Recent case law suggests an increase in the enforcement of environmental law provisions and the use of both administrative penalties and criminal sentences against companies who fail to comply with environmental legislation.
Schedule 3 of the National Environmental Management Act, 107 of 1998 (“NEMA”) sets out a number of environmental offences for which directors and employees of a company may be personally liable. Section 34, read in conjunction with the Schedule, deals with criminal proceedings and states that a director or employee, who fails to comply with the requirements of such legislation, may face personal liability for decisions he or she made in respect of an activity which has a negative impact on the environment.
Recent case law
In October 2012, the Ermelo Regional Magistrate’s Court convicted Golfview Mining (Pty) Ltd (“Golfview”) on two contraventions of NEMA and one contravention of the National Water Act, 36 of 1998 (“NWA”). The contraventions related to the failure of the company, a director, environmental officer and mine manager to comply with the applicable environmental legislation whilst conducting its activities.
A plea agreement was reached and Golfview was ordered to pay R3 million to affected Departments in the Mpumalanga Province, and an additional R1 million if they did not comply with the Court order within 5 years. The company was further ordered to rehabilitate the affected wetland, with the potential cost of rehabilitation estimated to be between R50 million and R100 million. The charges against the director and employees were withdrawn.
This was the first case in which the criminal provisions of NEMA, the NWA, and the environmental provisions of the Mineral and Petroleum Resources Development Act, 28 of 2002 have been invoked. It was also the first time that the provisions of environmental legislation have been raised to hold a director and employees of a mining company criminally liable for their actions.
In August 2013, the Nelspruit Regional Magistrate’s found Nkomati Anthracite (Pty) Ltd (“Nkomati Anthracite”), a mining company, guilty on four contraventions of the NEMA and four contraventions of the NWA. Nkomati Anthracite was ordered to pay R1 million, which was suspended for five years, and a further R4 million to the Department of Environmental Affairs for the purpose of the proper execution of their enforcement duties, environmental rehabilitation and enforcement training.
Unlike the Golfview Mining case, provisions to hold the director and employees criminally liable were not invoked in this case.
Although the Courts are yet to invoke the provision of section 34, the State has demonstrated its intention to enforce it. Consequently, the risk of corporate and criminal prosecution under environmental legislation is a factor which companies, directors and employees need to be aware of while conducting their duties. In order to avoid such liability, a director or employee must be able to prove that he or she took all reasonable steps to prevent negative impacts to the environment.