GUIDE - ENVIRONMENTAL LAW IN SOUTH AFRICA
Transcript of GUIDE - ENVIRONMENTAL LAW IN SOUTH AFRICA
Contents
04 Introduction
06 OurFirm
07 OurFootprintinAfrica
08 OurEnvironmentalPractice
09 OverviewofSouthAfricanEnvironmentalLaw
18 TransactionalConsiderations
22 KeyContacts
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Guide - Environmental Law in South Africa
Introduction
This is the first edition of our Guide to Environmental Law in South Africa. It is intended to provide a selective overview of certain aspects of environmental law in South Africa and to answer some of the most frequently asked questions regarding environmental law in a transactional context.
Wewill,infuture,expandthisguidetoalsocoverenvironmentalregulatory
considerationsinKenya,TanzaniaandUganda,alongwithotherAfricanjurisdictions.
Thecontentsofthisguideareforreferenceonlyand
shouldnotbeconsideredasubstitutefordetailed
legaladvice.ItiscorrectasofDecember2019.Ifyourequire
furtherinformationorspecificadvice,pleasecontactone
ofthekeycontactslistedattheendofthispublication.
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Our Firm
WithsevenofficesinfiveAfricancountriesandover400specialisedlawyers,we
drawonouruniqueknowledgeofthebusinessandsocio-politicalenvironmenttoadviseclientsonawiderangeoflegalissues.
Everywherewework,weofferclientsaservicethatuniquelyblendsexpertiseinthelaw,knowledgeofthelocalmarketandanunderstandingoftheirbusinesses.Ouraimistoassistthemtoachievetheirobjectivesassmoothlyandefficientlyaspossiblewhileminimisingthelegalandregulatoryrisks.
Ourclientsincludecorporates,multinationalsandstate-ownedenterprisesacrossarangeofindustrysectorsaswellasfinancialinstitutionsandgovernments.
Ourexpertiseisfrequentlyrecognisedbyindependentresearchorganisations.WewererankedfirstbydealvalueandsecondbydealcountinMergermarket’s2018Africaleaguetablesforlegaladvisors.WereceivedawardsinfiveoutofsixcategoriesattheDealmakersEastAfricaAwardsfor2018:toplegaladviserinM&Aforbothdealflowandvalue,toplegaladviserinGeneralCorporateFinanceforbothtransactionflowandvalue,andadvisedontheDealoftheYear.IntheDealmakers SouthAfricaAwardsfor2018,wewereplacedfirstfordealflowintheGeneralCorporateFinancecategory.
WewerenamedSouthAfricanLawFirmoftheYearfor2018intheChambersAfricaAwardsforExcellence.Wealsoreceivedthe2019awardsforTransportationandInfrastructureTeamoftheYearandTMTTeamoftheYearattheAfricanLegalAwardshostedbyLegal Week andtheCorporateCounselAssociationofSouthAfrica.
Bowmans exists to help our clients overcome legal complexity and unlock opportunity in Africa. Our track record of providing specialist legal services, both domestic and cross-border, in the fields of corporate law, banking and finance law and dispute resolution, spans over a century.
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Our Footprint in Africa
WeprovideintegratedlegalservicesthroughoutAfricafromsevenoffices
(CapeTown,DaresSalaam,Durban,Johannesburg,Kampala,MokaandNairobi)infivecountries(Kenya,Mauritius,SouthAfrica,TanzaniaandUganda).Weworkcloselywithouralliancefirm,AmanAssefa&AssociatesLawOffice,inEthiopia,andourbestfriendsinNigeriaandMozambique(UdoUdoma&Belo-OsagieandTacianaPeãoLopes&AdvogadosAssociados,respectively).WealsohavestrongrelationshipswithotherleadinglawfirmsacrosstherestofAfrica.WearerepresentativesofLexMundi,aglobalassociationwithmorethan160independentlawfirmsinallthemajorcentresacrosstheglobe.Thisassociationgivesusaccesstothebestfirmsineachjurisdictionrepresented.
Mozambique
Kenya
Tanzania
South Africa
Nigeria
Uganda
Mauritius
Best friends
Bowmans offices
Significant transaction or advisory experience
Alliance firms
Ethiopia
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DoingbusinessinAfrica,asinmostinternationaljurisdictions,requiresspecialisedcounseltoeffectivelymanagecorporateenvironmentalrisksanddecision-making.
WeareoneofAfrica’sleadingenvironmentallawfirms,offeringrealdepthandabroadrangeofexpertiseinenvironmentallaw.
Ourservicecoverslegalriskmitigationandmanagement,permitting,projectsanddevelopments,appealsagainstadministrativedecisionsandjudicialreviews,criminalandadministrativedisputes,litigation,impactsandcompliance,due-diligenceinvestigationsandcomplianceauditing.
Ourspecialistenvironmentallawyersareequippedwithapracticalunderstandingofboththelawanditsapplicationbytheregulatorsandareabletohandleenvironmentalmattersinallthejurisdictionsinwhichwearelocated.
Wehaveastrongcommercial-environmentalunderstandinginatransactionalcontext,includingwithrespecttotheintersectionamongsectorssuchasmining,energyandinfrastructuredevelopments,environmentalissuesandcommunityinterests,pollutionandcontaminatedlandliabilities,aswellasappropriatemechanismsforthemanagementandallocationofrelatedrisksintransactions,theauthorisationrequirementsfordevelopmentsandgeneralenvironmentaltransactionalrisksandmitigation.
Our Environmental Practice
Wefrequentlyrepresentclientswithrespecttoenvironmentalauthorityenforcementactions,compliancenotices,directives,appealsandreviews,aswellasincriminalprosecutionsonenvironmentalmatters.
Chambers & PartnershasrankedourSouthAfricanEnvironmentalPracticeinBand1forthepastfiveyears(2015to2019).Weareregardedasan,‘Impressiveenvironmentalgroupwithaprominentpositioninthemarket”.Clientsarequotedinthe2018editionofthepublicationassayingthatwe:‘…havebeenexcellentinallregards–strategy,guidanceandlegalaction’andthatwe,‘giveresponsibleandprofessionaladviceand,whereappropriate,adviseclientsagainstunnecessaryorimprudentlitigation’.
Weservethetop-endoftheSouthAfricanandbroaderAfricanmarket,advisingongovernmentprocesses,commerciallendingandmergersandacquisitions(includingcross-jurisdictionalworkintransactionalandothermatters).Ourclientsincludelargelistedcorporationsandthepublicsector.
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OVERVIEW OF SOUTH AFRICAN ENVIRONMENTAL LAW
1.WhataretheprincipalenvironmentallawsinSouthAfrica?
EnvironmentalmattersarehighlyregulatedinSouthAfrica,withthecountryhavinganenvironmentalrightenshrinedinitsConstitution,coupledwitharangeofenvironmentallawsatanational,provincialandmunicipal(localgovernment)level.
