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South Africa Environmental Export Market Plan
Chapter 2

Legal and Regulatory Overview

The new South Africa is changing the legal and regulatory framework for environmental management. The changes include the adoption of a final new constitution with significant new environmental rights, the publication by the Department of Environmental Affairs and Tourism of the final White Paper on Environmental Management Policy for South Africa in May 1998, and a draft National Environmental Management Bill in June 1998.

The new South African Constitution reflects the increased importance of environmental health and welfare, pollution control, nature conservation, and sustainable development. The Bill of Rights incorporates a statement of environmental rights and includes the right to bring public interest litigation. It provides that everyone has the right to:
--An environment that is not harmful to health or well-being; and
--An environment that is protected, for the benefit of present and future generations, through reasonable legislative and other measures that
—prevent pollution and ecological degradation;
—promote conservation; and
—secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.

The legal and regulatory framework for environmental management in South Africa has been subject to extensive review and public comment. At the national level, the framework of statutes, institutions, policies, and programs inherited from the former government have been reviewed and revised in detail. A consensus is emerging on an appropriate institutional design for government regulation to control and prevent pollution. At the provincial level, the nine new provinces have continued to work on the basis of legislation inherited from the four former provinces. Compounding the difficulty of achieving needed reforms is the fact that the national and provincial legislation must be integrated with legislation from the former homelands. At the local level, the ordinances and institutions that provide environmental services and protection are, for the most part, outdated and inadequate. Finally, the human and financial resources available to address South Africa's accumulated environmental problems are constrained.

Public interest environmental organizations, including many that did not exist in 1990, play an increasingly influential role in shaping policy and forcing change. These organizations are producing Green and White Papers to influence changes in both environmental laws and the institutions that administer them. Public thinking has shifted gradually from issues such as nature conservation and
wildlife protection to pollution control, environmental health, and the broader context of sustainable development.

Local government, the traditional provider of basic environmental services and land use management, is not well enough equipped to implement environmental programs. Several cities have initiated integrated environmental management planning processes, seeking to implement various features of the World Health Organization (WHO) Healthy Cities program. The city of Durban, for example, a leader in environmental management, has prepared a comprehensive State of the Environment and Development Report. The city of Cape Town conducted public workshops on sustainable urban development, prepared an environmental evaluation of the area, and developed an environmental policy framework. In addition, Cape Town has focused intensely on environmental issues in connection with its bid for the 2004 International Olympic Games.

Johannesburg created the Environment and Development Branch that is responsible for environmental policy, risk and impact assessment, and environmental education. It also created the Environmental Management Committee with the same status as housing and engineering services and the interdepartmental Environment and Development Working Group to facilitate integrated environmental management. Other cities represent opportunities to start coordinated environment and development programs.

Developments in cities such as those mentioned above are important because much of the spending for infrastructure improvement will take place at the local level. Funding, however, will have to come from central or provincial governments. U.S. firms should be aware that governmental institutions and environmental management in South Africa are in a state of evolution. Developments should be monitored and opportunities explored at all three levels of government: local, provincial, and national. Major policy initiatives are likely to come from the central government but will be implemented by provincial and local government.

A major development in June 1998 was the draft National Environmental Management Bill tabled with the Parliamentary Portfolio Committee on Environmental Affairs and Tourism. This bill, if enacted, could upgrade the landscape of environmental management, regulation, and enforcement. The bill is designed to improve environmental regulation by establishing procedures for cooperative environmental law among the various tiers of government, enhancing access to information by allowing South Africans to review governmental action or inaction, and will allow South Africans to bring suit against private companies and individuals. A new Environmental Tribunal would be established where complaints against the government can be referred and charges for environmental damage would be imposed on landowners.

