By Ms. Ishita Das*

The Baghjan oil field disaster has affected thousands of human lives and caused extensive damage to the environment. The company, Oil India Limited, seems to have engaged in serious violations of the Air Act, the Water Act and can be held absolutely liable under the Environmental Protection Act. Various established principles of Environmental Law including the precautionary principle, the polluter pays principle, the public trust doctrine, and the sustainable development principle can be invoked in this case. This brief research paper aims to discuss the legal implications of the disaster. The paper has been divided into three sections and the second section considers the core aim in detail.

Introduction

The Baghjan oil field disaster has created severe environmental repercussions for the community in Assam, including the flora and fauna. The oil field is located about 1 km away from the Dibru-Saikhowa National Park and 1.5 km away from the MaguriMotapungBeel. The former is one of the 18 biosphere reserves in India that is home to several species of endangered birds, mammals, and reptiles.[i] The latter is a critical wetland habitat and an Important Bird Area. Following the disaster, carcasses of Gangetic Dolphin, the country’s National Aquatic Animal, and other birds and animals were retrieved from the water bodies, soaked in oil as per the statement issued by the WWF, India.[ii] Two employees of the company’s firefighting unit also lost their lives while trying to save themselves from the impact of the fire following the blowout.[iii]

This disaster has raised several questions that require the immediate attention of all the members of the international community. Development in emerging countries is given increasing priority, often, at the cost of sustainability. While the developed countries that have caused significant damage to their natural resources now look towards the developing countries for extensive conservation efforts, the latter group of nations may argue that they would not compromise on economic growth even if it means encroaching upon critical habitats such as wetlands. This attitude could cause severe harm to the ecosystems that sustain many species and also adversely affect humans. If this continues for long, ‘sustainable development’ would remain a terminology that exists only in letter and not in spirit.

The Government of India has launched very ambitious projects for harnessing renewable energy in the country including the vision for the establishment of Ultra-Mega Renewable Energy Parks in Gujarat and Rajasthan, apart from various other schemes.[iv] While this effort is a welcome move in a country that derives more than half of its energy from fossil fuels,[v] several areas are still ignored. Following the issuance of Assam’s Pollution Control Board’s (“PCB”) closure notice to Oil India Limited (“OIL”), the top Public Sector Undertaking announced that they would challenge the notice. They argued that the company’s operations were being conducted with the approval of the state PCB.[vi]

Following discussion with the top company representatives, the PCB decided to withdraw the notice on certain grounds: OIL had to (1) draft an environmental management plan and submit the same within 15 days; (2) apply for Consent to Operate (“CTO”) under the relevant provisions of the Air (Prevention & Control of Pollution) Act, 1981 and the Water (Prevention & Control of Pollution) Act, 1974; (3) provide details of hazardous waste generated as per the Hazardous & Other Waste (Management & Transboundary Movement) Rules, 2016; (4)  apply for authorisation under E-Waste (Management) Rules, 2016 and (5) submit the return as per Batteries (Management & Handling) Rules, 2001 within the stipulated deadline.[vii]

The actions of the PCB have drawn flak from environmentalists in the state[viii] and across the country where big companies have managed to escape accountability for their actions in the past. As per certain news reports, the PCB had noted in its closure notice to OIL that it had not submitted its Annual Reports regularly as per Section 9 of the Hazardous & Other Waste (Management & Transboundary Movement) Rules, 2016,[ix] among other important concerns. Therefore, it is only natural that PCB’s withdrawal of the notice within 48 hours of its issuance[x] indicates systemic issues vis-à-vis big companies and the power of the industrial lobbies in our country. However, the fact that the environmentalists have various fora to voice their concerns can contribute to instilling public faith in governmental institutions. 

The National Green Tribunal (“NGT”) is considering matters related to the Baghjan oil well blowout. They have clubbed cases related to the same issue and are hearing them together. As per their recent order dated 24 June 2020, a Committee of Experts has been constituted that would provide their feedback on the preliminary terms of reference formulated by the NGT.[xi] Headed by former Judge of the Gauhati High Court, B.P. Katakey, the eight-member Committee comprising experts in this field would have to submit their preliminary report within 30 days of the Committee’s constitution.

