Changes made to the regulatory framework governing the environment, sustainability and climate change during 2023 are as follows.

The National Environmental Management Laws Amendment Act, 2022

In 2023, the bulk of the amending provisions of the National Environmental Management Laws Amendment Act 2 of 2022 (NEMLAA 2022) came into effect. NEMLAA 2022 amends various specific environmental management statutes. The implemented provisions are discussed below:

• Changes to the NEMA section 24G rectification procedure and Air Quality Act rectification procedure

 Section 24G of the National Environmental Management Act 107 of 1998 (NEMA) allows for an application to be submitted to the environmental authorities for ‘rectification’ of an unlawful listed activities under NEMA itself and the National Environmental Management: Waste Act (Waste Act).

Previously, the option of pursuing a section 24G rectification application was only available to the person who commenced the NEMA listed activity without authorisation. This has, historically, created some practical problems, such as when 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. This problem can now be circumvented if one is ‘in control of, or a succession in title to, the land’. This is because section 24G of NEMA now allows a 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 Waste Act occurred.

Section 22A of the Air Quality Act has also been amended. This section is, in some respects, similar to section 24G of NEMA, but it applies in relation to, among other things, conducting listed activities under the Air Quality Act without an atmospheric emission licence.

In deciding whether or not to apply for rectification, careful consideration should always be given to risks associated with doing so. The relevant risks include the fact that, upon application, the applicant may be directed to immediately cease the activity pending a decision on the application submitted in terms of section 24G, except if there are reasonable grounds to believe the cessation will result in serious harm to the environment. The ‘no serious harm to the environment’ exception does not apply to section 22A of the Air Quality Act. The rectification application may also attract significant administrative fines of up to ZAR 10 million.

• The duty of care under section 28 of NEMA

Section 28 of NEMA deals with the general duty of care in the context of significant pollution or degradation of the environment. This section imposes 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 or, in so far as such harm to the environment is authorised by law or cannot be reasonably avoided or stopped, to minimise and rectify such pollution or degradation of the environment’.

The relevant amendment under NEMLAA has now extended the scope of who may issue directives in terms of section 28 of NEMA to include a municipal manager of a municipality instead of only director-generals and provincial heads of departments.

• Effect of appeal on a directive

 Prior to the amendments if a directive was issued under NEMA or any specific environmental management Act, and if that decision to issue the directive was taken on appeal to the Minister or Member of the Executive Council, as appropriate, the appeal automatically suspended the directive in terms of section 43(7) of NEMA.

NEMLAA 2022 turns this around and, while an appeal still suspends 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.

• New approach to the regulation of residue stockpiles and deposits

The handling of residual stockpiles and deposits will be excluded from the definition of waste in the Waste Act. The practical effect of this will mean that the establishment and operation of residual stockpiles and deposits will no longer necessitate a waste management licence. Instead, the regulation of residual stockpiles and deposits will be governed by NEMA when the relevant provisions and related listed activities are brought to force. The date of commencement is linked to the decision of the Constitutional Court judgement in South African Iron and Steel Institute and Others v Speaker of the National Assembly and Others, which we discuss here.

The compliance date for NEMA’s Financial Provisioning Regulations: pushed out, again

The date to comply with the Financial Provisioning Regulations, 2015, has been extended to 19 February 2024.

On 19 May 2023, the Minister of Forestry, Fisheries and the Environment published a further notice of her intention to amend regulation 17B of the Financial Provisioning Regulations, 2015, published in terms of NEMA, as amended (FP Regulations). This will be the fifth extension of the compliance period, which proposes to extend the compliance deadline to 19 February 2024.

The extension is proposed so that the amendments to the FP Regulations can be finalised. The latest draft version of the FP Regulations was published on 11 July 2022 in the Proposed Regulations Pertaining to Financial Provisioning for Mitigation and Rehabilitation of Environmental Damage Caused by Reconnaissance, Prospecting, Exploration, Mining or Production Operations (Draft FP Regulations).

It is desirable that the Draft FP Regulations are finalised soon so as to create legal certainty for various right holders and to ensure the environmental financial provisioning regime is settled once and for all.

If the Draft FP Regulations are promulgated in their current format, they will significantly affect the mine rehabilitation financial provisioning regime, hence it is important to continue to plan for future changes. Among other changes, the Draft FP Regulations propose:

• To widen the application of the Draft FP Regulations and include the requirement that in a transaction involving the transfer of a right, in order to obtain approval as contemplated in section 11 of the MPRDA for the proposed transaction, the transferee should be required to conduct its own financial provision assessment as described in the Draft FP Regulations. This proposal goes further than the previous 2017 draft regulations and also includes a person who requires a renewal of a permit or right as contemplated in the MPRDA. Practically, if this proposed change is effected, whenever one applies for section 11 and section 102 consents under the MPRDA, they will be required to update all the applicable plans and confirm whether the existing financial provision is adequate.
• That the Draft FP Regulations will apply notwithstanding the applicability of section 52(1) of the MPRDA. Therefore, even if downscaling operations have commenced, these regulations will continue to operate and the obligations set out therein such as those relating to annual review, the update of plans, and the re-assessment of the environmental impacts, will remain.
• In terms of regulation 6(4) of the Draft FP Regulations, the determination of the financial provision must be undertaken by specialists. The term ‘specialist’ is in turn defined as ‘an independent person who is qualified by virtue of his or her demonstrable knowledge, qualifications, skills or expertise in the mining, environmental, water, resource economy and financial fields’. This departs from the current FP Regulations which provides that the holder must determine the financial provision.
• A new financial vehicle called ‘a closure rehabilitation company established for the sole purpose of regulation 5(b) and (c)’ is introduced. Besides this restriction, there is, however, no further guidance provided on this closure rehabilitation company.

As already mentioned, these proposed changes are fundamental, and holders need to prepare for them in advance. If you would like more information related to the extension of the compliance period and other proposed rehabilitation financial provisioning regime, please contact us and we will gladly assist further.

Notwithstanding the proposed amendment, right holders and other businesses are urged to continue to prepare for a new financial provisioning regime which, as is evident from the above, will come into effect sooner rather than later. The proposed amendments are fundamental, and industry actors need to prepare for them in advance.

Proposed draft regulations

In August 2023, the Draft National Appeal Regulations in terms of NEMA, were published. These appeal regulations largely deal with procedural issues. The 2023 Draft Regulations make the development that one can now appeal against environmental duty of care directives, within 30 days that the decision is sent by the functionary. Appeal in respect of other decisions remains 20 days. They provide extensive regulation on the time periods and procedural requirements regarding appeals in terms of NEMA.

Under the National Water Act, 1998, draft regulations were published in May 2023 that propose expansive changes to the procedural requirements for water use licence applications (WULA) and amendments. The most controversial amendment was interpreted to mean that applicants in certain sectors would need to have 75% of their shareholding to be with historically disadvantaged persons.

Concerns were raised that already-authorised water use licences would need to comply with this requirement, and that such an onerous requirement would bring large-scale disruption. The Department of Water Services clarified that the requirement would only accrue to prospective applicants, and with over 98% of South Africa’s water resources already allocated, the pool of prospective applicants is not deep nor broad. The form the Regulations finally take are certainly something to take account of.

For more information and to keep up to date with the latest developments, please contact Claire Tucker or Wandisile Mandlana in our Environment, Sustainability and Climate Change Practice.