In South Africa, environmental protection is governed by a comprehensive framework of policies, principles and laws designed to ensure sustainable development and the protection of natural resources, giving effect to the environmental right enshrined in Section 24 of the Constitution of the Republic of South Africa, 1996 (the “Constitution”).

Key laws include the National Environmental Management Act, 1998 (NEMA); the Hazardous Substances Act, 1973 (HSA); the National Environmental Management: Biodiversity Act, 2004 (NEMBA); and the National Environmental Management: Waste Act, 2008 (NEMWA).

Other laws include the National Environmental Management: Air Quality Act, 2004 (NEMAQA), which aims to reform air quality laws to protect the environment and promote sustainable development, and the Climate Change Act, 2024 (the “Climate Change Act”), pending commencement on a date to be determined by the president, which aims to develop an effective climate change response and a long-term transition to a low-carbon and climate-resilient economy.

In South Africa, several key regulatory authorities and bodies are responsible for environmental policy and enforcement. These include the Department of Forestry, Fisheries and the Environment (DFFE), which oversees the implementation of environmental policies and legislation, and the Environmental Management Inspectorate (EMI), also known as the “Green Scorpions”, which enforces environmental laws and regulations.

Provincial environmental departments and local municipalities also play crucial roles in managing environmental issues within their jurisdictions. The Presidential Climate Commission, established under the Climate Change Act (pending commencement on a date to be determined by the president) advises the government on climate change policies and strategies.

Mechanisms for co-operation with regulatory authorities in South Africa include legislative frameworks such as NEMA, which promotes integrated environmental management and requires the establishment of interdepartmental committees. Moreover, the requirement for co-operative governance is one of the key enshrined principles contemplated within the Constitution and is constitutionally required.

Intergovernmental committees such as the Presidential Coordinating Council and the Committee of Ministers and Members of Executive Councils (“MINMEC”) facilitate high-level co-ordination among various government departments.

Public participation and stakeholder engagement are also key principles in South Africa’s environmental laws, ensuring that all stakeholders are involved in environmental decision-making processes.

Environmental assets in South Africa, such as air, water, soil, flora, fauna, natural habitats and landscapes, are protected through a comprehensive framework of laws, policies and principles, including NEMA, NEMAQA, NEMWA, NEMBA and the Climate Change Act.

Key principles include sustainable development, the precautionary principle, the “polluter pays” principle, and public participation. Protection mechanisms include the establishment of protected areas, mandatory environmental impact assessments (EIAs), compliance and enforcement by the EMI, and public participation and stakeholder engagement.

Breaching environmental protections in South Africa can lead to significant legal, financial and reputational consequences, such as:

• legal consequences including criminal sanctions, civil liability, and administrative penalties;
• financial consequences including fines, the cost of remediation, and compensation for damages; and
• reputational consequences including damage to reputation and loss of business opportunities.

Notable cases such as the “Deadly Air case” highlight the serious legal and health consequences of failing to comply with environmental standards. Another prominent landmark decision was that of The Trustees for the Time Being of the Humane Society International – Africa v Minister of Forestry, Fisheries and the Environment and Others (2022), a ground-breaking interdict in which the Minister was prohibited from implementing trophy-hunting quotas due to the harm that stood to be suffered by the animals concerned (as opposed to a consideration of the harm that stood to be suffered by the applicants themselves, as is ordinarily required to be demonstrated in interdict proceedings).

Regulatory, permitting and supervisory authorities in South Africa have significant powers to address environmental incidents and breaches of law or permits.

The DFFE and the EMI have powers to conduct investigations, enter premises, inspect facilities, collect evidence, and take samples for analysis. They also have enforcement powers to issue compliance notices, directives, and administrative penalties, and to initiate legal proceedings against violators.

Environmental permits are required for activities that have significant environmental impacts in South Africa. These include land development and construction, mining and resource extraction, industrial operations, and activities involving threatened or protected species.

The process of obtaining environmental permits involves submitting an application to the relevant authority, conducting an EIA if required, and undergoing a review and decision process.

There are also rights to appeal permitting decisions based on procedural errors, substantive issues, or new information.

The Role of the Authorities

In South Africa, the approach to environmental policy and enforcement is grounded in principles of sustainable development, precaution, and the “polluter pays” principle. Regulatory authorities aim to ensure compliance with environmental laws and protect natural resources through a combination of legislative frameworks, enforcement mechanisms and public participation.

The EMI is responsible for enforcing environmental laws and regulations. Its operatives, known as the “Green Scorpions”, have the authority to investigate environmental crimes, enter premises, conduct searches, seize evidence and take samples for analysis.

Regulatory authorities can issue compliance notices and directives to individuals or companies that violate environmental laws. These notices require the offender to take specific actions to remedy the breach and prevent further harm.

The authorities can impose administrative penalties for non-compliance and initiate legal proceedings against violators. This includes substantial fines and imprisonment for serious offences.

The Role of the Public

Public participation is a key principle in South Africa’s environmental laws. It ensures that all stakeholders, including local communities, are involved in environmental decision-making processes. This mechanism fosters transparency and accountability.

The Role of the Courts

The courts play a crucial role in holding regulatory authorities accountable and ensuring that environmental governance aligns with constitutional and legal standards. Judicial review of regulatory decisions ensures that authorities act within their legal mandates and respect the rights of affected parties.

Legislative Framework

The transfer of environmental permits and approvals in South Africa is governed by NEMA, and other specific environmental management statutes. These laws ensure that the new holder of the permit is capable of meeting all the environmental obligations and that the transfer does not negatively impact the environment.

