Context

Star-rating system for states on the basis of their promptness in granting environmental clearances to industrial or infrastructure projects has not been operationalised yet.

Reasons for Delay in Operationalising Star Rating System for SEIAA

• Advocating Fishermen’s Rights: The MoEFCC implemented the star-rating system in 2022, but it was challenged before the NGT by a Tamil Nadu-based NGO advocating for fishermen’s rights.
• Reduction in Scrutiny: The petitioners stated that it was arbitrary and would reduce scrutiny throughout the environmental impact assessment (EIA) procedure.

• Violation of the 2006 EIA order: The petitioners also stated that the Ministry’s order violated the 2006 Environmental Impact Assessment (EIA) notification, which requires a thorough examination of all project impacts.
  • However, the Ministry defended its decision, stating that the rating criteria do not intend to affect any of the processes or timescales outlined in the EIA notification 2006.

Star Rating System for SEIAA (State Environmental Impact Assessment Authorities)

• Basis of Star Rating System: In 2022, the Ministry of Environment, Forest, and Climate Change (MoEFCC) introduced a star-rating system based on pollution control, environmental management practices, and regulatory compliance.
• About Ratings: The rating, which industries must apply for every year, ranges from one to five stars, with five stars representing the highest degree of environmental compliance and performance.
• Functioning of the Rating System: According to the star rating system, the SEIAA would receive points on a range of 0 to 7.
  • A SEIAA would receive two points for granting permission in less than 80 days, one point for clearing a project between 80 and 105 days, and 0.5 points for clearance issued between 105 and 120 days.
  • If an SEIAA takes more than 120 days to grant environmental clearance, they will receive zero points.
• Incentivizing States: The proposed star-rating system will be used to “rank” and “incentivize” states based on how swiftly and efficiently they can get environmental approvals.
• Encouraging Efficiency: The ranking method is designed to promote decision-making efficiency while maintaining regulatory safeguards.
• Incentivizing Industries: Industries with higher ratings will be eligible for different incentives and advantages, hence promoting ease of doing business.

Environmental Clearance Process

• Industries Needing Clearances:  The environmental clearance process is warranted for 39 types of projects listed in the Environmental Impact Assessment notification of 2006.
  • These include the mining of minerals, the building of airports and townships, and the installation of thermal power plants, to name a few. 
• Categorization of Projects: These projects are categorized based on the kind of environmental clearance they would require.
• Categories: Category A projects require mandatory environmental clearance at the central level, and category B projects are reviewed at the state level by the SEIAAs.
  • The SEIAAs further categorize these projects into B1 and B2, with the latter not requiring an environmental impact assessment to be carried out in order for clearance to be granted.
  • Those in the B2 category have to meet a separate set of parameters for clearance. 
• Responsibility of SEIAAs: The SEIAAs are responsible for providing permissions and environmental clearance for more than 90% infrastructure, developmental and industrial projects in the country.

News Source: The Indian Express