover
health, environmental quality, sensory offences and damage to property. “The Corporation
Tax Act, 2009” (hereinafter CTA, 2009), on the other hand, does not require that the harm be
‘significant’ or that the possibility of harm be significant. The CTA, 2009 also makes it clear
that the substances must be the only cause of the contamination. Thus, in the UK, the PPP is
strictly applied if contamination in any form is established on the polluter under the relevant
provisions.

In India, the development of PPP was shrouded in uncertainty till the Enviro-Legal Action
case (Indian Council for Enviro Legal Action v. Union of India15) where the principle of
absolute liability was affirmed. The same principle was reinstated in Oleum Gas Leak case16.
The principle of absolute liability and the concept of Sustainable Development for the first
time were invoked in Vellore Citizens Welfare Forum v. Union of India17. Thus, the use of
PPP has been justified via the Constitutional mandate, statutory provisions and Customary
International Law. Later on, with parallel developments in the international paradigm with
respect to Environmental Policies, the burden to protect the environment equally fell on the
persons who polluted it18. As a result, unlimited exploitation of natural resources came to an
abrupt halt with the subsequent introduction of Environmental Legislations to prevent the
abuse of Environment.

15
Indian Council for Enviro Legal Action v. Union of India, (1996) 3 SCC 212
16
Oleum Gas Leak Case, [M.C. Mehta v. Union of India] (1987) 1 SCC 395
17
Vellore Citizens Welfare Forum v. Union of India, (1996) 5 SCC 647
18
P Leelakrishnan, Environmental Law in India, (3rd edition, LexisNexis, Nagpur, 2008),
pp. 138-139

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 3: Polluter Pays Principle & Market Based Instruments

Market based or Economic Instruments (both are policies of PPP) are broken down into two
categories, Taxes and Tradable Permits which are seen as attempts to "make the polluter pay"
by attaching a fee to the polluting activities19. The tax would be paid either in the form of
an emissions fee or an excise tax on the sales of products that are associated with pollution.
The tradable permits approach would first have the government establish an overall
acceptable level of emissions for an Industry and would then distribute permits for that level
of emissions to Companies within the Industry. The Companies could then buy and sell these
emissions permits based on their needs to emit the pollutant and their abilities to find
pollution abatement techniques. By these means, the polluters are made to "pay" for their
polluting activities either through a tax, through the purchase of permits from others in the
industry, or through the use of their own assigned permits (foregoing the cash that could be
earned by selling them)20. In the first instance, the "payment" is established by and made to
the government. In the latter cases, it is established by the supply and demand conditions in
the market for permits.

While the presumed moral case for market based instruments is generally centered on the
concept of making the polluter pay, the economic justification for these instruments is that of
efficiency, i.e. using market based incentives to accomplish Environmental goals is assumed
to be more efficient than traditional command and control policies. As argued by the World
Resource Institute’s Duncan Austin, ‘Economic Instruments’, which aim to control pollution
by harnessing the power of market incentives offer a more cost effective, flexible, and
dynamic form of regulation than conventional measures21. This notion is tied directly to the
PPP. Theoretically, by making polluters pay, the pollution costs associated with their

19
R. Rajagopalan, Environmental Studies: From Crisis to Cure, (3rd edition, Oxford
University Press, New Delhi, 2016), p. 204
20
Brad Jessup & Kim Ruben Stein, Environmental Discourses in Public & International
Law, (1st edition, Cambridge University Press, Cambridge, 2012), p. 112
21
Ibid, p. 113

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production activities are taken into account. This encourages the more efficient use of
resources overall, while providing an incentive for polluters to find the lowest cost methods
for reducing emissions.

The problem with this theoretical approach is that, in advocacy and practice, the concept of
cost is twisted to mean more than actual damage inflicted on third parties22. Too frequently,
the payment that PPP advocates would impose or the degree of cutback that is mandated is
calculated to reduce the activity in question to the degree desired by the opponents of the
activity rather than to the extent warranted by the actual level of “external costs” associated
with the activity. Economics, being a behavioural social science, attaches the concept of
costs to human beings and individual decision making. “Cost” refers to what must be given
up when a person chooses one course of action as opposed to another, or when someone
else’s activities prevent a person from choosing one course of action rather than another23.
Economic theory argues that efficiency, i.e., social welfare, will be maximized when
producers take into account all of the costs involved in making the product (including the
costs they incur themselves and those they impose on other people) as they decide how much
to produce and how much to charge.

