{"id":55855,"date":"2023-04-27T15:43:47","date_gmt":"2023-04-27T10:13:47","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=55855"},"modified":"2024-12-27T16:22:49","modified_gmt":"2024-12-27T10:52:49","slug":"how-is-environmental-due-diligence-process-conducted-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/","title":{"rendered":"How Is Environmental Due Diligence Process Conducted In India?"},"content":{"rendered":"\n<p>Due\ndiligence is a term that describes the level of care taken by a person to\nprevent harm to other individuals or their belongings. On the other hand,\nenvironmental Due Diligence (EDD) is a procedure utilised to evaluate real\nestate for potential soil and groundwater contamination risks. EDD plays a\ncrucial role in mergers and acquisitions by assessing potential liabilities\nlinked to land quality, environmental issues, and Health &amp; Safety concerns.\nA comprehensive Environmental Due Diligence Report (EDDR) is produced for each\nproject. The primary goal is to gather and analyse information regarding\nenvironmental impacts and management measures incorporated in the project\ndocument.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/#Role_of_Consultants_in_Environmental_Due_Diligence\" >Role of Consultants in Environmental Due Diligence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/#The_Environmental_Due_Diligence_EDD_Assessment\" >The Environmental Due Diligence (EDD) Assessment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/#How_to_Conduct_EDD_in_India\" >How to Conduct EDD in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/#Documents_required_in_EDD\" >Documents required in EDD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/how-is-environmental-due-diligence-process-conducted-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Role_of_Consultants_in_Environmental_Due_Diligence\"><\/span>Role of Consultants in Environmental Due Diligence<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table table table-bordered\"><table><tbody><tr><td>\n  S. No. \n  <\/td><td>\n  <strong>Act\/ Rule\/ Policy<\/strong>\n  <\/td><td>\n  <strong>Objective<\/strong>\n  <\/td><td>\n  <strong>Authority responsible<\/strong>\n  <\/td><td>\n  <strong>Applicability<\/strong>\n  <\/td><\/tr><tr><td>\n  1.\n  <\/td><td>   <strong>Environmental Protection Act, 1986<\/strong><sup><a href=\"https:\/\/www.indiacode.nic.in\/bitstream\/123456789\/4316\/1\/ep_act_1986.pdf\"><strong>[1]<\/strong><\/a><\/sup>   <\/td><td>\n  To protect the environment\n  <\/td><td>\n  Ministry of Environment, Forest &amp; Climate\n  Change; State &amp; Central Pollution Control Boards; Central Ground Water\n  Authority\n  <\/td><td>\n  Applicable to almost all projects.\n  <\/td><\/tr><tr><td>\n  2.\n  <\/td><td>   <strong><a href=\"https:\/\/corpbiz.io\/environmental-impact-assessment-eia\">Environmental Impact Assessment<\/a><\/strong>   <\/td><td>\n  Required in developmental &amp; expansion projects\n  to study the impact of the activity on the environment\n  <\/td><td>\n  Ministry of Environment, Forest &amp; Climate\n  Change; State &amp; Central Pollution Control Boards\n  <\/td><td>\n  Applicable to construction, developmental, and\n  real estate projects\n  <\/td><\/tr><tr><td>\n  3.\n  <\/td><td>\n  Indian Forest Act, 1927; Forest (Conservation)\n  Act, 1980; Forest (Conservation) Rules, 1981; National Forest policy\n  <\/td><td>\n  Protection of forests and keeping track of\n  deforestation activities and maintaining ecological balance. A forest\n  clearance certificate and tree felling license is required under these rules.\n  <\/td><td>\n  Ministry of Environment, Forest &amp; Climate\n  Change; State Forest Department\n  <\/td><td>\n  Applicable to projects linked to forests. eg:\n  laying a pipeline through a forest, dam construction, etc.\n  <\/td><\/tr><tr><td>\n  4.\n  <\/td><td>\n  Wildlife Protection Act, 1986\n  <\/td><td>\n  For the protection of National Parks &amp;\n  Sanctuaries for the protection of flora &amp; fauna\n  <\/td><td>\n  National Board of Wildlife, Chief Wildlife\n  Warden of State\n  <\/td><td>\n  If the transaction is related to Wildlife\n  sanctuary, National Parks, etc.\n  <\/td><\/tr><tr><td>\n  5.\n  <\/td><td>\n  Biological Diversity Act, 2002\n  <\/td><td>\n  Conservation of biological diversity, promote\n  equitable sharing of benefits.\n  <\/td><td>\n  Ministry of Environment, Forest &amp; Climate\n  Change; National Biodiversity Authority; State Biodiversity Board\n  <\/td><td>\n  If the transaction deals with biodiversity.\n  <\/td><\/tr><tr><td>\n  6.