Environment Relief Fund

Context: Over ?800 cr. In Environment Relief Fund lying unutilised.

  • It is meant to provide relief for victims of accidents in the process of handling hazardous substances.
  • National Green Tribunal (NGT) called it a “travesty of justice” that the fund was lying unutilised even after 29 years of enactment of the legislation.


Under what law was the Environment Relief Fund created?

  • The Environment Relief fund was founded under the Public Liability Insurance Act, 1991 as a means to provide relief to the victims of accidents involving hazardous substances.
  • The no-fault liability principle is the basis of the fund, founded in a leading decision of the Supreme Court, M.C Mehta v. Union of India.
  • It was held that under the Public Liability Insurance Act, 1991, all industries dealing with hazardous substances have to compulsorily subscribe to Public Liability Insurance.
  • The Environment Relief Fund Scheme has been part of the Public Liability Act under 2008. The Fund was established by the Ministry of Environment, Forest and Climate Change (MoEFCC) under the Environment Relief Fund Scheme, 2008.
  • This Fund Scheme makes it mandatory for companies that are regulated under the PLIA Act to deposit a sum of money equal to one premium of its insurance policy with a fund manager, which is presently United India Insurance Company Limited (UIICL).
  • The amount that is transferred by the owner as compensation for damage to the environment under National Green Tribunal Act.
  • Central Pollution Control Board (CPCB) under MoEFCC is to guarantee the better implementation of the Public Liability Insurance (PLI) Act, 1991.

What is the purpose of the fund?

  • The primary purpose of the fund is to provide relief to persons (except workmen) who are injured or have died or suffered damage to their property due to an accident that is attributable to the handling of hazardous substances by the industry.
  • The liability of the owner to provide the relief is of a nature of no-fault liability.
  • Thus, it is not necessary for the claimants to establish any negligence, fault or wrongful act of the industry that has resulted in the death, injury or loss of property of the claimant.
  • Therefore, the Act requires the owner of an industry handling hazardous substances to subscribe to an insurance policy to insure against the liability arising out of such claims.
  • The process of disbursement of relief has been enunciated in the Environmental Fund Relief Scheme, 2008.

Are fines imposed under the Polluter Pays Principle credited to this Fund?

  • Yes, the money received through the fines imposed by the National Green Tribunals, specifically through 3 basic principles- the principles of sustainable development, the precautionary principle, and the polluter pays principle are transferred to the Environment Relief Fund.

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