Green Rating Project, Environmental Information Disclosure Programme

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  • 1. The Green Rating Project in India - A Perfect Note, but an Incomplete Symphony! Mr. Amit Gopal Chauhan, MEM. MSc. EAE, (LSE) Project Assistant, National Environmental Engineering Research Institute (NEERI) 89 – B. Dr. A. B. Road, Worli – 400 018, Mumbai, India Tel: +91 (0) 22 2497 3521; 2492 6859 Fax: +91 (0) 22 2493 6635 Email: amitchauhan@mail.comJEL Classification: K23 - Regulated Industries and Administrative Law K32 - Environmental, Health, and Safety Law K42 - Illegal Behavior and the Enforcement of Law Q52 - Pollution Control Costs; Distributional Effects; Employment Effects Q58 - Government PolicyAbstract:A number of countries around the world have tried many variations of environmental informationdisclosure programs as a regulatory tool for checking industrial pollution. Almost all of them are eitherinitiatives by government agencies responsible for regulating industries on environmental front or aresult of regulatory requirement. They are attempts of finding a better alternative to traditional commandand control regulatory approach. Most of them contribute very little towards enhancing environmentalperformance directly. The green rating project (GRP) conducted by centre for science and environment issimilar attempt with distinction. Some distinctive qualities of the GRP are that it collects internalinformation from the three industrial sectors, located all over India, by adopting a cooperative andcoordinative gesture, makes the findings public, achieves maximum participation within the sectors, andthat too way ahead before the “right to information” has any legal binding. The study attempts to take anaccount of the GRP, in focus of the available literature and the Indian context. It tries to compare theprocess of rating with reflexivity and infers that reflexivity is a property, which could express it self invarious societal situations not necessarily western as annexed by some authors. 1
  • 2. Any ‘problem’ that persist that long without resolution should lead us to Suspect subconscious resistance. (Harding, Garrett, 1991)Section 1 :Introduction1.1 The Indian context:Manufacturing industry is the second largest contributor to GDP after agriculture in India. Ceteris paribus,dependence on natural resources & environmental externalities is on the rise, hinting for a judicious use of theseresources and controlling environmental pollution. Various regulations and regulating bodies are in existence tomaterialize responsibilities of resource conservation and environmental pollution control.1 There is no dearth ofthem in India.2 However, means do not always guarantee ends. Inefficient production processes, mostly in theunorganized small-scale sector is the single most reason for point source pollution in India. One can blame pricesensitive character of markets on one hand and inability of the government policies to internalize environmentalcosts on the other. Poor governance record over decades and sidelined environment priorities for voraciouseconomic growth also indicates a “subconscious resistance” in Indian society against a more responsible behaviortowards environmental issues.As a democracy, India has long tradition of grassroots social political agitation. In recent years contribution of well-established and widespread network of community groups, non-governmental organizations and associations havehighlighted social issues, be it of local, national or global significance in to the public forum.3 Advocacy forenvironment protection & resource conservation is also common. Current trend of active judicial participation ofIndian citizens in pollution control management will continue to grow.4 However, transparency in functioning ofgovernment and administration is low, resulting in a week governance record reflected in widespread corruption,making state bureaucratic operations cumbersome, arbitrary, cost – ineffective and unresponsive to public needs.5Despite of democracy, free press & media revolution, social costs due to inefficiency and mismanagement of naturalresources and unaccountable behavior towards environment by the industry is rising in the country.6 Populationgrowth & rising impetus on industrialization & economic growth naturally suggest the need of a pro – active role toconserve resources and control pollution.1.2 Rationale of regulation:I think the goal of environmental regulation should be to enhance environmental performance of the subjectindustry. Lawsuits, pressure from stakeholders, media highlight, would not directly influence industry to reducepollution. As it is the intrinsic ability of industry, in terms of available and adoptable technological changes, fundsavailable for the change, its willingness, and the willingness of consumer to pay the price for a cleaner and greenerproduct are the crucial potential factors for better environmental performance. Ideally, if such a holistic approachwere available it would orchestrate the industry and squeeze the maximum of its efforts leading to greener, cleanerand safe production. Realistically however, the symphony is a bit difficult to achieve. There exist no singleinstitution or authority, no set of regulation in whatever combination; no financial incentive designed as1 See http://envfor.nic.in/legis/legis.html legislative details.2 When asked about the environmental legislation regulatory authorities in Maharashtra New Delhi, West Bengal were of the opinion that Indiahas ample of laws or bylaws on each environmental aspect.3 See http://www.acdi – cida.gc.ca /cida_ind.nsf/0/2b98c9b763213f5b852568be004859c4?Open Document4 See Sawhney Aparna (2003) highlighting the role of Public Interest Litigation in managing pollution.5 See Jalan Bimal, (1996) for a through evaluation and discussion on the matter.6 See Carter & Hommann, (1995) they estimate economic and social costs of approximately US$7 billion per year due to water and air pollutionin India. 2
  • 3. meticulously, no perfect social and cultural context available to guarantee a complete symphony. So, what isachievable? Who could do it? When it is possible? These are the main questions, which motivate this study.1.3 Searching a new approach to enhance industrial environmental performance:If traditional regulatory approach has limited utility in preventing pollution by increasing resource efficiency andintimidating responsible behavior on part of industry then can we not challenge it? Or at least look out for a moreeffective approach that would enhance industries environmental performance? There are a number of obvious andnot so obvious reasons why it could be or not done. More recently suasive instrument viz. environmental educationor provisions of information are in trial to alter behavioral pattern of polluters. They include public disclosure ofinformation on polluting activities of industries, which is assumed to create market pressure on manufacturers toadopt environmentally friendly production processes or produce greener products, generate social pressure fromstakeholders and compliance pressure from enforcing agency. Evidences suggesting merits of adopting disclosure ofinformation as social policy is growing world over.7 More importantly, they improve transparency, inclusiveness,and accountability in the administrative system.8 The “ Toxics release Inventory” in United States, Indonesia’s“PROPER”, China’s Green – Watch Programme, the “Ecowatch” programme in Philippines, “Chemical Releaseinventory” or “Factory Watch” in United Kingdom, are some of the few examples around the world. However, mostof them limit to coercive implications usually from stakeholders.9 Rarely a constructive edge is embedded in theprocess i.e. opening opportunities for improvement and resource saving.This study tries to assess a new approach towards achieving better environmental performance by industry. It alsotries to check out under what conditions such an approach will have a larger impact towards achieving betterenvironmental performance by industry.1.4 Issues with “Freedom of Information”:Indian parliament approved the “Freedom of Information Bill” in December 2002 followed by some states.10 India isnow among the 20 countries to have legislated a measure, which is in direction of providing transparency, opennessand accountability in government functioning.11 Yet, bureaucratic culture remains closed and secret using “theOfficial Secrecy Act, 1923” to restrict information. “One hears pious platitudes about an open bureaucracy, but asksanyone who tries to get figures on public expenditure even at the municipal level”.12 Even if it has potential forgreater openness and transparency in public administration for responsive governance, its broad application seems adistant dream. Free flow of information for citizens and non-government institutions suffers from severalbottlenecks, including the existing legal