THE BACKGROUND OF THE CASE
The case at hand is the globally well-known matter of the Volkswagen ‘emission scandal’, discussed before the Principal Bench of the National Green Tribunal, wherein, in September 2015 it had come to light that Volkswagen had installed ‘deceit devices’ in the engines of thousands of their vehicles since 2009,[1] to cheat the emission tests carried out on their diesel engines. The software helped make the cars meet exhaust pollution standards when monitored in tests but in reality, the emissions exceeded the limits.
Consequently, the Automotive Research Association of India (ARAI) tested 46 models of Volkswagen Pvt. Ltd. and recalled 2.18 lakh vehicles. The emission levels of (NOx) by Volkswagen were found to be more than expected.[2] After its testing by ARAI, it was found that the NOx emitted was nine times the levels tested during the approval stage. In the US forty times higher emission was found. In India, it was five to nine times according to ARAI. The manufacturers were to recall 11 million cars globally after it was found that they were violating emission norms by use of a cheating device.
The news item dated 05.11.2015 in the Business Standard was published under the heading “Volkswagen fails emission test in India, gets notice”[3]. Another one in the Economic Times was titled “Timeline of events in Volkswagen pollution cheating scandal”[4]. These articles were also considered while discussing the impact of the case.
THE FINDINGS
It was concluded that VW employed two distinct ways for EGR rate regulation via the ECU software. While fulfilling emission standards under the usual cold test settings, the older or original EGR method produced greater emissions throughout the warm test cycle as well as in the field. Certain VW models’ NOx emissions were also greater than those of other Indian cars evaluated with the same techniques. This was later fixed during the ARAI-supervised recall of the affected vehicles. Following the recall, the VW vehicles produced significantly fewer NOx emissions during the warm test cycle.
Moreover, it was found that the emissions released air pollutants in the air which can greatly negatively impact human health by aggravating existing respiratory illnesses. Additionally, emissions over the prescribed limit also cause environmental pollution. Therefore, the manufacturers are liable to pay compensation for this damage caused.
THE DECISION MADE
Volkswagen was fined Rs. 100 crores by the National Green Tribunal (NGT) in 2018 for employing cheat devices in their vehicles, which caused environmental harm.[5] In addition, the NGT ordered Volkswagen to submit a recall plan and pay the penalties within two months.
Volkswagen was given a further fine of Rs. 171.34 crores by the NGT in 2019 for inflicting environmental harm and breaking emission standards.[6] The Supreme Court rejected Volkswagen’s appeal of the NGT’s ruling, upholding the NGT’s order and directing Volkswagen to pay the fine within two months.
OBJECTIVES: WHY THIS CASE IS WORTH DISCUSSING?
The primary reason for discussing this case is that it highlights the need for India to have proper emission norms. It exposed weaknesses in the testing and enforcement of emission norms and led to the tightening of regulations to prevent similar incidents from happening in the future. In the present day, there is a lot of discourse about cleaner alternatives and sustainable energy. Thus, the secondary objective of discussing this case is to bring to light India’s commitment towards climate action and sustainable development.
RELEVANCE: WHY THIS CASE IS WORTH DISCUSSING NOW?
This case finds its relevance in the fact that it encapsulates not only the various principles of environmental law- sustainable development, and polluter pays, for instance; but also elucidates the need to deal with environmental pollution on a national and global level. Moreover, it is also relevant as an example showcasing the need and significance of CSR.
ANALYSING THE VARIOUS LEGAL IMPLICATIONS OF THIS CASE
Stricter Legislation: Introduction of BS-VI
A major point of discourse that finds itself in this article is the necessity of decided emission regulations. The manufacturers, Volkswagen, relied heavily upon this lack of set standards to prove their compliance with the environmental protection standards. However, these standards were very generic and not specific to emissions from diesel automobiles. Their plea was, fortunately, dismissed by the tribunal as they believed that the global standards should be sufficient while the National standards were still being set up.
