The situation was tense in Digwal village on October 4, 2018. The stage was set for a public hearing on the expansion plans of Piramal Enterprises, which has a 100-acre pharma facility in the village located in the Sangareddy district of Telangana.
But this was unlike other public hearings. There are several barricades, with locals being made to sit at least 10-20 feet away from the stage. Over 100 police personnel guard the venue. Piramal knew that there would be trouble. And there was. The hearing hardly began when locals, holding placards, started shouting slogans against Piramal’s expansion plans – “Piramal down down, collector down down, DCP down down.”
Their placards read: “Don’t we have any rights over our air, water, soil?”, “Stop pollution, save the planet” and “We are human beings, allow us to live on earth.”
The immense anger among the locals was clearly visible. Piramal Enterprises set up its facility in Digwal nearly 25 years ago. And ever since the factory came up, locals allege that the company has been polluting their air, water and soil. They claim that Piramal releases polluted discharge into the soil, contaminating their groundwater.
“I have an acre of land where I grow ginger and potatoes. But my produce has been severely affected due to the pollution. Since I handle the pump every day to irrigate the land, I have got skin rashes and boils due to the polluted water. Consuming the polluted water has given me heart ailments. I’m being forced to spend money to buy bottled water every day,” says Ramulu, a farmer from Digwal.
This is just one of the stories of hundreds of residents who have been facing problems, allegedly due to the pharma facility. And it’s not just Digwal. The district of Sangareddy is dotted with pharma facilities. Companies such as Piramal, Everest Organics, Aurobindo Pharma and MSN Laboratories have manufacturing facilities here. Ask any resident of villages in the district around these factories and they have a story to tell about the pollution.
Telangana as a pharma hub
Telangana’s association with the pharmaceutical industry began with the Indian Drugs and Pharmaceuticals Limited (IDPL), a public sector undertaking (PSU), being set up in Hyderabad in the 1960s to produce bulk drugs at low costs for the poor.
According to Prof K Purushotham Reddy, a noted activist who used to head the Department of Political Science in Osmania University, several scientists and technical experts working with IDPL began moving away and setting up pharmaceutical companies by themselves during this time. The laws in erstwhile Andhra Pradesh also facilitated setting up of industries by technical experts.
Moreover, in 1980, Indira Gandhi contested from Medak and went on to become the Prime Minister of India. With that, Medak became an attractive destination for entrepreneurs to set up industries in the area.
“Even in the Patancheru to Zaheerabad stretch and Hyderabad to Medak stretch, the government allowed entrepreneurs to buy lands to set up industries. There was no public hearing in those days. Sanctions too were given in a hushed manner, creating room for violation of laws pertaining to environmental pollution,” Prof Reddy states.
Cut to now.
According to the Industrial Policy of Telangana, the state has emerged as the pharma capital of the country, contributing to about one-third of the pharmaceutical production in India. As per the policy, one-third of the US FDA approved facilities and one-tenth of the medicines exported to the US are from Telangana. One in every five vaccines exported from India is manufactured in Hyderabad.
The TRS government has also been aggressively pushing to make the state a pharma and life sciences hub, with the state’s industries and commerce minister KT Rama Rao at the forefront.
In fact, the TRS government is in the process of building a 19,000-acre ‘Pharma City’ in Ranga Reddy district, which aims to be the largest in Asia. Through Pharma City, the government wants to make Hyderabad the destination for companies manufacturing bulk drugs.
This has been further boosted by the launch of the Telangana State Industrial Project and Self-Certification System (TS-iPASS) in 2015, through which the state government has approved around 700 investment proposals, most of them in the pharma and life sciences sector. Every new company that will be set up will enjoy the benefits of TS-iPass, which the government is betting on for ease of doing business and quick clearance processes.
TS-iPASS – Telangana’s ticket to attract investments
TS-iPASS is the TRS government’s flagship initiative, which has also fetched awards for the state. The TS-iPASS Act was passed in 2014 to facilitate speedy processing of applications to issue various clearances required for setting up of industries. Through TS-iPASS, this is done at a single point based on the self-certification provided by the entrepreneur.
Every department that is involved in establishing and operating an enterprise comes under the purview of TS-iPASS.
TS-iPASS sets time limits of approvals under each department ranging from a day to a maximum of 30 days. Under this, failing to grant approvals in the stipulated timeframe leads to an automatic approval given to the enterprise based on its self-certification. Applications for approvals from all departments are verified and processed online.
In February this year, speaking to reporters, KTR said, “Unlike other places, we don’t have multiple windows behind a single-window. Our system ensures that there are no grills in the window, ensuring a seamless approval process avoiding any room for delay and corruption. Our system is so stringent that any official responsible for a delay in issuing clearances beyond 15 days is punished with a daily fine till the clearance is given to a project, to ensure there are no bottlenecks.”
Speaking to TNM, Jayesh Ranjan, Principal Secretary of the Industries & Commerce (I&C) department, said, “The numbers we have achieved through TS-iPASS is amazing. In a year, 8,000 approvals were given and 75% of them have already commenced operations. For a state, these are big numbers. TS-iPASS has brought many companies to the state.”
However, many disagree with this analysis.
Environmental clearances ignored
There are three main laws at the central level that deal with pollution: The Water (Prevention and Control of Pollution) Act of 1974, Air (Prevention and Control of Pollution) Act of 1981 and the Environment Protection Act of 1986.