Application Process

The current permit holder must submit an application to the relevant regulatory authority, such as the DFFE or provincial environmental departments. The application must include detailed information about the proposed transferee and their ability to comply with the permit conditions. The application must be made in writing, on an official application form, to the competent authority. A fee may be payable.

Review and Approval

The regulatory authority reviews the application to ensure that the transferee is capable of meeting all the environmental obligations. This includes assessing the transferee’s technical and financial capacity to comply with the permit conditions. The authority may request additional information or modifications to the proposed transfer to ensure compliance with environmental laws and regulations.

Conditions for Transfer

The transfer must ensure that the new holder is capable of meeting all the environmental obligations and that the transfer does not negatively impact the environment. The courts have emphasised the importance of compliance, transparency, and maintaining environmental standards in the transfer process.

Right to Appeal

Any person or entity affected by a permitting decision can appeal to the Minister of Forestry, Fisheries and the Environment (the “Minister”) or the relevant provincial authority. The appeal must be submitted within 20 days from the date the decision was sent to the registered interested and affected parties. Appeals can be based on procedural errors, substantive issues with the decision, or new information that was not considered during the initial review.

The Minister or relevant authority can confirm, set aside, or vary the original decision, provision, condition or directive.

Legal Consequences

Breaching an environmental approval or permit in South Africa can lead to significant legal consequences. These include criminal sanctions, civil liability, and administrative penalties. For instance, under NEMA, the courts have the discretion to assess the monetary value of any gained advantage as a result of the offence, in addition to the punishment imposed.

Offenders may be held liable for damages caused by their actions, including the cost of remediation and compensation for any harm caused to individuals or communities.

The regulatory authorities can impose administrative penalties for non-compliance with environmental laws, which can include fines, suspension of permits, and orders to cease harmful activities.

Practical Consequences

The practical consequences of breaching environmental protections include substantial fines intended to deter non-compliance and ensure that the cost of violating environmental laws outweighs any potential benefits.

Offenders are often required to cover the full costs of remediation and restoration of the damaged environment, which can include cleaning up pollution, restoring habitats, and compensating affected communities. Companies found guilty of environmental violations can suffer significant reputational damage, impacting their relationships with customers, investors and other stakeholders.

Environmental violations can also lead to the loss of business opportunities, as companies may be excluded from contracts, partnerships and projects that require compliance with environmental standards.

In South Africa, various types of liability can be imposed on operators, polluters, landowners and others for environmental damage or breaches of environmental law. These include:

• criminal liability – involving substantial fines and imprisonment for serious offences, such as illegal dumping of hazardous waste and pollution;
• civil liability – involving compensation for damages and restoration orders requiring offenders to restore the environment to its original state;
• administrative liability – involving penalties for non-compliance with environmental laws, including fines, suspension of permits, and orders to cease harmful activities;
• strict liability – this may be imposed in cases involving hazardous activities or substances, meaning that the offender is held liable regardless of fault or negligence; and
• vicarious liability – employers can be held vicariously liable for the actions of their employees if the employees’ actions result in environmental damage or breaches of environmental law.

Under NEMA

Environmental issues must be disclosed in South Africa under various legislative requirements to ensure transparency, accountability and environmental protection. NEMA mandates that any person who causes significant pollution or degradation of the environment must take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring.

Under the PAIA and NWA

The Promotion of Access to Information Act (PAIA) provides the public with the right to access information held by the state and private bodies that is required for the exercise or protection of any rights. The National Water Act (NWA) requires the disclosure of any activities that may impact water resources.

JSE Requirements

Companies listed on the Johannesburg Stock Exchange (JSE) are required to disclose their environmental impacts, compliance records, and liabilities in their annual reports. Non-disclosure or incomplete disclosure of environmental issues can lead to significant legal consequences, including criminal sanctions, fines and imprisonment.

Liability for historical environmental incidents or damage can be imposed on current or purchasing operators and landowners in South Africa.

This liability is supported by legislative provisions such as NEMA and the NWA, and reinforced by case law. NEMA includes provisions for retrospective liability, meaning that parties can be held liable for pollution or degradation that occurred before the act came into effect.

The NWA also imposes liability for historical pollution of water resources. When purchasing property or taking over operations, it is crucial to conduct thorough environmental due diligence to assess any historical environmental damage and understand the potential liabilities associated with the property or operations.

Current or purchasing operators and landowners may be required to undertake remediation efforts to address historical environmental damage, including cleaning up pollution, restoring habitats, and compensating affected communities.

Environmental reporting requirements in South Africa are designed to ensure transparency, accountability, and environmental protection.

NEMA mandates that companies engaging in activities with significant environmental impacts must conduct EIAs, which are documented in environmental impact reports (EIRs). The NWA requires the disclosure of any activities that may impact water resources.

Companies listed on the JSE are required to disclose their environmental, social and governance (ESG) risks and opportunities in their annual reports. Environmental incidents, such as spills, leaks or emissions, must be reported to the relevant regulatory authorities immediately.

Public participation is a key principle in South Africa’s environmental laws, ensuring that companies and developers engage with local communities and stakeholders during the EIA process and disclose any potential environmental impacts of proposed projects.

In South Africa, liability for environmental incidents or damage can be imposed under various legal frameworks, including civil law, tortious liability, and administrative/regulatory liability.

Civil Law/Codes and Tortious Liability

Negligence

Liability arises when a party fails to exercise reasonable care, resulting in environmental damage. Key defences include demonstrating that reasonable care was exercised, the damage was not foreseeable, or the plaintiff contributed to the harm.

Strict liability

Liability is imposed without the need to prove negligence or fault, particularly for inherently dangerous activities. Key defences include arguing that the damage was caused by an act of God, an act of a third party, or compliance with all relevant regulations.

