Learning Outcomes
After studying this chapter, you should ht! able to:
• CXjlllam thr field of operation of enwonmental management
• compare c,wlronmental and buslncss management
• depict the role of cross-functional teams (CFTsl in environmental management
• ~c:ount for the cmcrgen~ of environmtntal manageme111
• link corporate socJal responsibility to environmental management
• diff"entlate between the different components of environmental management
• discuss the principles and costs that apply 10 environmental managcmen t
• clarify the strategies t~at apply to environmental management
• oulline the Impact of human activity on the mvironm,nt, which can result In
degradation.
Overview of this chapter
This chapter provides an overview of the different elements in I.he range of
activitfos and functions I.hat an organisation has to perform when developing
and implementing an environmental management programme, TI1e general
picture offered in this chapter depicts. illl brief. all I.he elements of environmental
management that nrc discussed in the fol.lowing chapters in more detail
1. 1
Introduction
Many people In South Africa Jive in condJtions that arc harmful to their henlth and
well-being - even U1ough It Is a fundamental right of nil South Africans 10 Ii~ in
an environment tba L is not bnrmful to their heahh and well-bei ng. Environmental
management should be integrated Into all development acllvitics and co-,opcrative
environmental governance should be provided for by cstablislilng decision-making
principles n-gardlng all maucrs concerning the cnvlronmenL
1.2
Defining environmental management
Environmental managl'lllmt can be dl'fined as the way in which businesses deal
with environmental asi>~ClS. Environmental aspt'CLS are regarded as any elt'Jllcnt
Environmental Management - A business management approach
or the activities. products or services or an organisation that interacts with raw
materials or n:soum:5 In the cnvironmer.11.
natural world cnn be regarded ns
an environment that comprises numerous natural sources that are available to
be used by tht' mannfa,:turi:ng industry as raw materials. Accortling to Section
l(xi) of the National Environmental Ma·nagement Act 107 of 1998 (NE.MA}. the
environment can be seen as the immedla1c and remote surroundings within which
individuals and organisations exist. Such surroundings are constituted by the
armosphue. water and land, plus micro-organisms. fauna and nora. as wel l ns
any section, combination or interrelationships baween these elements, plus the
physical. chemical and cultural properties and conditions of any element(s) in
this list that may arrcct human and/or organisational health or well-being. All
these elements represent objects that are made of matter with which humans
Interact on a dally basis and which could affect humans either positively or
adVC!rscly. See chapter 6 of this book for more detail on the nature of the
natural world.
To interact with raw materials as resources in indus11ial processes ~quires
particular ways of dealing with such processes in order to achieve specific objectives.
Such ways of dealing with dements in the environment requires •soft' faciors
within the context of managcmenL The mandate of management to humankind
ls 1ha1 humans use na1urnl resources in a R5ponsible and orderly manner and as
economically as possible. Orderliness within the context of the economic principle
applies to human activities. such as planning. doing. developing. implementing or
destroying. Humankind must be accountable In meeting its own and societal nt·tds
and targets through utilising resources in an orderly fashion. Accountability and
stewartlship In terms of orderliness In using resources, with due consideration of
economic principles.. are 01Jcial in all human conduct.
Management represents human mdcavou.rs 10 understand and describe the ways
that natural, human. financial and man-made resources should be used to reach
specified goals, objectives and targets, whiih." giving full recognition Lo and applying
the economic principle. The application of the «-Gnomic principle does not imply
thriftiness. The economic principle refers to practising economic eflidency. Soft
l,;sucs that apply to environmental managrmenL include commitmPlll. dedication.
inspiration, involvement, culture, recognition, leadership and many more. All such
elemems must be incorporated as integral parts of an organisational environmental
management system (EMS). The bes1 directives for implementing an EMS effectively
nre to be found In ISO 14000, a series of environmental management standards,
published by the lntcrnational OrganizaiJon for Standanilzation (ISO). which
provide guidelines for implementing an organisational EMS. Such implementation
needs to be based on an environmental management plan and must take place in
full consideration of the needs and interests of interested panics (individuals and
groups) that may be affected by an EMS. See chapter 9 of this book for more detail
on environmental management within the rramework of the implementation of an
organisational EMS.
·nic
2
One: Introduction to environmental management
1.3
Relationship between environmental management and business
management
There is a close congruence be1ween business management and environmental
managemcnL Business management can be regarded as the orderly and organised
utilisation of resources in providing goods and services to customers with due
consideration of the economic principle. The rendering of services and the provision
of goods via 1he co- ordination or work-rela1ed activities result from the effective
utilisation of human and other resources while implementing the functions of
planning. organising. leading and control (POLC cycle):
•
Planning implies Lhinking about the options involved in activities that relate
to the achievement of organisational business objectives.
•
Organising is concerned with structuring people into functional groups
and assigning tasks, authority and resources accordingly, in order to realise
organisational objectives.
•
Leading refe.rs 10 influencing and inspiring employees to realise the success
of a business organisation.
•
Comrol means applying processes Lo organise and regulate human and all
other resources involved in order to realise organisational objectives.
Environmental management and business management differ in terms of functional
focus. Environmental management focuses on ways to deal with environmental
aspects in order Lo prevent any adverse environmental impacts. Environmental
aspects refer to the involvement of any activities, products or services with any
substance or group or substances in the environment. Business management
focuses on the orderly utilisation of resources for the purpose of financial gain.
Implementing environmental management means thai an organisation plans and
implements all i1s activities, products and services in terms of environmental
management principles and strategies. In addition, environmental management
implies Plan, Do, Check and Act [PDCA cycle), which enables an orgartisation to
realise its environmental policy objectives a.ad largets.
The POCA cycle. whlcb was developed by Deming [1982), corresponds congruently
with the POLC cycle of business management. Planning provides for thinking
through and considering all options related Lo activities, products and services in
preparation for implementing an EMS. Based on such planning the organisation
moves 10 the Do stage, during which all planned activities are put inro practice.
The Do stage involves frequent periods of checking and reviewing to see whether
objeL1:ives a.ad targets have been achleved. After this stage. the organisation bas
to act lo rectify any non-conformities and to implement preventative action as
and when necessaJY. The ISO I 4000 guidelines, developed by the ISO, uses the
same approach in the effective implementation of an EMS. The stages outlined by
ISO 14000 in implementing an EMS are planning, implementation and operation,
checking and managemem review. ll is dear that there exists grea t congruence
3
Environmental Manageme_nt - A business management approach
between lbe ~-ystematic approaches of business management. tile Deming cycle and
Lhe operational scages of ISO 14000.
In the implementation of environmental management, total quality managemeat
(TQM) is continuously applied to determine lbe level of management efficienL),. The
key clements of environmental management that TQM foe-uses on are: management
approach, continual improvement in advance of legal compliance, elimination
of root causes of problems, the involvement of staff and interested parties, and
customer satisfaction. The focus orTQM greatly ties in with the formerly mentioned
POLC, POCA and Lhe stages outlined in ISO 14000. The dilTerem approaches
place different emphases on specific clements of an EMS, but in essence they all
operate from similar bases to ensure that the implementation of an EMS greatly
resembles lbe guidelines and requirements set by Ute ISO with reganl to advancing
the o~jectives and targets of environmental management Tile approaches of
business management, TQM and environmental management are integrated via
the application of Lhe Deming POCA cycle 011 a consistent basis, in accordance
with continual improvement tltrough expanding the focus and increasing levels of
advancement See chapter 9 for more infornJation on the application of the POCA
cycle in environmental management
1.4
Cross-functional teams
Cross-functional teams (CFTs) provide the best and only imegrative approach to
managing safety, healllt and the environment (SBE) effectively in the workplace.
Robbins (2001) notes that the members of such teams come from almost similar
hierarchical levels in an organisation. Such teams are multi-disciplinary in nature,
because the members come from different professions or disciplines that convene
to produce the best available solution to any SHE challenge in the workplace.
Workers from lower levels may also be included, depending on the nature of
1.be challenge.
CFTs can play an imponant part in innovation and change. The men1bers of
CFTs can be regarded as belonging lo complementary professions on the basis that
U1ey all deal with similar challenges concerning, Inter alia. SHE in the workplace;
however, their approach to challenges will differ in accordance with the focus of
1.b eir panicular discipline. CFJ's are purpose driven and do not function beyond the
scope of the challenge for which they need to find a solution. Members of a CFT
each have their own focus; these foci are complementary to a particular challenge
and the solution to such a challenge.