TheConstitutionofSouthAfricaprovidesthatthe‘environment’genericallyisafunctionalareaofconcurrentnationalandprovinciallegislativecompetence,whilesomeaspectsofmorespecificenvironmentalrelatedconsiderations(suchasairpollution,potablewatersupplysystems,anddomesticwastewaterandsewagedisposalsystems)arewithintheexecutiveandadministrativeauthorityoflocalgovernment.
TheNationalEnvironmentalManagementAct,107of1998(NEMA)istheprincipalenvironmentalstatute.Alignedwiththisareseveralso-called‘specificenvironmentalmanagementActs’(SEMA),includingthe:
• NationalWaterAct,36of1998(theNationalWaterAct);
• NationalEnvironmentalManagement:WasteAct,59of2008(theWasteAct);
• NationalEnvironmentalManagement:AirQualityAct,39of2004(theAirQualityAct);
• NationalEnvironmentalManagement:BiodiversityAct,10of2004(theBiodiversityAct);
• NationalEnvironmentalManagement:IntegratedCoastalManagementAct,24of2008(theCoastalManagementAct);and
• NationalEnvironmentalManagement:ProtectedAreasAct,57of2003(theProtectedAreasAct).
Variousregulations,aswellasnormsandstandards,havebeenpublishedunderNEMAandtheSEMAs.
Otherlegislationalsoaddressesenvironmentalissuesatanationalandprovinciallevel.Thisincludesthe:
• MineralandPetroleumResourcesDevelopmentAct,28of2002(theMPRDA)inthecontextofmineralprospectingandmining,andoilandgasexplorationandproduction-relatedactivities;
• WaterServicesAct,108of1997;• NationalForestsAct,84of1998;• NationalHeritageResourcesAct,25of1999
(theHeritageResourcesAct);and• MarineLivingResourcesAct,18of1998
(theMarineLivingResourcesAct).
InadditiontotheBiodiversityActandProtectedAreasAct,natureconservationandbiodiversity-relatedmattersareregulatedunderprovinciallegislationthatappliesinSouthAfrica’snineprovinces.
2.Whattypeofenvironmentalconsents,authorisations,approvals,licencesorpermitsmayberequiredforaneworexistingdevelopmentoroperation?
NEMAandmanyoftheSEMAsaswellasotherenvironmentalstatutes,requireauthorisations,licencesorpermitstobeobtainedbeforeparticularactivitiescancommenceorbeundertaken.
Obtainingconsents,orregistrationofactivitiesorfacilities,isalsotypicallyrequiredfornaturalresourceextractionorutilisation,suchasintheminingandproductioncontext,forindustrialoperations,inthecaseoffishingandforestry,andfortakingwaterfromwaterresources,orimpactingonwaterresources.
Consentsmayberequiredunderlegislationregulatingthestorageoruseofcertaintypesofhazardoussubstances,nuclearandradioactivity-relatedactivities,biodiversityutilisationandimpacts,conservationandactivitiesinprotectedareas,andcertainagriculturalactivities.
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• CoastalManagementAct–includescomplianceobligationsandrestrictionswithrespecttoactivitieswithinthecoastalzone,orthatmayimpactonthecoastalzone(suchastheuseofcoastalpublicproperty),aswellasmarineandcoastalpollutioncontrol(suchastherequirementtoobtainapermitfordumpingatsea).
• AirQualityAct–requiresthelicensingoflistedactivitiesthatresultinatmosphericemissions,withspecificminimumemissionstandardsbeingprescribedforsuchactivities,aswellasphaseddatesbywhencompliancewiththeprescribedemissionstandardsmustbeachievedbyexistingornewoperations.TheAirQualityActrequiresthereportingofemissions;includesmechanismsforairpollutioncontrol(suchasbycreating‘PriorityAreas’aroundthecountrywhereairqualitymanagementplansarerequiredtobeinplace);appliesdustcontrolregulations;andestablishescategoriesof‘controlledemitters’whichalsohaveregulatedemissionstandardsthatmustbecompliedwith.Arecentfocushasbeenonestablishingmechanismsforregistration;measuringandreportingregardinggreenhousegasemissionsinlightofacarbontaxregimethatappliesinSouthAfricaintermsoftheCarbonTaxAct,15of2019;andotheranticipatedtighterclimatechangerelatedregulatorycontrols,includingthroughapendingClimateChangeAct.
• HeritageResourcesAct,25of1999–createsvariousformsofheritageprotection,includingpermittingrequirementsforimpactsonheritageresources,andrequiresnotificationtoandapprovalfromtheheritageauthoritiesforcertaintypesofspecifieddevelopmentactivities.
• Provincialandlocalgovernmentlegislation–authorisations,licencesorpermits,oragreementswiththemunicipality,aretypicallyrequiredforactivitiessuchasthestorageofflammablesubstancesordangerousgoods,thedischargeofeffluentintomunicipalsewers,municipalwatersupply,andundertakinglistedscheduledtrades.Permitsareoftenrequiredunder
Activitiesthatcausepollutionorenvironmentaldegradationmayrequireauthorisationbeforetheactivitycancommence.
Environmentallawsthatimposerequirementsforconsents,suchasauthorisations,licencesorpermits,include:
• NEMA–requiresanenvironmentalauthorisationbeforemanytypesofconstruction,development,expansion,decommissioningandotherso-called‘listedactivities’cancommence.Theseincludeactivitiesassociatedwithclearingofindigenousvegetation,transformationoflandandwithrespecttotheexplorationfor,extraction,productionandminingof,mineralandpetroleumresources,aswellastheassociatedclosureordecommissioningofsuchactivities.
• NationalWaterAct–requiresalicenceorotherformofentitlement,suchasageneralauthorisation,forundertakingwateruses,whichinclude:abstractivewateruses,variouseffluentdischargeandwaste-relatedactivitiesthatmayimpactonwaterresources,aswellasactivitiesentailingphysicalimpactson,orinproximityto,waterresources.
• WasteAct–requireslicensingoflistedwastemanagementactivitiesorcompliancewithnormsandstandardsforcertainotherlistedactivities;currentlyregulatesresiduedepositsandresiduestockpilesinthecontextofmining,productionandrelatedoperations;andalsoimposesobligationsrelatingtothereporting,handlingandremediationofcontaminatedland.Contaminatedsitesmayneedtobereportedtotheenvironmentalauthoritiesandarepotentiallysubjecttoremediationorders,beingdeclaredasremediationsitesandrecordedontheSouthAfricancontaminatedlandregisterandwiththeDeedsRegistry.Theenvironmentalauthoritymayimposeconditionsthatmustbecompliedwithinthetransferofownershipofremediationsites.