The Indian government implemented stronger emission standards, known as Bharat Stage VI (BS VI), in April 2020 as a result of the mishap and the investigation. Similar to Euro VI emission standards,[7] BS VI standards mandate the use of cleaner fuels and more sophisticated emission control devices in automobiles.
Constitutional Perspective & Legal Provisions
It was through a chain of cases that the ambit of Article 21[8] was expanded to include the right to pollution-free air and water.[9] ‘Precautionary Principle’ and ‘Sustainable Development’ principles are part of Article 21 of the Constitution and Section 20 of the National Green Tribunal Act, 2010.[10]
In the case of Research Foundation for Science Vs. Union of India & Anr[11], it was held that environmental cost is not restricted to those which are immediately tangible but full cost for restoration of environmental degradation. In the present case, it was opined that ‘polluter pays’ does not mean pollute and then pay. Therefore, while estimating the damages that the respondents had to pay, the tribunal took into consideration the damage to the environment as well as the people due to the release of toxic pollutants in the air. The amount was arrived at by using Delhi as a base city. The amount may seem exorbitant, but the reasoning behind it is fair, equitable, and just. It is important that huge corporations like Volkswagen, whose net worth is more than USD 75 Billion[12], are charged accordingly for their contribution towards environmental degradation. This is done to set an example and cause deterrence of such unethical practices in society.
RELEVANCE TO SDG 7: The Move to Cleaner and Sustainable Energy
This case bears direct relevance to Sustainable Development Goal 7 which is to “ensure access to affordable, reliable, sustainable, and modern energy for all”. This case opens up a scope for the long-time ongoing debate about climate change and the need to find alternatives to non-renewable sources of energy. It elucidates that the use of the present sources of fuel is extremely harmful both in the short run and the long run. The use of diesel as a fuel, and its subsequent emissions are responsible for an irreparable amount of harm caused to the environment, thus, depicting the dire need for India to make a move towards cleaner and renewable, alternative sources of energy.
The goal is to achieve a 3.2 per cent annual energy-intensity improvement rate by 2030 as compared to the 1.2 per cent that we have now.[13] Along similar lines, the Hon’ble Supreme Court has also opined that the National Green Tribunal should consider expanding the scope of the present case to other automobile manufacturers as well.[14]
The Corporate Accountability
Ultimately, it has already been established that pollution cannot be allowed for a profitable activity.[15] Moreover, there is an absolute liability for harm to the environment which extends not only to compensate the victims of the pollution but also to the restoration of the environment degraded. [16]Thus, even though the respondents appealed it was apt for the Supreme Court to uphold the NGT’s decision in this highly controversial case.
CONCLUSION
The ‘Dieselgate emissions scandal’ is a remarkable decision in the history of the NGT. Volkswagen violated the emission norms in India by using ‘deceit’ devices. As a result, it was felt that India should have stricter emission norms. The Bharat Stage VI emission norms were a by-product of this case.
Under Article 21 of the Indian Constitution, every person has the right to clean and pollution-free air.
Moreover, in furtherance of climate justice, it is vital that such misconduct on behalf of powerful corporations be rightfully punished. Thus, employing the polluter pays principle, Volkswagen was fined not only for the environmental damage caused but also for the cost of restoring the environment.
The SDGs dictate that it is time to adopt cleaner and affordable means of energy. The NGT levied a heavy fine on the respondents, making it clear that they would like to not witness any more of such horrifically unethical practices in the future. It also strengthened India’s objective of transitioning to more sustainable forms of energy and emphasis on mitigating the impact of climate change.
As a consequence of this case, stricter legislation was brought forth. The safety and environmental impact were assessed. For a long time, corporations have enjoyed immunity from being prosecuted for their misconduct. It was about time that this notion changed. Volkswagen was held duly accountable for its downright cheating practice.