Which professions or disciplines should be included in CFTs for the purpose
of eJTectively developing, managing and sustaining SHE in the workplace? The
professions or disciplines wllich should be included are outlined below.
4
One: Introduction to e_nvironmental management
1.4.1
line manager
Line managers are responsible for the eJTectiveness of organisational activities,
products and services. This applies in particular 10 lhe SHE managemem of the
working and surrounding environments. line managers have 10 make the final
decisions on the nature of programme clements, implement the programn1e and
evaluate its outcome. Line managers have to engage the expertise of a range of
complementary disciplines to ensure that effectiveness and quality of environmental
management programmes within an organisation's EMS are achieved and maintained.
As previously noted, such expertise is vested in a team of experts, namely a CFf, in
which each member functions as an expert wilhln a different field of operation.
1.4.2
Environmental manager
Managing the immediate and adjacent environments in the workplace is an
important element of qualitative SHE in an organisation. Environmental specialists
contribute to monitoring environmental issues in and around an organisation 's
facilities; therefore they should be included in CFJ's when appropriate and necessary.
1.4.3
Safety practitioner
Safeiy practitioners are responsible for guarding the qualiiy of safety programmes.
They have to fadllta1e the discussion and decision-making processes. The quality
of the outcome of CFfs that meet to enhance SHE in the workplace rests squarely
on the shoulders of lhe safety practitioner. Safeiy practitioners are also responsible
for ensuring lhat the implementation of an outcome occurs in accordance with the
CFTs decisions. Their overall guldance, in which their authority as experts and their
creative use of personality (personal traits) play a major role, will detemtine success.
1.4.4
Occupational health expert
Occupational health experts, including health pracnuoners and nurses, are
renowned for their preventative approach to possible harmful eff-ects of work and
working conditions on workers. The main issues that occupational health experts
address are: ensuring that people are placed in suitable work; performing biological
monitoring and health surveillance, in accordance with applicable legisla1ion;
monitoring the health quality of the work environment; health counselling and
health education; delivering occupational health services; and keeping health
records and performing health liaison in connection with health services external to
an organisation. Occupational health experts play an important role in monitoring
the effects of the immediate and remote environments on the health and wellbeing of organisational workers and on the community at large. It is iroportant to
remember that certain legal functions pertaining to SHE can only be performed
by occupational health personnel. TI1eir input and knowledge that relate to
5
Environmental Management - A business management approach
pre- and post-medical examinations, medical surveillance, injury reviews. personal
protective equipment [PPE), etc are indispensable when it comes lo safety risk
assessment. incident analyses and solutions that result from their input.
1.4.5
Ergonomics expert
An ergonomics expert is an important partner in CFrs which focus on the health
and safety of the work environment. Ergonomics focuses on the human-machine
interface, which includes four elements: the environment, Lhe machine (eg
equipment), the capabilities of Lhe person and the interaction (interface) between
the person and the machine. The design of workplaces plays an important role
in this regard. Elements such as lighting, ventilation and manual handling are
addressed by ergonomics experts. The focus is mainly on tbe people, the work
environment, the human-machine interface and Lhe total working system.
1.4.6
Engineer
Engineers play a very important role in mosi industries. Their knowledge and
expertise is of particular interest to environmental management. because the basis
of handling all substances ls to be fo und in the physical and chemical nature
(structure and functioning) of things. Engineering for safety primarily focuses
on work equipment. which includes machinery and materials, Lhe overall work
environment (bulld.ings. plants and mines) as well as the general living environment.
Engineers are most knowledgeable about the SHE risks associated 1vith the design
of machinery and equipment. with ihe aim of limiting energy release at ihe source.
This can be significantly prevented via the appropriate design of equipment and
handling processes.
1.4.7
Human resources manager
The human resources manager, who to a great extent relies on business psychology,
has an important role to play as a member of a CFr. Factors such as selection and
placement of employees, understanding of human needs and human behaviour,
performance appraisal and conducting of surveys among workers are some of tbe
important fields of work that human resources can address. Making decisions about
human behaviour in order 10 enhance SHE practices In ihe workplace via effective
environmental management is where the human resource manager cau be most
helpful as a member of a CFT.
1.4.8
Financial manager
Very few. if any, decisions oa developing and sustaining effective SHE practices
in the workplace and environment are wiU1ou1 financial implications. The
introduction of any new form of improvement or innovation requires some level
6
One: Introduction to environmental management
or financial expenditure. No CIT can function eITectively without the input of the
linancial manager or a representative. Any change in machinery, equipment, work
procedures or, for example. tbe release of dangerous substance(s) goes band-inba.nd with financial requirements. Decisions or this kind must bave the backing of
a person from the finance department as pan or the CFf.
1.4.9
Enterprise safety risk manager
Enterprise safety risk management focuses on the financial sarery risk that an
organisation incurs in operating its basic business activities, products and
services. like other complementary professions or disciplines in an organisation.
environmental management has an important role to play in minimising the
possible financial losses associated with SHE practices. Developing. implementing
and sustaining an EMS eJTectively will ensure consistent qualitative SHE in the
workplace and surroundings, with due prevention or unnecessary organisational
enterprise safety risk. Enterprise sarei:y risk management relies greatly on the quality
of an organisation·s EMS with the aim or miuimising financial loss. As a member
of the CIT, the input of enterprise safely risk managers can be of great significance
when, for example, determining and monitoring the financial implications of the
application or a new smoke emission system in a manufacturing plant. 111 this
regard, the emerprise risk manager performs a corporate risk managemeot fonction.
1.4.10 Maintenance department staff
The maintenance department or an organisation can provide important input with
regard to the SHE in the workplace. Maintenance staff provide infonnation on the
probability of the performance of hardware; this is essential for making decisions
on the fonctional integrity of machines and equipment. Maintenance records or
machines and equipment provide imponam information for making decisions on
hardware related to SHE in the workplace and surrounding environment. There are
panicular fields within wh.icb maintenance staff can del.iver important contributions
where environmental management is concerned, namely: mechanical, chemical,
electrical, physical, pressure, structural and access.
1.4.11 Troining department staff
lnnovation or changes pertaio.ing to SHE issues in the workplace frequently require
workers to increase their level of competence. SHE training bas to be innovative in
accommodating requirements in this regard. Being a member of a CFT provides the
opportunity 10 take note of requirements that now from innovation and to validate
1.h e current qualiry or tra ining wben necessary. 1l1e importance or regular training
and re-training is to ensure that workers sustain their competence in dealing with
environmental risks. The CIT creates Lbe context with regard lo knowledge and
competence about which workers and the community need 10 be kept informed.
7
Environmental Manageme_nt - A business management approach
1.4.12 Fauna, nara and marine expert
Exper1S in these fields assist environmental managers lo take ownership and
accountability of potential and actual e:nvirorunental impacts on the environme:nL
TI1e input of these experts assists an organisation in caring for all lire in, among
others, the animal world, the vegetation and the marine environment.
1.4. 13 Water. air and sail expert
Experts who specialise in the prevention or minimisation of damage to water, air
and soil assist organisations in implementing an EMS that wilJ prevent or minimise
damage to such clements of human, plant and animal life.
1.4.14 Expert in the general psychalagica/ and socio/ well-being of humans
It is important that all industries, as far as possible, abs1ain from banning human
functioning in any respect, including psychological and physical harm. Adverse
impac1S on the environment can also negatively impact on human functioning.
Specialists of all kinds in human well-being need 10 be part of CFrs to assist
organisations to implement an EMS in such a way that it results in as Little harm
to humans as possible.
1.4.15 Quality management
Cross-functional teams offer organisations opportunities co learn from many other
fields of specialisation that play a role in environmental managemenL Quality
management refers to functions ofinspection, 11uality control and quality assurance.
In essence, qualiiy management implies perforating the functions and associated
activities of planning and control. Within the context of panicipating in a CFr
for the purpose of ensuring an acceptable quality of environmental management,
quality management focuses on the effectiveness of dealing with sig1tlficant
environmenta l aspects and the prevention and/or control of environmenta l impacts.
1.4.16 Special services
Although not frequently required, environmental management may need the input
of one or more special services offered by a particular company, profession or
contractor. Enhancing environmental well-being may, for example, require the
expert advice of, for exan1ple, the legal profession; a contract.or, who is a specialist
in rendering a particular service, such as implemeotin.g behaviour-based safety; a
fire-fighting department; or a company that provides an information service on
handling hazardous substances. A service provider that specialises in tbe provision
of personal protective equipment is often included as a member of a CFr because
the need to saf~guard workers frequently produces challenges pertaining to SHE.
