Why Environmental Impact Assessment in South Africa is a Fraud: The case of the Musina-Makhado Special Economic Zone
A key piece of South Africa’s environmental legislation is fatally flawed. As a consequence, it is failing the environment it is meant to protect, and it is failing us. It can be fixed.
Permits to pollute
No-one likes to strip it naked, but permits to pollute are one of the fundamental tenets of environmental protection. The key mechanism created under the National Environmental Management Act 107 of 1998 (NEMA) to ensure that economic development does not come entirely at the expense of the environment is ‘environmental authorisation’. Environmental authorisation, as provided for in NEMA’s Environmental Impact Assessment (EIA) Regulations, authorises economic activity, which may not lawfully proceed in its absence.
In recognition of the hard fact that almost all economic activities are environmentally damaging to a degree, it’s basically a controlled right to cause environmental damage, which must be applied for and granted upfront. The application process is a gate planted in the way of developers, a government checkpoint at which the developer and the proposed development are subject to a stress test to determine whether the development is really in the interests of broader society. If its economic benefits do not outweigh its unavoidable environmental and social costs based on an assessment of those ‘externalised costs’ undertaken by an independent assessor, it cannot pass through the gate.
The role of the gate-keeper
The job of the appointed environmental assessment practitioner or EAP as he or she is dubbed, is to assess the impact of the planned development and then to make a recommendation based on a cost-benefit analysis in relation to alternatives considered. The relevant government authority will then make a decision to approve the project or not based on the EAP’s recommendation. So if, hypothetically, you figure you’ll make a quick buck out of mining coal in the Kruger National Park, the appointed EAP may conclude after following a fairly rigorous process of scrutinising your plans and the impacts of your strip mine on the environment and all other sectors, that the ‘need and desirability’ of your mine is lacking, that only your narrow interests would be served in permitting it and would thus recommend the ‘no-go’ alternative to your mine. The EAP in other words, stands as guardian of the public interest.
Although the prescribed process for assessing the environmental costs of any proposed development falls far short of ‘full cost accounting principles’, as those are beginning to be applied internationally, and could certainly do with an overhaul, the regulations do also require mitigation measures be proposed to reduce highly negative impacts of the relevant development, so that should authorisation be granted, the developer is at least compelled to minimise the environmental damage the development causes at his profit margin’s cost: The permit for the project is made conditional on the implementation of the mitigation measures and an approved ‘Environmental Management Programme’.
Client pipers calling the tunes
As a citizen concerned about your Section 24 Constitutional right to an environment that is not harmful to you, at this point you’re feeling pretty good about the guard rails put in place by NEMA, right? So why is the KNP still threatened by coal mining? Why for that matter, does it seem like South Africa is firmly committed to human-induced ecosystem collapse via rampant unsound development? The system is failing for one fundamental reason. The integrity of the entire process critically hinges on the independence of the assessment of the environmental impact and of the resultant recommendation. Under the EIA regulations, despite the express requirement in regulation 13(1) that an EAP “must be independent”, that independence is compromised:
The EAP paid to assess the planned development is paid by the developer. In other words, the polluter pays, not for the damage it is causing, but for the assessment of the potential damage it may cause and whether its development should be allowed accordingly. The EAP is appointed by the developer – he (or she) is hired and can be fired by the developer. As anyone familiar with the capitalist system could predict, this creates a conflict of interest. The system makes the EAP dependent on the developer, and his judgement is consequently compromised. To put things crudely, he serves his paymaster or loses his job. If he does a bad job, say by warning a decision-making authority that a proposed development will cause serious harm, he won’t get hired for the next job. He has after all, hurt the interests of the project developer who hired him. And there isn’t even the equivalent of the shareholder in this system who might help to keep the auditor clean. These undeniable realities mean that the guardians of the public interest are in fact serving the often-conflicting interests of a developer.
NEMA’s EIA Regulations have spawned an entire industry, a shadow private sector bureaucracy packed with legions of environmental consultants whose daily bread is the conducting of environmental impact assessments that are triggered by almost any planned activity from digging a hole on your property to building a new ore smelter. And yet the whole costly layer built into the system is rendered a sham, a hollow box-ticking exercise, by the corruption of the integrity of the assessment process.
The scandalous case of the Musina-Makhado SEZ
The environmental authorisation of the Musina-Makhado Special Economic Zone provides a dramatic example of the fraud being perpetrated under an act and regulations that force a misalignment of the interests of the EAP with those of the developer.
