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Absolving historical polluters from liability through restrictive judicial

interpretation: a matter of (misguided) principle?

Willemien du PlessisLouis KotzéNorth-West University (Potchefstroom Campus)ELA Conference24 February 2006UCT

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Introduction

In the recent Gencor decision – community in the surrounding areas of a mineinstituted a claim against Gefco, Gencor, other companies and governmentTo rehabilitate an asbestos mineThe negative consequences of asbestos mines are well-known (impact on health and well-being of workers and community)

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Introduction

Court made several findings which mayHave a future effect on the interpretation of NEMAAs well as on the obligation of mines to rehabilitate land mined before the introduction of the Minerals Act of 1991

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Court decision

S 28 of NEMA has no retrospective effectRegulations ito Mines and Works Act were repealed by Minerals Act and MPRDA (except in one instance)Mines no longer obliged to comply with the repealed regulations

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This paper

Investigates the – Nature of the polluter pays principle (PPP) and

other principles of sustainability – Interpretation of s 28 of NEMA – Definition of pollution– Presumption against retrospective operation– Obligations incurred ito repealed legislation

Concludes with some observations

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Polluter Pays Principle (PPP)

Free use of resources is often main reason for environmental degradationPPP was developed to address this in 1970sEvolving international guiding principle mainly employed in EU and OECD countriesNot an international environmental law norm - lacks substantive content of law

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PPP Definition

‘Polluters and users of natural resources should bear the full environmental and social costs of their activities’ In other words:– Those who pollute must pay to remedy the effects

of pollution and compensate any resultant damages

– Internalisation of externalities – economic principle

– Plays central role in allocating economic obligations by setting minimum rules for civil liability

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PPP and liability

PPP is basis for liability regimesLiability regimes aim to:– Serve as economic instruments to provide

incentives to encourage compliance with laws– Serve as sanctions for wrongful conduct– Serve as sanctions to require corrective

measures to restore damage– Serve as financial measure to internalise

environmental and other costs

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PPP and liability

In assigning costs of pollution in an equitable and just wayMore concerned about who should pay than how much should be paidBased on the principle of proportionality –persons may only be held liable in so far as they contributed to pollutionStrict liability

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PPP in SA law

Relates to pollution prevention, control andremediation – NEMA definition wider than international practicePPP also adopted in White Papers on Environmental Management and Minerals and Mining PolicyIncluded in NWA

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S 2 NEMA

S 2 principles must guide the interpretation and application of NEMAMust also guide any act of any organ of state including the judiciary (s 239 Constitution-definition of organ of state)Principles include

– Duty of care– Sustainability– Precautionary approach– Preventive approach– Life cycle approach– Environmental assessment and triple bottom line – Polluter pays

Provide limitless potential for decision makers and the courts to develop sustainable environmental governance practices (Glazewski 2005)

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S 28 NEMA

One of main aims is to address historical pollution and contamination (Soltau 1999)S 28:

– Every person causes, has caused or may cause significant pollution or degradation of the environment,

– Must take reasonable measures toPrevent such pollution or degradation from occurring, continuing or recurring orIn so far as such harm to the environment is authorised by law or cannot reasonable be avoided or stopped to minimise or rectify such pollution or degradation of the environment

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S 28 NEMA

Very wide applicable duty of care to avoid, minimise and remedy pollutionDuty of care rests on non-exhaustive category of persons including:

– owner, – person in control, – person who has right to use – on which or in which any activity is or was performed or

undertaken or any other situation exist – which causes, has caused or is likely to cause significant

pollution’

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Two important aspects

Liability imposed may be potentially limitless ito category of persons involvedS 28 has retrospective effect ito normal wording of provision (Glazewski, Kidd, Oosthuizen and Soltau)Reasonable measures relate to whole life cycle of any project, product or processThe responsible person will be and remains liable for any damage caused by pollution throughout life cycle of product, project or processClearly suggest prospective, present and retrospective working and applicability of liability rules

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NEMA

NEMA sets framework liability regimeAims to perform remedial or protective function –also in context of s 24 of Constitution S 24 has socio-economic characterState must realise right by way of reasonable legislative and other measures

– Include functions of executive, legislator and even interpretative tasks of the judiciary

– PPP and other international guiding principles may also be regarded as “other measures” (s 2 NEMA)

