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Enforcing the Law: the challenges undermining environmental compliance monitoring and enforcement in South Africa

Enforcement of the law is a vital component of any regulatory system.

Without the rule of law and compliance to promote social stability and legal certainty, firms are less willing to make the investments and to assume the risks that form the basis of market economy development… This lack of investment, in turn, can slow economic growth and deprive governments of resources needed to invest in education, social safety nets and sound environmental management, all of which are critical for sustainable development.1

20% of the regulated population will automatically comply with any regulation, 5% will attempt to evade it, and the remaining 75% will be comply as long as they think that the 5% will be caught and punished.2

Enforcement of environmental laws in South Africa was given a significant boost in 2005 with the establishment of the Environmental Management Inspectorate, popularly known as the “Green Scorpions”. In a regulatory context where the lack of cooperation between government departments is frequently blamed for all ills, the Inspectorate is a real feat: its member institutions – the Department of Environmental Affairs, South African National Parks, Isimangaliso Wetland Park, all nine provincial environment departments, four provincial conservation agencies and even a few municipalities – all cooperate on the monitoring and enforcement of compliance with the National Environmental Management Act and its subsidiary laws covering protected areas, biodiversity, waste, air quality and coastal management. They share standard training, standard operating procedures, a logo and a newsletter, an annual EMI Lekgotla (national conference) and quarterly meetings. They also report results in a standard format into the annual National Environmental Compliance and Enforcement Report.

No complex institution operates perfectly, but the significant investment in the Inspectorate and hard work of the past ten years are starting to show meaningful results. By 2013-14, the 1915 designated EMIs were reporting annual figures that include 114 final notices and directives issued for violations, 78 convictions for environmental crimes, and criminal fines agreed in plea bargains of as high as R5 million.

…many environmental crimes and violations still go unpunished, and in the absence of effective deterrence, continue to be committed by companies.

Yet despite all of this, many environmental crimes and violations still go unpunished, and in the absence of effective deterrence, continue to be committed by companies. This is powerfully demonstrated in Full Disclosure: the truth about corporate environmental compliance in South Africa. The reasons for this are many and varied, and require a broad range of interventions. Some of these are listed below.

Firstly, for historical and political reasons, the Environmental Management Inspectorate does not have a legal mandate over environmental compliance of mining operations, or for laws relating to water, as this is the purview of officials in the Department of Mineral Resources (DMR), and the Department of Water & Sanitation (DWS) respectively. Both these departments have declined the opportunity formally to participate in a single Environmental Management Inspectorate, therefore largely missing out on a decade of learning and networking painstakingly done by environment authorities. Both departments have, by comparison with environment authorities, invested negligibly in compliance and enforcement capacity, and this is reflected in their enforcement results (or absence thereof).

Unfortunately, we also see a trend in diminishing budgets for environment authorities’ compliance and enforcement units. This inevitably means that fewer inspections can be conducted, inspection reports take longer to finalise, fewer notices and directives are issued, and fewer criminal convictions are secured.

If an enforcement response cannot be immediate and predictable, companies will continue to take risks with violations.

Secondly, the way that authorisations are traditionally drafted by licensing authorities makes compliance monitoring very difficult, and the asymmetry of information between the operator of an industrial facility and the often relatively junior officials with limited technical expertise doing inspections across a range of different types of facilities makes it too easy for companies to avoid detection of violations, or to tie authorities up in lengthy and complex disputes about whether violations have in fact occurred. The reports on industrial compliance monitoring and enforcement in the National Environmental Compliance and Enforcement Reports demonstrate the lengthy periods – often years – that pass between an inspection and actual enforcement action. If an enforcement response cannot be immediate and predictable, companies will continue to take risks with violations.

The implications of these shortcomings are apparent from Full Disclosure in a number of different ways. One of these is the view expressed by some of the companies that the findings of non-compliance is no more than an “opinion” of the EMIs, and not independently verified. No regulatory system in the world requires regulatory findings to be independently verified to be valid and enforceable, and that certainly is not the legal position under South African environmental law. Yet companies use this – essentially a disregard for the technical expertise of EMIs and of compliance monitoring and enforcement officials in the DMR and DWS, to defend their unwillingness to accept violations and spend the resources to achieve compliance.

Another consequence of this is the approach among major companies evident in Full Disclosure that compliance is the subject of negotiation with authorities, and that compliance is a “process” towards what is really a utopian end result. Because findings of compliance are frequently complex and disputed, negotiation – allowing a company more time – is often an easier option for officials than decisive, confrontational enforcement. And while this tendency is evident from the National Environmental Compliance and Enforcement Reports published by the EMIs, anecdotally (since the DMR and DWS do not yet publish the results of their compliance monitoring and enforcement) the DMR and DWS are particularly well-known for this approach to compliance.