For example, in the case of a Company that is polluting a river, the cost might be to
downstream recreational users who have to give up or cut back on certain activities:
swimming, fishing, etc. Their cost would be the value that they place on the activities that
the pollution is preventing them from pursuing. From this perspective, then, pollution
"problems" arise because the polluter is imposing costs on other human beings. It is the
human users of the river who bear the costs, not the river itself24.

The application of PPP that accurately reflects the economic theory of costs would have to
include the identification of a victim and compensation to that victim by the offending party.
An economic notion of "damage" would be directly linked to this view of costs. All pollution
damages would relate to costs that are imposed on others, either by directly causing them
physical harm or by somehow depriving them the use of their property. Many advocates of
market based instruments and PPP misappropriate the economic theory by redefining the

22
Supra note 6, p. 89
23
Dharmendra S. Sengar, Environmental Law, (1st edition, PHI Learning Pvt. Ltd., New
Delhi, 2014), p. 126
24
Ibid, p. 128

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concepts of cost and damage to apply to things rather than to people. Inanimate objects and
the Environment do not incur costs but people do25.

The development of PPP must also include mechanisms to safeguard against its potentially
harmful effects while at the same time reduce uncertainties about its economic impact.
Economists have expressed reservations about the economic viability of PPP:

1. The application of PPP in urban areas where the Industrial Sector is dominated by medium,
small and tiny enterprises operating in a highly competitive market is risky as any higher
costs from emission or other effluent clean up charge might adversely affect their
competitiveness in relation to large firms that are capable of affording the installation of
necessary equipment.

2. Even though PPP does not prohibit the polluter from passing on the additional costs that he
might incur in terms of increased costs, thereby increasing price of his product, the reality in
developing nations (India) may not always be this way. These nations which rely heavily on
exports of primary commodities for which demand in the international market is elastic may
find that the costs are entirely borne by the producers in the form of damage to human health,
property and ecosystems26.

3. Representing a larger objection to the inclusion of PPP in Indian Law is the consequences
it will have in the realm of the common property resource. The application of the principle
will lead to the appropriation of rights by wealthy landlords to the disadvantage of the small
land owners, if curbs are imposed on the manner in which a resource can be used, in this
instance, land27.

4. The Court has not dealt with the fact that the level of charges to be imposed on the polluter
are extremely difficult to estimate and therefore will give rise to difficulties.

To offset the potential economic harm, PPP must be implemented via Market Based
Instruments. The main aim of this is to induce efficiency in Environmental management

25
Dhandapani Alagiri & E Naveen Kumar, Environmental Issues in India: An Introduction,
(1st edition, Icfai University Press, Agartala, 2007), p. 137
26
Supra note 21, p. 133
27
Mahesh Rangarajan & K. Sivaramakrishnan, India’s Environmental History: From
Ancient times to the Colonial Period, (1st edition, Permanent Black Publishers, Ranikhet,
2014), p. 225

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through the use of market mechanisms28. One of the suggested mechanisms to achieve the
above mentioned goal is an Environmental Assurance Bond. This is a bond that would
provide a contractual guarantee that the principal would perform in an environmentally
benign manner, but would be levied for the current best estimate of the largest potential
future Environmental damages. Funds in the bond would be invested and would produce
interest that would be returned to the principal. The bond would be held till the uncertainty
or some part of it was removed29. This would provide a strong incentive for the principal to
reduce the uncertainty of the Environmental impact of their activities as quickly as possible,
by changing technology to being more Environments friendly. The bonds could be
administered by an independent regulatory authority, similar to that of the Pollution Control
Board.

A potential argument against such bonds is that it would favour relatively large firms that
could afford to handle the financial responsibilities of activities potentially hazardous to the
Environment. But this will prevent firms that cannot handle the financial imposition from
passing on the cost of the Environmental damage to the public30. This does not, however,
exclude small firms from the ambit of this principle. It is desired that these firms bond
together to handle financial responsibility for Environmental damage. They may also feel it
is more profitable to switch to less risky activities or technology that does not require such
high assurance bonds31.

