ENVIRONMENT RELIEF FUND (Syllabus: GS Paper 3 – Env and Eco)

Context: No compensation has been paid from the Environment Relief Fund (ERF) since 2019, Union Minister of State for Environment, Forest and Climate Change informed the Rajya Sabha.

Environment Relief Fund

• Established: 2008
• Instituted under the Public Liability Insurance Act (PLIA), 1991, following the Bhopal gas tragedy, the ERF’s primary purpose is to offer immediate relief to victims of accidents involving hazardous substances.

o Under PLIA, two types of compensation are expected to be disbursed from the ERF: relief awarded by NGT in environmental disputes and immediate relief to victims of accidents involving hazardous activities, as determined by the District Collector.

• Criteria: This relief is only provided when the amount awarded by the Collector exceeds the coverage of the insurance policy under PLIA, explains Debadityo Sinha, lead for climate and ecosystems at Vidhi Centre for Legal Policy.
• Objective: To assist individuals affected by hazardous substances.
• Current Status: As of March 31, 2023, the fund had accumulated Rs 1,062 crore.

Reforms

• Direct Disbursement: Fund managers are required to disburse all payments to the Central and State Pollution Control Boards (PCBs).
• Penalty Collection: The fund will collect penalties under the PLIA, along with interest or returns from ERF investments, monitored separately.
• Efficiency Improvement: This approach aims to streamline processes and enhance fund distribution effectiveness.
• Revised PLIA Provisions: The Jan Vishwas Bill revises PLIA, granting CPCB authority to demand compensation from the ERF for environmental damage caused by hazardous substances.