\n  <\/td><td>\n  Air (Prevention &amp; Control of Pollution) Act,\n  1981\n  <\/td><td>\n  To control air pollution. Providing CTO (Consent\n  to Operate) and CTE (Consent to Establish) certificates (NOC)\n  <\/td><td>\n  State Pollution Control Board\n  <\/td><td>\n  Applicable to all factories, manufacturing units\n  and expansion activity under the transaction deal. \n  <\/td><\/tr><tr><td>\n  7.\n  <\/td><td>\n  Water (Prevention &amp; Control of Pollution)\n  Act, 1974\n  <\/td><td>\n  To control Water Pollution. Providing CTO &amp;\n  CTE Certificates\n  <\/td><td>\n  State Pollution Control Board\n  <\/td><td>\n  Applicable to all factories, manufacturing\n  units, and expansion activity under the transaction deal\n  <\/td><\/tr><tr><td>\n  8.\n  <\/td><td>\n  Construction &amp; Demolition Waste Rules, 2016\n  <\/td><td>\n  For proper disposal of waste arising from the\n  construction &amp; demolition of sites\n  <\/td><td>\n  Local Authority &amp; State Pollution Control\n  Board\n  <\/td><td>\n  Applicable to most of the transactions involving\n  expansion &amp; development\n  <\/td><\/tr><tr><td>\n  9.\n  <\/td><td>\n  E-waste (Management &amp; Handling) Rules, 2016\n  <\/td><td>\n  For proper disposal of e-waste\n  <\/td><td>\n  State Pollution Control Board\n  <\/td><td>\n  Applicable to all major transactions, as e-waste\n  is inevitable in every business activity\n  <\/td><\/tr><tr><td>\n  10.\n  <\/td><td>\n  Hazardous and Other Waste (Management and\n  Trans-boundary Movement) Rules, 2016\n  <\/td><td>\n  Ensure safe handling, conversion, processing,\n  and treatment of hazardous waste. Permission is required under these rules if\n  the company deals with hazardous substances.\n  <\/td><td>\n  State Pollution Control Board\n  <\/td><td>\n  Applicable to most of the transactions involving\n  expansion &amp; development\n  <\/td><\/tr><tr><td>\n  11.\n  <\/td><td>\n  Noise Pollution (Regulation &amp; Control)\n  Rules, 2000\n  <\/td><td>\n  To control noise levels\n  <\/td><td>\n  State Pollution Control Board &amp; Central\n  Pollution Control Board\n  <\/td><td>\n  Required at any manufacturing facility,\n  production houses, etc\n  <\/td><\/tr><tr><td>\n  12.\n  <\/td><td>\n  Ozone Depleting Substances (Regulation &amp;\n  Control) Rules, 2000\n  <\/td><td>\n  Control &amp; reduce the use of ozone-depleting\n  substances\n  <\/td><td>\n  Ministry of Environment, Forest &amp; Climate\n  Change\n  <\/td><td>\n  Projects where air conditioning units play an\n  important role\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Environmental_Due_Diligence_EDD_Assessment\"><\/span>The Environmental Due Diligence (EDD) Assessment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The EDDR\nincludes assessments of subprojects&#8217; compliance with:<\/p>\n\n\n\n<ul>\n<li>Regulatory clearances (e.g., <strong><a href=\"https:\/\/corpbiz.io\/environmental-clearance\" title=\"Environmental Clearance\">environmental clearance<\/a><\/strong>, forest clearance, CRZ clearance)<\/li>\n\n\n\n<li>Environmental safeguards based on IIFCL&#8217;s ESSF and World Bank policies<\/li>\n\n\n\n<li>Analysis of alternatives<\/li>\n\n\n\n<li>Identification of environmental impacts and integration of management measures<\/li>\n\n\n\n<li>Public consultations and disclosure<\/li>\n<\/ul>\n\n\n\n<p>The\napproach to preparing the draft EDD involves the following work plan:<\/p>\n\n\n\n<ul>\n<li>Meeting of Environmental Development Specialists<\/li>\n\n\n\n<li>Collection of relevant information<\/li>\n\n\n\n<li>Site visit<\/li>\n\n\n\n<li>Preparation of draft EDD<\/li>\n\n\n\n<li>Joint site visit by funding organisation and project proponent<\/li>\n\n\n\n<li>Finalisation of EDD.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Conduct_EDD_in_India\"><\/span>How to Conduct EDD in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An environmental due diligence process involves the following steps:<\/p>\n\n\n\n<p><strong>Phase I<\/strong><\/p>\n\n\n\n<ul>\n<li>Examination of data room (virtual\/physical)<\/li>\n\n\n\n<li>Questionnaire and interviews<\/li>\n\n\n\n<li>Inspection of site<\/li>\n\n\n\n<li>Produce a report that contains findings, risk evaluation, liability costs, and recommendations.<\/li>\n<\/ul>\n\n\n\n<p><strong>Phase II<\/strong><\/p>\n\n\n\n<ul>\n<li>Investigation of issues recommended in Phase I<\/li>\n\n\n\n<li>Produce a report that contains detailed budgets for remediation or abatement.<\/li>\n\n\n\n<li>These processes are customised to meet the needs of customers.<\/li>\n<\/ul>\n\n\n\n<p><strong>Phase III<\/strong><\/p>\n\n\n\n<ul>\n<li>Remediation of identified contamination, abatement\nof water and air pollution and reducing hazardous waste.