Full Disclosure 2016

Pretoria Portland Cement Company Limited's disclosure of environmental non-compliances in annual reports

2016 update

2015 company reports

In relation to environmental compliance generally, PPC states in its 2015 Integrated Annual Report:

The speed of change in environmental legislation has been a challenge for the cement industry. PPC continues to engage extensively on legislation that could affect our business. Current engagements have focused on air quality, water issues at national and local level, climate change and waste issues including definitions of waste.¹

The 2015 Integrated Annual Report states as follows regarding inspections conducted at PPC’s operations by the DEA:

In total, PPC has had four audits by the environmental management inspectorate, with two feedback reports received to date. One report commended PPC Dwaalboom on its environmental performance. PPC Hercules received a number of findings including a pre-compliance notice and intention to issue a directive on fugitive management of dust, especially at conveyance systems, annual performance audit including emergency plan and submission of emergency plan to City of Tshwane. These were addressed to the satisfaction of the inspectors. No directives were issued to PPC.²

With respect to sanctions for non-compliance, the report states that there were no fines incurred for non-compliance at any of PPC’s operations.³

The report states that the company’s “lowlights” during the year included a public complaint regarding the fugitive emissions at the Hercules facility and excessive emissions at Dwaalboom.⁴

PPC reportedly received 17 environmental complaints in 2015 relating to water pollution, dust eradication, blasting activity, noise and disclosure. The report states that some of these complaints were addressed with the stakeholder concerned and others “are being addressed”. The company report notes that one of these complaints was submitted by the Centre for Environmental Rights for insufficient disclosure of environmental non-compliances in annual reports, and that “PPC submitted its response to the centre, which was published as part of the full disclosure report”.⁵

The Integrated Annual Report also states that Dwaalboom’s WUL is currently pending.⁶

2016 company reports

In relation to environmental compliance PPC states as follows:

To ensure compliance across the group, we use a combination of targeted internal audits, legal registers, external legal auditing and external permit-compliance audits. PPC operations use the environmental management systems approach to identify operational risks and manage these to ensure continual improvement and environmental compliance. All our South African cement operations are certified ISO 14001 by independent certification body, SABS, our lime facility is certified by Dekra and our aggregates facilities are affiliated to ASPASA (Aggregate and Sand Producer Association of South Africa) which follows the ISO 14001 framework. No major findings were recorded in the reporting period.⁷

The 2016 Integrated Annual Report states as follows with regard to compliance monitoring by the DEA in the reporting year:

PPC’s SA operations had no formal compliance inspections in the reporting period, but a number of ad hoc visits were undertaken by provincial and local authorities.⁸

PPC’s states as follows with regard to environmental incidents in 2016:

Three NEMA section 30 incidents were reported to the authorities. At PPC Lime, we recorded excessive dust emissions after a premature failure of a large number of filter bags. At our Dwaalboom operation, DK2 nitrogen dioxide emissions exceeded the limit for more than two days, which is a reportable incident. At Hercules, water entered the washbay after a flash flood and contaminated the stormwater with hydrocarbons. The necessary clean-up was done and reports sent to the relevant authorities.⁹

In relation to fines for non-compliance, PPC reports that no significant monetary fines or non-monetary sanctions were received in the reporting year.¹⁰

Full Disclosure 2015

PPC’s annual reports mention the findings made in the National Environmental Compliance and Enforcement Reports to a limited extent. The level of disclosure is low considering the number of violations which the National Environmental Compliance and Enforcement Reports record at PPC operations and PPC’s recurring failure to adhere to commitments made to the Department of Environmental Affairs.

