Environmental Relief Fund

By : Neha Dhyani

Updated : Apr 19, 2022, 6:02

The Environment Relief Fund is a specialised sort of fund established by the Ministry of the Environment to compensate persons who have been harmed by hazardous substance handling or working in a dangerous environment. Under the Public Liability Act of 1991 (PLIA), the Environment Relief Fund (ERF) was formed to give urgent relief to victims of hazardous material incidents.

The PLIA, based on the principle of no-fault responsibility and in reaction to the Supreme Court of India's judgments on absolute liability in M.C. Mehta v Union of India, 1987, makes public liability insurance mandatory for enterprises working with hazardous substances. The ERF is made up of compensation given by the National Green Tribunal (NGT) for environmental damage under Section 24 of the NGT Act, 2010. It also includes contributions from hazardous companies that choose for insurance under the PLIA.

Environmental Relief Fund Need

Following the Bhopal Gas Tragedy of December 2, 1984, the Government of India approved the Processing of Claims Act 1985 on March 29, 1985, to expedite the resolution of claims resulting from or related to the Bhopal gas leak tragedy. The Act's constitutional legality was questioned at the Supreme Court.

While deciding the case on December 22, 1989, the Supreme Court emphasised the necessity for new legislation to ensure the prompt payment of compensation to industrial victims and the establishment of an industrial catastrophe fund.

The Court also proposed the legislation's broad dimensions. As a result, it was thought that a stricter no-fault liability fund should be formed.

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Current Status of Environmental Relief Fund

Since its inception in November 2008, the Environment Relief Fund has increased from Rs 283 crores to Rs 810 crores by March 2019.

Until 2018-19, different general insurance firms contributed a total of Rs 3,74,89,95,487.

New India Assurance (26.8%), United India Insurance (22.5%), Oriental Insurance (18.3%), National Insurance (16.7%), and Tata AIG (16.7%) are the top five cumulative donors to the fund (3.3 per cent). Contributions made in response to compensation or relief granted by the National Green Tribunal are not properly recorded. They are only shown in the fund's statement of accounts under "Others" from 2012-13.

Challenges of Environmental Relief Fund

The National Green Tribunal has criticised the Ministry of Environment and Forests (MoEF) for not allocating more than Rs 800 crore to the Environment Relief Fund for victims of hazardous material incidents.

Rs 881 crore has been placed with United India Insurance Company Ltd, the Fund Manager, till March 31, 2020, but no information on whether any of the funds have been used. Even after 29 years of admirable welfare legislation, despite the deposit of a large sum of money intended for needy victims, the money remains unutilised, to the disadvantage of the victims for whom the law was designed.

The Environmental Relief Fund is a very important fund that aims at providing assistance to those who are impacted by any kind of environmental damage. You should know everything about it as the topic is quite important from the exam's perspective.

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FAQs on Environmental Relief Fund

Q.1. How much has the Environmental Relief Fund grown in the last ten years?

The Environmental Relief Fund has grown from Rs. 283 Crores to Rs. 810 Crores in the last ten years.

Q.2. Under which Act was the Environment Relief Fund established?

The Environment Relief Fund was established under the Public Liability Act of 1991.

Q.3. After which tragedy did the Environment Relief Fund come into the picture?

The Environment Relief Fund came into the picture after the Bhopal Gas Tragedy.

Q.4. What is Environment Relief Fund?

The Environment Relief Fund (ERF) was established under the Public Liability Act, 1991 to provide immediate relief to victims of accidents involving hazardous substances.