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• NationalWaterAct–anownerofland,apersonincontroloflandorapersonwhooccupiesorusesthelandonwhichanyactivityorprocessisorwasperformedorundertakenoranyothersituationexists,whichcauses,hascausedorislikelytocausepollutionofawaterresource,musttakeallreasonablemeasurestopreventanysuchpollutionfromoccurring,continuingorrecurring.
NEMAandtheNationalWaterActallowfordirectivestobeissuedbytherelevantauthorities(suchaswhenthestatutorydutyofcareisnotbeingadequatelymet)andforremediationorothercosts,whenincurredbytheauthorities,toberecoveredfromawidecategoryofpersons.Asidefrompersonswhoareresponsibleforthepollutionordegradation,aswellasownersofthelandandtheirsuccessor-in-title,personsincontrolof,orwhohadtherighttousethelandattherelevanttimes,orwhonegligentlyfailedtopreventtheactivityorthesituationcomingabout,maypotentiallybeliableforreasonableremediationcosts.
SimilarbroadlystatedgeneralobligationsarecontainedincertainoftheSEMAsandapplywithrespecttothespecificsectorsregulatedundertheSEMAs,suchasthedutytoavoidcausingadverseeffectsonthecoastalenvironmentcontainedintheCoastalManagementAct.ThereisalsoageneraldutyinrespectofwastemanagementandspecificdutiesofpersonstransportingwastecontainedintheWasteAct(includingthatanypersonwhosellsaproductthatmaybeusedbythepublicandthatislikelytoresultinthegenerationofhazardouswastemusttakereasonablestepstoinformthepublicoftheimpactofthatwasteonhealthandtheenvironment).
Inrespectofwaste,NEMAcontainscradle-to-graveprinciples,whichareincreasinglybeinggivendirectlegaleffectthroughtheWasteAct,creatingextendedproducerresponsibilityforcertainproductsandmaterials.Requirementsforcompulsoryindustrywastemanagementplansforarangeofsectors,includingthetyreindustry,thepaperandpackagingindustry,theelectricalandelectronicindustry,andthelightingindustryhavealsobeenpublished.
provinciallegislationforactivitiesthatimpactprotectedanimalorplantspecies,whilenoisecontrolandwasterelatedlegislationalsoappliesincertainprovinces,amongstotherenvironmentallaws.
Anenvironmentalimpactassessment(EIA),orthelessonerousBasicAssessmentReport(BAR)process,orotherformsofimpactassessment,oftenhavetobeconductedpriortoobtainingauthorisationforundertakingregulatedactivities.NEMAandtheWasteAct,amongotherlegislation,requireanenvironmentalauthorisationorwastemanagementlicencetobeprecededbyanimpactassessment,eitheranEIAorBAR,dependingonthenatureoftheintendedactivity.
3.Ifaprojectordevelopmentdoesnotrequireconsents,authorisations,approvals,licencesorpermitsintermsoftheenvironmentallaws,whatgeneral‘dutyofcare’orothersimilarcomplianceobligationsarethereintermsoftheenvironmentallaws?
UndersomeoftheSEMAs,therearespecifiedactivitiesthat,whilenottriggeringtheneedforlicences,insteadrequirecompliancewithpublishednormsandstandards,aswellaspossibleregistrationoftheactivity.
Anoverarchingstatutoryenvironmental‘dutyofcare’obligationisimposedinsection28ofNEMAandsection19oftheNationalWaterAct,creatingseparatebutsimilargeneraldutiesthathavetobeobservedregardingthepreventionandremediationofpollutionorenvironmentaldegradation:
• NEMA–requiresthatanypersonwhocauses,hascausedormaycausesignificantpollutionordegradationoftheenvironmentmusttakereasonablemeasurestopreventsuchpollutionordegradationfromoccurring,continuingorrecurringor,insofarasitisauthorisedbylaworcannotreasonablybeavoidedorstopped,tominimiseandrectifysuchpollutionordegradation.Personsuponwhomtheseobligationsareplacedincludeownersoflandorpremises,personsincontroloflandorpremises,orpersonswhohavearighttousethelandorpremises.
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Dependingonthecategoryoflistedactivityforwhichanenvironmentalauthorisationissought,whichisdeterminedbytheListingNoticeinwhichtheactivityappears,applicationsentaileitheraBAR(ashorterprocedure)orascopingandEIA(alengthierprocedure).
Timeframesfortheenvironmentalauthorisationapplicationprocessaresetoutinthe2014NEMAEnvironmentalImpactAssessmentRegulations:
• TheshorterBARprocess(includingtheperiodforpublicparticipation,considerationoftheBARbytheenvironmentalauthorityandthetimeperiodsexpresslyprovidedforwithinwhichadecisionmustbetakenbytheauthority)maytypicallytakearoundsixmonthstocomplete.
• Ingeneral,thelongerEIAprocessforthe
grantingofanenvironmentalauthorisation(takingintoconsiderationthetimeperiodswithinwhichthescopingreportmustinitiallybesubmitted;thetimeperiodswithinwhichtheEIAmustthereafterbesubmitted;thepublicparticipationprocess;andtheperiodsprovidedforwithinwhichadecisionmustbetakenbytheauthority)maytypicallytakearound10-12months,orpossiblylonger.
ApplicationsforlicencesintermsoftheWasteActandtheAirQualityActarealsosubjecttotheseprocessesintermsofNEMA.
AnapplicationforawateruselicenceundertheNationalWaterActcanoftentakelengthytimeperiods.IntermsoftheWaterUseLicenceApplicationandAppealRegulations,theprocedure(includinganysiteinspection,ifnecessary;publicparticipationperiods;submissionoftechnicalreports;andconsiderationofandadecisiononthefullapplicationandrelevantreportsbytheDWS)maytakeoverayeartocomplete.
4.Whichauthoritiesissueenvironmentalconsents,authorisations,approvals,licencesorpermits?
Eachstatuteprescribestherelevantcompetentauthority.However,thekeygovernmentdepartmentsandagenciesthatareinvolvedintheadministrationandenforcementofenvironmentallawsinclude:
• DepartmentofEnvironment,ForestryandFisheries(DEFF)andtherelevantprovincialEnvironmentDepartments;
• DepartmentofWaterandSanitation(DWS);• DepartmentofMineralResources(DMR);• DepartmentofEnergy(DoE);• SouthAfricanHeritageResources
Agency(SAHRA);• DepartmentofAgriculture;and• Metropolitan,districtandlocalmunicipalities.
Ataprovinciallevel,environmentaldirectoratesinthenineSouthAfricanprovincialgovernmentsareresponsiblefortheadministrationandenforcementofaspectsofenvironmentallawintheprovinces.
5.Whatisthetypicaltimeperiodrequiredtoobtainenvironmentalconsents,authorisations,approvals,licencesorpermits?Ispublicparticipationrequiredintheprocess?
