NPA places more emphasis on prosecution of environmental offences

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The last few years have seen the National Prosecution Authority (NPA) placing far greater emphasis on the prosecution of environmental offences, with a number of significant and forceful judgments being handed down by our courts.

In the matter of S v Frylink, an environmental assessment practitioner (EAP) was held criminally liable for providing incorrect and misleading information in a basic environmental impact assessment report (BAR) to the Department of Environmental Affairs (DEA).

Frylink, an EAP employed by Mpofu Environmental Solutions CC, was appointed by the Department of Public Works to conduct a BAR for the proposed development of the Pan African Parliament buildings. The environmental impact assessment (EIA) regulations require, inter alia, that the EAP must be independent (and must declare such independence under oath) and further provide that the furnishing of any incorrect or misleading information in the environmental impact assessment process is a criminal offence.

Presence of wetland

In the basic assessment report, Frylinck indicated that there was no wetland present within a 500m radius of the site and had informed the relevant officer at the DEA that a wetland delineation study was not necessary. However once construction had commenced, concerns were raised by national and local government departments regarding the existence of a wetland on the site. An investigation was initiated and the presence of a wetland in the area was confirmed.

Frylinck was charged with fraud and a contravention of regulation 81 of the 2006 EIA regulations under the National Environment Management Authority (NEMA). He was acquitted on the fraud charge but convicted on the contravention of regulation 81. The court held that Frylinck's conduct proved wilful disregard of the required standard of conduct by an EAP in relation to the existence of a wetland on the site, and that the EAP was negligent.

The information contained in the BAR was incorrect and the EAP had therefore provided incorrect or misleading information to the competent authority. He was sentenced to two years' imprisonment or a fine of R80,000 and his firm was sentenced to a fine of R80,000, with half of the fines being suspended for five years.

Frylinck's conviction highlights the important role that the EAP plays in the EIA process and the need for the EAP to ensure that he/she presents accurate information in the EIA process and to understand the extent of his or her legal duties under NEMA and the regulations promulgated thereunder.

Personal criminal liability

Since Frylinck, the NPA's focus has shifted to the conduct of company directors and the scope for personal criminal liability for environmental degradation caused on their watch.

In 2012, the Ermelo Regional Court was the first court to invoke the criminal provisions of the NEMA, the National Water Act, No 36 of 1998 and the environmental provisions of the Mineral and Petroleum Resources Development Act, No 28 of 2002, against the managing director of a mining company and to hold the MD guilty of the contravention of the provisions of these Acts.

The charges resulted from certain mining related activities which impacted negatively on water resources in the area, including the diversion of water resources, mining within a flood line, the failure to have pollution management mechanisms on site, the dumping of waste rock materials into a water resource and mining within a wetland. The offending activities were also conducted in contravention of the Environmental Management Programme associated with the company's mining right.

The mining company was ordered to rehabilitate the affected environment and the MD was handed a five year sentence without the option of a fine; on condition that the areas which had been damaged by the illegal mining activities were rehabilitated within three months of the date of judgment.

Landmark case

More recently the landmark case of Blue Platinum Venture has reflected the direction that environmental enforcement in South Africa will take. The matter arose out of Blue Platinum Venture's clay mining activities conducted outside the village of Batlhabine in Limpopo since 2007, which resulted in environmental degradation. Numerous complaints were lodged by the affected community to the Department of Mineral Resources over the years without any decisive action being taken.

When the activities continued unabated, the community laid criminal charges against the mining company and its managing director, Matome Maponya, in terms of NEMA. Maponya was sentenced to five years' imprisonment for damages caused to the environment. This sentence was suspended for five years, on condition that the affected areas were rehabilitated within three months, with costs estimated at R6.8m. Maponya was not given the option of a fine. The case is the first in South Africa where an executive of an offending company was held criminally liable and sentenced without the option of a fine under NEMA for environmental offences relating to mining activities undertaken.

