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Analysis of Corporate Environmental Criminal Liability in Gas Leak Cases

INTRODUCTION:

The environment is one of the most exploited public properties among other things. Rather, it should be the most carefully protected one as it sustains life and many other ecosystems. India does preserve and protect its rich environmental resources through a set of regulatory regimes. But the law works badly when it works at all. The environment is a rich heritage that should be passed on to future generations. The legislative is quick to enact laws to do the same and protect the environment. But the governments lack the zeal to implement environmental laws. The government agencies across the country yield vast power to regulate any harm-causing industry. But it rarely happens as they are not willing to punish the violators due to high implementation cost or corruption or due to economic inefficiency. Being a third-world country, the environment was not the first priority until the early 1970s. In 1974 the very first environment-related legislation was enacted. The Water Act, 1974 was enacted.[1] The statute was similar to other Indian statutes at that time. It also prescribed an agency-regulated licensing regime only that this time it is for polluting water resources. The regime did not change till 1986. This year marked the change for the environmental law regime. The Bhopal gas tragedy has left some unforgettable scars on the environmental heritage and the people of the country. This lead to the enactment of the Environment Protection Act, 1986.[2] One of the main objectives of the act was to criminalise any violation of the act and discipline the violators through punishment.

On the whole, even this act could not bring about much change in the regime due to loopholes and implementation gap. The implementation gap subsists in all the legislations due to the democracy being corrupted and power greedy rather than welfare and service-oriented. The enforcement agencies are vested with a dangerous amount of power. Like any other aggravated citizens even in India, the courts became the last refuge. The courts have been silent spectators for years. Many of the acts leave the liability part to be decided by the judges. But the courts were influenced by many social and political factors and they did not set proper precedents. The court never really used its power and position to discipline the violators. But now even the courts have changed their sale and instead of being reactive, they became proactive. This gave rise to many doctrines and principles to attach liability to individuals, corporations, and the state. Yet there have been some serious breaches recently. Despite the laws, the corporations are negligent towards the environment. Although the courts are assuming their roles, they are not given freedom of decision. The decisions seem to be stricter but on the ground, they are toothless due to various reasons. Even the apex court itself lamented over the present scenario. It stated that if at all the plethora of legislation is implemented strictly towards pollution-free environment then India would be the least polluted country in the world. But this is not so, environmental degradation has increased on the contrary despite hundreds of legislation.[3]

GAS LEAK CASES IN INDIA:

The Courts’ stand in the gas leak cases became stricter over the years. The Courts came up with new doctrines and attached tort liability. The evolution of the environmental policy regime in India started with a gas leak case. At the time of the Bhopal gas tragedy, the Indian Penal Code was the only law to attach criminal liability or any liability at all to the violators. But now we have a plethora of legislations, rules and other regulations to attach liability.

Gas leak as such is not defined in any of the legislations. The natural meaning of this term is the unintended leakage of any gaseous substance into the environment where it should not be and causes serious effects.[4] Some of the terms which can be construed to have a similar meaning have been defined in the Environmental Protection Act, 1986. Section 2(e) of the act defines hazardous substance as follows it means any substance or preparation which, because of its chemical or physico-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plant, micro-organism, property or the environment; Section 2(b) and (c) of the act defines environmental pollutant and environmental pollution respectively. The read as follows “environmental pollutant” means any solid, liquid, or gaseous substance present in such concentration as may be, or tend to be, injurious to the environment; “environmental pollution” means the presence in the environment of any environmental pollutant. Gas leak cases are one of the gravest cases of environmental pollution and this has to be curbed. The courts generally adopt strict liability or absolute liability in case of the gas leak and attach a tortuous or civil liability. But it is rarely the case for criminal liability. The state might also have some role in this whole negligence part due to the lack of efficiency of the enforcement agencies. But millions of lives are affected and in some cases even generations are affected. There is law to attach criminal liability in such grave situations.

The general ideology is that a corporation is incapable of committing grievous crimes like murder or manslaughter. This concept is because it is an artificial or juristic person and has a separate personality from its directors. But what we miss is that it is run by natural persons who are capable of crime. Even in the legislations like Indian Penal Code, the definition of a person includes a company. But nowhere in the statute is it given that a corporation could commit murder or what is the punishment if that happens. There are clear and specific legislations regarding the same in other countries like UK and the US. With a growing number of gas leak cases in India as a process of development, there is a clear-cut enviro-criminal jurisprudence regarding the same but there is a little criminal course of action. The courts have shown how important the environment is and included it in the right to life, but there are no provisions if the life itself is endangered. Environmental crimes, noncompliance, and risks create significant immediate and future harms to the health of humans and the natural world. Yet, the field of criminology has historically shown relatively little interest in these issues. Criminologists have documented notable examples of environmental crimes and negligence by companies, governments, and organized crime groups, but this aspect of the criminological literature has historically lacked the theoretical and methodological depth and breadth of other facets of criminology, such as the study of street crime.[5] Until today only compensatory damages are claimed from a corporation but not punitive damages. The main purpose of imposing a criminal liability is to deter others from committing the same act which may cause harm. The growing number of gas leak cases shows how this can be the right time to implement the existing enviro-criminal.

