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Full Disclosure 2016

Pretoria Portland Cement Company LimitedUpdated

Key questions shareholders should ask

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

PPC has eleven facilities at the following locations:

  • Hercules Cement Factory, Pretoria, Gauteng
  • Jupiter Cement Factory, Johannesburg, Gauteng
  • Port Elizabeth Cement Factory, Port Elizabeth, Eastern Cape
  • Dwaalboom Cement Factory, Dwaalboom, Limpopo
  • Slurry Cement Factory, Slurry, North West Province
  • De Hoek Cement Factory, De Hoek, Western Cape
  • Riebeeck Cement Factory, Riebeeck West, Western Cape
  • Saldanha Milling Depot, Saldanha, Western Cape
  • Lime Acres Lime Plant, Lime Acres, Northern Cape
  • Laezonia Quarry, Gauteng
  • Mooiplaas Quarry, Pretoria, Gauteng

Department of Environmental Affairs’ compliance monitoring and enforcement action

Riebeeck West
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20091 Following an inspection on the 27th of May 2008, a number of findings were made:

10 non-compliances relating to the company’s permit in terms of the Environment Conservation Act, 1989.

EMIs observed significant dust emissions emanating from various sources on site.

 The following information was also provided in the 2009 report:

The company has budgeted for its dust abatement equipment to be upgraded in the new financial year.The company has since reviewed its operating procedures and compiled plans to rectify and address these issues.
20102 The 2010 report provided the following update:

Follow-up inspection …undertaken…towards the end of the reporting period in order to compare the site conditions with the undertakings made in the representations responding to the inspection findings. The Department is in the process of finalizing a decision on whether to take enforcement action.
20113 As outlined in the 2011 report, representations in relation to the 2008 findings were received in October 2008 and a follow-up inspection was undertaken on the 3rd of December 2009.The principle findings were as follows:

The facility was still in the process of installing baghouse filters to address the air pollution issue from the mills.

The study on measures to reduce the fugitive emissions on site was still underway.

The facility had submitted requests for amendment of the waste management license conditions.

 The following information was also provided:

Enforcement Strategy developed. Warning letter to PPC Riebeeck West requesting further information and notice of referral. Matter referred to West Coast District Municipality (“WCDM”) and Western Cape Department of Environmental Affairs and Development Planning (“DEADP”) for further enforcement action.
2012 – –
2013 – –
2014 – –
2015 – –
Port Elizabeth
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20094 An inspection held on the 27th of May 2008 made the following findings:

11 non-compliances.

Excessive fugitive dust emissions.

 The status of the enforcement process was reported to be as follows:

The company advised that it has upgraded its ESP (Electrostatic Precipitator) in order to reduce the emissions emanating from the kiln stack and it has appointed a consultant to undertake an air quality investigation. Plans are in place to upgrade the dust abatement equipment at the raw mill stack.
20105 In the 2010 report, the following update is provided:

Follow-up inspection …undertaken…towards the end of the reporting period in order to compare the site conditions with the undertakings made in the representations responding to the inspection findings. The Department is in the process of finalizing a decision on whether to take enforcement action.
20116 As reported in the 2011 report, representations were received on the 22nd of December 2008 and a follow up inspection was undertaken on the 5th of October 2009. The principle findings were as follows:

Potential groundwater and surface water pollution from poor storm water management, storage of coal ash on unlined area.

Requests submitted for amendment of the APPA permit to address the stack height.

Fugitive emissions from the clinker collection area were still observed.

Installation of the bag filters to replace the ESP was still in progress during the follow-up inspection.

 Further information was provided regarding the enforcement strategy:

Enforcement Strategy developed. Section 31A ECA & Section 28 NEMA pre-directive dated 5 October 2010 issued by DEA. The facility has provided a response and the Department found that the concerns were adequately addressed by the facility. A “spot inspection” will be conducted at the facility to confirm its compliance prior to making a final decision on whether or not to proceed with the directive.
2012 – –
2013 – –
2014 – –
2015 – –
De Hoek
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20097 In the 2009 report it was recorded that:

EMIs detected 11 non-compliances which have since been addressed.

According to the 2011 report, these non-compliance findings were made following an inspection in July 2008.

 The following was also reported in the 2009 report:

The company intends undertaking a R70-million project at the plant to improve air quality, reduce dust emissions and ensure the company complies with new environmental legislation. Old precipitators will be replaced with more efficient bag-filter technology. The project is expected to be completed in 2011.
20108 – In the 2010 report it was stated that:

Follow-up inspection …undertaken…towards the end of the reporting period in order to compare the site conditions with the undertakings made in the representations responding to the inspection findings. The Department is in the process of finalizing a decision on whether to take enforcement action.
20119 Representations had been received on the 9th of December 2008 and a follow-up inspection was undertaken in December 2009. The following are the principle findings made at that inspection:

The non-compliances in relation to the section 20 ECA permit, which were listed in the initial inspection report, were not yet addressed. The facility had also not yet addressed the environmentally harmful activities listed in the initial inspection report.

The facility still had to replace the Electrostatic Precipitators (“ESPs”) with bag filters in order to reduce excessive emissions and a study to investigate the sources of fugitive emissions was still underway.

