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Regulatory risks
Sugar mill effluents are high in organic content. Untreated or partially treated
effluent discharge has led to degradation of water and aquatic life, which has
resulted in a significant number of conflicts between local communities and
sugar industries. A recent example includes the action taken by the Punjab
Pollution Control Board (PPCB) to close the AB Grains Spirit Mill at Kirhi
Afghana village for causing air and water pollution in the area 116 .
In India, the use, management, and ownership of water is often linked to land
or irrigation structures rather than to the resource itself; hence property rights
to water are poorly defined. As a consequence, legal disputes over water are
often complex and costly 117 . India also shares a number of transboundary rivers
with Pakistan, Bangladesh, and Nepal. Water-sharing agreements, particularly
with Pakistan, can be a source of tension.
Reputational risks
Public discussions and regulatory sanctions about the environmental impacts
related to sugarcane production and processing represent a high reputational
risk for companies involved. The accompanying national or international press
can damage the reputation of the company involved.
In India, about
35 million farmers grow
sugarcane. It needs
2,200 Liters to grow
one kilogram. Since
most of this is irrigation
water, freshwater
scarcity is already
threatening production.
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