framework, lack of infrastructure at the grass root levels and an attitude ofsecrecy within the civil services. On the other hand, other intrinsic limitations of transaction cost in terms of timeand effort on the seeker, poverty, illiteracy & lack of awareness restrict access to information. Private sectorindustries use jargons of “internal matter” & “trade secrete” to restrict information. Issues of their functioning, riskassociated with the facility, hazardous substances and processes in use, are some of the best-guarded secrets by theindustry even for the enforcing authority at times. Access to information about a private sector facility fromauthorities is a big challenge for proactive, established non-governmental organization in the country! what chancedoes an individual stakeholder have given the transaction costs involved, and time consumed?7 See Graham, M., (2002), chapter five.8 For example, see Karkkainen (2001). Pp 261- 2629 The stakeholder could be a) Investors/ Insurance b) joint venture partners and suppliers, c) consumers, d) government regulatory bodies, e) civilsociety, f) local communities, g) judiciary h) employees of the firm.10 In states Goa, Tamilnadu, Karnataka, Delhi, Rajasthan, Maharashtra.11 See The Right to Information – A cleansing effect by Thomas E. C. (2003) at http://pib.nic.in/feature/feyr2003/fjan2003/f160120031.html12 See Roy Ranjan, (2004). 3
  • 4. 1.5 Organizational advantage:One point is clear from above discussion that individuals are at a disadvantage in comparison to organizations inrespect to efforts, time and money involved in using their access to information right in the present scenario.Secondly, transaction cost involved will dictate the source and type of information sought by the individuals. It isobvious that only that information which affects the seeker directly for example environmental information thataffects his/her livelihood or his/her health or quality of life is actively sought. Information means differently todifferent people. Receiving information does not imply behavioral change or entering appropriate transaction.Problem in summarize and understand the received information may be constituted by “bounded rationality”.13Highly technical information needs an unrelenting effort by an agency to interpret and communicate the risk to thepublic.14 People will have a defined way of relating events to their own experience thereby limiting broadercomprehension. Values, personal interests and priorities, culture, and socio-political-economic context of theirexistence play a role in shaping their decisions and nature of individual or collective action on receivinginformation. An institution/organization can expand the horizons of “bounded rationality” for the people; makeinformation more comprehendible, widely accessible and building their capacity to take action, increasingprobability to interact, expounding societal encounters for a reflexive existence.1.6 Subject of the Study:Discussion from 1.2 to 1.5 brings to light the regulatory context, the socio cultural context to a certain extent, theidealistic and realistic viewpoints, the information issue, organizational advantage to access of information and theemphasis on environmental performance. It senses the potential of transparency and functional openness in theoperations of regulatory agencies to cleanse and disinfect the system as sunlight does it for the living world. Havingdone that let us, now focus on the subject of study, the Green Rating Project (GRP), conducted by Center forScience and Environment team, claiming to be most comprehensive exercise of evaluating environmentalperformance of firms & makes it public with a constructive edge. It is first of its kind in India and adopts the “LifeCycle Assessment (LCA)” approach, a materials accounting exercise to gauge environmental performance of theindustries with efficiency as its main attribute.1.7 The objective of study:The objective of the study was to check and confirm the claims of the GRP, its efficacy as a regulatory tool, tounderstand the process and to explore supporting contextual attributes, which would enhance its capability as aholistic regulatory approach. One of the objectives was also to explore its potential for gaining legitimacy from theregulators, how far India is ready for such an approach & its dependence on traditional regulation. The literaturesuggests that ordinary citizens can do what government regulators have traditionally done: encouraging industries toimprove its environmental performance.151.8 Structure of the paper:Section 2 discus merit of environmental information disclosure programmes contrasting with traditional approach ofenvironmental regulation in India. Synthesis of a model based on literature cited on reflexive environmentalregulation is the next step. Section 3 gives detailed methodology followed during the study. Section 4 gives a brief13 See Ogus, A (2002). In 1957, Simon, H. proposed the notion of Bounded rationality: that property of an agent that behaves in a manner that isnearly optimal with respect to its goals, as its resources will allow. Models of bounded rationality try to answer the question of how real peoplewith limited time, knowledge, money, and other scarce resources make decisions. Athttp://ai.eecs.umich.edu/cogarch0/common/theory/boundrat.html14 See Rich, Conn and Owens (1993)15 See for example, Titinberg, T (1998); Pargal & Wheeler (1996); Karkkainen et al. (2000) 4
  • 5. account of the Green Rating Project (GRP) following a normative approach. Section 5 sums up field observationsand discusses them in light of the literature review.Section 2: Literature review and AnalysisReview of literature is in three major parts. The first part covers the regulatory regime in India & access toinformation status. Part 2 divides in eight sub-divisions; it focuses on “information disclosure” as regulation, typifiesthe subject in light of literature, and arrives at investigation questions. Part 3 contrasts the first two parts & thesubject with reflexivity.2.1 Regulatory realities in India:Typically traditional regulation impose detailed, legally enforceable limits, conditions, and affirmative requirementson industrial operations; generally controlling sources that generate pollution on individual bases.16 They seekpollution control in two forms. Firstly, by prohibiting pollution in excess of technical limits specified in permits orconsent. Secondly, it may require use of specific technology. Violation of both lead to fines, penalties or criminalprosecutions. In India environmental regulation is traditionally top-down form of regulation i.e. policy prescriptionfrom a higher authority in a centralized, hierarchical structure of regulation, often named as “Command and control”(CAC).17 Detailed laws and by laws with various amendments make a complex web and difficult for small andmedium sized industry to follow and understand.18 The central pollution control board is the central agency underthe ministry of environment and forestry, and has six zonal offices along India. The State Pollution Control Boards(SPCB’s) constituted in almost every state share more than three forth of the regulatory responsibilities.19The critics claim CAC as ineffective and often inefficient.20 As it is often subjective to the enthusiasm andcompetence of the authority.21 It provides discretion to the administrative bureaucrats and makes the systemvulnerable to lax enforcement.22 Poor monitoring and lax enforcement by pollution control boards is justified myriadin the literature.23 With limited transparency and public scrutiny, it is also vulnerable to “capture” by the veryindustries they are supposed to regulate.24 They are also vulnerable to political influence, agency influence, andmismatched with the situation. The type of regulation best suited for a particular problem depends on a pragmaticassessment of circumstances. 25 Criticizing CAC as too static and leading to “environmental juridification” by beinghighly technical and specific laws with exploitable loopholes, Heyes (1998) rightly observes that environmentalregulations are only useful if firms comply with them, and insofar, as they are either fully or partially self-enforcing.The above discussion gives a fair idea of the limitations and possibilities of CAC. However, CAC is the case withevery other field, which requires regulation of any kind in India. To expect a radical change in environmentalregulation will be a bit naive. It is a system loc-in. amendment after amendments but no critical evaluation of CAC16 See Steinzor .R.I, (1998).17 For generic chronology of Indian environmental regulation See Kathuria & Gundimeda (2002), also Shaman .D, (1996);http://www.pbs.org/wgbh/commamndingheights/lo/countries/in/in_env.html. See Gupta, S., (2003b); Interview comments by Sunita Narain,Chandra Bushan. Also see Sinclair .D, (1997).18 See http://envfor.nic.in/legis/legis.html legislative details. The regulatory tools exercised concerning pollution control in the country aremyriad.19 See Shaman .D, (1996), & Gupta .S, (2003b).20 See Orts, E. W., 1995.21 See Kathuria .V and Gundimeda .H, (2002).22 The authorities often focus only on large industries and medium size industries to get compensation for lax enforcement. The compensation-received act as a deterrent for monitoring small – scale industries. See Gupta, S., 1996; Orts 1995; Janike & Weinder (eds.) 1995.23 See Kathuria and Gundimeda (2002, 2001, 2000), Murty et al. (1999), Kuik et al. (1997) for an overview of regulatory instruments and theirevaluation. See Pargal, S., et al., (1997) they comment. Inspections are mainly a rent seeking activity with poorly paid inspectors, poor moral.24 The most prominent examples of state failure is “ regulatory capture” see Stigler .G, (1971) in Pargal et al (1997)25 See Orts, E. W., (1995). 5
