enter -The green rating project

Indian industry is huge. But most environmentalists believe it has done little to reduce pollution, which will only rise as the economy grows. The Centre for Science and Environment has launched a Green Rating Project to assess the industry's environmental performance. As a pilot project, the pulp and paper industry was chosen because of its impact on the environment, including natural forests. Voluntary disclosure by the companies on their environmental performance is the hallmark of the project

Indian industry is huge and powerful. Most environmentalists believe that it has done little to reduce pollution. Is there, therefore, anything that the civil society can do to change the situation? I am delighted to present to the readers of Down to Earth ( dte ) the results of an exercise carried out by the Centre for Science and Environment ( cse ) to rate the environmental performance of Indian companies, which we hope will go a long way in bringing about adequate public pressure on the companies as well as the regulatory and financial agencies to take better care of the environment.

This exercise started nearly four-and-a-half years ago. During a visit to the United States, I had come across a magazine which had carried a feature on a non-governmental organisation ( ngo ) called the Council of Economic Priorities ( cep ) based in New York. A key activity of cep , the article said, was to rate the social and environmental performance of us companies. As several us businesspersons now want to invest only in socially-responsible and environment-friendly companies, cep 's ratings are used by financial companies handling these investments to decide which units meet these criteria.

This sounded like an interesting idea even for India where little is known about the environmental performance of industrial firms. I, therefore, asked my colleagues at cse to study the possibility of undertaking an environmental rating programme for Indian companies. A paper was prepared which showed that a large part of the funds for industrial investment come from government financial institutions instead of the stock-market unlike the us . As government agencies are duty-bound to protect the environment, whereas the stock market has no such responsibility, one would expect these agencies to be interested in the environmental ratings of the firms they invest in. Many meetings were held, which included eminent economists like Dr Raja Chelliah. All participants heartily endorsed the concept, but we still had to work out the strategy and rating methodology, all of which looked extremely daunting. It was clear that if the rating exercise meant a detailed environmental audit of each company before it was rated, then the exercise would be so monumental and time-consuming that it would become an almost impossible exercise.

A key activity of cep , the article said, was to rate the social and environmental performance of us companies. As several us businesspersons now want to invest only in socially-responsible and environment-friendly companies, cep 's ratings are used by financial companies handling these investments to decide which units meet these criteria.

This sounded like an interesting idea even for India where little is known about the environmental performance of industrial firms. I, therefore, asked my colleagues at cse to study the possibility of undertaking an environmental rating programme for Indian companies. A paper was prepared which showed that a large part of the funds for industrial investment come from government financial institutions instead of the stock-market unlike the us . As government agencies are duty-bound to protect the environment, whereas the stock market has no such responsibility, one would expect these agencies to be interested in the environmental ratings of the firms they invest in. Many meetings were held, which included eminent economists like Dr Raja Chelliah. All participants heartily endorsed the concept, but we still had to work out the strategy and rating methodology, all of which looked extremely daunting. It was clear that if the rating exercise meant a detailed environmental audit of each company before it was rated, then the exercise would be so monumental and time-consuming that it would become an almost impossible exercise.

Soon thereafter, my cancer recurred and I had to go back to the research hospital in Washington, where I had been treated earlier. On one of those days when I was out of the hospital and not feeling down and out, I decided to find out cep 's phone number and then sent a fax to the head of cep saying that I would like to see her, if possible, in New York to seek her help for setting up an environmental rating programme in India. Within a few hours, I got a return fax from an excited young man named Paul Hilton who had read my earlier writings on forestry and who would even be happy to take leave and come to India to help me set up the programme. I was really surprised. How does somebody who works with the Wall Street? Curious, I picked up the phone and spoke to Paul and it turned out that he was a young anthropologist who had once worked with an ngo in Udaipur called Astha and had read cse 's publications on Indian tribals and their relationship with their environment. I explained to Paul that we needed help from someone who could work out an rating process for us. "I will do anything to come and help," said Paul with a sense of excitement that was truly infectious. I immediately sent a message to cse in to start putting together a small team with which Paul could work on his arrival in Delhi. After my treatment ended, about six months later, Paul took leave from his organisation, at the risk of losing his job, to join us in Delhi.

Weighing the options
But talking to Paul, we soon realised that it was not possible for us to adopt the cep strategy. cep simply uses the Toxics Releases Inventory, a database carefully maintained by the United States Environment Protection Agency ( usepa ), which has year-wise information on the wastes and emissions of companies and is openly accessible. Once this data is available, it is easy to set up benchmarks and rate accordingly. In India, the Central government does not maintain such a centralised database and even the data that it has on companies, is not easily available to the public.

Moreover, we felt that even if we went to the courts to seek access to the data available with the government and undertook a rating exercise on the basis of this data, the environmental community would simply laugh at us because there is little credibility in the data being supplied to the government. As many companies do not meet air and water standards, for which they can be prosecuted and even closed down, there is a tendency to report false data. Even if the companies report correct data, nobody believes them. This is totally contrary to the credibility enjoyed by usepa 's Toxics Releases Inventory.

This realisation totally stumped us. Undertaking an environmental rating exercise in India literally meant creating a new database on Indian companies. How were we to attempt such a massive task, especially one which was cost-effective and manageable by an ngo ? Then a thought struck us. Why don't we go to the companies themselves and ask for data on their environmental performance, get the data reviewed by technical experts and then further assessed through field visits which would include discussions with the local pollution control boards, local communities, ngo s and the media?

Carrot and stick policy
But why would companies be prepared to cooperate with this exercise? Our argument was simple. Let us not mix apples and oranges. In other words, let us not rate automobile companies together with paper companies. Let us rate one sector at a time. And within any sector, we felt that there would always be some firms which are making an effort and they would have an incentive to seek a public pat on their back. This itself will separate the good ones from the bad.

In order to push this 'reputational incentive' further, we decided to use the carrot and stick policy. The stick was a 'default option' under which we would automatically rate any company which does not disclose information as the worst company. The logic being that whereas a company can legitimately argue that its financial dealings are its private business, its environmental impact is a public matter simply because the environment belongs to the public. Therefore, non-disclosure of its environmental is just not acceptable. This argument is also supported by global trends. More than 1,000 companies in the West voluntarily publish an annual environmental report. So voluntary disclosure in the case of environment is today an accepted business practice. The carrot, on the other hand, we thought could be a certain weightage in the ratings given to companies who are trying to make a difference. In other words, let us begin by assuming that all Indian companies have been performing badly on the environmental front -- partly because of inadequate enforcement of Indian laws and partly because political and industrial leaders have not considered pollution control to be a serious issue. But if a company can convince us that it is making an effort to set up good environmental management policies to bring about a change in its current environmental performance, then we would respect that effort and give it a certain weightage. Over time, this weightage would be reduced and full weightage given only to actual environmental performance.

The groundwork
Though we had a sense that this approach would make the rating exercise feasible, we still had a nagging doubt whether it would actually work. So the Green Rating Project ( grp ) team, as it was now called, decided to meet industrial associations, senior executives of a few companies and write off letters to more than 1,250 companies asking whether they would like to participate in such an exercise. The response was excellent.

Nearly 55 companies responded expressing an interest. Though only about four per cent of the companies agreed to join the project voluntarily, the interesting fact was that most of these 55 companies were market leaders in their industrial sector.

This was very encouraging since companies which drive the market were now supporting cse to increase the environmental concern within the industrial sector. Our belief was, thus, confirmed. There will always be some who would come forward to get the benefit of the 'reputational incentive' offered by the rating process. And this was a good starting point for the rating exercise.

A good start
The discussions that the cse team had with various people also opened up a window for financial support. The staff of the United Nations Development Programme ( undp ), which was then formulating a new cycle of environmental assistance to India, found the project very exciting and offered to provide funds for it. Subsequently, the ministry of finance ordered the undp that it could not give any funds directly to ngo s and that its funds had to be routed through the substantive ministries. The ministry of environment and forests, too, gave full support to the project.

Meanwhile, in order to give high credibility to the exercise, we approached senior politicians, scientists, lawyers and judges, journalists, and members of the environmental community to support the project by participating in the Project Advisory Panel. Former finance minister, Dr Manmohan Singh, gave us his full support and graciously agreed to chair the panel. The former Union minister of environment and forests, Mr Saifuddin Soz, also agreed to join the panel together with the former Chief Justice of India, Justice P N Bhagwati, and eminent agricultural scientist Dr M S Swaminathan.

With all this in place, we decided to choose as pilot projects, those industries which would have environmental impacts at different stages of their product life cycle -- first the pulp and paper industry because of its impacts mainly at the raw material and production stages and then the automobile industry because of its impacts mainly at the product use stage.

