JUSTICE (R) CH. MUHAMMAD YOUNIS, CHAIRPERSON.---By this single judgment we intend to dispose of all the above captioned appeals filed under section 22 of P.E.P. Act, 1997 as common questions of laws and facts are involved therein.
2. Briefly stated the facts giving rise to the instant appeals are that the appellants moved for environmental approval and submitted their applications along with IEE report on the dates mentioned in the table below.
Sr. No. Appeal No. Name of proponentDate of submission of IEEDate of Impugned order by EPA 1 05/2014 United Ethonol25-1-2012 27-12-2013 2 08/2014 Saif Renewable23-5-2013 27-12-2013 3 11/2014 Makhdoom in Green2-1-2013 27-12-2013 4 17/2014 Friends Engineering13-5-2013 27-12-2013 5 19/2014 Prime Industry 3-10-2013 27-12-2013 6 21/2014 Pyrorecycling 31-7-2013 17-1-2014 7 24/2014 Zenith Energy 16-7-2013 20-1-2014 The EPA did not communicate its approval or otherwise within the stipulated period and under section 12(4) of the P.E.P. Act, 1997 the said IEE reports are deemed to be approved after the lapse of statutory period of 4 months which was never extended by the EPA under section 12(5) of the Act ibid. The EPA after keeping the matter pending for a considerable period communicated the impugned orders as mentioned above whereby the IEE reports/applications of the appellants for Environmental Approval were declined on the following grounds:-
(i) The project has been constructed/established in violation of section 12 of the PEP Act, 1997.
(ii) Reference of Chairman OGRA received vide his letter No,OGRA-OIL-19-(9)/2013 dated 21-3-2013 for stoppage of the illegal Pyrolysis Plants of Pyrolysis oil (i,e, a low flash point combustible hydrocarbons manufactured from used tyres) which are reportedly affecting two areas of concerns i,e, adulteration in petroleum products and Health, Safety and Environmental (HSE).
(iii) The Tyre Pyrolysis Oil (TPO) does not fall within definition of refined oil product hence OGRA has recognized it as a fuel vide letter No, OGRA-OIL-19(9)/2006 dated 24-7-2013.
(iv) Import Policy Order 20133 only allows import of used tyres for industrial consumers to be used as fuel while cut/used tyres as a raw material are not covered under IPO-2013.
(v) Recommendations of Technical Committee on Pyrolysis oil constituted by Ministry of Climate Change, Government of Pakistan, Islamabad received vide letter No,1(18)/10HW/ T.O(Chem) dated 23-8-2013 to EPD Punjab to:
(a) Close down all pyrolysis plants
(b) Stoppage of use of cut tyres by Pyrolysis Plant
(c) Non-issuance of Environmental Approval to Pyrolysis Plants in future by EPAs.
3. The appellants have assailed the impugned order on the following grounds:-
(1) That the impugned decision of the EPA is illegal and violative of relevant legal provisions of the PEP Act 1997.
(ii) That it was passed without considering all technical aspects of the plants.
(iii) That the impugned order was without any solid reasons and had been passed arbitrarily. The Agency had no jurisdiction to decline the Environmental approval;
(iv) That the impugned order was passed in violation of revised technical guidelines adopted by the parties under Basel Convention;
(v) That the impugned order was passed without hearing the appellants and it was violative of the established principle of 'Audi Alteram Partem' and that it was result of misuse of authority and was unjust.
4. The learned counsel for the appellants argued that the appellant installed the tyre pyrolysis plants which is latest technology and widely accepted throughout the modern world. According to a recent study, B increasing industrialization and motorization has lead to a significant rise in demand of petroleum products. As these are non-renewable resources, it is difficult to predict availability of these resources in future, resulting in uncertainty in its supply and price and is impacting growing economies like Pakistan which is importing 80% of the total demand of the petroleum products. Many alternate fuels like Biodiesel, LPG (Liquefied Petroleum Gas), CNG (Compressed Natural Gins) and Alcohols/Ethnol are being used now-a-days by different vehicles, biomass and coal are being used as fuel for power plants for which EPAs are also according environmental approvals. In this context pyrolysis of Scrap tyres can be used effectively to produce oil, thereby solving the C problem of waste tyre disposal.