The legislative aspect of corporate criminal liability has been very bleak in India. It was always compensatory or remedial. Especially in gas leak cases, the courts have been reluctant to attach criminal liability to corporations although there are existing laws. One of the first pieces of legislation that attaches criminal liability is the Indian Penal Code, 1860.[6] Section 304 and 304A[7] have been used to attach criminal negligence to the corporations in some of the gas leak cases. It reads as follows:

304A. Causing death by negligence: Whoever causes the death of any person by doing any rash or negligent act not amounting to culpable homicide, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

The next piece of legislation that helps in attaching liability to companies in gas leak cases is Environment Protection Act, 1986.[8] One of the main objectives of the act is to make the violators of the act criminally liable to the hazards caused and deter any such harm to the environment in the future. Section 16 of the Act reads as follows: 

16. OFFENCES BY COMPANIES.-

(1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officers of the company, such director, manager, secretary or other officers shall also deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

V.S.Khanna (1996)[9]  stressed the importance of criminal liability or hybrid version of liability in certain cases like environmental degradation. The article explores how there has been an expansion of corporate criminal liability into various disciplines like food laws, pharmaceuticals laws, and environmental laws. The article stresses the increasing need to attach criminal liability although there is a considerable debate on the whole. The article analyses the underlying rationale behind criminal liability and says that the imposition is for deterrence. The article argues that corporate civil liability can capture the desirable features of corporate criminal liability, especially criminal liability’s powerful enforcement and information-gathering dimensions. Furthermore, he contends that corporate civil liability avoids the undesirable features of corporate criminal liability. Such undesirable features include criminal procedural protections and criminal sanctions and stigma effects. 

Neal Shover and Aaron S. Routhe (2005)[10] explain what is environmental crime and how is it determined in this article. They explain how the environmental movement has grown in the 20th century and how the perpetrators are punished using this movement. The article shows how the decision of liability is left to the regulatory agencies in most of the countries and they stress the point that the agencies do not operate vigorously or the punishment given is not that severe. 

Engobo Emeseh (2003)[11] stresses the challenges face by developing countries in enforcing criminal liability for environmental damage. He stresses the factors like lack of political will, perception of damage like how these violations are seen as a mere breach of administrative regulations or accidents, social and economical factors, the sheer financial power of multi-national companies, legal lacunas, institutional breakdown, and other important factors influence the liability and restrict the applicability of criminal liability. 

Clarence J Dias (1986)[12] argues that the job recessions and monitoring factors and many other socio-political and socio-economic factors influenced the decisions in the Bhopal gas tragedy. The author further stresses to have a separate regulatory framework for such disasters and calculate the proper liability for such damages and argues the need and importance of unbiased monitoring units or regulatory bodies. 

John E. Stoner (1985)[13] argues how criminal liability can influence corporate behaviour especially in cases of homicide and such serious crimes. The article stresses the history and evolution of corporate behaviour and  how the basic postulates of punishment affect corporate behaviour. The aims of deterrence, rehabilitation are discussed in the article, which are the results of criminal liability. The article stresses how criminal liability will send a stronger message than administrative fines and civil suits. The criminal liability will make the companies realise how such behaviour is unacceptable in society. 

David Whyte (2014)[14] argues that we need to widen the theoretical scope of the concept of “state-corporate crime” if we are to grasp the full significance of state-corporate symbiosis in the production of corporate crime. The article argues for historically and systemically sensitive analysis of the state-corporate relation that takes account of the a priori constitutional features of the relationship between states and corporations in contemporary capitalist democracies. The article, therefore, uses the state-corporate crime literature as a point of departure for understanding a deeper structural relation between organized capital and state institutions which is similar to the Bhopal Gas tragedy where due to state gave permissions, the corporation was negligent and the state represented the aggrieved people whereas it was also a party to the crime.

CM. Jariwala (2011-2013)[15] stresses who is liable and the government’s role in the whole process. The article also highlights the stance taken by many countries again environmental crime and why India should adopt them. The article substantiates attaching criminal liability not only to the directors or operators but to the whole company. 