Administrative/Regulatory Liability

Compliance notices and directives

Regulatory authorities can issue compliance notices and directives to enforce environmental laws and require remedial actions. Key defences include demonstrating compliance with the notice or directive, improper issuance of the notice, or that the alleged breach did not occur.

Administrative penalties

The authorities can impose fines and other penalties for non-compliance with environmental regulations. Key defences include demonstrating compliance with the regulations, disproportionality of the penalty, or lack of jurisdiction on the part of the authority.

Criminal sanctions

Serious breaches of environmental laws can result in criminal charges, leading to fines and imprisonment. Key defences include arguing that the offence was not committed, a lawful excuse, or failure of the prosecution to prove the case beyond a reasonable doubt.

Key Defences, Limits and Conditions

Due diligence

Demonstrating that all reasonable steps were taken to prevent environmental harm. This defence is often used in cases of strict liability and administrative penalties.

Act of God

Arguing that the environmental damage was caused by natural forces beyond human control. This defence is applicable in both civil and regulatory contexts.

Third-party actions

Claiming that the damage was caused by the actions of an independent third party. This defence can be used in cases of negligence, strict liability, and administrative penalties.

Compliance with regulations

Arguing that all relevant environmental regulations and permits were followed. This defence is particularly relevant in administrative and regulatory liability cases.

Statutory limits

Certain statutes may limit the extent of liability or provide specific conditions under which liability can be imposed. These limits are defined by environmental laws such as NEMA, the NWA, etc.

In South Africa, corporate entities can be held liable for environmental damage or breaches of environmental law under various legal frameworks. These include NEMA, NEMWA and the NWA.

Companies can face criminal liability, civil liability, and administrative penalties for violations:

• Criminal liability involves substantial fines and imprisonment for serious offences, such as illegal dumping of hazardous waste and pollution.
• Civil liability includes compensation for damages and restoration orders requiring offenders to restore the environment to its original state.
• Administrative penalties can include fines, suspension of permits, and orders to cease harmful activities. Directors and officers of companies can also be held personally liable for environmental damage or breaches of environmental law committed by the company.

Carbon Tax

South Africa introduced the Carbon Tax to reduce greenhouse gas (GHG) emissions and combat climate change. Governed by the Carbon Tax Act, 15 of 2019, it came into effect in June 2019.

The initial rate was set at ZAR120 per tonne of carbon dioxide equivalent (tCO₂e) and has been subject to periodic increases. As of 2022, the rate is ZAR144 per tCO₂e. The tax is implemented in phases to allow industries time to adapt, with the first phase starting in 2019, including significant tax-free allowances to ease the transition for businesses.

Plastic Bag Levy

This levy is imposed on plastic bags to reduce plastic waste and encourage the use of reusable bags. The levy is charged per plastic bag and is included in the price paid by consumers.

Motor Vehicle Emissions Tax

This tax is imposed on new motor vehicles based on their carbon dioxide emissions, aiming to encourage the purchase of more fuel-efficient and environmentally friendly vehicles. The tax rate varies depending on the vehicle’s emissions, with higher rates for vehicles with higher emissions.

Electricity Levy

This levy is imposed on electricity generated from non-renewable sources to promote the use of renewable energy. The levy is charged per kilowatt-hour (kWh) of electricity consumed.

Tax Deductions for Conservation Efforts

Section 37C of the Income Tax Act allows eligible taxpayers to deduct qualifying conservation and maintenance expenses from their taxable income. This incentive aids the conservation of threatened species and ecosystems. Taxpayers who sign Biodiversity Management Agreements (BMAs) with the Minister can deduct expenses incurred in conservation activities, such as security costs, ranger salaries, and veterinary expenses.

Green Fund

Established by the DFFE, the Green Fund provides catalytic finance to facilitate investment in green initiatives that support poverty reduction and job creation. The fund promotes innovative and high-impact green programmes and projects.

Good Green Deeds Programme

Led by the DFFE, this programme mobilises citizens and social partners to act as Good Samaritans for Green Deeds. It promotes sustainable living practices and encourages communities to clean up, fix up, and conserve their environment.

Exemptions for Good Environmental Citizenship

EIA exemptions

A person may be exempted from a provision in the Environmental Impact Assessment Regulations requiring or regulating a public participation process if the rights or interests of other parties are not likely to be adversely affected by the exemption.

Penalties for Bad Environmental Citizenship

Criminal sanctions

Individuals or companies found guilty of violating environmental laws can face substantial fines and imprisonment. Under NEMA, penalties can include fines of up to ZAR10 million and imprisonment for up to ten years.

Administrative penalties

The regulatory authorities can impose administrative penalties for non-compliance with environmental laws. These penalties can include fines, suspension of permits, and orders to cease harmful activities.

Cost of remediation

Offenders are often required to cover the full costs of remediation and restoration of the damaged environment. This can include cleaning up pollution, restoring habitats, and compensating affected communities.

Shareholding or parent companies can be held liable for environmental damage or breaches of environmental law. Refer to 7.1 Liability for Environmental Damage or Breaches of Environmental Law.

In South Africa, environmental, social and governance (ESG) requirements are guided by a combination of national laws, regulations and international commitments. These requirements ensure sustainable development, protect natural resources, and promote social equity and good governance.

