By Michael Vermaak Monday, June 12, 2017

The National Environmental Management Laws Amendment Bill [B14-2017] was introduced to the National Assembly on 24 May 2017.  In its current form the Bill proposes, amongst other things, a range of amendments to the National Environmental Management Act 107 of 1998 (NEMA), as well as across the broad suite of specific environmental management Acts, including the National Environmental Management: Waste Act 59 of 2008 (NEMWA), the National Environmental Management: Protected Areas Act 57 of 2003, the National Environmental Management: Biodiversity Act 10 of 2004, the National Environmental Management: Integrated Coastal Management Act 24 of 2008 and the National Environmental Management: Air Quality Act 39 of 2004.

The Bill also contains the latest instalment in the ongoing saga of the rollout of the “One Environmental System”, with still further proposed amendments intended to effect a coherent legislative transition in relation to environmental issues associated with mining and related activities, from the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), to NEMA (and NEMWA, in relation to residue stockpiles and residue deposits). This is not the only recent or pending amendment to the laws around the One Environmental System. Revisions to the NEMA EIA Regulations were recently effected on 7 April 2017, and still further amendments are also proposed in the Mineral and Petroleum Resources Development Amendment Bill [B15D-2013].  Some of the amendments proposed in Bill B14-2017 are intended to apply retrospectively, with effect from 8 December 2014, backdated to the point in time when the One Environmental System was introduced. We don’t cover the recent and pending changes to the One Environmental System in this article, as it justifies separate analysis (along with the proposed legislative changes regarding residue deposits and residue stockpiles) and we will cover these developments in follow up articles in the next week or two.

Many of the amendments that are proposed in terms of Bill B14-2017 are far reaching. Some are welcome, while others will create new compliance and enforcement risks and potential liabilities to businesses that have an environmental impact or that operate on polluted or contaminated land.  

We touch on some of the more significant proposed amendments to NEMA below.

NEMA section 24G rectification applications

Section 24G of NEMA allows for an application to be submitted to the environmental authorities for rectification of the unlawful commencement of listed activities i.e. for commencing the listed activity without first obtaining the authorisation required under NEMA or NEMWA (and in some circumstances, also for commencing listed activities that previously applied under the Environment Conservation Act 73 of 1989).

However, the option of pursuing a section 24G rectification application is currently only available to the person who actually commenced the NEMA listed activity without authorisation. This has historically created some practical problems, such as in circumstances where the premises at which the omission occurred has been sold and the historical transgressor is either no longer in existence or is unwilling to embark upon the section 24G application in its own name (the rectification process can result in an administrative fine of up to

ZAR5 million, along with other potential adverse consequences). From a commercial perspective the current provision under section 24G of NEMA also doesn’t adequately accommodate the situation where a business is sold and, at the time of the purchaser’s due diligence, a historical transgression is identified which requires rectification. At present, it is the seller, as the historical transgressor, which would have to apply, meaning that the seller would be unable to effect a clean break from the business until the section 24G rectification process had run its course (which can take several months or even longer). 

In a welcome development, the proposed amendment contained in the Bill will in future allow for the section 24G rectification application to also be submitted by “a person in control of, or a successor in title to, land” on which the non-compliance with NEMA or NEMWA occurred. This pending change reinforces the importance of undertaking a proper environmental legal due diligence at the time of acquisition of a business to ensure that any historical transgressions are identified and that the responsibilities of the parties, the financial implications of the administrative fine, and the potential consequences of activities being curtailed or stopped through the section 24G process, as well as the other risks, can be appropriately accommodated in the sale of business agreement.

NEMA section 28 directives

Amendments are also proposed to section 28 of NEMA, dealing with the general duty of care in the context of significant pollution or degradation of the environment, imposing an obligation on “every person who causes, has caused or may cause significant pollution or degradation of the environment” to take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring. 

The relevant environmental authorities (which the Bill proposes to extend to include a municipal manager of a municipality) are empowered to issue a directive to, amongst other things, cease any activity, operation or undertaking, to investigate the impact of activities and report on them, and to commence taking specific measures and complete those measures.  In terms of the current wording contained in section 28(4) of NEMA, such a directive may only be issued against “any person who is causing, has caused or may cause significant pollution or degradation of the environment”. 

The amendments contained in the Bill will bring about a fundamental change, by introducing the words “and any other person to whom the duty of care applies” to the category of persons who may be the subject of a directive by the authorities. This must be read with section 28(2) which stipulates that the persons on whom the general duty of care imposes an obligation to take reasonable measures “include an owner of land or premises, a person in control of land or premises or a person who has the right to use the land or premises on which or in which (a) any activity or process is or was performed or undertaken; or (b) any other situation exists, which causes, has caused or is likely to cause significant pollution or degradation of the environment”. 

This proposed amendment will in effect introduce the potential for an extended liability arising from the administrative provisions allowing for directives, under section 28 of NEMA, to also capture owners, users and persons in control of land who are not responsible for the pollution or degradation. These persons may in future find themselves being targeted by the authorities for clean-up or other measures even though they have not in any way actually caused the significant pollution or degradation of the environment that forms the subject of the directive. 

In another intended change, in circumstances where a directive is not acted upon (or is inadequately acted upon), and the measures are instead taken directly by the authorities themselves, the Bill will also introduce a joint and several liability provision with regard to cost recovery by the authorities from certain categories of persons.

This pending amendment also emphasises the importance of proper environmental due diligence at the time of acquisition of any potentially polluting business, or of purchasing any property that may be polluted or contaminated. The pending change in law should also be considered by lessees operating on properties that may have historically been polluted by other persons. The inclusion of provisions in the relevant agreements to effect an appropriate allocation of environmental responsibilities and risks, as well as environmental indemnity provisions, would need to be considered.

Appeals against directives

Staying with directives, under NEMA as it currently stands, should a directive be issued under NEMA or any specific environmental management Act, and should that decision to issue the directive be taken on appeal to the Minister or Member of the Executive Council, as appropriate, the appeal will automatically suspend the directive in terms of section 43(7) of NEMA.

The Bill proposes to turn this around and, while an appeal will still continue to suspend an environmental authorisation, exemption or any other decision under NEMA or any other specific environmental management Act, directives and other administrative enforcement notices issued in terms of NEMA or any other specific environmental management Act will no longer be suspended automatically.  Instead, an application will need to be made and good cause shown for the directive or other administrative enforcement notice to be suspended pending the outcome of the appeal.  In the interim, the directive would need to be observed barring a court order being obtained to set it aside.