TOXIC BLAZE
Chemical Disaster: UPL hunkers down in ‘right to silence’ legal trench
United Phosphorus Limited has taken refuge behind a legal laager, refusing to disclose a raft of regulatory and safety documentation to Durban residents. It has also refused to fund or to take part in a new public forum to access more information about the Cornubia chemical disaster.
United Phosphorus Limited (UPL) and its media consultants ventured out to the frontline of public opinion last week, but very soon the company beat a hasty retreat to its legal redoubt where it invoked its “right to silence” and the “right against self-incrimination”.
The UPL media offensive began on Wednesday, 20 October when the company issued another public statement calling on the eThekwini municipality to reopen several beaches that have been closed for three months after a cocktail of toxic chemicals poured into the sea from its chemical warehouse inferno.
Marcel Dreyer, the UPL regional head for Africa and the Middle East and national Environment Minister Barbara Creecy huddle under umbrellas during an inspection of the Cornubia farm poisons warehouse on 3 October 2021. (Photo: Department of Forestry, Fisheries and Environmental Affairs).
The sea and beaches were safe once more, it said, thanks to a multimillion-rand UPL clean-up operation. The time had come to halt “unnecessary delays” and allow people to frolic on this coastline.
Japhet Ncube, former editor of The Star newspaper and newly appointed spokesperson for UPL South Africa, also went on radio, telling SAfm presenter Stephen Grootes that his company was “part of the community’’ and wanted to support the local hospitality industry’s ability to attract holidaymakers back to hotels and restaurants next to the city’s northern beaches.
But Ncube ran into rough weather while facing awkward questions from both Grootes and Durban environmental justice activist Desmond D’Sa.
Later that evening, UPL’s lawyers sent a frosty response to the Cornubia Fire Action Group, an umbrella group of residents that lodged a detailed shopping list of information requests using the Public Access to Information Act (PAIA).
Andrew Clark of Durban-based Cox Yeats attorneys said UPL would accede to nine of the action group’s information requests (many of which are already in the public domain) — but it was refusing or declining to grant access for another 28 requests.
UPL Refusal of PAIA Request – 20.10.21 (ID 2268815)
Among the 28 information items refused are requests for a copy of the property lease between UPL and the landowner; a copy of any environmental impact assessment for the storage of listed dangerous goods, building plan approvals and any risk assessments done under the Major Hazardous Installations Act.
The action group further requested records of all complaints of human health impacts caused by the UPL pollution which identify where, when and how complainants got sick (excluding personal information) and whether UPL had permission to import certain banned or restricted chemicals regulated under the Rotterdam Convention.
Finally, the action group asked for “any record of state subsidisation (national, provincial, municipal or parastatal), ‘fast-track’ approval, investment, incentive, relaxed exchange control provisions, tax benefits, capital depreciation allowance, or related loopholes, or any form of concessions on payments for water, electricity, municipal services, rentals or other government-based or Cornubia-specific goods and services”.
In response to this last item, Cox Yeats ventured that the request was “broad and vague, hence it is not discernible what records are sought. On this basis, the requests are declined.”
The retreat to the laager was emphasised on Saturday, 23 October, when UPL failed to pitch for the launch of the Cornubia Multi-Stakeholder Forum — a “conduit for information to flow” from government regulators to the general public and other stakeholders.
Forestry, Fisheries and Environment Minister Barbara Creecy. (Photo: Tony Carnie)
The new forum, set up on instruction by national Department of Forestry, Fisheries and Environment Minister Barbara Creecy and her provincial counterpart MEC Ravi Pillay, follows a storm of protest about the poor information flows to the public despite the potentially serious health consequences of exposure to toxic chemicals.
Creecy and Pillay said two weeks ago that UPL would be asked to fund the establishment and operations of the new forum in terms of the “polluter pays” principle of the National Environmental Management Act.
Pillay has also suggested that the forum should operate for at least two years, and longer if need be.
But UPL had now indicated that “it does not intend to fund the forum,” said Heinz Kuhn, legal adviser to the provincial Department of Economic Development, Tourism and Environmental Affairs. Kuhn said the refusal to provide funds was “something that government will have to take up with UPL”.
The Mumbai-controlled company confirmed that its lawyers had written to the department to advise that it would not attend the forum launch.
UPL said it found some of the forum’s proposed terms of reference to be “objectionable”, while the “overly broad mandate that was proposed for the forum and the extensive powers accorded to it” could confuse the roles of government with those of stakeholders and make it “potentially unworkable”.
Ravi Pillay, the KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs. (Photo: Tony Carnie)
The company — which continues to sign off its media releases with assurances that “UPL remains committed to continue working closely with government, civil society and surrounding communities in order to mitigate the impact of the fire and chemical spill” — lamented that the decision to launch the forum before settling its disputed terms of reference was “highly unfortunate”.
“UPL is disappointed that the opportunity to launch the forum with UPL’s wholehearted support has been lost.”
While UPL has objected to the apparently “extensive powers” of the forum, several civil society groups have raised polar opposite concerns — namely that the forum may end up being another toothless talk-shop.
