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Paper industry giant Sappi coughs up R8m for sulphur gas crimes

Paper industry giant Sappi coughs up R8m for sulphur gas crimes
The Sappi-Saiccor pulp mill at Umkomaas, about 50km south of Durban, has been the source of frequent complaints by local residents since 1955 owing to pollution of the air and sea. (Photo: Tony Carnie)

The South African pulp and paper industry giant Sappi has been fined R8m after pleading guilty to a string of air pollution offences at one of its pulp mills on the KwaZulu-Natal coast. This is possibly the stiffest fine imposed to date for national air pollution crimes.

The Saiccor pulp factory at Umkomaas has been mashing up and dissolving gum trees in chemical cookers for nearly 70 years to produce tree-based fibres for clothes and curtains. 

But since operations began in 1955, the factory has also raised the ire of local residents frequently by gassing the atmosphere with clouds of sulphur dioxide and other noxious gases, and by dumping its “purple death” liquid effluent into the sea.

A newspaper headline from 1984 about sea pollution from the Saiccor factory. (Source: Natal Mercury)

Sappi took over the factory in 1988 from the British textile group Courtaulds.

Toxic fumes forced removal of 250 schoolchildren

Just short of a decade later, a government official leaked documents to this writer demonstrating that the factory frequently exceeded the government’s air pollution guidelines. Sappi later agreed to relocate 250 children from a nearby primary school to a new site 2km away because of the cloying fumes that threatened the health of the children.

At that time, the pre-democracy Atmospheric Pollution Prevention Act provided for derisory maximum fines of R500. This law was rarely enforced.

Another newspaper report from 1996 about air pollution from Sappi-Saiccor. (Source: The Mercury)

Now, nearly three decades after pupils from the Drift Primary School were forced to up sticks because of high gas levels from Sappi-Saiccor, the company will have to pay an R8-million fine after pleading guilty to 38 charges under the National Air Quality Act.

Represented by company vice president Dr Beverley Sukhdeo, Sappi accepted guilt as part of a plea and sentence agreement confirmed by the Scottburgh Regional Court on 14 April 2023.

Of the total fine (classed as a “compensation order”), R5-million will be paid to the Ethekwini Municipality and a further R3-million into the Criminal Assets Recovery Account established in terms of the Prevention of Organised Crime Act.

This follows a joint investigation launched in 2014 by Ethekwini’s Environmental Health Unit and Ryno Serfontein, a pollution and waste investigator in the national Department of Forestry, Fisheries and Environment.

According to the plea and sentence agreement, the 38 offences relate to exceedances of the company’s Atmospheric Emission Licence, which allows the company to dump a maximum of four tons of sulphur dioxide (SO2) into the atmosphere a day.

Yet, between 2012 and 2014, Sappi’s emissions exceeded these limits several times. In some cases, the SO2 levels were more than double the allowed pollution limits.

State vs Sappi-Saiccor

Table of more recent sulphur pollution exceedances – Source: State vs Sappi-Saiccor criminal charge sheet

According to the agreed facts in the negotiated settlement, some of these exceedances were blamed on “infrequent technical or operational challenges or equipment downtime and process upsets”.

Old King Coal a culprit, again

Other exceedances were attributed to “general issues with coal quality” (poor quality coal with a high sulphur content).

In mitigation, Sappi-Saiccor argued that it had “involved itself with numerous community initiatives and projects” since 1955, while “constantly refining and improving its impact on the environment”.

As some examples, the company cited donations of printing paper to the neighbouring communities of Umkomaas, Magabeni and Craigieburn; sponsoring bursaries for matric students; food hampers; firewood donations or sponsorship of a mountain bike race series and local soccer tournament.

From 2017 to 2022, the company also allocated some R20-million to a variety of projects to reduce sulphur emissions, water use or flood protection measures.

Ramaphosa opened R7.7bn Sappi expansion project in 2022

The company also suggested that it was of “great significance” that Sappi instituted a major R7.7-billion expansion project at the Umkomaas mill that was opened in September 2022 by none other than President Cyril Ramaphosa as part of his presidential investment drive.

According to Sappi, around R3.8-billion of the total project costs were “invested to achieve a reduction in the mill’s water consumption, effluent, waste to landfill, SO2 emissions and CO2 fossil emissions”.