28
O.V. Nandimath, Handbook of Environmental Decision Making in India: An EIA Model,
(1st edition, Oxford University Press, New Delhi, 2009), p. 175
29
Ibid, p. 177
30
S Shantakumar, Introduction to Environmental Law, (2nd edition, LexisNexis, Nagpur,
2005), p. 137
31
Supra note 26, p. 180

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 4: Polluter Pays Principle - Indian & UK Perspective

The European Charter on the Environment and Health, 198932 and the Single European Act,
198633 made provisions for applying the PPP. The United Nations Conference on
Environment and Development, 1992 in Principle 16 incorporated the PPP. More recently,
the member States of the Council of Europe and the European Economic Community adopted
the ‘Convention on Civil Liability for Damage Resulting from Activities Dangerous to the
Environment’34 which specifically deals with transboundary pollution35. Every breach of
International Law gives rise to an obligation to make reparations. As civil liability is not
connected to the breach of administrative standards in most European legislations,
consistency is more with traditional legal concepts. Environmental Legislation provides for
measures which are taken to minimise risks – even in cases where there is a lack of scientific
knowledge and scientific cause–effect relationships cannot fully be established36. Although
traditional norms of State responsibility concern the treatment of aliens and their property, the
‘Trail Smelter Arbitration’ recognised that the principle of State responsibility is applicable in
a field of transfrontier pollution and consequently States may be held liable to private parties
or other States for pollution that causes demonstrable damage to Environment37. The

32
The European Charter and Commentary, First European Conference on Environment
and Health, Frankfurt, 7-8 December, 1989; WHO Regional Publications European Series
No. 35; See also www.euro.who.int/en/.../policy.../european-charter-on-environment-and-
health,-1989 {Last visited on 11 March at 22:00, IST}
33
Single European Act, 17 Feb. 1986, 1987 OJ (L 169) 1
34
Convention on Civil Liability for Damage Resulting from Activities Dangerous to the
Environment; European Treaty Series No. 150, Lugano, 21.VI.1993, ETS 150, Retrieved
from https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent? {Last
visited on 12 March at 23:30, IST}
35
Richard Moules, Environmental Judicial Review, (1st edition, Hart Publishers Ltd.,
Oxford, 2011), p. 141
36
Shyam Divan & Armin Rosencranz, Environmental Law & Policy in India: Cases,
Materials & Statutes, (2nd edition, Oxford University Press, New Delhi, 2014), p. 210
37
P Leelakrishnan, Environmental Law Case Book, (2nd edition, LexisNexis, Nagpur,
2006), p. 167

12
pertinent question is whether the mere presence of PPP in a few instruments can have the
effect of giving it the status of Customary International Law?

In the Erika Oil Spill Case,38 the European Court of Justice held based on Art. 15 of the EU
Waste Framework Directive, 2006 that the producer of hydrocarbons which became waste
due to an accident at sea, could be held liable for the clean-up costs39. In accordance with
PPP, however, such a producer is not liable unless he or she has contributed through his or
her conduct to the risk of pollution stemming from the shipwreck. The question of whether
the “user” could also be regarded as a “polluter” becomes relevant as users often pay
indirectly when pollution control costs are internalised in the prices of the product. There is
yet a unanimous opinion as to whether PPP should be considered as a general principle of law
or Customary International Law under Article 38 of the Statute of the International Court of
Justice.40

The International Court of Justice in the North Sea Continental Shelf Case41 delivered a
landmark judgment determining whether a particular provision in a treaty had acquired the
status of Customary International Law, thereby making it binding on those nations who are
not signatories to the treaty concerned42. According to the decision, State practice and opinio
juris can enable a treaty to acquire the status of Customary International Law. The former
requires that there be widespread acceptance by nations of the new norm and the latter
signifies that the practice must have been rendered obligatory by the existence of the Rule of
Law requiring it. The fact that 153 states were signatories of the Rio Declaration does not
make PPP in the declaration one of Customary International Law. What is required is a
demonstrable willingness to adhere to it and the practice of nations must alter according to
the prescriptions of the new norm for it to attain the status of Customary International Law 43.
In the absence of any such clear intent among nations in incorporating the above two

