THE COVER story of this issue of Down To Earth proves that Indian companies have a considerable potential to reduce wastes and hence, their waste treatment costs.

Last year, India became the first country in the world to require environmental audits by law. But the results of this statute, at the end of one year, are not very gratifying. The biggest fear that companies have is that their audits will be used against them by pollution control authorities. The law only demands that companies prepare these audits every year and submit them in time to the pollution control boards of their respective states, and it prescribes penalties and punishment for non-submission. But the government has been silent on what happens thereafter.

This fear may prove to be the undoing of this entire effort. The purpose of an environmental audit is for a company to study its own operations and how it is using its energy and material inputs. Environmental audits are taken up on a voluntary basis by several Western companies nowadays. These audits have become popular because they help companies to cut down on their energy and materials use, thus reducing normal production costs; and, they help them to reduce end-of-the-pipe waste treatment costs simply because pollution is less. Indian companies are profligate users of both energy and materials and they need to conserve on both.

Clearly, a violating company must be brought to book. But there are sufficient laws in the hands of environment departments to take erring companies to task. The MEF should, therefore, assure Indian companies to the best of its ability, and within the constraints of law, that it will not use the data provided to the boards in environmental audits to prosecute them.

Once this data starts coming in, the MEF should analyse it rapidly to show what the average usage norms of Indian companies are so that bad companies can know that they are unnecessarily incurring high production costs. And, it is at that stage that Kamal Nath and Manmohan Singh together should take measures that really bite. Heavy excise taxes should be levied on unnecessary use of toxic materials and critical resources like water. This would be start of what German environmentalist Ernst Fritz von Weizsacker has called 'ecological tax reforms'. This is a language that all industrialists understand.

The fear of prosecution from the outset will only get falsehood and provide a boost to the inspector raj, and defeat the whole exercise of environmental audits.