  • 6. for adapting a new approach for pollution control. Further, the experimentation with Market Based instruments is inthe primitive stage and scarcely exercised.262.2 Environmental Information access: Status in IndiaThis section will try to contrast the existing normative literature used to justify need for access to information in aglobal perspective and literature on practical observations about freedom to information debate in the Indian context.Nearly fourteen years ago, India committed itself to idea of sustainable development. Principle 10 of the Riodeclaration three “access principles” represent fundamental global norms of equitable and environmentally sounddecision – making. The three access principles are also key characteristics of good governance, a concept that hasemerged as an important element of the discourse on sustainable development in recent years. Since 1992, manyregional instruments have come up indicating a growing international consensus on the said core set ofenvironmental governance.27 World Resource Institute (WRI) puts forward three derivative corollaries of theprinciple “access to environmental information enables citizens to make informed personal choices and encouragesimproved environmental performance by industry and government”.28 In another report published by WRI identifiespublic access to information from governments, business, and non – governmental organizations as a necessaryprecursor to improved environmental performance.29 The argument is that information enables people andimportantly the poor communities to participate in environmental decision-making process and governance. Thereport asserts that improving public access to information and decision – making is a way to ensure thatenvironmental and social considerations are fully integrated into economic development policies.30However, WRI study finds that access to industrial facility information: based on air and water compliance,monitoring and pollutant release and transfer register (PRTR) are weak, the quality and accessibility of informationis week or non – existent in India.31 Long after its commitment, the government of India was able to approve“Freedom of Information Bill” in 2002 followed by some states.32 The access to information about environmentalperformance by industries is week in all the four dimensions viz. a) Provisions in law, b) Practice of seekinginformation, c) Quality of information made available, and d) accessibility to information on environmentalperformance by industries.332.3 In focus “Information disclosure” as regulation:Though nascent, literature on information disclosure of environmental performance of facilities products and firms 34is growing. Most of the literature presses that the prime motive force for success of such an approach is that itoffers “reputation incentive” along with stock market reaction.35 However, in contrast, they are a great deal of26 See annual report MOEF, India 2002 – 2003 at http://envfor.nic.in/report/0203/chap-05.doc27 For example, the United Nations Economic Commission for Europe (UNECE) Convention on Access to Information, Public Participation inDecision Making and Access to Justice in Environmental Matters (Aarhus Convention) 1998, The Inter-American Strategy for the Promotion ofPublic Participation in Decision-Making for Sustainable Development (ISP) 1999, Malmo Declaration of UNEP 2000, East Africa CommunityEnvironmental Memorandum of Understanding (MOU) 2000; from, Saini .R .S et al. (2004).28 See Petkova, E., et al. (2002), Closing The Gap, Information, Participation, and Justice in Decision making for The Environment. Athttp://pubs.wri.org/pubs_pdf.cfm?pubID=375929 See “Decisions for the Earth: Balance, voice and power” at http://newsroom.wri.org/newsrelease_text.cfm?NewsRealseID=25230 Ibid31 Ibid32 Passed by Lok Sabha on 3 December 2002 and Rajya Sabha on 17 December 2002; also seehttp://www.freedominfo.org/news/india/foi2002.doc. In states Goa, Tamilnadu, Karnataka, Delhi, Rajasthan, Maharashtra33 See Saini .R .S et al. (2004).34 The “Toxics Release Inventory “of the US was the first approach of its kind in the world. Moreover, it is not surprising that most of theliterature is on TRI. The programme initiated the generation of literature in the US. See footnote 39, in Fiorino, D. J., (1999) for some earlyliterature. However there is some research on such programmes as the GRP from countries for example Indonesia, China, Mexico, Colombia,Bangladesh, and Thailand.35 See for example Graham Mary (2002), Pedersen (2001), Afsah et al., (2000), Stephen Mark (2002), Titenberg, T., (1998), Konar & Cohen(1997), Khanna (1997), Hamilton (1995), Laplante and Lanoie (1994), Pargal et al., (1997), Fung et al., (2002), Dasgupta and Laplante (2001),Gunnigham and Grabosky (1998), Gupta (2003). 6
  • 7. literature indicating that resource conversion and efficient production processes lead to environmental benignbehavior.36 A fair effort is spend to appreciate relevant literature.2.3.1 Definition:Informational regulation means “regulation, which provides to affected stakeholders information on the operation ofregulated entities, usually with the exception that such stakeholders will then pressure on these entities to complywith regulations in manner, which serves the interest of stakeholders”.372.3.2 Typifying Information DisclosureManufacturing industries disclose their environmental performance information of its possession, productionprocess or impact of its products in three generic ways. Information to the consumer about the contents of theproduct and its environmental impacts is termed as “environmental labeling” (Type 1).38 This information isdisclosed either on the product or conveyed by means of a certificate accompanying the product or the service theypurchase. When companies inform its stakeholders about its environmental performance in its annual report (TypeII).39 And information to the public domain at large about their possession, consumption and discharge of hazardoussubstances in the ambient environment (Type III).40 The environmental information disclosure programme discussedin this paper is the environmental performance information collection of industries of a particular sector, itsassessment in accordance with the benchmarking criteria, and its disclosure by a public interest organization inIndia. We could safely categories GRP as “Type III”.2.3.3 Determinants of Industrial Environmental PerformanceThe functioning of any industrial facility is effected by factors both internal and external to it self. The level ofpollution and pollution trends from its activities over time are a function of these factors. Literature suggests that theinternal factors defining the level and nature of pollution from a facility as, its products, its production processes &technology, characteristics of chemicals & raw material use, level of organization, quality of skilled and unskilledemployees, their understanding and functioning which characterizes their innovation capacity, the scale ofproduction & the cost and benefit of pollution control as assessed by the owner.41 The external factors orstakeholders influencing level of pollution could be the materials supply, infrastructure providence, consumer,workers, shareholder, local and national community and regulatory regime. These factors potentially play animportant role for improving environmental performance of the firms.Let us consider the external factors first. We can classify them in three different ways. Those having direct influenceare the quality of raw material use, available infrastructure where in the facility functions, and the workers andconsumer for safety and health reasons. Secondly, the investors having their investment at stake may influence thefunctioning of firm. Disclosure of any negative information may lead to legal action on firms or it may indicate theirinefficient working practices there by defining the profitability of the firm and hence levels of returns on the36 For a famous reading see for example Porter and Linde (1995) arguing that superior environmental performance may actually improve financialperformance by reducing materials waste and process inefficiencies. Also, see theories of ecological modernization, Pedersen (2001).37 See Orts (1998).38 See Magat, & Viscusi (1992), Graham, (2002) chapter 3 in particular, for an excellent analysis and discussion on human behaviour and labelingof products.39 See Brown & Deegan (1998) on environmental information disclosure by companies in annual reports and media agenda setting theory andlegitimacy theory.40 See The Greening Industry Report (2000) by World Bank for variants of such programme across the nations. Fung & O’Rourke (2000): See forexample how are the toxics release inventory data used? – Government, business, academic and citizen uses published by USEPA, Washington,DC, may 2003.41 See Antweiler & Harrison (2001) also Dasgupta, Hettige and Wheeler (2000) find that publicly traded firms, have more highly educatedworkers, and have adopted ISO14001 – type internal management procedures are more likely to comply with environmental regulations. SeeMichael E. Porter & Claas van der Linde, (1995) Fung and O’Rourke argue that the key factor in reducing pollution is that information disclosureprogrammes allow for comparisons across the firms 7
