Thoothukudi Sterlite Copper Plant: What Made Madras High Court To Rule Against Its Opening

The Madras High Court has dismissed all the contentions of the UK-based Vedanta Resources while dismissing its petition to quash the Tamil Nadu government's 28 May 2018 order to shut its Thoothukudi Sterlite Copper Plant.

A two-judge bench of Justices TS Sivagnanam and V Bhavani Subbaroyan, in their 815-page judgement, said Vedanta had failed to prove any malafide intent on the part of the Tamil Nadu government ordering its copper plant closure.

The judgement, written by Justice Sivagnanam, has also referred to the 2013 Supreme Court judgement that allowed Sterlite to resume operations after the High Court ordered it shut.

It has drawn some inferences from the Supreme Court ruling to dismiss Vedanta’s petition.

The judges have said that there was collusion between Sterlite and Tamil Nadu Pollution Control Board in getting a favourable order in the Supreme Court in 2013, while they have also questioned the permission given for the plant’s expansion.

‘TNPCB Took A Curious Decision Before Supreme Court’

Referring to the Tamil Nadu Pollution Control Board (TNPCB) and State Government stand that all is not well with Sterlite, the High Court pointed out that a committee appointed by the Supreme Court visited the plant in September 2014.

Then, Sterlite did not have adequate infrastructure and provisions for management of waste generated.

The committee asked the State government to conduct a detailed environmental audit of the plant and assess the efficacy of its environmental management practices by an independent agency.

The judges wondered why an independent agency was asked to make the assessment, though the TNPCB has been repeatedly saying that Sterlite had not complied with the environment requirements fully.

The judges said that the committee appointed by the Supreme Court had specifically recommended that Sterlite not be granted approval for expanding its capacity and yet, it had got the permission as the regulatory authority at various levels did not take the matter seriously.

The High Court said that Sterlite did not possess sufficient land or infrastructure for storage of disposal of nearly eight lakh tonnes of copper slag.

The judges did not accept Vedanta’s argument that a study by SGS showing that it was producing eight lakh tonnes of slag was unscientific.

The court also said it found the TNPCB taking a curious stand in 2013, despite adverse reports against Sterlite, by stating that 30 conditions need to be laid down to allow the copper plant to function.

Then, the committee accepted TNPCB's change of stand and allowed the plant to function.

Now again, TNPCB says Sterlite had not cumulatively complied with all the conditions.

“Can this lead to an inference that TNPCB was guilty of not placing full facts before the Supreme Court in the 2013 case? We have held that the past conduct of the petitioner (Sterlite) should be and can be taken into consideration by the regulator and … the court is empowered to take note of the past conduct. We have assigned reasons for such conclusions,” the judges said.

‘Hard To Believe Petitioner Has State-Of-The-Art Plant’

The judges refused to agree with Vedanta’s argument that the copper plant was a state-of-the-art one with “utmost commitment to the environment and society”.

“The courts have limitations when it comes to examining highly technical issues… The problem which is peculiar to the case on hand is as to whom to believe,” the court said.

Furthering their stand, the judges said that they were constrained to say so in view of “the inconsistency of the authorities at various levels at different points of time”.

“If courts are left to doubt every technical report relied on by the regulator, it would lead to disastrous consequences and ultimate self-destruction,” they said.

‘Environment Is Supreme Over Economy’

Referring to Vedanta’s argument that India’s copper demand cannot be met if the plant is shut down, the judges, pointing out at a Supreme Court judgement, said that when the economy is pitted against the environment, the latter will reign supreme.

“Economic considerations can have no role to play while deciding the sustainability of a highly-polluting industry and the only consideration will be safe-guarding environment for posterity…,” the bench ruled.

‘Mala Fide Intentions Not Proved In The Manner Known To Law’

In response to Vedanta’s argument that its copper plant had been singled out of the 63 industries functioning in the industrial city, the High Court said it had not been proven in the manner known to law.

“Does the petitioner (Vedanta) state that the State Government has acted mala fide, if so, what is the foundation for such a plea? If the petitioner states that the TNPCB’s action is mala fide, it should establish as to which office or authority of the regulator acted mala fide,” they said.

Referring to Vedanta’s allegations that the copper plant was ordered shut for “political consideration”, the judges wondered how it got permission from the State government to establish a hazardous industry within 14 days when it was unable to do so in two other States.

The court rejected as “vague and devoid of any substance” Vedanta’s argument that the Tamil Nadu government ordered the copper plant shut to divert the public attention from the mishandling of the anti-Sterlite agitation that led to police firing on 22 May 2018.

The judges, further, said:

2013 Supreme Court Order Empowers Regulator To Take Action

On Vedanta’s argument that it cannot be “vexed on the same issue twice” following the 2013 Supreme Court order allowing it to function, the judges said the apex court had held the view that the regulator has the power to take action, including ordering closure.

The 2013 order was issued by the Supreme Court on the High Court’s closure order, whereas in the present case, the TNPCB has refused to renew its consent for the copper plant operations. Therefore, the two situations are different, the court said.

The judges said the Supreme Court did not exonerate Sterlite Copper plant in its 2013 order and the argument that the matter had already been adjudicated could not be accepted.

Pointing out at a portion of the 2013 judgement, the High Court said in such matters, the argument of res judicata (matter has already been adjudicated) need not be entertained.

“Entire Order Of 2018 NGT Order Set Aside In Toto”

Stating that the copper plant has had a “chequered history”, the bench rejected Vedanta’s plea to consider reports and affidavits submitted before the National Green Tribunal (NGT) in 2018.

(Then, the company moved the tribunal which quashed the closure order. However, the Supreme Court ruled that the NGT order was not maintainable.)

The judges said that in its order on 18 February 2018, the Supreme Court had asked Vedanta to petition the High Court against the Tamil Nadu government and TNPCB orders. They said:

“In other words, the ‘slate’ has been cleaned and there are no writings on it to rely on,” they said.

“Rejection Of Copper Plant By Two Other States”

The bench observed that Vedanta could not set up the plant in Maharashtra and Goa following public protests and pointed out its past behaviour when it had begun mining without permission.

On submissions that the local people want the plant to continue operations, the judges said that the statements were “tutored”.

They also rejected the company’s argument that Thoothukudi was safer than Chennai as it was unsubstantiated.

The court also referred to a document of a land owned by a buyer of copper slag, saying Vedanta had hoodwinked revenue officials by saying that they had sold the slag and it cannot be held responsible.

The judges said that “TNPCB had colluded with the company by not issuing it a show-cause notice”.