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Petitioner: D. G. Khan Cement Company Ltd VS Respondent: Government Of Punjab through Chief JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Syed Mansoor Ali Shah, Manzoor Ahmad Malik Title:D. G. Khan Cement Company Ltd vs Government Of Punjab through Chief
JUDGMENT
Reported As: 2021 P C T L R 857, 2021 SCMR 834 Result: Petition dismissed Judgment SCRC JUDGMENT SYED MANSOOR ALI SHAH, J.---The case stems from Notification dated 08.03.2018 ("Notification ") issued by the Industries, Commerce and Investment Department, Government of the Punjab ("Government"), under sections 3 and 11 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 ("Ordinance"), introducing amendments in Notification dated 17.09.2002 to the effect that establishment of new cement plants, and enlargement and expansion of existing cement plants shall not be allowed in the "Negative Area" falling within the Districts Chakwal and Khushab. 2. The petitioner owns and runs a cement manufacturing plant in Kahoon Valley in the Salt Range at Khairpur , District Chakwal and feels wronged of the Notification for the reasons, viz. (i) the Provincial Government and its line Department lacked jurisdiction to issue the Notification and only Local Govern ment under the Punjab Local Government Act, 2013 ("Act") could exercise jurisdiction over matters relating to zoning and classification of land, land use, environment control, water sources and ecological balances; (ii) the respondents without a detailed scientific study about underground water levels acted with undue haste in issuing the Notification; (iii) the petitioner was not given the opportunity of hearing under section 3 of the Ordinance read with Articles 4, 9, 10A, 18 and 25 of the Constitution of the Islamic Republic of Pakistan ("Constitution"); (iv) the petitioner's right to freedom of trade, business and profession under Article 18 of the Constitution was infringed; and (v) the actions of the respondents unreasonably discriminated between the petitioner and other cement manufacturers similarly placed on the basis of materials and information that could not be termed as reasonable or intelligible differentia thereby violating Article 25 of the Constitution.1
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3. We consider in this case if the Government's decision of issuing the Notification lacks statutory authority or if factual grounding of the Notification compromises its legal validity . Legality of declaring an area as a "Negative Area" under the Ordinance 4. We first turn to the question whether the Provincial Government can declare an area to be a "Negative Area" under the Ordinance. "Negative Area" under the Notification is where no new cement plant can be set up and no enlargement or enhancement of an existing cement plant can be allowed. The preamble to the Ordinance provides for organized and planned growth of industries in the Province. Organized and planned industrial growth is unquestionably in the public interest and is effectively regulated through section 3 of the Ordinance. No person can establish an industrial undertaking or enlarge any existing industrial undertaking except with the prior permission of the Provincial Government. Generally , such permission can be granted or refused only after extending an opportunity to the applicant to show cause against it. The discretion of the Government to permit the setting up or enlargement of an industrial undertaking under section 3 is structured according to the conditions spelled out in section 3(b) of the Ordinance. Section 3(a) deals with the permission for establishing or enlarging an industrial undertaking in an area as a greenfield project, which is being examined by the Government for the first time. However , section 3(b) refers to the area where the Government has already satisfied itself on the basis of the information available to it and after making such inquiry as to whether the industrial undertaking to be established or enlarged is prejudicial to national interest, or injurious to health of the residents of the local area in which the industrial undertaking is proposed to be set up or enlarged, or is a source of nuisance for the residents of the local area in which the industrial undertaking is proposed to be set up or enlarged and may declare such an area to be either positive or negative area or zone as the case may be. "Planning" is a comprehensive, coordinated and continuing process that involves identification of future goals, development of plans to achieve those goals, and devising of mechanism to give effect to those plans with a view to promoting the common good of the society . Zoning of the Province into positive and negative areas is a means towards achieving organized and planned industrial growth without impinging on the social, environmental, ecological, civic and economic interests of the locals. Zoning divides land into distinct geographical areas and imposes restrictions with respect to use of land in each area. These regulatory controls allow or disallow use of land in a particular geographical zone. Therefore, any application requesting permission to establish or enlarge an industrial undertaking under section 3 of the Ordinance in an area that is already marked as a zone (negative or positive) is decided accordingly . The organization and planning under the Ordinance is, therefore, in effect, actualized on the basis of the parameters mentioned under' section 3(b) of the Ordinance. 5. Further , the socioeconomic concerns critical for organized and planned development existing in the year 1963 have since multiplied and become more complex as the population has swelled from approximately 48 million in 1963 to more than 217 million in 2019. Organized and planned growth in the world today would undoubtedly mean "sustainable development " and the terms prejudicial to national interest, injurious to health and source of nuisance would naturally encompass the pressing issues of the time i.e., climate change; environmental degradation; food and health safety; air pollution; water pollution; noise pollution; soil erosion; natural disasters; and desertification and flooding having an appreciable impact on public health, food safety , natural resource conservation, environmental protection, social equity , social choice, etc. The authority to regulate land use, introduce zones or negative or positive areas, has been recognized as the police power of the state, asserted for public welfare. The legislative policy of organized and planned growth, under the Ordinance, also synchronizes well with our constitutional values, set out in the preamble of the Constitution, as well as the Fundamental Rights and the Principles of Policy , in particular , the right to life and dignity , promotion of social and economic wellbeing of the people and safeguarding the legitimate interest of backward and depressed classes . 