Thirdly, South African environmental laws still rely almost exclusively on criminal prosecution as the route to punishment for environmental violations. Criminal prosecution of environmental crimes is slow and difficult, particularly in an already overburdened criminal justice system. Criminal prosecution requires collecting evidence that will withstand the burden of proof required in criminal cases, namely beyond reasonable doubt. It also, crucially, requires the cooperation of both the South African Police Service and individual prosecutors in the National Prosecuting Authority, many of whom are not well-acquainted with environmental laws. It also requires judges and magistrates who are willing to impose maximum penalties for crimes that are often not, in our socio-political context, considered particularly serious.

Despite a significant increase in maximum criminal penalties for environmental crimes in the past 10 years (the maximum criminal penalty for some crimes in environmental law is now as much as R10 million or 10 years in prison), regional magistrates accustomed to seeing violent crime remain reluctant to impose maximum penalties for environmental crimes. South Africa is not alone in this – even in the United Kingdom, where conviction rates for environmental crimes exceed 90%, this problem occurs.

…empowering a regulatory authority…with the power to impose immediate monetary penalties that truly reflect the cost of those violations to society is the only way to incentivise greater compliance amongst South African corporates.

Most international jurisdictions are therefore either in the process of shifting away, or have already undertaken the shift away from, criminal penalties to an administrative or civil penalty system for environmental violations. A criminal enforcement programme must always be retained for the most egregious and intentional of environmental crimes. But empowering a regulatory authority, or even an independent tribunal, with the power to impose immediate monetary penalties that truly reflect the cost of those violations to society is the only way to incentivise greater compliance amongst South African corporates.

One has only to consider the way in which the Competition Act has revolutionised corporate behaviour in relation to fair competition to understand the potential impact civil and administrative penalties could have on environmental compliance in South Africa.

Fourthly, environmental regulation in South Africa continues to be plagued by an inappropriate provision in the National Environmental Management Act (section 24G) that allows companies that have commenced activities without the required authorisation to obtain the authorisation after the fact. The procedure for ex post facto authorisation is quicker, and often cheaper, despite the fines imposed, than the application process for a proper authorisation. Most of these fines are too small even to require disclosure to shareholders, and certainly do not compensate for the time and profit gained by the violator through its illegal activity by by-passing the environmental impact assessment requirements, including the commissioning of expert studies and the required public participation processes. Even worse, because these fines are paid directly to government departments (in 2013/14 alone, R5 931 000 was paid to authorities in fines), in an environment where budgets are continuously decreased, the provision creates a perverse incentive for regulators to process as many of these after-the-fact applications as possible. This provision needs a fundamental overhaul.

There is still very limited transparency around compliance with environmental laws in South Africa.

Fifthly, there is still very limited transparency around compliance with environmental laws in South Africa. Despite the 2014 Supreme Court of Appeal judgement against ArcelorMittal South Africa, a case in which the Vaal Environmental Justice Alliance was represented by the Centre for Environmental Rights, where the Supreme Court of Appeal acknowledged and confirmed obligations of South African corporates to report environmental impacts not only to the state, but also to affected communities and civil society, companies remain skittish about sharing information beyond their express reporting duties to the state. The only way to mitigate the impacts of the limited capacity within the state to verify those reports and to respond to reports of violations is to require companies to publish their impacts in an easy and accessible format that allows communities and civil society organisations publicly to hold those companies to account when government cannot.

In the current economic climate, when companies are cutting back on all expenditure that they consider to be “non-essential”, it is even more important for enforcement action to be swift and meaningful. Attempts to “save” costs on matters relating to environmental impacts – by cutting back on capital expenditure, by reducing environmental staff, and by reducing expenditure on appropriately qualified external environmental expertise, now means that serious environmental violations and incidents are more likely in the future. To ensure that the environmental regulatory system gives effect to the Constitutional environmental right, we need, at the very least:

  • enough trained, experienced and resourced compliance inspectors and investigators in all relevant government departments;
  • better quality and more monitorable authorisations;
  • a comprehensive new system of administrative penalties for environmental violations, coupled with a complete overhaul of section 24G of the National Environmental Management Act;
  • consistent, regular, integrated and public reporting of compliance and enforcement results; and
  • far greater public transparency of licences and compliance data.
  1. Zaelke, Stilwell and Young, 2005 (D Zaelke, M Stilwell and O Young “What Reason Demands: Making law Work for Sustainable Development: Chapter 1” in D Zaelke, D Kaniaru and E Kruzikova (eds) Making Law Work: Environmental Compliance and Sustainable Development Vol 1 (2005) at 45.
  2. C Bowles “Promises to Keep: My Years in the Public Services, 1941-1969 (1971), quoted in D Zaelke, D Kaniaru and E Kruzikova (eds) Making Law Work: Environmental Compliance and Sustainable Development Vol 1 (2005) at 59.