Environmental Requirements

• NEMA provides the overarching framework for environmental management in South Africa. It sets out principles for decision-making on matters affecting the environment and establishes procedures for EIAs and compliance monitoring.
• The Climate Change Act aims to develop an effective climate change response and a long-term transition to a low-carbon and climate-resilient economy. It includes provisions for national adaptation strategies, GHG emissions targets, and the establishment of the Presidential Climate Commission.
• NEMAQA aims to reform the law regulating air quality to protect the environment and promote sustainable development. It includes provisions for national norms and standards for air quality monitoring, management, and control by all spheres of government.
• NEMWA provides measures for the prevention of pollution and ecological degradation and for securing ecologically sustainable development while promoting justifiable economic and social development.

Social Requirements

Broad-Based Black Economic Empowerment (B-BBEE) is a government policy aimed at redressing historical inequalities and promoting the economic participation of black South Africans. It includes measures for employment equity, skills development, and enterprise development.

The Labour Relations Act, of 1995 (LRA), governs labour relations in South Africa, ensuring fair treatment of employees, promoting collective bargaining, and protecting workers’ rights. The Occupational Health and Safety Act, 1993 (OHSA), mandates the disclosure of any environmental hazards that may pose a risk to the health and safety of employees and the public.

Governance Requirements

The Companies Act, of 2008 (the “Companies Act”) governs corporate structure and management, ensuring transparency, accountability, and good governance practices. It includes provisions for the establishment of audit committees, disclosure of executive compensation, and compliance with anti-bribery and corruption laws. The King IV Report on Corporate Governance (the “King Code”) provides guidelines for corporate governance in South Africa, promoting ethical leadership, sustainability, and integrated reporting.

Reporting, Monitoring and Enforcement

Companies, especially those listed on the JSE, are required to disclose their ESG risks and opportunities in their annual reports. This includes detailed reporting on sustainability practices and climate-related risks.

Environmental incidents, such as spills, leaks or emissions, must be reported to the relevant regulatory authorities immediately. Regulatory authorities, such as the DFFE and the EMI, are responsible for monitoring compliance with environmental laws and regulations. They conduct inspections, audits and investigations to ensure adherence to ESG requirements.

The regulatory authorities can impose administrative penalties for non-compliance with environmental laws. The courts play a crucial role in enforcing environmental laws and protecting public health.

In South Africa, companies are not universally mandated by law to conduct environmental audits. However, environmental audits are often required to achieve compliance with certain environmental regulations and standards. These audits serve as a tool to formally check compliance with environmental laws and identify areas for improvement.

Voluntary Audits

Many companies voluntarily conduct environmental audits to ensure compliance with environmental laws and to identify areas for improvement. These audits help companies manage their environmental impact and demonstrate their commitment to sustainability.

Industry-Specific Requirements

Environmental audits are particularly common in industries with significant environmental impacts, such as mining, manufacturing and agriculture. For example, the Sustainability Initiative of South Africa (“SIZA”) provides a framework for environmental audits in the agricultural sector, ensuring that producers meet both local and international environmental standards.

Regulatory Compliance

While not universally mandated, environmental audits may be required as part of compliance with specific environmental regulations or permits. For instance, companies may need to conduct audits to comply with the conditions of their environmental authorisations or to meet the requirements of environmental management plans.

Reporting and Monitoring

Companies engaging in activities with significant environmental impacts must conduct EIAs. These assessments are documented in EIRs, which must include a non-technical summary, a comprehensive description of the proposed activity, an evaluation of potential impacts, and proposed mitigation measures. Companies, especially those listed on the JSE, are required to disclose their environmental impacts, compliance records, and liabilities in their annual reports.

Enforcement

Regulatory authorities, such as the DFFE and the EMI, are responsible for monitoring compliance with environmental laws and regulations. They conduct inspections, audits and investigations to ensure adherence to ESG requirements. Companies that fail to comply with environmental regulations or permit conditions may face administrative penalties, including fines, suspension of permits, and orders to cease harmful activities

In South Africa, directors and other officers can be held personally liable for environmental damage or breaches of environmental law committed by the company. This liability is supported by legislative provisions and reinforced by case law.

• NEMA includes provisions for holding directors and officers personally liable for environmental damage. Directors and officers can be held liable if they participated in, or acquiesced to, conduct that contravenes environmental laws.
• The NWA imposes liability on directors and officers for pollution of water resources. Directors and officers are required to take reasonable measures to prevent pollution and to remedy any pollution that has occurred.
• NEMWA provides measures for the prevention of pollution and ecological degradation. Directors and officers can be held liable for any environmental damage caused by improper waste management.

Penalties for Personal Liability

Directors and officers found guilty of violating environmental laws can face substantial fines and imprisonment. For instance, under NEMA, courts can impose fines of up to ZAR10 million or imprisonment not exceeding ten years, or both. Directors and officers may be held liable for damages caused by their actions, including the cost of remediation and compensation for any harm caused to individuals or communities. The regulatory authorities can impose administrative penalties for non-compliance with environmental laws.

Key Defences and Conditions

Directors and officers can argue that they exercised reasonable care and took all the necessary measures to prevent environmental harm. This defence is often used in cases of strict liability and administrative penalties. They can also argue that the environmental damage was caused by natural forces beyond human control, a defence applicable in both civil and regulatory contexts. Additionally, they can claim that the damage was caused by the actions of an independent third party.

It is possible for individuals and companies in South Africa to insure against environmental liabilities and penalties. Environmental liability insurance policies are designed to cover costs associated with environmental damage, including clean-up expenses, legal defence costs, and third-party claims for bodily injury or property damage resulting from pollution incidents.

Environmental Liability Insurance

Environmental liability insurance (also known as pollution insurance or pollution coverage) provides coverage for loss or damages resulting from unexpected releases of pollutants. This typically includes costs associated with clean-up, legal defence, and third-party claims for bodily injury or property damage. First-party coverage covers the insured’s own property and operations, including clean-up costs and business interruption losses. Third-party coverage covers claims made by third parties for bodily injury, property damage, and clean-up costs resulting from pollution incidents.