Thetimeperiodforobtainingenvironmentalconsentswilldependontheapplicablelegislationandtheauthorisationprocessthatisprescribedunderthelegislation.Thismusttakeintoaccountthenatureandextentoftechnicalinvestigationsthatmaybeneeded,publicparticipationrequirementsandtheextentofopposition,andtimeperiodsfortheauthoritytoreviewandconsidertheapplication,amongotherconsiderations.
NEMA,beingtheprincipalSouthAfricanenvironmentalstatute,requiresthatanenvironmentalauthorisationmustbeissuedbeforealistedactivitymaycommence,withadiverserangeover120listedactivitiescurrentlyapplyingunderNEMA,continuedinthreeseparateListingNoticespublishedin2014.
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SEMAs(suchaswastemanagementlicencesintermsoftheWasteAct,atmosphericemissionlicencesintermsoftheAirQualityActandwateruselicencesundertheNationalWaterAct)aresubjecttoauthority‘review’periods,atwhichtimetheconditionsofthelicencemaybeamendedorotherwisevaried.
Changestoconditionsduringtheperiodofthepermit,licenceorauthorisationcouldalsobemadebytherelevantauthorityunderothercircumstancesasstipulatedintheapplicablelegislation,orotherwiseasallowedintermsoftheconditionsofthepermit,licenceorauthorisation.
Theconditionscontainedinthepermit,licenceorauthorisationmustbeadheredto,withafailuretocomplynotonlybeinganoffence,butalsopotentiallyresultinginthevariation,withdrawalorsuspensionofthepermit,licenceorauthorisation,eitherintermsoftheconditionsoftheauthorisationitself,ortheapplicablelegislation.
7.Arethereanylocalownershiporempowermentrequirementsinrelationtotheissuingandmaintainingofenvironmentalconsents,authorisations,approvals,licencesorpermitsoraresuchconsentsissuedwithanylocalownershiporempowermentobligationsasconditionsthereto?
TheMarineLivingResourcesActprovidesthatonlyadefined‘SouthAfricanperson’may(unlessotherwisedeterminedbytherelevantMinisterinrelationtoholdersof‘existingrights’)acquireandholdrightsascontemplatedinSection18,includingcommercialfishingrights.
Otherthanincertainstatelicensing,permittingandauthorisationprocesses,thereisno‘hardlaw’thatanyprivateentityinSouthAfricamustmeetspecificbroad-basedblackeconomicempowerment(B-BBEE)targetsormustimplementaB-BBEEpolicy.TheBroad-BasedBlackEconomicEmpowermentAct,53of2003(BEEAct)doesnotprovideforoffencesorpenaltiesrelatingtoB-BBEEperformancebutratherseeks,throughtheeconomicmeasuresdiscussedbelow,tofacilitateauniformapproachtoB-BBEEintheSouthAfricaneconomy.
6.Whatisthesecurityoftenureonceissuedwithanenvironmentalconsent,authorisation,approval,licenceorpermit?Cansuchconsentsbewithdrawn,suspendedorcancelledandunderwhatcircumstances?
Apublicparticipationprocessmustusuallybeundertakenaspartoftheprocessofapplyingforanenvironmentalconsent.Interestedoraffectedpartiesmaymakesubmissionstotherelevantauthorityastowhetherthepermit,licenceorauthorisationshouldbegrantedorregardingtherequirementsthatshouldbeimposedasconditionssoanyadverseeffectsthatwouldariseasaresultoftheissuingoftheconsentcanbemitigated.Thisprocessalsoallowsforaninterestedoraffectedpartytoobjecttothegrantingofapermit,licenceorauthorisationtoapprovetheactivityordevelopment.
Oncethepermit,licenceorauthorisationhasbeenissuedorrefusedbytherelevantauthorityintermsofNEMAoranyotherSEMA,appealsmaybelodgedagainstthedecisionoftheauthority.Pendingtheoutcomeoftheappeal,thedecisionoftheauthoritysubjecttotheappealunderNEMAoraSEMAwillusuallybeautomaticallysuspended.Bywayofexample,ifadecisiontograntanenvironmentalauthorisationunderNEMAistakenonappeal,theenvironmentalauthorisationwilleffectivelybesuspendedpendingtheoutcomeoftheappeal,withconsequentdelaystocommencementofthedevelopmentoractivity.TheappealproceduresareusuallydeterminedintermsofregulationsunderNEMA,certainSEMAsorotherenvironmentallegislation.
UnderthePromotionofAdministrativeJusticeAct,3of2000(PAJA),apersonmayseekaHighCourtjudicialreviewofthedecisiontograntortorefuseapermit,licenceorauthorisation.However,otherthaninexceptionalcircumstances,suchareviewmayonlybesoughtthroughthecourtsonceallinternalremediesprovidedforintheenvironmentallegislationconcernedhavebeenexhausted,suchastheinternalappealprovisions.Onceissued,manyofthepermits,licencesandauthorisationsunderNEMAandthe
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IntermsoftheBEEAct,governmentbodiesandstate-ownedenterprises(SOE)arerequiredtotakeprivatesectorparties’relativeB-BBEElevelsintoaccountwhen(amongotherthings)theyissueanylicenceorotherauthorisationinrespectofeconomicactivity.Assuch,businessesthatinteractwithgovernmentby,forexample,operatinginsectorsthatrequirelicencestoperformtheirparticularactivities,areincentivisedtoincreasetheirlevelsofB-BBEE.
TheMinisterofTradeandIndustryhasalsopublishedvarioussector-specificcodesthatdetailthemannerinwhichB-BBEEmustbemeasuredforbusinessesoperatinginparticularsectors.Whereasector-specificcodehasbeenissued,businessesinthatsectorarerequiredtoapplytherelevantsectorcoderatherthantheCodesofGoodPractice(theCodes).ThegeneralCodesapplyonlywherethereisnosector-specificcodealthoughthegeneralCodesandthesector-specificcodesshouldgenerallyapplythesamebroadprinciples.Sectorcodeswerepublishedfor,amongothers,theforestry,construction,transport,andagriculturesectors.
Statutesthatspecificallyprovidefortheconsiderationofempowermentgoalsincludethe:
• MPRDAinrespectofmining,prospecting,explorationandproductionactivitieswhichrequiretheholdersofsuchrightstomeetstipulatedempowermentpercentages;and
• MarineLivingResourcesAct,andtheGeneralPolicyontheAllocationandManagementofFishingRights,2013,publishedthereunder,amongotherpolicies,whichprovidethat,inrespectofcommercialfishinglicenceallocationsandgrants,empowermentandtransformationgoalsbeconsidered(however,nobenchmarksinthisregardhavebeenpublished).