Setting up the network
When it came to organising actual visits to the plants we were faced with a major logistical and financial problem. India is a large country. The large companies in the pulp and paper sector alone have 31 plants spread across 13 states. If cse staff members were to visit all these plants, it would take an enormous time and effort. This is where we decided to make the rating process as participatory as possible by involving dte readers. dte readers have some extraordinary strengths. dte is neither a film magazine nor a magazine about political scams. Every single dte reader is a serious and intelligent person. Moreover, dte 's readership, though tiny by mainstream media standards, reaches out to more nooks and corners of this country than any magazine or newspaper except possibly India Today . dte today has readers all the way from Ukhrul in Manipur to Kasaragod in Kerala. Therefore, we decided to put out a notice in dte that we were setting up a Green Rating Network and invited them to join. The job involved visiting a plant within the state where the reader lived, after being properly briefed, and interviewing and collecting data from pollution control officials, local communities, ngo s and media. The work would probably take about a week or more. We would cover the travel costs but the honorarium would be a mere Rs 1,000. Over 200 people responded. We asked for their biodatas and found we had a treasure of serious and interested people here who wanted to contribute to the environmental effort. The respondents included journalists, doctors, engineers, even some pollution control officials, social workers and so on.

Settling doubts
It was amazing that this entire effort took only one but extremely hard-working young man, Chandra Bhushan, to carry out the entire exercise. He did get the support of the full institution but for long had only interns to help him directly in his work. The three-member technical panel consisting of leading paper technologists also played a key role in assessing all the data provided by companies. During the entire process, something totally unexpected happened. The pulp and paper sector is a highly polluting sector and, therefore, has a lot to hide. But contrary to all our expectations literally every private company slowly joined the exercise. Even the two public sector companies -- Mysore Paper Mills in Karnataka and Tamil Nadu Papers Limited -- that were missing till about a fortnight before the release of the ratings decided to share information with us.

The private sector has responded with considerable openness to this entire exercise. A few months ago, as we were nearing the end of the exercise, Chandra Bhushan came to me and said that Ballarpur Industries Ltd., the largest paper company in the country, had not yet responded despite several reminders. So should we apply the 'default option' to them -- in other words, will we rate them the last because of non-disclosure? I said that as a last effort we should write to Mr L M Thapar, the head of the company. We could not believe it. Our letter to him brought an almost immediate response. Within days, the company's officials were in touch with us asking us for our questionnaire and giving us the information needed by us.

Will theywon't they?
Within cse , there has always been a debate on how industry will respond to grp when cse also has campaigns against pulp and paper companies being given access to public forest lands for plantations and against automobile companies for neglecting pollution and public health implications of their vehicles. For some time, even the grp team was unsure how companies would look at the institution -- one arm of which was attacking their interests and another arm of which was going to rate them for their work? Would they see grp as an unbiased exercise and, therefore, collaborate with it or would they shy away from it?

I, too, had persistent doubts. But I must say that I am by now amazed by the response of the private sector. Let me give an example. Readers of dte are aware of the Rs 100 crore legal notice that was sent to us by telco , one of India's leading automobile companies, against an article that was written by my colleague, Sunita Narain, and me ( Down To Earth , Vol 8, No 1 and No 4). And we also have a campaign against the dieselisation of private vehicles which can seriously damage telco 's investments. Exactly at the same time when Sunita and I were telling the press that we would love to see the company in court, our colleague, Chandra Bhushan, was getting in touch with automobile companies, including telco , to start the rating process for this sector. telco officials had a year or so ago expressed an interest in participating in the exercise. But now they were telling Chandra Bhushan that given the current tensions between cse and telco this would be quite difficult.

Chandra Bhushan was unhappy but it was not to be for long. At the height of our campaign against diesel vehicles, we got a letter from Mr V M Raval, executive director, automobile business unit, saying that his company would be happy to join the rating exercise. And added, "We welcome the initiative taken by your organisation and confirm that we would join your green rating programme for the automobile industry. We would provide you with whatever information that may be required to the best of our ability and support you in your endeavour to improve the environmental performance of the industry, and the nation as a whole." We could not believe it. This was truly a surprise. And a very pleasant one.

In India's interest
If the GRP has convinced me of anything, once again, it is that India's biggest strength is its democracy. It gives its people the chance to organise themselves, protest, push, create and change. Economic liberalisation and privatisation need not do any environmental damage if adequate space and support is given to the civil society to act as a powerful and knowledgeable watchdog. This is what democracy is all about: checks and balances.If the GRP has convinced me of anything, once again, it is that India's biggest strength is its democracy. It gives its people the chance to organise themselves, protest, push, create and change. Economic liberalisation and privatisation need not do any environmental damage if adequate space and support is given to the civil society to act as a powerful and knowledgeable watchdog. This is what democracy is all about: checks and balances.

If grp continues, I am convinced it will not only help to improve environmental governance in the country by introducing transparency into the environmental performance of Indian companies and put public pressure on them to constantly upgrade their work in this area but it will also go a long way in lifting the environmental concern within the companies themselves right to the top. grp will make industrial leaders realise that environmental compliance should not be restricted to meeting government norms but can actually become a proactive exercise in which official norms constitute only the minimum effort.

Our experience in rating the pulp and paper sector has shown that many firms have found it an extremely useful educational exercise. "We happily welcome the public announcement to be made by cse on the paper industry's environmental record," said Suresh Kilam, chief executive officer, Sinar Mas-India.

This is not new. Paul had also told us that even in the us , cep 's rating scheme had both helped raise environmental concern to the top-level management where the most vital decisions are taken and helped to get a better picture of what is expected from it in terms of environmental management.

In a country like India, it is in the industry's own interest to take a proactive role in environmental management. India is just beginning to industrialise, urbanise and motorise and yet it is already heavily polluted. We will see incredible levels of pollution in the years to come unless serious efforts are made to prevent it (see Down to Earth , Vol 7, No 17). If pollution grows, there will be public protests, given the space Indian democracy provides, and either the politicians or the courts will have to respond. In such a situation, it is industrialists who are likely to find their investments most threatened. Judicial activism, community and ngo protests are already beginning to bite. And, therefore, in a sense, industrial leaders' eagerness to cooperate with grp should not be surprising. But the expression of that eagerness in the form of voluntary participation in grp has pleasantly surprised us.

The following pages present some of our key findings on the environmental performance of the country's pulp and paper industry. We hope our readers will share our excitement with this project.

-- Anil Agarwal

For assessing actual environmental performance, cse decided to use the broader Life Cycle Analysis ( lca ) approach instead of the more restricted Environmental Impact Assessment ( eia ) approach used by the government to clear projects. The eia approach only assesses environmental impacts at the production site whereas the lca approach assesses the full environmental impact of a product, which is also called the 'cradle-to-grave' analysis. It includes the environmental impact of the raw materials obtained for making a product (the impact on forests, for instance, for obtaining wood to make paper), the environmental impact at the production stage (chemicals, for instance, that is used in the pulp-bleaching stage) and then the environmental impacts at the time the product is being used and is being disposed off (whether the company recycles wastepaper). A combination of all these factors gives the rating a more holistic image, in tune with the ground reality. Thus, the rating of the actual environmental performance is comprehensive (See diagram: Cradle-to-grave ).

The approach is simple. At the primary data collection stage, a policy and plant-level questionnaire specific to the pulp and paper industry is prepared to collect information from the company. Simultaneously, secondary data is collected by green inspectors from state pollution control boards about the nature of the plant, production process and waste treatment facilities used and adopted by the companies, perceptions of local communities and non-governmental organisations. Additional information is collected from all possible published sources about the company.

All this data is compiled and analysed by the grp team and presented to the technical panel for consideration and a profile of the company's environmental performance is prepared. This profile is then sent to the companies for their feedback. They can contest any information that is included in the profile but they have to provide cse with adequate information to support their claim. Profiles were also prepared for companies which did not give the grp team any information based on secondary information and plant visits. The 'default option' -- that is, a company which does not voluntarily disclose information is given zero rating -- is applied to these companies.

At the onset of the Green Rating Project, cse set up a project advisory panel ( pap ) comprising industry leaders, judges, research and development experts, policymakers, academicians, environmentalists, journalists and other eminent members of the civil society.

pap was formed to advise, guide and steer the project and give the entire rating process a holistic and credible outlook. It was assumed that the huge and seemingly powerful industry would easily be able to dismiss an ngo 's attempt to assess their environmental performance. Therefore, to give weightage to the entire rating process, eminent people from various walks of life were involved. Their presence gave the project the much-needed credibility.

The pap is to serve as a sounding board for the grp and the ultimate group to clear the ratings.

