Sunil Jain: Not just on paper

Round one to civil society. That, above all, is the lesson to be drawn from the Centre for Science and Environment's (CSE) latest green ratings of the country's paper-producing industry.

For, though environment pollution laws in the country still tend to be quite lax and the penalties nominal, the paper industry has transformed itself voluntarily over the last four to five years.

Apart from a 15 per cent improvement in the CSE ratings over the last ones in 1998 when just four per cent of the mills had an environment-friendly ISO 14001 certification, this time around close to half the mills already had it and another fourth were likely to get it within a year.

And, as opposed to just 30 per cent of mills that had an environment policy the last time around, close to 90 per cent have it now. In the case of the top-rated firm which won the three-leaf rating, ITC's Bhadrachalam unit, Rs 500 crore was invested in 2001 to make it more efficient and be the first to move to a chlorine-free technology (Indian mills emit 52 kg per tonne of paper as compared to the global best practice of zero chlorine), and the plant can now sell food grade non-toxic packaging paper.

The plant has installed a lime kiln to take care of the huge sludge problem (Indian mills generate 40 times more lime sludge as compared to the global best practice), and as a result of all this, its organochlorine emissions, or AOX, fell from a whopping 2.6 kg per tonne (Indian plants emit 20 times more than European plants) to a much lower 0.3 and lime consumption fell from 289 kg per tonne to a little as 23.

The company though, hasn't done much to reduce water consumption "" while this fell by over 40 per cent, at 82 tonnes per tonne of paper produced, it is still around five times the global best for this kind of paper plant.

While JK Paper Mills came second this year (it topped the last time around), it still doesn't have a lime kiln (it generates 785 kg of lime sludge per tonne of paper) and its chlorine usage is still 35 kg per tonne (this is 30 per cent lower than the Indian average but globally mills don't even use chlorine), an indicator of just how far Indian mills still have to go.

While Ballarpur's Graphic Papers Limited has been rated number three (this is the plant the Thapars bought from Indonesian giant Sinar Mas), the main units of the group (number three the last time around) fell dramatically to number 13 in this round of ratings.

Since the country's biggest pulp and paper company's gross profits were around 24 per cent during 1998 to 2002 (the period of the review) as compared to around 10 per cent for the country's top 10 mills excluding Ballarpur, clearly money can't be the reason for this sorry state of affairs.

The company doesn't have a lime kiln and generates 575 kg of lime sludge per tonne of pulp and gets just around 16 per cent of its raw material from social forestry.

Pressure from civil society, there is no doubt, has made a difference "" a Delhi School of Economics paper found stock prices of environmentally unfriendly companies fell by as much as 40 per cent within a fortnight of green ratings in the past!

Yet, with the government not following this up with equally stringent laws of its own, companies are tending to slack off after the initial bout of enthusiasm brought about by civil society's actions.

Indeed, whatever mills have closed down in the past (on an average, each large Indian mill uses up water enough for 2.4 lakh individuals) have been forced to do so primarily because of conflicts with the local community that file, on an average, five suits against each large mill.

Grasim Industries, Mavoor and SIV have had to close their plants primarily due to community protest followed by regulatory pressures. Others like Harihar Polyfibres, Seshasayee Paper and Tamil Nadu Newsprint have had to close down sometimes in the summer months due to paucity of water, and JK Paper Mills (the number two mill) has seen the river (Nagavali) that it gets water get much smaller.

One of the biggest weaknesses of policy that has allowed mills to remain inefficient, needless to say, is the almost-free water they're allowed to tap. As compared to around seven paise per kiloliter that Indian mills have to pay, according to the CSE, mills in the UK pay around Rs 90 per kilolitre, Rs 42.5 in France, Rs 76 in Canada and Rs 21 in the US.

If you take into account the money that needs to be spent to pump and treat the water, the cost in India does go up to around Rs 2, but that's still a fraction of what it costs globally. BILT Graphics, by the way, pays the highest water costs in India and is also the lowest consumer in the country.

Perhaps the biggest area of regulatory failure, of course, lies in the fact that paper plants are amongst the worst polluters in the country, on an average spewing out around 150 tonnes of wastewater, gaseous emissions and solid waste for each tonne of paper they produce.

While Indian mills discharge around five times the global average (even JK, the best, is three times the US average) when it comes to water, large Indian mills put out 20 times more AOX than European mills do, ten times more BOD and 15 times more TSS.

Between 1998 and 2001, it is true, these emissions have come down by around 30 per cent in India, but this is still too high. Recently, regulators have asked Indian mills to cut AOX levels (voluntarily, not statutorily) from 2 to 1 kg per tonne of paper, but this is still way too high considering AOX standards in countries like Germany are 0.35 kg per tonne.

And since the disposal standards on land are more strict than for rivers, discharging effluents on to land is becoming more popular "" BOD standards for river disposal are 30 mg per litre versus 100 mg per litre for land disposal.

While plants like BILT Graphics emit just 0.2 kg of sulphur dioxide per tonne of paper (this is a third that of European plants), the average for large Indian mills remains over 4 kg. Carbon dioxide emissions are around eight times those of European mills.

The one area where government action has proved to be very effective is in raw material procurement by mills. While the industry has been clamouring for getting wasteland to do captive farming, the government has not allowed this.

Indeed, as early as 1988, the National Forest Policy stopped the paper industry from accessing government-owned forests, and ever since, there's a lot more use of bamboo for instance.

By 2002, forest-based raw-materials comprised just a third of the industry's use, around 30 per cent came from agricultural residue (bagasse, wheat and rice straw) and around 35 per cent from waste paper.

Thanks to the pressure to stop plantations on government-owned degraded land, most top companies have started programmes to reach out to farmers to get them to grow wood.

In the case of ITC's Bhadrachalam unit, this year's most green plant, it meets around 80 per cent of wood and bamboo requirements from farm and social forestry, and R&D has helped raise the yields of eucalyptus plantations from 6 tonnes per hectare in natural forests to 200 tonnes on farmland "" with a profit of well over 33 per cent, the company has covered around 10,000 hectares of land under this, taking the total number of farmers up from 330 in 1998 to 3,335 in 2002.

While ITC gets around 80 per cent of its requirements from such social forestry, Harihar Polyfibres gets 93 per cent, JK Paper gets 90 and Andhra Pradesh Papers gets over 85. According to CSE's calculations, roughly 1.1 million hectares of land is required to meet the industry's requirements, and this in turn would give employment to around 5.5 lakh farming families.

Like other methods to make paper mills environment friendly and community-sensitive, this move too depends upon government goodwill as bamboo supplied by state-owned forest departments is roughly a fifth cheaper than that supplied by farmers!

While green ratings of the CSE-type are clearly a great start, it would be foolish to expect them to achieve results on their own, without appropriate policy actions from the government kicking in.

We've seen in the case of Ballarpur how, after being the number three company, fell to number 13 simply because there were no financial compulsions for it to instal a lime kiln, for instance, or to reduce other effluents. The industry's done very well in the last few years, but it's hardly enough. If effluent discharge levels have gone down by around 30 per cent over the past three to four years in India, they've gone down by much more globally as well.