Private prosecutions – The changing face of compliance in South Africa
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By Warren Beech
20 Jun 2019
South Africa has recently developed a culture of private prosecution. The trend towards private prosecution has largely been focused on the prosecution of individuals for corruption. The significant challenges faced by the private prosecutors (primarily AfriForum) in these cases are well documented. There are various extensive legal hurdles that must be overcome, before a private prosecutor can initiate private prosecution against individuals, for example, for corruption.
This is not the situation in relation to private prosecutions for environmental offences. The legislation which is applicable, namely the National Environmental Management Act, No. 107 of 1998 (“NEMA”), makes specific provision for private prosecution and sets lesser requirements that must be met, for a private prosecutor, to initiate prosecution under NEMA.
The judgment of the High Court, Gauteng Division, Pretoria, in the private prosecution of BP Southern Africa Proprietary Limited (“BP”) by Uzani Environmental Advocacy CC (“Uzani”) has been ground-breaking in several respects, primarily because it resulted in the private prosecution of BP in relation to the so-called “rectification applications” i.e. applications to rectify (obtain environmental approval) which companies often submit after commencing activities which require prior environmental approvals and authorisations, in terms of Section 24G of NEMA.
Section 24G of NEMA essentially allows a company that has commenced with an activity (in the case of BP, it was the construction and upgrade of various filling stations), before obtaining the relevant authorisations, to apply for rectification i.e. post-commencement authorisation. It is a broad application of the principle “it is better to ask for forgiveness than permission”. There have been various reasons for companies adopting this approach, including the extended time periods that are often taken by the regulator, to grant environmental authorisations. The rectification process under Section 24G of NEMA has been used to “bypass” these lengthy time periods, which could impact on the timelines for the implementation of a development, and other activities associated with construction of mines, buildings and other infrastructure.
At the heart of each application in terms of Section 24G of NEMA (“the Section 24G Application”), is an admission, by the applicant that it ought to have applied for an environmental authorisation, prior to the commencement of the activity, and that it has failed to do so. Section 24G of NEMA provides that an applicant can, based on this “confession” obtain ex post facto environmental authorisation, provided that the processes set out in Section 24G of NEMA have been followed.
The processes set out in Section 24G of NEMA include the payment of an administrative fine, conducting appropriate environmental impact assessments, and proper completion of the Section 24G Application forms. What is important, is that, despite the payment of the administrative fine, which is a prerequisite to the regulator considering the application, the applicant for rectification, exposes itself to a criminal prosecution. In the circumstances, i.e. that the applicant has to “confess”, it has long been thought by certain stakeholders, in South Africa, that prosecutions should automatically follow the submission of the Section 24G Application. This has however not been the case for various reasons, including discussions between the Department of Environmental Affairs and the National Prosecuting Authority (“NPA”).
The judgment of the High Court in the Uzani/BP matter (“the BP Judgment”) has essentially, confirmed that private prosecutors can step into the gap created by a failure of the NPA to prosecute applicants that have submitted Section 24G Applications.
BP has successfully been prosecuted by Uzani, acting as private prosecutor, on various charges, based on Section 24G Applications. It is important to note that it is the corporate entity i.e. BP that has been prosecuted, and no individuals have been prosecuted, including its directors, officers, and environmental specialists. Under South Africa Law, where a corporate entity is prosecuted, the consequence, will be a criminal fine, and not imprisonment. The relevant representative of BP, namely Mr Robert Sazi Mfeka (“Mr Mfeka”) appeared in his representative capacity, and was therefore not prosecuted nor found guilty, in his personal capacity. This is the most common form of initiating prosecutions against corporate entities i.e. that one or more directors are cited in their representative capacity and are therefore not prosecuted personally, and of course they are not therefore, found guilty, in their personal capacity. This does not mean that this principle will apply in all cases, because South Africa Law does allow prosecution of individuals, such as directors, officers, and environmental specialists.