EvenintermsofNEMAasitiscurrentlydrafted,aswellastheSEMAs,anenvironmentalorotherauthorisationmaybeissuedsubjecttoconditionsimposedbytherelevant
authority.Therefore,inprinciple,iftheauthorityreasonablydeemsempowermentorlocalownershiprequirementsnecessarytobeincorporatedintoanenvironmentalauthorisationitispossiblethatempowermentorlocalownershiprequirementscouldbeimposed,butthismustalwaysbedonelawfully.Forexample,wateruselicencesissuedintermsoftheNationalWaterActareoccasionallymadesubjecttoconditionsrelatingtoobtainingormaintainingspecificB-BBEElevels.
8.Whatregulatoryrehabilitation/remediationprovisionsarethereinrelationtoanewandexistingdevelopmentoroperationanddotheserehabilitation/remediationobligationssurviveintheeventofasaleofbusiness?
Asidefromtheprovisionsspecificallyrelatingtoprospecting,mining,exploration,productionandrelatedactivities,whichwillbeaddressedindepthinaseparateBowmansguide,NEMAandtheNationalWaterActbothimposea‘dutyofcare’regardingthepreventionandremediationofpollutionandenvironmentaldegradation.ThepersonsuponwhomanobligationisplacedarestatedinNEMAtoincludeanowneroflandorpremises,apersonincontroloflandorpremises,orapersonwhohasarighttousethelandorpremises.
ASouthAfricanSupremeCourtofAppealjudgmentdealingwithdirectivesissuedintermsoftheNationalWaterActheldthatdirectivesissuedagainstanowneroflandandbusinesscanpersistevenafterthelandandbusinessaresoldandthatpriorownerhaslostitsconnectionwiththeland.Thismakesinclusionofappropriatecontractualmechanismsinasaleofbusinessagreementakeyissueinthehandlingofresponsibilitiesintermsofanydirectivesandinaddressingandallocatingthepotentiallong-termenvironmentalliabilitiesoftheparties.
Inaddition,NEMArequiresthatanapplicantforanenvironmentalauthorisation(inparticularrelatingtoprospecting,exploration,miningorproduction)mustcomplywiththeprescribedFinancialProvisioningRegulationsforenvironmentalrehabilitationinrespectof
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liabilityfordirectors,employeesandagentsinthecaseofso-calledNEMASchedule3offences.
NEMAprovidesfortheappointmentofenvironmentalmanagementinspectors,withnationalandprovincialenforcementdirectoratesinvariousgovernmentdepartments.
NEMA,alongwithmanyotherstatutes,empowersofficialstoissuecompliancenoticesanddirectivesrequiringtheholderofanyauthorisationtocomplywiththeconditionsthereof,orwithapplicablelegislation,ortoensurethatpollutionorenvironmentaldegradationisaddressed.Anyfailuretocomplywithdirectivesorcompliancenoticesusuallyconstitutesanoffenceintermsoflegislationandmaybefollowedbycriminalprosecutionand,afteradministrativeprocesshasbeenfollowed,thesuspensionorwithdrawaloftherelevantauthorisation.IfadirectivewhichhasbeenissuedunderNEMAortheNationalWaterActrelatingtopollutionorenvironmentaldegradationisnotcompliedwith,theenvironmentalauthoritymaytaketherequiredremedialstepsitselfandseektorecoverthecoststhereoffromtheresponsibleperson,aswellasawiderangeofotherpersons.
Virtuallyallenvironmentallegislationwhichrequirespermits,licencesorauthorisationsissubjecttoprovisionsprovidingfortheirwithdrawal,suspensionorcancellationforafailuretocomplywiththeconditionsimposed,orwiththeapplicablelegislation.
NEMAprovidesfortherecoveryoflossesordamagescausedbyanenvironmentalcrimefromtheconvictedperson,includingadirectorconvictedunderNEMA.Inparticular,anorganofstateorprivatepartythathasincurredcoststorehabilitatetheenvironmentcanclaimsuchcosts,lossesordamagesinthecriminaltrialwithouthavingtolodgeaseparatecivilclaimagainsttheconvictedperson.Thecourtmayalsoassessthefinancialadvantagethattheoffendergainedasaresultoftheenvironmentalcrimeandordertheconvictedpersontopaybackthefruitsofthecrimeasdamages,orcompensation,orafine.Furthermore,theconvictedpersonmayberequiredtopaythecostsoftheprosecutionofthecrime.
closureandongoingpost-decommissioningmanagementofnegativeenvironmentalimpacts.ItisalsoincreasinglycommonforenvironmentalauthorisationsissuedunderNEMAandwastemanagementlicencesissuedundertheWasteActtocontainconditionswhichimposedecommissioning,rehabilitationorongoingliabilityobligationsontheholderoftheauthorisationwithregardtotheauthoriseddevelopmentandrelatedactivities,bothduringtheconstructionperiodandattheendoflifeoftherelevantinfrastructureorfacility.
Therearealsoprovisionsinenvironmentallaws,suchasNEMAandtheNationalWaterAct,thatallowforsecuritytoberequiredbytheapplicantrelatingtoenvironmentaldamagecausedbytheauthorisedactivity.
TheNationalWaterAct,andWaterUseLicenceApplicationandAppealRegulationspublishedthereunder,providemechanismsenablingtherelevantauthorityto,ifnecessary,requiresecuritytobeputinplacepriortotheissuingofalicence.Similarly,NEMAmakesprovisionfortherelevantauthoritytopublishregulationsrequiringthepaymentorprovisionofsecurityinrelationtoenvironmentalauthorisations.FinancialProvisioningRegulationshavebeenpublishedthusfarinrespectofmining,prospecting,explorationandproductionactivities.
9.WhatarethetypesofenforcementmeasuresexercisedbytheenvironmentalauthoritiesinSouthAfrica;forexample,directives,suspensionordersorcompliancenotices,administrativepenalties,criminalprosecutionorrecoveryofremediationorcleanupcosts?
Mostenvironmentalstatutescontaincriminalsanctionsfornon-complianceandpenaltiesaretypicallypotentiallysignificant,usuallyincludingthepossibilityofimprisonmentforamaximumspecificperiod,impositionofafine,orbothsuchprisonsentenceandfine.PenaltiesunderNEMAandtheSEMAsareusuallyintherangeofamaximumofZAR5millionuptoamaximumofZAR10millionand/orimprisonmentforuptofiveor10years,dependingontheoffence.Thereisalsothepotentialforpersonalcriminal
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(admissionofguiltfinesarefinespaidforlessseriousenvironmentaloffencesintermsoftheCriminalProcedureAct,51of1977);
• therehasbeenasignificantincreaseinthenumberofcompliance-monitoringeventsinwhichfacilitieswereinspectedtoascertaincompliancewithrelevantlegislationandauthorisations;
• thenumberofpre-directivesissuedhasincreased(pre-directivesareissuedtoapersonsuchaswherethereisconfirmationanactivityiscausingpollutionordegradationoftheenvironment);
• thenumberoffinalcompliancenoticesissuedhasgenerallyincreasedinrecentyears;and
• thetotalamountofadministrativefinespaidforrectificationofactivitiesundertakenwithoutthenecessaryauthorisationintermsofNEMAamountedtoZAR10millionin2017/2018(asopposedtothepreviousyear’sZAR9.7million).Intermsofsection24GofNEMA,whenalistedactivityisundertakenwithoutpriorauthorisation,arectificationapplicationmustbemadetotheauthorities.Partofthisprocessincludesanadministrativefinebeingimposedontheapplicant,whichmaybeuptoZAR5million.