6. We deem it necessary to observe that zoning of areas into positive and negative is not absolute. The ban under the Notification is I not etched in stone but may be lifted if the Government is of the view that the valley , in this specific case, stands recharged with water and nature has become resilient to allow sustainable development. Organization and planning of future grow th cannot be frozen in time and is never intended to be static. Zoning allows the flexibility needed to respond to change. The choices that govern a particular territorial zoning may not2 3 4 5 6 7 8 9
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hold good indefinitely . Land use patterns change giving rise to opportunities to revise earlier standards as zoning measures are introduced in public interest. The value of zoning lies in the flexibility by which it is administered to react to new social and economic situations. We, therefore, hold that zoning of areas for the purposes of the Ordinance is not absolute but is subject to change provided such change is necessitated by new circumstances. Hence, the prohibition under the Notificati on not to establish or enlarge an industrial undertaking in a negative area is not absolute. 7. Insofar as the objection of the petitioner that the mandate of zoning of land belongs to the local government is concerned, suffice into say that the matter involved a trans-district issue which could be dealt with by the Provincial Government exercising the authority conferred by the Ordinance. Even so, the functions of the local government could not mean to trump the executive authority of the Provincial Government. The Ordinance is a special law compared to the Act and therefore takes preference. Furthermore, under section 4 of the Act, local governments have to function within the provincial framework and are to faithfully observe the federal and provincial laws. And in the performance of their functions, the local governments shall not impede or prejudice the exercise of the executive authority of the Provincial Government. Even otherwise, nothing has been brought on the record that shows that the concerned districts have taken a contrary position or are aggrieved of the Notification. 8. Also, the petitioner claimed that its right to freedom of trade, business and profession guaranteed under Article 18 of the Constitution was infringed and the actions of the respondents unreasonably discriminated between the petitioner and other cement manufacturers. We are, however , of the view that the rights granted under Article 18 of the Constitution are "subject to such qualifications" that have been "prescribed by law". The Ordinance forbids the setting up of any industrial undertaking except by the prior written permission of the Government. Placing an embargo on establishment and expansion of cement plants in the Negative Area to provide for organized and planned growth of industries in the Province in line with the objectives of the Ordin ance does not offend Article 18 of the Constitution. Moving on, the decision to impose a ban on the establishment and expansion of cement plants was not taken to benefit or punish anyone but to ensure the organized and planned growth of industry in the Province in view of the findings of a multidisciplinary study (discussed later) which provided reasonable basis for zoning of project area without violating Article 25 of the Constitution. Factual foundation of the "Negative Area" 9. The next question is whether the Notification was issued in public interest in line with the objectives of the Ordinance or not. In 2016,. the Secretary , Mines and Minerals Department informed the Provincial Government that existing cement plants in the Salt Range were causing ecological harm to the area. In this backdrop, the Government decided to inquire into the matter and solicit expert advice. A study was commissioned for determining the suitability of the project area for cement plants comprising Districts of Chakwal, Jhelum, Khushab and Mianwali of Punjab. Messrs. NESP AK and Messrs Sogreah ("Consultants") were engaged for the purpose. The project team included foreign experts such as Cement Plant Expert, Environmental Chemist and Geologist having experience of working in a range of countries in different regions of the world. The methodology of the study reflects that following determinants were identified to be the criteria for suggesting proposals concerning delineation of the negative and positive zones for the establishment of new and expansion of existing cement plants: i. suf ficiency of cement raw materials; ii. sustainable water resources; iii. environmental conditions of the project area; iv. socio-economic conditions; v. transportation infrastructure; and vi. agriculture, forest, restricted and sensitive sites. The Consultants undertook a fairly comprehensive exercise covering a range of factors likely to be impacted by the establishment or expansion of cement plants in the project area. They verified deposits, determined their quality and estimated their resource potential to decide the issue of sufficiency of cement raw materials; carried out water resource study by examining ground and surface water resources; and studied air emissions, ambient noise, and ground, surface and waste water . They also conducted surveys to examine socioeconomic conditions of the area10 11 12 13 14 15