Speaking to TNM, Dr Narasimha Reddy, an independent policy expert, said, “There are institutional mechanisms that come from these three Acts, along with the Pollution Control Board (PCB) and Environmental impact assessment authority (EIAA) as regulatory bodies. This has been diluted by the Telangana government under the guise of TS-iPASS and ease of doing business rankings.”
“TS-iPASS has completely undermined the existing system. Earlier it was a corrupt system that led to polluting industries being set up in violation of guidelines, but now it has been appropriated officially,” he adds.
Sources in the PCB said that since 2015, with TS iPASS coming into being, it was not exactly compulsory for a field officer to visit as they can digitally and virtually demand for information and ratify permissions. Activists also allege that prior to 2014, PCB physical inspections were mandatory but since TS-iPASS was implemented, they have not been as diligent.
The PCB, on the other hand, has denied these allegations.
Speaking to TNM, Ramesh Gupta from the PCB said, “Before setting up any unit, they first obtain environmental clearance from the Ministry of Environment, Forests and Climate Change (MoEF) at the Centre and the state. Only then can they even apply for the pass.”
“After this, they need a Consent for Establishment (CFE) and a Consent for Operations (CFO) certificate. As far as the PCB’s role in this process is concerned, CFE and CFO applications are received online to ensure that all environmental regulations are being followed. The board’s staff inspect the site after which they submit a report online that is placed before a committee, which takes the final call. There is no way to avoid inspections. The TS-iPASS is just a way to speed up the process,” Gupta claimed.
However, there’s a catch. The Comptroller and Auditor General (CAG) of India in its 2017 report said that there was a ‘lacuna in the design’ of the policy itself, observing that, “The objective of single point approval was not achieved as the software allowed selective approvals.”
This meant that the Telangana government admitted to the CAG that it was issuing approvals only to the extent for which approvals were sought for by the company, instead of all the approvals required.
“Audit scrutiny between March and June 2017 showed that the TS-iPASS software application did not have controls to ensure that all the approvals were applied for. It also did not provide an option to ‘apply later’. The audit noted that only 9% of all entrepreneurs applied for all the approvals,” the CAG said in its report.
Pharma and bulk drugs companies generally fall under the Red Category because of their polluting nature. Data from the Commissioner of Industries that was furnished to the CAG showed that 43% or 63 out of the 148 companies that were established under the Red Category didn’t even apply for PCB clearance.
In the Orange Category, out of 441 companies, 266 companies or 60% didn’t apply for PCB approval.
Stating that the value of prescribed fees for these approvals that were not sought was Rs 9.57 crore, the CAG also said that 97% of the companies in this time period did not even apply for clearance from the Fire Department, thereby potentially violating fire safety norms.
“There was no mechanism to ensure whether the 1,764 units that applied for partial approvals had thereafter established units and commenced operations. There is a risk of such units starting operations even without all necessary approvals,” the CAG noted.
However, responding to the findings in the report, Jayesh Ranjan said that it was not entirely true that companies commenced operations without receiving approvals. “If a company decides to operate without a clearance, they will go bankrupt. The government will shut down any highly polluting company. And they will not take that risk since the government will not allow them to operate that way,” he said.
Jayesh further said that while the CAG report states that companies didn’t take all necessary approvals, the government norm is that when they commence operations, they need to have every approval in place. “From the time they get approval to set up an industry and buy the land, it takes a minimum of six months for construction and for operations to begin. It is during this time that they get all the remaining required approvals. The government will not allow a company to operate without all approvals in place,” he added.
Symptomatic of a larger problem
The problem is far from new, as various reports have been reiterating that united Andhra Pradesh and, more recently, Telangana is heading towards a disaster if it does not keep a tab on polluting pharma industries. The criticism, however, has largely been falling on deaf ears.
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In a paper published recently, Prof Prabha Panth from Osmania University analysed the New Industrial Policy of Telangana and observed, “The main thrust of industrial development in the new state of Telangana seems to be the establishment of more Red industries… Red industries are being proposed to be set up in the most polluted districts of the State, which will only worsen industrial pollution therein. The greater preference given to establishment of more Red industries will only serve to exacerbate the industrial pollution impacts and ecological destruction in the state.”
Stating that it was in contravention of the rules of the MoEF because granting environmental clearance itself was a long process, the paper stated, “By hastening the environmental clearance, there is every scope of diluting environmental standards, pollution treatment, and control. With the bulk of new industries belonging to the Red category, and with the low level of industrial compliance, such a move will spell environmental disaster.”
“Cleaning up after the event is useless, as most of the pollution impacts are irreversible,” the paper said in its conclusion.
“The main question one has to ask is, why do pharma companies prefer Telangana over most other places in the world? That itself gives us a fair idea of how easily environmental norms can be violated,” Narasimha Reddy says.
Prof Reddy says, “The balance of power has shifted in favour of corporates, and political elites have started serving those interests. In Telangana, the government talks about ‘ease of doing business’, but what does this mean? What about the ease of making a poor man’s life better? They don’t take the environment into consideration.”
With the TRS government going full throttle in boosting the pharma and life sciences sector in the state and TS-iPASS being the enabler for that, hundreds of new companies are expected to set up shop in Telangana.
Pollution is already choking villages around existing factories since even before the formation of Telangana. Activists and locals fear that implementation of policies like the TS-iPASS will only make their lives worse.