The pap consists of:

CHAIRPERSON

Dr Manmohan Singh , former Union finance minister

DEPUTY CHAIRPERSONS

Justice P N Bhagwati , former Chief Justice of India

Dr M S Swaminathan, chairperson, M S Swaminathan Research Foundation

MEMBERS

Prof Saifuddin Soz , former Union minister of environment and forests

Professor M K Prasad , Kerala Sastra Sahitya Parishad, Kochi

Father C J Saldanha , director, Centre for Taxonomic Studies, Bangalore

T N Ninan , editor-in-chief, Business Standard

Ashok Parthasarathi , secretary, National Commission on Scheduled Castes and Scheduled Tribes, Government of India

Aloke Mookherjea , director (corporate affairs) Asea Brown-Boveri Limited

Arun Duggal , chief executive officer, Bank of America-India

R Rajamani , former secretary, Government of India

A S Dhillon , general manager, Tata Iron and Steel Company

Rajiv Dubey , managing director, Tata Metaliks Limited

M L Gulrajani , dean, industrial research and development, Indian Institute of Technology-Delhi

A N Jha , senior vice-president, Essar Investments

Sreekant Gupta , associate professor, Delhi School of Economics

Bibek Debroy , economist, Rajiv Gandhi Foundation

V N Das , director (safety, health and environment), Ranbaxy

A competent technical panel is vital for the Green Rating Project. Keeping this in mind, cse selected three leading technologists in the pulp and paper sector to form the Technical Consultants Panel ( tcp ) to help in the rating the industry. The tcp members are:

N J Rao , professor, Institute of Paper Technology, Saharanpur, Uttar Pradesh;

P K Bhattacharya , professor, chemical engineering, Indian Institute of Technology, Kanpur;

T N Chaturvedi , consultant, pulp and paper sector and expert on agrowaste-based small-scale paper industry.

The tcp became a stakeholder in the entire exercise of rating the pulp and paper sector. Besides, by getting involved in grp, they gave the project enormous technical credibility. The basic role of the tcp was to:

l Guide the grp team in preparing questionnaires;

l Review the information supplied by companies and the company profiles prepared by cse and identify the possible lacunae and technical drawbacks;

l Review the work done by cse on overall rating format, criteria and weightages; and

l Guide cse in finalising the ratings.

Despite the fact that the tcp members were consultants to paper companies, they did not fear any reprisals from the companies and went through the data with a fine-tooth comb. They were excited by the project and kept telling the grp team that it will really give the industry a new perspective (see p58: There is no transparency in the Indian paper industry).

In May/June 1997, cse 's grp team released advertisements in Down To Earth inviting professionals, students, non-governmental organisations and other sections of the civil society to become a part of the "Green Rating Network". They would be responsible for collecting data on Indian industries. The rationale behind the setting up of this network was to quell apprehensions raised during the function marking grp 's launch. Participants had doubted cse 's ability to track down, by itself, industries located in every nook and corner of the country. Hence, cse created a countrywide network comprising members of the civil society.

In January 1998, after finishing the conceptual framework for rating the industries, the grp team began its study on the pulp and paper industry to test the feasibility of the green rating methodology. To collect data on 31 paper plants, about 30 green inspectors ( grn volunteers) -- out of 200 applicants -- were shortlisted on the basis of qualifications and proximity to the plants.

Letters were sent to these volunteers and 12 of them agreed to undertake the survey and collect data on the mills. Considering the secrecy adopted by Indian industries and government institutions at the stage of the project, it took a tremendous effort on the part of the grn volunteers to collect the data.

Most of the green inspectors made an exemplary effort. They sent back voluminous details about the plant, including extremely damaging pictures, spent hours and days at pollution control board offices, faced, in many cases, hostile plant managers, and spoke to local non-governmental organisations and local communities, throwing up in many cases contradictions between their perceptions and those of the pollution control board officials.

cse's green inspectors

Anand Bishey, mediaperson with experience and expertise in industrial and economic journalism, Nagpur

P N Udaya Chandra, reader, environment and ecology, S D M College, Karnataka

Ravinder Dhami, sub-divisional officer, Punjab Electricity Board

Vandana Gupta, former cse volunteer

Priya Shah, mediaperson with expertise in scientific journalism, Maharashtra

N P Mahammad, coordinator, Centre for Voluntary Actions and Rural Development, Kerala

Ranjit Prakash, M Phil student, environment and ecology, Jawaharlal Nehru University

Rachna Yadav, environmental activist and eco-journalist, Assam

Dileep Chandan, editor, Assam Bani , Assam

J V Dash, environmental activist and journalist, Orissa

R V Singh, Ph D, biodiversity, New Delhi

Paramjeet Singh, environmental planner, Gujarat

B D Gowda, urban and regional planner and president, Centre for Rural Development, Karnataka.

June-July 1997: The first letter sent to the 28 companies in the pulp and paper sector requesting them to send their annual reports and brief profile. By the end of August 1997, only seven got back to cse with their annual report and only one of them, the West Coast Paper Mills Ltd ( wcpml ), Karnataka, sent its profile.

Few companies even understood the basic purpose of the project. This was proved by the fact that all the reports were sent by chartered accountants. Only in the case of itc -Bhadrachalam Paperboards Ltd, Andhra Pradesh, it was sent by the vice-president (plantations).

November-December 1997: cse sent a formal invitation along with questionnaires to the companies requesting them to voluntarily disclose their performance. But out of the 28 companies, only Hindustan Newsprints Ltd, Kerala, voluntarily disclosed information.

April-October 1998: Since the response from the companies was very poor, cse was left with few options, one of which was to undertake a survey and data collection exercise on its own. By October 1997, the Green Rating Network was established comprising volunteers from all over the country to undertake the exercise on behalf of cse . During this period a strong link was established with a majority of the companies and, by the end of October 1998, a substantial amount of data was collected. However, even during this phase, only 14 companies disclosed information to cse .

January-April 1999: By mid-January, the draft environment profile of all thecompanies was sent to them for their feedback. The response was amazing. Immediately after receiving the draft profiles, all the companies got back to cse with their response.

With a score of 42.75 per cent, J K Paper Mills takes the lead in environmental performance, followed by Andhra Pradesh Paper Mills Ltd with 38.50 per cent. Both these mills have been given three leaves rating. The best company would have received five leaves rating, but sadly no one deserved it. At least, not yet. Mukerian Paper Mills and Amrit Paper Mills are the tailenders but with a neck and neck race between the poor performers.

COMPANY	SCORE	RANK	RATING
J K Paper Mills, Orissa	42.75	1
Andhra Pradesh Paper Mills Ltd, Andhra Pradesh	38.50	2
Sinar Mas Pulp & Paper (India) Ltd, Maharashtra	37.40	#
BILT-Ballarpur Unit, Maharashtra	33.44	3
Hindustan Newsprint Ltd, Kerala	33.30	4
South India Viscose Industries Ltd, Tamil Nadu	31.73	5
Pudumjee Pulp & Paper Mills Ltd, Maharashtra	31.44	6
Tamil Nadu Newsprint & Papers Ltd, Tamil Nadu	31.40	7
ITC-Bhadrachalam Paperboards Ltd, Andhra Pradesh	31.15	8
Century Pulp & Paper, Uttar Pradesh	31.07	9
Nagaon Paper Mills, Assam	28.70	10
Seshasayee Paper & Boards Ltd, Tamil Nadu	28.20	11
West Coast Paper Mills Ltd, Karnataka	27.67	12
BILT-Asthi Unit, Maharashtra	27.10	13
BILT-Yamunanagar Unit, Haryana	25.70	14
Central Pulp Mills Ltd, Gujarat	25.35	15
Star Paper Mills Ltd, Uttar Pradesh	24.76	16
Shree Vindhya Paper Mills Ltd, Maharashtra	24.70	17
BILT-Sewa Unit, Orissa	23.75	18
Orient Paper Mills, Madhya Pradesh	22.10	19
Mysore Paper Mills Ltd, Karnataka	21.60	20
Cachar Paper Mills, Assam	21.43	21
Rama Newsprint & Papers Ltd, Gujarat	21.10	22
BILT-Chaudwar Unit, Orissa	21.06	23
Nath Pulp & Paper Mills Ltd, Maharashtra	20.80	24
Grasim Industries Ltd (Mavoor), Kerala	20.65	25
Mukerian Papers, Punjab	20.01	26
Amrit Paper, Punjab	19.01	27

# Sinar Mas is not rated as it is a new company and its data does not match with the period taken for the Green Rating Project. Three other mills — Sirpur Paper
Mills, Orient Paper Mills-Brajrajnagar and Nagaland Pulp and Papers — were not in operation during the data collection phase of the Green Rating Project period