Institutional Fragmentation

National Level

On the national level, environmental management in South Africa is fragmented. The Ministry of Environmental Affairs and Tourism, although the nominal coordinator, is only one of several ministries with environmental responsibilities. It has the responsibility to formulate environmental policy, coordinate environmental administration, and monitor policy implementation. It also has some responsibilities for air pollution, environmental impact assessments, the coastal zone, sea fisheries, research, public education, and information. The White Paper on Environmental Management Policy for South Africa (May 1998) and the draft National Environmental Management Bill seek to address the problem of fragmentation by making the Department of Environmental Affairs and Tourism South Africa's lead agent for environmental management.

The Ministry of Water Affairs and Forestry has the potential to have the greatest impact in both the short and long term. Its functions include water pollution (at the national level), wastewater standards, water supply, water resource management, water law, sanitation, hazardous waste facility guidelines, and forestry management. To date, it has published several significant documents--the White Paper on National Water Policy (April 1997), the White Paper on Water Supply and Sanitation Policy (November 1994), and the National Sanitation Policy Draft White Paper (November 1995)--as well as several important documents on water law reform.

The Ministries of Finance, Housing, Public Enterprises, Public Works, Trade and Industry, and Transport are also important in terms of development and infrastructure projects, and thus as users of environmental services. The South African National Parks Board plays a significant role in the protected areas under its jurisdiction. Finally, the South African National Defense Force, as the largest single landowner in South Africa, should be considered in the category of environmental managers, especially in light of the environmental impacts of military installations and operations.

Other key ministries include the following:
--Mineral and Energy Affairs, with regulatory jurisdiction over South Africa's large mining industry, including mining pollution and rehabilitation;
--Land Affairs and Agriculture, with responsibility for land use planning and agricultural conservation;
--Health, with responsibility for environmental health policy and standards, including drinking water, waste disposal, and medical and toxic wastes; and
--Arts, Culture, Technology, and Science, which deal with cultural and historic preservation.

As a result of the Consultative Process to Develop a National Environmental Policy, authorities are moving to overhaul South African environmental management. The Department of Environmental Affairs and Tourism (DEAT) has been designated the lead agency for environmental management. DEAT has developed a green paper entitled Toward a New National Environmental Policy and a white paper entitled White Paper for Environmental Management Policy for South Africa. The overriding objective is “to move from a previous situation of unrestrained and environmentally insensitive development to sustainable development with the aim of achieving an environmentally sustainable economy in balance with ecological process.” As for implementation, a white paper will develop an integrated pollution control and waste management system (IPC&WM) with a focus on technical solutions.

Provincial and Local Levels

At the provincial level, adequate legislation, institutions, policies, and programs are not yet in place. Fiscal and human resources to develop these institutions are also constrained.

The old regime established and substantially supported provincial nature conservation agencies. Pollution control and enforcement, however, were not part of environmental concerns. Transfer of environmental management responsibilities and funding to the provinces is proceeding slowly. A loose organization of the provincial environmental ministers, known as MINMEC, is designed to provide coordination and cooperation. Apparently, little has been accomplished to date.

The local environmental management framework is underdeveloped, except in the largest cities. Basic services--such as solid waste collection, the provision of safe drinking water, and sanitation--are largely not inadequate in the large urban areas and their satellite townships and informal settlements. Local government elections over the past year-and-a-half have begun to change the political climate for environmental protection services in the municipalities. Local governments in South Africa are on the front line of the country's environmental management efforts. National reform legislation is being developed to restructure local government in both metropolitan and rural areas to facilitate better delivery of environmental services.

Institutional Capacity

The Department of Water Affairs and Forestry (DWAF) has a comparatively strong complement of professionals and well-developed or developing functions. Management of water supply and water quality is the South African Government's highest environmental priority, and is reflected in DWAF’s funding and stature. The 1996 budget included significant and increasing resources in support of DWAF activities. Water Affairs alone received a 32 percent increase to $200 million. The seriousness of the solid and hazardous waste disposal problem, for example, has spurred construction of hazardous waste facilities, for which the DWAF has responsibility.