Policy Inclusions

Environmental liability insurance policies can also cover fines and penalties imposed by regulatory authorities, depending on the specific terms and conditions of the insurance policy. This is particularly valuable for businesses operating in industries with higher environmental risks, such as manufacturing, mining, and chemical processing.

Practical Considerations

Environmental liability insurance is usually discretionary but can become a requirement stipulated in contractual clauses, such as in mergers and acquisitions negotiations or public sector contracts, or to satisfy permitting obligations. Industries with significant environmental impacts, such as mining, manufacturing, and agriculture, are particularly encouraged to obtain environmental liability insurance to mitigate potential risks and liabilities.

Availability and Coverage

In South Africa, environmental insurance is available and serves as an important tool for managing environmental risks. This insurance typically covers various risks, including pollution liability, costs for clean-up operations, and third-party claims for damages or injuries caused by environmental incidents. Types of coverage include pollution liability insurance, environmental impairment liability insurance, and spill protection plans.

Compulsory Elements

Environmental insurance is generally discretionary but can become a requirement stipulated in contractual clauses, such as in mergers and acquisitions negotiations or public sector contracts, or to satisfy permitting obligations. Certain high-risk industries, such as mining and chemical processing, may have specific regulatory requirements that necessitate environmental insurance to cover potential liabilities and ensure compliance with environmental standards.

Practical Considerations

Environmental insurance policies can be customised to address the specific risks and needs of different industries. This ensures that companies have adequate coverage for their unique environmental exposures.

Financial institutions and lenders can be held liable for environmental damage or breaches of environmental law under certain circumstances. This liability is supported by legislative provisions such as NEMA and the NWA. Lenders must conduct thorough environmental due diligence when financing projects or acquiring properties. They can be held liable if they have a degree of control over the operations on the land, could reasonably foresee that pollution may take place, and should reasonably have taken the measures necessary to ensure that the pollution did not occur.

Lenders can protect themselves from environmental liability risks by conducting thorough environmental due diligence, including environmental site assessments and regulatory compliance reviews. They can include environmental representations and warranties, indemnities, and covenants in loan agreements to ensure compliance with environmental laws. Regular monitoring and enforcement of loan covenants, as well as obtaining environmental liability insurance, are also crucial strategies for mitigating potential risks.

Civil claims for compensation or other remedies can be brought in cases of hazardous substances violations, significant environmental harm or pollution, health and safety violations, consumer protection issues, and property damage. Affected parties can seek compensation or other remedies for harm caused by these violations.

Courts can award exemplary or punitive damages in circumstances where the defendant’s conduct is found to be particularly egregious or vexatious. In the context of environmental law, this might occur if a party’s actions demonstrate a blatant disregard for environmental regulations or the well-being of the community, resulting in significant harm. The purpose of these damages is to punish the wrongdoer and deter similar conduct in the future.

Class or group actions are possible for environment-related civil claims in South Africa. These actions allow a group of individuals who have suffered similar harm due to environmental damage to collectively bring a claim against the responsible party. This is particularly useful in cases where the harm affects a large number of people, making individual claims impractical.

There have been several landmark cases on civil liability for environment-related claims in South Africa, including the following.

• Minister of Water and Environmental Affairs v Really Useful Investments No 219 (Pty) Ltd – this case involved the interpretation and application of the Environment Conservation Act and NEMA. It highlighted the responsibilities and liabilities of parties under these laws.
• The “Deadly Air case” – in this landmark High Court judgment, the court found that the poor air quality in the Highveld “Priority Area” violated residents’ constitutional right to an environment that is not harmful to their health and well-being. The court ordered the government to take action to improve air quality, highlighting the serious legal and health consequences of failing to comply with the ambient air quality standards set for the designated Highveld Priority Area. It should be noted that the Supreme Court of Appeal is currently tasked with hearing the appeal on this matter.

Indemnities or other contractual agreements can indeed be used to transfer or apportion liability for incidental damage or breaches of law. These agreements are common in various types of contracts, including leases, insurance policies, and commercial agreements. They serve to allocate risk between the parties involved, often stipulating that one party will compensate the other for certain losses or damages.

Limits and Exceptions

However, there are limits and exceptions to the enforceability of these indemnities.

Public policy and legality

Indemnities that attempt to cover illegal activities or gross negligence may be deemed unenforceable as they contravene public policy. The courts are unlikely to uphold agreements that encourage or protect unlawful behaviour.

Statutory restrictions

Certain statutes may impose restrictions on the extent to which liability can be transferred. For example, environmental laws may hold parties strictly liable for pollution, regardless of any indemnity agreements in place.

Fairness and reasonableness

The courts may scrutinise indemnity clauses to ensure they are fair and reasonable. If an indemnity is deemed excessively broad or one-sided, it may be struck down or limited in scope.

Consumer protection

In contracts involving consumers, there are often additional protections in place to prevent unfair indemnity clauses. For instance, the Consumer Protection Act in South Africa limits the extent to which businesses can impose indemnities on consumers.

Regulatory decisions

Regarding their binding effect or influence on regulators, indemnities and contractual agreements between private parties generally do not bind regulatory authorities. Regulators are tasked with enforcing statutory obligations and ensuring compliance with the law. Therefore, even if a private agreement transfers liability from one party to another, regulators can still hold the original party responsible for breaches of law. For example, in environmental law, the party responsible for pollution may still be held liable by regulators, regardless of any indemnity agreements with third parties.