5. The learned counsel while explaining the process argued that Pyrolysis is a Thermochemical decomposition of organic material at elevated temperature in the absence of oxygen. Pyrplysis typically occurs under pressure and at operating temperatures about 430C in a batch process system. The waste tyres are stacked in a steel reactor of approx. 8 ft. Diameter and 20 ft. Length and then sealed. The cylinder/reactor is initially heated by means of oil/wood under controlled condition of temperature and pressure. The process brings about molecular restructuring of rubber and converts into vapour and gases. These vapuors and gases come into separator where heavy oil fraction is separated from gases and the gases are passed through the series of heat exchangers to condense the vapour in to liquid form called tyre pyrolysis oil (40 to 45%) by means of re-circulated water from cooling tower and is collected into the storage tank. Non-condensable gases also called pyro gases (about 10%) are used for heating the reactor in place of oil/wood initially used for heating purpose as per the requirement. During the process carbon black (30 to 35%) and steel wires (10 to 15%) are also generated, being pulled out of reactor to be sold into the open market. Pyrolysis of scrap tyres produces oil that can be used as liquid fuels for industrial furnaces, foundries and boilers in power plants due to their higher calorific value, low ash, residual carbon and sulphur content.
6. The learned counsel further argued that Pakistan is a Party to the Basel Convention. In the 10th Meeting of the Parties in Columbia 17-21 October 2011 the "Revised Technical Guidelines for the environmentally sound management of used and waste pneumatic tyres" were adopted. Mr. Zaigham Abbas, Deputy Director, Federal Ministry of Climate Change (MOCC) represented Pakistan in the said E meeting. The guidelines cover almost all the aspects including components of tyres, the possible harmful effects on human health and environment, the various methods of handling, storage and disposal etc, and the possible positive and negative effects of various disposal processes on environment and remedial measures. A perusal of the stated Guidelines shows that "waste management hierarchy should apply as a priority order in waste prevention and management, legislation and policy to avoid undesirable impacts on the environmental and human health."
7. While summing up his arguments the learned counsel maintained that the latest pyrolysis plants already come installed with latest wet scrubbers for safe Air Emissions and Water Pit for scrubber water treatment. Pyrolysis is internationally recognized as environmentally sound process of recycling waste tyres and Guidelines have been adopted by Basel Convention Parties in this regard.
8. Moreover the Government of Pakistan has adopted the policy of sustainable development, use of natural resources scarcely and to use indigenous coal, biomass in power plants to reduce reliance upon imported oil and to get economic benefits for the country.
9. According to the policy referred to above the Environmental Assessment provides a means for promoting economic development which is environmentally sustainable and the use of resources by present generations while protecting the interests of future generations for example avoiding over-exploitation of renewable resources, minimizing waste, leading to cleaner production.
10. The learned counsel maintained that the pyrolysis plants having multifarious benefits on environment, economics and job creation etc have been emerged throughout the world including Pakistan. These plants are based on sound technology, equipped with wet scrubbers which do not emit any air pollutant in excess of the Environmental Quality Standards.
11. The learned counsel for the appellant referred to the Environmental approval granted by the EPA on 26-3-2012 to Messrs Brothers Recycling Unit Lahore which is also similar project and by declining IEE submitted by the appellants vide impugned order discriminatory treatment has been afforded to the appellants which is not warranted by the Constitution of Pakistan. The learned counsel further argued that any direction of the Federal Government on the basis of which the IEE was declined was not binding on the Provincial Agency as the word 'Govt' means the Provincial Government as per amended Act. It was further pointed out that the impugned order is not sustainable in the eye of law being against the Basel Convention as well as law of the Land.
Moreover no adverse environmental effect has been discussed in the impugned order. So the learned counsel prayed for setting aside the impugned order passed by the Agency and under the deeming clause declaring the project of the appellants to have been approved.
12. The learned counsel maintained that when a particular thing is required to be done in a particular manner it must be done in the same prescribed manner. In support of his arguments the learned counsel for the appellants referred to 2014 CLD 222, 2006 SCMR 129, 1970 SCMR 323, PLD 1970 SC 173, 2013 CLC 141, PLD 1994 SC 693, 2007 CLD Karachi 783, PLD 2010 Karachi 236, 2013 SCMR 642, 2013 CLC 325 Lahore, 2012 SCMR 186, 1992 SCMR 1152, PLD 2013 Lahore 343, 2011 SCMR 1621, 2012 SCMR 1034(sic.), 2000 SCMR 907, 1971 SCMR 681 and PLD 1993 SC 473.
