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Full Disclosure 2016

Sappi LimitedUpdated

Key questions shareholders should ask

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

Sappi operates mills at the following locations:

  • Ngodwana mill, Ngodwana
  • Stanger mill, Stanger
  • Tugela mill, Mandeni
  • Saiccor mill, Umkomaas
  • Lomati sawmill, Barberton

Non-compliance findings at the Enstra mill, sold by Sappi in July 2015, are also included in this assessment.

Department of Environmental Affairs’ compliance monitoring and enforcement action

Sappi Saiccor
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20151 The report states that:

An inspection was conducted on 2 and 3 September 2014. Several non-compliances were identified and an inspection report detailing the findings of the inspection has been finalised. In addition, an enforcement strategy has been drafted and the Department is in the process of making a decision on the way forward. A criminal investigation has been initiated.

 –
20162 The following update is provided in 2016:

An inspection was conducted on 2 and 3 September 2014. Several non-compliances were identified and an inspection report detailing the findings of the inspection has been finalised. In addition, an enforcement strategy was drafted and the DEA is in the process of taking a decision on the way forward in relation to administrative enforcement.

A criminal investigation was initiated and a search warrant executed at the site. The investigation is nearly complete and the docket will be referred to Director of Public Prosecutions within the 2016/2017 financial year.
Enstra
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
2009 – –
2010 3 The facility was inspected during October 2009 and the main findings were as follows:

Non-compliances with conditions of the APPA permits.

Emissions from the Copeland Reactor and the boilers exceeding the required limits over a number of years.

Non-compliances to conditions of the EIA authorisations; ECA Section 20 permit and the Water Use License.

 The following information was also provided in the 2010 report:

Representations were received from Sappi in response to the Inspection Report issued by GDARD. An enforcement strategy has recently been developed, including the need for a criminal investigation in relation to the air emission contraventions. These enforcement actions will be initiated in the next reporting period.
2011 4 It was reported in the 2011 report that representations had been received in February 2010. In 2011 the following was also reported:

Following the compliance inspection, an enforcement strategy was developed and both administrative and criminal enforcement action were recommended. The criminal investigation that was initiated is currently suspended in order to allow for submissions to be made by the sector as a whole in relation to the performance of Copeland Reactors.
2012 – –
2013 – –
2014 – –
2015 – –
Ngodwana
NECER Significant Inspection Findings Further Developments and Status of Enforcement Process
20095 It was reported in the 2009 report that an inspection had been conducted at this facility. –
20106 It was reported that the following findings were made at an inspection in August 2008:

Non-compliance with conditions of the APPA permits.

Non-compliance with conditions of the ECA Section 20 permit.

Operation of three waste disposal sites without authorisation.

Upgrade of ESP and fly-ash collection system and the PF Boiler without the required EIA authorisation.

Lack of proper bund walls and measures to contain spillages of hazardous chemicals.

Non-reporting of emergency incidents to authorities.

 The following was also reported in 2010 report:

The undertakings contained in the representations made by this facility include the installation of dust suppression systems, the submission of various applications, changes to the monitoring programme and construction of bunded areas. Numerous other commitments were also made to rectify the non-compliances identified. The Department is still in the process of making a decision on whether or not any enforcement action against [sic] is required.
20117 Representations had been received in November 2009 and a follow-up inspection was carried out in March 2011. The following findings were made:

Non-compliance with conditions of the APPA permits.

Non-compliance with conditions of the ECA Section 20 permit.

Operation of 2 waste sites without authorisation.

Lack of proper bund walls and measures to contain spillages of hazardous chemicals.

After the initial inspection the facility has constructed a chemical storage facility without the required environmental authorisation.

Potential groundwater and surface water pollution from poor storm water management around the coal storage area.

Conducting environmentally harmful activities.

Poor management of waste.

 The following was also reported:

Follow-up inspection report still to be vetted and enforcement strategy then to be developed.
20128 – In 2012, the status of the enforcement process was said to be as follows:

Enforcement strategy is being finalised.
2013 – –
20149 – In the 2014 report, it was stated that:

A follow-up inspection was conducted in March 2013 in order to verify/confirm the information received, as well as the commitments made during the 2011 compliance inspection. During this inspection EMIs gathered and requested a substantial amount of additional information from the facility. Said information has been provided and is currently being reviewed by DEA, following which, a decision will be made on the next step in the enforcement process.
2015 – –
  1. National Environmental Compliance and Enforcement Report 2014/2015, at p49.
  2. National Environmental Compliance and Enforcement Report 2015/2016, at p59.
  3. National Environmental Compliance and Enforcement Report 2009/2010, at p24-25.
  4. National Environmental Compliance and Enforcement Report 2010/2011, at p51.
  5. National Environmental Compliance and Enforcement Reports, 2008/2009, at p29.
  6. National Environmental Compliance and Enforcement Reports, 2009/2010, at p26.
  7. National Environmental Compliance and Enforcement Report, 2010/2011, at p52.
  8. National Environmental Compliance and Enforcement Report, 2010/2011, at p47.
  9. National Environmental Compliance and Enforcement Report, 2013/2014, at p49.