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Dr Reddy's still caught in eco litigation

C.R. Sukumar

HYDERABAD, April 27

DR REDDY's Laboratories Ltd (DRL), which is currently eying the overseas generic non-branded formulations markets and simultaneously upgrading its manufacturing facilities to the US-FDA standards, may not be discharged from the environmental litigation p ending against it in the Supreme Court in the near future.

The apex court, in its hearing on the decade-old litigation, on March 13 this year, had adjourned the case to a later date.

The original writ was filed by the Indian Council for Environmental Legal Action in 1989 in the Supreme Court seeking safety for the people residing in the areas of Patancheru and Bollarum, near here.

The Council had sought clean drinking water to the people affected by chemical industrial pollution. It had asked the Court for an order directing the Central and State Governments to avert pollution and compensate those affected by it.

DRL is one of the respondents as three of its active pharmaceutical ingredient units were named by the Andhra Pradesh Pollution Control Board (APPCB) as being among the polluting industries.

After taking the necessary action in complying with the directives of the Supreme Court and notices served by APPCB, DRL requested the pollution control board to remove its name from the partial compliance category and to reconsider its direction, which required the company to divert the natural drain outside the premises.

Meanwhile, in 1996, the Andhra Pradesh district judge proposed that the polluting industries compensate farmers in the Patancheru, Bollarum and Jeedimetla areas for discharging effluents which damaged agricultural land. The compensation was fixed at Rs 1,300 per acre for dry land and Rs 1,700 per acre for wet land over the following three years.

So far, DRL had paid an amount of Rs 19.22 lakh towards compensation. The company, along with the Bulk Drug Manufacturers Association (BDMA), was of the view that full compensation was already paid by 1996 and that no further payment was due.

Accordingly, both DRL and BDMA requested the Supreme Court to dismiss the petition against them since they were in compliance with the court directives.

According to DRL officials, ``We believe it will be some time from now before we are released from the environmental litigation because there are 62 industries operating in Bollarum, 32 of which discharge industrial effluent into the Nakka river. We beli eve that we have maintained our effluent treatment plants and treated the effluents well within the limits prescribed by the environmental authorities and have also made payment towards the compensation to be paid to the farmers.''

However, according to DRL officials, ``if companies which are subject to this litigation are found not to be compliant, then all companies affected by the litigation may be required to cease operations. We will continue to upgrade our effluent treatment plants in accordance with the directives issued by the Pollution Control Board and the Supreme Court and to pay any compensation due to the affected farmers.''

In view of this, Dr Reddy's Labs is currently not in a position to estimate the cost it would have to bear in the event it becomes unsuccessful in the environmental litigation. ``We have not recorded any provision in our financial statements with respect to this matter because management considers the possibility of liability to be remote.''