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Characteristics of PollutionDuty to prevent control and remediate past, future and present effects of pollutionPollution may be ongoing process which may have ongoing future effect on natural resources and human health and well-being (receptors)Even when pollution is contained and historical pollution is addressed, quality of resource will invariably be affectedSomeone needs to be held liable for loss of resource, use and enjoyment thereofIn order to establish accountability and liability it is necessary that polluters be held liable for past, present and future pollution activities or residual pollutionImplies that s 28 has retrospective effect since the polluter remains liable for effects of pollution throughout life cycle of project, product or process

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Characteristics of Pollution

It is important to consider– Source of pollution, – Pathway towards receptor, – Time frame (delayed or residual) and – Vulnerability of and impact on receptor

The effect of pollution on the receptor is often independent from when the activity occurred

– as the effects of pollution on the receptor are often time delayed (asbestosis)

– or slow cumulative effects (sustained low dosages metal poisoning) – or the receptor may be impacted upon continuously from ceased activities

by means of residual sources of pollution (e.g. mine tailings and mine discard dumps)-humans are the ultimate receptors

One cannot only focus the activity or the timing of the activity – the continuum of the source, pathways, time and the receptor)That is the intention of section 28 of NEMA – words refer to past, present and future (Nel, 2006)

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Transport & Exposure Pathways to Human & Environmental Receptors (CEM, 2006)

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Gencor Decision - facts

Asbestos mined at Bute Asbestos NWPMining operations discontinued 1981/85Mine not rehabilitated – asbestos dumps, beneficiation plant and haul road remainedPlaintiffs: Chief Bareki on behalf of community, Heuningvlei community and environmental NGO

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Plaintiffs alleged

Gencor/Gefco caused significant pollution in mining and surrounding area – distribute asbestos fibersIto s 28 Gencor/Gefco remains responsible to take reasonable measuresResidents exposed to serious health risks Environmental integrity of region is threatenedPollution constitutes damage or loss caused by unlawful or negligent failure to perform duty of careGovernment remains liable

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Claim 1

Director of DEAT to order an assessment itos 28Exception:– NEMA commenced on 29 January 1999 and is

not retrospective by nature– Alternatively that plaintiffs did not follow correct

procedures ito s 28(12) to notify DEAT of intention

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Alternative claims

Claims based on provisions and regulations of Mines and Works Act of 1956 and Minerals Act of 1991Plaintiffs: owner or manager of mine remain responsible for compliance to regulations

– Coverage of dumps with sludge or soil– Rehabilitation of mine

Exception – regulations repealed by MA and MPRDA

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Findings of court

S 28 does not have retrospective application– NEMA creates strict liability – creates unfairness – do not

rebut presumption against retrospective operationThe asbestos dump must be covered with sludge: regulations not repealed by MA – and summons was served in July 2003 – before introduction of MPRDAOther exceptions upheld – MA repealed regulations regarding rehabilitation – MA’s wording not to the effect to suggest continuation of rehabilitation regulations

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Discussion

Although plaintiffs were given an opportunity to amend their claimsthe findings of the court have important implications for the liability of companies that abandon operations without rehabilitating the landCourt based findings on narrow construction of rules of interpretation of statutes and may be technically correct However raises a number of issues

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S 24 Constitution

Court indicated that NEMA was promulgated to give effect to s 24Did not elaborate on role of s 24 or its interpretationDid state that court must promote the ‘spirit, purport and objects of the Bill of Rights’Ito Constitution, Gencor and Gefco should be obliged to rehabilitate the mining area and to protect the surrounding communities from the consequences of the pollution

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Retrospective operation of statutes

Trite law: presumption against retrospectivity –legislation has future applicationPrinciple based on fairness: ‘people should be able to know the law and to act according to the law’Thirion J (Kruger case 1994):

– ‘However strong the presumption – it is an aid in interpretation and must yield to the intention of the legislature as it emerges from any particular statute – must ascertain the intention of the legislature’

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Possibility of rebuttal

If retrospective operation is expressly or impliedly provided forThe common law is confirmed in the statuteWhere an enactment benefits the subjectEuromarine Case (1986) – ‘an Act should not have retrospective application if the Act creates newliabilities and obligations they were totally unaware of’It is possible that retrospective operation to a portion of a statute is possible, unless the words of the statute are unclear or vague (e.g. s 28)