8
One: Introduction to environmental management
It must be clearly understood U1a1 an organisation does not necessarily need
1.he input of the entire range of complementary disciplines all at once. Needs
could lluctuate. There are also many more complementary disciplines U1a1 are not
listed in this chapter. This list serves as a basis of compleme.n1ary disciplines that
could apply. The composition of a CFf depends on U1e need for specific expert
advice; this is determined by the nature of the environmental aspects and related
environmental impacts associated with a particular organisation.
1.5
Environmental management - emergence
Section 24(a) or the Constitution of the Republic or South Africa. L996 (the
Constitution) indicates that ·everyone has the right Lo an environment that is
not harmful to their health or well- being'. There are a number of environmental
conditions that are currently posing environmental safety risks to the health and
well-being of humans and all other living organisms, including ecosystems. Issues
such as global wanning, ozone depletion, disastrous weather patterns, urbanisation,
as well as water, air and soil pollution require that environmemal management
receives high priority in order to prevent il:reversible damage to tlie global
environment. Business organisations are increasingly Laking action 10 prevent
environmental degradation through implementation of an EMS in accordance with
international, national and local environmental legislation. IL is imponant to note
that environmental legislation is of vital importance in promoting environmental
sustainability. both as a source of guidance and of er1forcemenl. The Constitution
provides the overarching legislative foundation for all environmental management
in South Africa, with NEMA as the primary environmental framework Act. Specific
environmental management Acts (SEMAs), such as the National Environmental
Management: Air Quality Act 39 of 2004 and the National Environmental
Management: Waste Act 59 of 2008, are linked to NEMA. Further chapters will
look at some of the SEMAs in more detail.
1.6
Environmental management and corporate social responsibility
Environmental management should be utilised to ensure sustainable developmenL
Sustainable development. according to NEMA, refers to the integration of social,
economic and environmental Factors into the planning, implementation and decisionmaking of a business in order to ensure that development that is undertaken will
serve not only the present generation but also future generations. As development
might have an effect on the environment, iL is only fair rhar such impacts be
deliherated with Lhe people who might be affected.
When assessing the environmental impact of any application for environmental
auU1ocisation, all potential interesied and affected parties should be given the
opportunity lo raise their concerns and make comments on any issues relevant
lo such an application. This public panidpation process is described in NEMA.
9
Environmental Management - A business management approach
Furthermore, interested and affected parties are described in NEMA as including:
any person, group of persons or organisation interested in or affected by such
operation activity; and any organ of state that may have jurisdiction over any
aspect of tbe operation or activity.
All businesses need io have customers io buy their products or make use of
their services - no business can function in isolation. Therefore, businesses have a
responsibility to take any social impact of their business activities into consideration.
As much emphasis is given lo environmental issues on a global scale, businesses
need to revise Lheir policies 10 include environmental aspects if they want to ensure
a competitive advantage and sustainable developmenL Policies might include
engaging with tbe community in order to improve the environment in terms of
air, water and soil; producing eco-friendly goods; and taking responsibility for
produclS from ·cradle to grave: Corporate social responsibility and sUS1ainable
development will be discussed in more detail in later chapters.
1.7
Components of the environment
The environment comprises three main components, namely the natural environment,
the built environment and the social environment. The natural world consists of
all physical and chemical substances, all forms of lifo, as well as all ecological
processes and interactions between any one or more of U1e preceding elemenlS.
TI1e bulll environment, which is man-made, is made up of physical structures and
infrastructures, while tbe social environment consists of socio-cultural structures
and processes. as well as the communiiy and product safety and health. Although
U1e three components exist within clearly cliITerentiated structures, they function
on a continuous integrated basis.
Natural environment
Built environment
Organisation
Social environment
Agu~ 1. t: Components of ihe environment
NEMA depicts the environment as the total surroundings within which the
human race exists. Such surroundings are made up of all physical structures and
infrastructure, all forms of life and processes of ecological existence, plus the total
sphere of human social expressions.
10
One: Introduction to environmental management
1.7.1
The nuturol environment
People live in a vast and intriguing environment that is constantly changing and
comprises thousands of things. All things. also called objects, can be classified as
either observable or non-observable. Observable tilings can be seen or experienced
by humans. Non-observable things cannot be seen or experienced by humans.
All things have substance, whether they are observable or non-observable.
Substances (things or objects) that are made or matter can make contact with one
another; such substances have contact ability. Only tbings that are made of mailer
can interact with one another. A tiling, substance or object that can make contact
and interact with other objects has the potential Lo harm people and damage
property and the physical environment. Anything that bas the potential lo harm or
damage is a safety hazard. A safety hazard can be defined as any substance that
has the potential to pose barm or damage to something or someone else.
Sa.f'ety hazards create safety risks during the mutual interaction between one
or more safety hazards in the environment Such safety risks can cause harm to
people or damage ro property or the environmeni. It is during the interaction or and
dealing with objects (as safety hazards) that organisations create environmental
aspects. Such environmental aspects can result in environmental impacts, which are
observable in adverse or positive effects on the environment lt can be concluded
that all substances are potential environmemal safety hazards because of tl1eir
ability to be instrumental in creating environmental aspects and environmental
impacts. See chapter 6 of this book for a detailed discussion of the natural world.
1.7.2
The built environment
The environment of a.a organisation comprises two distinguishable groups of things.
namely things that are made by people and things that are not made by people.
Although things that are not made by people have a natural origin, such things
are also substances, made or maner, and are inclined to make contact and imeract
with other natural and man- made substances in the environmenL Such interaction
also generates safety risks. The built environment includes all structures, processes
and practices humans create to advance their quality or life. In many irtslances
such creations endanger the many elements and systems in the natural world.
Examples include the pollution or air, water and soil, deforestation, the destruction
of ecologkaJ systems, the production of excessive waste and the extinction of
species or fauna and nora.
Organisations need 10 consider aU elements within the natural world when
implementing an environmental management programme. The main focus must
always be on environment.al conservation, with as little damage as possible to the
natural world. Preventing damage and. if any damage occurs, sustaining the status
quo with i:be purpose of rectification, if possible, must be rlte essemial endeavour
in the total process. Organisations need 10 understand that aU elements of the
II
Environmental Manageme_nt - A business management approach
components of the environment are always in some way in consistent reciprocal
interaction; organisations should therefore apply an integrated approach when
tht.'Y implement environmental management policies.
1.7.3
The social environment
Humans fonn an important part of an organisation·s external and internal
environment. All Lhe needs of human parties who may have interests or could be
affected by any pan of an environmental progr,unme mUSl be considered. The tolal
well-being of the surrounding human environment in both immediate and remote
contexts has to be considered wlih reference to safety, secudty, physical and mental
health. as well as social and cultural issues, and more. All the components of the
exiernal environment of an organisation are consistently in inieraction with and
have a mutual effect on each other. An integrative approach to considering the needs
and interests of the natural world, the man-made world and the social environmem
Is essential in implementing an environme111al management programme.
1.8
Principles of environmental management and environmental costs
Any economy needs resources in order to be sustainable. Such resources are assets
that are used to produce goods and render services to meet tl1e needs and wants of
humans. As tllese resources are scarce (limited amounts are available) tlley need to
be properly managed in order ro fulfil tlte wants and needs of sociery, but also in
such a way as to ensure tllat future generations will also be able to use them.
Common goods comprise all resources mat are found in nature such as land.
water, plants, animals and air. In many instances humans do not pay for tllese
resources; therefore, nature can be used and misused for economic and/or social
reasons without remuneration. Humans are t..iusing irreparable damage to natural
resources by irresponsibly using too many resources and polluting resources.
Population gm,vth, pressure on water supplies and an ever-increasing demand for
energy all lead to global environmental issues.
1.8.1
Principles of environmental monogrment
Specific principles guid.e and direct tlle development and imp lementation of an
environmenta l management programme. The principles cover a wide range of
clements. The following list provides a swnmary of the most significant principles:
•
Everybody has tlle right 10 an environment that is in all respects safe with
regard to health and genernl well-being.
•
Environmental conservation is tlle primary focus with an emphasis on the
prevention of pollution and, where damage bas already occurred, limiting or
reversing tlle damage, if possible.
12
One: Introduction to e_nvironmental management
•
Any organisation that implements an environmental management programme
is held responsible for all the effects of the programme for as long as the
programme runs. Such 'cradle to grave· responsibility goes hand in hand
with the rule that the ·polluter pays' for all adver..e effects that may flow
from the programme of such a polluter (these two concepts will be described
in more detail in chapter 11 ).