A ‘Special Economic Zone’ or SEZ is Department of Trade, Industry and Competition jargon for a type of industrial zone. The Musina-Makhado SEZ is a joint Chinese-South African state-backed mega-project that is the undergirding of an ambitious plan to industrialise the remote Vhembe District region of Limpopo Province based on the exploitation of its unexploited coal resources. The flagship ‘energy-metallurgical zone’ of the MM-SEZ, operated by Chinese partners, will manufacture crude steel. It is set to more than double South Africa’s steel output and is seen as the key to unlocking the coal reserves of the Greater Soutpansberg Coalfields. In the Economic Rationale report produced by Mintek, for example, the proximity of coal as a raw material is cited as a major rationale for the project:
"The Musina-Makhado SEZ is located in close proximity to the Soutpansberg coal-field which is estimated to be hosting over 12 billion tons of hard coking and thermal coal reserves… The Soutpansberg coal-field is comparatively undeveloped and underexploited than other coalfields in South Africa… The availability of both coking and thermal coal within Musina-Makhado SEZ’s vicinity will ensure the uninterrupted supply of input materials to the metallurgical and power generation complex."
The scale of the overall project is immense, as this promo shows, encompassing a mega-dam on the Limpopo River, power and petrochemicals plants and a so-called Smart City. The ore smelters and petrochemical plants will be supplied by twelve new open-cast coal mines that are planned, including the Vele Colliery on the Mapungubwe National Park’s boundary, Makhado Colliery under development adjacent to the MMSEZ South Site and a cluster of nine pit sites known as the Greater Soutpansberg Projects.
Notwithstanding the severity of the impacts of the carbon-intensive noxious industrial development, especially given its location in a UNESCO-inscribed Biosphere Reserve, and the huge feasibility risks attached to it, environmental authorisation was granted by the designated authority, the Limpopo Provincial Government, on the 23rd of February 2022. All appeals were dismissed on the 8th of July last year. Significantly, however, in the Final EIA Report which was published on the 1st of February 2021, the appointed EAP, Ronaldo Retief, then of DeltaBEC, did not recommend authorisation. Technically, he had merely demurred on the basis that the cumulative environmental impacts of the entire project had not been adequately assessed to enable him to make a recommendation, but a Final EIA Report is final and it effectively prevented the designated authority from approving the project. This may seem to the uninitiated like a bit of a fudge – a cowardly maneuver by the EAP to avoid blessing one of the dirtiest and thirstiest industrial developments on the continent and in South Africa’s history without openly opposing it. In fact, it was one of the most courageous acts of defiance by an EAP ever witnessed and risked professional suicide. Reliable stats aren’t readily available, but anecdotally, the proportion of EIAs that conclude with a positive recommendation is near all. What happened next is telling.
Despite the finality of a Final EIA Report, the Limpopo provincial government department, which in this particularly egregious case is also the applicant, publicly demanded that the EAP himself fix the flaws in the assessment on which he had leaned to avoid making a recommendation. For a brief period, Retief and DeltaBEC went along with it – preparing an “Action Plan” as ordered to remedy the deficiencies, but after a particularly hostile exchange with the public during a public meeting held at the Fire & Ice Hotel in Pretoria on the 30th of April 2021, at which accusations of unlawfulness and damning concessions were made, Retief quit. The scandalous tale is recounted in Daily Maverick here, replete with details of a meeting attended by all three ostensibly independent role players – the EAP, project sponsor and authority at which a scrupulously deferential EAP is relentlessly badgered by the intensely frustrated backers of the project for frustrating its progress. A new EAP, Ishmael Semenya of Enviroxcellence, was then appointed, who proceeded to issue a Revised Final EIA Report on the 13th of September 2021 that recommended authorisation. The rest is history.
A call
This may be an extreme example, but it loudly illustrates the problem of an EAP being at the mercy of the developer: the pressure they are under to blind and mute themselves to the dangers of a development, the undue influence developers have over the process, their power to simply get rid of non-compliant EAPs who threaten them – the fatal corruption of the system and why it is failing to protect you and me, and nature from harmful development.
The MMSEZ Environmental Authorisation is now the subject of no less than three High Court judicial review applications contesting the lawfulness of the decision to authorise it. Both EAPs will doubtless find themselves squirming on the witness stand later this year. One of them will be able to hold his head higher than the other, but in reality, they are both victims of the law. It is urgent that we commission a review of the EIA Regulations, to remedy the fatal flaw that is regulation 12(1) – to re-write the single line that is destroying nature and the natural systems that sustain us and institute measures the improve the integrity of this vital gatekeeper.
12. Appointment of EAPs and specialists
(1) A proponent or applicant must appoint an EAP at own cost to manage the application.