Theincreaseincompliance-monitoringinspectionsindicatespre-compliancenotices,aswellasultimatelycompliancenotices,shouldberegardedasthemoretypicalmechanismofadministrativeenforcementthatwouldbeencountered,alongwithpollution-relateddirectiveswhereappropriate,withprosecutionsbeinglesscommon.Thereisalsoincreasinglyactiveinvolvementofnon-governmentalorganisations,environmentalassociationsandinterestgroups,whichnotonlymonitorandreportontheenvironmentalperformanceofcompaniesoperatinginSouthAfrica,butwhicharewillingtolitigateonenvironmentalissues.ThisincludesarecentsuccessfulprivatecriminalprosecutioninaccordancewiththeprovisionsofNEMA.
10.Whichoftheenforcementmeasuresdotheauthoritiesgenerallytake?
TheSouthAfricanNationalEnvironmentalComplianceandEnforcementReports(NECERReports),whicharepreparedonanannualbasisbyDEFF,reflectenforcementandcompliancestatisticsacrossallprovincesandvarioussectors.TheNECERReportsindicatecompliancemonitoringinspectionsandadministrativesteps,suchastheissuingofpre-complianceandcompliancenotices,aswellasdirectives,aregenerallythemostcommoninitialenforcementmeasure(asidefromminoradmissionofguiltfinesformoretrivialoffences).
Therehasbeenageneraltrendofincreasesinthenumberofcompliance-monitoringinspectionsoffacilities,issuingofpre-compliancenotices,aswellascompliancenotices.
Thenumberofmatterswhichproceedtocriminalprosecutionandtrialissubstantiallylower,withtheenvironmentalauthoritiesandtheNationalProsecutingAuthoritybeingmoreselectiveastowhichnon-compliancemattersproceedtoprosecution.However,therehavebeensuccessfulprosecutionsonenvironmentalmattersinrecentyears.
11.ArethereanyevidentenforcementtrendsarisingfromcourtdecisionsinSouthAfrica?
OntheNECERReportsandthelimitedavailablecourtdecisions,statisticallytheredoesnotyetappeartobeaconsistentoruniformtrendtoenforcementovertheyears(thosejudgmentsthatareavailableareoftenaresultofpleaagreements).
However,thegeneralapproachbyauthoritiescanbeascertainedfromtheNECERReports,whichprovidesfeedbackonthetypesofenforcementstepstakenandprosecutionsthathaveproceeded.TheNECERReportssuggestenforcementefforts,generally,aretrendingupwards(albeitwithsomeyearonyearfluctuations):
• thenumberofcriminaldocketsregisteredhasgenerallytendedtoincreaseinrecentyears;
• therehasbeenanupwardtrendinthenumberofadmissionofguiltfinesissued
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hasbeenaggrievedbyanauthority’sdecisionhasarighttobegivenreasonsforthedecision.
13.Howlongdoesittypicallytakeforsuchremediestobepursuedtoaconclusion?
IntermsoftheappealregulationsunderNEMA,anappellantmustsubmithisorherappealwithinspecifiedtimeperiodsassetoutintheappealregulations.Theseregulationsalsocontainspecifictimeframesforrespondingstatementstoanappealtobesubmittedandbywhenadecisionontheappealmustbemade.Ifexpertadviceisrequiredbytheappealauthorityorifanindependentappealpanelisappointed,thetimeforprocessinganappealintermsoftheNEMAappealregulations,wouldbelonger.Typically,appealproceedingsunderNEMAshouldtakeaboutfourmonthstocomplete,butthismaybelongerdependingonthecomplexity.
AmorecomplexmechanismforappealsappliesundertheNationalWaterActand,dependingonthenatureoftheactivityforwhichawateruselicenceapplicationand/ortheadministrativedecisionwhichisthesubjectoftheappeal,anappealmayhavetobemadetotheMinisterofWaterandSanitationorotherwisetotheWaterTribunal,thelatterbeingapotentiallylengthyandcumbersomeprocess.
Followingtheappealproceedingssetoutabove,and(otherthaninexceptionalcircumstances)onlyoncetheinternalprocesshasbeenexhausted,ifaggrievedbythedecisionoftheappealauthority,apersonmaytakethedecisiononjudicialreview.
Thematterwillthenbeconsideredbythecourtanditisnotpossibletosayhowlongthejudicialreviewprocesswouldtaketofinalise.14.ArethereanyspecificlawswhichgovernclimatechangeinSouthAfrica?
InlinewithitsinternationalcommitmentsasamemberoftheUnitedNationsFrameworkConventiononClimateChange,SouthAfricahasrecentlyimplementedacarbontaxregimethroughtheCarbonTaxAct15of2019.TheCarbonTaxActprovidesforacarbontaxtobeleviedonthecarbondioxideequivalentofthesumofgreenhousegasemissionsofataxpayer.
12.Whatremediesdoesanapplicantforaconsent,authorisation,approval,licenceorpermitshaveiftheconsentisdelayedorrefused,ifitisissuedwithunfavourabletermsorconditions,orifitisrevoked?
SpecifictimingstipulationsareputinplaceinNEMAandthe2014EIARegulationsintermsofwhichanenvironmentalauthorisationapplicationprocessmustproceed,andwithinwhichperiodsadecisionmustbetakenonwhetherornottograntanapplication.Forexample,itisrequiredthattheauthoritymustgrantorrefusetheapplicationwithin107daysafterthereceiptbytheauthorityofanapplicant’sBARorscopingreportandEIA.
NEMAcontainsprovisionsthat,inthecontextofmining-relatedapplications,allowforadelayinthedecisiontobeescalated.Inextremecircumstancesofunreasonabledelay,theapplicantmayconsidertakingactionbywayofapplicationtotheHighCourtintermsofthePAJAtocompeltheauthoritytomakeadecision.
SouthAfricanenvironmentallegislationgenerallycontainsprovisionsallowingforappeals,includingbytheapplicantaswellasinterestedandaffectedparties,againstmanydecisions(suchasrelatingtograntingpermits,licencesandauthorisations)andspecificappealregulationshavebeenpromulgatedunderNEMA(whichalsoapplywithrespecttoappealsintermsofcertainoftheSEMAs,includingtheWasteAct,AirQualityAct,CoastalActandtheBiodiversityAct).IntermsofNEMA,anypersonmayappealadecisionoftheauthority.Duringthecourseofthisappealprocess,thedecisionwhichisthesubjectoftheappealgenerallyissuspendedpendingtheappealoutcome.