  • 8. investment. 42 Thirdly, the cause for appreciation or gain in level trust from the community surrounding the facilityor negative disclosure could cause legal action or economic and political sanctions by the community with theoperators of the facility. This logic holds true with the economic approach to environmental problems attributed toCoase and gives a conceptual foundation for disclosure strategies.43 Coase points out inefficient pollution imposecosts on victims, which exceed the cost of controlling that pollution. However as the list of the victims could belarge victims experiencing both use and nonuse information can therefore motivate them to pressurize firms forpollution control or minimize damage caused to them. Advocates of informational strategies argue thatgovernment’s instead of setting rules, standards, and direct intervention should focus on collecting anddisseminating appropriate information. Such information will enable individuals, communities, market agents andregulators to interact in ways that promote socially desirable patterns of production and consumption. Thatinformation proves a powerful incentive for firms to reduce negative externalities from private activities.442.3.4 On Information cost:Two problems generally sited by economist are the transaction costs in generating and disseminating informationand inability or limited bargaining and influencing power of the victims. They involve high transaction costs whenmany small polluters are involved and unable to internalize fully external costs when these fall on third parties.45However, regulation can make polluters responsible for supplying the information. Moreover, victims can beempowered.46 Knowing this we could say that firstly it is required to regulate the firm to share the data secondly thetransaction costs of generating and disseminating information should be minimum & thirdly empowering victims, byproviding economic, social, political or legal power to express their preferences at their will which can lead to amutually antagonistic relationship between facility owner and the victim.47 Subsidizing or encouraging informationgeneration could be right instrument to use there by reducing the transaction.482.3.5 Stakeholders & Information qualityRequiring firms to disclose information is the initiation of the process of making society aware of the external costsit incurs due to pollution.49 This may prove to be the first step towards internalizing the externalities. Another strandof literature uses a "risk disclosure" game model to explain intricacies of disclosure programme.50 It observes that itis possible to motivate firms to internalize the potential harm they might inflict on third parties in an efficient andeffective way. Provided the interested parties must have ability to act quickly and wisely, based on the informationthey receive, and that the judicial system is readily accessible at reasonable const and it is capable of effectiveimplementation to alter compliance status of firms.51 Further the information generated should also be of goodquality, considering the costs of associated with producing, disseminating and processing data.52 The informationcan be used for research and development to bring processes level changes and avoid misinterpretation. The degreeof criticality shown by the stakeholder in demanding information may be a good attribute for achieving precision42 See for example Konar & Cohen (1997) and (Karkkainen (2001). Both papers confirm speculating that adverse TRI information causesinvestors to re – evaluate a firm’s future cash flows, which could be affected by inefficient production methods, community pressures, consumerboycotts, future regulatory actions, future legal liability, or the necessary to make future investments in pollution abatement measures to avoidany of these adverse outcomes.43 See Coase, R. H., (1960)44 See Afsah, S. et al (1997)45 Ibid.46 See Titenberg, T., (1998).47 See Kleindorfer and Orts, (1998).48 See Titenberg, T., (1998).49 See Pedersen (2001).50 See Sinclair-Desgasne & Gozlan (2003)51 See Pargal, S., et al (1997) for evidence and justification of such an adversarial and formal approach in India52 Ibid. 8
  • 9. and the accuracy of the information generated reveals the true nature of his activity.53 Lastly, with the“sophisticated-skepticism” the stakeholder can completely discount any partial reporting, as there are little reasonsto conceal information if the firms are with safe activity.2.3.6 Merits:Environmental information disclosure programmes are termed as “third wave” environmental regulation oftensuperior to other forms.54 They immediately discipline polluting private actors, in process of collection andpublication of data, give transparency and sustainability.55 Literature advocates them to be adopted as social policyto expand democracy and key to increase public participation in decision – making and to certain extent theinstitutions of civil society (e.g., civic associations, non-governmental organizations) may be able to compensatethrough ‘informational regulation’.56 Such programmes my offer “substantive” and “instrumental” benefits throughcollection, compilation & dissemination of information whilst creating facilitating information rich decision-making 57processes within companies. For example, the materials accounting approach can revile new information andopportunities for pollution reduction to the firm. Finally, negative environmental performance by the firms results inpoor stock valuation.582.3.7 Limitations:The limitations for such a strategy are that its efficacy depends on timely access to accurate information by thesociety with certain capacity to interpret and ability to react. Such a proactive role by the civil society is uncertain inmany developing countries. It requires reasonable spending in terms of effort, time, and resources. Costs andbenefits from a disclosure to the user also determine weather disclosures prompt the users to press for improvementsfor transparency in policymaking process. Further type of action depends on social, economic, cultural, and politicalcharacter of the community. If it takes an adversarial stance resulting in mutually antagonistic relationship, hardlywill they contribute to enhance internal capability of the firm directly. Stakeholders may face an “informationalcapture” if they are not sufficiently sophisticated in their skepticism towards the data provided by the industrial firm.Use of disclosure strategies for regulating industry for resource efficient, pollution preventive behavior will only becomplimentary rather than substitutive with little scope for change.Disclosure cost increases with the amount, scope, and/or level of detail of information provided to users. They have 59concentrated costs and diffuse benefits. Disclosure activities significantly influence changes over time inaggregate. All such initiatives are adopted by the enforcing agency, having an upper hand by default.60 Thus far,information disclosure has been opportunity-driven, not demand driven.61 Further, leading agencies tend to do whatis bureaucratically and politically easy, rather than what might more readily improve environmental quality. Thegoals set decide benefits and costs of the exercise.62 Lastly “without constant political oversight, careful attention tothe benefits and costs surrounding disclosure and users, awareness of the impact of change in the market and53 Ibid.54 After traditional and market based approaches. See Titenberg, T., (1998), and Glasbergen in Fiorino, D.J., (1999).55 See Fung & O’Rourke (2000); Fung et al (2002).56 See Graham (2002). Also O’Connor, 1998 pp. 103-104, O’Connor, 1994, pp. 134-13557 See Beierle (2003b)58 See Gupta S., (2003a)59 See Fung et al (2002)60 See Grant (1997).61 See Baierle (2003) pp. 54.62 See Graham Mary (2002) She gives architecture of disclosure systems based on various factors including purpose, targets, scope, metrics,vehicles, audience and enforcement. 9
