Norms for 2 accident relief schemes eased

The Union environment ministry notified amendments to Public Liability Insurance (PLI) Act 1991 and Environment Relief Fund (ERF) Scheme, 2008 last month in an attempt to make it easier to do business in the country, and to also ensure that in case of industrial accidents, affected people can be assured of recompense.

The two were part of the 42 laws which were amended under the Jan Vishwas Act, 2023 which decriminalised 182 provisions. The PLI Act and ERF lay down how compensation can be accessed by people impacted by environmental disasters perpetrated by public or private companies.

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PLI, enacted in 1991 in response to the Bhopal Gas Tragedy (1984) aims to provide for public liability insurance for the purpose of providing immediate relief to those affected by industrial accidents.

While provisions of the public insurance liability law have been decriminalised, the amendments notified last month, have laid down the process for how victims of environmental corporate disasters can claim monetary relief.

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The Central Pollution Control Board or State Pollution Control Boards as the case shall make an application for allocation of funds from the “Environmental Relief Fund” to the central government for restoration of the damage as claimed by a complainant.

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The central government upon receipt of the application, will scrutinise the extent of the damage caused and determine the amount to be allocated from the Environmental Relief Fund for restoration of such damage and issue an order. The amount of the Funds allocated for restoration of damage shall not exceed 10% of the amount available in the Environmental Relief Fund.

The Relief Fund will be vested in the central government.

The Public Liability Insurance (Amendment) Rules, 2024 states that in case any accident occur in any industrial unit, the industrial unit shall publicise among the affected persons, their right to claim for relief under the Act and the rules. The maximum aggregate of the insurance policy shall not exceed ₹250 crore and in case of more than one accident during the term of insurance policy or one year, whichever is less, shall not exceed, ₹500 crore in aggregate.

Further, the rules lay down how complaints have to be filed through Central Pollution Control Board or State Pollution Boards through authorised officers and the manner of holding inquiry by adjudicating officers of the Centre, to determine compensation to be paid. All sums realised by way of penalties under the Act shall be credited to the Environmental Relief Fund. The owner of the erring company shall be liable to reimburse such amount, or provide such other relief for the loss or damage under the Act. Before the amendments, non-compliance with the provisions of the Act could have resulted in imprisonment up to three years or fines up to ₹15 lakh, or both.

For death due to fatal accidents, the relief will be ₹5 lakh per person in addition to reimbursement of medical expenses, if any, incurred up to a maximum of ₹1.5 lakh. For permanent total or permanent partial disability, the relief will be reimbursement of medical expenses incurred, if any, up to a maximum of ₹25,000 in each case plus other reliefs for loss of wages etc.

“The context of environmental liability and social impacts has vastly evolved since the time this law was enacted in 1991. Any amendment to laws that came into existence at the cusp of liberalisation in India need to take into account the rich experience India’s regulatory framework offers. Public liability therefore needs to cover damages beyond industrial pollution and requires a much more socially accountable grievance redressal design,” said Kanchi Kohli, independent legal and policy expert.