The company had also made commitments to a (voluntary) global initiative to reduce greenhouse gas emissions as well as a “Green the Future” initiative for local schools and teachers.

That said, the company acknowledged that the national environment department had a duty to “monitor and control the quality of the environment for all South Africans” and to enforce air pollution laws strenuously.

“The compliance with environmental legislation by all members of society, including commerce and industry, are accordingly accepted by (Sappi) as important imperatives.”

It further recognised that companies guilty of air pollution crimes should be convicted and punished in the interests of the community and greater society.

Though Sappi-Saiccor was listed as a first offender with no previous convictions, it is noteworthy that Sappi was fined R6,000 in 1989, after pleading guilty in the Nelspruit Magistrates’ Court to polluting rivers in the vicinity of its Ngodwana paper mill in Mpumalanga. 

It is also noteworthy that Sappi has recently increased production at the Umkomaas mill by at least 200,000 tonnes per year – though it has firmly rebuffed requests by local community groups to disclose its predicted profit margins from its “Project Vulindlela” and “Project Stone” expansion projects.

Profit margins have ‘no bearing on application for environmental authorisation’

Back in 2018, the South Durban Community Environmental Alliance asked for these figures during a community stakeholder process, but was told: “Project margins, profits and turnover is commercially sensitive information and has no bearing on the application for environmental authorisation.”

During these meetings, the alliance stated that Sappi-Saiccor had a long history of polluting the air around Umkomaas and said its expansion plans should not be approved. Rather, it deserved to be fined for environmental issues that had not been addressed.

Local pollution watchdog MA Naicker said he was concerned that the bigger the mill became due to expansion, the more toxic waste and gases there would be.

In response, the company’s environmental consultants suggested that the expansion plans would result in “significant environmental improvements” – and these would not be realised if the expansion did not go ahead.

Sappi pled guilty to 38 offences; the other 57 charges fall away

Significantly, Sappi’s board of directors only agreed to plead guilty to 38 of the original 95 alleged offences in the charge sheet – which also included allegations that the factory failed to validate emissions of other chemical pollutants; failed to store or dispose waste products safely; or exceeded legal limits for discharging effluent to the sea via a 6.5km long pipeline.

On these other charges, the agreement states that “these (agreed) convictions shall constitute a full and final resolution of all alleged offences during the periods set out in the charge sheet”.

In other words, the rest of the charges fall away.

The exact reasons why the State opted not to prosecute the other charges remain unclear, but the fact that it took almost a decade for the case to get to court suggests that the plea and sentence route was seen as the most practical option.

As noted by specialist environmental attorney Dr Melissa Strydom, criminal charges demand a higher standard of proof than in civil matters and can often require specialist knowledge of technology, industrial processes and environmental law by prosecutors.

In her recent doctoral thesis on using criminal environmental sanctions against large industries, Strydom notes that disputes over facts and technical interpretations can hinder successful prosecutions. Prosecutors also faced further burdens in proving that environmental law offences were deliberate or negligent, as this usually involves considering voluminous documents including technical and specialist reports.

Nevertheless, the R8-million fine imposed on Sappi appears to be one of the highest so far.

Strydom notes that the records of similar prosecutions are not easily accessible, but the scale of fines for environmental crimes has risen significantly over recent decades and currently provide for penalties of between R5-million and R10-million, depending on the nature of the offence.

She noted that each of the 38 charges to which Sappi pleaded guilty could have been subject to a maximum penalty of R5-million.

“In that context, R8-million may not be considered high, although several factors are relevant at sentencing.”

Examples of other cases include the Durban company, Wood Glaze, which was fined R7.5-million in the Durban Regional Court in 2021 for trying to develop low-cost housing in a wetland. But part of this sentence was suspended, resulting in an effective fine of R2.5-million.

In 2013, UNICA Iron and Steel (represented by Mohammed Qasim) was fined R5.5-million in the North West Regional Court after pleading guilty to several offences related to listed environmental activities without permits or licences.

Samancor Manganese was fined R3-million in 2016 for air pollution and waste offences, while ArcelorMittal was fined R3.6-million in 2020 for air pollution offences. DM/OBP.

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