PROFIT OVER PASSAGE - A CASE OF COLLAPSE OF CORPORATE GOVERNANCE.

 Corporate Governance Practice Audit  

* Birendra K Jha                                                                                                                                                                       Independent Director, IICA ( Ministry of Corporate Affairs ); Corporate Governance  Practice Audit; CSR Social Impact - CSR Planning & Implementation;  Expert Company Law -SEBI Law - Social & Environmental Law   EMail: birendrajha03@yahoo.com

 Independent Director fails to control the corporate greed. This is proved here. This is a valid question for the Independent Director.  Why were biodiversity safeguards not integrated into the engineering design when the refinery is located near a protected elephant corridor? When corporate greed is high, company has no respect and priority for the biodiversity.  But Independent Directors are different. Why they are silent? Sorry. This is again poor quality and skill  of the Independent Director in regulating and understanding the basic of Corporate Governance. The Independent Directors and the company Secretary all failed to understand correctly provisions as tabulated below:  

  

Where was the oversight? The presence of a massive concrete wall slicing through a protected elephant corridor is more than an engineering oversight—it is a glaring indictment of Independent Director failure. When corporate greed drives expansion, biodiversity is often the first casualty. But Independent Directors are appointed to be the "moral compass" of the boardroom. Their silence here is deafening.

The Hard Questions for the Board:

Integrated Design: Why were biodiversity safeguards not mandated at the blueprint stage for a refinery in such a sensitive zone?

The Ethical Gap: If the corporation lacks respect for natural corridors, why did the Independent Directors fail to enforce it?

Governance Competency: This isn't just a lack of empathy; it is a fundamental failure of skill and duty in regulating corporate impact by the Independent Directors.

The wall stands as proof: when Independent Directors remain silent, corporate greed builds barriers that nature cannot break.

There are various Corporate Governance related compliance violations. The Directors have failed to comply them:

1. SEBI (LODR) Regulations, 2015

Under the Listing Obligations and Disclosure Requirements, the board—and specifically Independent Directors—have clear mandates regarding ESG (Environmental, Social, and Governance) risk.

Regulation 17(9) - Risk Management: The Board is responsible for framing, implementing, and monitoring the Risk Management Plan. Failing to identify the "Legal and Reputational Risk" of blocking a protected elephant corridor is a failure of this mandate.

Regulation 34(2)(f) - BRSR Reporting: Since 2022-23, the top 1,000 listed entities must submit a Business Responsibility and Sustainability Report (BRSR).

Principle 6 of the NGRBC (National Guidelines on Responsible Business Conduct) explicitly requires companies to respect and make efforts to protect and restore the environment.

Providing false or "greenwashed" data in the BRSR regarding biodiversity impact is a punishable offense under SEBI laws.

Fiduciary Duty of Independent Directors: Under Schedule IV of the Companies Act (Code for Independent Directors), they are required to "safeguard the interests of all stakeholders." In this context, the "environment" and "local community" are legal stakeholders.

2. The Wildlife Protection Act, 1972

Elephants are listed under Schedule I, affording them the highest level of legal protection in India.

Section 9: Prohibits the "hunting" of wild animals, which has been judicially interpreted to include the destruction of their habitat or blocking of their natural migratory routes.

Section 38-V: Relates to Tiger Conservation plans but sets the precedent for "Ecological Connectivity." Permanent concrete structures in identified corridors directly violate the spirit of habitat connectivity mandated for Schedule I species.

3. Environment Protection Act (EPA), 1986

Eco-Sensitive Zones (ESZ): Under Section 3, the Central Government notifies areas around National Parks (like Kaziranga) as ESZs.

No-Development Zones (NDZ): Specifically for refineries (like this case in Assam), the MoEFCC has  declared a 15km radius as an NDZ. Building a boundary wall for the business operation within an NDZ is a criminal violation of the EPA.

4. Judicial Precedent (The "First Right" Rule)

The National Green Tribunal (NGT) and the Supreme Court of India in Numaligarh Refinery Ltd. vs. Rohit Choudhury have established a landmark principle:

Elephants have the first right in the forest over business.

The courts ordered the demolition of such walls, stating that corporate property rights do not override the biological necessity of migratory corridors.