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The environment and your company

Much attention has been paid lately to companies’ obligations in relation to the environment and climate change. During a panel discussion in 2018 the Institute of Directors of South Africa confirmed that climate change and environmental sustainability must be considered during strategic deliberations and risk management.

Section 24 of the Constitution guarantees every individual the right to a safe environment which includes the right to:

  1.  An environment which is not harmful to their health or well-being; and
  2.  To have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that:
  1. Prevent pollution and ecological degradation;
  2. Promote conservation; and
  3. Secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.

Section 24 has led to the enactment of the National Environmental Management Act 107 of 1998 (NEMA) which places a duty on all persons and companies to take reasonable steps to ensure that their conduct does not cause significant pollution or degradation of the environment. The Act goes further by listing what will be considered reasonable steps. These are to:

  1. Investigate, assess and evaluate the impact on the environment;
  2. Inform and educate employees about the environmental risk of their work and the manner in which their tasks must be performed in order to avoid causing significant pollution or degradation of the environment;
  3. Cease, modify or control any act, activity or process causing the pollution or degradation;
  4. Contain or prevent the movement of pollutants or the cause of degradation;
  5. Eliminate any source of the pollution or degradation; or
  6. Remedy the effects of the pollution or degradation.

Failure to comply with the provisions of NEMA can result in fines of up to R10 million and/or imprisonment for a period between one and ten years.  NEMA determines that members of a close corporation or directors of a company will be held jointly and severally liable for any negative impact on the environment caused by the company or close corporation. Directors or members could accordingly be sent to prison or be expected to pay fines in excess of R10 million for the company’s failure to comply with the NEMA provisions.

Directors must be able to show that the reasonable measures referred to above were taken to ensure compliance with the duty of care. It is suggested that companies, especially those which conduct activities that are potentially harmful to the environment, ensure that there are policies and procedures in place to ensure that the company’s operations do not impact the environment and that these are consistently implemented to ensure compliance with NEMA. Employees must be trained in this regard and must be made aware of the existence and content of the policies. All reasonable steps must be taken to ensure that minimum harm to the environment is caused.

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