- The environment ministry has notified the Environmental Audit Rules, which introduces independent auditors into India’s environmental monitoring framework.
- A new Environment Audit Designated Agency will oversee auditor certification and performance, but experts warn the system’s effectiveness depends on ensuring auditors’ independence and avoiding conflicts of interest.
- While auditors can report violations, enforcement remains a challenge as Pollution Control Boards have limited capacity to penalise offenders.
The Indian government is introducing independent auditors to India’s environmental monitoring framework, in an effort to “bridge the manpower and infrastructure deficits” faced by regulatory authorities.
The principal bodies in charge of monitoring compliance with environmental laws and regulations are the State and Central Pollution Control Boards and Pollution Control Committees. Formed under India’s water and air pollution laws, the PCBs are tasked with assessing, inspecting, and evaluating pollution sources against existing norms.
However, vacancies in technical posts and inefficient fund management have hampered the ability of Pollution Control Boards to carry out their duties. Out of 11,562 sanctioned posts in the State Pollution Control Boards, 5,671 remain vacant, the government revealed in Parliament in March. The reason for high vacancies is a combination of requiring government approval for recruitment, no suitable candidates or lack of applications, the central government said, adding that it had “reminded” state and union authorities to “fill the vacancies at the earliest.”
The Union Environment Ministry notified the Environmental Audit Rules 2025 to “supplement” the efforts of regulatory authorities. Qualifying auditors can be hired to carry out inspections by the SPCBs and PCCs, or by industries for self-compliance purposes. However, the independence of the qualifying auditors will determine the scheme’s integrity, experts say.
Contours of the scheme
The scheme establishes an Environment Audit Designated Agency (EADA) which is tasked with identifying qualifying auditors, certifying and registering them, and monitoring their performance. Registered auditors are certified based on prior experience and expertise, called Recognition of Prior Learning (RPL) or by sitting for a National Certification Examination (NCE).
Auditors, once certified, are empowered to do environmental audits of projects, activities, and processes under a range of environmental laws. The new framework enables auditors to conduct sampling and analysis of emissions effluents, and wastes, evaluate the effectiveness of pollution control and waste management systems, report all violations, and compute environmental compensation whenever required.
Auditors are also empowered to check the conditions under which to grant industries consent to operate, as well as whether conditions stipulated in environmental clearance for projects are being met with.
Bodies in charge of controlling pollution have failed to regularly check emissions and other norms. Out of 268 highly polluting industrial units that were inspected by the Central Pollution Control Board last year, 129 were found to be non-compliant. Apart from monitoring emissions and effluents, auditors are also empowered to check compliances under new regulations, including for generating Green Credits and awarding products with the Ecomark certification.
“The effectiveness of this measure will depend on how strict and independent the Environment Audit Designated Agency is,” said Debadityo Sinha, lead, climate and ecosystems, at Vidhi Legal. Auditors can be hired by project proponents or assigned by government authorities to carry out monitoring, the new rules say. “This new framework creates an industry of auditors, and if the Environment Audit Designated Agency is not kept independent, it risks becoming pliant to industry or government pressures,” he added.
The introduction of external auditors comes at a time when several environmental norms are being relaxed to favour the “ease of doing business.” The government recently scrapped the mandatory installation of flue gas desulphurisation (FGD) technologies in thermal power plants, which curb toxic sulphur emissions.
Earlier this year, the government changed regulations to give polluting industries an opportunity to “move down” the pollution index if they adopted cleaner fuels and reduced pollution loads, with some of the incentives including reduced checks for compliance.
Preventing conflicts of interest
Several state governments have experimented with outsourcing monitoring work to third party auditors. Research on the state of pollution control boards in the Indo Gangetic Plain – the most polluted belt in India – found that industries often hired their own auditors to demonstrate compliances, in order to obtain requisite permits, because the SPCBs didn’t have the capacity to carry out their own checks. Issuing permits like consent to operate are the biggest revenue sources for several pollution boards, creating the potential for conflict of interest.
The tendency for independent auditors to report inaccurate data was made clear in another 2011 study in Gujarat – the first state to formally rely on independent auditors to check monitoring and compliance. The Gujarat government introduced its own environmental audit scheme in 1997, after the Gujarat High Court made it mandatory for external auditors to check environmental compliances.
A field-based, randomised control trial by economists from J-PAL found that 29% of reports from auditors hired by and directly paid for by industry falsely reported pollution as being below the regulatory standard. These auditors also reported that 7% of plants violated particulate matter emissions standards, when back-checks revealed the true extent of violation to cover 59% of plants.
By comparison, auditors that were randomly assigned to monitor compliance and were paid from a common pooled resource reported pollution levels more truthfully and substantially. The Gujarat government eventually acted on the study’s findings and modified the design of its auditing scheme to reduce potential conflicts of interest.
The centrally notified Environmental Audit Rules 2025 don’t mention conflict of interest arising from payment methods, only stating that payment and fees “shall be subject to any guidelines issued by the Central Government.”
The rules do, however, specify that auditors should not have any relationships with the industries they are auditing, financial or otherwise, or have a history of providing other services to the industry (apart from independent audits).
Empowering pollution control boards
Ashok Kumar Ghosh, former chairman of the Bihar Pollution Control Board, told Mongabay India that while human resources are a severe constraint, for Pollution Control Boards to be truly effective, they must be empowered to enforce environmental norms as well. “Even if auditors are able to provide information about violations, ultimately it’s the pollution control authorities that will need to do something about it,” he said.
The powers of the PCBs are ambiguous when it comes to penalising violations. Pollution control bodies often have to rely on other authorities to carry out closures and exact environmental compensation, which Ghosh said can lead to delays or lack of enforcement.
In an order delivered last month, the Supreme Court ruled that pollution control boards had the power to impose restitutionary and compensatory damages for environmental harm.
Banner image: Workers install metal mesh sheets on the banks of Bellundur Lake to prevent industrial pollution from spilling on to the road in Bangalore. (AP Photo/Aijaz Rahi)
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