The South Korean polymer factory near Vishakapatnam, in the southern Indian state of Andhra Pradesh, which leaked toxic gas last week lacked mandatory environmental clearances. The incident left 12 people dead and hundreds unwell. Experts said the revelation exposed a dangerous gap in India's enforcement of environmental laws. The LG Polymers factory, owned by South Korea's biggest chemical company LG Chem, admitted in an affidavit on May 10 last year that it had not obtained environmental clearance for its plant since 1997. The official document was submitted to the state Environment Impact Assessment Authority as part of the company's application for an expansion. LG Polymers wrote: "As on this date, our industry does not have a valid environmental clearance substantiating the produced quantity, issued by the competent authority, for continuing operations." Under Indian law, the petrochemical-based factory is classified under hazardous industries. To operate, it needs a federal environmental clearance, granted by the Ministry of Environment after an environmental impact assessment, which includes measuring the ecological consequences to soil, water and air, and consulting residents near the factory. The assessment has been mandatory for such industries since 2006. Ms Geeta Menon, joint secretary of the environment ministry, told The Hindustan Times that the polymer plant was "a very old project" established before the environmental impact assessment notification was applicable. Started in 1961, the polymer manufacturer was bought by LG Chem in 1997. From 2004 to 2016, the factory expanded its production capacity from 280 to 415 tons per day. The only official permission for operations it had was from the Andhra Pradesh Pollution Control Board. Such state permits are often automatically renewed. In March 2017, the federal environment ministry announced a one-time opportunity for "violators" old units that did not have permits - to apply for environmental clearance. LG Polymers did not apply during the six-month window. Instead, in April 2018, the company applied to state environment authorities for clearance to expand its capacity further to 655 tons per day. The state agency asked for more information, which the company provided in May last year, admitting that it had never sought or received environmental clearance. In June, realising the unit was a highly polluting one; the state agency suggested the company apply to the federal ministry. Records show that LG Polymers did apply to the federal ministry for an expansion on Jan 2, 2018, but withdrew the submission in a day, citing "typo errors". Ms Menon said there was "confusion" on whether it should be assessed by the state or by the environment ministry.

The state transferred the application to the Indian government only last month, she added. The company thus operated for 23 years without environment clearance, and no state or federal agency closed down the unit. The gas leak is now being investigated and a court has directed LG Polymers' management to make an initial deposit of 500 million rupees (S$9.4 million) towards compensation to the victims. Andhra Pradesh's Minister for Industries has now identified 86 companies in the state, which will be allowed to restart only after safety audits and government clearance.

Answer the following questions: 1. There have been growing calls for government to better protect social and environmental interests by asserting more control over business activities. Discuss the various policy tools and critically analyse why the government policy in this case has not been effective in meeting these demands. Give real examples to support your arguments. (10 marks)