The tale of LG Polymers, evasion of environmental clearance & the Visakhapatnam tragedy

Nihar Gokhale | The Caravan

On 6 May 2020, a deadly gas leak at a factory of LG Polymers in Andhra Pradesh’s Visakhapatnam killed 13 people and injured over 1,000 others. Several media reports termed it the worst gas leak in India since the Bhopal chemical disaster in 1984. The company took over the factory in 1997, but had not gotten an environment clearance till the time of the leak. Documents from the union environment ministry and state environment department show that LG Polymers consistently evaded getting an environmental clearance for the factory by filing contradictory information about itself and taking months to file simple paperwork. Senior officials of the Andhra Pradesh government as well as state and central level agencies of the environment ministry were aware of this but did not raise questions. Eventually, the clearance application was stalled at the environment ministry, where it remained missing until just after the accident.

LG Polymers is an Indian subsidiary of a South Korean chemical-manufacturing company called LG Chem. Within days of the Visakhapatnam leak, the media reported that an LG Polymers official had admitted in an affidavit filed in 2019—which was available on the environment ministry’s website—that the factory was operating without an environmental clearance. In July 2020, the Andhra Pradesh police arrested the head of the factory and two junior staff of the Andhra Pradesh Pollution Control Board on charges of letting the plant operate without an environmental clearance. An investigation is in progress. Media coverage of the incident largely ended there, but documents accessed by The Caravan reveal that the company had submitted contradictory information to authorities several times to dodge or postpone environmental clearance, often without any objection from state and central government officials.

The Environment (Protection) Act of 1986 was one of several law passed after the Bhopal Gas Tragedy to address legal gaps in industrial regulation. In 1994, and later in 2006, the central government issued the Environment Impact Assessment notifications under the EPA, making it compulsory for new industries and expansions of existing ones to get prior environmental clearance. The clearance process requires the company to submit a report on the environmental impact of a proposed project, conducting public hearings and having its assessment vetted by a government-appointed panel of experts. The process also includes doing risk assessments and preparing disaster management plans.

LG Polymers took over the Visakhapatnam plant in 1997. At the time, the plant did not have an environmental clearance. According to the 2019 affidavit, through the 2000s, LG Polymers made a dozen or so expansions to the facility. By 2017, the plant had nearly doubled its production capacity. Each expansion required an environmental clearance, but, according to the affidavit, the company did not seek one till the end of December 2017. This was despite the fact that the manufacturing process involved handling styrene, a hazardous chemical that can explode at room temperature. Factories using it come under the highest category according to the pollution control board—the “Red” category of polluting industries. LG Polymers converts styrene into its polymer versions, polystyrene, or PS, and expandable polystyrene, or EPS. These are some of the most commonly used polymers and are used in packaging electronics and in styrofoam cups.

A top official in the Andhra Pradesh government, who has been involved with the company’s environmental-clearance process, told me that the state government knew before 2017 that the factory needed an environmental clearance. The official did not wish to be named as he fears being implicated in the ongoing investigation into the leak. According to the official, the company argued that it did not need a clearance. “The company claimed that it was a simple polymerisation process so clearance was not necessary,” he said. The official told me that once, during a routine inspection, officers from the Central Pollution Control Board visited the factory but did not raise any questions about the lack of clearance. He, however, told me that he could not remember the date of the visit. He suggested that the state government was unbothered by the lack of an environment clearance because even the CPCB did not raise the issue.

The company finally applied for an environmental clearance in December 2017, though it is unclear what prompted them to do so, given that they had ignored the legal requirement for 20 years. The company’s application form, shows that LG Polymers wanted to double its production capacity of PS and EPS in one go. But the approval of the application soon became mired in delays and transfers.

The EIA notification classifies industries into two categories based on their potential environmental impact. Petrochemical-based factories, like LG Polymers, fall under the higher Category “A” if they are standalone units, and have to be assessed by the union environment ministry. At the union ministry, Category “A” projects are evaluated by sector-specific expert committees—such as for coal mining, non-coal mining, river valley projects—with members drawn from those fields. Projects like LG Polymer’s should be evaluated by the “Industrial Projects-2” committee which deals only with petrochemical industries.

Factories inside industrial zones and industrial estates fall under Category “B,” and are processed by the state-level environment impact assessment authority—SEIAA—which also falls under the union environment ministry. At the state level, however, there is only one expert committee that looks at every application and may not have the subject experts. “Although the EIA Notification is clear about the division between the two categories, companies often choose to apply to the state”—referring to the SEIAA—“or the centre based on where they expect to get favourable treatment,” Ritwick Dutta, an environmental lawyer and founder of the Delhi-based Legal Initiative for Forest and Environment, told me.