The Blue Platinum judgment will result in company executives paying considerably more attention to the conduct of their employees and the risk of damage to the environment caused by their activities. It is also likely to see company executives placing far greater emphasis on having environmental management systems in place and ensuring that these systems are strictly monitored and enforced.

Implications for insurance

The judgment will also have significant implications for the insurance industry with executives likely to ensure that their directors' and officers' (D&O) liability cover for environmental degradation, which many business owners have chosen to neglect in the past, is updated or increased.

The judgment may also result in an increase in shareholder derivative action claims seeking redress for wrongful acts of the company directors and officers.

The Blue Platinum prosecution and sentence has set a significant precedent for future prosecutions of environmental offences and will empower affected communities to lay criminal charges against offending companies and their directors for environmental damage. It has also shown that the willingness of the courts to impose more forceful criminal sanctions for environmental offences, including on directors in their personal capacities without the option of a fine.

These cases have also indicated that the courts are prepared to pierce the corporate veil in circumstances where a director knew or reasonably should have known of the environmental degradation or non-compliance associated with the company's activities and failed to take the necessary measures to prevent such non-compliance or degradation.

Training is key

Having the appropriate training and operating systems in place to investigate and prosecute cases involving environmental offences is key to bringing offenders to justice. The mandate and powers granted to environmental management inspectors (EMIs) under NEMA are far-reaching and forceful. This is an indication of the legislator's intentions to strictly enforce environmental compliance.

These powers range from arrest and detention to attachment of goods and the forced closure of a facility that does not comply with environmental laws or is causing significant environmental degradation. However, these tools are only effective as a deterrent if they are consistently and successfully enforced by the NPA.

The DEA has embarked on various training and capacity-building initiatives over the last ten years, aimed at ensuring all environmental enforcement actions are legally defensible and to ensure that EMIs are trained to properly investigate environmental offences. Training and capacity building also focuses on non-EMIs in the investigation and prosecution of environmental offences. This training is extended to magistrates and prosecutors through field training, specialised training and short courses.

The DEA has also collaborated with the NPA and has certain cooperation agreements and standard operating procedures in place to ensure the improvement of investigation and prosecution of environmental offences, and to ensure that there are proper lines of communication with the South African Police Service and the NPA.

Need for education

Importantly, there is also a need to inform and educate the public - particularly the rural communities, which are most often affected by environmental degradation - of their right to lay complaints against companies that cause environmental harm.

Ideally, South Africa should have specialised green courts that sit on certain days in every region to prosecute environmental offences. The original Green Court in Hermanus in the Western Cape, had a dedicated environmental prosecutor and a conviction rate of more than 80% before it was disbanded.

South Africa is one of the few countries that guarantees the right to a healthy environment as one of its citizens' basic human rights. Our country's environmental laws also contain some of the strictest criminal and civil sanctions for environmental non-compliance and degradation in the world, including sanctions in respect of personal liability for directors, as discussed above.

However, South African courts and their staff have significant capacity constraints, not unlike many other jurisdictions in the world. This, coupled with a lack of experience and training in the prosecution of environmental crimes among prosecutors and magistrates, has in the past created an obstacle to the successful prosecution of environmental crimes.

Increased capacity

Although still relatively new by global standards, South Africa's EMIs are some of the best trained environmental officers in the world. The EMI is steadily increasing its capacity to investigate environmental offences more consistently. The Inspectorate has trained over 224 officials, magistrates and prosecutors over the last few years.

The recent trend by affected communities to lay criminal charges for environmental degradation by companies and which has seen our courts imposing far stricter criminal sanctions, including personal liability for company directors, is a game changer on numerous levels. Companies and their directors will ensure that their environmental management systems are improved and are properly monitored and enforced.

There is likely to be an increase in D&O insurance cover for environmental degradation and banks and financiers are likely to impose far stricter lending criteria - which place greater emphasis on the risks of environmental degradation and the history of contamination and degradation by a company.