The evolution of environmental criminal jurisprudence is still in progress. But the courts have taken the starting steps to reform environment policy regulation in the country which is shown in the form of environmental jurisprudence and fundamental right to the environment. Bhopal Gas tragedy judgement set out a wrong precedent. The judgement and the compensation have been criticized by many over the years. All those criticisms point to how the court compromised on basic human rights and pardoned the accused. Such precedents do not send out a good message and show the desperation of a developing country. This makes the citizens of the country more vulnerable and susceptible to exploitation. The multi-national companies will be of the view that they can get away with anything without punishment in a developing country like India. This behavior can be seen in the immediate year after Bhopal Tragedy, through the Oleum Gas leak Case.[16] But this time the apex court stood up to its reputation. The court gave the doctrine of absolute liability[17] in this case. The no-fault liability is one of a kind of tortuous liability, where the violators are liable without any exceptions. The court may have laid a foundation for the development of environmental criminal liability through absolute liability. But this kind of criminal jurisprudence is far from realization due to many reasons. The court is reluctant to attach liability using the existing regulatory framework. What is slowing down environmental criminal prosecution or why has Section 16 never been used to determine the liability? These are some of the reasons which were construed from some of the gas leak cases:

1. High cost of implementation of the existing laws or court orders: the cost of implementation of criminal prosecution orders is high for a developing country like India. In a developing country like India, resources are scarce and justice is costlier when it involves environmental crimes. Environmental crimes all over the world give a profit billions to organized crime companies. In such a background, it is really difficult for a developing country to make such profit-eating monsters criminally liable. The sheer financial power of these multi-national companies makes it impossible for the developing countries to attach liability. They have many players to influence the decision of the court due to the huge financial power which is not matched by the developing countries. The country becomes much more vulnerable when we expect those companies to set our shop and bring huge foreign investments. We give them free passage to pollute and cause such disasters.

2. Right to livelihood v. Right to Life: The courts are always faced with this issue in almost every environmental case not particularly environmental crimes or gas-leak cases. The courts deter from closing down the companies or imposing harsher punishments just to sustain the jobs the company is providing in the country. the judiciary misses the simple logic of what is a job without life. 

3. Political will and development: Another important factor that influences the decision of the court is the political will to safeguard the nation from environmental crimes. Developing nations especially are in a mad race to be developed. But in this race, they somewhere forget the welfare of the people. This makes the whole development process a lost cause. The environment should be at the top of political agendas like any other economic development. This equal opportunity to both environment and economy is the lifeblood of sustainable development. 

4. Inefficiency in permission granting Regime: The boards or controlling authorities or enforcement agencies are the main link to implement environmental laws. But they are very defective in our country. there is either corruption or inefficiency in the agencies. They should perceive the importance of their position and assume their roles accordingly. Another inefficiency in the implementation of laws from an agency perspective is that we do not follow a command control mechanism. This mechanism has specificities and anything even slightly beyond this specific limit is punishable. Rather the regulatory boards follow an economic incentive mechanism, where perks are given for not causing pollution. In this mechanism, the only glitch is you can still pollute by paying fines. This mechanism is not beneficial in the long run. 

5. The vagueness and loopholes in law: All the laws in India have inefficiency in the implementation part due to the vague and uncertain nature of laws. And there are many loopholes to save from the inefficiency. Especially in the case of section 16 the terms like “due diligence” and “without knowledge” make it difficult to attach liability. Also, there is no specific term mentioned for imprisonment or any specific punishment mentioned for the same in section 16 whereas it is mentioned for individuals in section 15. Another loophole is that the whole act is government and corporation-friendly rather than environmental and citizen-friendly. In cases like these knowledge should be made irrelevant. If the country wants justice this legislation needs to be given teeth, not such a vague mechanism. 

Although there have been many debates to attach criminal liability to companies, there have been many recent developments. Companies are huge economic players in a nation. It is hard to suppress the ones which provide economic development to a nation. These are some of the reasons why it is important to attach criminal liability:

1. Deterrence: The main purpose of criminal law and punishment is deterrence. Criminal liability is more efficient than any civil liability. Criminal liability sends a stronger message to those who want to trifle with vulnerable groups and developing countries. Criminal liability deters such behavior.

2. Incapacitation and Rehabilitation: Due to criminal prosecution or criminal liability the companies may lose their goodwill and reputation. There are huge chances of incapacitation of such companies and they should be closed down in a victim country. The imposition of huge fines allows for the rehabilitation of the affected people as well as acts as a deterrent. 

3. Retribution: With criminal liability, there is justice done to the lost lives. Justice cannot be denied just because it is a huge company with a huge amount of capital and jobs. 

CONCLUSION: WHAT NEXT?

