Companies and directors: Past environmental transgressions may haunt you


Section 24G of National Environmental Management Act, 1998 (NEMA) which enables the ex post facto authorisation of activities that unlawfully commenced under NEMA and the National Environmental Management: Waste Act, 2008 (NEMWA) is contentious in the environmental world.

This "rectification procedure" has, in our experience, been abused historically, with some companies going so far as to proceed with a development without authorisation and budget for a rectification application, including the payment of the obligatory administrative fine.

The proverbial section 24G noose is, however, being tightened to close this unintended loophole. On 20 July 2017, the Section 24G Fine Regulations (Regulations) came into force. These Regulations provide for a procedure to be followed and a list of criteria to be considered in determining the quantum of section 24G administrative fines.

The Regulations apply to any section 24G application submitted after 20 July 2017.

Key risk areas to be noted:​

  • Annexure A and repeat contraveners: The Regulations include an Annexure A which must be completed and included with any section 24G application submitted after 20 July 2017.
    • Of particular importance is that Part 2 of Annexure A which requires applicants to disclose all previous administrative actions (compliance notices, directives), criminal convictions and section 24G applications submitted by the firm, its directors, and the firms on whose board the applicant's directors sit / sat.
    • Why? This information is needed because Regulation 9 provides for "repeat contraveners". It provides that the fine committee must recommend to the competent authority that the applicant pay the maximum administrative fine of R5 million if the applicant is classified as a repeat contravener.
    • Any client planning to submit a section 24G application must take note of this significant change. We recommend that clients:
      • have a clear picture of their dirty laundry, including that of existing directors - the Regulations require that all conduct since 7 January 2005 can be taken into account; and
      • interrogate the environmental past of new directors to be appointed as part of their due diligence process.
      • Note: it is an offence under the Regulations to submit incorrect, false or misleading information in a section 24G rectification application.

  • Mandatory public participation: The Regulations require an advertisement to be published in a local newspaper and on the applicant's website before submitting an application for rectification. Applicants are also required, among other things, to open and maintain a register of interested and affected parties.
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