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Full Disclosure 2016

Summary of findings and company response - 2015

PPC claims the following in its Environmental Policy:

In line with our environmental policy commitments, PPC is committed to environmental compliance across the group.1

The National Environmental Compliance and Enforcement Reports show that a number of PPC’s facilities were inspected by the Green Scorpions in 2008. Environmental Management Inspectors discovered multiple serious non-compliances with environmental laws and permits at all of the PPC facilities inspected. PPC made representations to the Department of Environmental Affairs in which it made commitments to address these non-compliances. However, it appears from subsequent NECER reports that follow-up inspections found that PPC had largely failed to implement the improvements, and that in many instances PPC was still committing the same breaches of environmental laws and permits that were discovered at the initial inspections.

In many instances, details of the findings by the Environmental Management Inspectors were not disclosed in PPC’s reports to its shareholders.

PPC’s 2008 Annual Report refers to the inspections carried out by the EMIs. The Annual Report states that the EMI’s report for Riebeeck West had been received and “contained no major legal findings”, despite the fact that the EMIs had in fact found 10 non-compliances with the company’s permit in terms of the Environment Conservation Act, as well as “significant dust emissions emanating from various sources on site”.

PPC’s 2009 Annual Report claims that it is a “business objective” for the company to “meet all legislated emission level requirements and further reduce emissions”. The report refers to the inspections carried out by EMIs at 6 plants in the reporting year, and states that “no non-conformance notices or clean-up directives were issued as a result of these visits”. The Annual Report does not mention the fact that during the course of these inspections the EMIs found 56 non-compliances with environmental legislation and permits, and that the reason no directives or notices had been issued was due to the company’s representations to the EMIs that massive capital expenditure was planned to improve the conditions that had led to the non-compliances.

In PPC’s 2011 Annual Report it was again stated that no fines or directives had been received for South African operations. The Annual Report did not mention that follow-up inspections by the EMIs had found that most of the non-compliances which PPC had undertaken to address had not been rectified, and that the EMIs were in the process of finalising a decision on enforcement action.

PPC’s 2012 Annual Report stated that “Slurry kiln 7 dust emissions remain a challenge, we are discussing options with the authorities”. PPC’s 2013 Annual Report again states that “Slurry kiln 7 dust emissions remain a challenge”. PPC’s annual reports do not mention that a follow-up inspection had taken place at this facility on 13 May 2010, at which the EMIs found that “[c]onditions of the APPA permit were still not being complied with. Dust was a significant problem across the site. PPC was unable to demonstrate the adequacy and efficiency of the dust abatement measures”.

In his response to Full Disclosure 2015, Darryll Castle, CEO, did not address the company’s failure to disclose the findings of the Green Scorpion inspections in its annual reports.

Mr Castle provided information about PPC’s “participation in the transition from the old Atmospheric Pollution Prevent [sic] Act regime to the National Environmental Management: Air Quality Act”, stating that:

[o]ften this participation resulted in unintended consequences e.g. participation in the APPA review process resulted in PPC plants being immediately migrated to the 2015 emission limits in the then draft minimum emission standards …The result of this was that PPC, at some sites, was permitted into non-compliance at the time that Green Scorpion inspections were being conducted across the PPC group. The audit resulted in a number of findings against these permits including emission limits and stack heights. With substantial effort on the part of PPC, most of these issues were remedied.

Mr Castle also provided information about PPC’s waste permitting and water use licencing, as well as providing details and costs of upgrades to facilities aimed at improving emissions.

Mr Castle stated that “[o]ther improvements arising as a result of the Green Scorpion inspections were made at the following plants”:

  • Upgrades to stormwater management systems at Hercules and Riebeeck;
  • Improvements to management controls for waste at Riebeeck, De Hoek, Slurry and Dwaalboom;
  • Fugitive emission plans developed and implemented for all sites.

Mr Castle’s response ends with the statement, “We will continuously identify opportunities to continuously improve our environmental performance through our certified ISO 14001 management systems”.

ISO 14001 (the current version being ISO 14001: 2015) sets out the criteria for an Environmental Management System. An Environmental Management System refers to the management of a company’s environmental programmes in a comprehensive, systematic, planned and documented manner. ISO 14001 does not stipulate any requirements for environmental performance, but rather maps out a framework that companies can follow to set up and maintain an effective Environmental Management System.

Retention of ISO 14001 certification is therefore not an indication that a company is in compliance with environmental laws and permits, nor is it a substitute for reporting environmental non-compliance.