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and made estimation of the existing traffic volume through manual classified count surveys, capacity analysis of existing road network, estimation of generated traffic due to new facilities and traffic projections based on relevant socioeconomic indicators and past data. Technical audit of existing cement plants was conducted. Forest, agricultural and wildlife reserve areas/sanctuaries were taken into consideration. Field visits were conducted and ecological features of the area were studied. A meeting of the Consultants with the representatives of the cement plants and the Government of ficials was also held. 10. The Consultants found that groundwater table had gone down at an average of 64 feet at various locations, shallow wells (open/dug wells) had been found dried up and, therefore, further installation of new cement plants/expansion of existing cement plants could cause further depletion of groundwater resulting in greater problems for the local people and especially for agriculture. They were of the view that four valleys i.e. Kahoon, Vinhaar , Pail and Padhrar having importa nt scenic and touristic value needed to be protected. Additionally , these valleys contain forest areas, settlements and agriculture lands. It is underlined that total population of the area was recorded as 4.8 million in 2017 and around 1,23,753 in the Negative Area alone. The study showed that any new cement plant or expansion of any existing cement plant would require new road infrastructure or improvement in the capacity of the existing road infrastructure. A negative zone covering an area of 979 sq km (11% of the total area) with an embargo on establishment of new and expansion of existing cement plants was thus delineated out of a total of 8,872 sq km. It was also proposed that demarcation of negative zones be reviewed after every ten years on the basis of technical assessment. 11. The Provincial Cabinet in view of the said recommendations of the Consultants took a number of decisions including declaration of "Negative Area" comprising 979 sq km of land in the Salt Range out of a total area of 8,872 sq km where establishment of new and expansion of existing cement plants was completely banned. It is underlined that the Positive Area adjoin s the Negative Area and can be accessed by the petitioner for future development subject to the regulatory , approvals under the law. It was also decided that the existing cement plants falling within the Negative Area would be allowed to operate only if they were fully compliant with all legal, technical and environmental standards prescribe d by the Government and after a final approval was given by the Government to this effect. The Notification was thus issued and establishment of new and expansion of existing cement plants was banned in the Negative Area. The Government concluded that permitting the establishment of new and expansion of existing cement plants would be prejudicial to public interest. 12. It is hardly a secret that water situation in the project area is far from satisfactory . In November 2017, this Court had taken notice of the reports of drying up of the fabled Katas Raj Temple Pond. Cement companies situated in the vicinity of the pond were found pumping huge quantities of water free of charge and without having any regard for the environmental impact of such unbridled extraction on the aquifer as well as surrounding areas. This Court in Katas Raj case had observed that the issue of scarcity of water in the area was becoming acute adversely affecting the environment and lives of the people living nearby . The cement companies were directed to switch to alternative sources of water and bring their dependence on groundwater to zero within six months. The cement plants, subsequently , claimed to have brought the use of groundwater to zero though the feeding channels of Katas Raj Temple Pond could not become functional and, therefore, the Director General ("DG"), Environmental Protection Agency ("EPA") Punjab was directed to constitute a "Team of Experts" from all concerned departments for technical survey of the area to discover the reasons behind the issue. The "Interim Report" dated 11.06.2020 submitted by the DG, EPA Punjab did not convey a satisfactory picture: "14 % (of groundwater in the valley) is abstracted by cement industry"; "Katas Raj Temple' (sic) pond is located downhill whereas the Bestway Cement Factory was installed at (sic) uphill 03 km away from the pond, thus the latter intervention may influence the groundwater flow path recharging holy pond"; and "over abstraction appears so far to be the main cause of drying out of pond." Here, we are reminded of the Consultants' recommendation that use of existing tube wells within the boundary of existing cement plants, even after shifting to alternative sustainable water sources, must be monitored to ensure that cement plants are not abstracting groundwater . 13. The Assistant Director (Environment) Chakwal during the pendency of this case carried out site inspection of the petitioner's cement plant on 09.02.2021. His report reveals that there are also other issues besides water . He16 17 18 19
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reported that blasting and quarrying of raw materials caused dust pollution in the locality causing environmental damage; quarrying also threatened the local ecology of biodiversity rich area of Kallar Kahar; deforestation and erosion resulted from quarrying; heavy transport and machinery used for transporting raw material affected the locals of the area negatively; quarrying sites deteriorated the aesthetic appeal of the area; and air emissions from the cement industry was a cause of air pollution in the area. 14. The only objection raised by the petitioner to the report of the Consultants relates to the finding about underground water levels. However , the petitioner loses sight of the fact that sustainability of water resources was not the sole factor leading to designation of the Negative Area. Rather , the Consultants carried out a multidisciplinary study of the project area to determine suitability of land for establishment and expansion of cement plants. Fixated on the issue of groundwater levels, the petitioner engaged private consultants "to prepare a factual report on the status of ground water in and around the plant area." Without going into the qualification of the consultants hired by the petitioner