In summary, the BP Judgment confirms the following:
- private prosecutions can be initiated in relation to environmental breaches, specifically, as was the situation in the BP Judgment, where a corporate entity has applied for rectification in terms of Section 24G of NEMA
- an entity such as Uzani could initiate the private prosecution, because it was a “person” as defined in Section 1 of NMA, it had complied with the provisions of Section 33(2) and (3) of NEMA, and it met the test, namely that it was acting in the public interest
While the BP Judgment focused on the situation where the applicant (BP) had applied for rectification in terms of Section 24G Application, the principles could apply more broadly i.e. to circumstances where a corporate entity has not complied with its obligations, but has not applied for rectification. In these circumstances, securing the conviction of the “accused” may be more challenging, because there is no “confession” in a rectification application, but private prosecutions in these circumstances also now remain a possibility.
The attorney behind Uzani, Mr Kallie Erasmus (“Mr Erasmus”) has, off the back of the success of the BP Judgment, publicly announced the following:
- Uzani will be prioritising those companies which Uzani believes have committed the “most serious offences”
- any amounts received by Uzani, following the BP Judgment, will be utilised to empower law firms across the country, so that further public prosecutions can be initiated
- the intention is to create a network of “private prosecutors” to go after “serial offenders” and “those companies which have committed the most serious offences”
Without going into extensive detail, Section 24 of NEMA provides that activities that have been identified which will or may potentially have a significant impact on the environment, may not be commenced with, until such time as an environmental authorisation has been granted in terms of NEMA. In order to obtain the relevant environmental authorisation, an extensive process must be followed by the applicants, which can take an extensive period of time, to be concluded, before the environmental authorisation is granted.
NEMA acknowledges the reality that in certain circumstances, an activity may be commenced, without environmental authorisation, and makes provision for “rectification” i.e. ex post facto authorisation of an activity, which did not, at the time of commencement, have the relevant environmental authorisation.
Section 24G(1) of NEMA provides that, on application by a person who has commenced with a listed or specified activity without an environmental authorisation in contravention of Section 24F(1) of NEMA, or has commenced, undertaken or conducted a waste management activity without a waste management licence in terms of Section 20(b) of the National Environmental Management: Waste Act, No. 59 of 2008 (“NEM:WA”), the Minister, the Minister responsible for Mineral Resources, or the MEC concerned, as the case may be, may direct the applicant to (a) immediately cease the activity pending a decision on the application submitted in terms of Section 24G of NEMA, (b) investigate, evaluate and assess the impact of the activity on the environment, (c) remedy any adverse effects of the activity on the environment, (d) cease, modify or control any act, activity, process or omission causing pollution or environmental degradation, (e) contain or prevent the movement of pollution or degradation of the environment, (f) eliminate any source of pollution or degradation, and (g) compile a report containing a description of the need and desirability of the activity, the assessment of the nature, extent, duration and significance of the consequences for or impacts on the environment of the activity, including the cumulative effects and the manner in which the geographical, physical, biological, social, economic and cultural aspects of the environment may be affected by the proposed activity, a description of mitigation measure undertaken or to be undertaken in respect of the consequences for or impacts on the environment or of the activity, a description of the public participation process followed during the course of compiling the report, including all comments received from interested and affected parties and an indication of how the issues raised have been addressed, and an environmental management programme or provide such other information or undertake such further studies as the Minister, Minister responsible for Mineral Resources, or MEC, as the case may be, may deem necessary.
Section 24G(4) of NEMA provides that a person i.e. the applicant must pay an administrative (civil) fine, which may not exceed R5 million, and which must be determined by the competent authority, before the Minister, Minister responsible for Mineral Resources, or MEC concerned may act in terms of Section 24G(2)(a) or (b) of NEMA i.e. consider the application, and possibly issue the appropriate environmental authorisation.
Importantly, Section 24G(6) of NEMA provides that the submission of an application or the granting of an environmental authorisation in terms of Section 24G(2)(b) of NEMA shall in no way derogate from (a) the Environmental Management Inspectors’ or the South African Police Services’ authority to investigate any transgression in terms of NEMA or any Specific Environmental Management Act, and (b) the National Prosecuting Authority’s Legal Authority to initiate any criminal prosecution.
The reference in this context, is to the authority of the NPA to prosecute, notwithstanding (a) the payment of the administrative fine, which is pre-requisite to the processing of the rectification application, and (b) the granting of an environmental authorisation. There is no reference, in this context, to private prosecutions, as this is addressed in terms of Section 33 of NEMA. The same principle would however apply i.e. if the criteria set out in Section 33 of NEMA are complied with, then a private prosecution can be initiated, notwithstanding that a rectification application has been granted, and the applicant has paid the administrative fine as contemplated in Section 24G of NEMA.