• Environment policy/policy statement: Even if these companies do not have environment policy statements with all the details worked out, they do have formal environment policy statements. They also have environment departments with senior managers looking after their day-to-day affairs

l Chemical recovery plants and lime kilns: Several companies that have featured high in the ratings have installed chemical recovery plants and other elaborate mechanisms to recover chemicals in the wastes they generate. Some of the best among the top bracket have installed kilns to recover lime from the sludge that is left after chemicals are recovered from pulping wastes (black liquor)

l Improvements in bleach plant processing: Most of the companies that have done well in the ratings have been moving away from highly polluting elemental chlorine bleaching. There is a trend to move towards elemental chlorine-free bleaching processes among the better companies

l Efficiency: These companies are better than the average Indian company at getting the maximum out of the raw materials they use. In general, they reveal better process efficiency and continuously decreasing trends of fibre, water energy and chemical use

l Sound at fibre sourcing: The companies show a trend towards social/farm forestry in sourcing their raw materials and are less dependent on government-owned natural forests

l Compliance with pollution norms: They meet the pollution norms set by the respective state pollution control boards for emissions, effluents and solid wastes and some even have their own internal pollution standards

l Sound pollution control equipment: Almost all the companies in the top bracket have spent a considerable amount of money to install pollution control devices such as effluent treatment plants and equipment to control emissions

l Recycling and reuse of raw materials: There is a clear trend towards recycling and reusing as much of the wastes generated as possible. One example is the generation of energy from wood chips and sludge from effluent treatment plants

l Profitability: Most companies with better than average environmental records are making profits. There is a clear link between sound environmental performance and profitability

It is no surprise that the only Indian company that had an iso 14001 certificate even before the Green Ratings Project began has come out on top. But even the top-rated company has only scored 42.75 per cent.

J K Paper Mills ( jkpm ) is owned by J K Corp, and the plant is located in Jaykaypur town of Raygada district, Orissa. The mill has scored much higher than most others on corporate policy and management systems. It has a statement on environmental policy that is quite comprehensive and tries to address several environmental issues. The policy statement has been signed by the deputy managing director, who is a member of the board of directors. The policy has been formulated specifically for the paper mill at Raygada, and there is reason to believe that it is implemented at the unit level.The policy statement has also tried to take into account long-term sustainability by addressing issues such as raw material procurement, the production process and disposal of wastes and pollutants. But the policy statement does not detail issues relating to basic inputs, water, energy and chemicals.

When it comes to sourcing raw material, the company gets 55 per cent of its wood requirements from forests allotted by the government, though this is showing a decreasing trend. The company has undertaken farm forestry programmes in Orissa and Andhra Pradesh.

The fibre-use efficiency of the company is 44 per cent, whereas the maximum that can be achieved according to the rating criteria is 52.5 per cent. But the efficiency has been decreasing continuously mainly because the mill has not stablised with technology upgradation as yet. Similarly, the mill's average energy consumption has been increasing continuously, and the company has scored quite low in this department. The company's per unit water consumption stands at 138 tonnes. While this is lower than the average of Indian mills of similar type which use 250 tonnes, it is much higher than the minimum of 60 tonnes (for bleached paper) and 30 tonnes (for unbleached paper), which is techno-logically achievable. jkpm uses 112 kg of caustic soda per unit of pulp. The maximum according to the rating criteria is 100 kg. The per unit consumption of elemental chlorine is 12.2 kg, which is quite low. But this can be brought down to zero kg.

The mill has installed a new pulping process in the last quarter of 1998 at a cost of Rs 300 crore. In the future this will help the mill reach greater efficiencies in resource use. The mill is also installing a new bleaching system that is considered environment-friendly. Among the weaknesses of the company is the fact that it does not have a kiln to recover lime from sludge. Also, no substantial effort has been put into disposal of fly ash and lime sludge. And though the company shared information, there was a marked hesitancy in disclosing data.

The mill has the traditional problem of being too dependent on government sources for its forest-based raw material. This trend will have to change in the future if the mill wants to retain its top position.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	18.5	35
Input management	1.37	8
Process management	7.06	21
Recycling and reuse	4.6	10
Waste management and pollution controle	1.29	10
Compliance and community perception	6.75	10
Total	40.19	94

The company that has been rated second is located on the left bank of river Godavari in the pilgrim town of Rajahmundry, East Godavari district, Andhra Pradesh. Not that Andhra Pradesh Paper Mills Ltd's ( appml 's) environmental performance is extraordinary. But it shows consistency. The mill is ranked above average in several departments. appml has also been regularly making profits.

The company has taken an initiative in framing an environmental policy statement, though this is very general in nature. And it came about as a result of cse 's questionnaire. The company has a specific environmental department with an established organisational structure. The department is headed by a manager who reports directly to the vice-president (works).

In terms of raw material, appml primarily relies on farm forestry, which accounts for 80 per cent of its fibre consumption. But the company also gets bamboo from natural forests from neighbouring states and from the Northeast for the remaining 20 per cent of its fibre requirements. The fibre-use efficiency of the company is comparatively higher than most Indian mills of a similar type and, importantly, it is showing improvements. Though it has taken some initiatives to reduce its energy consumption, these efforts are not reflected in the mill's energy performance. The company's per unit energy consumption figure stands at 41.51 giga joules, which is closer to the worst in Indian mills of its type. But the overall trend in energy consumption is registering a decrease.

What is most noteworthy is that that the mill is perhaps the only one in India that discharges effluent upstream of the point in the river where it draws water. So, if the mill does not meet the prescribed standard, its water supply would also be affected.

But appml 's per unit water consumption is high: 210 tonnes - close to the Indian average of 250. A mill of appml 's type and size can achieve as little water usage as 60 tonnes for each tonne of paper produced. The company's use of chemicals is worrying, except for the use of elemental chlorine, the use of which has declined. The per unit use of caustic soda stands at 207 kg, which is more than double the maximum of 100 kg according to the rating criteria.

The mill has installed a kiln to recover lime from the sludge that is left after chemicals are recovered from black liquor. There has been an overall decrease in the company's consumption of chlorine and lime. The mill does have a che-mical recovery system. The company's effluent treatment plant is better than those installed by the average Indian pulp and paper mill. The company has replaced two coal-fired boilers with fluidised bed combustion technology. While the former relies only on coal, the latter can use a diversity of fuels.

However, a recurring complaint of the people of the nearby town is the foul smell that emanates from the mill, especially in humid weather conditions. It has to be noted that the mill is poor at disposal of fly ash, monitoring and research and development. India's best mills will have to value their resources even more to improve their environmental performance.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	10.75	35
Input management	3.42	8
Process management	7.47	21
Recycling and reuse	6.10	10
Waste management and pollution controle	2.14	10
Compliance and community perception	8.21	15
Total	38.10	99

Two Leaves Company
SCORE 33.44%
RANK THREE

Ballarpur Industries Ltd ( bilt ) operates an integrated pulp and paper mill on the banks of the Wardha river about two km from the town of Ballarshah in Chandrapur district of Maharashtra. It has to be noted that the Ballarpur unit is the only mill of the bilt group that figures high in the ratings.

The company has no exclusive environmental department at the corporate level, although it has one at the production unit level, which is clubbed with its research and development wing. The mill had drafted a corporate-level environmental policy statement in 1994. But the same has not been signed formally by the board of directors. The policy is general and does not take into account specific environmental aspects of the production unit. It ignores the long-term environmental sustainability of its raw material usage.

This becomes important as the mill procures its entire pulp requirement from natural forests allotted by the government. This dependence on bamboo and wood supplies is not only unsustainable in environmental terms but also makes bad business sense. The government supply distorts the market and worse it is a major cause for deforest-ation. The company has not given data on the price it is getting government forest produce. bilt Ballarpur should try to move towards social/farm forestry.

So, how did the company rank high in the ratings despite the fact that its fibre-sourcing policies are rated poor? Because it scores quite high on two grounds: efficiency in production and reuse and recycling of wastes. bilt -Ballarpur's fibre-use efficiency stands at 49 per cent, which is quite close to the maximum of 52.5 per cent according to the rating criteria. And this efficiency is increasing consistently. But its energy consumption per tonne of paper produced is quite high at 48.7 giga joules and approaches the high of 50 giga joules reserved for the worst performers. Per unit water consumption is also quite high, though at 193 tonnes, it is under the maximum of 250 tonnes. The achievable target is 60 tonnes of water for each tonne of paper.

The company's water conservation initiatives are above average. The company's thrust has been on selection of appropriate technology and equipment with a view to achieve pollution abatement and loss prevention. In its mission statement, bilt states that loss prevention is one of the major steps towards pollution abatement. The mill also has good systems of re-covering chemicals from effluents, and it is also making efforts to shift towards elemental chlorine-free bleaching.