According to its application form, LG Polymers initially applied for environmental clearance to the ministry as a category “A” project. This was because it is a standalone factory with its own 200-acre facility. But four months later, in April 2018, the company wrote to the ministry to withdraw its application. It did not specify why. On the same day, it filed the same application with the Andhra Pradesh SEIAA. This time it declared itself as Category “B.” In its application, it added the words “Industrial Zone” to its postal address.

The application appears contrary to facts. The Andhra Pradesh government’s list of industrial zones in the state does not include the area that LG Polymers operates in. “There is no industrial zone here,” Nageswar Adurthi, a 65-year-old who lives one kilometer away from the plant and grew up in the area, told me. When the plant was set up in 1961, he said there was “nothing there” but a few houses. “Even now there is no factory here other than LG Polymers.”

But the Andhra Pradesh SEIAA did not raise questions about its eligibility as a Category “B” project. It accepted the application in April 2018 and took it up for processing. According to the official who requested anonymity, the company told the SEIAA that the state government in the 1950s had issued a gazette notification declaring the factory itself as an industrial zone. But the company could not produce the notification. “They said they had it somewhere, so we believed them,” the official told me. I tried to independently locate this notification but did not find it either. The company also did not respond questions I had emailed them regarding the notification.

In March 2017, the environment ministry had launched an amnesty scheme for industries operating without an environment clearance, called “violation cases,” in the ministry’s parlance. The ministry offered to grant an ex-post-facto clearance to such cases if they agreed to pay penalties under the law, and applied for the environment impact assessment process under the EIA Notification, including preparing EIAs and disaster management plans. “There are many industries still running in India without compliance to the EPA,” Ram Charitra Sah, the Nepal-based coordinator of the Asian Network for the Rights of Occupational and Environmental Victims, told me. “This compromised industrial safety of workers and people living near these industries. So, the amnesty scheme was a good move by the government to bring companies under environmental compliance. And it showed that there is negligence from both companies and the government.”

The Andhra Pradesh SEIAA then made another mistake, which stalled the environmental clearance application. When LG Polymers applied for environment clearance in December 2017, it said it was not a “violations” case. The ministry had added a “Yes/No” question in its clearance application form asking whether the application was under the amnesty scheme. However, in its application to the Andhra Pradesh SEIAA in April 2018, the company answered “Yes.” The Andhra Pradesh SEIAA wrote to the company in August 2018 asking it to file an affidavit stating that it had not taken environmental clearance and was willing to face the consequences for it. This was unusual, because the environment ministry’s rules for the amnesty scheme did not need such an affidavit. The state government had cited a 2017 Supreme Court order to ask for the affidavit, but the order applies only to mining projects.

The company took nine months to file the affidavit. This is the affidavit, filed in May 2019, that was reported on in the aftermath of the gas leak. The delay in filing the affidavit also pushed back the environmental impact assessment and disaster management studies that would have to be submitted by the company had the Andhra Pradesh SEIAA followed its regular process.

After it submitted the affidavit, the Andhra Pradesh SEIAA finally sent the application to the State Expert Appraisal Committee, a panel of experts under the SEIAA that would issue orders to prepare the EIA. The committee took up the LG Polymers application at its monthly meeting in June 2019. The minutes of the meeting says that it was attended by a representative of the company and Team Labs, a Hyderabad-based company that was its EIA consultant. It is unclear why the appraisal committee allowed Team Labs to accompany LG Polymers to the meetings as the company does not figure in the government’s list of accredited consultants for petrochemical projects. It is a violation of the EIA notification to engage unaccredited consultants—a rule that was introduced to stop faulty and poor quality EIAs.

The minutes indicate that before the committee could discuss the application, LG Polymers made a U-turn on which category it was applying for again. The company told the committee that its application was actually Category “A” and should have been filed with the environment ministry. It requested the committee to transfer the proposal to the ministry. During the meeting, the representative for LG Polymers did not reveal that just one year ago it had done the withdrawn its application to the centre. The minutes of the meeting show that the committee also raised no questions about the matter and approved the transfer.

VSRK Prasad, the chairperson of the committee at the time, told me over the phone that the LG Polymers clearly fell under Category A and not B. “We would have transferred it to the environment ministry anyway,” he said. Prasad is the principal of an engineering college near Visakhapatnam. He said the Andhra Pradesh SEIAA was responsible for sending the panel applications and he was not aware of why it did not transfer the application to the union ministry on its own.