Community activist D’Sa said civil society groups had scrambled to make inputs on the proposed terms of reference and were concerned that there were certain clauses that “might gag or silence us”.
Senior Green Scorpions enforcement director Grant Walters: ‘There has never been an incident of this magnitude in the history of South Africa’. (Photo: Tony Carnie)
D’Sa said robust discussions were critical in such a forum and he found it strange that civil society inputs had not been captured fully in the draft terms of reference.
Echoing concerns by senior Green Scorpions inspectorate official Grant Walters that “there has never been an incident of this magnitude in the history of South Africa”, South Durban community activist Bongani Mthembu said: “We are facing a monster… government is facing a huge task in dealing with this incident.”
Based on his experience with a similar multistakeholder forum for a recent fire and explosion at the Engen refinery in Wentworth, Mthembu said it was important that history not repeat itself.
“What guarantees are there that this forum will have some teeth and the power to make decisions?” he asked.
United Phosphorus Limited CEO Jan Botha. (Photo: Tony Carnie)
Mthembu was also surprised that the chemical giant was baulking on funding the forum, given recent boasts by UPL South Africa chief executive Jan Botha that United Phosphorus was the “fifth-biggest crop protection company in the world” with an annual turnover of $5-billion a year and a sales revenue of nearly $100-million in South Africa alone.
“UPL should not be ‘asked’ (to fund the forum). They caused this disaster by not following due process,” Mthembu told the meeting.
In response, MEC Pillay said: “They have declined and we are engaging them to change their position.”
Attorney Kamini Krishna wanted to know what degree of participation civil society could expect to exercise if members of the forum were excluded from the government’s Joint Operations Committee investigating the Cornubia disaster.
How could the forum act as a watchdog over the JOC without some teeth, she asked.
MEC Pillay said he did not think there were any limitations on civil society groups from litigating in their personal capacities, or possibly supporting the government as amicus curiae (friends of the court) in potential future litigation.
UPL – Responses – Daily Maverick – 24 October 2021_
Durban attorney and environmental law expert Jeremy Ridl (the convener of the interim stakeholder forum) said he took note of these concerns, but cautioned against entering into a “never-ending fight” with a major multinational group and its lawyers.
While recognising that UPL was reluctant to participate in a forum that could expose it to civil liability, he expressed the hope that UPL would choose to address the many concerns raised by civil society and that the government would also test the legal principle of the “polluter pays” in the courts. DM/OBP
The new interim forum elected at the weekend will be made up of Kamini Krishna, Rico Euripidou, Francine Hattingh, Keshia Naidoo, Kwanele Msizazwe, Allimuthu Perumal, Kirsten Youens, Desmond D’Sa/Bongani Mthembu (alternate) and Jeremy Ridl.
- People who wish to contact, or make inputs to the interim Multi-Stakeholder Forum can contact Jane Tennet (HSG Attorneys Inc) by email: [email protected]
- UPL’s public statements on the Cornubia disaster can be accessed at https://www.upl-ltd.com/za/upl-cornubia-warehouse-fire-incident.
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Thanks Tony C and DM for keeping this on the radar and highlighting the duplicity of UPL. Whilst fully supporting the right for any SA firm of attorneys to ply their trade/profession in trying to defend the failures of UPL (Cox Yeats), I also fully support the right of every impacted citizen and corporate to review its use of Cox Yeats – so much better to “force” UPL to get a remote firm from a hamlet in the Northern Cape !! No public health assessment of all of us impacted by this disaster has been initiated by KZN Health so we have no “marker” for future cancers etc. And telling us to stay in doors when we were out patrolling and manning roadblocks in the face of the ANC RET Insurrection violence whilst the SAPS and SANDF mulled a response, helped no-one and just showed how out of touch the government is with ” our people”.
Talk about evil
Who else will be persecuted after being torched by the ANC dissidents?
It would be interesting to check the holdings and compliance status of their other SA locations with those areas’ relevant fire, health and environmental authorities.
They have more than likely continued selling the same stuff but now warehouse at the other locations in SA
Well done Tony. These chaps are ducking and diving and let’s be honest Cox Yeats- haaibo – surely you don’t business that badly?
Well done Tony! Is Barbara Creecy up to the fight I wonder. Cox Yeats? Surely they are not that desperate for business?
It really is a pity that Cox Yeats took on this client because they are a firm with an excellent reputation, particularly Andrew Clark.
If UPL won’t answer the majority of the questions posed surely it is possible to retrieve information from the relevant municipal and government bodies on environmental impact studies (if any), any building approval limitations on storage of chemicals, any special approvals granted, compliance with health and Safety reports, whether full disclosure was made of all chemicals stored etc.
It is not for UPL to say “open the beaches”, this can only be confirmed by an unaffiliated expert body.
What happened during the insurrection is a red herring, any building can catch fire.
What special precautions were taken to mitigate the accident, such as bund walls to contain spillage etc?
Why did the fire department have no prior knowledge of materials stored to enable them to plan how to engage the fire?
You’re obviously assuming that the relevant municipal and government departments have those documents on file, Dream on, they don’t exist.