13. The learned Director Legal assisted by Deputy Director Legal and Assistant Director Legal has vehemently resisted the appeals and argued that word 'declined' is not conclusive and it does not mean that the doors of the EPA stand closed for the appellants. They could file EIA as the projects of the appellants were likely to cause an adverse environmental effect. He has also referred to the directions of the Federal Government conveyed to the Chief Secretary and then to the Agency and maintained that the Agency was bound to obey the said direction as per Rules of Business formulated by the Government of Punjab. As regards the case of Brothers Recyclining Unit it was admitted that the Environmental approval was granted by the EPA but the facts of the said project were distinguishable from those of the appellants, It was further maintained that several writ petitions had been filed before the honorable Lahore High Court and the High Court had directed them to file EIA with the Agency. The order dated 14-3-2014 of the Honorable High Court was assailed in ICA which was disposed of on 30-4-2014 upholding the order of the learned Single Judge. The Agency was bound to follow the direction of the Government and it acted upon the same while disposing of the matters. The learned Director Legal further maintained that during the pendency of these appeals the appellants have been running their Units in violation of Section 12.
He maintained that the impugned order was passed by giving reasons for declining IEE submitted by the appellants and it suffers from no legal infirmity and the appeals are liable to be dismissed being devoid of any substance.
14. We have considered the arguments advanced from both the sides. The projects of the appellants involve generating energy from the waste and the technical aspects are enumerated hereunder:
(1) The projects of the appellants fall under waste-to-energy generating projects. The projects under this category recognize and support sustainability and are considered to be environmentally sound and socially responsible having a long term community value.
(2) The said projects help to reduce waste problem by converting waste into material recourses and energy. The material and energy produced by these projects can be utilized and made available for the coming generations. The projects also reduce Greenhouse Gas (GHG) emissions and help the Global movement to solve the climate crisis.
(3) The appellants projects are using the process for pyrolysis to produce Crude pyrolysis oil and other products. Pyrolysis of rubber in scrap tyres is considered to be one of the most reasonable alternatives in terms of environmental protection due to lack of Greenhouse gases. It amounts to establishing an emerging technology for the sound management of used tyres which is being used throughout the World. The other technologies such as incineration or burning of tyres induces combustion of hydrocarbon and forms Green House Gases (GHG) such as Carbon dioxide (CO2) and other gases like Carbon Mono oxide (CO), and Sulpher dioxide (S02) Pyrolysis process produces multiple beneficial products such as hydrocarbon gases, pyrolysis oil, Carbon black and scrap steel. The Hydrocarbon gases typically consisting of Hydrogen (H2), Hydrogen Sulphide (H2S)
Carbon Dioxide (CO2) Carbon Mono Oxide (CO) and most often used to fuel the pyrolysis plant.
(4) The oil produced is refined to be used as a fuel and it can also be a raw material for the petrochemical process. The low grade carbon black derived from the process can be further treated to obtain high grade carbon, activated carbon or other valuable chemicals such as Benzene, Toluene and xylene.
(5) The pyrolysis state-of-art process plants work in closed loops and there is hardly any emission of concern from the plant if proper mitigation and housekeeping measures are implemented. The Basel Convention and WTO rules also consider recycling of scrap tyres as a better option than their use as tyre derived fuel.
(6) The appellants projects will be helpful to shift the focus from open burning, open dumping and land filling to an organized industrial activity involving less health and environmental hazard and will promote economic growth.
(7) It is to mention that waste tyres management is an international problem due to non- compaction and poor bio-degradability. Improper disposal of waste tyres is posing serious threat to public health, safety and the environment. It is well established that waste tyres become sources of breeding places of insects and rodents, crate fire hazards, leach toxin in soil and waste and build up issues of aesthetics.
(8) The appellants project will help to reduce/solve the above mentioned problems/issues and will provide a road map for sustainable/green solution to the problem.
15. Dwelling upon the legal aspects of the matter it is observed that after promulgation of the amended Act the Provincial Agency was required to make rules under section 31 of the PEP Act 1997 and for carrying out the purposes of this Act the Provincial Government was empowered to make regulations under section 33 but the Provincial Agency has not been able to make and notify in the official gazette its rules and regulations for Review of IEE and EIA. Although the Regulations made by the Federal Govt. Are not strictly applicable to the Provincial Agency but just for the sake of arguments even if we borrow the wisdom from the Regulations of the Federal Government namely "Pakistan Environmental Protection Agency Review of IEE and EIA Regulations 2000, the EIA was to be filed only if the project was likely to cause an adverse environmental effect. Although the Agency can direct the proponent of a project whether listed in Schedules I and II or not to file an EIA for reasons to be recorded but no such direction could be given without recommendations of the Environmental Assessm ent Advisory Committee. Admittedly this Committee has also not been constituted as yet. In absence of any Rules and Regulations we are left with no option but to follow the provisions of the statute only. For better appreciation we would like to reproduce the relevant provisions of Section 12 as under:- S.12(1). No proponent of a project shall commence construction or operation unless he has filed with the {Provincial Agency} an initial environmental examination or where the project is likely to cause an adverse environmental effect, an environmental impact assessment, and has obtained from the {Provincial Agency} approval in respect thereof.