In South Africa, environmental insurance is available and serves as an important tool for managing environmental risks. This type of insurance typically covers a range of risks, including:

• Pollution liability – this covers the costs associated with pollution incidents, including clean-up operations and third-party claims for damages or injuries caused by environmental incidents.
• Legal defence expenses – environmental insurance policies often include coverage for legal defence costs in the event of litigation related to environmental damage.
• Business interruption – coverage for business interruptions resulting from environmental events is also commonly included. This helps businesses manage the financial impact of operational disruptions caused by environmental incidents.
• Gradual pollution events – in addition to sudden and accidental incidents, environmental insurance can also cover gradual pollution events, which may not be immediately apparent but can cause significant damage over time.
• Industry-specific coverage – environmental insurance can be customised to suit specific industries, such as manufacturing, mining, and waste management, which are more susceptible to environmental risks.

Overall, environmental insurance in South Africa provides comprehensive coverage for various environmental risks, helping businesses manage potential liabilities and ensuring compliance with regulatory requirements.

In South Africa, the key laws governing contaminated land include NEMA, NEMWA and the NWA.

These laws provide a comprehensive framework for managing contaminated land and ensuring that those responsible for contamination are held accountable. The regulatory authorities take a proactive approach to remediation requirements, emphasising the importance of preventing further environmental harm and restoring contaminated sites to a safe and sustainable condition.

The responsibility for clearing up contaminated land primarily falls on the person or entity that caused the contamination. This principle is rooted in the “polluter pays” doctrine, which is a key aspect of NEMWA. Under this act, those responsible for pollution are required to take reasonable measures to prevent, mitigate and remediate environmental damage. This responsibility can be delegated through contractual agreements, where the liable party may engage third-party contractors to carry out the remediation work. However, the original polluter remains ultimately accountable for ensuring that the remediation meets regulatory standards.

In cases where more than one party has contributed to contamination, liability is typically determined based on the principle of joint and several liability. This means that each party responsible for the contamination can be held liable for the entire cost of remediation, regardless of the extent of their individual contribution. The regulatory authorities or courts will assess the degree of involvement and the nature of the actions taken by each party to determine their respective liabilities. In practice, the parties involved may negotiate and agree on the apportionment of liability through contractual agreements. However, the regulatory authorities retain the right to hold any or all of the responsible parties liable for the entire cost of remediation if necessary.

In South Africa, the locus standi requirements for bringing proceedings against polluters, landowners or occupiers are designed to ensure that those affected by contamination can seek legal redress. The Constitution, particularly Section 38, and NEMA, Section 32, have broadened the scope of legal standing in environmental matters. Additionally, the Promotion of Administrative Justice Act, 2000 (PAJA) plays a crucial role in this context. Under these provisions, any person or group of persons acting in the public interest, or in the interest of protecting the environment, has the right to approach a court. This includes individuals directly affected by the contamination, as well as NGOs and community groups advocating for environmental protection.

Key Steps Under NEMA

The process of investigating environmental accidents in South Africa is governed by NEMA and involves several key steps to ensure a thorough examination and appropriate response.

Immediate reporting

When an environmental accident occurs, it must be reported immediately to the relevant authorities, including the Department of Environmental Affairs, provincial environmental departments, and local municipalities. The initial report should provide details about the nature of the incident, the substances involved, and any immediate risks to the environment and public health.

Initial assessment 

Upon receiving the report, the authorities conduct an initial assessment to determine the severity of the incident. This assessment helps to identify the immediate actions required to mitigate any risks and prevent further harm.

Investigation 

The DFFE and EMI are responsible for conducting investigations into environmental incidents. They have the authority to enter premises, inspect facilities, collect evidence, conduct searches, seize evidence, and take samples for analysis.

Compliance notices and directives 

Based on the findings of the investigation, the DFFE can issue compliance notices, directives and administrative penalties to the responsible parties. These notices and directives outline the actions that must be taken to remediate the environmental damage and prevent future incidents.

Legal proceedings 

If necessary, the DFFE can initiate legal proceedings against violators. This may include seeking court orders for remediation, imposing fines, or pursuing criminal charges for serious breaches of environmental laws.

Monitoring and follow-up

After the initial response and remediation efforts, the authorities continue to monitor the affected area to ensure that the remediation measures are effective and that there are no ongoing risks to the environment or public health.

This structured approach ensures that environmental accidents are addressed promptly and effectively, with a focus on mitigating harm and holding responsible parties accountable.

In South Africa, the key policies, principles and laws relating to climate change form a comprehensive framework aimed at addressing climate change and promoting sustainable development.

The Climate Change Act

The Climate Change Act is the cornerstone of South Africa’s climate change framework. However, its commencement remains pending on a date to be determined by the president. This act aims to facilitate an effective climate change response and a just transition to a low-carbon and climate-resilient economy. It mandates the development of national adaptation and mitigation strategies, including the allocation of carbon budgets to major GHG emitters. Until the commencement of the Climate Change Act, however, the remaining legislative framework, including NEMA, the Carbon Tax Act, NEMAQA and others remain the legislative framework applicable.

The National Climate Change Response White Paper

The National Climate Change Response White Paper outlines South Africa’s strategic priorities for climate change mitigation and adaptation, emphasising risk reduction, sectoral responses, policy alignment, and the promotion of sustainable development.

NEMA

NEMA provides the overarching framework for environmental management in South Africa, including provisions for holding corporate entities liable for environmental damage, and mandates the development of environmental management plans.