In July 2019, the Andhra Pradesh SEIAA approved the transfer of the application. But after that, there appears to be no trace of it. There is no record of it on the environment ministry’s Parivesh portal, which otherwise maintains updated records of every environmental clearance application made to it. “The website updates every day and the record from LG Polymers should have reflected on the website,” Dutta, the environment lawyer, told me. “This was unusual considering that the AP SEIAA is a state-level body of the environment ministry itself.” The ministry’s rules for the amnesty scheme required the ministry to also take action against the violators. But no such action appears to have been taken against LG polymers.

The application appeared on the website only a fortnight after the gas leak as an agenda item on the ministry’s expert appraisal committee’s meeting on 19 May 2020. The file number of the project shows that it was opened only in 2020. Every environmental clearance application is assigned a file number and a proposal number. An entry is created in the Parivesh portal for each project, disclosing all the information filled in the application form and attachments. For the LG Polymers application, there is a file number, but there is no record in the Parivesh portal as of 12 January 2021. A search for LG Polymers on the portal returns only the entry of the application that was withdrawn by the company in April 2018.

EAS Sarma, a former secretary in the union ministry of power, told me that neither the union environment ministry nor the Andhra Pradesh agencies “applied their minds” to the LG Polymers application. Sarma has filed a petition to the National Green Tribunal, seeking the prosecution of LG Polymers on behalf of the victims of the leak. “By not taking a clear stand, both these agencies had allowed a patent illegality to continue, culminating in the ghastly accident,” Sarma said.

Charitra Sah, the coordinator of the Asian Network for the Rights of Occupational and Environmental Victims, told me that the LG Polymers accident shows how hazardous industries continue to evade environmental legislation due to weak regulatory agencies. The ANROEV is a coalition present in 14 Asian countries. “Our data showed that India was similar to other south Asian nations, with understaffed and unequipped regulatory agencies,” Sah said. Yet, he told me, it was surprising that a large multinational such as LG Polymers escaped scrutiny. “It is not a small company that could escape regulation,” he said. “It is a global company. It is one of Korea’s largest companies. How was it running without complying to the environmental protection agency in a country where a lot of larger accidents have happened in the past? This shows negligence not only from the company but also from the state and central governments.”

This is not the first time LG Polymers has had a run-in with environmental regulators in Andhra Pradesh. In April 2017, the company resisted the Andhra Pradesh government’s demands for an environmental clearance for a plastics production unit it wanted to start at its Visakhapatnam premises. According to the minutes of the APPCB’s April 2017 meeting, the board had asked the company to seek a clarification from the environment ministry on whether the unit required an environmental clearance. But the company disagreed with this view and sent its representatives to the APPCB meetings to argue that such plastics facilities were exempted from getting an environmental clearance. It cited a 2014 amendment to the 2006 EIA Notification, issued one month after the Narendra Modi-led BJP government was elected to power. The amendment, among other things, exempted the manufacturing of products from polymer granules from requiring an environmental clearance.

The Andhra Pradesh SEIAA said it was not sure if the exemption applied to LG Polymers as it had proposed to use some other raw materials. The board was not convinced and reiterated its demand for a clarification from the environment ministry. According to the minutes of a meeting held by the APPCB on 27 July 2017, the company never produced the clarification. That month, the company’s representatives showed up at another APPCB meeting and said they had met “the concerned authority” at the environment ministry in Delhi, and this person, whom they did not name, said that an environmental clearance was not necessary. The minutes also do not specify the names of the LG Polymers representatives. The minutes of the meeting say that the company representatives claimed they could not manage to get this in writing because of “heavy workload” in the ministry. They said obtaining the written clarification would lead to an “inordinate delay” in the project which the parent LG Group wanted running in nine months. This time, the board relented and withdrew its demand for a clarification. LG Polymers was allowed to start its unit.

This decision was puzzling and lacked a valid reason, Sarma told me. “When the company said that the environment ministry was not readily providing a clarification, the board could have asked the ministry itself,” he said. “And if the board did agree with the company on the exemption, it should have recorded its reasons. The fact that APPCB did not do so would lead one to the inevitable conclusion that some extraneous pressure was brought to bear on it.”

I emailed a questionnaire to LG Polymers, the Andhra Pradesh SEIAA and the environment ministry, but they did not respond. BSS Prasad, the APPCB chairperson, who had also attended the Andhra Pradesh SEIAA meetings in 2018 that discussed LG Polymers as a special invitee, declined to answer my questions saying that investigations and court cases were under way.

NIHAR GOKHALE is an environmental journalist with an interest in the politics and impacts of infrastructure projects. He is the associate editor at Land Conflict Watch, an independent network of researchers studying land conflicts, climate change and natural-resource governance in India

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