(2) The {Provincial Agency} shall-
(a) review the initial environmental examination and accord its approval, or require submission of an environmental impact assessm ent by the proponent; or
(b) review the environmental impact assessment and accord its approval subject to such conditions as it may deem fit to impose, or require that the environmental impact assessment be re-submitted after such modifications as may be stipulated, or reject the project as being contrary to environmental objectives.
16. While considering the above Provisions of section 12(2)(a) of the PEP Act 1997 the Agency is required to review the IEE and accord its approval or require submission of an EIA by the proponent.
Section 12(2)(b) deals with the review of EIA under which the Agency has to review the EIA and accord its approval subject to certain conditions or require the EIA to be resubmitted after such modifications as may be stipulated and the last option for the Agency is to reject the project if it is contrary to environmental objectives.
17. In the instant case the Agency failed to adopt the legal procedure contained in section 12. The Agency is not empowered to decline IEE. Either it had to be approved or the Agency could require submission of an EIA by the proponent if permissible by law and for the reasons to be recorded only in case the project was likely to have any adverse environmental effect. In the instant cases the EPA travelled beyond its jurisdiction and declined environmental approval without requiring appellants to submit EIA. Even for direction to submit EIA the EPA had to follow the law because in each and every case EIA cannot be ordered to be submitted. When we see the impugned order in this legal perspective, we find no solid reason therein for declining the approval by the Agency. No adverse environmental effect has been discussed and it is nowhere found by the Agency that the project was contrary to environmental objectives. The grounds for declining the approval are extraneous. The approval could not be declined on the basis of any recommendation or direction of the Federal Government as it was a Provincial subject now after the 18th amendment and the Provincial Agency was required to apply its own independent mind and assess the project in respect of which IEE had been submitted by the appellants but without taking into consideration the environmental aspects the impugned order was passed without adhering to the legal provisions. Admittedly Pakistan was signatory of the Basel Convention in which the guidelines were formulated for the technology of Pyrolsis. It was acknowledged to be a green technology throughout the world but this aspect was totally ignored by the EPA. As regards the case of Brothers Recycling Unit to whom environmental approval has already been granted, we find that discriminatory treatment has been afforded to the appellants who had also submitted IEE in respect of similar projects. If seen from that perspective it amounts to acknowledging the technology to be green by the EPA. There can be no pick and choose among the similar projects.
However, the Agency could consider the facts and circumstances of each case by application of independent mind and all the projects could not be declined with a stereotype order. The grounds mentioned in the impugned order stand bye-passed when approval has already been granted to a similar project.
18. The impugned order does not find mention of any direction of the Provincial Govt. Through Chief Secretary Punjab as argued by the learned Director Legal. Similarly no solid reason has been given in the impugned order to deviate from the Basel Convention of which Pakistan was signatory.
19. As regards the contention of the learned counsel, for the appellants that the cases of the appellants fall within the purview of section 12(4) of the PEP Act 1997, there is a qualifying clause in the said provision of law and the IEE or FIA is deemed to have been approved only to the extent to which it does not contravene the provision of this Act and the rules and regulations. So this deeming clause is also dependent upon the fulfillment of the provisions of law and the project cannot be deemed to be approved as a whole if the same partly contravened any provision of this Act. It again involves the role of the Agency to determine the extent of contravention if any.
20. One of the grounds for declining the environmental approval by the Agency was that some Units have been established in violation of section 12. We are of the view that in hundreds of complaints pending before this Tribunal if the project is not got regularized as per direction of the Agency the proponent can be punished under section 17 if the offence is proved against him. So it was not a good ground for declining environmental approval. Rather the said violation was punishable under section 17 if a complaint was filed by the Agency.
21. In the light of above discussion we are of the considered view that the impugned order passed by the EPA is not sustainable in the eye of law and has not been passed by application of independent mind by the concerned Authority. So the appeals are allowed, the impugned orders are set aside and the matter is remanded to the Agency to review IEE of each and every Unit in view of the specific facts and circumstances of each project and decide the matter afresh after hearing the appellants and by taking into consideration the Environmental aspect of the matter.
Copy of the judgment be sent to the Provincial Agency for compliance.