Section 32(1) of NEMA provides that any person or group of persons may seek appropriate relief in respect of any breach or threatened breach of any provisions of NEMA or any other Specific Environmental Management Act, or any other statutory provision concerned with the protection of the environment or the use of natural resources. Any such person may do so (a) in that person’s or group of person’s own interest, (b) in the interests of or on behalf of a person who is, for practical reasons, unable to institute such proceedings, (c) in the interests of or behalf of a group or class of persons whose interests are affected, (d) in the public interest, and (e) in the interests of protecting the environment.
In terms of Section 32(2) of NEMA a court may decide not to award costs against a person or group of persons which fails to secure the relief sought in respect of any breach or threatened breach if the court is of the opinion that the person or group of persons acted reasonably out of concern for the public interest or in the interests of protecting the environment, and had made due effort to use other means reasonably available for obtaining the relief sought.
Section 32(3) of NEMA provides that where a person or group of persons secures the relief sought, a court may on application (a) award costs on an appropriate scale to any person or persons entitled to practice as an advocate or attorney in the Republic who provided free legal assistances or representation to such person or group in the preparation for conduct of the proceedings, (b) order that the party against whom the relief is granted pay to the person or group of persons concerned any reasonable costs incurred by such person or group in the investigation of the matter and its preparation for the proceedings.
Section 33 of NEMA makes specific provision for private prosecution. Section 33(1) of NEMA provides that any person may (a) in public interest, or (b) in the interests of the protection of the environment, institute and conduct a prosecution in respect of any breach or threatened breach of a duty, other than a public duty resting on an organ of State, in any national or provincial legislation or municipal by-law, or any regulation, licence, permission or authorisation issued in terms of such legislation, where that duty is concerned with the protection of the environment and the breach of that duty is an offence.
Certain requirements must be met, before a private prosecution can be brought. In summary, these requirements are as follows:
- the person prosecuting privately must do so through a person entitled to practice as an advocate or an attorney in the Republic
- the person prosecuting privately must have given written notice to the appropriate Public Prosecutor that he or she intends to bring the private prosecution
- the private prosecutor has not, within 28 (twenty eight) days of receipt of the notice, stated in writing that he/she intends to prosecute the alleged offence
Importantly, the “private prosecutor” is not required to produce a certificate issued by the NPA, stating that it has refused to prosecute the accused and the person prosecuting privately is not required to provide security for such action. All that is required in this regard, is notification to the relevant office of the NPA, and a failure by the NPA, to respond, within 28 (twenty eight) days. It is for this reason that prosecution under Section 33 of NEMA is regarded as being easier than in other circumstances where private prosecution is possible.
The matter in the BP Judgment had a long history, which started with leave being granted on 29 June 2017 by Judge President Mlambo, to Uzani, for it to institute a private prosecution against BP. After various processes, interlocutory applications, arguments, and interim judgments, the matter was finally heard, focusing on alleged contravention, by BP, of its obligations to obtain prior environmental approval for various upgrades to existing filling stations, and the construction of new filling stations.
The court convicted BP on the basis of the rectification applications that it submitted in terms of Section 24G of NEMA i.e. essentially, the “confession” in the applications, formed the basis of the convictions.
As at the date of this newsletter, the “penalties” have not been imposed on BP. On the basis that BP, in its capacity as the corporate entity, has been found guilty of contravening its environmental obligations, the consequences will be the imposition of a criminal fine.
These criminal fines are likely to be substantial, and will be applied, in relation to each of the charges set out in the indictment. NEMA makes provision for a certain amount of the criminal fine (up to a quarter) to be paid to the private prosecutor, which must be applied for, and if granted, must be utilised by the private prosecutor in the interests of environmental protection.
Uzani and Mr Erasmus in his personal capacity faced significant criticism from BP during the course of the matter, for various reasons, including that Uzani would benefit from a conviction. Despite this, the court convicted BP.
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Warren Beech is a Partner and the Head of Mining at Eversheds Sutherland. He is based in the Johannesburg office and has been practicing for over twenty years, during which...
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