Considerable expertise also exists in other pockets of national government, such as the Department of Mineral and Energy Affairs. Such capacity is usually suspect when it is housed within a mission agency whose primary responsibility is development. As a whole, however, national government departments lack the capacity to manage problems, such as air pollution, toxic and hazardous substances, pesticides, and contaminated sites, largely because of the relatively low priority given to these problems.

The scientific community of South Africa is highly developed; this was a priority of the former government. The major institutions include the following:
--The Council for Scientific and Industrial Research (CSIR)
--The Human Sciences Research Council (HSRC)
--The Medical Research Council
--The Foundation for Research Development (FRD)

The CSIR, for example, through its Envirotek Division, provides expertise in environmental management and strategy, environmental impact assessment, environmental audits, environmental health, waste management and minimization, and pollution prevention. The Medical Research Council, on the other hand, has conducted studies of the environmental health effects of air and water pollution. Together, these organizations form a scientific resource pool of some significance in the areas of science and technology.

Some local environmental consulting and accounting companies providing a variety of services are seeking to occupy niche markets. One company, Steffen Roberts Kirsten (SRK), has made inroads. It seeks to capitalize on the need for business to consider new issues-- including environmental ones--as part of its social agenda. Foreign companies, particularly from the European Union, have begun to take advantage of the goodwill they earned during the apartheid years and are entering the market. One of these companies is Ninham Shand from the United Kingdom.

Environmental Legislation

South Africa has a large body of environmental protection legislation on the books. For the most part, these statutes are enabling, not self-executing, in nature. With relatively few exceptions, the government has not implemented existing statutes by promulgating detailed regulations. A prime example is South Africa's major environmental law, the Environment Conservation Act.

Heavy industry, energy, and mining enjoyed a privileged and protected status under the old government. The business community was, and remains, subject to little environmental enforcement. Accordingly, business has not emphasized pollution prevention and waste minimization.

The Environmental Impact Assessment

In 1992, the government published what are universally regarded as outstanding guidelines for integrated environmental management (IEM). However, the IEM guidelines are not binding as a matter of law. As a result, neither governmental agencies nor private-sector developers are subject to mandatory environmental impact assessment (EIA). While many private developers have undertaken some form of environmental assessment of their projects, the adequacy of these studies has depended in large part on the terms of reference of the assessment. These typically have been far narrower than would be required if the IEM guidelines were legally binding.

However, in September 1997, the South African Government promulgated binding regulations that impose EIA requirements on certain categories of development. In April 1998, it published the Discussion Document on Integrated Environmental Management.

Even the current “voluntary” environmental assessment process has supported a market for environmental services of approximately $13 million, with roughly $2.8 million attributable to consulting services. The rule of thumb is to allocate 0.5 percent of the total project budget for private and public capital projects to environmental assessment work. The total value of capital projects for last year was approximately $13 billion. It is anticipated that this market will substantially increase as the new EIA regulations take effect.

The Atmospheric Pollution Prevention Act

The Atmospheric Pollution Prevention Act of 1965 contains a registration system, standards, and a “best practicable means” approach to compliance, but enforcement has been a problem. Air scrubbers, for example, are not required on fossil fuel burning power plants. In addition, there are severe air quality problems in the large metropolitan areas. In 1997, however, the Minister of Environmental Affairs and Tourism ordered closure of a limekiln for violation of the law. This may signal a new approach to enforcement and possibly new demand for industrial pollution control equipment.

A New Framework for Water Regulations

The Department of Water Affairs and Forestry is making efforts to revise water management and improve enforcement against industrial polluters under improved water regulations. In June 1998, the National Assembly passed the National Water Bill and sent it to the National Council of Provinces.

