Environmental Law and Liability
Author: Glendyr Nel - Associate : Cullinan and Associates
( Article Type: Overview )
South African law regards the environment as a public trust to be conserved and protected for the benefit of all. Consequently if the environment is harmed, the law makes provision for holding a range of people responsible through imposing criminal liability (fines and imprisonment) as well as by requiring them to take specified measures (e.g. to remedy the damage) and to compensate the state and third parties for expenses which they have incurred as a consequence of the offence. Recent developments in environmental law have made it easier for the State to hold polluters liable for historic pollution and to convict both corporate entities and their executives in their personal capacity, for negligently failing to prevent harm to the environment.
The ‘Green Scorpions’ who are tasked with ensuring compliance, have also begun to show an appetite for taking tough action against individuals who they believe are responsible for harming or putting the environment at risk. Furthermore, enforcement officers, called Environmental Management Inspectors (‘EMIs’) have been given the powers of ‘peace officers’ and as such, they may disclose information gathered during the course of their work, including contraventions of environmental legislation and any risks posed to the environment, public safety and health and well being. This could result in more ‘naming and shaming’, which most offenders will wish to avoid. While the National Environmental Management Act 107 of 1998 (‘NEMA’), has always imposed a general duty on all persons to take reasonable measures to avoid, or to minimise and rectify, significant harm to the environment, since the commencement of the National Environmental Laws Amendment Act 14 of 2009, in September of that year, it has become an offence for anyone to unlawfully and intentionally or negligently commit any act or omission which: (a) causes, or is likely to cause, significant pollution or degradation of the environment, or (b) detrimentally affects, or is likely to affect, the environment in a significant manner. Furthermore, if the authorities step in and issue a directive to ensure that an offender takes reasonable measures to address actual or potential pollution or degradation, failure to comply with a directive is now an offence (NEMA, section 28(14)). A person convicted of the section 28(14) offences is liable to a fine of up to R1 million or imprisonment for up to one year, or to both. NEMA has also been amended to clarify that the duty to take reasonable measures to prevent significant pollution or degradation of the environment from occurring, continuing or recurring (‘the duty of care’), also applies to pollution that occurred before NEMA commenced; to pollution that might arise at a different time from the actual activity that caused the contamination and to pollution that may arise following an action that changes pre-existing contamination (NEMA section 28(1A). It is therefore no defence to say that the pollution is historic, indirect or underlying – the responsibility to take reasonable steps remains. The significance of these changes becomes more apparent when one remembers that section 34 of NEMA makes provision for both ‘firms’ (including companies and partnerships) and their ‘directors’ (including board members, executive committees or other managing bodies of companies or members of close corporations or of partnerships) to be held liable, in their personal capacities, for environmental crimes. This personal liability also applies to managers, agents or employees who have done or omitted to do an allocated task, while acting on behalf of their employer. In all instances, the offence in question has to be one that is listed in Schedule 3 of NEMA and the person concerned must have failed to have taken all reasonable steps necessary under the circumstances to prevent the commission of the crime.
The sting in the tail is that NEMA section 28(14) is now listed as a Schedule 3 offence. This means that unless it can be shown that all reasonable steps necessary to prevent the crime were taken, even an unintentional (but negligent) unlawful act or omission which causes significant pollution or degradation of the environment, can make a ‘director’ personally liable. A firm that is not well-managed may easily contravene this section unintentionally. Many firms routinely conduct activities that have the potential to cause pollution or other detrimental effects on the environment and some of those activities may be being conducted unlawfully, for example if the conditions in a permit are not being complied with or the permit has expired. Furthermore, many firms occupy sites where toxic materials were buried many years ago and run the risk of causing pollution by disturbing the buried waste. In either of these circumstances a firm may well be found to have been negligent and be convicted of an offence. Any executives of the firm that failed to take reasonable steps to prevent this occurring can be convicted of the same crime. NEMA’s Schedule 3 lists a wide range of offences beyond that found in section 28(14).
These include offences for contravening legislation regulating heritage resources, water, forests, veld and forest fires, biological diversity and air quality. (As yet the schedule does not include the offences under the National Environmental Management: Waste Act.) The penalties for many of these offences are severe, ranging from a fine of a million for a section 28(14) offence, to fines of five or ten million Rand (coupled with periods of imprisonment) for contravening certain provisions of the National Environmental Management: Biodiversity Act. A court can substantially increase these criminal sanctions by increasing the fine by an amount equivalent to the monetary advantage gained by committing the offence, ordering the person convicted to take remedial action (e.g. to clean-up a contaminated site) and to compensate the state or third parties for loss or damage suffered as a consequence of the offence, and to reimburse the authorities for the reasonable costs of investigating and prosecuting the case (NEMA section 34(3) and (4)). The costs of cleaning up polluted sites or rectifying harm to the environment can be enormous and many executives could be bankrupted if convicted of such offences. As emphasised by the King III Report, sound environmental management is central to the sustainability of a business, and environmental issues should form part of risk management strategies. Directors and other executives must ensure that they take all reasonable measures to ensure that the firm and its employees, agents or managers do not do anything (or omit to do anything) that will harm the environment or put it at risk, or contravene any of the many provisions listed in NEMA Schedule 3. In practical terms this means that directors and senior managers would be well advised to ensure that their firm: (a) has put in place management systems that keep them up to date with regard to their environmental law obligations (e.g. the authorisations that are required), (b) monitors its environmental impacts and compliance with its permits, and (c) has established standard operating procedures or other means of ensuring that employees and others acting on behalf of the firm comply with the law. It is no longer an option for an executive who suspects that someone in the firm may be polluting or degrading the environment or contravening an environmental or heritage law to turn a blind eye.
A court may well conclude that an executive who does so negligently failed to prevent the commission of an offence and convict the executive as well as the company. In the end, the bottom line for directors and senior managers is the same as it always has been – be vigilant and ensure that all reasonable measures are taken to ensure compliance with the law and to avoid and minimise harm to the environment. The difference now is that both the likelihood of incurring personal liability and the sanctions for doing so have increased.