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_required_in_EDD\"><\/span>Documents required in EDD<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\ndocuments required for Environmental Due Diligence are as follows:<\/p>\n\n\n\n<p>EDD\ninvolves a review of various documents related to a property or project. The\ncommon documents that may be required in EDD include:<\/p>\n\n\n\n<ol>\n<li><strong>Property Records<\/strong>: These may consist of deeds, surveys, title reports, and tax assessments.<\/li>\n\n\n\n<li><strong>Environmental Reports<\/strong>: Environmental reports can include Phase I and II environmental site assessments, remediation plans, and monitoring reports.<\/li>\n\n\n\n<li><strong>Regulatory Permits and Compliance Records<\/strong>: These may include environmental permits, compliance records, and notices of violations.<\/li>\n\n\n\n<li><strong>Hazardous Materials Inventories<\/strong>: These can include lists of chemicals and hazardous substances used or stored on the property.<\/li>\n\n\n\n<li><strong>Geologic And Hydrologic Data<\/strong>: Geologic and hydrologic data may be needed to assess potential soil and groundwater contamination issues.<\/li>\n\n\n\n<li><strong>Historical Records<\/strong>: Historical records can include maps, aerial photos, and property-use records that may be used to identify potential contamination sources.<\/li>\n\n\n\n<li><strong>Financial Records<\/strong>: Financial records, including budgets and financial statements, may be needed to evaluate the financial risks associated with a property or project.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Environmental due diligence is a complex undertaking that demands significant exertion, endurance, and coordination. Given that it could be a deal-breaker, it needs to be handled with the utmost caution. The <strong><a href=\"https:\/\/corpbiz.io\/environmental-due-diligence\" title=\"Environmental Due Diligence\">process of environmental due diligence<\/a><\/strong> does not operate in a vacuum; it involves Environmental Consultants operating on-site to ensure compliance with legal requirements for permits and licenses. The teams need to collaborate closely to ensure the success of the transaction, as on-site conditions may provide a positive signal. At the same time, legal requirements are not fulfilled, or the deal may have serious irreversible environmental consequences despite the company having fulfilled all legal obligations. Please coordinate effectively between the teams to avoid significant costs and loss of business for the parties. Thus, the recommendations provided throughout the process will be highly beneficial in determining liability allocation and reducing the overall transaction costs for businesses.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-conduct-esdd-in-india\/\">How To Conduct ESDD In India? An Overview<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Due diligence is a term that describes the level of care taken by a person to prevent harm to other individuals or their belongings. On the other hand, environmental Due Diligence (EDD) is a procedure utilised to evaluate real estate for potential soil and groundwater contamination risks. EDD plays a crucial role in mergers and [&hellip;]<\/p>\n","protected":false},"author":52,"featured_media":55856,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3161],"tags":[3521],"acf":{"service_id":"688"},"authorName":"Suchandra Mukherjee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2023\/01\/MicrosoftTeams-image-52-1.jpg","authorDescription":"Suchandra is a 5th Year Law Student, pursuing Law from University of Mumbai. She has published 100+ Articles and Blogs on Legal Portals and International Multidisciplinary peer-reviewed journals. She is adept at legal research and can write fast SEO-friendly creative articles and blog posts on legal topics. She loves to paint and watch thriller movies in her free time.","postViews":2839,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/55855"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/52"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=55855"}],"version-history":[{"count":3,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/55855\/revisions"}],"predecessor-version":[{"id":68073,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/55855\/revisions\/68073"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/55856"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=55855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=55855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=55855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}