Some of the questions that they are slated to examine include the following: (1) cause of the gas leak and extent of its damage to human lives, flora and fauna; (2) contamination caused to the air, water, soil near the oil well and its vicinity; (3) impact of the leak on the DibruSaikhowa National Park and the MaguriMotapungBeel; (4) whether any mitigation strategies were adopted by OIL to deal with the incident; and (5) assessment of compensation for the victims, inter alia.[xii] The NGT also slapped an interim fine of Rs. 25 crores on OIL based on a prima facie case being made out against the company.[xiii]

However, as per Assam Tribune, the NGT has deferred OIL’s payment of the interim fine till the Committee works out the actual amount and disbursement plan to the affected families. OIL has admitted that different committees are studying specific aspects following the disaster, including M/s ERM, TERI, CSIR-NEIST, and IIT Guwahati[xiv] and that the final report would be prepared based on the reports submitted by these committees.[xv] Apart from these reports that various committees plan to provide, the NGT has noted the detailed study conducted by the Wildlife Institute of India (“WII”) that holds OIL unequivocally liable for the blowout.[xvi] The outcome of the report submitted by the Committee of Experts should throw more light on this issue.

At the time of writing this research piece, the fire from the blowout is yet to be curbed, after continuing for more than 50 days. Keeping this background in view, the core aim of this research piece is to throw light on the legal implications of the blowout and how OIL seems to have violated relevant provisions of the Air (Prevention & Control of Pollution) Act, 1981, the Water (Prevention & Control of Pollution) Act, 1974, and assess whether it can attract absolute liability under the Environmental Protection Act, 1986. The section below explores these issues in detail. The last section would provide the suggestions and concluding remarks of the author.

Understanding the Legal Implications of the Baghjan Oil Field Disaster

The Baghjan oil field blowout has given rise to several legal issues, especially the ones pertaining to the environment and wildlife. The PCB in its closure notice has noted that OIL had violated Sections 25/26 of the Water (Prevention & Control of Pollution) Act, 1974 (“Water Act”), Section 21 of the Air (Prevention & Control of Pollution) Act, 1981 (“Air Act”), and Section 21 of the Hazardous & Other Waste (Management & Transboundary Movement) Rules, 2016. The WWF India has expressed that Section 16 of the Environmental Protection Act, 1986 (“EPA”) should be invoked in this case. Therefore, it is imperative at this stage to understand the implications of these violations.

Potential Violations of the Air Act and the Water Act

Section 25 of the Water Act deals with prior consent wherein restrictions are imposed regarding new outlets and new discharges. The previous consent of the PCB should be obtained before establishing or seeking to establish any industry, operation, process, or any treatment and disposal system or any extension or addition thereto that may discharge sewage or trade effluent into a water body such as a stream or sewer or land.[xvii] The Supreme Court in A.P. Pollution Control Board II v. Prof. M.V. Nayadu (Retd.)[xviii]noted that after the amendment of Section 25, it was mandatory to obtain consent for even the establishment of an industry or taking of steps towards that process.

The Andhra Pradesh High Court in Oil Country Tubular Ltd. v. A.P. Pollution Control Board &Ors.[xix]reiterated this observation and stated that consent would be required at three stages: (1) before establishment; (2) at the time of operation and (3) in the event of any extension or addition thereto. In this case, the PCB alleged that OIL was conducting its Baghjan oil field operations in violation of Sections 25/26 of the Water Act. Even though the PCB has allowed OIL to obtain CTO for operations in the Baghjan oil field, they seem to have violated the provisions for not seeking proper permission for Consent to Establish (“CTE”). If this is proved to be true, OIL would have engaged in serious violations of the Water Act wherein it could be subjected to penalties prescribed under Section 44 of the Act.[xx]

Section 21 of the Air Act imposes restrictions on the use of certain industrial plants. It provides that no person shall, without the previous consent of the PCB, establish or operate any industrial facility in an air pollution control area.[xxi] Similar to the Water Act, the enterprise would need to obtain CTE and CTO under the Air Act as well. The PCB’s notice specifies that OIL had neither obtained CTE nor CTO under the Air Act. However, they later stated OIL only had to seek CTO as one of the stipulated conditions, effectively compromising on the CTE violation of OIL. Therefore, coupled with violations under the Water Act, if this is proved to be true, OIL would have engaged in serious violations of the Air Act and could be subjected to the penalties prescribed under Section 37 of the Act.[xxii]

