Jayanthi assails investment super committee proposal

Proposed NIB would be illegal, she says

Updated - November 17, 2021 05:11 am IST

Published - October 10, 2012 03:40 am IST - NEW DELHI

Minister of State for Environment and Forests Jayanthi Natarajan has expressed “very serious concern” at the setting up of a National Investment Board to fast-track clearances of major infrastructure projects, saying the “concept is unacceptable,” documents exclusively obtained by The Hindu reveal.

In a five-page letter sent to Prime Minister Manmohan Singh on October 9, Ms. Natarajan said the proposal would upturn established procedures of government business, place corporate interests over those of citizens and violate environmental protection mandates imposed by the Supreme Court.

The Hindu had >first reported earlier this month that the Department of Economic Affairs-proposed NIB — an empowered standing committee of the Cabinet that will be chaired by the Prime Minister and will include key offices like that of the Finance Minister and the Law and Justice Minister — would hear appeals from companies whose projects had been stalled on environmental grounds, and fast-track clearances.

Pro-corporate body

Ms. Natarajan’s letter says that while the proposal to set up the NIB gives corporations with projects worth “1,000 crore or more a route for fast-track appeal, it does not contemplate giving a hearing to citizens, stakeholders, or NGOs, who may be aggrieved by the impact of the project.”

Her letter points out that the NIB’s powers will, therefore, “be used for the benefit ONLY of large investors, but not ordinary people, local citizens and stakeholders dedicated to preserving environmental integrity.”

Ms. Natarajan notes that there is a conflict of interest between investment promotion and the Ministry of Environment and Forests, which exists “to protect the integrity of the environment, to ensure that our forests and wildlife, and by extension, forest dwellers are protected.”

“Often,” the letter argues, “hard decisions have to be taken to balance the imperatives of the development with the crucial need to preserve the environment. In this context, it would be utterly against the spirit of the Environment Protection Act to allow an investment Board, or the Finance Ministry to overrule, or decide upon environmental concerns.”

Prime Minister Singh, Ms. Natarajan notes in her letter, has voiced a commitment to “the most disadvantaged sections of society, indigenous people, forest dwellers, and the aam admi, whose interests and health are often impacted by unregulated industrial excess.”


Ms. Natarajan’s letter says the note proposing the creation of the NIB “and the haste with which our reply has been sought is deeply disturbing.” The issue, her letter records, “has never been discussed at the bureaucratic level, by a Committee of Secretaries, and is a proposal which is being brought directly to Cabinet. These proposed changes would have far-reaching consequences on the way Ministries are run, governance carried out, and responsibilities to the Legislature by the Executive discharged.”

The Environment Minister’s letter adds that the NIB will not possess “the domain knowledge, and expert level input of various levels of the Environment and Forest Ministry officers, and Committees, cannot be substituted.” When the Minister of a Ministry, acting upon the expert advice of officers, takes a decision, there is absolutely no justification for the NIB to assume his/her authority, nor will the NIB, have the competence to do so,” the letter states.

“I submit,” Ms. Natarajan writes, “that no entity anywhere in the world has the right to set up a project or an industry anywhere he wants just because of the possibility of large investments. Project location the world over is finalised ‘after’ and NOT ‘before’ looking at key considerations like environmental, and forest aspects, and even national security.”

Ms. Natarajan also challenges the Department of Economic Affairs’ claims that environmental clearances are holding up key projects. For example, her letter records, environment clearance had been granted to 181 coal mines with a total capacity of 83 million tons per annun during the 11th Plan Period, up to August 2011 — doubling India’s current capacity. In addition, 113 coal mines had been granted permission to divert 26,000 hectares of forest land for industrial use.

Indeed, her letter states, clearances have been awarded to projects “far beyond [what] has been targeted in the current and future plans.” “For instance,” the letter states, the “Ministry of Environment and Forests in the five years till August 2011 has granted environmental clearance to 210,000 MW of thermal power capacity. However, most of these projects have not been commissioned.”


Pointing to serious issues of Constitutional importance, and the functioning of the Cabinet, Ms. Natarajan rejects the notion presented in the draft Cabinet Note, that in the case of “failure” of the Competent Authority/Minister to act, the matter will stand transferred to the NIB. “This concept is unacceptable. The NIB has no constitutional or legal authority to decide upon the failure of any Minister,” she writes.

“If any decision of the Minister for Environment is overruled by the NIB,” the letter asks, “who will answer to this in Parliament?”

Her letter notes that in July 2011, the Supreme Court’s order dated July 6, 2011 had laid down far-reaching directions on the statutory clearance procedures to be followed by the Environment Ministry, which it would be illegal for the NIB to overrule.

Ms. Natarajan warns that clearing projects in the face of these legal mandates could end up eroding investor confidence, by opening the way for litigation. “Today, many projects are being delayed after clearance has been granted simply because we are not able to justify that the statutory procedure for clearance has been followed,” she writes.

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