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Bulldozing environmental rights by fast-tracking infrastructure development

Written by  Centre for Environmental Rights Friday, 29 March 2013 21:39
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27 March 2013 was the closing day for comments on the draft Infrastructure Development Bill, introduced by Minister of Economic Development Ebrahim Patel in the National Assembly last month, and designed to facilitate designation, authorisation and implementation of the special infrastructure projects (SIPs). Developments that can be declared as SIPs include all major infrastructure works of “significant economic or social importance” or that would “contribute substantially” to any government infrastructure development strategy, and expressly includes mines, oil and gas pipelines, refineries, and power stations – all developments that pose high risk to the environment.

While insiders say that the Bill is a vast improvement on earlier drafts, its disregard for the very notion of sustainable development and integrated environmental management and planning is distressing.

The principle of streamlined and integrated processes of approval for environmental and related authorisations for development, and greater coordination between different authorities, is sound and worthy of support. We believe that such processes promote integrated environmental management and planning, and reduce the burden on communities and civil society organisations who participate in such processes on their own behalf and in the public interest. We also recognise the dire need to improve infrastructure and access to essential services. However, we assert that suitable strategic and impact assessment processes, with their attendant expert input and public consultation phases, are crucial to determining the type of infrastructure that is best suited to the region and service to be provided. Rather than delaying infrastructure roll-out, these processes can serve to minimise the impacts, environmental risks and long-term maintenance costs of infrastructure projects.

However, the Bill effectively disregards decades of national policy development in relation to environmental management and sustainable development, and existing government commitments to sustainable development and environmental management. Despite the express obligations in section 24 of the Constitution to “secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development”; despite adoption of the National Sustainable Development Plan by Cabinet in 2011; despite recognition of the need for development that is sustainable in the National Development Plan; and despite the Bill envisaging the roll-out of large scale infrastructure much of which will have significant, long-term environmental impacts – the Bill contains not a single reference to sustainable development.

Against this background, the Bill provides a process flow for authorisation of SIPs within 220 days, from “approval of the project plan” to “regulatory decision” – “which timeframe may not be exceeded”:

  • 7 days to submit an application after approval of the project plan
  • 30 days for public consultation on the application and project plan
  • 52 days to amend the application and project plan and submit to the relevant authority
  • 60 days to prepare a “detailed development and mitigation plan”
  • 44 days for public consultation on and review of the development and mitigation plan by the relevant authority
  • 57 days for consideration and assessment by the relevant authority

Apart from contradicting existing, well-established procedures for environmental impact assessment (already in their third stage of development), in many instances these time periods will not be sufficient for responsible scientific assessment of potential detrimental impacts of the SIPs on water resources and air quality (to name but a few), or for developing adequate mitigation measures to address these impacts. The time periods can also never be sufficient to gauge the opinions of residents and other affected parties, whose inputs may well improve and expedite the implementation of the SIPs.

To achieve such fast-tracked authorisation, the Bill co-opts decision-making authorities onto various structures, and essentially places obligations on those authorities to ensure that the application and authorisation processes run without a hitch. This would place those Departments who hold the environment and water resources in public trust for the people of South Africa in an impossible conflict position, fundamentally undermining their Constitutional and legislative mandates. The Bill effectively sanctions political pressure on these Departments and their officials to grant authorisations for the SIPs without adequate impact assessment, and even if existing data motivates for a refusal of authorisation: the Bill provides for “negotiation” with an authority “with a view to obtaining the necessary approval… and [making] every reasonable effort to avoid an intergovernmental dispute”.

In the Centre for Environmental Rights’ comments to the Department of Economic Development, we have set out in detail the ways in which the Bill could be vulnerable to Constitutional challenges. These include:

  • potential violation of the right to an environment not harmful to health or well-being, and to have the environment protected for future generations through reasonable legislative and other measures, which we submit include the National Environmental Management Act, 1998 and its EIA regulations, already in their third iteration;
  • potential violation of the right to just administrative action;
  • potential violation of the cooperative governance provisions in the Constitution, including by giving insufficient recognition of local authorities’ Constitutional powers to regulate local land use planning.

Over and above the procedural aspects of the fast-tracking proposed in this Bill, it is important to understand the potentially radical consequences of short-cutting established time-frames for EIA, public participation and appeal. In simple terms, poor or inadequate assessments of risks posed to water quantity and quality, particularly in the drier and more variable climatic zones of the country, can expose entire communities to loss of access to drinking water. South African taxpayers are already bearing the cost of poor planning and inadequate regulation of environmental impacts in matters like acid mine drainage; ultimately, though, it is poor and vulnerable communities who cannot afford to relocate to avoid environmental pressures – the very communities the SIPs are supposed to assist – who bear the brunt of poor planning and inadequate regulation of environmental impacts.