Potential Culpability under the Environmental Protection Act

The WWF India has expressed that Section 16 of the EPA should be invoked in this case.[xxiii] Section 16 essentially provides for the piercing of the corporate veil to hold the company that has caused environmental damage accountable for its actions. The person who is ‘directly in charge’ of the company would be deemed to be guilty of the offence.[xxiv] This provision is parimateria with Section 40 of the Air Act and Section 47 of the Water Act.[xxv] Therefore, the persons in charge of the company when the blowout occurred can be held vicariously liable through these provisions. The impact of the blowout on the environmental resources and wildlife could have potentially caused irreparable harm to the ecosystem. Therefore, the people at the helm of the affairs of the company must be held accountable for their negligence or omission.

As per industry insiders, the reason behind the blowout could be attributed to human negligence.[xxvi] The problem seems to have occurred during the workover operations that were being carried out by Chartered Hire Rig owned by Ahmedabad-based John Energy. John Energy was the contractor in charge of the workover operations and was working in the Baghjan oil field under the supervision of OIL. OIL had planned to move the workover rig to another well after closing Baghjan well 5, the well from which the blowout of the crude oil and natural gas occurred. This well was a High-Temperature (“HT”) and High-Pressure (“HP”) one, thereby requiring more diligence as far as workover operations are concerned.

The officials used a cement plug and then installed a blowout preventer to control any potential blowout from Baghjan well 5. The cement plug is generally given 12-48 hours to settle to prevent the spillover of oil and natural gas from the well. However, in this case, the plug was given less than 12 hours to solidify following which the officials removed the blowout preventer to initiate the process of moving the workover rig. As per news sources, the hydrocarbons were trapped between several layers of the same well.  Generally, only one layer is worked upon at one point of time and as the officials were suspecting that the production from the lower zone had fallen, they assumed that due to less production, the pressure would also be less.

However, the cement plug had not settled in effectively within the time frame as estimated by the officials, causing this horrible disaster.[xxvii] Therefore, on a prima facie basis, OIL could be held absolutely liable for harming human lives, flora, and fauna near the Baghjan oil field. The Supreme Court has articulated in M.C. Mehta v. Union of India (the Oleum Gas Leak case) that a company that engages in a dangerous activity that could cause harm to its employees or the people nearby owes an absolute and non-delegable duty towards them. However, if harm is caused, they would be liable for the same and cannot invoke the exception of negligence or that all reasonable precautions had been taken.[xxviii]

Legal Principles of Environmental Law that could be applicable

Further, established principles of Environmental Law comprising the precautionary principle, the polluter pays principle, the public trust doctrine, and the sustainable development principle also come into play in this case. In several cases such as the Indian Council for Enviro-Legal Action v. Union of India,[xxix]Vellore Citizen’s Welfare Forum v. Union of India,[xxx]N.D. Jayal v. Union of India,[xxxi]S. Jagannath v. Union of India,[xxxii]M.C. Mehta v. Kamal Nath,[xxxiii] among various others, the Supreme Court of India recognized the importance of protection of the environment and articulated how these legal principles apply to the particular facts of each case. In most of these cases, the Supreme Court observed that economic advancement needs to be balanced with ecological imperatives.

In this particular case, OIL seems to have been negligent in properly dealing with Baghjan well 5, thereby affecting human lives, flora, and fauna as a result of their actions. First, it seems that they did not take adequate precautions to prevent the blowout. Second, it seems that as they have caused contamination of water bodies and air in the concerned area, they could be liable to pay appropriate damages to the victims. Third, it seems that their actions have adversely affected the people who were dependent on the ecology surrounding the Baghjan oil field for their livelihood. Finally, as it seems that they were conducting operations in the Baghjan oil field without following due procedure, they have miserably failed in balancing environmental concerns with economic interests.

Therefore, on a preliminary basis, it seems that OIL may have engaged in serious violations of the Air Act, and the Water Act, and can be held absolutely liable under the EPA. The concerned court of law after careful examination of the facts and the various reports that would be submitted soon should ensure that the company is held accountable for its actions and that the victims are adequately compensated for the damage caused to them. The harm caused to the flora and fauna in the Dibru-Saikhowa National Park and the MaguriMotapungBeel and other surrounding areas could be irreparable, and therefore, the court of law may consider directing OIL to pay exemplary damages.

