Mining company Bosveld Phosphates, its directors, officers and, potentially, its environmental advisers, could face hefty remediation costs and even criminal charges, owing to a week-long contaminated water spill from a process water dam at its fertiliser manufacturing plant in Phalaborwa, Limpopo.

The contaminated water from the dam flowed into the Selati river, a tributary of the Olifants river, in the Kruger National Park, killing thousands of fish over a 15 km stretch of water.

Law firm Hogan Lovells SA (previously Routledge Modise) mining head Warren Beech says, although the South African Department of Water Affairs (DWA) has laid criminal charges against Bosveld Phosphates for contravening the National Water Act, the subsequent investigation process, which is likely to be lengthy, will fully reveal the extent of medium- to long-term environmental damage and the related remediation costs, charges and fines.

He notes that the conventional procedure to ascertain the extent of the damage would be for the DWA and the South African Police Service to jointly investigate the allegations. This investigation would normally include on-site inspections, taking statements from witnesses and engaging with Bosveld Phosphates, and possibly with other persons who may be charged. Technical advisers may also be interviewed.

Beech says that, depending on the results of the investigation, other charges that the miner could face can include contraventions of the terms and conditions of any water-use licences that have been granted to Bosveld Phosphates and of the National Environmental Management Act, which typically attract criminal penalties of up to R5-million for each charge.

He highlights four potential consequences of contravening environmental laws that Bosveld Phosphates could face. The first is reputational risk, where the reputation of the company may be tarnished to such an extent that it impacts commercially on the company. There may also be various reporting requirements on the environmental damages during the investigation, which further exposes the company to reputational risk.

The second is potential administrative action, in terms of which the regulators issue appropriate instructions and directives to remediate the pollution and address the underlying cause, at the cost of the company.

The third is the cost of remediation, in terms of implementing practical measures to rectify the situation, which must be carried by the company, and the fourth is potential criminal prosecution, which could result in imprisonment for a company’s staff and/or the payment of criminal fines.

Beech points out that an additional consequence could be civil claims from persons who might have been affected by the pollution, as well as other entities affected.

South Africa has introduced a range of environmental laws addressing a wide area of activities, often stipulating their own authorisations and permit requirements. As a result, most mining projects and operations require various authorisations, permits, licences, or exemptions, before any of the activities may start.

Further, in sensitive areas, particular consideration is required when it comes to compliance with the National Water Act and the terms and conditions of applicable water use licences. “Typically, this includes waste and waste management, with the emphasis on tailings and related facilities, as well as water management at mines,” says Beech.

These environmental laws place extensive obligations on any persons (natural or juristic) to prevent pollution from occurring or reoccurring and, where it has occurred, to remediate the pollution caused by the event.

Beech advises not only mining companies but also agriculture, industrial and commercial entities to obtain the relevant environmental authorisation beforehand. This will ensure that potential pollution threats and any potential short-, medium- or long-term impacts on the biodiversity, aquatic life and water quality of an area, as a result of pollution, are avoided.

The law also ensures that companies are often investigated and prosecuted for failure to have the necessary environmental authorisations in place and, thereafter, to comply with the terms and conditions of those particular authorisations.

In addition to obtaining the various environmental authorisations, mining companies must implement appropriate systems to ensure that they comply with the terms and conditions of those authorisations, supplemented by the applicable provisions of the environmental laws. This system should include regular in-house and external audits.