  • 10. regulatory environments surrounding the disclosure systems, and vigilant and well – funded enforcement efforts, thedisinfecting power of disclosure soon fades”.632.3.8 Imperfect rehearsals: For a promising strategy:Information for information sake has little value.64 Disclosing any, information has to have a significant meaning, apurpose. Complete, precise information, presented in a simplified way so as lay people can understand has bettervalue. A social cost disclosure program’s initial form rarely will present the information society needs in the mostsocially useful format.65 However, a beginning is necessary. Justifications on why and how such programmes areadapted are available. Under what conditions they will have a greater impact is not known. Success of disclosureprogrammes is contextual and to expect everything working everywhere is naïve.66 Impact may be different undercompulsory or voluntary regimes.67 Level of participation across a sector and comparison, within a region or acountry plays a key role in reducing pollution within the firms.68 The strength of the reputation incentive relies onthe environmental awareness of the society. 69 The incentive for accurate information disclosure will depend on thecost to the community for independent verification.70 The new information has greater marginal value to lesseducated, poorer communities than better-educated, wealthier ones.71 The industry benefits the most, may be itsreputation or process efficiency with monitory gains or prevent coercive action from the enforcement agency orcommunity at large. Information disclosure programmes are capacity building tools i.e. policies and programmesthat increase the ability of people to act on their concerns.72 The theory on when such disclosure programmes workis at best incomplete, our understanding limited.73 This paper is an attempt to contrast the process of environmentalinformation disclosure programmes empirically as the GRP with the theory of reflexivity and reflexiveenvironmental law.The probable additions to the theory could be that reflexive assessment and disclosure process stimulate higherenvironmental performance from the industry and the programmes them selves learn and improve in both anincremental and dynamic way over time as loopholes in the previous assessment system become evident.2.4 The link between reflexivity and information disclosureReflexivity refers to the process by which people learn from and change behavior based on information theyreceive.74 Reflexivity has two components, namely reflection and reflexion. In the present context, the first is togather information by self-critical confrontation of the industry in a process of self-reflection and gatheringinformation about its performance. Second is to put that information in to the public domain which will thenaccording to its pragmatic capability will reflect on the collected information provided and changes its ownbehavior. Environmental information disclosure programme is described as a policy tool, which is based onreflexive legal rationality used often to compliment a well-developed regulatory regime and at times replaced as aregulatory instrument for pollution control.7563 See Fung et al (2002).64 See Abkowitz et al (1999), pp. 423.65 See Pedersen (2001).66 See Mark Stephen (2002), page 20267 See Kleindorfer and Orts (1999).68 Fung and O’Rourke (2000). Hear they argue for the advantage of comparison.69 Comments in O’Connor (1998).70 See Karkkainen (2001).71 See Titenberg (1998) also see Pargal and Wheeler (1996)72 See Schineider and Ingram (1990)73 Ibid.74 Though Giddens and Beck critically claim that reflexivity should be unique characteristics of the developed world, this paper will try to link itwith the programme in focus of the study.75 See Fiorino, D. J., (1999). 10
  • 11. A reflexive strategy creates incentives and procedures that induce entities to act in certain ways and to engage ininternal reflection about what form that behavior should take. It places legal controls in an “Indirect and abstract”form to control behavior and aims to strengthen “reflexion mechanisms” within the entity to encourage the desiredbehavior.76 The mechanism which environmental information disclosure programmes try to induce within theindustry and its stakeholder is similar to the concept of reflexivity. Fig1: Reflexivity and Information Disclosure Behaviour Activity / Change Industry Information Collection Reflexion Reflection Self- Critical from Public Confrontation Domain External Pressure Internal assessment Reputational Environmental Disclosing Incentive Performance Information Processed Collection Information / Rating Financial Gain Resource Efficiency Behaviour Interaction Change With Institution/ Organization Information CollectionThis tells us that the reflexivity mechanism involves (a) the entity i.e. the industry, (b) the society, (c) the regulatoror the regulation and (d) the activity i.e. (i) reflection –(ii) interaction – (iii) information – (iv) behavior changes(optional) – (v) disclosure – (vi) receiving information from public domain – (vii) behavior changes (compulsory) -(i) reflection activity cycle. A relationship where the entity is responsible to reflect upon its activity, generateinformation and provide to the society and the society interprets this information changes its behavior, take action inits self-interest, and try to induce behavioral change in the industry’s activity by interaction. Rather then followingthe initial activity of (i) intervention – (ii) behaviour change (optional) – (i) intervention activity cycle which is oftenseen in traditional forms of regulation.76 Ibid. 11
  • 12. In United States as in India, environmental degradation is traditionally a collective action problem restricted tointervention through bureaucratic regulation response.77 Governing consists of a relation or interaction between thestate and the society with complexity of problems and interdependence among public and private actors, creatingneed for cooperation.78 Interaction and communication among actors should result in policy based on Sociallearning.79 First, the social learning induces structural openness. Sharing of information helps development of newtechnology and management practices, multiplies opportunities for improvement. Secondly, it changes the nature ofparticipant role. The regulator becomes facilitator. Industry participates for the collective good. Third, sociallearning assumes a different approach to implementation i.e. a cooperative model where the government andindustry share responsibility for achieving mutually defined policy goals by replacing the hierarchical and controlmodel. This constructive model of regulation helps building capacity of industry, regulator, and society, at large tobe a part of innovation process.The figure represents an “in synch” between the various strands of literature in focus. It also gives a conceptual flowof the GRP exercise. The two hemispheres of the sphere symbolize to components of reflexivity i.e. reflection andreflexion representing the internal and external pressure points and benefits of the GRP exercise to mobilize industryto boost its environmental performance. The stages in the cycle depict various conceptual stages of the GRP exercisein assessing, rating, processing, disclosing various aspects of a single activity within and out side the industry. Theexercise is able to contribute positively because of transparency & intrinsic property of reflexivity. Next sectiondeals with methodology.Section 3: Methodology3.1 Selecting subject of study and literature review:At first, it was an idea to use information disclosure of environmental performance as a tool for checking pollutionfrom point sources in India. Later, it came to my knowledge that GRP was functional in India. The link between theliterature and the on going process was soon realized. With extended cooperation by CSE, the study was initiated.Its correlation with similar exercises around the world was established. After outlining the study, proposalpreliminary preparation for interviews began. Publications by CSE and other documents included internal reports,newspaper and magazines clippings, were assessed from CSE library. Literature with the participating industryhelped to some extent. Some of the evidence of GRP causing a political stir in the country was made accessible byone of the company.80 The study did not critically evaluate industrial performance nor did it challenge the ratingmethodology. The only purpose was to observe the rating process and collect information on its efficacy as aregulatory exercise. Later it contrasted the study with reflexivity and gauges its importance as a potential approachto regulate industries by enforcement authority at the center and the state.3.2 Justification for qualitative approach:An exercise to gather quantitative evidence to support or question GRP would not have clearly able to highlight thesubtle qualities of GRP as a process and its impacts by large. Qualitative approach to research was a more reliablemethod, as it is known for its richness of analysis and more probable to reach the heart of issues. Efforts were madeto refine the questions to bring the actual perceptions of the interviewee participants. Flexibility was the key77 Ibid. While quoting Martijn Van Vliet. This was a common feeling of members of the GRP and CSE, interviewed and in informal discussionsas well. Dr. Trivedi was also pressing the same during his interview78 Ibid.79 See Glasbergen, P (1996) in Fiorino, D. J., (1999). 457 – 46080 See Singh Dilip. (2003), “Answer to the un starred question no. 5287 raised in the Lok Sabha (House of Commons)”, Minister of State,Ministry of Environment and Forests, Government of India. 12
