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Full Disclosure 2016

Non-compliance with environmental laws as reported in the National Environmental Compliance and Enforcement Reports

Merafe’s mining operations do not feature in the National Environmental Compliance and Enforcement Reports. However, as the Department of Environmental Affairs’ Environmental Management Inspectors do not have jurisdiction over the environmental or water impacts of mining, this does not mean that the company has not been subject to compliance monitoring and/or enforcement action. The Department of Mineral Resources and the Department of Water and Sanitation are responsible for compliance monitoring and enforcement of environmental and water laws by mining companies. Unlike the Department of Environmental Affairs, thus far neither department has published any information on the findings of their inspections or on the enforcement action taken by their departments.

While the DWS has, for the first time in 2016, collaborated with the DEA by providing some key statistics about its compliance monitoring and enforcement activities for inclusion in the 2015/2016 NECER, these statistics are high-level, overall statistics. The DWS has not given any details of facilities inspected or of inspection findings.

Most of the mining companies assessed in Full Disclosure do not refer to compliance monitoring inspections by the Department of Mineral Resources or Department of Water and Sanitation in their shareholder reporting.

The fact that the Departments charged with regulating the sector do not publicise non-compliance findings or enforcement action means that it is impossible to know whether or not the level of disclosure on environmental and water non-compliances by mining companies in their annual reports is accurate.

However, two of the non-mining operations in the Glencore-Merafe Venture1 have featured in the National Environmental Compliance and Enforcement Reports.

Department of Environmental Affairs’ compliance monitoring and enforcement action

Lion Smelter
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20152 An inspection on the 4th and 5th of November 2014 revealed the following non-compliances:
  • non-compliances with conditions of the AEL, Environmental Authorisations, WML and Water Use Licence.
  • potential groundwater contamination from the unlined waste storage areas;
  • failure to comply with its general duty of care in respect of waste management and with the requirements for the handling and storage of waste.
20163 The following update is provided in 2016:

After having conducted a site visit on 4 and 5 November 2014, the DEA issued an inspection report to the facility in May 2015. Representations from the facility was [sic] received and reviewed and a decision is being considered in respect of appropriate enforcement action, if required.

Wonderkop
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20094 An inspection in January 2008 revealed 38 non-compliances including the following:

Lack of adequate monitoring;

Air emission exceedances;

Unauthorised waste disposal sites;

ROD contraventions;

Environmentally harmful activities that could be prevented /rehabilitated in terms of the NEMA duty of care;

Lack of water use licence.

The following information was also provided in the 2009 report:

Xstrata argued that it is situated on an authorised mine and the disposal sites are therefore operated in accordance with mining legislation and the approved EMPR from DME. Since the inspection, it was noted that there had been a vast improvement in the storm water management system on site. The response received demonstrated that the company was willing and had started coming into compliance with environmental legislation and authorisations. A follow-up inspection in line with project’s timeframes will determine whether or not it is necessary to take enforcement action.

20105 The 2010 report provided the following update:

Subsequent to the issuing of the report and receipt of representations, Xstrata was issued with an enforcement letter, dated 13/04/2010, requesting further information on issues that have not been adequately addressed in the representations. This information, which relates primarily to the APPA contraventions, has been received. A review of this information by Air Quality specialists will inform the need for further action.

20116 The 2011 report noted that a follow-up inspection had been scheduled to be conducted in the 2010-2011 financial year but could not be undertaken. The following information was also provided:

Additional information was requested in April 2010, relating primarily to APPA contraventions After review of the received information, it was still unclear whether or not the facility was in compliance with environmental legislation Follow-up inspection needs to be undertaken, prior to a decision on enforcement approach Inspection planned for July 2011.

20127 The follow-up inspection, conducted in August 2011, resulted in the following findings:

Xstrata has submitted applications to legalise the waste management activities which were found to be operated without permits in terms of Section 20 of the ECA;

Xstrata has been issued with a water use licence, however, non-compliances to licence conditions were found;

Non-compliance to APPA R/C;

Failure to comply with general duty of care in respect of waste management on site;

Air pollution caused by significant fugitive emissions from the Pelletising Plant and the Metal Recovery Plant;

Exceedences of the limits set out in the APPA R/C.

In relation to an enforcement strategy, the following information was provided:

Based on the findings of the follow-up inspection an enforcement strategy is being developed.

20138 The following information was reported in the 2013 report:

A Notice of intention to issue a Section 31L NEMA notice and Section 31A ECA & S28(4) NEMA directives, was issued to the facility on 27 November 2012 and representations were received in January 2013.

Meetings were held with the facility on the 18 March 2013 during which certain issues pertaining to ground and surface water monitoring, waste removal and the facility’s AEL application were discussed. Further information was requested and was received on 26 March 2013.

Said information is currently being reviewed, upon which the DEA will decide what enforcement action, if any, is required.

20149 The 2014 report repeated the above enforcement action.
201510 The 2015 report states:

In addition to the administrative enforcement activities that are taking place in relation to this facility, the criminal investigation has been finalised and a case docket has been referred to the DPP North West for decision.

201611 The 2016 report states:

On 1 March 2016 representatives from the Glencore-Wonderkop Smelter met with officials from the DEA to discuss the contents of the NECER 2014/15. Subsequent to this meeting and upon further investigation, the DEA identified that the NECER 2014/15 contained information regarding a criminal case against the facility. The DEA subsequently clarified this information with the facility, and wishes to state, that the NECER 2014/15 erroneously referred to a criminal case against the Glencore-Wonderkop Smelter, instead of the criminal case against Glencore Royal Bafokeng.

Notwithstanding the above, the DEA has also issued the facility with a letter, dated 14 March 2016, in which further information was requested to assist the DEA to determine the facility’s current level of compliance. On 31 March 2016 the facility provided the DEA with a response. The DEA is currently in a process of reviewing this response and will thereafter take a decision on the way forward.

  1. Merafe and Glencore participate in a “pooling and sharing venture” in chrome mining and the beneficiation of chrome ore into ferrochrome. The Glencore-Merafe Chrome Venture operates five ferrochrome smelters, twenty-two ferrochrome furnaces and nine mines (which include the Wonderkop smelter, and the Lion I and II smelters). See Merafe’s 2015 Annual Financial Statements, at p4, available at: http://www.meraferesources.co.za/reports/ir_2015/pdf/afs.pdf (last accessed on 7 November 2016).
  2. National Environmental Compliance and Enforcement Report 2014/2015, at p48.
  3. National Environmental Compliance and Enforcement Report 2015/2016, at p56.
  4. National Environmental Compliance and Enforcement Report 2008/2009, at p26.
  5. National Environmental Compliance and Enforcement Report 2009/2010, at p28.
  6. National Environmental Compliance and Enforcement Report 2010/2011, at p43.
  7. National Environmental Compliance and Enforcement Report 2011/2012, at p41.
  8. National Environmental Compliance and Enforcement Report 2012/2013, at p40.
  9. National Environmental Compliance and Enforcement Report 2013/2014, at p46.
  10. National Environmental Compliance and Enforcement Report 2014/15, at p46.
  11. National Environmental Compliance and Enforcement Report 2015/2016, at p55.