38
M V Erika, (1999); The ERIKA Oil Spill: Environmental contamination and effects in
the Bay of Biscay (2004), Special Issue of Aquatic Living Resources, Volume 17, Number
3, July-September 2004, EDP Sciences; See also The Erika Oil Spill: The Bird Rescue
Response, LeDrean-Quenec'hdu, S., Jacques, J-P., Lamy, A. (2001), Proceedings of
International Oil Spill Conference 2001, American Petroleum Institute, Washington DC, USA
39
Supra note 37, p. 171
40
Article 38 of the International Court of Justice, Retrieved from www.icj-
cij.org/documents/?p1=4&p2=2 {Last visited on 12 March at 23:45, IST}
41
North Sea Continental Shelf Cases; Germany v. Denmark & The Netherlands, [1969] ICJ
1; See also 1969 ICJ Reports 4, 50
42
Supra note 35, p. 167
43
Donald K. Anton & L. Shelton, Environmental Protection & Human Rights, (1st edition,
Cambridge University Press, Cambridge, 2011), p. 194

13
requirements of Customary International Law, the concerning question is how PPP has been
incorporated into municipal law. Therefore, PPP stands on a weak legal foundation mainly
because its salient features have yet to be finalised by International Law jurists.

In Oleum Gas Leak Case44, where Oleum gas leak from ‘Shriram Food and Fertilisers Ltd’., a
complex at Delhi killed many innocents and a practising lawyer in a nearby Court in Delhi,
the principle of Strict and Absolute Liability was imposed where the defendants were forced
to pay compensation to the victims. Similarly, in the case of Vellore Citizens Forum v. Union
of India45, where industrial pollutants and other toxic substances were released into a nearby
river which affected a large number of people who depended on the river as a source of
drinking water, the Court took serious cognizance and directed the polluters to pay
compensation by reiterating the concept of Sustainable Development. Also, in Indian
Council for Enviro-Legal Action v. Union of India46, a PIL was filed against economic
degradation in coastal areas and for protection of the same. The Court upheld “Precautionary
Principle” by stating that polluters should compensate if adequate precautionary measures
aren’t taken to protect the environment. Thus, the above landmark three cases set the
benchmark by preventing polluters from taking environment for granted and by imposing a
duty and responsibility in equally protecting the environment.

Thus, both India and UK adopted PPP on a different footage. In UK, the development of PPP
came as a redress mechanism to Land Contamination and as a counter rehabilitative measure.
Hence, the polluter was forced to compensate the damage caused. UK, being a member of
various International Conventions and Treaties including OECD recognized the need of PPP
to curb the growing menace of Environmental pollution. On similar lines, India (being a non-
member of OECD) also adopted PPP as inevitability to primarily protect Environmental
degradation from unscrupulous polluters as the costs to repair the Environment each time was
a very great burden to the Indian Government47.

44
Supra note 16
45
Supra note 17
46
Supra note 15
47
Supra note 31, p. 143

14
 5: Conclusion & Suggestions

The idea that polluters should be made to pay for damages that they cause to health and
property in a free society based on Rule of Law should be the guiding principle for all
environmental policies. The notion that Environmental problems are essentially about
interpersonal conflicts over the use of resources has been taken completely out of the
equation. A correctly construed PPP would highlight the fact that there is no tension between
liberty and economic efficiency on the one hand and sound environmental stewardship on the
other. Finally, the PPP ends up as a device in effectively monitoring by making those liable
for Environmental pollution by setting the stage for efficiency based Environmental
management through the proper use of market mechanisms. PPP can also be made more
effective by:

1. Adjusting incentives so that the polluter pays the cost of uncertainty;

2. Developing scientific methods to determine the potential costs of uncertainty vis-a-vis

Environmental damage;

3. Implementing the laws strictly laid down by the Government for preventing pollution
through regular monitoring;

4. Inducing efficiency in Environmental management through proper use of market

mechanisms;

5. Offering appropriate incentives to reduce the detrimental effects of high risk activity.

15