The Carbon Tax Act, the REIPPPP and the IRP

The Carbon Tax Act imposes a tax on carbon emissions to incentivise businesses to reduce their GHG emissions, forming part of South Africa’s broader strategy to transition to a low-carbon economy. Additionally, South Africa has implemented various renewable energy policies, including the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which aims to increase the share of renewable energy in the national grid and reduce reliance on fossil fuels. The Integrated Resource Plan (IRP) outlines South Africa’s long-term electricity-generation plan, focusing on diversifying the energy mix and increasing the contribution of renewable energy sources.

South Africa has established clear policy and legal targets to reduce GHG emissions, in line with its commitments under the Paris Agreement. The country’s updated Nationally Determined Contributions (NDCs) set specific targets for emission reductions.

By 2025, South Africa aims to limit its GHG emissions to a range of 398 to 510 million tonnes of CO₂ equivalent (MtCO₂e). This target becomes more stringent by 2030, with a goal to reduce emissions to between 350 and 420 MtCO₂e.

These targets are part of a broader strategy to transition to a low-carbon economy and achieve net-zero carbon emissions by 2050.

The Climate Change Act is central to this strategy, mandating the development of national adaptation and mitigation plans, including carbon budgets for major emitters and promoting the adoption of cleaner technologies and renewable energy sources. Additionally, the Carbon Tax Act incentivises businesses to reduce their carbon footprint by imposing a tax on GHG emissions.

In South Africa, the regulation of asbestos and PCBs is governed by several key policies and laws aimed at safeguarding public health and the environment. The Asbestos Regulations of 2001, established under the OHSA strictly prohibit the use, processing and manufacturing of asbestos and materials containing asbestos. They also enforce stringent controls on the handling, removal and disposal of asbestos to prevent exposure and contamination. NEMWA includes provisions for the management of hazardous waste, specifically addressing PCBs. It mandates the identification, labelling and safe disposal of PCB-containing equipment and materials.

The management and regulation of waste in South Africa are governed by several key laws and regulatory controls aimed at protecting the environment and public health.

NEMWA

NEMWA provides comprehensive guidelines for waste management, including the classification, handling, storage and disposal of waste. It emphasises the principles of waste minimisation, recycling and the safe disposal of hazardous waste.

The Waste Classification and Management Regulations, issued under NEMWA, provide detailed requirements for the classification of waste, the management of waste disposal facilities, and the reporting of waste management activities.

NEMA

NEMA establishes overarching principles for sustainable development and environmental protection, mandating that all waste management activities must be conducted in a manner that prevents pollution and environmental degradation.

The Hazardous Substances Act

The Hazardous Substances Act regulates the control and management of hazardous substances, including their disposal, to prevent harm to human health and the environment.

Local By-Laws

Local municipalities also have by-laws that govern waste management within their jurisdictions, often including provisions for waste collection, recycling and the management of waste disposal sites.

A producer or consignor of waste can retain liability for waste even after it has been disposed of by a third party, under certain circumstances.

This principle is rooted in the “polluter pays” doctrine, which is a key aspect of the NEMWA. According to this act, the original producer or consignor of waste remains responsible for ensuring that the waste is managed and disposed of in an environmentally sound manner. Liability can be retained if the waste is transferred to a person or entity that is not authorised to handle or dispose of the waste. If the third party lacks the necessary permits or fails to comply with regulatory requirements, the original producer or consignor can be held accountable for any resulting environmental harm.

Producers of goods can be required to design, take back, recover, recycle or dispose of their products once they become waste, under specific circumstances. These requirements are primarily governed by NEMWA and the associated Extended Producer Responsibility (EPR) Regulations.

The EPR Regulations mandate that producers take responsibility for the entire life cycle of their products, including the post-consumer stage. This means that producers must implement measures to manage the waste generated from their products, ensuring that it is handled in an environmentally sound manner.

The regulations apply to various product categories, including packaging, electronics, and hazardous materials. Producers are required to design products with their end-of-life management in mind, promoting recyclability and reducing environmental impact.

Waste operators in South Africa have specific rights and obligations under NEMWA and other related regulations. Waste operators have the right to apply for and obtain the necessary permits and licences to conduct waste management activities, including the collection, transportation, treatment and disposal of waste.

They also have the right to access information related to waste management regulations, guidelines and best practices to ensure compliance and effective waste management. Waste operators must comply with all relevant waste management regulations, including the proper handling, storage, transportation and disposal of waste, adhering to the conditions set out in their permits and licences.

They are obliged to take all reasonable measures to prevent pollution and environmental degradation, implementing measures to minimise waste generation, promote recycling, and ensure the safe disposal of hazardous waste. Waste operators must maintain accurate records of their waste management activities and submit regular reports to the relevant authorities, including information on the types and quantities of waste handled, as well as any incidents or non-compliance issues.

They must also have emergency response plans in place to address any incidents or accidents that may occur during waste management activities, including measures to contain and mitigate the impact of spills, leaks or other environmental hazards.

Breaching waste management obligations can result in significant fines and penalties, suspension or revocation of permits, legal action, and reputational damage.

In South Africa, there are requirements to self-report environmental incidents or damage to regulators and, in some cases, to the public.

These requirements are outlined in various environmental laws and regulations, including NEMA and NEMWA. Environmental incidents, such as spills, leaks or emissions, must be reported to the relevant regulatory authorities immediately. This includes providing detailed information about the incident, its impact, and the measures taken to mitigate the damage.

Companies, especially those listed on JSE, are required to disclose their environmental impacts, compliance records and liabilities in their annual reports. This ensures that shareholders and the public are informed about the company’s environmental performance.

Public participation is a key principle in South Africa’s environmental laws. Companies and developers must engage with local communities and stakeholders during the EIA process and disclose any potential environmental impacts of proposed projects. Failure to comply with these reporting requirements can lead to significant legal consequences, including criminal sanctions, fines and imprisonment.