FollowingtheappealproceedingsintermsofNEMA,apersonaggrievedbyanenvironmentalauthority’sdecisionmay,wherejustified,seekajudicialreviewofthedecisionunderPAJAinacourtortribunal.However,suchareviewmaygenerallyonlybesoughtthroughthecourtsoncetheaggrievedpersonhasexhaustedallinternalremediesprovidedforintheenvironmentallegislationconcerned.Furthermore,intermsofPAJA,apersonwho
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butinsomeinstances,anentirelynewconsentapplicationmayberequiredbythebuyer:
• WasteAct–inrelationtoasaleofbusiness,theholderofthewastemanagementlicence,withthepermissionofthelicensingauthority,maytransferthelicencetothenewowner.
• NEMA–intermsofthe2014EIARegulations,itispossibletoapplyfortheamendmentoftheenvironmentalauthorisation,includingchangingthenameofthepersonwhoholdstheauthorisationintheeventofachangeofownershiportransferofrightsandobligations.
• AirQualityAct–ifownershipofanactivityforwhichanatmosphericemissionlicencehasbeenissuedistransferred,itispossibletotransferthelicencetothenewowneroftheactivity.Inordertoeffectsuchtransfer,itisnecessarytoapplytothelicensingauthority.
• NationalWaterAct–theholderofanentitlementtousewaterfromawaterresourceinrespectofanylandmaysurrenderthatentitlement,orpartthereof,inlieuofadifferentlicenceapplicationinrespectofotherlandandontheconditionthesubsequentapplicationisgranted.TheNationalWaterActalsoprovidesthatlicencesmaybeamendedtoreflectsuccessors-in-titleasanewlicenseefortheremainderofthetermofthelicence.
Inthecaseofasaleofshares,changeofcontrolprovisionsaresometimesincludedasconditionstoconsents;forexample,wastemanagementlicencesundertheWasteActfrequentlycontainauthoritynotificationrequirementsinthecaseofachangeofparticularsoftheultimateholdingcompanyofthelicenceholder.RightsandpermitsundertheMarineLivingResourcesActoftencontainconditionsregardingsaleofsharesandchangeofcontrol,potentiallyrequiringnotificationorapprovalincertaincircumstances.
Allconsentsrelevanttothetransactionwouldneedtobeindividuallyscrutinisedforanychangeincontrolimplications.
ThetaxisadministeredasanenvironmentallevyundertheCustomsandExciseAct91of1964,whichalsorequiresemissiongenerationfacilitiestoberegisteredorlicenced.TheemissiongeneratingactivitiesinrespectofwhichthetaxisleviedalignswiththeGreenhouseReportingRegulationsundertheAirQualityAct,intermsofwhichemissionsneedtobereportedinspecificinstances.
FurtherandmoreonerousregulatorycontrolsareanticipatedthroughthependingClimateChangeAct,whichamongstothers,isanticipatedtoimposemandatorycarbonbudgetsandcompliancewithgreenhousegasmitigationplans.
Inaddition,therehasrecentlybeenafocusontheextenttowhichclimatechangeimpactsneedtobeconsideredintheenvironmentalauthorisationprocessunderNEMA,aswellassocialpressureontheneedforlenderstodisclosetheclimatechangeimpacts/greenhousegasemissionsandclimatechangerelatedfinancialriskoftheprojectsinwhichtheyinvest.
TRANSACTIONAL CONSIDERATIONS
1.Arethereany‘changeofcontrol’ortransferofownershiprequirementswithrespecttoconsents,authorisations,approvals,licencesorpermits,suchaswhereasaleofbusinessorsharesisanticipated?
Intheeventofasaleofbusiness,theenvironmentalconsentsheldbythesellerwilltypicallyhavetobetransferred,inordertobeheldinthenameofthebuyer.Certainenvironmentallegislationstipulatesaspecificprocesstobefollowedtoeffectthetransferoftheconsentfromonepersontoanother(whichmayincludea‘fitandproperperson’qualificationcriterionsuchasundertheWasteActandAirQualityAct)
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2.Isitrequiredintermsofenvironmentallegislationforasellertodiscloseenvironmentalliabilitiesand/orcomplianceissuestoaprospectivepurchaserinthecontextofatransaction?
TheWasteActprescribesthatnopersonmaytransfercontaminatedlandwithoutinformingthepersontowhomthelandistobetransferredthatthelandiscontaminated.Inaddition,ifthelandhasbeendeclaredaremediationsiteintermsoftheWasteAct,theMinistermustbenotifiedofthetransactionandanyconditionsimposedbytheMinistermustbecompliedwith.
Therearenootherprovisionsintermsofenvironmentallegislationthatspecificallyrequirethedisclosureofenvironmentalliabilitiesorcomplianceissuestoaprospectivepurchaser.
However,itisrequiredintermsofthe2014EIARegulationsunderNEMA(andisanincreasinglycommonrequirementinconditionsofenvironmentalauthorisationsandlicences)thatholdersundertakeindependentcomplianceauditsfromtimetotime,andreporttheresultsoftheaudits,aswellasreportingroutinemonitoringresultsandpollutionincidents,totheenvironmentalauthorities.Theseauditandotherreportsprovideausefulpointofreferenceforaprospectivepurchaser.
PendingamendmentsproposedtoNEMAwillprovideforthepossibilityforasuccessor-in-titleorapersonincontroloflandtoundertakearectificationapplicationprocessforatransgressionrelatingtocommencingofalistedactivityunderNEMAbyapreceding/otherparty.Theimplicationofthisproposedamendmentisthattheapplicantwhopurchasesthebusinessandproceedswithrectification,maybeliableforanadministrativefineofuptoZAR5million(ormoreintermsofthependingNEMAamendments)byvirtueoftheownershipofthehistoricallyunlawfulbusinessand/orcontrolofthelandassociatedwiththetransgression.
Itisprudentforpurchaserstoundertakeappropriatedue-diligenceinvestigationsincircumstanceswheretherecouldbeenvironmentalcomplianceorpollution/contamination-relatedrisksandliabilitiesassociatedwithabusiness.
3.Cancontractualenvironmentalindemnitiesbetweenthepartiestothetransactionbeusedeffectivelytolimitexposureforenvironmentalliabilities?
Tovaryingdegreesanddependingonthefacts,contractualenvironmentalindemnitiesandundertakingsbetweenthepartiestothetransactioncanbeusedasaneffectivemechanismtolimit,butnotentirelyremove,exposuretoenvironmentalliabilitiesandrisks.Specialistlegaladviceisoftenrequiredtoensurethepotentialrisksandliabilitiesareidentifiedandthatcommerciallyappropriateandpracticaltermsareincludedinthetransactiondocuments.
