India Drafts Notification of Third Party Environment Audit

India’s Ministry of Environment, Forest and Climate Change (MoEFCC) has drafted the “Environment Audit Notification” on January 29, 2024, and is inviting comments for 60 days starting the said date. The draft notification mainly stipulates the conditions for the establishment of private environmental auditors and auditing firms, which are private and not governmental institutions, through which companies can conduct audits in various environmental fields and make environmental appeals. In accordance with the Green Credit Rules, 2023, environmental auditors will also be appointed as designated agencies to audit corporate activities prior to the issuance of green credits. However, these third-party audits are voluntary and will not be a replacement for inspections conducted by government authorities.

The term “Environment Auditor” is defined as follows:

An individual professional or firm having expertise in various aspects of environmental management that inter-alia include national and international environmental frameworks, legislations, conventions and declarations, guidelines, environmental approvals, environmental standards, relevant concepts for effective environmental assessment and management viz. pollution load assessment, carrying capacity of an area, energy audit, environment financial audit, environment compliance audit, environment performance audit, water audit etc.

As part of an environment audit, the following sources of information may be considered:

• Green approvals obtained by the project proponent from relevant government agencies/regulatory authorities
• Environment management plan (EMP) as associated with environment impact assessment (EIA) report
• Rules and regulations governing the project proponent relating to environmental compliance
• Materials from civil society organizations, peer review reports, media reports, academic reviews etc.
• Financial accounts
• Technology solutions adopted
• Projects, Activities, Processes being undertaken as part of the Green Credit Rules, 2023.

In order to ensure independence and to avoid conflicts of interest, the following conditions for the environment auditor have been specified:

• Is not related to any owner or operator or project proponent of the relevant project, process or activity. Such a relationship includes employer, business partner, employee, having a contractual arrangement outside the audit, spouse, partner, sibling, parent, and child.
• Does not have or had any pecuniary interest in the relevant project, process or activity of the auditee or parent company. Such an interest includes the situation where there is a reasonable likelihood or expectation or obtaining of financial gain or loss to the auditor, or to a person to whom the auditor is closely related.
• Is not involved in, jointly or severely, the environment audit for the environmental impact assessment report of auditee

This notification is available to download at link below:
https://egazette.gov.in/writeReadData/2024/251722.pdf