•
The responsibi.lities for conservation and for the prevention of pollution
diJTer between developed and developing countries. Developed countries
contribute more to global environmental degradation as a result of
industrialisation.
•
The main focus of all environmental management is to serve all humans, as
well as lheir values and needs, equitably.
•
The outcomes and developments ofenvironmemal management must he
socially, environmentally and economically sustainable, wilh due reference to
the co nse.r vation of ecosystems, prevention of pollution, waste management,
prevention of disturbance to landscapes, the use and exploitation of nonrenewable resources and protection of the environmental dgbts of humans.
•
Environmental education, sharing knowledge and experience, as well as
raising environmental awareness and other appropriate me-.tns must be used
to advance cornmuru ty well-being.
•
All deds.ions concerning environmental management must be open and
transparent. All parties who have an interest in or who may be affected by
an environmental programme must be duly consulted.
•
Environmental managers must fully recognise and in1plen1ent an integrative
approach, acknowledging tbat all lhe clements of the environment are
reciprocally linked and imegrated.
•
Environmental policies, legislation and action with regard to environmental
management must be harmonised and co-ordinated via intergovernmental
co-operation, in accordance with local, national and international
requirements and standards.
1.8.2
Environmental casts
Environmental costs comprise a wide range of environmental management
activities. Such costs range from cleaning up land that has been contaminated
to installing solar power to supply energy lo a business. TI1ere are four
environmenta l costs:
•
Costs that a.re not directly or legally the responsibility of the business. Such
costs include environmental impacts due to, for example, carbon dioxide
emissions from burning coal in a steam engine when delivering goods
10 ind~-i:ry.
13
Environmental Manageme_nt - A business management approach
•
•
•
Costs due Lo compliance with environmental legislative requirements. TI1ese
include costs for waste disposal, costs assodated w.ilh pollution prevention
and fines for non-<:ompliance.
Costs related 10 1lte implemen1ation of environmental measures. Costs related
to innovation 10 produce and market green products are included in Lhe costs
related 10 environmental measures.
All co~-is Lha1 are related Lo environmental management in a business. These
include costs for water, energy, rue! and raw materials. By reducing these
costs owing 10 a reduction in usage, businesses often also reduce their impact
on the environment.
1.9
Environmental management strategies
Implementing environmental management occurs with full recognjtion of three
specific strategies, outlined below.
1.9.1
Outside- in strotegy
Factors external 10 an orgarusation affect Lhe implementation or an environmental
plan. This requires that an organisation dearly formulate a strategy to accommodate
such factors and tl1e effects iliey could have on the internal operations or the
organisation. Specific issues need 10 be considered in the outside-in strategy:
•
•
•
The nature and quality or the competition offered by external compe1itors
need 10 be identified and analysed in the context or an organisation's own
strategies and activities aimed al ac.Weving Its environmental objectives
and targets.
A thorough survey needs to be conducted in order 10 identify the total
number or competitors and the nature or the opposition that they offer;
this gives an idea of numbers, size, markets and market positions. All of
these issues need io be fully considered when drawing up an environmental
management strategy.
An analysis or the nature and cl!aracterislics or products and types of
markets must be carried out in order for an organjsation to develop a
competitive strategy for its own products and to achieve a competitive edge
in Lhe market place. Issues that are orimponance in this regard are mass,
fragmented or segmented markers, or local, regional, national or global
markets, e1c.
Performing an outside-in strategy will enable an organisation 10 counteract ou1sidein effects on the developmen1 and implemenla1fon of its own environmental
management plalL
14
One: Introduction to environmental management
1.9.2
Inside-in strotegy
Developing a competitive strategy requires Ullll an organisation determine the
availability of s1afJ, skills, resources and appropriate organisational arrangements.
An audit on finandal, tangible and intangible assets needs to be conducted. lssues
to be clarified are staff expertise and know-how, patents, bull dings, equipment and
more, with a view to ascertain and define firm-specific advantages. The need for and
nature of co-ordination on an internal basis, as well as with complementary external
resources, has to be established in order to design effective vertical integration In
operation processes. An inside-in strategy also applies to an organisation which
has branches at different locations.
Clarity on an inside-in strategy leads to efficiency in tackling environmental
management issues at various levels and locations, if applicable, within an
organisation.
1.9.3
Inside-out strotegy
Titis strategy depicts Ute structure and functioning of the external networks within
which an organisation operates. The inside-out strategy clarifies the position the
organisation occupies and the influences it exercises within networks. Interaction
within a network focuses on the allocation of values and on exchanging goods,
technology and capital. The strength of an inside-out strategy sets the need for
and emphasises external dependency and bargaining relations in order to enhance
competition in general. The potential of control over product chains, which
influence the expansion of environmental practices, flows from dependency
relations. The effectiveness of ao inside-out strategy, in which the strength of
internal characleristics is mobilised, plays an important role in achieving core
positions to influence the effectiveness of integrated environmental managemenL
It is therefore clear that an organisation has to develop these three environmental
strategies to ensure that it focuses on the fundamenta l issues tha t determine the
success of Its environmenia l management plan.
1.1 o End resul t - the impact of human activity
Humans cannot be separated from the environment; they live in the environment,
utilise natural resources and cause most of the environmental issues. Owing to their
inconsistency, humans have a tendency to misuse limited natural resources. Human
impacts on natural resources [the environmenr) include two key factors:
•
•
TI1e number of people using Ute natural resources
The rate at which the natural resources are used.
15
Environmental Manageme_nt - A business management approach
Human activities impacting on the environment i.nclude the following:
•
Urba11isario11: Large areas of nature arc utilised for urban areas - think of big
cities such as Johannesburg, Pretoria and Cape Town. Such urban areas use
vast amounts of natural resources and in the process generate vast amounts
of waste. People usually bave a Limited kn.o w ledge of environmental issues
and their impact.
•
Economic activities: All economic sectors have an impact on the
environment - unfonunately mostJy negative. Such sectors include mining,
retail, manufacturing, communication and tourism.
•
Public sector: The government, both national and local, co ntributes 10
pollution. Population data should form a critical part when planning for
development as population growth leads lo an increase in environmental
impact. Furlhemtore, people should be involved (through public participation,
etc) and empowered in environmental management. Legislation with
regard to environmental issues should be all encompassing and should be
enforced. Environmen1al management should be a priority with government:
nationalJy as well as locally.
1.11
Conclusion
This cliapter indicates that environmental management has a wide field of
operation. It includes a spectrum of planning and activities that focuses on
protecting the human environment from adverse effects tha t could flow from
natural happenings and in particular from human endeavours and activities. It
is quite clear that environmental management has a significant role to play in
promoting environmental conservation, thereby preventing irreparable damage to
the environment.
Review questions
I.
What would you include in your definition of environmental
management? List the main elements.
2.
In what ways are environmental management and business management
alike?
3.
List the possible members of a CFT for environmental management.
4.
Explain bow environmental management emerged.
5.
Describe the components of an environmental management programme.
16
One: Introduction to e_nvironmental management
6.
Describe the strategies of an environmental management programme.
7.
Ust 10 pdndples or environmental management~ explain only five.
8.
Ust the various environmental costs which may be inctim.'cl
9.
Briefly explain the impact of human activity on the e.11vironmenL
IO. How does corporate social responsibility tie in with environmental
management?
References
Constitution of the Republic of South Africa, 1996. Pretoria: Government Primer.
Deming, WE. 1982. Quality, productivity, a.11d competitive position. Cambridge,
Massachusetts: MIT Press.
Environmental legislation and Policies. 2015. Available: bttp://www.ru.ac.za/
environment/resources/envirolegislarion/. (Accessed 11 March 2015].
Goetsch, DL l't Davis. SB. 2001. ISO environmental management New Jersey:
Prentice Hall.
loDSA. Institute of Directors in Southern Africa. 2009. Klng Report on Corporate
Governance for South Africa. Sandton: loDSA.
ISO. Cntemational Organization for Sta.11dardization. 2009. Environmental manage
ment: The ISO 14000 family of international standards. Available: http://www.
iso.org/iso/theiso I4000family2009 .pdf. (Accessed 18 November 2014].
ISO. International Organization for Standardization. 2014. ISO 14000 - Environ
mental managemenLAvailable: www.iso.org/iso/iso 14000. (Accessed 18
November 2014).
Kolk, A. 2000. Economics of environmental management. London: Pearson
Education.
Kruger, LP l't Steenkamp, RJ. 2008. Basic OPQ-M principles for operations. project
and quality management. Menlo Park: Red Pepper Books.