  • 13. attribute to put forward the questions, as it required a broad spectrum of participants with different training andviewpoint because of their subjective evolution. Framing of open-ended questions with the ethics, protocol with longsessions of interview was an inspiration from Grant Mc Cracken (1988). Selection of participants was on theassistance and information shared by CSE. The preliminary interviews were chosen on the basis of their role indesigning, conducting, involvement in the rating process and those who had an out of the frame perspective, mainlyauthorities and personnel from government enforcement agency and industrial institutions sharing similar concernswith the CSE. The proceeding of the events and interviews was such that the technique evolved can be termed as“Snowball sampling” which involves using each interview and interviewee to help identify further interviewsubjects (Jones 1996). Conducting semi-structured long interview seemed to be an appropriate tool for my study asits contextual and subjective merits for this study were obvious in comparison with other techniques given the shortperiod available for research and scope of investigation possible with the technique.81 This form was chosen asalmost all the interviewees were experts or professionals in their fields with different backgrounds and perspectives.Such an approach also allows one to avoid such risks as that of failing fully to explore important questions becauseof lack of experience. Based on information collected from the previous interview the goals for next interviews weretargeted and preparations done accordingly.Caution was taken not to guide the interviewee during interview. Body language was used create an atmosphere ofethical enquiry. Distance was maintained by restricting writing up during the interview. Dictaphone was used.Reactions of agreement and disagreement on a point were kept only moderate. It could give an impression of aconfident enquirer, which could generalize the arguments for issue under investigation. The literature review sectionof the study elaborates more on conceptual basis for analysis of interviews and other contextual evidences gatheredduring the study. Appointments received were kept timely.3.4 The research questions:Why disclosure programmes? Why CSE? Is the manner in which CSE conducts the ratings appropriate? What areits achievements? What is missing? How did the rating exercise work? How does it correlate with sociologicaldebates of reflexivity? Under what conditions environmental information disclosure programmes will givemaximum output in terms of enhanced environmental performance from the industry?Section 4: Getting Familiar with the Green Rating Project (GRP)4.1 About CSE:Center for Science and Environment (CSE), New Delhi is a registered society under the Societies Registration ActXXI, India, 1860. It is a public interest organization. Late Shri. Anil Agarwal an engineer by profession and a well-known environmentalist was the founder. It is known for its fuming battles with corporate world and government forissues relating to environment conservation & won many. It has built some very stable and productive bridges. Foraround 20 years now it is premier NGO in India forwarding the environmental causes into the public debate.824.2 The Green Rating Project:Long before “Freedom to Information bill” was passed, even before central and state pollution control boards coulddirect the industry to prepare an inventory for hazardous waste generation and handling, CSE initiated a unique81 As I was lacking any economics background, it was disheartening to realize my inability to carry out an economic model evaluation sort ofstudy. Neither it’s been feasible to gather data and study it, as it was very contextual and subjective. Reliability of the data could also bechallenged. The theory of reflexive modernization appealed me. It was possible however to do a qualitative research by accessing the findings ofthe project, talk to people, as I had few reservations. My personal emotive zeal and attribute of not letting things go so easily, I think, supportedme for an intense discussion.82 Interview with Narain Sunita, (2003). 13
  • 14. experiment for mobilizing and improving environmental performance of Indian industry by adopting disclosurestrategy. “The Green Rating Project” (GRP) as it claims is most comprehensive exercise unlike other environmentalinformation disclosure programmes or environmental performance benchmarking exercise around the world.83 It hasa positive influence on industry, enforcement agencies, financial agencies, and public.84 It is a premier effort fromdeveloping world to rate industrial firms on their environmental performance.85Enforcement agencies in India lack systematic data maintenance on industries environmental performance.86 In suchcontext, cost of creating a database and operational, legal, logistical and financial limitations were impracticable toovercome.87 HOWEVER, CSE weighed the benefits of such an exercise superscript costs.88 Voluntary disclosure byindustries would save the cost. Careful strategies were designed and implemented to gain maximum participationfrom the industry. A benchmarking system formulated with rigorous consultations with national & internationalexperts. Data collection is from primary as well as secondary sources.89 It takes help of experts and “PollutionInspectors” to crosscheck primary data provided by the industry. 90 The level of detail and authenticity of collecteddata largely characterizes rating exercise outcome.91 A committee comprising competent technical people subjectscollected data to vigorous analysis. Compiled data along with expert suggestions shapes first draft. First reader ofreport is the industry itself and it gets a chance to make its own comments that are incorporated in final report. Sofar, CSE has rated firms in pulp and paper, automobile manufacturing and chemicals (chlor-alkali) sectors. Therating takes a “life cycle assessment” approach in assessing environmental performances of the industrial sector.92The exercise is an extensive study. Beginning from raw material procurement to product recycling is used to studythe environmental impact of a firm. For a brief idea, the environmental impact at the following stages of the lifecycle is analyzed: (a) during sourcing of raw materials, (b) during production, i.e. processing of raw material intofinal products, (c) during product use phase and (d) during disposal of the products.93 Please follow CSE website fora detailed review on the methodology, achievements, and recommendations of the GRP for all the three sectors athttp://www.cseindia.org/misc/2004paper.htm The level of transparency showed by the industry is high and evidentfrom the fact that companies are increasingly becoming more transparent in the second phase. The level ofconfidence in the exercise by the industry has shot up tremendously. The benchmarks are against ‘theoretical bestpractice’ for the various components/criteria. Accordance of theoretical components with global best practices in theparticular sector is in focus. Alternatively, companies/plants/products rating were not against current environmentalnorms, standards or regulation but against an ideal best practice. The final rating are simplified and communicated,in a way, which a layman can understand and comprehend. The companies receive “green leaves” awards. The topperformer receives the leaf award according to its performance. The five-leaf award goes to the ideal performer,however no one has reserved it yet. The lowest is zero. While such ratings are a subject to usual index numberproblems, they are fairly consistent and careful evaluation of firm level performance.9483 See Bhushan Chandra, (2001), (2003)84 See Agrawal Anil, (1999).85 See http://www.cseindia.org/misc/2004paper.htm for more information.86 Whatever data available has little credibility87 Interview with Bhushan Chandra, Monali Zeya-Hazra, 200388 See CSE website. Also evident from literature at CSE and interview with participants.89 Like the department of excise, customs, pollution controls boards90 The inspectors are screened volunteers who undergo a thorough process of short-listing, briefing and training with absolute caution andconsciousness. See Down To Earth issues vol. 8 No. 5, vol. 10 No. 13 vol. 11 No. 8, for detail.91 Interviews with Dr. N.J. Rao and Prof. M.M. Mehta92 Life Cycle Assessment (LCA) is a decision cum management tool, which provides information on the environmental effect of various productsand processes to arrive at necessary corrective measures to make the entire process efficient with optimal utilization of resources, and minimalwaste generation or resource conservation. See www.cseindia.org/htm/eyou/grp/grp_rating_method.htm93 This approach is in operation through the six broad criteria and their components listed in annexure I.94 See Gupta Shreekant, (2003). 14