It is internationally recognised, and firmly established in South Africa’s own policy frameworks, that identifying and addressing environmental issues as early as possible in planning processes is the most efficient and effective way of minimising later costs, delays and re-work, and costly and slow legal challenges. A cornerstone of EIA is the need to consider reasonable and feasible alternatives to the proposed project, and their impacts on the environment and affected communities. The earliest possible engagement with environmental authorities and stewards of our natural resources base in seeking the “best practicable environmental option” to achieve strategic projects, simultaneously minimising environmental risks, should therefore both expedite national objectives and ensure sustainable development. Environmental concerns need to be properly considered from the beginning of the project and not simply when raised in reaction to detailed plans already on the table. South Africa has world-leading strategic spatial environmental information to aid in development planning (both to avoid unnecessary environmental impacts and to reduce the environmental risk faced by projects), yet the Bill provides for no added impetus to use such information to facilitate and expedite appropriate infrastructure projects.

South Africans deserve significant public investment in and roll-out of infrastructure to facilitate economic growth. They are also, however, entitled to infrastructure development that is responsible, well-conceived, enjoys high levels of public support, does not prejudice their health and well-being, and does not cause environmental damage that will slow these projects down and generate long-term liabilities for the state. These are not radical ideas that can be bulldozed in the throes of election fever, but notions entrenched in the Constitution and our national policy framework. Pushing the Bill through in its current form will cost South Africa dearly.


Mintails placed into final liquidation

BUSINESS DAY Mintails placed into final liquidation Department of Mineral Resources will join long line of creditors hoping to recoup money 20 September 2018 - 17:27 Lisa Steyn

BUSINESS DAY EXCLUSIVE: Liquidation allows Mintails to shirk environmental liabilities

