Errant listed companies threaten environment: Tracey Davies – head, corporate accountability, Centre for Environmental Rights

SA companies need severe, immediate penalties for breaching environmental laws.

 

HANNA BARRY: A new report out from the Centre for Environmental Rights finds that between 2008 and 2014, so in the past six years or so, 20 large listed companies performed very poorly when it comes to complying with environmental legislation. Some of the companies investigated by the centre include Sasol, Anglo American, Arcelor Mittal, Gold Fields and many others.
    Tracey Davies from the Centre for Environmental Rights joins us now. Tracey, it’s good to have you with us. What kind of breaches of environmental laws are we talking about here?

TRACEY DAVIES: Hi, Hanna. Thanks for having me. There is a broad range, but we are talking about air pollution, groundwater pollution, soil contamination, toxic spillages – really serious things that have a big detrimental impact on the environment.

HANNA BARRY: And when these breaches have occurred, how seriously have they been taken and addressed by companies and also authorities?

TRACEY DAVIES: They are addressed seriously by the authorities when they have the capacity and the knowledge to deal with them. As the report Full Disclosure by the Centre for Environmental Rights shows, the Green Scorpions, who are the environmental management inspectorate for the Department of Environmental Affairs, conducts regular inspections at big facilities. And when they find non-compliances they are unable, really, to deal with them immediately and extremely effectively because of the way our regulatory system is set up.
    So while they can issue compliance notices and directives and order the company to clean up or change things or apply for permits or licences, they can’t fine them immediately. They can’t issue them with immediate and serious penalties.
    So if companies continue to breach the law or don’t comply with directives, then the only option that the Department of Environmental Affairs has is to prosecute them criminally, which is an extremely long and difficult and tedious process.
    So one of the things we advocate in Full Disclosure is that South Africa desperately needs to move to a system of administrative penalties like they have in the United States and many other countries in the world where the regulators can immediately impose significant penalties on the companies. That also forces the companies to take these violations more seriously because, when there are significant fines imposed on them, they are forced to report the violations to their shareholders which, as our report also shows, they are currently not doing.

HANNA BARRY: We are nearly out of time, but I would like you to just touch on that – that companies are not good at being transparent about these to shareholders in their annual reports. At the same time, do shareholders ask about these or care?

TRACEY DAVIES: Well, they profess to care, but unfortunately it doesn’t seem that they are asking the right questions, because the information that we used at the Centre for Environmental Rights to compile this report is easily available to anybody. So the red flags in the company reports are there for anybody to see and the questions really should be asked by shareholders, not by civil society. But there is no evidence that that is happening at the moment.

HANNA BARRY: Thanks to Tracey Davies. The name of that report is Full Disclosure. You can find it online. There is also an article on Moneyweb [click here] around this report, which goes into slightly more detail. We are not talking about small fly-by-night companies here. These are very large listed industrial concerns.

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