Mumbai: In violation of stringent Supreme Court directives and government regulations, a large number of recycling units in India, located close to ports, appear to be engaged in an elaborate scam that leads to adulteration of furnace oil with unprocessed waste oil from ships.
This is also a potentially serious environmental hazard as adulterated furnace oil—used as fuel in a range of industries such as steel and power, and manufactured in oil refineries—when burnt, releases cancer-causing toxins such as halogen, polychlorinated biphenyls, lead and sulphur that are extremely dangerous even in parts per billion.
According to several recyclers and agents that Mint spoke to, such adulteration is rampant throughout Maharashtra and other Indian states with ports.
“People like us, agents, collect the (waste) oil (from the ships) for licensed recyclers of waste oil,” says an agent in Mumbai who did not wish to be identified because of the illegal nature of the activity. “Most of the licensees use the oil for adulteration in furnace oil. It is a well set up process. Furnace oil tankers that come out of refineries are stopped, 1,000 litres of pure furnace oil removed and equivalent of waste oil is added. On an average, the driver gets Rs6,000 each time,”
For the so-called recycler, it is easy money. Even after paying the agents as well as transport and related charges, the oil costs Rs6-7 per kg. Pure furnace oil, on the other hand, is sold at Rs17 a kg, potentially generating huge profits from the adulteration.
“The market for adulterated oils is valued at around Rs40,000 crore,” says a government official familiar with the situation, who didn’t want to be named.
By definition, waste oil, which comes off ships, contains spills of crude oil, tank-bottom sludge, used fuel remains, emulsions and slop oil, and is highly hazardous. Across the world, such oil has to be reprocessed for recycled use, as they contain toxic levels of cadmium, chromium, arsenic, lead, sulphur and halogens, among other substances.
“When improperly processed waste oil is burnt in plants, all the harmful constituents are released into the atmosphere as dioxins and furans, which are proven cancer-causing toxins,” says T. Chakraborty, head, hazardous waste division, National Environmental Engineering Research Institute, Nagpur.
Concerned about the toxic nature of waste oil that was being sold, the ministry of environment and forests (MoEF), in 2000 and 2003, introduced amendments to the Hazardous Waste Handling and Management Rules, 1989. The amendments included rules on waste oil and its treatment, while specifying that recycling processes used by licensed plants have to be based on environmentally sound technologies.
Independently, following a writ petition in 1995, a Supreme Court monitoring committee, put out guidelines in 2003 that prescribed safe technologies, including vacuum distillation and thin-film evaporation processes, which cost about Rs2-3 crore to set up. Simpler technologies, which were used earlier, merely cost Rs20 lakh.
After this notification, all recyclers were given six months to upgrade their technology, based on which they would be reissued licences after examination by the state pollution control board (SPCB) and then the central pollution control board (CPCB).
“This is where the issue started getting murkier,” says a recycling unit owner, who also didn’t want to be identified.
Though the rules clearly mandated that environmentally safe techniques be used, which was the basic criterion for licensing of recycling plants, the CPCB later did a flip-flop. Correspondence, reviewed by Mint, shows that in several cases, in spite of evidence from various laboratory and field reports that certain reprocessing units did not possess adequate facilities, the CPCB recommended them for licences.
Meanwhile, a court-appointed high-powered committee, which was set up specifically to monitor waste oil, in the light of large quantities of illegal imports, also discovered violations of norms and prescribed the use of environmentally safe technology while re-refining waste oil. Based on these findings, the apex court reiterated the directives.
However, even after the directions, the CPCB has continued to maintain, in its correspondence with SPCBs, that waste oil does not require cleaner ways and means. According to the CPCB, removal of water and sediment makes waste oil non-hazardous. Such processes are easily done by dehydration and filtration, but heavy metals and other compounds cannot be removed by such processes.
Moreover, the environment ministry later sought to dilute the norms by proposing new standards for waste oil-derived fuel, which only included specifications for water and sediment content, without any mention of other contaminants. According to ministry guidelines, proposed in 2005 and yet to be formally put in place, the maximum allowable limit of sulphur in waste suitable for recycling is 4.5%. However, according to the International Convention for the Prevention of Pollution from Ships, 1973, called the Marpol Convention, the limit for sulphur content is 1.5%, which will be lowered to 0.5% in 2008.
Even in more serious toxins, India’s standards are lax compared with countries such as the UK and the US.
Some 147 units are licensed by the CPCB for reprocessing used and waste oil, many of which are located in states far from ports, such as Haryana, Chhattisgarh and Punjab.
“Not even 10% of these units have installed safe technologies, but they have licences for procurement of waste oil,” said the same refiner. He adds that it doesn’t even make economic sense for the refiner to transport the oil to distant plants for processing. “It is procured here and sold here, without any cleaning whatsoever,” he insisted.
In its report, the Supreme Court’s monitoring committee on hazardous waste said: “Recyclers from UP (Uttar Pradesh) are tendering for oil waste in Kerala and Gujarat is bidding from units in Chennai or Bhubaneswar. As a result of such high demand, prices can reach Rs20 and above a litre.”
The report goes on to conclude that such high rates are proof enough that reprocessing is not happening at all.
If waste oil is being transported from Kerala to Gujarat and UP at Rs4,000-8,000 per barrel, it doesn’t make business sense to process it because profit margins will not exist. “It is because of this high demand of waste oil by these units that we are not able to procure even smaller amounts. Though we have a proper EST (environmentally safe technologies) for processing, most of the time we just meet out expenses,” said one re-refiner who has clean technology.
The report concludes that the situation has worsened after the Supreme Court orders that called for tightening of norms.
Part of the problem arises from the ports’ lack of adequate equipment and capacity to test and track where the waste oil goes.
According to the Marpol Convention, ports are required to have storage and incineration facilities for hazardous oil. However, Indian ports do not have such facilities and the oil is directly given to recyclers without testing for percentage of contaminants. A senior government official said that because it is given away directly, it is virtually impossible for SPCBs to either know the content of the oil or to track its movement.
A Comptroller and Auditor General (CAG) report of 2007 on the environmental capacity and management by the Mumbai Port Trust (MPT) is revealing. It said the MPT had last procured 30 pieces of laboratory equipment in 1991, out of which only 10 were in working condition. The trust had bought an incinerator in 1993, which stopped functioning in 1996 and was sold in 2002 without a replacement. Oils and chemicals were either drained off or dumped.
The CAG audit also found that over several years, collected sludge was lying in tanks under unsafe conditions but useful materials such as oils and slops were already taken away by the oil industry. The report also found that the mandatory pollution control cell hardly had any staff.
The customs department at the Jawaharlal Nehru Port in Navi Mumbai echoed a similar scenario. “We are constantly under pressure to clear cargo. We receive about 4,000 containers every day. Each customs official can inspect up to 60 containers daily. It is just not possible for us to inspect all the cargo in containers,” conceded a joint commissioner of customs at the port.
Currently, 209 containers of imported hazardous waste oil are still lying in a warehouse near the port, awaiting court directions on disposal.
A microcosm of the flourishing waste oil trade in Mumbai can be seen in an obscure section in Mankhurd.
Down a dusty, grimy lane, barrels upon barrels of oil are lying in the open, while small units boil foul-smelling, black oil in huge vats. Some of this, used in making soaps, lies ready for transport in unidentifiable brown packets, while the bulk is either sold or adulterated. On being asked by Mint where they get the oil and what they do with it, one operator said: “It is none of your concern.”