and the scope of the inquiry undertaken by them, we believe, it is not our job to referee battles among experts. The Government has discretion to rely on reasonable opinions of its own qualified experts in case of conflicting specialist views. Another aspect is the integration of science in planning and regulation. The courts while reviewing scientific and technical determinations generally exhibit deference to institutional competence because of the specialized nature of the subject matter . There is a risk that the courts will unravel layers of careful scientific work as a result of their combined ignorance and judicial second-guessing while reviewing science-based regulatory decisions. However , scientific complexity does not provide excuse to evade judicial scrutiny as it needs to be ensured that Government does not transgress its mandate or does not mangle scientific results to produce certa in outcomes. Judicial oversight of specialized adminis trative decision- making is necessary to obviate the possibility of capture and incompetence: Accordingly , we keep ourselves restricted to the rationality of the Government's decision. 15. It was vehemently argued by the learned counsel for the petitioner , that the petitioner company proposes to expand the existing cement plant by installing a new "zero water" technology cement plant. However , there is no evidence brought on the record to establish the claim that the new cement plant technology is `zero-water' or even the fact that the petitioner is currently manufacturing cement without any use of water . Even the consultants engaged by the petitioner did not say that cement plants could be run without using water . On the contrary , according to the position taken by the petitioner and confirmed by the DG, EPA, Punjab, the petitioner is currently using six rainwater harvesting ponds and two water tanks to save water for use in the cement plant. This act of building storage tanks and ponds shows that water is essential for the running of the cement plant, not to mention that development of the ponds and storage tanks further restricts the recharge and replenishment rate of the aquifer which is to sustain the local habitat including nature, population, subsistence agriculture and help in regaining water supply levels for Katas Raj Temple Pond. We also notice that building such ponds and storage tanks (a water management project) required an Initial Environmental Examination (IEE)/Environment Impact Assessment (EIA), which does not appear to have been done, casting doubts on legal sustainability of these ponds and storage tanks in the Negative Area. Recourse to alternative source of water by the petitioner company clearly establishes that use of water is an indispensible requirement for running a cement plant. Additionally , the petitioner claimed that it was not given the opportu nity of hearing before the issuance of the Notification. We, however , see that the Consultants had arranged a Stakeholders Consultation Meeting with cement companies. Three officials of the petitioner participated in the said meeting and their names and signatures are visible in the report. Besides, we need to look beyond limestone, clay and other minerals to appreciate the, value of the stretch of land, called the Salt Range, whose charm has captivated pilgrims, travelers and emperors since olden days. The picturesque region rich in biodiversity , and historical and sociocultural heritage is a national asset of timeless magnificence. Precautionary Principle, In Dubio Pro Natura and Environmental Legal Personhood 16. The facts of the case brought before us through various technical reports of the Government and its consultants (referred to above) show that there are serious threats to environment in the Negative Area, especially to the underground water aquifer that needs to be first recharged before any sustainable development in the area can take place. Negative area in other words means an environmentally fragile area, which is a vulnerable natural20 21 22 23 24 25 26
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habitat and needs care and protection, till it I recovers, if at all. Enlargement of an existing cement plant in a negative area attracts the well-established principle of international environmental law called the Precautionary Principle, reflected in Principle 10 of the Rio Declaration, 1992. The principle provides; "where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost- effective measures to prevent environmental degradation." Another emerging environmental principle declared as Principle 5 of the IUCN World Declaration on the Environmental Rule of Law (2016) is in dubio pro natura i.e. "in cases of doubt, all matters before courts, administrative agencies, and other decision-makers shall be resolved in a way most likely to favour the protection and conservation of the environment, with preference to be given to alternatives that are least harmful to the environment. Actions shall not be undertaken when their potential adverse impacts on the environment are disproportionate or excessive in relation to the benefits derived therefrom." In the facts of the case, the Provincial Government was obliged to take a precautionary approach and act in-line with the principle of in dubio pro natura, till, inter alia,' a detailed hydrogeological study assessing the potential of groundwater resources for industrial purposes of the project area is carried out. This approach is also constitutionally compliant as the courts are to protect the fundamental rights of the public and in this case right to life, sustainability and dignity of the community surrounding the project remains paramount till such time that the Government is of the view that the project has no adverse environmental effects. Also, the environment needs to be protected in its own right. There is more to protecting nature than a human centered rights regime. We see elements of personhood have now been ascribed to nature by legislatures and courts around the world. The approach of personifying the environment in order to protect and preserve nature and its objects is one of the latest evolutions in environmental law. Man and his environment…
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