The local community and the media were severely critical of the mill's environmental performance. Lime sludge is disposed of three km away from the plant in a sludge garden that resembles a huge, snow-clad mountain. The lime blows with the wind, causing a burning sensation in the eyes of residents of nearby areas. Although there are some encouraging signs, the company has a lot to do to improve its image.

And for the sake of our forests, its fibre sourcing needs some serious rethinking.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	10.75	35
Input management	0.69	8
Process management	10.04	21
Recycling and reuse	4.9	10
Waste management and pollution controle	1.56	10
Compliance and community perception	4.5	14.5
Total	32.73	98.5

SIV: On the comeback trail South India Viscose ( siv ) Ltd has a factory on the banks of river Bhavani in Sirumugai village of Coimbatore district, Tamil Nadu. siv 's recent history is also the story of a vigilant local community and media that taught a lesson to the polluting factory. The factory learnt the lesson and has improved its environmental performance significantly. This shows that pressure from the local community, civil society and media can ensure proper functioning of the state pollution control boards, politicians, the bureaucracy and the industry.

Unhappy with the pollution of the Bhavani by the mill, a local community group filed a writ petition in the Madras High Court against running of siv 's pulp plant in January 1995. The Tamil Nadu Pollution Control Board ( tnpcb ) denied the factory consent to continue operations in 1994-95 and 1996-97. The board gave the factory a closure notice in 1995. Yet the factory kept operating till January 1997, when it was closed following orders from the high court.

But the siv management got its act together. The company made investments in pollution control equipment. The mill is now equipped with a computerised effluent treatment plant which is one of the best in the country. Recently, the company's pulp plant also has been given consent to operate on a trial basis. This will certainly improve the mill's financial standing as it relies heavily on the pulp plant, and needs to recover the losses it incurred while the plant was closed.

One of the reasons why the company did not figure high in the ratings is that it has undertaken modernisation very recently. The ratings are based on performance in the past three years up to 1997-98. Considering the efforts that the company has made in recent times, there is no reason to believe that the company would not improve further.

SPBL: An innovative approach

Seshasayee Paper and Boards Ltd ( spbl ) is located on the banks of the river Cauvery in Erode, Tamil Nadu. The company has not figured high in the ratings. One of the reasons is that its pollution control efforts are not good enough. There have been questions about the quality of the treated effluent. And there are complaints of groundwater pollution.

Yet there are aspects of the company's performance that are quite striking. An important feature of the mill has been its management of effluents and procurement of raw materials through an ingenious arrangement called the 'tripartite agreement'. The system has been functioning well for the past eight years. This shows that the company had a vision of sustainability much before such terms gained common parlance.

The system began to grow roots in 1964, when spbl started supplying treated effluent to farmers. This helped the com-pany avoid discharging effluent into the Cauvery.

Secondly, use of treated effluent for irrigation brought barren lands in the surrounding areas under a green cover. In 1982, the district revenue authorities also started promoting use of effluents for irrigation. Farmers of nearby villages formed a lift irrigation society. Sugarcane yields increased.

The third aspect of the system is a move towards renewable raw materials. Way back in the 1960s, anticipating shortages of bamboo supplies, the mill started procuring bagasse from a nearby sugar mill. But the agreement could not work out. In 1983, the mill was facing a shortage of raw material. To overcome this, it promoted the establishment of a captive sugar mill, Ponni Sugars and Chemicals Ltd, to secure the availa-bility of bagasse. spbl gives its treated effluent to farmers to grow sugarcane, which is bought by the sugar mill, which, in turn, provides raw material to the factory. Simple as that.

• Lack of environment policy/policy statement: Let alone having a comprehensive environmental policy statement, most of these companies do not even have a general environment policy statement. They have not made any effort to set up an environment department

l Poor at fibre sourcing: Most of the companies source their raw materials from natural forests and there is no effort to move towards farm/social forestry

l Lack of efficiency in use of resources: Most of these companies are quite poor at utilising their raw materials efficiently. In general, their consumption of fibre, energy, water and chemicals is extraordinarily high

l Poor relations with local communities: These companies have bad relations with local communities, reflecting mist rust about the operations of the factories

l Non-compliance with pollution norms: Some time or the other, almost all the companies at the bottom of the rating have exceeded pollution norms set by the respective state pollution control boards in terms of effluents, emissions and solid wastes

l Poor pollution control equipment: There is a marked lack of effort to install good-quality pollution control equipment. Most of the pollution control equipment is either outdated or poorly maintained

l Failure to recycle and reuse raw materials: No effort at recycling wastes generated during the production process and poor disposal practices. Most companies do not have kilns to recover lime from sludge

l Poor technology: Most companies that have received poor rating have outdated technology, especially with regard to use of chlorine in bleaching processes. There is hardly any move to adopt chlorine-free bleaching process

Grasim Industries Ltd has a plant along the river Chaliyar at Mavoor, district Kozhikode, Kerala. It produces rayon-grade pulp and is entirely based on bamboo and wood for raw materials. The mill claims that it has an environmental policy statement, though no document has been provided to substantiate the same. The fact that the mill is not aware of the details of the policy raises the possiblity that there is no policy or if it is there, it is for namesake.

Grasim claims to have an environment department that is clubbed with the research and development wing. The department is shown to have 73 employees, which seems to be very high. The mill's resource consumption is marginally lower than other Indian rayon-grade pulp plants. It has revealed no documented policy on waste management or relations with local communities. Its pollution control equipment is rated as average. The mill has a chemical recovery system and a kiln to recover lime from sludge.The company has not furnished any documented policy on adopting cleaner technology.

The fibre-use efficiency of Grasim is a mere 29 per cent, which is quite low. What is worse, the trend in fibre-use efficiency has consistently remained at a low level and no initiatives have been taken to increase it. However, the com-pany's per unit energy consumption is quite low, and is decreasing overall, which is a positive sign.

But areas where Grasim seems to have performed parti-cularly poorly is water and chemical consumption. While the Indian worst average per unit water consumption stands at 200 tonnes, Grasim uses a whopping 300 tonnes of water to produce one tonne of paper. The mill is still using substantial amount of chlorine-based chemicals. It has to be noted that it is possible to bring down the figure to almost zero kg.

This makes a few things clear. The company uses a large amount of water and chemicals to produce a small amount of products. And it discharges the effluent into the river, downstream of its uptake point. Moreover, as the Kerala Pollution Control Board ( kpcb ) points out, the factory does not even meet the stipulated standard for effluents. The figures indicate that the factory must be polluting the river. And that is just what the local community complains about. They point to a rise in incidence of cancer and respiratory diseases in the region due to pollution caused by the factory.

Scientific studies have indicated that concentrations of some toxic heavy metals were above the acceptable levels in the river beyond Chungapally, 6 km downstream of Mavoor, where the factory discharges its effluent, clearly pointing the finger of suspicion at the factory. Grasim has also been accused of bargaining with the government on wood prices on the pretext that if the mill closes down, the employees will suffer major hardships.

kpcb 's consent for air to the factory is valid up till July 31, 1999. But the consent for water has not been valid since December 31, 1992. According to kpcb , the factory's effluent treatment plant is not capable of dealing with the amount of effluent it generates every day.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	4.05	35
Input management	2.26	8
Process management	7.07	21
Recycling and reuse	4.50	10
Waste management and pollution controle	2.36	9
Compliance and community perception	0	15
Total	20.24	98

As the name suggests, Mukerian Papers Ltd ( mpl ) has its plant at Mukerian, about 40 km from Pathankot in Punjab. Although mpl has been making profits in the past, its turnover and profitability have declined continuously since 1996-97.

The company does not have a documented environmental policy statement, though the management claims it has adopted an environmental policy in 1976. The company says it believes in implementation and strives to maintain the limits prescribed by the Punjab Pollution Control Board ( ppcb ). But let alone being proactive about improving its environmental performance, mpl has failed even at meeting the effluent standard set by ppcb . It does not have a formal environment department and lacks a policy on renewable raw materials and energy sources, though it is showing positive signs in recycling of wastepaper.There is no provision for environmental auditing by an external agency, though an internal audit is undertaken annually.

mpl 's raw material requirement is met through imported pulp, wastepaper and bagasse, among other things. That mpl relies on agro-residues for raw material gives it some advantage, and its ecological footprint to produce one tonne of paper is a mere 0.024 hectares. On this count, the mill has scored 1.98 out of 2 points. Another point in favour of the company is that it uses rice husk for power generation.

mpl 's fibre-use efficiency is slightly higher than other Indian agro-based paper mills, but is way short of the global standards. The mill's average water consumption per unit has been continuously decreasing. In three years, it came down by 50 per cent. The figure now stands at 210 tonnes per tonne of paper produced. Yet the Indian worst is 200 tonnes, and the mill has not scored any points on this. The figure seems remarkably high. The technically best option is to reduce water consumption to 25 tonnes.