21 August 2018 - 05:04 Mark Olalde   Pollution: Water resource management consultant Anthony Turton, with the Mintails gold plants and water treatment tanks in the background. Picture: BUSINESS DAY/FREDDY MAVUNDA Mintails Mining and several related companies have announced their liquidation, throwing into question the environmental rehabilitation of highly polluting operations near Johannesburg. Mintails mines and processes gold from a sprawling 1,715ha complex of waste piles and open pits in Krugersdorp and has for years been flagged for noncompliance. Its operations are bordered by informal settlements and suburbs housing thousands of residents, many of whom have complained of health effects, which they blame on radioactive dust and water pollution from Mintails’ mines. Records show that the cost to clean up the environment would be about R330m, but there is only R25.6m available. Observers fear that the situation could deteriorate further, as happened at the Blyvooruitzicht Gold Mine, an abandoned large-scale operation on the West Rand. A case study in the country’s deeply flawed mine closure system, Mintails teetered on the verge of collapse for years and entered business rescue in October 2015. Mariette Liefferink, the activist CEO of the Federation for a Sustainable Environment, tracked Mintails for more than a decade and is now working to intercede in the liquidation proceedings as the legal voice for what she labels the "mute environment". "There was poor planning. [Mintails’] due diligence was flawed. They overestimated the gold grade and the resource that could be reclaimed. "They continued to exploit the resource, to reclaim only the profitable parts and never top up the financial provisions," Liefferink says. As the company slips into liquidation, it passes the brunt of its environmental liability to taxpayers and, to an extent, to other mining companies. After Mintails fought for nearly three years to save the company, business rescue practitioner Dave Lake notified the Johannesburg high court in early August of his intention to liquidate the company. Provisional liquidation was granted on August 17 and a liquidator is expected to be appointed soon. THERE IS NO LONGER A REASONABLE PROSPECT OF RESCUING THE COMPANY. The business rescue plan called for the refurbishment of a gold ore processing plant but, according to a memo dated August 1 that Lake sent to the court and to affected parties, it failed when multiple investors ceased funding Mintails. "There is no longer a reasonable prospect of rescuing the company," the memo read. The liquidator will now decide how to pay back creditors with the remaining assets. Environmentalists fear this process could leave environmental liabilities low on the list of what deserves money. According to the business rescue plan, written in December 2016, Mintails owed various creditors more than R1bn, including a shortfall of about R300m in reclamation funding. Due to a web of involved companies, it remains unclear if a large portion of the already insufficient financial provisions can be accessed for environmental cleanup. DRDGold formerly held one of the mining rights and the corresponding trust fund, which are now in the Mintails group. DRDGold CEO Niël Pretorius says he believes that the trust fund contained R18m but he did not identify the trustees, whose consent is vital to unlocking the money. Documents show the Mintails group acknowledged that rehabilitation would probably cost between R300m and R336.5m, but it declined to top up financial provisions. According to the environmental management programme from one of Mintails’ mining rights: "These liabilities are also historic and predate Mintails’ involvement and should thus not be for Mintails’ account." Experts debate this narrow interpretation of the law. Lake wrote in the business rescue plan: "The Mintails group’s rehabilitation liabilities have remained largely unfunded for some time, and there are simply no free funds available to the [business rescue practitioner] to enable him to immediately provide such funding." Legal Resources Centre attorney Lucien Limacher is representing the Federation for a Sustainable Environment. "This is a trend that has been occurring for a couple of years where mining companies have undertaken a business rescue plan or have applied for liquidation because they have failed to really look after the rehabilitation fund," he says. The Legal Resources Centre sent letters to several government agencies, including the department of mineral resources, the department of water & sanitation and the department of energy, asking them to intervene in the situation and threatening to pursue legal action if the department of mineral resources fails to act. Department of water & sanitation spokesperson Sputnik Ratau says they are "engaging Mintails so that the immediate measures can be put into place to ensure water resources protection. A longer-term plan is required to ensure rehabilitation of the mining-impacted areas." Lake declines to answer questions about the failed business rescue and the liquidation but he wrote for Moneyweb in January 2017 and laid out his argument for Mintails’ use of business rescue: "Mintails was sick – but it wasn’t terminal." Now the situation has become what Liefferink calls "pass the parcel", with Mintails playing the part of a "scavenger company", a term coined by researchers to describe under-resourced outfits that buy the scraps left over from larger mining companies and ultimately abandon them. Large gold, coal and platinum mines rarely, if ever, properly close in SA and there wasn’t one large-scale mine in Gauteng that achieved full, legal closure between 2011 and 2016. Mintails’ case will not affect the law that ring-fences financial assurances for reclamation, Limacher says. "But it is precedent-setting in that mines might now start applying for liquidation to avoid paying the cost of rehabilitation." Mintails’ West Rand concessions came in part from DRDGold, which also remines waste piles, and from Mogale Gold, which was in judicial management when Mintails acquired it in 2006. Since then, Mintails engaged in a pattern of environmental degradation. For example, the department of water & sanitation found in an August 2014 inspection that Mintails transported "slurry/sludge" in unlined trenches, completed insufficient monitoring, spilled slurry from pipelines and implemented no storm water management system at a pollution control dam. In December 2016, polluted runoff from waste piles was found to be seeping through a dam wall into the Wonderfonteinspruit, which has immediate downstream agricultural uses in the community of Kagiso. Now it will largely be up to the liquidator and regulators to protect the environment and public health. "That is the pattern that seems to be followed in the gold mining industry, and, I assume, would be followed in the coal and platinum mining industries, as well. "As soon as a mine is no longer very profitable, it transfers its assets," Liefferink says. "That seems to have the tacit support of the department of mineral resources." However, the department of mineral resources sent a statement that reads: "The department will engage with the appointed provisional liquidators with the intention to safeguard the environmental and social responsibilities." Mintails former CEO Johan Moolman declined to comment except to say he quit on June 26 when he learned a new investor had bought the company. Mvest Capital agreed to purchase Mintails from Paige, a vehicle of the UK-based Harbour family, with the understanding that Mvest would inject R30m into the beleaguered company to stimulate the business rescue plan. Mvest decided against handing over the full amount, paying only R5.5m. Mvest director Matthew Moodley acknowledges the initial agreement and the R5.5m. He says that after a month it became apparent the deal would require more investment to succeed. "With the increased need for working capital in July, Mvest took a decision to withdraw from the transaction," Moodley says, adding that Mvest did not "conclude a transaction with Paige". Liefferink says these companies are all "jumping from a sinking ship". She fears Mintails will go the way of the abandoned Blyvooruitzicht Gold Mine, which was once one of the country’s most productive gold operations and is now a source of pollution, violent illegal mining gangs and headaches for adjacent mines. Mintails has followed a strikingly similar pattern. In the Blyvooruitzicht case, two companies, DRDGold and Village Main Reef, almost completed a business deal to sell the nearly exhausted mine and both walked away, claiming the other carried responsibility. "That whole area, just like Blyvooruitzicht, will be left like it is," Liefferink said. While neighbouring mining companies will probably have to pump water from the void in Mintails’ absence, the consequences of "the dust fallout and the toxic water in the river systems" will be carried by communities and by the municipality. Additional reporting by #MineAlert manager Tholakele Nene


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