  • 15. Section 5: Results and Discussion:5.1 Implementation issuesThis study started by questioning traditional environmental regulatory approach in India.95 Insights from literaturereview and critical interviews with participants discussed below. In general, the information from interviews can belinked very well with the literature. Almost all interviewee noted that India has sufficient provisions in law to ensureenvironment protection. The problem is with the implementation. Facts highlighting the lax regulatory enforcementsin various parts of the country came to knowledge as expected. For example, two Pulp and Paper industries in thestate of Kerala and Punjab were operating without consent for more than two decades.96 The exercise of rating andthe whole evaluation process had no regulatory significance as such.97 The bureaucrats expressed their difficulty touphold their decision and disciplining industries under political pressure. They also expressed monitory limitationsto carry their duties and implementation drive. The large numbers of illegal industries in small and medium scalewere the most difficult to gain a significant implementation impact. 985.2 Gains for industry!Most of the industrial participants from paper and pulp industry acknowledge the resource conservation benefit ofthe exercise and insightful for further research and development with respect to cultivation practices, process changeand new technology adoption. It made them more responsible towards environment conservation.99 The activityspurs abatement by improving factory manager’s information about their own plant emissions and abatementopportunities by either redesigning its process or inserting physical release controls into the process.100 With theinstitutional tie-up, it resulted in new, better & efficient manufacturing processes & products. For the chlor-alkalyeindustry, the exercise was a catalyst to shift the manufacturing process to a safer and less polluting one.101 Theregulators also took serious of the observations and recommendations of the rating team during and after thecompletion of the exercise.102 A couple of industries acknowledged the benefits in terms of better management,resource efficiency, and reputation and financial gain after the rating process.103 The automobile industry respondedwell after the rating by incorporating and adopting “Environment Management Systems” in their day-to-dayactivity.104 The pulp and paper industry showed the greatest impact by implementing EMS, adopting farm forestry,& technological change. This was not only done to gain scores in the rating but also to reflect a serious commitmenttowards environmental concerns. Although they impressed that any technological leap i.e. dynamic changes in fueland superior technology is subjected to other factors such as existing regulation, consumer demand coupled withtheir willingness to pay, available resources with the firm, and peer performance approach as it faces toughcompetition. However, they promise to take a proactive role but caution not to expect too much very fast.105 All theparticipants recollected that while collecting, compiling, disseminating of information created a more informationrich decision making environment in the companies. However, the most interesting part is that the LCA exercise95 See section 1.1, 2.1 and 2.1.196 See page 30, 46 Down To Earth vol. 8 No. 5 for issues and details of some key findings of the Pulp and Paper industry rating process.97 Interviews with regulatory authority.98 the authorities are always susceptible to political pressure, often based on incomplete or incorrect information.99 A unanimous observation by the industry, CSE & expert team.100 See Pedersen (2001), Afsah et al. (2000) & Blackman and Bannister (1998) for similar observation with the literature.101 Please refer CSE website. Couple of industries also has the opinion along with the rating experts.102 Ibid.103 Shriram chemicals & Century Chemicals.104 See CSE website for details at: http://www.cseindia.org/misc/2004paper.htm105 An interview with HeroHonda, though they are the most environmentally friendly motor bike producer. 15
  • 16. reveled to firm’s new information and opportunities for pollution reduction.106 Moreover, those firms who could notmake radical technology changes adopted a management approach.5.3 The Rating Methodology:All the industrial participants and two of the experts agreed on the appropriateness of “Life cycle assessment”methodology adapted by CSE to rate the industry as it better able to focus on critical issues to thatindustry/product/production process. An expert comment was that “What you dont know about, you cant manage”,or yet more precisely, "you manage what you measure”. 107 However, such an analysis had limitations in suggestingproduction process changes/ product design changes/ technology change.108 A more critical and technical survey isrequired and for which, an industrial institution for example CII, or technology consultants is well equipped. 109 Therating exercise as a whole and its LCA approach is more friendlier and positive approach then traditionalregulation.110 If the rating exercise be declared legitimate by the government then it can be coupled with somefinancial incentives, promotional perks, tax relief or prioritization by private banking institutions or industrialorganizations.1115.4 The Involvement Game: Competition brings out the best:GRP require firms to share information on their resource efficiency, compliance, pollution potential, safety, etc.Local expert team and voluntaries are screened, trained and appointed as “pollution inspectors” who visit theindustrial facility, question local people, collect data from government offices, and suppliers, contractors recruitedby the industry. Most of the stakeholders were involved in the rating process. To gain maximum participation fromthe industrial sector in absence of any compulsion was achieved by incentivising participation it self. Other thenthat it also opened its position and methodology hence facilitating mutual trust and cooperation. As after the exercisewhen the information is made public & competitors of a particular industry & investors, it ingrains the feeling ofcompetition among the participants. The competition potential factor leads the firms for innovation.1125.5 CSE: An appropriate Institution for rating:Three types of agencies can do the task of carrying out the exercise. First the regulatory body it self.113 Second anindustrial organization it self.114 Lastly, a public interest organizations like CSE.115 However, none of the industrieswanted more then one-convener organization. Why CSE then? Because very little of the information can begenerated through conventional, fragmentary, frequently non-standardized, compliance-oriented environmentalreporting. The accuracy of information is subjective to the level of trust and cooperation shown by the industry. Theproperty of “sophisticated-skepticism” shown by the “green inspectors” and the experts along with the rating teambefore believing and authenticating the data is more keenly flowed during the exercise. The other two institutionsone because of implementation problems and other with probable “regulatory capture” are less suited for such anexercise.116 GRP India is a small step in comparison to any other disclosure programme in world. It is not an106 This is in accordance with study by Beierle (2003b).107 Prof. N.J.Rao.108 Interview with HeroHonda.109 In general all the three sector industrial participant along with CII.110 CSE team, Industrial participants & authorities.111 Interview with Mr. K.P. Nyati ( CII).112 In general all the three sector industrial participant along with CII. Also see Porter, M. E. and Class van der Linde (1995).113 In better position to command data from the industry, check it, legal access to the facility premises, large network through out the country,receives regular funds from the nodal agency. Also see Pedersen (2001) pp. 194114 Better access to technology, can build capacity of the industry concerning environment management. Easier to Gain cooperation fromindustry, receives funds from the industry it self, technically sound human resource. Interview with Nyati .K .P (2003)115 Credible, Committed, wide network, open to ideas and voices as a media group.116 Interview with Dr. N.J. Rao, Prof. M.M. Mehta, Monali Zeya-Hazra (2003). Also see Sinclair-Desgasne & Gozlan (2003). 16