The mill's average per unit consumption of pulping che-micals also tells a similar story. Though the consumption has been declining, it still stands at 266 kg per unit, whereas the Indian average is 100 kg. The company consumes remarkably high amounts of chlorine even by Indian standards. The bleaching process used by the mill is primitive, and relies heavily on chlorine.

ppcb has not granted mpl consent for water discharge since May 1976. The mill was discharging effluents without meeting the standards into the river Beas, which flows about five km away. ppcb had served a closure notice to the mill for this. After receiving the notice, the factory seems to have stopped this practice, though the local community still doubts it. The board had asked mpl to install a chemical recovery system by December 1998. But the mill has been unable to meet this deadline due to lack of funds. Moreover, as on March 1, 1999, mpl is on the Central Pollution Control Board's list of defaul-ters who not having adequate pollution control measures.

Although the mill bought 79 hectares of land for growing eucalyptus trees, its effluent is more than what can be used for irrigating the plantation. The rest is discharged in nearby areas, allege local residents.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	5.52	35
Input management	4.48	8
Process management	8.54	21
Recycling and reuse	0	10
Waste management and pollution controle	1.29	8
Compliance and community perception	0	15
Total	19.46	97

Amrit Paper Mills ( apm ) has a plant at Saila Khurd in Hoshiarpur district, Punjab. Though the company claims to have an environmental policy, it seems doubtful as no documented proof of the policy has been provided. The company also claims to have environment departments both at the corporate level and the unit level. But as per the feedback of the cse surveyor, it seems that the company does not have an environment department.

apm uses agro-residues for raw material. While the source is renewable and the company's fibre-use efficiency has been increasing, the mill's fibre consumption per unit is increasing, which is a negative sign. When it comes to energy consumption, a major portion of the mill's energy requirements is met through rice husk -- a positive sign again, as it is a renewable source. But the use of rice husk is decreasing.Moreover, the mill's energy consumption initiatives have been rated as average and overall energy consumption has been increasing. apm 's per unit energy consumption is 31.73 giga joules, whereas the minimum that can be achieved is 15.12 giga joules.

The entire water requirement of the mill is met by groundwater that is pumped out through tube-wells. The company has not scored any points on this count. The mill consumes an average 201.4 tonnes of water to produce one tonne of paper. This is roughly the Indian average for mills based on agro-residue for raw material. The mills consumption of water has been increasing continuously, and it has mentioned no initiatives to conserve water. Consequently, it has scored zero in water management.

apm 's use of chemicals is very high: it consumes an average 155.2 kg of chlorine to produce one tonne of paper, and the figure is increasing continuously. This is way above the maximum for an agro-based mill, which is 100 kg. It has to be noted that it is possible to reduce this figure to zero. And the company has made no effort to improve its bleaching process by substituting or reducing the use of chlorine.

The local community's response is mixed. While some local farmers want the effluent from the mill for irrigation, they also have complaints that excessive effluent damages crops. But the farmers are unaware of the adverse effects that effluent can have. Earlier, the farmers were using the effluent for irrigation. However, there were complaints about deterioration of soil. Thereafter, the Punjab Pollution Control Board ( ppcb ) directed the company to use the effluent for its own irrigation purposes. ppcb says the effluent would be fit for irrigation after a chemical recovery plant is installed. But the company failed to install the plant in the stipulated timeframe, and there is no information to prove that it has been able to do it up till now. The company says it does not have enough funds. But even when the mill was making profits, there was no effort to control pollution. apm does not conduct any environmental audit internally or externally.

Though the company claims that it has been taking measures to control pollution since its inception in 1980, as on March 1, 1999, apm is on the Central Pollution Control Board's list of defaulters for lacking proper facilities to treat wastewater.

PARAMETERS	WEIGHTED SCORE	WEIGHTED TOTAL
Corporate policy and management system	5.15	35
Input management	2.36	8
Process management	4.72	21
Recycling and reuse	0.05	8
Waste management and pollution controle	2.92	7
Compliance and community perception	1.75	12.50
Total	17.40	91.50

Mind your business

Good environmental performance makes good business sense. And to support this rationale, CSE analysed the financial performance of the 28 firms that had been rated. The conclusion: there is a 60 per cent likelihood of a mill with fairly good environmental performance churning out profits (see graph: Pollute or profit?).

The best performers environmentally are financially sound too. Take, for instance, J K Papers, the mill with the highest grp score. The company enjoys a profit of 14 per cent (gross profit as percentage of turnover).

However, the grp team also found a few companies -- such as Grasim Industries Ltd which has a profit margin of 16 per cent -- otherwise rated at the bottom for their environmental performance. This is a clear indicator that the profits that the company earns are not being used to improve their environmental performance. This despite the public uproar against the company on environmental grounds.

On the other hand, companies like Amrit Papers, Nath Pulp and Paper Mills and Rama Newsprint, which are in the bottom of the rating, are also running in losses. It's time they realised environmental performance goes hand-in-hand

The problem of diversity
Product diversity means more pollution

The more the variety of products a pulp and paper mill manufactures, the higher the pollution it generates. At least, this is what happens in India where the level of technology is very poor. Most of the Indian mills are small and they change their product type depending on the demand in the local market. However, the small-size of the mill does not make it profitable to switch to a technology which is best suited to make the required type of paper. Ill-suited and obsolete technology adds to the pollution load.

The problem of product diversity is not just limited to production technology. Most of the Indian mills do not have adequate technology to recycle their wastes. Effluent treatment plants ( etp s) are capable of handling discharges and emissions emerging from single-product paper plants only. With an increase in the types of paper produced, the efficiency of the etp s plummets.

Production of single product gives competitors an edge in terms of optimisation of processes. Global giant International Papers and Indonesian major Asia Pulp and Paper, which is the parent company of Sinar Mas-India, are both producing single paper. Besides, their production is not dependent on the vagaries of a local market, but on the global market, where there is comparatively less variation in the demand for a product-type. Besides, their large size gives them the opportunity to adopt cleaner technology, which also includes a factor of safety for product variations.

But, in India, small, unregulated mills usually cut into the pockets of bigger mills, forcing the latter to move away from limited number of products to a variety of products.

In search of fibre...
... mills have now reached the rich bamboo reserves in the country's Northeast

The paper industry has literally come a long way with respect to raw material sourcing, specifically fibre. When paper mills were first set up they were able to procure most of their wood from forests in the vicinity. However, over a period of time the forests were depleted with no sustainable forestry practices being adopted. This forced mills to extend their search for wood to neighbouring states. As these forests have also met with a similar fate, paper units are now moving to the veritable treasure trove in the country's Northeast.

For instance, Andhra Pradesh Paper Mills Limited ( appml) located in the East Godavari district. Almost 80 per cent of the total raw material comprises hardwood, 19 per cent bamboo and the rest wastepaper and market pulp. Although appml has been able to meet most of its hardwood demand from its farm forestry programmes and open market, it still depends on natural forests for bamboo. The unit's bamboo consumption varies between 15-20 per cent of the total requirement. Till recently, appml procured its bamboo needs from Andhra Pradesh government forests. After protests by local ngo s, the government was forced to withdraw the allotment in 1998. This has forced the mill to turn to the neighbouring states for bamboo, or even the distant Northeast - the only region in India which still has bamboo reserves (see map: Bamboo travails ). Going by appml 's and other mills appetite for fibre, soon those reserves too might not be worth talking about.

Dubious dealings
neeri is a consultant of opm . It also acts as a regulatory body

Nagpur-based National Environmental Engineering Research Institute ( neeri ) has been a consultant to Orient Paper Mills ( opm ). The mill is located on the western bank of the river Sone at Amlai in Madhya Pradesh. In 1969, the mill approached neeri for the first time to conduct research on effluent treatment plants ( etp s). Since then, neeri has been directly involved in the planning and implementation of etp s (installation and modernisation), the most recent being the implementation of the High Rate Transpiration System ( hrts ). hrts entails the use of liquid effluents for irrigation purposes.

A public interest petition was filed against the mill on environmental grounds. In response, the Supreme Court asked neeri to submit a report on the efficiency of the ETP and the pollution generated by the mill. Later, on the basis of this report, the case was dismissed.

This is a clear case of conflict of interest where neeri is acting both as a consultant to the company as well as a regulatory body. Hence, doubts about an impartial opinion naturally arise.