NEMA. NatiooalEnvironmental ManagemenlAct 107 of 1998. Pretoria: Government
Printer.
Robbi.11S, SP. 2001. Organizational behaviour. New Jersey: Prentice Hall.
SABS. South African Bu.reau of Standards. 2009: SANS 14001:2005. Pretoria: SABS
Standards Division.
Smit. SJ. 2012. Introduction 10 health and safety management: Course in the
f0.11damentals of occupational health and safety management. Pretoria:
Foundation for Professional Development.
17
Environmental Management - A business management approach
Smit, SJ ft Este.dmyzen. E. 2014. The basics of safety hazards and the origins of
safety risk. Pretoria: Business PrinL
Stranks, J. 2012. Health and safety at work: An essential guide for managers.
London: Kogan Page.
Suydam. J. 201 I. Introduction to business management. In Strydom, J (ed].
Principles of business management. Oxford : Oxford University Press.
Thompson, AA, Strickland III, AJ Et Gamble, JE. 2005. Crafting and executing
strategy: A quest for competitive advantage - Concepts and cases. Boston:
McGraw-Hill/Irwin.
Valsamakis, AC Vivian. RW Et Du Toit., GS. 1992. The theory and principles of risk
management. Durban: Bunerworths.
18
Learning Outcomes
After studying this chapter, you should understand:
•
that people and nature are intimately connected
• why rapid human population growth is the fundamet1tal environmental Issue
• what susrainabllity is, and why we must learn to sustain our environmental
resources
•
how human beings affect the environment of the entire planet
• why urban environments need attention
• why solutions to environmental problems involve making value judgements,
based on scientific knowledge
•
what the precautionary principle Is and why it Is lmportanL
Overview of this chapter
The chapter provides a discussion on environmental science, encompassing what
environmental science entails., its scope and the major themes of environmental
science. It further creates the connection between mankind and the environment
and the way we affect U1e surroundings. Finally, sustainability is discussed wWch
provides guidance for organisations 10 produce. distribute and strive for uslng
moft' environmentally friendly solutions.
2.1
Introduction
To ensure the earth, its environment and organlsms perfonnlng crucial processes
endure through the ages, humanity as an entity should work towards not only
protecting and preserving what is left of the environment but also combatlng
damage and destruction already caused. Environmental science is at the forefront.
undertaking a crucial role. JI is important to unde.rstand the study of humanity"s
effects on our surroundings.
Environmental Manageme_nt - A business management approach
2.2
Th e need for environmental science
Over the years, civilisation has become more and more aware of the effect il has
on the environment. What drew even more attention to this matter were major
environmental events such as oil spills, threat of extinction of fauna and flora, and
warming of the earth"s stratosphere. When environmentalism first became an issue,
many did not recognise the importance ofits protection. Others stressed l11e problem,
fighting for a resolution to whal they viewed as humani1y·s impending doom. This
gave rise to the categorisation of two distinct groups, the ·environmentalists· and
l11e ·anti-environmentalists'. As staled, environmentalists believed the world was
in peril, the extinction of many species and the human race imminent due 10 the
destruction caused by social and economic development. Anti-environmentalists
believed tha1, even if ii may have adverse effects on the environment, social and
economic progress is necessary for civilisation to prosper.
Recently tlte situation has changed, with the environment ranking among tlte
most important soda! and polltical issues around the world. Humanity is constantly
developing and inlplemenling new legal frameworks geared towards protecting
1he environment and counteracting the destruction already caused. TI1e mining
industry, for example, adheres 10 strict water use legislation ainled to protect natural
wa ter resources (National Waler Act 36 of 1998). TI1ey are further proWbited from
prospecting or mining in protected areas [National tnvironmental Management
Protected Areas Act 57 of 2003). Initiatives such as banning single-use plastics also
assist the environment on an individual level, as eve.ryone is encouraged to form
part of tlte movement.
2.3
The essence of environmental science
tnvironmen1al science studies what effect any processes, be they nalllral or
unnatural, have on tlte planet. It encompasses numerous disciplines concerned with
l11e physical, chemical and biological cl1arac1erisiics of environs. lnllially there
were just two general sub-groupings, penaining to 'lire'. ie biology. and ·earth'. ie
geology. As environmemal issues became more pressing, influencing more aspects
of nature, additional disdpllnes such as meteorology and paleodlma1ology were
also incorporated in the science. The term ·environmental science' later developed
a more precise definition, with the scientific discipline synthesising (bringing
together) tlte insights or a range of branches or science to inform and manage
contemporary environmental issues. Because the environment is forever cltanging,
1he field nr environmenlal science is always expanding. Today, environmental
science is known as an inrerdisc:iplinary academic field informed by the branches
of science shown In figure 2.1.
20
Two: Introduction to environmen tal science
Metrorology
Engineering
Figure 2.1: Branches of environmental scien~
In short. these branches can be described as:
•
Ecology: Sludying the relationship between the enviroument and organisms
living within i I.
•
Geology: studying the solid earth.
•
•
Meteorology: studying atmospheric phenomena, for example the weather.
Biology: studying living things and their processes.
•
Cheinistry: studying the composition of subSlances.
•
•
Engineering: studying the use of scientific principles 10 design and build.
Physics: studying U1e behaviours of the universe.
Together these branches study environmental problems and bu.manity's impact on
the environment.
Enviroumental science is seen as a separate and different discipline from
environmema l studies. Environmental studies focus on the relationship berween
humans and the envirorunent from a social and political perspective. Environmental
scie.nce aims not only to protect the environme.111 from further degradation but also
to undersiand the effects between the different dimensions of Ute e.11viroument.
Three main goals of enviroumenral science a.re:
•
10 learn how the natural wodd works;
•
•
understand how we as humans interact with the enviroument; and
detennine bow we can affect the environment a.nd finding ways 10 deal with
these effects.
21
Environmental Manageme_nt - A business management approach
These e.lTects humanity has on the environment can be divided into six major
Lhl'mes. Within the next section, these Lhemes will be discussed.
2.4
Major themes of environmental sciences
The major themes in whil'h environmental science can be divided are as folJows:
•
Buman population growth (the envirolllllental issue)
•
Sustainability (environmental goal)
•
A global perspective (global environmental problems require global solutions)
•
Urbanising worlds (where humanity lives or works)
•
People and nature [the history we share with nature)
•
Science and values [science can assist in solving problems).
Eal'h theme will be discussed in-depth lo clarify Lbe main issues and alms of
environmentaJ science and why continuing to develop this scientific discipline
is crucial
2.4.1
Human population growth
Human population growth is, in some important ways, the underlying issue of
1.he environment Much current environmental damage is directly or indirectly
tbe result of the very large number of people on Earth and our rate of increa.~e.
Within the final years of the 20th ceatury and in lhe 21st century the most radic-.u
increase in population occurred with far-reaching effects. Figure 2.2 illustrates the
rapid population growth since 2009 in South Africa alone. It can U1erefore only
be expected that the elTects humanity bas on its surroundings will increase at a
rapid rate.
South Africa population growth
2010
2012
figure 2.2: South Africa·s population growth
Source: Trading Economic (2019)
22
2014
2016
2018
Two: Introduction to environmen tal sdence
One aspect suffering immense eITects are the rate which nat11ral resources are
11Sed. Nat11ral resources are necessary for su rvival and encompass a va riety
of substances and energy s011rces. Nai11ral resources can be divided into two
categories: renewable reso urces and non-renewable reso11rces. Renewabl e sources
can be replenished; however, ir11Sed at a loo-rapid pace they cannot be replenished
fast enough to meet the demand. Renewable resources include wind, soil and wood.
Non-renewable resomces 11Sed rapidly are a more crucial issue as they cannot be
replenished and are becoming closer to expiration and disappearing forever. Non-
renewable resources indude minerals and crude oils.
Besides the 11Se or natural resomces for su.rvival, many tragedies have also
caused remaining resomc,e s to be contaminated or damaged because ofbumanl ty's
influence. Over U1e years, population growth has increased the degree of pollution
or the air, water resources and ground. In Sou th Africa, for example, towns
rurrounding the Orange River have been warned abou t the quality or their drinking
water as poor sanltation procedures for human waste made il unsafe. In the pas1.
ind11Strial discharge from industries such as minlng has also compromised water
resomces causing illness wiiliin the communlties.
2.4.1.1 Famine
Famlne is the phenomenon where the population exceeds its environmental
resomces. Over the years, famine has occurred in Africa for numerous reasons.