Conclusion

In several cases, including the Bhopal Gas tragedy, the impact of the actions of the companies has been felt for generations. In the recent incident in Vishakhapatnam where styrene gas from the chemical plant owned by LG Polymers Private Limited killed 11 people and sickened 1000 more, the NGT held the company strictly liable for the damage caused and ordered them to deposit Rs. 50 crores with the Collector.[xxxiv] However, the problem with this legal formulation is that instead of holding the company accountable through absolute liability, they have decided to proceed with strict liability that allows room for exceptions.[xxxv]

Further, the use of the strict liability principle is obsolete after the Oleum Gas Leak case wherein Justice P.N. Bhagwati articulated the principle of ‘absolute liability’ and which is also part of Section 17 of the National Green Tribunal Act, 2010.[xxxvi]The parent company, LG Chem is a South-Korean batter-maker, and therefore, the possibility of holding the parent company accountable seems bleak given the history with how multinational companies have been absolved of liability even after causing widespread harm to human lives and the environment in India.

Unless sustainability is given priority and placed at the same pedestal as economic growth that unlike the former has a tangible representation such as General Domestic Product or the Gross National Product, it is impossible to realize the true benefits of sustainable development. The concept of sustainable development would only work if the legal, political, economic, and environmental minds in the country work in tandem towards the achievement of common goals. The compartmentalization of goals will not help anymore and it is high time that integration is achieved in these sectors. Only then can we prevent incidents such as the Baghjan oil field disaster in the future.


About the Author

*Ms. Ishita Das is PhD Scholar with the NALSAR University of Law, Hyderabad. She pursued LL.M. from The W.B. National University of Juridical Sciences, Kolkata [Gold-Medalist], and has completed her undergraduate training from National Law University, Jodhpur. She has worked as Assistant Professor of Law with the National Law University and Judicial Academy, Assam, teaching courses relating to the Environmental Law specialization to both undergraduate and postgraduate students. She has also worked with Oval Observer Foundation, New Delhi, conducting research and writing short pieces concerning sustainability, foreign policy, and international trade.


[i]‘DibruSaikhowa National Park’ (Outlook Traveller, 15 April 2017) <https://www.outlookindia.com/traveller/ot-getaway-guides/dibru-saikhowa-national-park/> accessed 21 July 2020.

[ii]‘WWF India Statement on the Blowout in the Oil Well in Baghjan, Asam and its Impacts’ (WWF India, 12 June 2020) <https://www.wwfindia.org/?19322/statement-on-the-blowout-in-the-oil-well-in-baghjan-assam> accessed 21 July 2020 [WWF India].

[iii]‘Assam: 2 Firefighters killed in OIL Well Fire’ (The Hindu, 10 June 2020) <https://www.thehindu.com/news/national/other-states/assam-2-firefighters-killed-in-oil-well-fire/article31793085.ece> accessed 21 July 2020.

[iv]Anjana Parikh, ‘Government to Set up 50 GW of Ultra-Mega Renewable Parks in Gujarat and Rajasthan’ (Mercom India, 19 February 2020) <https://mercomindia.com/government-set-ultra-mega-renewable-parks-gujarat-rajasthan/> accessed 21 July 2020.

[v]Bilal Abdi, ‘Economic Survey: Fossil Fuels, Coal to Remain an Important Source of Energy (The Economic Times, 4 July 2019) <https://energy.economictimes.indiatimes.com/news/coal/economic-survey-fossil-fuels-coal-to-remain-an-important-source-of-energy/70073900> accessed 21 July 2020.

[vi]‘Baghjan Oil Field Fire: Assam Pollution Boar Withdraws OIL Well Closure Notice’ (The Wire, 23 June 2020) <https://thewire.in/environment/assam-baghjan-fire-oil-india> accessed 21 July 2020.

[vii]‘Pollution Control Board withdraws ‘Closure Notice’ given to Baghjan Oil Field’ (Pratidin Time, 22 June 2020) <https://www.pratidintime.com/pollution-control-board-withdraws-closure-notice-given-to-baghjan-oil-field/> accessed 21 July 2020.