Meanwhile, the local community and the media have been extremely critical of the mill. One of the most serious allegations is that the mill builds an earthen dam across the river Sone to block water for most part of the year, except for three months during the monsoons, which leaves people downstream facing an acute water shortage. A little water seeps through the earthen dam, but this is not enough. Way back in 1966, a five-member committee of the state legislature concluded that the pollution of the Sone was caused by opm. There are several allegations that the mill is polluting the Sone. A media report also says, apart from the massive discharge of wastewater from opm , Hukumchand Mill, a caustic and chlorine plant which is operating just to supply chemicals to opm , finishes off whatever life is left in the river.

Public insight
Views of the local communities are important to assess the pollution load on the local environment

It is possible to estimate the amount of pollution generated by a pulp and paper mill, but whether the pollution gene-rated by the mill is within the carrying capacity of the local environment is not easy to quantify as the estimation is based on various subjective parameters. Here, community perception is the only indicator to ascertain the impact of the mill on the local environment.

At the secondary data collection stage of grp , the perception of the local communities were also taken into account to rate the mills. The quality of those perceptions can be divided into the following three categories:

l Where there is only one mill in the area: In this case, public perception can be fairly accurate. If the pollution load surpasses the carrying capacity, the number of complaints against the mill will increase. People's anger against South India Viscose ( siv ) Ltd in Coimbatore, Tamil Nadu, comes in this category. A local community group, unhappy with the pollution of the river Bhavani, filed a petition against the mill in the Madras High Court in 1995. The court issued a closure order to siv in 1997, but thereafter the mill got its act together. Now the mill's pulp unit has been allowed to operate on a trial basis.

Local communities living around West Coast Paper Mills ( wcpm ) Ltd in Karnataka, Central Pulp Mills in Gujarat and Chaudwar unit of Ballarpur Industries Limited in Orissa also voiced their grievances against the mills concerned. In fact, cse received a complaint against wcpm from Hemant Naik of Parisara Samrakshana, a local activist group, complaining about the pollution of the river Kali. In his letter, Naik said, "The mill is discharging high amounts of untreated effluents into the river."

l Where the mill is located in an industrial belt: In such a situation, the local community is not able to peg the blame on a single industrial plant. For example, people living around Pudumjee Paper and Pulp Mill ( pppm ) in Maharashtra talked about pollution of the river Pawna and air pollution, but were hesitant to pinpoint the source, u nsure of whether the culprit was pppm or a nearby sugar factory.

l Where social issues dominate environmental concerns: When social issues like unemployment prevail over environmental problems, the local communities' perceptions are shaped by their own needs. Their viewpoint on Sinar Mas-India appears to fall in this category. People of the surrounding area showed their unhappiness about the mill's operation. But environmental problems aside, it was noticed that the concerns centred around unemployment and the fact that the mill had hired outsiders in place of the local people. The mill itself is not a holy cow. Though it has started interacting with the local people, overall it has been reluctant to include them as stakeholders.

Company that had an environment policy before GRP started
J K Corp

Companies that adopted an environment policy after receiving CSE's questionnaire
Century Pulp & Paper
Star Paper Mills
Pudumjee Pulp & Paper Mills Ltd
Andhra Pradesh Pulp & Paper Mills Ltd
Sinar Mas Pulp & Paper Ltd
ITC-Bhadrachalam Paperboards Ltd
South India Viscose Ltd
Tamil Nadu Newsprint and Papers Ltd

The three key objectives of grp are:

l To monitor the environmental performance of Indian companies and create a transparent rating system that acts as an incentive for them to improve;

l To make environmental management an issue for ceo s; and

l To make the top management realise that good environmental management involves being proactive.

These objectives are slowly being met. At the outset of grp , only one pulp and paper company had a formal environmental policy, namely J K Corp, which has iso 14000 certification. By the time the ratings were being finalised, nine companies had an environment policy statement. The project has pushed eight companies to adopt an environment policy statement between September 1998 and May 1999 after receiving the cse questionnaire (see graph: Waking up ).

What this clearly shows is that the civil society can impress upon industry to get serious about the environment. How do you do that? By making companies realise that their reputations are at stake and that the only way of having a sound image is by sharing information (see p27: Opening the account ).

All companies want a good rating and a clean public image in an economy that is moving towards globalisation. Concern about environmental issues among investors and regulatory authorities is increasing. There is a clear incentive for companies to improve environmental performance and share information, which can be the most powerful force in a democratic country.

T he pulp and paper industry is one of the oldest industries in India: the first paper mill was set up as early as 1832 at Serampore in Hooghly district of West Bengal. But in terms of production capacity, the industry remains very small. The mills have an aggregate capacity of 3.8 million tonnes per annum (tpa). But the effective capacity is only 2.6 million tpa, because many of these mills are sick. In the newsprint segment, the total capacity is around 0.45 million tpa, of which 73 per cent is dominated by four major public sector mills, while the rest is shared by 14 small players.

By international standards, India is a very low producer and consumer of paper. The country's per capita consumption of paper in 1995 stood at a meagre 3 kilogrammes (kg) as against the global average of 45 kg, with the us , western Europe and Japan accounting for 30 per cent, 20 per cent and 12 per cent respectively of the total demand. Compared to its population of over 900 million, India's total paper and paperboards requirements forms a marginal 1.25 per cent share in the global market.

The aggregate capacity of the Indian mills is not enough to meet the demand. Even pulp is in short supply and it is usually imported. The demand for paper was expected to go up to 4 kg by the year 2000, but according to a 1999 survey done by Protech India, a market surveyor, India has already reached that figure. By 2010, the demand for paper is expected to touch 6 million tpa, with an extra demand of 1.6 million tpa for newsprint. But even that is negligible compared to its Asian counterparts, whose demands have already more than doubled. For instance, China's current consumption is 14 kg per person. This is expected to rise to 20 kg by 2000. Similarly, East Asia's paper consumption has zoomed to 200 kg per year, from less than a tenth of this figure two decades ago. Even the average per capita paper consumption in Asia (18 kg) is six times higher than that of India's.

In the last 10 years or so, due to environmental concerns, considerable modifications have taken place in production and disposal processes in the global pulp and paper sector, especially in developed European and North American countries. However, to make these investments economically viable, an expansion of capacity has to be included due to the economies of scale. The problem of size plagues the India industry. Government estimates put the total number of mills in India at 340, but according to Protech India there are as many as 679, mostly small-scale mills. A mill with a capacity of 33,000 tpa is considered large in India, compared to Brazil and Sweden where the largest mills have a capacity between 300,000 to one million tpd. This poses potential financial problems for upgrading technology to reach international environmental standards.

About 30 mills fall in the large-scale category in India, followed by 80 medium-sized mills. The rest are small mills which are agrowastes and wastepaper-based and the major problem is with these mills and their small capacity. Though these mills meet one-third of the total paper and pulp production, they account for 60 per cent of the pollution load discharged by the total pulp and paper mills. The size of these mills give little scope to invest in pollution abatement equipment.

Many recent pollution prevention efforts in the pulp and paper industry have focused on getting rid of the use of chlorine for bleaching, a process which helps to increase the brightness of the paper. Elemental chlorine (that is, pure chlorine) or chlorine dioxide is generally used for bleaching but, in the process, large amounts of chlorinated pollutants such as dioxins -- a persistent organic pollutant with very high cancer-causing potential -- are released into the water. Hence, there is an increasing trend worldwide to reduce the use of both elemental chlorine and chemicals containing chlorine.

Two bleaching processes, which are increasingly being adopted by Western nations are elemental chlorine free ( ecf ) bleaching and total chlorine free (tcf ) bleaching. However, to make investment in environment-friendly bleaching processes more economically feasible, Indian companies will have to expand their capacity to take into account the economies of scale.

In industrialised countries, most of the firms are large ones. But, in India, they are mostly small or medium-sized. Hence, there is little scope for investment in pollution prevention technologies. But even if we ignore these mills in India, not one of the larger mills is anywhere near adopting truly environment-friendly technologies, or even replacing the more dangerous elemental chlorine with chlorine dioxide. Only a few mills are producing chlorine dioxide in order to partially replace use of elemental chlorine.

Since the establishment of the first paper mill in 1832, the paper industry has been a pampered and protected one. The government has consistently helped industry exploit the country's forests and rural poor by supplying raw materials at unrealistically low prices. In 1981-82 for instance, the paper industry paid the Madhya Pradesh forest department Rs 0.54 for a length of bamboo, while the forest dweller paid a little over Rs 2.00 for it. But the fast-depleting forest cover has now led to a severe raw material crunch, leading to a revival of a long-standing demand from industry for captive plantations on state-owned forest land.

Industry leaders say the shortage of raw material is the biggest threat to the paper industry but few are willing to acknowledge their relative lack of initiative in promoting what can become a virtually inexhaustible source of wood for the industry and a good source of revenue for the farmers -- farm forestry. If industry is to compete globally, it needs an assured supply of wood. And farm forestry is undoubtedly its best option, socially acceptable, ecologically sustainable and economically viable.

