Full Disclosure 2016

Sasol Limited's disclosure of environmental non-compliances in annual reports

2016 update

2015 company reports

In 2015, along with its Integrated Annual Report, Sasol published its sustainability information in an online report entitled “Sasol Online Sustainable Development Information 2015”.¹ The online report contains a section titled “Responding to environmental challenges”.

In this report, Sasol states as follows with respect to environmental compliance generally:

Compliance with environmental norms and standards is integral to how we manage the environmental and social impacts of our operations. In practice, this means we always consider and prioritise ways to limit the impacts of our activities, while striving to ensure our presence realises positive benefits for all our stakeholders, in particular, the communities in which we operate.²

The report states as follows with regard to Sasol’s management of and compliance with air quality laws and standards:

In terms of the MES, Sasol’s existing South African operations had to meet the standards set for existing plants effective April 2015, and further have to meet more stringent standards set for newly commissioned plants by April 2020. While the majority of our processes will be able to comply with the future MES, some of these standards and associated compliance timeframes present significant compliance challenges, particularly in terms of the technical implications for some of our existing operations. To ensure compliance and to effectively manage compliance risks in the short and long term, Sasol applied to the National Air Quality Officer for the postponement of compliance timeframes for some of the Minimum Emission Standards (MES), which were granted in February 2015. These decisions, while aligned with our requests, impose stretched targets in support of improved ambient air quality. Subsequently, the decisions have been incorporated into our atmospheric emissions [sic] licences under which we now operate.³

The report states further:

Our focus is on implementing the air quality improvement roadmaps that support our postponement applications. These include both the continued capital expenditures at our operations and the development and implementation of air quality offset plans. While having been granted extended timeframes within which to comply with some of the 2015 standards, postponements may not adequately address our longer-term compliance challenges, particularly where feasible solutions are not presently available to achieve compliance with the new plant standards by April 2020. We remain committed to advancing ambient air quality management in a sustainable manner and will continue to engage with the regulators and our stakeholders to find solutions to address our remaining challenge.⁴

In relation to waste management and compliance, the report states:

We have made progress in preparing to meet the new waste classification and assessment for disposal requirements that are applicable from August 2016 onwards. A SAP waste information system that simplifies waste data collection and reporting for our chemical operations has progressed from development to implementation… Under the leadership of the Department of Environmental Affairs (DEA), we have had productive engagements through the industry Waste Forum established between business and the DEA to highlight any identified challenges relating to the implementation of the Act and its associated regulations and standards.⁵

Sasol states the following on the subject of environmental offsets:

Sasol welcomes the DEA’s initiatives toward advancing a policy framework for environmental offsets as a formally recognised mechanism for sustainable development, under an aligned overarching regulatory umbrella. While we note that some stakeholders see offsets as providing a “licence to pollute”, we do not share this view. We believe that if properly designed and implemented, offsets can be a complementary environmental management tool for achieving desired environmental outcomes in a potentially more cost-effective manner, and with potentially greater socio-economic benefits, than using conventional regulatory mechanisms alone. We believe there are sustainable opportunities for using offsets as part of a mix of measures for carbon mitigation, water stewardship, and as a means for improving ambient air quality in the vicinity of our operations.⁶

Sasol states as follows with respect to water management:

In 2015, our engagements with the South African DWS included discussions to address challenges with some of our water use licence applications, and to provide feedback regarding the proposed Vaal River Catchment Management Agency as well as the proposed Water Management Classes for the Vaal River.⁷

In relation to sanctions for non-compliance, in the “Performance review” section of its 2015 online sustainability report, Sasol states that there were no fines, penalties or settlements for legal non-compliance in 2015.⁸

2016 company reports

Sasol’s 2016 Sustainability Report states as follows:

We seek to ensure legal compliance and remain committed to sustainable ambient air quality improvement, and to minimise the environmental impact of our activities. We monitor our performance, disclose non-compliances with licence conditions and the management thereof to the relevant authorities and report environmental incidents. We made significant progress this year in rolling out the environmental compliance module of our enterprise resource planning software system (SAP) at our South African operations. The aim is to enhance our management of compliance. We have continued to embed a new environmental incident classification system, seeking to record and investigate all environmental incidents, and implement effective controls to prevent recurrence of such incidents.⁹

In relation to air quality management and compliance, Sasol states:

In South Africa, legislated minimum emissions standards (MES) make provision for stringent industrial point source emission limits. The MES, which require retro‑fitting of some of our plants, pose significant compliance challenges for some of our existing plants from a technical and financial feasibility perspective. In pro-actively managing these risks, Sasol applied for and received initial postponements of compliance timeframes for some of the legislated MES in 2015. As part of our postponement applications, we have outlined air quality improvement plans to meet the MES. These improvement plans include a roadmap to achieve an 80% reduction in emissions of six volatile organic compounds (VOC) by June 2020 (on our 2009 baseline), as well as successful implementation of offset plans for our Secunda and Sasolburg facilities.¹⁰