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Obligations incurred under repealed legislation

The only exception the court allowed was where civil proceedings were instituted before repeal of the regulations (covering of asbestos dump)However, s 12(2)(c) does not link the obligation or liability incurred to instituted legal proceedings – it states only that legal proceedings may be instituted, continued or enforced as if the repealing law had not been passed The court was correct to disallow the exception to the second alternative claim

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Other alternative exceptions

The distinction drawn between the 2nd and other exceptions is not clearBased on the argument that no legal proceedings were instituted before the regulations were repealed by MA – mine can therefore not be held liable to rehabilitate the mineHowever s 12(2)(c) is wide enough to cover the liabilities and responsibilities mines incurred itorepealed legislationMines should not be allowed to use the law to avoid compliance to the law

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Knowledge of mine

The mine knew they had to rehabilitate the mine itoMines and Works Act – the obligation is not new –they cannot state that the law was not applicable to them S 12(2)(c) should be linked to s 24 of the Constitution – in this case it was not the individual company that experienced the harm (financial) But their lack of action or ignorance of the law resulted in a severe threat to the health and well-being of neighbouring communitiesThe strict liability should be weighed against the effect of the pollution on the surrounding community

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In BP Southern Africa (2004)

– ‘pure economic principles will no longer determine, in an unbridled fashion, whether a development is acceptable … By elevating the environment to a fundamental justiciable human right, South Africa has irreversibly embarked on a road, which will lead to the goal of attaining a protected environment by an integrated approach, which takes into consideration, inter alia, socio-economic concerns and principles’

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Alternative approaches to interpretation of statutes

Court may use one or more approaches to interpretation of statutes to reach an equitable decision‘purpose of enacted law is to suppress mischief’ – if linked to contextualism the purpose of the act within its context must be found‘the purpose of interpretation is to suppress the mischief and to promote the remedy designed for its elimination without, however, applying coercive measures that go wider than is necessary to remedy the mischief in question … the Constitution is a remedial measure that must be construed generously in favour of redressing the mischief of the past and advancing its own objectives for the present and the future’ (DuPlessis)

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What is mischief?

Du Plessis argues that legislation augmenting the Constitution and/or enacted to enhance legal, political and socio-economic reform is remedial legislationNEMA is remedial legislation – augment s 24Mischief is pollution – due to lack of enforcement/disregard of obligationsRemedies need to be maximised – s 28 – strict liability – it can be argued that s 28 is not unfair as it remedies past mischief

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Law promotes public interest

Balance must be struck between individual entitlements (cost to rehabilitate) and the public interest (health and well-being)Public interest linked to ConstitutionNEMA can be regarded as public interest legislation – formulated in the public interest read with s 24, the health risks posed by the asbestos dumps would outweigh the individual interest of Gencor and GefcoThe unfairness created by strict liability should be outweighed by the public interest in providing everyone an environment that is not detrimental to their health and well-being

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Conclusion

PPP is an internationally accepted principle –holding polluters responsible for historical, past and future pollution and environmental degradation also principlesThe PPP also forms basis of liability regime with retrospective, present and prospective application

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Conclusion

Characteristics of pollution supports retrospective operation of PPPCharacteristics of pollution processes were not explored, which should take into account the– Source of pollution, – Pathway towards receptor, – Time frame (delayed or residual) and – Vulnerability of and impact on receptor

S 28 has retrospective application – NEMA as framework liability act would be worthless if not retrospective

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Conclusion

Court only emphasised the economic aspects of sustainability and thus became entwined with the politics of pollutionEmphasis in SA on economic growth and development with inadequate consideration of environmental interests and negative effects of pollutionSustainability ito NEMA and Constitution requires consideration of economic, environmental, social and governance aspects

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Conclusion

Mining companies should be held liable for past actions – especially if they ignore legislation applicable to them at time of closure of the mine (MA and MPRDA)Retrospective operation did not create unfairness if weighed against the public interest or remedial effect of the legislationQUESTION: Otherwise who should bear the cost of pollution – the ultimate receptor - human kind?Given the vast scope of historical pollution, especially caused by mining activities, the polluter must be held responsible

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DISCUSSION