The major contributing factor is the increase in population; however, poor farrnlng
p ractices. increasing deforestation a nd soil erosion were also contn1mting factors.
The recent fami attacks in Souili Africa is cal1Se for concern and can lead lo a new
era a r faniine.
2-4.2
Sustainability and carrying capacity
Destruction to natural resources and recent famines make hu manlty ponder. Could
there be a maximum n11mber of peop le earth could SUS1ain? This is seen as the
sustainable human carrying capacity. As discussed, humanity runs the risk of using
resources faster than they can be replenished. It is crucial to start 11Siag these
resources s11Sta inably to continue 10 reap benefits or these life-s11Stainiag assets
for generations io come. The question is what quality plane t we will leave 10 o ur
clilldren. Living Sl1Siainably means many things, often causing confusion. In terms
of the environment, S11Staina bility has two a inls:
•
Sustainability and resources, whicli includes, for example, marine life, timber
and crude oils.
•
Sustainability and ecosystenis, referring to the use of resources.
23
Environmental Manageme_nt - A business management approach
Sustainability experts and economists established a "planning time horizon'. Titis
refers to Lhe suscainability of an ecosystem, explaining LhaL if resources ca n be
harvested at a certain rate and can be harvested at Lhe same rate for a specified
time into Lhe future, this resource is used sustainably. 11 is, however. important to
lake into consideration that ecosystems and species are constantly changing and
the formula or definition for sustainability used should be adapted accordingly.
From a sociological perspective, sustainability also refers 10 developmenLS
that do not harm the environment and are fair Lo humanity. TI1e attributes for a
sustainable economy are:
•
humanity and other living organisms Living in bannony with the natural lifesustaining ecosystems (eg air, water and land);
•
Jaws and policies providing guJdance for developmenLS tl1at pollute the
atmosphere, cause climate change or pose unacceptable risk;
•
strategies for using renewable resources ensuring Lhey will not delete or
damage the ecosystem;
•
strategies for using non-renewable resources in such a way that it does not damage
the environment and en.-rures resources remaining for future generations; and
•
creating a social, legal and polltical system that is dedicated 10 sustainability.
Society claiming that we need Lo esLabllsb a sustainable future intLicates that we
realise our current resource usage is not sustainab le. The sustainability of resourres
will depend on development of new industrial, social and environmental processes
and concepLS, achieving a paratLigm shift for running society.
2.4.2.1 Carrying capacity
The concept of carrying capaciLy relates to sustainability as iL is defined by the
maximum number ofintLividuals or species tllatcan be sustained by an environment
withoui preventing the capacity to provide sustenance for future generations.
Carrying capacity docs not refer only to human population but also to aJJ other
species with wWcb we need to share resources. Carrying capacity therefore entails
the trifecta of tile human population, other species and future geneJ:aLions.
2.4.3
A global perspective
Because humanity"s effecLS on Ille environment are willlessed worldwide, a global
perspective of environmental awareness and management of euvironmental issues
has been adopted. The e:ITects on tile environment is not only thaL of humanity
today. but Lhe hundreds of y= civillsation consumed resources and caused
environmental destruction wiLhouL reallsing they are putting Lhe future of eanh at
risk.. With environmental destruction continuing daily, future generations will need
to take furtller steps not only to prevent additional destruction but also to overturn
the damage already done.
24
Two: Introduction to environmental stience
2.4.4
An urban world
Because of the improvements in technology and the rapid growth of the human
population, more and more people are either working or Living in an urban
environmen1. The effects on tbe environment are therefore more and more due 10
urban life.
People started moving away from farms into cities due to greater economic
prospects. As cities and towns gel larger il often leads to destruction of agricultural
land, river plains or coastal areas, risking vital habitats for other species. To alJow
for a greater population of people we cut down forests and cover agriculture soil
with pavement and buildings.
In lhe past, focus was placed on non-urban issues. The focus bas. however.
shifted from, for example, endangered species. deforestation and natural resources
to include urban environmental issues.
2.4.5
People and nature
From tbe knowledge we have about environmental issues today, humanity can take
one of two approaches:
•
•
Identify bwnanity's actio!L~ that cause environmental problen1s and stop
these actions, no matter the consequences. This could have a major impact
on the economic, teclmological and sociological environment as il will lead
10 the shut-down of factories. industrial mining and other major industries.
Analyse environmental controversy scientifically leading lo cooperative
problem-solving. This approach acknowledges a connection between
humanity and the environment and aims 10 achieve long-lasting
environmental sustainability.
Humanity's dependency on the environment means the two will always be
integrated. We rely on the environment primarily for material resources (wood,
water, oxygen) , secondarily for service functions (soil needed for agriculture, the
ozone layer), and finally for needs of our inner selves (beauty of and recreation
within narure).
The environment is further integrated with humaniiy due 10 the elJect we
have on it Humanity has since the beginning changed the environment, in some
instances considering it ta be ·natural change· [cutting down trees and planting
crops). Environmental science now shows how we are connected and the ways
in which this connection is beneficial or destructive 10 both entities. TI1e growing
awareness of the enviro11men1's importance is creating a more earth-centred
generation, aiming lo spend more lime in nature for recreation purposes and
celebrating the union with nature.
Sustainability is therefore a ploy to enable humanity and the environment to
persist together.
25
Environmental Manageme_nt - A business management approach
2.4.6
Science and values
Solving environmental issues will rtly on both science and values. Humanity needs
to idemify wbat the environment should be. Science allows us to know what is
possible by a nalysing scientific data and interpreting the implications of the data.
Critical scientific thinking provides conclusion, generalisations, and scientific laws
and theories. The knowledge and beliefs we have about environmental issues are
comprised of the results or critical scientific thinking.
Once science identifies bumanity·s option, how we select depends on our values.
One example of a value judgement orinunanity on environmental issues is the use
of plastic grocery bags for convenlence (plastic being a major cause of pollution)
as opposed to reusable material bags.
Considering the option selected and values or society, goals are developed to be
attained. Once again, this step requires science and knowledge to ensure sus1ainable
processes and practices are used.
Although science is at the forefront in determining with absolute certainty how
a human activity could lead to environmemal problems, it is still subject 10 analysis
and interpretation of data and the testing of hypotheses. It can therefore take some
time to detennine. This led the Rio Earth Summit on Sustainable Development
(1992] to develop what is known as the precautionary principle.
2.4.6.1 Precautionary principle
The precautionary principle states that when a threat of serious environmental
damage a.rises, immediate precautionary steps should be taken to prevent it. This
should take precedence over waiting for scientific proof that environmental damage
will occur.
The precautionary principle involves critical thinking on the following
environmental concerns:
•
Manufacturing and use of chemicals.
•
Agricultural use of pesticides and herbicides.
•
The use of fossil fuels and nuclear energy.
•
Conversion of land (from rural to urban).
•
Management of wildlife, fisheries and forests.
The principle acknowledges the need for scientific evidence, a.ad takes into account
all available knowledge to draw on and provide provisioual conclusions. The
principle further encourages the continuing of scientific investigations in order to
broaden U1e current knowledge field.
Tue precautionary principle is difficult to apply. but necessitates humanity to
predict consequences of bumaa activities before they OC{_-Ur. It is therefore seen as a
proactive tool (see trouble coating], instead of reactive (reacting after trouble arises).
26
Two: Introduction to environmenta l stience
Science further suggests eight justifications encompassed in rhe 'value of
Lhc environment':
•
Utilitarian j11srijicatio11 - the environment is valuable because of its benefits
to individual economies or is necessary for human survival.
Ecological j11stijicario11 - the ecosystem is valuable for survival of species
beneficial to us.
Aesthetic justificatio11 - the environment is valuable because of its beauty.
Ri-creatio11al jusr·ijicario11 - rhe environment is valuable because of our desire
to enjoy iL
Juspiratio11al justificatia11 - the environment is valuable because of its
benefits to the human spiriL
Creati11ejustificatio11 - the environment is valuable because it aids human
creativity.
Moral justificatia11 - the environment is valuable because it has the cight to
exist and it remains humanity's moral obligation to allow it to persist.
Culwral justificarion - different cultures have different and similar values
regarding the environmenL Although all cultures may value nature, religious
beliefs may influence how resources are consumed.
•
•
•
•
•
•
•
2.5
Conclusion
This chapter iakes an in-depth look. al environmental science, whal ii is and what ii
encompasses. We discovered that environmental science considers seven branches
of science to inform about the changes in the relationships between humanity
and the environmen1. Environmental science further has six major themes, which
were identified and discussed. The main learning point clear from this discussion
is that people and nature are intertwined and are always affecting each other. It is
crucial to identify new sustainable processes and practices to ensure the survival
of the human race and ample natural resources for the generations ta come.
