• Last week, the environment ministry said that no compensation has been paid since 2019 from the Environment Relief Fund (ERF) to aid individuals affected by hazardous substances.

• Union Minister of State for Environment Ashiwini Kumar Choubey said that as on March 31, 2023, the fund has accumulated Rs 1,062 crore.

What is the purpose of Environmental Relief Fund?

• In exercise of the powers conferred by section 7(A) of the Public Liability Insurance (PLI) Act, 1991, the central government established the Environmental Relief Fund (ERF) in 2008. 

• The United India Insurance Company Limited (UIICL) is the fund manager of the ERF Scheme. 

• The ERF’s primary purpose is to offer immediate relief to victims of accidents involving hazardous substances.

• The amount of compensation to be awarded has also been notified as part of the schedule to the PLI Act.

• The PLI Act mandates industries handling hazardous materials to mandatorily obtain public liability insurance.

• Apart from contributions from hazardous industries that opt for insurance under the PLIA, the ERF consists of compensation awarded by the National Green Tribunal (NGT) for damage to the environment under Section 24 of the NGT Act, 2010.

• Applications for compensation from the ERF are submitted to the respective collector.

• The collector subsequently issues an order directing the fund manager, United India Insurance Company Limited, to transfer funds from the ERF to the collector’s account. The collector then disburses the amount to the claimant.

Public Liability Insurance Act

• The Public Liability Insurance Act, 1991 enacted with a purpose to provide immediate relief to the persons affected by accident occurring while handling hazardous substances and for matters connected therewith or incidental thereto. 

• It was enacted after the Bhopal gas tragedy in 1984.

• PLI Act, 1991 covers death or injury to any person other than workman (general public) or damage to property resulting from an accident while handling hazardous substances.

• The Act covers 179 chemicals and flammable substances. 

• As per Section 7A of the Amended Act, 1992, the Major Accident Hazard (MAH) units shall contribute an amount equal to the amount of premium of the insurance policy to the Environment Relief Fund to be created by the central government.

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