Other Statutes

Land-based pollution is covered by more than 30 statutes and is regulated by various government agencies. South Africa does not have comprehensive cradle-to-grave legislation regulating hazardous wastes and no framework for controlling their storage, treatment, or disposal. The Hazardous Substances Act of 1973, administered by the Department of Health, provides some legislative authority. Because of the fragmentation among regulatory authorities, however, waste disposal is largely unenforced. In some areas, the provincial government has stimulated development of regional waste management strategies, but, for the most part, local authorities administer solid waste disposal programs.

Because solid and hazardous waste disposal is not subject to meaningful regulation, there is a growing but unaddressed problem of contaminated sites. Legislation permits the government to order cleanup of contaminated sites or do the cleanup and recover its costs (similar to provisions of the U.S. Superfund Act); however, these provisions have not been widely implemented.

There are numerous statutes at the national and pro-vincial level on protected areas. These tend to be site or problem specific, dealing with mountains and catchment areas.

Regulatory Enforcement

Enforcement of environmental statutes is slowly coming into focus. Various ministries are implementing more aggressive enforcement policies. The Minister of Water Affairs and Forestry ordered closure of a landfill in the Durban metropolitan area that was causing health and odor problems. In addition, the government stopped the Grootfontein mine near Springs from pumping polluted water into a wetland and identified 15 Western Cape firms as contaminating water resources.

In launching an enforcement initiative in 1996, ministers with various environmental responsibilities issued a joint press release on September 6, 1996, that stated: “Past experience has shown, unfortunately, that industry and individuals cannot be relied on to manage pollution control voluntarily in a responsible and sustainable manner.” The ministers have resolved to establish, as a matter of urgency, a task group to look into the “uncoordinated and fragmented way in which waste and pollution control is managed.”

The low level of disincentive monetary penalties is one problem in environmental enforcement. The maximum penalties under existing statutes is a $23,000 fine or ten years in prison under the Environment Conservation Act. More serious than penalties, however, are orders to close a plant or to cease polluting activities. Such orders are increasingly being threatened or invoked. Increases in the statutory maximum for both civil and criminal fines and penalties are likely to be included in the next round of environmental legislation.

There appears to be a trend toward environmental litigation--both public interest and commercial. Such litigation has not previously been a major factor in South Africa. Opponents of the construction of the Saldanha Steel Plant and the Oudekraal Development Project in the Western Cape, for example, took their concerns into court. In the commercial realm, a developer who purchased a former filling station site that had been contaminated by leaking underground storage tanks sued a major oil company. The plaintiff relied on provisions of the Water Act very similar to those of the U.S. Superfund statute. While the matter has been settled, the case may represent a change in business attitudes toward environmental litigation.

The public interest environmental sector in South Africa historically has been dominated by the three conservation organizations: the World Wide Fund-South Africa (WWF-SA), the Wildlife and Environment Society of South Africa (WLS), and the Endangered Wildlife Trust (EWT). These three organizations are no longer the only important players. New nongovernmental national environmental organizations such as the Environmental Justice Networking Forum--a loose coalition of trade unions, civic organizations, and community-based organizations--are playing a leadership role in the environmental movement. Environmental health, pollution control, waste management, water and sanitation, and the need to “clean and green” townships and informal settlements have emerged alongside traditional nature conservation issues.

On the business side, Eskom, an electric utility company, established the Industrial Environmental Forum (IEF) in the early 1990s. A number of the largest South African companies are members of the forum. The IEF helps coordinate the business community's approach to environmental matters.

International Treaties and Conventions

South Africa is a signatory to more than 80 international treaties and conventions that bear on the environment. As it has rejoined the international community, South Africa has taken its responsibilities under these treaties and conventions with increasing seriousness. South African environmental policy also presents opportunities. The country has been moving forward on two major areas of global environmental concern: global warming and biodiversity. Project financing is available from the Global Environment Facility (GEF) Secretariat within the World Bank. ISO 14000 standards have received significant attention in the business community. Two companies--Semancor a minerals company, and Sappi Forests, the largest timber company in South Africa--have recently developed environmental management systems under ISO 14000.

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