 In relation to the enforcement strategy the following information was also provided:

Enforcement Strategy developed. Warning letter dated 6 December 2010 requesting further information and notice of referral. Matter referred to West Coast District Municipality (“WCDM”) and Western Cape Department of Environmental Affairs and Development Planning (“DEADP”) for further enforcement action.
2012 – –
2013 – –
2014 – –
2015 – –
Slurry
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
200910 An inspection carried out on the 16th of July 2008 detected 14 non-compliances. It was recorded that alongside dust emission problems the company did not report certain incidents that had the potential to give rise to environmental and health risks to the authorities. The 2009 report also contained the following statement:

The report has been recently issued to the company and representations are expected in the near future.
201011 – The 2010 report provided the following update:

Follow-up inspection …undertaken…towards the end of the reporting period in order to compare the site conditions with the undertakings made in the representations responding to the inspection findings. The Department is in the process of finalizing a decision on whether to take enforcement action.
201112 Representations had been received on the 12th of August 2009 and a follow-up inspection had been undertaken on the 13th of May 2010. The following findings were made:

Conditions of the APPA permit were still not being complied with. Dust was still a significant problem across the site.

PPC was unable to demonstrate the adequacy and efficacy of the dust abatement measures.

Various issues pertaining to soil erosion at the landfill site were still outstanding.

 The following was stated regarding the enforcement process:

A warning letter was issued in November 2010 informing the facility that the matter has been referred to NWDACE:RD for enforcement action.
2012 – –
2013 – –
2014 – –
2015 – –
Hercules
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
200913 It was recorded that 13 non-compliances had been detected on site, but the date of the inspection was not provided in this or subsequent reports. These non-compliances included the following:

Air pollution issues…were observed.

EMIs found that the air quality monitoring as required by the SPL authorisation issued by the GDACE to be inadequate.

 In 2009 it was also recorded that:

GDACE is currently reviewing a section 24G application from the company for a dry mortar mixer plant in terms of the NEMA.
2010 – –
2011 – –
2012 – –
2013 – –
2014 – –
2015 – –
Dwaalboom
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
200914 It was recorded that “all seven non-compliances have been rectified”, but the date of the inspection which found these non-compliances was not provided in this or other years’ reports. It was also stated that:

with regard to the dust problem on site, the facility has commissioned a study to identify all dust source points and to recommend mitigation measures.

The following statement was also made in the 2009 report in relation to each of the PPC operations which featured in the NECERs:

PPC, as a Group, has planned capital expenditure, subject to Board approval, for upgrades and expansion at all operations to improve dust emissions. Thus far, R40-million has been spent on improving environmental conditions at PPC’s Slurry, Jupiter, Hercules and Port Elizabeth cement plants. Given the positive response received from the above facilities and management’s willingness to come into compliance with environmental legislation, there was no need for stringent enforcement action following the initial inspections. The pressing air quality issues will be addressed by the new atmospheric emission licences and the license requirement of phased upgrading of air quality abatement equipment. It is encouraging to note that many of the above facilities have been proactive in this regard. Follow-up inspections will take place in the next financial year to confirm that the measures proposed have been effectively implemented. Where non-compliances are still being detected, enforcement action will follow.
201015 In the 2010 report, the following update is provided:

Follow-up inspection …undertaken…towards the end of the reporting period in order to compare the site conditions with the undertakings made in the representations responding to the inspection findings. The Department is in the process of finalizing a decision on whether to take enforcement action.
2011 – –
2012 – –
2013 – –
2014 – –
2015 – –
201616 A follow-up inspection was conducted on 1 September 2015. The report notes that following the inspection conducted on 1 September 2015:

a PCN was issued detailing alleged non compliances that were observed during the inspection. Details concerning the non-compliances will be disclosed should the DEA follow through with final administrative enforcement action after having reviewed the representations.
  1. National Environmental Compliance and Enforcement Report 2008/2009, at p28.
  2. National Environmental Compliance and Enforcement Report 2008/2009, at p27.
  3. National Environmental Compliance and Enforcement Report 2008/2009, at p54.
  4. National Environmental Compliance and Enforcement Report 2008/2009, at p28.
  5. National Environmental Compliance and Enforcement Report 2009/2010, at p27.
  6. National Environmental Compliance and Enforcement Report 2010/2011, at p54.
  7. National Environmental Compliance and Enforcement Report 2008/2009, at p29.
  8. National Environmental Compliance and Enforcement Report 2009/2010, at p27.
  9. National Environmental Compliance and Enforcement Report 2010/2011, at p55.
  10. National Environmental Compliance and Enforcement Report 2008/2009, at p29.
  11. National Environmental Compliance and Enforcement Report 2009/2010, at p27.
  12. National Environmental Compliance and Enforcement Report 2010/2011, at p55.
  13. National Environmental Compliance and Enforcement Report 2008/2009, at p29.
  14. National Environmental Compliance and Enforcement Report 2008/2009, at p28.
  15. National Environmental Compliance and Enforcement Report 2009/2010, at p27.
  16. National Environmental Compliance and Enforcement Report 2015/2016, at p60.