Fouling the ecosystem

Poor technology means more pollution

The technology and management practices currently being used in India are obsolete in the global context. They are similar to those used in the 1950s-60s by the pulp and paper mills in developed countries like Sweden and Canada. Poor technology coupled with ineffective governmental regulations for controlling industrial pollution makes the scenario bleaker . Hence, the industry's poor environmental performance should not come as a surprise. The industry has been widely criticised on environmental grounds. For example:

• cse estimates about 1,200-1,500 kg of chemicals are needed to produce 1 tonne of paper in India, of which, Greenpeace estimates 90 kg is chlorine gas and about 65 kg where chlorine dioxide is used partially. In the western world, it is 25 kg.

• The average total organochlorine ( tocl ) discharge per tonne of paper produced from Indian mills is estimated to be 2-10 kg per tonne, while most developing countries aim to achieve a tocl level of 0.1 kg per tonne. At the most it is 1 kg. Furthermore, because tocl enters the food chain and does not degrade easily, the Swedish Environmental Protection Agency was unable to determine any safe level for organochlorine discharges. But, in India, the pollution control board allows a discharge of 2 kg per tonne. Sadly, in India, not one state pollution control board has facilities to test tocl levels and, in practice, this parameter has not been used for monitoring by them.

There is another problem, that of disposal of solid waste. A conventional mill, which has a chemical recovery system, generates around 1,000-1,500 kg of lime sludge, 750-1,000 kg of fly and bottom ash and around 200 kg of other waste like chipping dust per tonne of paper produced. A few mills have installed lime sludge recovery systems, but nearly 1.5 tonnes of waste per tonne of paper produced is still being dumped by them.

The pulp and paper sector must steadily move towards sustainable industrial development. Here are some actions which could help:

INPUTS

sourcing of wood: Although the 1988 National Forest Policy does not allow raw materials sourcing from gov ernment forests, the government has not made any plan to work with the pulp and paper industry to promote f arm forestry. The government continues to supply fibre resources from government forests. Despite the lack of government action, there are several companies like itc- Bhadrachalam and Andhra Pradesh Paper Mills Ltd which are trying to meet a part of their needs from farmers. Government agencies and private companies should learn from them.

wastepaper recycling: India today is importing wastepaper. As India's wastepaper collection is very poor, the government and paper companies should together develop wastepaper collection and recycling programmes.

long-term policy for fibre supply: The government and the pulp and paper industry must develop a long-term vision and programme for sustainable and environment-friendly fibre supply for the country. Plantations and development of fibrous resources are long-term investments and these investments will neither be made nor sustained unless there is long-term support for them.

pricing and sourcing of water: Freshwater consumption by Indian mills is high. Water consumption beyond an acceptable level should be priced a progressively higher rate. Most pulp and paper mills have a large amount of land. A calculation made for Sinar Mas-India shows that nearly 50 per cent of the company's current water consumption can be met through its rainwater endowment. Water recycling should also be encouraged.

PROCESS AND TECHNOLOGY

technological upgradation: The mills today work with a technology that is way below international standards which also results in inefficient resource utilisation and ultimately low environmental performance. The mills should invest in cleaner technology and the government should come up with a package of measures to facilitate this upgradation.

use of chlorine: The global debate on the use of Elemental Chlorine Free bleaching and Total Chlorine Free bleaching has passed largely unnoticed in India. Mills which have poor technology should not get into manufacturing high-brightness paper. Only firms with good technology and end-of-pipe treatment should make bleached paper. There should also be awareness schemes to promote the use of unbleached paper.

WASTES AND POLLUTION

wastewater discharge standards: Wastewater discharge standards should not differentiate between wastewater discharged in surface waters and wastewater discharged on land. At present, there is a substantial difference between the two standards. Most of mills, which discharge their wastewaters on land also discharge their wastewaters into water bodies, especially during the rainy season when the land is saturated and does not need wastewater for irrigation. There is heavy runoff from farms using effluents into water bodies.

avoiding land contamination: All mills which discharge their wastewater on land should monitor the soil characteristics and quality of crops grown on the land irrigated by the effluents. Though the productivity of the land goes up initially because of the availability of plant nutrients in the effluents, the land becomes unproductive after five to 10 years due to increased soil salinity. Soil contamination is difficult to reverse.

fiscal incentives: Hardly any company or manager is making an attempt to improve environmental performance beyond the regulatory standards set by the government. Companies see the meeting of these standards as the maximum effort they need to make. Fiscal incentives should be provided to pulp and paper companies which go beyond these standards.

deemed consent: The Central government should penalise state pollution control boards which do not take a decision on 'consent to operate' within four months of application. Many pulp and paper companies are today operating on 'deemed consent' because of no response from the boards.

The Green Ratings Project has been supported by the Ministry of Environment and Forests and the United Nations Development Programme.

J K Paper Mills ( jkpm ) of Raygada in Orissa has been rated the greenest paper mill in India. jkpm is followed by Andhra Pradesh Paper Mills Ltd ( appml ) and the Ballarpur unit of Ballarpur Industries Ltd. The significant feature of jkpm is a modern pulping process called rapid displacement heating ( rdh ), which consumes less energy and its fibre efficiency is also high. The amount of bleaching chemicals and water required is smaller. jkpm consumes only about 12 kg of elemental chlorine per tonne of paper produced as compared to most other mills which consume about 100 kg.

Sinar Mas Pulp and Paper, based in Pune district of Maharashtra, has also received a high score.It has not, however, been given a rating because the mill was not in operation during the entire period for which the performance of all the other mills was analysed.

The mills which came at the bottom of the ratings were Grasim Industries Ltd, based in Kerala, and Amrit Papers and Mukerian Paper Mills, both of which are located in Punjab, and have been operating without a consent for more than two decades now.

In the green rating project of the pulp and paper sector, a mill was evaluated using over 100 green criteria under three broad categories - corporate environment policy and management systems, input and process management, and the public perceptions of the mill's environmental responsibility, including that of the local community, non-governmental organisations and the media. jkpm , for example, scored above 50 per cent in both environmental policy and public perceptions but got just 19 per cent in input and process management. Most of the mills that were rated low were found to be having no environmental policy and using outdated technology.

Thirty-one plants with a capacity of over 100 tonnes per day were considered for the rating. These mills put together produce over 50 per cent of the country's paper and board. Three out of the 31 mills were closed during the GRP period.

The green rating report reveals that the overall environmental health of the sector is not very good. Not one mill could get a five leaves rating (75-100 weighted score) or a four leaves rating (50-75 weighted score). Only two companies scraped into the three leaves category. As many as 12 companies were in the very poor, one leaf category.

The sector is plagued by resource use inefficiency, improper sourcing of raw material, outdated technology, and a highly-wasteful and polluting production process.

In the early 1970s, wood was dirt cheap and its utilisation efficiency in Indian mills was extremely low. Today, wood constitutes a major proportion of total input cost and most of the Indian mills have performed comparatively better than in the past. But they are far from achieving optimum fibre use. Indian mills, on an average, have a fibre use efficiency of 46.9 per cent, as against the maximum attainable efficiency of 100 per cent. Similar is the case with water, energy and chemical consumption.

The global debate over the use of chlorine-free bleaching has largely bypassed the industry in India. Almost all mills continue to use chlorine to bleach paper. Use of chlorine can release organochlorines, including the carcinogenic dioxin, that can enter the food chain. Till now, not even one of the larger mills in India has progressed beyond the use of elemental chlorine in pulp-bleaching to use an oxygen process before bleaching. A few mills are generating chlorine dioxide in order to partially replace elemental chlorine in the first stage of producing pulp for pre-bleaching and second stage as a replacement for hypochlorite. The most recent initiative of some of the progressive, larger mills in India limits itself to the recovery of chemicals from black liquor for reusability.

Though the foundations of the modern-day big industrial houses have mostly been the paper and pulp industry, the profits made from this sector have not been invested back into these companies. Today, a modern mill of 100,000 tonne capacity, with a chlorine-free bleaching process, can cost anywhere between Rs 600 to 1,000 crore. But investing in such plants -- though socially and ecologically desirable -- does not excite the industry economically.

Freshwater consumption by Indian mills is dangerously high for the health of the water bodies. They should think in terms of harvesting rainwater and recycling its effluents. A calculation made for Sinar Mas, a mill in Maharashtra situated in a dry region, shows that it can meet 50 per cent of its current water needs through rainwater harvesting.

The studies also found that almost all the companies are engaged in serious conflicts with the local communities and complaints of water and air pollution are widespread. But some companies like Seshasayee Paper and Paperboards in Tamil Nadu are learning to work with the local people. A change is in the air. But still only a small one.

India