Acompanymayalsotakeoutenvironmentalimpairmentliabilitypoliciesand/orDirectorsandOfficersLiabilityInsurancetoprotectitsdirectorsandofficersagainstthepaymentofanydamagesorfines.
Therearelimitationsastohowfarthisformofcontractualandinsuranceprotectioncango.Forexample,adirectorwhoisappointedfollowingthetransactioncouldfacepersonalcriminalliability,includingpossibleimprisonment,intheeventthatthereisongoingnon-complianceassociatedwiththebusinesswhichcannotbeimmediatelyremediedpost-transaction(suchaswherealicencetooperateakeyfacilityisoutstanding,orwhereconditionsofalicence,suchasrelatingtoemissionlimits,cannotbecompliedwithwithoutinvestingsignificantcapitalexpenditureandlongconstructionleadtimes).
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4.Canlenders,shareholders,directors,employees,agentsorotherpersonsbeliableforenvironmentaltransgressionsand/orpollutionandenvironmentaldegradation-relatedremediationcosts?
SouthAfricanstatutoryprovisionsregardingpossibleextendedliabilityfortransgressionsandpollutionorenvironmentaldegradationhavenotyetbeencomprehensivelytestedinthecourts,butabroadoverviewofsomeoftheprincipalareasofpotentiallender,shareholder,director,employeeandagentexposuretoenvironmentalliabilitiesissetoutbelow.Itwouldbeadvisableforspecificlegaladvicetobesoughtinatransactionalcontextwherethereareconcernsofmaterialenvironmentaltransgressionsorpollutionandenvironmentaldegradation-relatedliabilities,particularlyincircumstanceswhereenforcementactionhasalreadybeenthreatenedorcommenced.
NEMAallowsforpersonalcriminalliabilityofdirectors,employeesandagentsinthecaseofso-calledNEMASchedule3offences,withthemajorityofthemoresignificantenvironmentalcrimesthatfallunderarangeofenvironmentallegislationatanationalandprovinciallevelbeingincludedasSchedule3offences.
Inthecaseofdirectors,NEMAprovidesthatdirectorsatthetimeofcommissionoftheoffenceshallbeguiltyoftheoffence,wheretheoffenceresultedfromthedirector’sfailuretotakeallreasonablestepsnecessaryunderthecircumstancestopreventthecommissionoftheoffence.Thisissubjecttoafurtherprovisothatproofoftheoffencebythecompanyconstitutesprimafacieevidencethedirectorisguilty,creatinganevidentiaryburdenonthedirector.Inordertoescapeliability,adirectorwouldhavetoshowthatheorshetookallreasonablestepsunderthecircumstancestopreventthecommissionoftheoffence.
NEMAalsoprovidesfortherecoveryoflossesordamagescausedbyanenvironmentalcrimeandotherfinancialclaimsfromtheconvictedperson,includingadirectorconvictedunderNEMA.
Inthecaseofpotentialcriminalliabilityofshareholders,thereisnopresumptionorotherstatutoryenvironmentalliabilitydirectlyassociatedwithshareholding.Alloftheelementsofacrimewouldhavetobeestablishedforasuccessfulprosecutionandconvictionofashareholderforanyoftherelevantoffences,suchasstipulatedinNEMAandtheNationalWaterAct.
Regardingpollutionandenvironmentaldegradationliabilities,section24N(8)ofNEMAprovidesthat,notwithstandingtheSouthAfricanCompaniesAct,71of2008,thedirectorsofacompany“arejointlyandseverallyliableforanynegativeimpactontheenvironment,whetheradvertentlyorinadvertentlycausedbythecompanyorclosecorporationwhichtheyrepresent,includingdamage,degradationorpollution”.Thisprovision(whichwaspreviouslycontainedintheMPRDA)remainsuntestedintheSouthAfricancourts.
Section28ofNEMAandSection19oftheNationalWaterActbothseektomakeanypersonwhocanbesaidtohaveparticipatedinorbenefitedfromapollutingactivitypotentiallyliableforthepollution,includingthroughcost-recoverymechanismsthatapplyifremediationcostsareincurredbytheauthorities.Bothstatutesincludeprovisionswhichmakeapersonwhoisincontroloflandorpremisespotentiallyliableforpollutionorenvironmentaldegradation,orforpollutionofwaterresources.SouthAfricancourtshavenotconsideredwhatthetermincontrolmeansinthiscontextofpollutionorenvironmentaldegradationandwhetherthisextendstoparentcompanies.However,dependingonthefacts,ashareholdercouldpotentiallybeconsideredtobeincontroloflandorpremisesundercertaincircumstances.
BothNEMAandtheNationalWaterActalsoextendcost-recoveryliabilitytopersonsresponsiblefor,orwhodirectlyorindirectlycontributedto,thepollutionordegradationandpersonswhonegligently
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failedtopreventtheactivityorprocessbeingperformedorundertakenorthesituationoccuring.Additionally,ashareholdercouldpossiblybeliableunderthecost-recoveryprovisionsbasedonitsshareholdingbecauseNEMAandtheNationalWaterActprovidethatanypersonwhobenefitedfromremediationundertakenbytheauthoritiesmaybeliablefortheremediationcosts.Ourcourtshavealsonotyetconsideredtheseprovisions.
ThesameliabilityprinciplesunderNEMAandtheNationalWaterActcouldpotentiallyapplyinappropriatecircumstancestolenders,inparticularwherealenderhasahighdegreeofoversightovertheborrower’soperations.
Civilliabilityindelict(tort)fordamageandcleanupcostsmayapplytoaparentcompanyundercertaincircumstanceswherethereisdamagewrongfullycausedbyanintentionalornegligentacttoapersonorthepropertyofanother.
Incertaincircumstances,adirectorofaSouthAfricancompanycouldpotentiallybedelictuallyliablefordamagecausedtothirdpartiesbythecompany.
Thepossibilityofcommonlawactions,suchasdamagesclaimsindelict,arenottheonlycommonlawrisk,asinterdicts(injunctions)inrelationtoongoingenvironmentaltransgressionsandpollutingactivitiesmaybecommencedbyneighbours,environmentalinterestgroupsorbytheenvironmentalauthorities.
Theriskaroundcivilandcriminallitigationextendsbeyonddirectlyaffectedpersons,asenvironmentalinterestgroupscouldalsoestablishlegalstandingtoapproachthecourtsduetothebroadenedprovisionsrelatingtolegalstandingunderNEMA.Thereisincreasinglyactiveinvolvementofnon-governmentalorganisations,environmentalassociationsandinterestgroupsinlitigationonenvironmentalissues,includingarecentsuccessfulprivateprosecutionintermsofNEMA.
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