Profit from Pollution: How India’s Laws Shield Corporate Environmental Criminals
The 1984 Bhopal gas tragedy, which killed thousands, showed a huge flaw in how India holds corporations accountable for environmental damage. On paper, India’s laws seem really strong, they have tough rules like “absolute liability” and lots of environmental regulations. But in reality, enforcement is weak, and recent changes have actually made punishments less serious. The real issue isn’t a lack of laws; it’s why companies still find it profitable to pollute when there are supposedly rules to stop them.
Absolute Liability: A Good Idea That Doesn’t Work Well in Practice
Back in 1987, the Supreme Court set up the “absolute liability” principle for dangerous industries. This is even stricter than regular “strict liability.” It means if a company’s hazardous activity causes harm, they’re responsible no matter what, there is no excuses allowed. This rule was key in the Bhopal case against Union Carbide. The court used it to make the parent company pay compensation. The legal idea was solid, but the $470 million paid wasn’t nearly enough for the devastation caused. This shows that even the best legal principles fail if the punishment doesn’t fit the crime. This idea is still a main part of India’s environmental laws today. But it mostly targets the company as a whole, not the people who actually run it.
The “Corporate Veil”: A Shield for Decision-Makers
The corporate veil is a legal separation between a company and its owners or managers. In environmental cases, this becomes a loophole. The company might get fined, but the individuals behind the decisions stay safe. Indian laws actually have ways to “pierce this veil” and hold people accountable. For example, the Water Act says the “person in charge” of a violating company can be held guilty. But courts almost never do this. In Bhopal, even though Union Carbide clearly controlled its subsidiary’s safety, no executives were personally prosecuted. Compare this to a 2019 UK case involving a mining company in Zambia. The UK Supreme Court said the parent company could be sued because it had direct control over its subsidiary’s operations. India doesn’t follow this logic. Courts here set a nearly impossible bar, requiring total domination before they’ll hold a parent company or its executives responsible.
The 2023 Jan Vishwas Act: A Major Step Backwards
In 2023, the government passed the Jan Vishwas Act to “decriminalize minor offences” and improve “ease of doing business.” For environmental laws, the changes were drastic: all prison sentences for violations were removed. Before, breaking environmental rules could mean up to 5 years in jail plus fines. Now, it’s only a monetary penalty. And even the fines were reduced. For example, under the Environment Protection Act, the maximum fine is now just ₹5 lakhs.
Here’s the problem: for a big company making ₹1,000 crores a year, a ₹5 lakh fine is like a 0.05% fee. It literally becomes cheaper to pay the fine than to properly prevent pollution. Breaking the law turns from a crime into just a minor business cost.
The numbers show how bad enforcement already was: from 2019-2022, over 1,737 cases were filed but only 39 ended in conviction. Removing jail time and lowering fines just made a broken system worse.
The “Guilty Mind” Problem: Can a Company Even Have One?
Criminal law usually requires proving a “guilty mind” or intent (mens rea ). But a corporation is just a legal entity, it doesn’t have a mind. So how can it be found criminally guilty?
India has a vague “corporate culture” theory that a company’s mindset comes from its policies. But this is hard to use in court. Thankfully, many environmental laws use “strict” or “absolute” liability, which doesn’t require proving intent. A company is liable just for breaking the rule. This should make prosecutions easier. But when combined with tiny fines and no real enforcement, it becomes meaningless.
The Real Issue: Enforcement Has Collapsed
Good laws are useless if nobody enforces them. India’s pollution control boards are severely understaffed, so much that in 2024 the Supreme Court had to order states to fill empty posts. Regular police, who handle these cases, have no special training for environmental crimes. The National Green Tribunal (NGT), a special environmental court, has ordered big compensations in some cases, like ₹25.2 crores for illegal mining in the Yamuna. But even the NGT’s fines are often criticized for being arbitrary and are frequently reduce don appeal. So, we have a system that looks tough but is actually soft. Companies get hit with big NGT orders that get watered down later, while almost nobody faces real criminal consequences.
What Needs to Change
To actually fix this, a few things need to happen:
- Partly reverse the 2023 changes to bring back jail time for serious violations.
- Update the rules to “pierce the corporate veil” more easily, following the UK example, so controlling parents and executives can be held liable.
- Create clear, transparent formulas for calculating fines based on actual damage and company profits.
- Seriously strengthen enforcement by funding agencies properly and creating specialized environmental crime units.
Conclusion
India’s environmental framework looks impressive in law books but fails on the ground. The 2023 amendments deliberately weakened it, trading accountability for “ease of doing business.” Companies keep profiting from pollution because the risks are laughably low and enforcement is broken. This environmental damage isn’t an accident; it’s the result of policy choices. Fixing it means admitting an uncomfortable truth: right now, under India’s legal system, pollution is just a calculated, and very profitable, business expense.
Article written by
Yukta, B.A. LL.B. (Hons.)
2nd Year, DAV University
