Maruti Suzuki asked to halt construction of new R&D unit

The Government of Haryana has asked Maruti Suzuki to halt the construction of an upcoming R&D facility at Rohtak. The new facility, which was a Rs. 3,500 crore project, was to be the first unit built by Suzuki Motor Corporation, Japan to develop and test cars for India and global markets. It was to be built over an area of 600 acres and expected to be operational by next year.

The state Government claims that the country's largest carmaker in terms of sales did not obtain the necessary environmental clearance before beginning the construction work on the facility. The previous Government of India had introduced a policy, which makes it mandatory for companies to seek environmental clearance for construction of any facility greater than 20,000 sq. ft. in size.

On August 9 at a meeting held by the PMO industry leaders present at the meeting had stressed that the requirement constitutes a misinterpretation of a clause from the environmental impact assessment (EIA) rules of 2006, which were aimed at keeping a check on residential building projects. Top government law officers have earlier opined that this clearance is not necessary in the case of industrial projects. The implication of the rule would mean that even a medium-size unit being built over six acres of land would need a prior environmental clearance before commencing construction. This introduces an additional delay of at least 18 months for investments. This had led to confusion in the understanding of the policy.

Maruti Suzuki has been obtaining the necessary clearances for air and water pollution and hazardous waste. It had forwarded an application for environmental clearance for the construction in February 2013 even though it was not convinced about the requirement of this clearance. The company went ahead with the construction of the new facility and in March 2014, the state government decided to initiate action against it under the Environment Protection Act of 1986 for commencing construction without obtaining clearance.

In May 2014, the Delhi High Court directed the Government of Haryana not to initiate any criminal action against Maruti Suzuki. The High Court also directed the company to obtain a post-facto environmental clearance for the construction of the project. The Haryana State Environmental Impact Assessment Authority has filed an appeal against this verdict and as a decision on the appeal is yet to be pronounced, Maruti has been asked to stop all construction or operational activity.

Source: Economic Times