Pandora Papers Part 15: For yacht, overseas real estate, UPL’s Shroff brothers go offshore
Not resident in India, pay all taxes on India-sourced income, they say.
Written by Khushboo Narayan | Mumbai |
Updated: October 27, 2021 7:56:02 am
Pandora papers, Vikram Shroff, Vikram Shroff Pandora papers, Swiss bank account, offshore accounts, black money, Panama papers india, Panama papers indian celebrities, indian express newsAn Express investigation into the Pandora Papers reveals how individuals and businesses are pushing the envelope to evade detection, using loopholes in the law at home and the lax jurisdiction of tax havens.
VIKRAM SHROFF, one of the two sons of Rajju (Rajnikant) Shroff, the founder of the Rs 38,694-crore global pesticide producer UPL (earlier United Phosphorus Ltd), acquired companies in the British Virgin Islands to hold a yacht and along with elder brother Jaidev, set up a four-layered subsidiary structure to own real estate in Dubai, records in the Pandora Papers investigated by The Indian Express reveal.
The records show that Vikram Shroff, a British citizen, had in June 2011, set up a company called Spider Investments Ltd in the Cayman Island, to hold a Euro 3.65 million motor yacht named Robusto for personal use and chartering. Spider Investments was incorporated through Trident Trust Company (BVI) Ltd, a corporate services provider firm.
In July 2016, Trident Trust set up another company called Blue Harbor Group Ltd in BVI with Vikram Shroff as the beneficial owner, and Trident Trust subsidiary Harris Trustees Limited, registered in St Kitts and Nevis, as its shareholder.
According to the incorporation form of Blue Harbor, the company was set up solely to hold a Euro 3.5 million yacht, to be later exported to BVI for “tax purposes”. The Blue Harbor records are maintained at Trident Trust’s office in Cyprus. Vikram’s annual income is stated to be $1.5 million and approximate overall wealth to be $40 million in the incorporation form.
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Jaidev and Vikram are also owners of BVI firms Gem Consulting Ltd and Legacy Investing SA, respectively. Both these firms were incorporated in January 2013. While Jaidev’s Gem Consulting owns JS Investments Ltd in Jebel Ali Free Zone (Jafza) in UAE, Vikram solely owns VS Investments Ltd in Jafza.
Also Read |Pandora Papers Part 14: Gautam Singhania acquired two BVI entities, one to hold Swiss bank account
JS Investments and VJ Investments, in turn, hold 50 per cent each in another Jafza-based entity VJS Investments Ltd (now Vesper Investments Ltd). VJS Investments Ltd is the owner of Dubai-based Prasadah Trading DMCC, which records in Pandora Papers reveal, was set up to own properties in Dubai. All these firms were set up in 2014 between February and September.
Trident Trust documents show Vikram Shroff as the Beneficial Owner of BVI entity Blue Harbour Group Ltd.
Records also show that Vikram Shroff is the beneficial owner of another BVI firm Lorena Asset Holdings Ltd set up in 2011 to hold bankable assets and investments. It was also set up to own a bank account and Vikram’s investment portfolio at Bank Julius Baer in Zurich. The sole shareholder of Lorena is another BVI entity, Louksor Limited, the records show.
Jaidev Shroff is the beneficial owner of Trenkore Investments Limited, an entity in Cyprus which was re-domiciled in the BVI in 2011. Shroff controls this company through Seychelles-based Vector Projects Ltd, records show.
Responding to a list of questions, Mishcon de Reya LLP, the law firm representing the Shroff brothers Jaidev said, “Jaidev and Vikram Shroff have worked exceptionally hard building one of the world’s largest corporations which has created jobs and prosperity in India and across the world. The Shroffs own a yacht, which is only ever used by the family in a private capacity. It has never generated any income, is not used for chartering and there are no taxation implications.”
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It further said: “To ensure their private assets and liabilities are recorded and tracked, Jaidev and Vikram set up companies for each of their investments well in advance of any deal. If that deal is not concluded, the company has no further use and lies dormant or is wound up. If it goes ahead, Jaidev and Vikram proudly comply with the global Common Reporting Standard developed by the OECD in 2014. They send information to the relevant tax authorities and keep their tax filings up to date. The brothers are not resident in India but wherever Indian-sourced income is generated they readily pay all taxes due.”
On January 22, 2020, the Income Tax authorities had searched UPL premises after complaints of alleged tax evasion. In its annual report of FY 2021, the company said the I-T department served notices asking it to file revised tax returns for past years.
“Company has filed its return of income. Further, the income tax department has issued notices to the company calling for certain preliminary information. The company is in the process of responding to the above notices and does not expect any significant financial or reporting implications to emerge out of this matter,” said UPL in the annual report.
UPL was also mired in a controversy after a whistle-blower alleged siphoning of funds by promoters as the company paid crores of rupees in rent to shell companies for properties earlier owned by UPL’s global head Jaidev Shroff. He denied any wrongdoing and said the UPL’s audit committee examined the whistle-blower’s complaint in 2017 and did not find merit in the allegations.
(With inputs from Jayprakash Naidu in Mumbai)