PAIA and NEMA

In South Africa, the public can obtain environmental information from public authorities and bodies under several circumstances, primarily guided by the Promotion of Access to Information Act (PAIA) and NEMA.

PAIA provides the public with the right to access information held by public and private bodies. It aims to promote transparency and accountability by ensuring that information is available to the public, especially when it concerns the environment and public health.

NEMA emphasises the importance of public participation and access to information in environmental decision-making processes. It mandates that environmental information, such as EIAs and environmental management plans, be made available to the public.

EIAs

During the EIA process, public participation is a key requirement. This involves consultations with interested and affected parties, public hearings and comment periods to ensure transparency and stakeholder involvement.

Public Authorities and Bodies

Public authorities and bodies are broadly defined for these purposes. They include government departments, provincial and local authorities, and any other entities that perform public functions or provide public services.

This definition ensures that a wide range of entities are covered, promoting greater transparency and accountability in environmental matters.

Corporations in South Africa, especially those listed on the JSE, are required to disclose environmental information in their annual reports. This requirement ensures that shareholders and the public are informed about the company’s environmental performance, compliance records, and liabilities.

The disclosure typically includes information on the company’s environmental impacts, measures taken to mitigate these impacts, and any environmental violations or penalties incurred. The King Code also emphasises the importance of ESG considerations in corporate governance. It encourages companies to integrate these principles into their business strategies and to report on their ESG performance.

Green finance arrangements are primarily guided by the South African Green Finance Taxonomy. This taxonomy provides a classification system that aligns with global standards while addressing local priorities. It defines a minimum set of assets, projects and sectors that qualify as “green” or environmentally friendly, thereby supporting sustainable development and climate change mitigation efforts.

The taxonomy aims to enhance the credibility and transparency of green investments, making it easier for investors to identify and support environmentally sustainable projects.

The national treasury plays a pivotal role in the development and oversight of the Green Finance Taxonomy. It is responsible for monitoring and enforcing these arrangements to ensure that green finance initiatives are effectively implemented and contribute to the country’s environmental and sustainability goals.

Environmental due diligence is typically conducted on mergers and acquisitions, finance, and property transactions in South Africa.

This process is crucial for identifying potential environmental liabilities and ensuring compliance with environmental laws and regulations. Environmental site assessments involve evaluating the environmental condition of a property to identify any existing contamination or environmental issues.

Environmental Site Assessments (ESAs)

This includes Phase I Environmental Site Assessments (ESAs), which involve a review of historical records, site inspections, and interviews with current and past property owners. If potential contamination is identified, a Phase II ESA may be conducted, involving soil and groundwater sampling and analysis. A regulatory compliance review involves reviewing the target company’s compliance with environmental laws and regulations. It includes examining permits, licences, and any past or ongoing enforcement actions or violations.

Environmental Management System (EMS)

This helps to identify any potential legal liabilities and ensure that the company is operating within the legal framework. Evaluating the target company’s environmental management system (EMS) ensures that it has effective policies and procedures in place for managing environmental risks.

This includes reviewing environmental audits, monitoring reports, and incident response plans. Identifying any contingent liabilities related to environmental issues, such as pending litigation or regulatory actions, is also crucial. This includes assessing any ongoing or future remediation obligations that the target company may have.

Sustainability and ESG

Assessing the target company’s sustainability practices and ESG performance is increasingly important. This includes evaluating the company’s efforts to reduce its environmental footprint, manage climate risks, and promote sustainable practices.

Conducting thorough environmental due diligence helps purchasers make informed decisions, negotiate indemnities or adjustments to the purchase price, and mitigate potential environmental risk.

In South Africa, a seller is required to disclose environmental information to a purchaser. This requirement is primarily governed by NEMA and NEMWA. These laws mandate that sellers provide accurate and comprehensive information about any environmental issues or liabilities associated with the property or assets being sold.

The disclosure typically includes information on any known contamination or pollution on the property, compliance with environmental regulations and permits, any ongoing or past environmental investigations or enforcement actions, and details of any environmental management plans or remediation efforts.

Failure to disclose such information can result in legal consequences, including potential claims for misrepresentation or breach of contract.

Several common environmental legal issues can arise within the context of transactions in South Africa, particularly in mergers and acquisitions, finance, and property transactions. One of the most significant concerns is the presence of contaminated land.

Buyers need to be aware of any existing contamination and the associated remediation obligations. This includes understanding the extent of contamination, the costs of clean-up, and any ongoing monitoring requirements. Ensuring that the target company or property complies with all relevant environmental laws and regulations is crucial. This includes obtaining and maintaining necessary permits and licences, adhering to waste management regulations, and complying with air and water quality standards. Identifying potential environmental liabilities is a key aspect of due diligence. This includes assessing any past or ongoing environmental litigation, fines or penalties that the target company may face. It also involves understanding any contingent liabilities related to environmental issues.

For companies involved in the production of goods, EPR regulations require them to take responsibility for the entire life cycle of their products, including post-consumer waste management. This can impact the financial and operational aspects of a transaction. Increasingly, transactions are scrutinised for their impact on climate change and sustainability. This includes evaluating the target company’s carbon footprint, energy efficiency, and compliance with climate-related regulations. Investors and stakeholders are placing greater emphasis on ESG factors. Transactions involving land or natural resources may need to consider biodiversity and conservation issues. This includes assessing the impact on protected areas, endangered species and ecosystems.

Compliance with biodiversity laws and regulations is essential to avoid legal and reputational risks. Ensuring transparency and public participation in environmental decision-making processes is a legal requirement. This includes disclosing potential environmental impacts and engaging with local communities and stakeholders during the EIA process.