Different justifications can de1eonine why people value the environment [the use
of the environmen1); however, no matler what tJ1e justification it is important 10
protect It.
Review questions
I.
Which of the following are globa l environmenta l problems? Why?
a)
Growth of the human population.
b)
furbish's lousewort, a small flowering plant found in the state of
Maine and in New Brunswick. Canada. It is so rare that it has been
s~en by Few people and is considered endangered.
27
Environmental Manageme_nt - A business management approach
c)
The blue whale, listed as an endangered species under the U.S.
Marine Mammal Protection Act.
d)
A cat that has air-conditioning.
e)
Polluted harbours and coastlines in major ocean pons.
2.
l:!ow could you del'ermine the carrying capacity of Earth?
J.
Jdentify and discuss the six major I.hemes of environmental science.
4.
Discuss how people and naiure are connected.
5.
Define sustainabitity and explain why it is important to sustain our
environmental resources.
References
Course Hero. n.d. Major themes of environme1110/ scie11ce. Available: bttps://www.
cou.rsehero.com/ me/ 10879893 /Majo r-Themes-or-Environmental-Science/.
(Accessed 4 June 20t9).
Encyclopaedia Britannica. 2019. Environmental science. Available: b11ps://www.
britannica.com/science/environmental-science. [Accessed 4 June 2019).
Environmental Science and ManagemcnL n.d. Unit l : Tire eartlr system and its
compo11e11ts. Available: bttps://www.soas.ac.uk/cedep- demos/OOO_PSOO_ESM_
K3736-Demo/unitl/page_09.htm. (Accessed 4 June 2019).
Environmental science.org. 2019. What is e11viro11me111a/ science? Available:
hrtps://www.environmentaJsdeoce.org/. (Accessed 4 June 2019).
Leam.org. 2019. Wlrat is enviro11me11ta/ scie11ce? Available: https://leam.org/
artides/Wbat_is_Environmental_Sdence.html. [Accessed 4 June 2019).
Study.com. 2019. Whal is e11vira11111e11tal scie11ce: Defi11itio11 and scape of field?
Available: bttps://study.com/academy/lesson/what-is-environmental-sdeocedefmition-and-scope- or-tl1c- f1eld.btml. [Accessed 4 June 2019).
Trading Economics. 2019. Sour/1 Africa 11opulario11. Available: btrps://
trndingeconomics.com/soutb-africa/population. [Accessed 4 June 2019).
28
i--...,chapter Three
1
dimensloh10fi
envir~nme~tal
.::_-,,:;
---.r
,,r ,#~•
I Aucamp, r Relief. N K,ng
Learning Outcomes
After studying this chapter, you should be able to:
• explain what (he 2030 Agenda for Sus1alnable Development and the i7SDGs entail
• describe the role of the LINEA and UNEA2
• describe the concept of sustainable development
• explain what the concept of health en1ails
• outline 1.heimportlnceofwell-being and describe the related strategies and dimenslons
• explain what quality of life enlllils
• describe social Impacts in terms of environmental management
• explain what social change entails
• outline the concept and role of human rights
• describe environmenllll, social and othl'r related justices
• explicate publir participation and stakeholder e_ngagemenr
• summarise! the various global initiatives that underpin the so<!ial dimension of
environmental management
• describe the South African leglslatlon that is applicable to the social dimension
of environmental management
• explicate the three approaches alming to deal with the interface between the
social and environmental dimensions
• describe what corporate social r6ponslb11ity [CSR) entails
•
discLISS the principles and core subjects for soeial responsibility
•
provide a detailed description of the various project-level instruments
• describe the strategic-level instruments aimed at proactively informing policy,
plans and programmes
• explain the UNEA2 report framework of policy in1rrventions.
Overvi ew of this chapter
This chapter provides an overview of current thinking aboul the social dimensions
wiLWn an environmental management contexL You will learn basic definltions
and !ind more information on global and loca l policy as well as legal conrext.
Environmental Management - A business management approach
This chapter looks at policy and legal mandates underpinning the social dimension
as well as environmental management approaches and instruments. Fi.nally, this
chapte:rcondudes by investigating the way forward for environmental manage:menL
3.1
Introduction
Worldwide, humanity is increasingly recognising ils dependence on a healthy
planet 10 underpin and sustain bu.man beings· social well-being and ultimately,
survival. In recent years, a plethora of international agencies has been liighligbtiog
our dependence on healthy ecosystems, healthy oceans and dean air and water
as prerequisites for healthy human lives that underpin social developmem. The
2030 Agenda for Susta inable Development, encompassing the 17 Sustainable
Development Goals (SDGs) agreed on by the United Nations General Assembly in
September 2015, bas brougl11 all of this understanding together, emphasising the
critical links between development. global to local environmental health. human
well-being and the foll enjoyment of a wide range of human rights, including the
rights 10 life, bealth, food, waler and sanitation. However, recent assessments of the
stale of planetary health, such as the Millennium Assessment {Millennium Ecosystem
Assessment 2001) and the work of the Global Footprint Network (Global Footprint
Network n.d.), show that we are 'more in the red than in the black' in terms of our
natural capital, and that tbis accumulating eco logical debt is undermining our ability
lo achieve further improvements in human well-being whilst increasing the risks
of extreme disaster events with significam negative impacts on developmem gains
and built infrastructure, as well as loss of human life (see, for example, UNFCCC n.d.).
ln order 10 bener address these challenges, the United Nations Environment
Assembly (UNEA), commissioned a multi-agent)' report for their second assembly
(lJNEA2) in May 2016 entitled H~a/1/ry Enuiro11111e111, Healthy People. detailing how a
poor quality and deteriorating environment and compromised ecosystem health are
undertnining the quality oflife and increasingly proving fatal to many people (UNEP
2016a). The latest figures show that in 2012, an estintated 12.6 million premature
deaths globally, some 23% or the roral, were directly attrihucable to an unhealthy
environment- the poor quality of the air that we breathe, the food we eat, the waler
we drink. and the continued degradation of the eco~ystems which sustain us.
Globally, a shift in balance away from infectious, parasitic and nulritional
diseases, owing largely to a greater proportion of humanity having access to clean
water and sanitation and iotproved nutrition, to non-commwticable diseases is
evident (although il should be noted that Ibis is scarring 10 swing back again as the
impacts or climate change, in particular extreme events such as floods impa~"ting
infrastructure, increases). The growing prevalence or non-communicable diseases
is attributable 10 increasing exposure to industrial chemicals, poor air qualily and
unheaJU1y lifestyles. While the environmental effects on health represent 231\b of
premature deaths globally, the figure increases to 261\b for children under 5 yeais
old and to 25<\b for adults between the ages of 50 and 75, indicating that the burden
30
Three: The socia l dimension of environmental management
is greater on more vulnerable groups. Sub-Saharan Africa is the only region where
the burden of infectious, parasitic and nutritional diseases continues to be greater
than that of non-cornmunicahle diseases, but the lauer are on the rise, increasingly
exposing this region to both. Importantly, the repon sta tes that these estimates,
however, do not yet account for the effects of emerging global environmental
changes such as climate change and makes it clear that the combined effects of
climate change, biodiversity loss, accumulating chemicals and heavy metals and Ure
ongoing degradation of the natural systems that suppon life on Earth risk reversing
decades of progress in human heal tit and developmenL
Sustainable development has become an aspiration worldwide. as reflected
in the 2015 Millennium Development Goals and subsequent 2030 Sustainable
Development Goals agreed by the United Natio!L~ General Assembly. Tite balance
between a sustainable future and present needs rests on the nexus between 'three
pillars': social development. economic development and environmental protection
(Aucamp et al 20JJ). These a.re the basis of the United Nations resolution entitled
The Future We Want [UN General Assembly 2012) wherein ii states rhe following:
We recognise that people. are at the centre of sustainable development and
in this regard we strive for a world that is just. equitable and inclusive,
and we commh to work together io promote sustained and inclusive
economic growth, social development and environmental protection and
there.by benefit all.