  • 17. enforcement agency initiation.117 However, it is a neutral agency, transparent, credible, and skillful enough tocommand cooperative participation and information form industry.118 Some distinctive qualities of the GRP are thatit collects internal information from the three industrial sectors, located all over India, by adopting a cooperative andcoordinative gesture, makes the findings public, achieves maximum participation within the sectors, and that tooway ahead before the “right to information” has any legal binding.5.6 Empowering rationality:Though the issues in relation to pollution are raised, the approach by an individual member of the society is ad hoc.“If a person is able to assimilate the supplied information with his intellectual processes of cognition, there are fairchances of an action or a decision in relation to the information received”.119 The Green-rating project interprets thedata through expert cognition process and provides simple, palatable information to the people at large. It alsodisseminated the processed information of the exercise in a simple and easily comprehendible way with in depthreporting.1205.7 A chord Struck! Or Stuck?The passing of “Freedom of Information” by the Indian parliament is referred as “a momentous engagement with thepossibilities of freedom” by Amartya Sen.121 A beginning of a more inclusive development process, howeverinformation means little if the levels of literacy and rights awareness among the people is low. Empowerment beginswith education, education can discipline minds, it can strengthen will, it can enable one to know what is to be valuedand to be sought in life, it can enable people to make choices and have a long-lasting enabling power. That isdevelopment. That is what education did to a bunch of brilliant Indian lawyers critically are responsible largely forIndia’s freedom. A combination of literacy, rights awareness, and freedom of information can expand theopportunities to share knowledge, multiply probabilities of efficient allocation of resources, and have a cleansingeffect on the system of environmental governance.A usual percept is that social preferences in India are low as regard to better pollution free environment and thatonly investment in education to elevate it.122 People lack willingness to pay for a resource efficient product.123 Theydiscount the externality cost while making market choices.124 Moreover, there is no regulation to check theaccountability of the industry to post production, post sales stages of product life cycle for reuse/recycle.1255.8 Momentous Engagements Excess: Quite Possible!Regulation can be the most important factor for information rich governing of industry. Information providenceimplies transparency, which in turn can shy away certain non-complying industries. However, it will bring newpromising opportunities for communities and institutions for an exercise similar to GRP. Transparency has potentialto remove the discretion veil.126 It has a disinfectant effect. On the flip side, focusing on the problem collectively117 For example, PROPER of Indonesia, or TRI in US.118 CSE has proven repeatedly in razing issues of public concerns and has been instrumental in influencing critical policy decisions taken by thegovernment of India (for example, CNG for three wheeler and four wheeler automobile in Delhi, recently also instrumental in drawing attentionof government of India for laying drinking water standards). See Fung et al (2002), Graham M., (2002).119 See Ogus (2002).120 This aspect is in conformance with the recommendation by Fung et al (2002). They recommend that “comprehensible information content –transparency policies can require information to be conveyed in a manner that is readily interpretable by intermidiaetories and/or end users”.Interview with Mr. Chandra Bhushan, and publications by CSE121 See Thomas. E. C. (2003), “ The right to Information – A cleansing effect”, Feature article, Press Information Bureau, Government of India, athttp://pib.nic.in/feature/feyr2003/fjan2003/f160120031.html122 Interview with Mr. R. Varadhan,123 Interview with Mr. Aloke Mookherja & Gurgaon facility in charge, HeroHonda.124 Personnel discussion with Dr. Rakesh Kumar, Scientist & Head, NEERI Mumbai.125 Interview with Mr. K. P. Nayati.126 See Graham M., (2002). 17
  • 18. would give many opportunities to confrontation with the industry. Just as too much sunshine hurts the eyes. GRPsurly opens a forum, initiates the process and set examples for the regulatory authority to learn. The level oftransparency showed by the industry is high and evident from the fact that companies have increasingly moretransparently participated in the second phase. Curiosity about the weightings, and acceptance of increased level oftransparency surfaced from the industry during investigation. The picture would have been different if the agenciesprovided the data in a least restricted way as possible. Increasing the entropy of the system, making things work, andcould blow a new life in the process of regulation. Unitizing the data and the acts for producing a database andgiving it to public, no rule stops the authority to do, it.5.9 Summing Up:Disclosure policies require certain circumstances in order to flourish.127 A detailed explanation is in the literaturereview section. GRP has gone through various stages and produced the results. Reflexivity was its intrinsiccharacter.However, evolution is often painful and slow, but survival demands it. GRP should be self-critical and evolve. Thereflexivity will only cover the society if it is able to educate it self, makes it self aware of its rights, uses the rights tofulfill its duties towards its present and future generation. The new “Freedom of Information” law brings a newsunrise for a corruption free, efficient and more responsible Indian industry and society. However, the tool of“Freedom of Information” needs to be sharper by use. It needs to be more sophisticated and usable for people formdifferent strata of Indian society. On the other hand, it is to be kept in mind that at the heart the purpose of using thistool is to enhance industrial environmental performance and not to create adversarial status quo between the societyand the industry. GRP has been a step forward in right direction for assessing the environmental performances of theindustries but has not been able to achieve the object in Toto. As still the legislation uses the same stick to disciplineindustries. Rationalization of standards, specialized regulation for individual industrial sectors, arriving at acomprehensive regime to understand the nitty-gritty’s of industrial functioning and then regulating to the optimalcapacity would be a concrete permanent correction in the traditional regulatory system. Institutionalization of therating exercise with legal binding would be the way ahead. A complete symphony requires precise law for industryto provide information along with the government departments, with wider, systematic, periodic and regularenvironmental performance evaluations. They have to be more incentives designed while rewarding successfulperformers and penalizing defaulters. Alone CSE cannot achieve the horizons of achievements and therefore it canrightly be said that, it is a perfect note but an incomplete symphony!References:Aalders, M. and T. Wilthagan (1997), “Moving Beyond Command and Control: Reflexivity in the Regulation ofOccupational Safety and Health and the Environment”, Law and Policy, Vol. 19, No. 4.Agarwal, Anil (eds.) (1999), “The Good, The Bad and The Ugly: enter The Green Rating Project. Down To Earth”,Vol. 8, No 5, 20 – 58. Publisher: Sunita Narain, New Delhi. India.Agarwal, Anil (eds.) (2001), ““An Auto Dream”. The Green Rating Project: India Automobile industry”, Down ToEarth, Vol. 10, No. 13, 18 – 52. Publisher: Sunita Narain, New Delhi. India.Anand, Umesh (2000), “Green rating must run deep”, The Financial Express on 20 August 2000, New Delhi. Indiasighted in; Agarwal, Anil (eds.) (2001), ““An Auto Dream” the Green Rating Project: Indian Automobile Industry”,Down To Earth, Vol. 10. No. 13, 18 – 52. Publisher: Sunita Narain, New Delhi. India.Afash, S., et al. (2000), “How do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia”,Resources for the Future, Discussion Paper 00 – 44.127 See Fung et al (2002), Graham M., (2002). 18
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