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Business News/ Companies / News/  SC junks Vedanta's plea to reopen Sterlite Copper's Thoothukudi plant
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SC junks Vedanta's plea to reopen Sterlite Copper's Thoothukudi plant

The top court upheld the decisions of the Tamil Nadu Pollution Control Board and the Madras high court's 2020 ruling to close the plant due to violations of environmental norms

Sterlite Copper plant in TN has remained shut since 2018. (Reuters)Premium
Sterlite Copper plant in TN has remained shut since 2018. (Reuters)

In a significant setback for mining giant Vedanta, the Supreme Court on Thursday dismissed the company's plea to reopen its Sterlite Copper smelter plant in Tamil Nadu’s Thoothukudi.

The top court upheld the decisions of the Tamil Nadu Pollution Control Board (TNPCB) and the Madras high court's 2020 ruling to close the plant due to violations of environmental norms. The plant was shut down following violent protests in 2018 that left 13 people dead.

A three-judge bench led by Chief Justice DY Chandrachud noted that while closing the industry is not the first course of action, the persistent breaches and severity of violations left authorities with no alternative but to shut the plant.

"Closure of industry undoubtedly not a matter of first choice. However, the repeated nature of breaches, coupled with the severity of the violations would in this analysis neither the statutory authorities nor the HC take any other view unless they were to be oblivious of their plain duty," the Court said in its judgment.

The apex court acknowledged the plant's contribution to the nation's revenue generation, but stressed the need to prioritize the well-being of the local populace and upheld the principles of sustainable development, the polluter-pays principle, and the public trust doctrine in its decision to keep the plant closed.

The court noted various environmental violations, including the failure to remove copper slag dumped in 11 sites, mishandling of gypsum, and lack of authorization for hazardous waste disposal that led to the unit's closure.

According to the court, Vedanta was given opportunities for compliance but it failed to act upon previous warnings. The court initially proposed the formation of an expert committee to examine the future of the plant but the Tamil Nadu government questioned the need for such a panel given the exhaustive findings of the Madras high court.

The state government also told the court that the plant should not be considered a national asset or deemed necessary to reopen. It said the Adani Group’s forthcoming copper smelter plant in Gujarat was capable of fulfilling India’s copper demand. Before its closure, Sterlite's plant accounted for nearly 40% of India's copper demand. 

Trouble began for the company in mid-1990 when local fishermen, concerned about pollution affecting their livelihoods, demanded closure of the plant. Legal battles ensued, including a closure order from the Madras high court in 2010, which the Supreme Court later stayed.

The company faced further challenges following a sulphur dioxide leak in 2013 and violent protests in 2018, leading to the plant’s closure by the Tamil Nadu government. 

“The Supreme Court's refusal to allow Vedanta to reopen its Sterlite copper smelting plant in Tuticorin sets a precedent for stringent enforcement of environmental regulations, emphasizing sustainable development, the polluters pay principle, and the public trust doctrine," said Pratik Bakshi, counsel, BTG Advaya.

“India may see more ESG-focussed regulations come into play. For instance, Indian regulators have been driving the ESG push with the release of ESG disclosure requirements and guidelines. SEBI had introduced a framework to regulate ESG rating providers," he added.

There could be stricter scrutinization and increased penalties by regulators for non-compliance with environmental norms to avoid legal repercussions similar to those faced by Vedanta, said Shruti Maniar, partner at Solomon & Co., Advocates & Solicitors.

 

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ABOUT THE AUTHOR
Krishna Yadav
Krishna, a lawyer turned journalist, is a key member of Mint's corporate team. He covers major legal battles in Delhi's courtrooms, with a focus on finance, markets, and policy. Additionally, he crafts easy-to-understand explainers for complex stories and holds a PG Diploma from the renowned Asian College of Journalism.
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Published: 29 Feb 2024, 05:01 PM IST
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