[viii]Mubina Akhtar ‘PCBA Fails to make OIL Accountable for Baghjan Catastrophe’ (NorthEast Now, 26 June 2020) <https://nenow.in/north-east-news/assam/pcba-fails-to-make-oil-accountable-for-baghjan-catastrophe.html>accessed 21 July 2020 [Akhtar].

[ix]JayantaKalita, ‘OIL India Skipped Public Hearings before Expanding Drilling in Assam’s Baghjan (The Wire, 21 June 2020) <https://thewire.in/environment/exclusive-oil-india-skipped-public-hearings-before-expanding-drilling-in-assams-baghjan>accessed 21 July 2020.

[x]Akhtar (n. viii).

[xi]BonaniKakkar&Anr. v. Oil India Limited &Ors., NGT Order, 24 June 2020, para. 15.

[xii] Ibid, para. 17.

[xiii] Ibid, para. 21.

[xiv]‘Locals Block Road, Confine Baghjan Oil Well Workers after Affected Villager Kills Self’ (Outlook India, 20 July 2020) <https://www.outlookindia.com/newsscroll/locals-block-road-confine-baghjan-gas-well-workers-after-affected-villager-kills-self/1898630> accessed 21 July 2020.

[xv]KalyanBarooah, ‘NGT Defers Payment of Rs. 25 Crore Interim Penalty by OIL’ (Assam Tribune, 4 July 2020) <http://www.assamtribune.com/scripts/mdetails.asp?id=jul0420/at064> accessed 21 July 2020.

[xvi]Jayashree Nandi, ‘Put New Gas Wells on Hold until OIL has a Disaster Plan: Wildlife Institute’ (Hindustan Times, 11 June 2020) <https://www.hindustantimes.com/india-news/put-new-gas-wells-on-hold-until-oil-has-a-disaster-plan-wildlife-institute/story-6HMCWjkuKJZYGlTOfQgNKN.html> accessed 21 July 2020.

[xvii]Water (Prevention & Control of Pollution) Act, 1974, s. 25 [Water Act].

[xviii]A.P. Pollution Control Board II v. Prof. M.V. Nayudu (Retd.) &Ors., (2001) 2 SCC 62.

[xix]Oil Country Tubular Ltd. V. A.P. Pollution Control Board, 2005 (3) ALT 715.

[xx]Water Act, s. 44.

[xxi]Air (Prevention & Control of Pollution) Act, 1981, s. 21 [Air Act].

[xxii] Air Act, s. 37.

[xxiii] WWF India (n. ii).

[xxiv]Environmental Protection Act, 1986, s. 16.

[xxv] Air Act, s. 40; Water Act, s. 47.

[xxvi]Twesh Mishra, ‘Negligence behind Oil India’s Baghjan Gas Blowout, Fire: Sources’ (The Hindu BusinessLine, 10 July, 2020) <https://www.thehindubusinessline.com/news/negligence-behind-oil-indias-baghjan-gas-blowout-fire-sources/article32041181.ece> accessed 21 July 2020.

[xxvii] Ibid.

[xxviii]M.C. Mehta v. Union of India, (1987) 1 SCC 395. 

[xxix]Indian Council for Enviro-Legal Action v. Union of India, (1996) 3 SCC 212.

[xxx]Vellore Citizen’s Welfare Forum v. Union of India, (1996) 5 SCC 647.

[xxxi]N.D. Jayal v. Union of India, (2004) 9 SCC 362.

[xxxii]S. Jagannath v. Union of India, (1997) 2 SCC 87.

[xxxiii]M.C. Mehta v. Kamal Nath, (1997) 1 SCC 388.

[xxxiv]In re: Gas Leak at LG Polymers Chemical Plant, NGT Order, 8 May 2020, para. 6.

[xxxv] Amit Kumar, ‘Vizag Gas Leak: Why the NGT should have Applied Absolute, not Strict, Liability’ (The Wire, 13 May 2020) <https://thewire.in/rights/vizag-gas-leak-ngt-strict-absolute-liability> accessed 21 July 2020.

[xxxvi] National Green Tribunal Act, 2010, s. 17.

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