Updated: September 1, 2020 8:50:40 am
In a conversation, the moment it is evident that I am from Kerala, the first comment usually is that it is a beautiful state. The conversation typically extends to saying that no industry can survive in Kerala. I defend my state by stating that, not many companies are mature enough to operate in Kerala. Having said that, the Kerala diaspora is a well-known story. The state also has a high debt ratio and in recent times, has been one of the slow economic growth states. I am not implying that the industrialised states of India are much better, but there is something not quite right.
The pandemic presents an opportunity for us to think of a new recovery path, one that can decouple economic growth and environmental degradation. It becomes more important as India sees opportunities on the global call to diversify the supply chain and its internal call for Atmanirbhar Bharat. For that, we need to strengthen our production and manufacturing capabilities.
Indian cities feature high in the list of polluted cities in the world, and the country features very low on quality of life. At the same time, any discussion on more production facilities, mining, utilities and construction evokes fears about where we are going wrong. We have all the environmental regulations we need, but the biggest gap lies in monitoring and implementing them. Take the municipal solid waste rules. Two decades after the regulations came into effect, their status is for all to see. A comparatively recent regulation, centred around Extended Producer Responsibility, has also posed challenges in monitoring and implementation. In a recent ruling, the judiciary not only ruled against the industry but also blamed officials responsible for implementing the regulations. This will not help us in capitalising on the current opportunity. Regulatory infrastructure is supposed to be the bridge of trust between the community and industry. If the bridge is not stable, the community and industry feel the impact, which, over a period of time, spreads to the nation.
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No community wants an industrial facility, a key economic engine, shut unless there are very serious issues. Other than an accident, such problems don’t happen over a day. When early signs from the environment are neglected, they reach thresholds leading to a community upsurge. Then the political system intervenes. It is a battle that nobody wins. Even as a nation, we have shown inability to showcase growth in a sustainable manner.
Diluting regulatory requirements is not a solution — in the long run, it will create more adverse impacts resulting in greater community upsurge. The focus has to be to improve the system’s capabilities to monitor and implement regulatory requirements. There needs to be greater transparency and accountability; there is no dearth of technology to facilitate this. Around the world, we are also debating another issue of extreme surveillance. Since somebody is always watching, spotting, noticing or identifying the problem should not be a challenge. But what happens after that is a challenge. The intention and capacity to take action, rectify and diffuse is critical. The right ecosystem between the industry, community and regulator is crucial — if the three stakeholders remain isolated and get activated only in a crisis, we will not make any progress towards solving the issue.
I will go back to Kerala to discuss an initiative by the state’s police — Janamaithri Suraksha. It aims to bridge the gap between the police and public with citizens’ involvement. We need similar maithri, an improved level of trust, between the regulator, community and industry on environmental protection. The conventional manner of waiting for an agitation, investigating and then knocking on the doors of justice is not the way to sustainable development.
Any anthropogenic activity will have impacts. It is important to understand whether we have a net positive effect from all stakeholders’ perspectives, wherein the future generation is also a key stakeholder. I wrote earlier that the way forward is to decouple economic growth and environmental degradation. However, it would be more right to say that we need to couple growth and environmental protection. Environmental health will be the key enabler of socio-economic growth in the future.
It is important for us to get this right quickly. Community activism in terms of environmental damage is surging and we will have more judgments from the courts. Nobody benefits from such outcomes in the long run. We need to grow to keep progressing, and for that we need industries. When trust between the industry and community erodes, there are more agitations.
By focusing on the bridge element of the regulatory system, I am not undermining the role of industry and the community. Industry needs to realise that it is a part of an ecosystem and not at the centre of it. Communities get impacted, either positively or negatively. They need to empower themselves through education, so that they are not driven by the agenda of individuals with vested interests.
We need to accept that we have a challenge in implementing environmental regulations. The community does not trust that the industry is meeting its compliance requirements. The regulatory system’s role is to improve this trust quotient. There is a need to evolve a more effective implementation involving all stakeholders, and a more transparent monitoring system. There is, thus, a necessity for a maithri system.
As we plan our recovery past the pandemic, we have a good chance to create a new normal. We need to align towards a common cause and goals. We should not miss this chance.
This article first appeared in the print edition on September 1, 2020 under the title ‘Address the trust deficit’. Jayaram is partner and head, Climate Change and Sustainability Advisory, KPMG India
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