2008 company reports

PPC’s 2008 Annual Report stated that a number of its plants had been audited by the environmental management inspectors, presumably a reference to the inspections reported in the National Environmental Compliance and Enforcement Report.¹¹ It was also reported that, “(t)he Green Scorpions’ report for PPC Riebeeck has been received and contained no major legal findings. Issues of concern in the report included the management of dust impacts and waste management at the PPC Riebeeck landfill.”¹²

PPC’s 2008 Annual Report also stated that during the 2008 reporting period the Jupiter operation had been issued with a directive in terms of section 31A¹³ of the Environment Conservation Act and that PPC had responded to the provincial environment department’s requirements for section 24G applications to be submitted for the Slurry and Dwaalboom operations, alongside the payment of R 120,000.00 in fines for both operations.¹⁴

This report also noted that there had been fires at the De Hoek and Dwaalboom facilities.¹⁵

2009 company reports

A “business objective” within the 2009 Annual Report was to “meet all legislated emission level requirements and further reduce emissions”.¹⁶ The CEO’s report also stated that during the reporting year six plants had impromptu visits from the environmental management inspectors and that “no non-conformance notices or clean-up directives were issued as a result of these visits”.¹⁷ Considering the significant number of non-compliance findings set out in the National Environmental Compliance and Enforcement Reports, this statement is misleading.

There was also a statement in another section of the report that “external legal audits have identified a few areas of non-compliance, however management plans have been drawn up to address these areas of concern”.¹⁸ In terms of “Environmental compliance and incidents” it was stated in the Sustainability Report that there were no fines issued to PPC but an emergency incident report had been lodged with the Department of Water and Environmental Affairs during 2009.¹⁹ It was explained that it had been discovered at the Slurry operation that about 3509 litres of diesel was unaccounted for in August and that the underground transporting pipes were leaking. It was also stated that “environmental non-conformances on site were managed through the ISO 14001:2004 /ASPASA EMS system”.

2010 company reports

In the 2010 Annual Report it was stated that the Port Elizabeth plant had received correspondence from the environmental management inspectors requesting management plans to address fugitive emissions and raw material onsite.²⁰ It was also stated that no fines or directives had been received for the South African operations.²¹

2011 company reports

In the 2011 report it was again stated that no fines or directives had been received for South African operations.²² The 2011 report fails to disclose that follow-up inspections by the environmental management inspectors had found that most of the non-compliances which PPC had undertaken to address had not been rectified, and that the Department of Environmental Affairs was at that time in the process of developing enforcement strategies.

2012 company reports

PPC’s 2012 report stated that “PPC Riebeeck faced challenges in meeting permitted sulphur dioxide limits due to its plant technology and composition of the ore body. PPC completed extensive investigations and has approached the authorities to request an interim relaxation of limits pending the upgrade of this facility.”²³

It was also stated that, “Slurry kiln 7 dust emissions remain a challenge, we are discussing options with the authorities”.²⁴ It was also stated that PPC Lime Acres had recently been audited by the environmental management inspectorate and it had been “recommended that PPC Lime Acres apply for a variation of its waste licence to ensure that all conditions are appropriate for the operation”.²⁵ A variation application was reported to have been submitted.

2013 company reports

The 2013 report also stated that a section 30 incident²⁶ had been reported at PPC Riebeeck and that “Slurry kiln 7 dust emissions remain a challenge”²⁷(as had also been reported in the previous year’s report). The section 30 incident related to a historical diesel tank spillage at PPC Riebeeck and it was stated that the Department of Environmental Affairs had issued a directive to address this and PPC was implementing recommendations from the directive.

It was also stated that the operations at Jupiter and Hercules had been inspected by the Gauteng Environmental Inspectorate to verify compliance against environmental permit conditions and the duty of care but that no reports had been received for those inspections.²⁸

PPC’s 2013 environmental review stated that PPC had “almost 70%” of water use licences issued by the Department of Water Affairs.²⁹ PPC was therefore presumably operating without 30% of required water use licences.

2014 company reports

PPC’s 2014 Integrated Report listed the following “lowlights” from the year:

Given concerns on the performance of four emission points, we applied to postpone compliance timeframes for Dwaalboom kiln 1, PE kiln 4, De Hoek finishing mill 6 and Slurry kiln 7.

Delays in issuing water-use licences and various regulatory amendments remain a challenge. PPC continues to engage with government officials to ensure successful outcomes.

…

We have been unable to achieve our goals in implementing energy management systems aligned to ISO 50001, due to resource constraints.³⁰

It was also reported that no environmental compliance directives had been received in South Africa over the year.³¹ In an update on the company’s lack of water use licences, it was stated that, “PPC has not received all integrated water-use licences”.³²