With the recent Vizag gas-leak case[18], it can be seen how corporations are misbehaving with a developing country. The courts are still reluctant to even attach absolute liability so criminal liability needs more push to become a reality. Currently, India has to make the existing laws and provisions tougher and specify harsher punishments. It is already halfway through it where the corporate veil is lifted and the directors are held liable. But that is not sufficient in the long run. Proper and fearless implementation of the laws is also important. Now the final question is there a need for separate legislation to hold corporations criminally liable for crimes other than white-collar crimes. The answer would be yes. It is high time that these profit-eating monsters are closed down and punished and we do need a law for this. Although there are many debates as to how to hold a corporation criminally liable and imprison it and many other procedural debates, there are many countries that are implementing it already. India can adopt from those countries. Another measure would be an international law to punish ecocides.[19] An international regime would stop trans-national exploitation by multi-national companies. All these measures are far from realization but there should be some effort to protect the most prized possession of the earth. We should be able to pass a safe and clean environment to future generations as we inherited from our past generations. We need to take action against these exploitations before it is too late.


[1] The Water (Prevention and Control of Pollution) Act, 1974, No. 6, Acts of Parliament, 1974 (India).

[2] Environment Protection Act, 1986, No. 29, Acts of Parliament, 1986 (India).

[3] Indian Council for Enviro-Legal Action v. Union of India, 1996 (5) SCC 281.

[4] TREVOR A. KLETZ, LEARNING FROM ACCIDENTS 40-51 (Gulf Professional Publishing 2001) (1988).

[5] Carole Gibbs, Meredith L. Gore, Edmund F. McGarrell and Louie Rivers III, INTRODUCING CONSERVATION CRIMINOLOGY: Towards Interdisciplinary Scholarship on Environmental Crimes and Risks, 50 The British Journal of Criminology, pp. 124-144 (2010) https://www.jstor.org/stable/43612851.

[6] Indian Penal Code, 1860, No. 45, Acts of Parliament, 1860 (India).

[7] Keshub Mahindra v. State of Madhya Pradesh, 1996(6) SCC 129

[8] Supra note 2

[9] V.S. Khanna, Corporate Criminal Liability: What Purpose Does It Serve?, 109 Harvard Law Review, pp. 1477-1534 (1996).

[10] Neal Shover and Aaron S. Routhe, Environmental Crime, 32 Crime and Justice, pp 321-327, (2005

[11] Engobo Emeseh, Challenges to Enforcement of Criminal Liability for Environmental Damage in Developing Countries: with Particular Reference to the Bhopal Gas Leak Disaster, 1 OGEL, (2003) https://www.researchgate.net/publication/37145828_Challenges_to_Enforcement_of_Criminal_Liability_for_Environmental_Damage_in_developing_countries_with_particular_reference_to_the_Bhopal_Gas_Leak_Disaster.

[12] Clarence J Dias, That they Shall not Have Died in Vain, 28 Journal of Indian Law Institute (1986).

[13] John E. Stoner, Corporate Criminal Liability for Homicide: Can the Criminal Law Control Corporate Behavior, 38 Sw. L. J. 1275 (1984).

[14] David Whyte, Regimes of Permission and State-Corporate Crime, 3(2), State Crime Journal 237-246 (2014).

[15] CM. Jariwala, Corporate Environmental Criminal Liability in India: Reality or Myth, 3-5 RMNLUJ (2011-2013).

[16] M.C. Mehta v. Union of India, AIR 1987 SC 965.

[17] Bharath Parmar, Aayush Goyal, Absolute Liability: The Rule of Strict Liability in Indian Perspective, MANUPATRA    http://docs.manupatra.in/newsline/articles/Upload/2D83321D-590A-4646-83F6-9D8E84F5AA3C.pdf.

[18] Environment Protection Act: Vizag Gas Leak Angle, LEXLIFE INDIA (May 21, 2020),  https://lexlife.in/2020/05/21/environment-protection-act-vizag-gas-leak-angle/.

[19] Lawyers Are Working to Put ‘Ecocide’ on Par with War Crimes. Could an International Law Hold Major Polluters to Account?, TIME (Feb 19, 2021), https://time.com/5940759/ecocide-law-environment-destruction-icc/.


Cite this article (The Bluebook 20th ed.)-

Meher Mansi, Analysis of Corporate Environmental Criminal Liability in Gas Leak Cases, Ex Gratia Law Journal, (April 1, 2021), https://exgratialawjournal.in/journal/volume-2/volume-2-issue-2/analysis-of-corporate-environmental-criminal-liability-in-gas-leak-cases-by-meher-mansi/.


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Author

Meher Mansi
Student - School of Law Christ University