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Environment Ministry Denies Lifting Adani Fine, Documents Say Otherwise

Environment Ministry Denies Lifting Adani Fine, Documents Say Otherwise

The Adani port at Mundra, Gujarat. Credit: Wikimedia Commons
The Adani port at Mundra, Gujarat. Credit: Wikimedia Commons
The Adani port at Mundra, Gujarat. Credit: Wikimedia Commons

New Delhi: The Modi government last week issued a rejoinder to reports that it had cancelled a Rs 200 crore restoration fund for damage to the environment imposed on Adani Ports and SEZ, the biggest environmental penalty ever, but questions are now being asked about the robustness of its latest claims.

Responding to a Business Standard report by Nitin Sethi first highlighting the issue of the removed fine, the environment ministry  said the fine has not been cancelled. According to it, the show-cause notice issued to Adani for the creation of the Environmental Relief Fund was not provisioned for by law under the Environment (Protection) Act, 1986, Sethi states in another Business Standard article.

The ministry said in their clarification (quoted in Business Standard): “in September 2015, the government under the National Democratic Alliance, after having satisfied with the necessity to undertake restoration of degraded environmental components and further conservation as recommended by the Sunita Narain Committee, directed for more stringent conditions with open-ended financial commitment by APSEZL for financing the study; restoration and integrated conservation for protection of creeks, mangrove areas, conservation of Bocha island”.

This decision, according to the government, is much more stringent than asking for Rs 200 crore because now all damage restoration and further conservation work recommended by the Sunita Narain Committee has to be borne by the company, not only limited to Rs 200 crore.

“It is amply clear that [the ministry] has not withdrawn its demand for Rs 200-crore restoration fund. This government has passed an order in a legally correct framework and also imposed more serious responsibility upon the project proponent without any cost limit,” the clarification said.

The Adani group, in a separate clarification to Business Standard, said the final decision on the matter of fines, etc. had been conveyed to them under the previous government.

In the original article from July 2, Sethi stated that the government had not only removed the fine on Adani, but also extended the environmental clearances given in 2009 to the company’s waterfront development project (part of a larger port, SEZ and township) in Mudra, Gujarat.

Business Standard and Sethi have stood by the original article, saying that official documents accessed by them clearly show that the ministry revoked the demand for Rs 200 crore and said it was not permitted under the Environment Protection Act. It mentions no other penalty imposed for existing damage, though it asks the company to pay for conservation plans in the future. After this government order, all environmental fines imposed on the project will have to be below the Rs 1 lakh limit, though there is not timespan given for when this decision may be taken.


In a case against the project at the Gujarat high court, the environment ministry in 2012 constituted a committee led by Sunita Narain to investigate allegations of environmental destruction at the Mundra project site. The committee’s report was scathing, finding multiple violation of regulations, immense destruction of local ecology and illegal reclamation of land.

Recommendations in the report included a ban on the project’s north port (where maximum damage had been caused). It also said the company must be made to pay reparations of Rs 200 crore or 1 per cent of the project cost, whichever was higher. This fine was far above the Rs 1 lakh limit set by the Environment Protection Act, but was accepted along with the other recommendations by the environment ministry in 2013.

After the recommendations were accepted, a show-cause notice was issued to Adani Ports and SEZ, asking why action should not be taken against them. The company denied all allegations of wrongdoing, with their claims supported by state government officials, Sethi said. However, Union environment ministry officials stuck by the initial decision to take action against the company, including imposition of the fine

Ministry records between 2012 and 2016 accessed through the Right to Information Act by Kanchi Kohli of the Centre for Policy Research-Namati Program, Sethi says, show some senior officials appointed to the ministry after Prakash Javadekar took charge changed the opinion on Adani Ports and SEZ. Javedekar then also questioned how blame for the damage could be put on Adani. While officials held their view that there was substantial damage, they changed their stance to saying there was no proof it was done by the Adani project. After this finding, the fine against the company was dropped.


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