Author(s) Name: Avani Tungare (Symbiosis Law School, Pune)
References:
[1] M KS, ‘Volkswagen Scandal Comes to India, NGT Expert Panel Recommends Rs 171-Crore Fine as Health Cost’ (The Indian Express, 15 January 2019) <https://indianexpress.com/article/business/companies/volkswagen-scandal-comes-to-india-ngt-expert-panel-slaps-rs-171-crore-fine-as-health-cost-5538538/> accessed 8 August 2023
[2] ‘National Green Tribunal Imposes Rs 500 Crore Fine on Volkswagen for Damaging Environment’ (India Today, 7 March 2019) <https://www.indiatoday.in/auto/latest-auto-news/story/national-green-tribunal-imposes-rs-500-crore-fine-on-volkswagen-1472327-2019-03-07> accessed 8 August 2023
[3] Standard B, ‘Volkswagen Fails Emission Tests in India, Gets Notice’ (Business Standard, 4 November 2015) <https://www.business-standard.com/article/companies/govt-issues-showcause-notice-to-vw-for-manipulating-emission-norms-115110401344_1.html> accessed 8 August 2023
[4] www.ETAuto.com, ‘“dieselgate” Fraud: Timeline of a Scandal – et Auto’ (ETAuto.com, 11 June 2021) <https://auto.economictimes.indiatimes.com/news/dieselgate-fraud-timeline-of-a-scandal/83424770#:~:text=A%20timeline%20of%20the%20scandal%3A&text=In%202016%2C%20VW%20announces%20its,for%20nearly%20500%2C000%20US%20drivers.> accessed 8 August 2023
[5] ‘Explained: What Is the “Dieselgate Scandal” against Volkswagen?’ (The Indian Express, 27 May 2020) <https://indianexpress.com/article/explained/volkswagen-dieselgate-scandal-6427918/> accessed 08 August 2023
[6] Raj A, ‘VW Fined ₹500 Crore for Violating Diesel Emissions Norms in India’ (mint, 7 March 2019) <https://www.livemint.com/auto-news/volkswagen-fined-rs-500-crore-for-violating-diesel-emissions-norms-in-india-1551985540364.html> accessed 8 August 2023
[7] Iea, ‘Bharat Stage (BS) VI Emission Standards – Policies’ (IEA) <https://www.iea.org/policies/7454-bharat-stage-bs-vi-emission-standards> accessed 08 August 2023
[8] Constitution of India, Article 21
[9] M.C Mehta v UOI A.I.R [1987] S.C 965; M.C Mehta v UOI A.I.R [1988] S.C. 2217; Vellore Citizens Welfare Association v UOI A.I.R [1996] S.C 2715; Indian Council of Enviro-Legal Action v. UOI A.I.R [1996] S.C 1446; Subhash Kumar v. State of Bihar A.I.R [1991] SCC 420
[10] National Green Tribunal Act 2010, s 20
[11] Research Foundation for Science Vs. Union of India & Anr [2005] 13 SCC 186
[12] ‘Volkswagen (Vow3.de) – Market Capitalization’ (CompaniesMarketCap.com – companies ranked by market capitalization) <https://companiesmarketcap.com/volkswagen/marketcap/> accessed 8 August 2023
[13] ‘- SDG Indicators’ (United Nations) <https://unstats.un.org/sdgs/report/2022/goal-07/> accessed 8 August 2023
[14] ‘Emission Norms: Sc Asks NGT to Consider Expanding Scope of Volkswagen Case to Other Car Makers’ (The Economic Times) <https://economictimes.indiatimes.com/news/politics-and-nation/emission-norms-sc-asks-ngt-to-consider-expanding-scope-of-volkswagen-case-to-other-car-makers/articleshow/67627028.cms?from=mdr> accessed 8 August 2023
[15] Sterlite Industries (India) Ltd. v. Union of India [2013] 4 SCC 575
[16] Vellore Citizens Welfare Forum vs. Union of India (UOI) and Ors A.I.R [1996] S.C 271