Sasol states the following in relation to a complaint regarding air quality:

A complaint from neighbouring Zamdela community in Sasolburg relating to dust generated from coal and ash stockpiles was reported. We immediately responded by implementing controls to address the complaint and will continue to assess the progress.¹¹

In relation to water use management and compliance, Sasol states the following:

Following a protracted application process, our Sasolburg Operations received a new water use licence, with ambitious timeframes to meet challenging discharge limits; we have continued our engagements with authorities on this matter.¹²

Sasol states as follows regarding waste management and compliance:

In May 2014, the contaminated land provisions set out in Part 8 of the National Environmental Management: Waste Act came into effect, requiring owners of ‘significantly contaminated’ land, or those who undertake an activity that has the potential to cause land to be significantly contaminated, to notify the DEA of any such occurrence. We have submitted all notifications where required and are following the directions received from the DEA.¹³

Sasol’s 2016 Sustainability Report includes a section on “Advancing transparency via requests for information”. This section states as follows:

Sasol regularly communicates with its stakeholders on sustainability matters. Sasol recognises the rights of interested and affected parties as provided for in the South African Promotion of Access to Information Act, 2 of 2000 (PAIA) (the Act). In 2016, Sasol received various PAIA requests for access to information as explained in the Integrated Report. Requests for environmental information received are detailed below. In accordance with the Act, we responded to requests received from non-governmental organisations, private entities and via the Department of Environmental Affairs (DEA). We agreed to and facilitated the disclosure of information relating to:

• Sasol’s notifications on contaminated land management in terms of Part 8 of the National Environmental Management: Waste Act, 59 of 2008 and the DEA’s responses thereto; these were specifically in relation to our Secunda, Sasolburg operations and Energy business in South Africa;
• Confirmation that no enforcement initiatives (such as directives and non-compliance notices) had been instituted by the Department of Water and Sanitation (DWS) against Sasol in relation to dams relevant to our Secunda Synfuels operations;
• Waste licences, including applications and subsequent applications for amendments; and
• Environmental legal compliance assessments and other technical reports.¹⁴

The report states further:

Over the past two years, we also received specific requests for information regarding licences governing our atmospheric emissions. Copies of Sasol’s atmospheric emission licences (AELs) in effect at the time of its various postponement applications were made available to all interested and affected parties as part of the public participation process, together with copies of relevant atmospheric impact reports and annual emission reports. Following informal requests from, and engagements with, key stakeholders, we also made available redacted copies of the amended AELs reflecting the outcomes of the government’s postponement decisions. This approach will also be followed for postponement applications that are already underway.¹⁵

In relation to sanctions for non-compliance, the 2016 Sustainability Report states that there were no fines, penalties or settlements for legal non-compliance in 2016.¹⁶

Sasol’s Integrated Annual Report makes the following statement regarding “managing environmental and regulatory challenges”:

Business is operating in increasingly constrained conditions, with greater scrutiny and demands from regulators and civil society with regards its impacts [sic] on the economy, environment and communities. These can affect Sasol’s long-term success. Legislation is continuing to evolve, requiring innovative thinking and practices to ensure that we remain a good corporate citizen, committed to doing business the right way. A strong compliance programme helps prevent errors or failures before they occur or allows detection at an early stage; in turn supporting operational efficiency.¹⁷

Full Disclosure 2015

Sasol did not report on the Environmental Management Inspectors’ inspection findings in either its annual or sustainable development reports.

Sasol’s reports contain data on topics such as water use, emissions of certain pollutants and waste. However, there is very little disclosure of environmental non-compliances or incidents. Those incidents which are disclosed relate primarily to non-compliances at Sasol’s international operations.

Frequently included in the annual reports is a version of the following statement:

Ongoing work is being taken to remediate contaminated land throughout our South African operations. Our goal is to prevent future contamination and address all historical issues.¹⁸

No further detail is provided as to the location of the sites where the remediation work is being carried out, or as to the nature of the contamination.

Sasol’s 2008 and 2009 Sustainable Development Reports also contain some detail on fines. In the 2008 report it is stated that:

Sasol Oil recorded 19 fines during the year. These fines relate to previously unauthorised tank installations for which applications were submitted to the relevant authorities from 2006.¹⁹

In the 2009 Sustainable Development Report, and other reports, the number of “fines, penalties and settlements” is provided although it is not explained what the relevant violations were.²⁰ However, under the subject of “incidents of non-compliance with environmental laws” in the same 2009 report, the number of fines, penalties and settlements is referenced.²¹

The 2008 report, and some others, contain details on incidents which occurred during the year, but these appear not to be solely the number of environmental incidents, but rather “process incidents” or the cumulative number of safety, health and environmental incidents:

We reported 28 significant fires, explosions and releases, compared with 21 in 2007, and 15 in 2006. (For the purposes of reporting, a fire, explosion or release is registered ‘significant’ when it: involves a fatality or lost workday case; results in damage to property or equipment of more than US$25 000; or causes a release of chemicals in excess of a defined threshold for listed substances).²²