Environmental Liability for Corporate Climate Damage

Author: Tems Das, National Law University Tripura


This article explores the issue of corporate responsibility for environmental damage within the Indian legal system. It explains how laws such as the Water (Prevention and Control of Pollution) Act, 1974 and the Environment Protection Act, 1986 form the backbone of environmental regulation in India. These laws empower both central and state authorities to prevent pollution and take action against companies that harm the environment. The role of the judiciary is also highlighted, as Indian courts have actively interpreted these laws to hold corporations accountable, even when environmental harm occurs indirectly or without intent. Despite this strong legal To the point framework, effective implementation remains a major concern. Regulatory bodies often face shortages of funds and manpower, penalties imposed on violators are usually too low to act as a real deterrent, and public awareness about environmental rights is limited. In addition, weak coordination among environmental authorities further reduces enforcement efficiency. Consequently, corporate accountability for environmental damage remains difficult to achieve in practice.


Use of legal jargon

There is an increasing movement toward formulating a precise legal definition of “ecocide,” understood as grave, widespread, and long-term environmental damage, with proposals to recognize it under international law. Legal scholars are also examining methods to strengthen the attribution of corporate criminal liability, including the application of attribution doctrines and the piercing of the corporate veil to hold directors and senior management accountable. Another critical issue concerns jurisdiction, particularly whether states can exercise extraterritorial jurisdiction over foreign corporations for transboundary environmental harm, which would require developments in international legal frameworks. These debates form part of a broader discourse on employing criminal law as a tool to address the climate crisis. Extending criminal liability to serious environmental harm reflects a growing recognition that such acts warrant treatment comparable to other serious international crimes.



The proof

The idea of sustainable development requires industries to improve the quality of production while using natural resources efficiently and generating minimal waste. Modern businesses are no longer responsible only for producing goods and services; they are also expected to protect and conserve the environment throughout their operations. Industrial activities contribute to various forms of pollution, including air, water, land, marine, and noise pollution.


Environmental degradation is often linked to rapid industrialization, especially where environmental laws are weak or poorly enforced. The environmental movement, which gained momentum in the 1960s, highlighted corporate responsibility as an essential part of social responsibility, particularly after major environmental disasters such as the Bhopal gas tragedy, Chernobyl nuclear accident, Love Canal contamination, and major oil spills. In response, many corporations adopted ethical standards and Corporate Social Responsibility (CSR) practices. Over time, tools such as environmental audits, self-regulatory codes, Environmental Management Systems, and concepts like the Triple Bottom Line and stakeholder theory reshaped corporate practices, placing environmental protection at the center of business decision-making.



Abstract

India’s rapid industrialization has led to serious environmental degradation, including air, water, and soil pollution, making corporate accountability a pressing legal issue. The Water (Prevention and Control of Pollution) Act, 1974 and the Environment (Protection) Act, 1986 form the core legal framework governing corporate liability for environmental harm in India. Despite these laws, effective enforcement remains weak due to inadequate funding, limited capacity of regulatory authorities, and poor monitoring mechanisms. Low public awareness of environmental rights further restricts citizen action against polluting industries. This article examines the legal framework on corporate environmental liability in India and highlights the judiciary’s crucial role in interpreting and enforcing environmental protection laws.



Case laws



1. M.C. Mehta v. Union of India (Oleum Gas Leak Case), 1987

The Supreme Court introduced the doctrine of absolute liability, holding hazardous industries fully responsible for environmental harm caused by their operations, regardless of negligence or intent. This case significantly strengthened corporate accountability and set a strict standard for industries dealing with dangerous substances.

2. Vellore Citizens’ Welfare Forum v. Union of India, 1996

The Court recognized the Polluter Pays Principle and the Precautionary Principle as part of Indian environmental law. It directed polluting tanneries to compensate affected communities


and adopt pollution control measures, reinforcing sustainable development as a constitutional obligation.



3. Sterlite Industries (India) Ltd. v. Union of India, 2013

The Supreme Court imposed monetary compensation on the company for environmental pollution while allowing conditional reopening of operations. The case emphasized strict regulatory compliance and confirmed that economic interests cannot override environmental protection.



4. Indian Council for Enviro-Legal Action v. Union of India, 1996

Chemical industries responsible for severe soil and water pollution were ordered to pay the cost of environmental restoration. The judgment firmly established that polluters must bear the financial burden of repairing environmental damage caused by their activities.



FAQS

1. What is corporate environmental liability in India?

It refers to the legal responsibility of companies to prevent environmental harm and to compensate for damage caused by their industrial activities.



2. Which laws govern corporate responsibility for environmental damage in India?

The Water (Prevention and Control of Pollution) Act, 1974 and the Environment (Protection) Act, 1986 are the main laws.



3. What is the principle of strict liability?

It means industries engaged in hazardous activities are liable for environmental harm even without negligence or intent.



4. What role does the judiciary play in environmental protection?

Courts interpret environmental laws, enforce corporate accountability, and protect the right to a healthy environment.

5. Why is enforcement of environmental laws challenging in India?

Weak regulatory capacity, low penalties, limited public awareness, and poor coordination among authorities reduce effective enforcement.