I. INTRODUCTION "The ‘polluter pays principle’ states that whoever is responsible for damage to the environment should bear the costs associated with it." "If anyone intentionally spoils the water of another ... let him not only pay damages, but purify the stream or cistern which contains the water..." - Plato Polluter Pays Principle has become a popular catchphrase in recent times. 'If you make a mess, it's your duty to clean it up'- this is the main basis of this slogan. It should be mentioned that in environmental law, the 'polluter pays principle' does not refer to "fault." Instead, it favors a curative approach which is concerned with repairing ecological damage. Few people could disagree with what seems at first glance to be such a straightforward proposition. Indeed, properly construed, this is not only a sound principle for dealing with those who pollute but is an extension of one of the most basic principles of fairness and justice: people should be held responsible for their actions. Those who cause damage or harm to other people should "pay" for that damage. This appeal to our sense of justice is why the "polluter pays principle" (PPP) has come to resonate so strongly with both policy makers and the public. The polluter pays principle is an economic rule of cost allocation. The source of the principle is in the economic theory of externalities. II. HISTORICAL PERSPECTIVE OF POLLUTER PAYS PRINCIPLE The first mention of the Principle at the international level is to be found in the 1972 Recommendation by the OECD Council on Guiding Principles concerning International Economic Aspects of Environmental Policies, where it stated that: "The principle to be used for allocating costs of pollution prevention and control measures to encourage rational use of scarce environmental resources and to avoid distortions in international trade and investment is the so- called Polluter-Pays Principle” The OECD emphasizes the necessity for removal of subsidies which would prevent polluters to bear the costs of pollution which they caused, urging then those costs be internalized into the prices of goods and services: the PPP should "... not be accompanied by subsidies that would create significant distortions in international trade and investment." This is normally referred to as weak or standard PPP. However, the PPP evolved into what is called extended or strong PPP. In 1989 OECD included in the PPP costs related to accidental pollution; the Recommendation of the Council concerning the Application of the Polluter-Pays Principle to Accidental Pollution states that: "In matters of accidental pollution risks, the Polluter-Pays Principle implies that the operator of a hazardous installation should bear the cost of reasonable measures to prevent and control accidental pollution from that installation [...]". The PPP has also been reaffirmed in the 1992 Rio Declaration, at Principle 16: and is mentioned, recalled or otherwise referred to in both Agenda 21 and the World Summit on Sustainable Development (WSSD) Johannesburg Plan of Implementation. The PPP is today one of the fundamental principles of the environmental policy of European Community. The Treaty Establishing the European Community, under Title XIX Environment, provides at article 174.2 that: "Community policy on the environment [...] shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay." The PPP is widely acknowledged as a general principle of International Environmental Law, and it is explicitly mentioned or implicitly referred to in a number of Multilateral Environmental Agreements. III. CONCEPT OF POLLUTER PAYS PRINCIPLE The polluter pays principle is essentially a principle directed to the internalization of environmental costs. This involves the internalization of environmental costs into decision making for economic and other development plans, programs and projects that are likely to effect the environment. The principle requires accounting for both the short term and the long term external environmental costs. This can be undertaken in a number of ways including: 1. environmental factors being included in the valuation of assets and services; 2. adopting the polluter pays (or user pays) principle, that is to say, those who generate pollution and waste should bear the cost of containment, avoidance or abatement; 3. the users of goods and services paying prices based on the full life cycle of the cost of providing goods and services, including the use of natural resources and assets and the ultimately disposal of any waste; and 4. environmental goals, having been established, being pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, that enable the best placed to maximize benefits or minimize costs to develop their own solutions and responses to the environmental problems. The polluter pays principle is an important basis of international law. 1. In 1972, the OECD wrote Guiding Principles concerning International Economic Aspects of Environmental Policies, stating: “… the polluter should bear the expenses of carrying out the above-mentioned measures decided by public authorities to ensure that the environment is in an acceptable state.” 2. The polluter pays principle was incorporated into the Rio Declaration on Environment and Development, which states: Principle 16: “National authorities should endeavor to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.” (earth.org) https://www.economicshelp.org/blog/6955/economics/polluter-pays-principle- ppp/ 3. De Sadeleer, Environmental Principles, From Political Slogans to Legal Rules, Oxford University Press, 2002, explains, the polluter pays principle: “Requires the polluter take responsibility for the external costs arising from his pollution. Internalization is complete when the polluter takes responsibility for all the costs arising from pollution; it is incomplete when part of the cost is shifted to the community as a whole.” 4. J Moffet and F Bregha, “The Role of Law in the Promotion of Sustainable Development” (1996) 6 Journal of Environmental Law and Practice explain the philosophical foundation of the “polluter pays” principle in the following way: “The polluter pays principle reflects an important philosophical position…Under the polluter pays principle, the community effectively ‘owns’ the environment, and forces users to pay for the damage they impose. By contrast, if the community must pay the polluter, the implicit message is that the polluter owns the environment and can use and pollute it with impunity. This message is inconsistent with the principles of sustainable development and is not widely reflected in contemporary policy pronouncements, although it remains the effective basis for decision-making in the many areas in which public policy has not yet compelled polluters to internalize their external costs.” 5. In 1986, Article 25 of the Single European Act provided that: “Action by the Community relating to the environment shall be based on the principles that preventative action should be taken, that environmental damage should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay”. As quoted in P W Birnie and E Boyle, International Law and the Environment, Clarendon Press, Oxford, 1992, p. 110. IV. FLAWS IN THE CONCEPT OF POLLUTER PAYS PRINCIPLE It is true that polluter pays principle has a positive effect to reduce pollution. The principle seems quite relevant for pollution that occurs during industrial activity, although it remains inefficient in the case of historical pollution. Most developing countries, however, have not yet subscribed to the PPP as a main environmental policy guideline. As Rege (1994) points out, this is due to adverse economic conditions. Legal theorists discovered few loopholes of this rule. The flaws are as follows: 1. Firstly, ambiguity still exists in determining 'who is a polluter'. In legal terminology, a 'polluter' is someone who directly or indirectly damages the environment or who creates conditions relating to such damage. Clearly, this definition is so broad as to be unsupportive in many situations. For example, Mr.Aryaan owns a BMW .If his BMW emits harmful gas in the atmosphere, he will be directly liable for the emission .Furthermore, the manufacturer of the vehicle will be indirectly liable for committing ecological damage too and so the retailer of the vehicle and the fuel supplier, and the government who created 'conditions relating to the damage' by building roads and neglecting public transport regulations. 2. Second, a large number of poor households, informal sector firms, and subsistence farmers cannot bear any additional charges for energy or for waste disposal. 3. Third, small and medium-size firms from the formal sector, which mainly serve the home market, find it difficult to pass on higher costs to the domestic end-users of their products. 4. Fourth, exporters in developing countries usually cannot shift the burden of cost internalisation to foreign customers due to elastic demand. 5. Lastly, many environmental problems in developing countries are caused