Environmental management is essentially about finding ways 10 manage and
influence human behaviour towards more sustainable ot11comes. This understanding
implies that the definition of the term 'environment' should be considered in its
broadest sense to include the so-called social dintensiOIL The latter understanding
is, especially in the South African comext, supported and entrenched in policy
and legislation. Experience in practice indicates that social considerations in the
environmental sector have been recognised as increasingly imponant in the past
rew decades. This can be ascribed to 1.be rising awareness in communities about
their rights; local impacts of environmental degradation such as deteriorating air
and water quality; and the global importance given to human rigltts, wltb social and
environmental r:igltts being directly relevant io the environmental management field.
This chapter aims to provide an overview of current think:Jng about the social
dimension within an environment.al management context. To achieve this we
deal with basic definitions, Ute global and local policy and legal context as well
as provide an introduction to key environmental management approaches and
instruments that speak directly to the social dimeasiorL We do not consider this
cltapter to be exhall!,iive but rather as one tltat serves a~ a reference point for
researchers and scholars engaging with this topic, particularly within the South
African contexL There are many international sources that introduce and discuss
the social dimension of environmental management. However. this cltapler provides
a unique contribution by introducing the tJreme from a distinctly South African
31
Three: The social dimension of environmental management
is greater on more vul11erable groups. Sub-Saharan Africa is the only region where
Lhe burden of infectious, parasitic and nurriLional diseases continues to be greater
than that of non-communicable diseases, but the laner are on the rise, increasingly
exposing this region lo both. Importantly, the repon sta tes that these estimates,
however, do not yet account for the effects of emerging global environmental
changes such as climate change and makes it clear that the combined effects of
climate change, biodiversity Joss, accumulating chemicals and heavy metals and the
ongoing degradation of the natural sys1ems that suppon life on Eanh risk reversing
decades or progress in human health and developmmi.
Sustainable development bas become an aspiration worldwide, as reflected
in the 2015 Millennium Development Goals and subsequent 2030 Sus1ainable
Development Goals agreed by the Uolll'd Nations General Assembly. TI1e balance
between a sustainable future and present needs rests on the nexus between "three
pillars': social development, economic development and environmental protection
(Aucamp et al 201I). These are the basis of the Uniied Nations resolution entitled
The Future We Wm1I (UN General Assembly 2012) wherein it states the following:
We recognise that people are at U1e centre of sus1ainable developmen1 and
in this regard we strive for a world that is just, equitable and inclusive,
and we commit to work 1ogether to promote sustained and inclusive
economic growth, social development and environmental pro1ection and
thereby benefit all.
Environmen1al management is essentially about finding ways to manage and
influence human behaviour towards more sustainable ouicomes. This understanding
implies that the definition of the term 'environmeni' should be considered in its
broades1 sense to include the so-called social dimension. The latter understanding
is, especially in the South Af-rican cou1exi. supported and entrenched in policy
and legislation. Experience in practice indicates Lhat social considerations in the
environmenral sec1or have been recognised as increasingly important in the past
Few decades. This can be ascribed 10 the rising awareness in communities about
their .rights; local impacts of environmental degrndatioa such as deteriorating air
and water quality; and the global importance given to human rights, with social and
environmenlal rights being directly relevant to the environmental management field.
This cltapter aims Lo provide an overview of current thinking about L11e social
dimension within an environmental management contexL To achieve this we
deal w.ith basic definitions, the global and local policy and legal context as well
as provide an introduction 10 key environmental management approaches and
instruments that speak directly to the social dimension. We do not consider this
chapter 10 be exhausUve but rather as one that serves as a reference point for
researchers and scholars engaging wiU1 this 1opic, particularly within the South
African context. There are many international sources that introduce and discuss
1be social dimension of environmenta l managemeni. However, this chap1er provides
a unique contribution by introducing the theme from a distinctly South African
31
Environmental Management - A business management approach
perspedive. Al Lhis early stage we highlight Lhat, although we focus on the social
dimension, we are noi arguing for a silo-based approach (ie dealing with social
Issues iu isolation) but rather a systems and iutegrated approach which recognises
Lhe iutegrated and iuterrclated nature of socio-et.'OlogicaJ systems. We truSt that
Lhis will become clear iu the foUowing sections.
3.2
Understanding key concepts
The first step when engaging with the literature on the social dimension oF
environmema l management is to clarify different key concepts so as to introduce
a common language. Key concepts are borrowed from various disciplines, and
might be interpreted differemly, depending on Lhe context Moreover, Lhere is a
Wgh degree of overlap and imerrelalionship between some of these concepts, for
example "health' versus "welJ-beiug' versus 'quality of life'. Therefore, allhough Lhe
following sections provide an introduction, readers will have to co111ex1ualise and
operationallse these concepts further for dilTeren1 situations.
3.2. 1
Health
Health is a Slate of compll'le physical, mental and social well-being and not merely
the absence of disease or Infirmity (WHO 1946). Health is a complex concept and is
influenced by physical, social, economic and environmental factors (Solar a Irwin
2010), therefore ii is important 10 consider health in environmental managemenL
Social and environmemal iuequality contribute to heallh dispa.rity (Schulz a
Northridge 2004), for example landfill sites that are often constructed next 10 poor
and vulnerable communities. The social determinants of heaJLh refer 10 social,
economic and environmental factors Lhat influence well-being. Factors such as
the availability of medical care; environmental factors such as air pollution; and
lifestyle choices and behaviours, such as smoking, seeking or foregoing medical
care and not following treatment guidelines are often referred to as downstream
determinants of bealih. TI1ese are influenced by upstream social determinants of
health such as personal resources, for examp le education a nd income and the
social environment in which people live, work, study and engage in recreational
activities. The contextual conditions described above influence people's exposure
lo environmental risks and their personal lifestyle choices and health beltaviours,
vulnerability 10 illness, access to care, and ability Lo manage conditions al home
(Woolf a Braveman 20 11 ).
Detecminants of health are both intrinsic and extrinsic 10 human populations.
Intrinsic de1ecminants of dise-dSe are biological in nature and include aspects suth
as age, gende.r, genetic make-up and immune response. Extrinsic determinants
of disease include nutrition, poverty, vector ecology and behaviour (eg mosquito
vectors of malaria, dengue fever), and various human activities such as poorly
planned agricultural and irrigation developmem. uncontrolled urbanisation, careless
32
Three: The social dimension of environmental management
use of chemicals such as insecticides, and improper self-treatment with medications
[Ehrenberg Et Ault 2005: 119). Human activities can often exacerbate damage caused
by natural disasters such as llooding and mudslides, and climate change is already
having and will increasingly have a considerable impact on human health.
Emerging threats 10 human health and well-being are hlghlighted in a receut
UNEP report on Emerging Issues of E.nvironmental Concern, which highlights, for
example, the growing appearance of and exposure to novel zoouotic diseases as
humans push further into natural habitats through activities such as mining, and the
increasing prevalence of roxin accumulation, induding microplastics, as a health
problem in the food chain (UNEP 2016b]. Zoonotic diseases. linked to ecosystem
disruption, such as aviau influeuza, Rift Valley fever and Ebola, have become the
source of major pandemics. The outbreak of Zika is potentially exacerbated as a
result of inadequate waste collection and management-the proliferation of tyres.
plastics, cans, and other containers in which water collects and which serve as
breeding sites for the mosquito vector (Ardes aegypN1. Overall, the multi-sectoral
data analyses in this report show that a clear nexus exists between environmental
quality and human health across the spectrum of human developmenL
Data further show that air pollution is the single largest environmental risk to
human health: some 7 million people across the world die prematurely each year as a
result of everyday exposure to poor air quality, mostly in urban environs. However,
who is affected depends on exposure and occupation. The UNEP report rinds that in
some coumries, simply preparing a meal is a major risk lo health because of indoor
air pollution. with 4.3 million premature deaths attributed to household air pollution
arising from cooking with fossil fuels. Exposure is particularly hlg)1 among women
and young children, wbo spend the most time near the domestic hearth. Children,
the aged and those with low immunity are especially vulnerable. Lack of access
to clean waier and sanitation causes 58% of cases of diarrhoeal diseases in lowand middle-income countries. Unsafe water, inadequate sanitation or insufficient
hygiene result in 3,5 million premature deaths worldwide, representing 25% of ille
deaths of cllildren younger than 14. The 50 biggest active solid waste dump-sites
affect the lives of some 64 million people. Around 107 000 people die annually
from exposure to asbestos and 654 000 died from exposure to lead in 2010. Since
1.be first session of ille Conference of the Parties to the United Nations Framework
Convention on Climate Change [UNFCCC] in 1995, it is estimated that 606 000 llves
have been lost and 4.1 billion people have been injured, left homeless or in need of
emergency assistance as a result of weather-relall'd disasters.
In terms of developmeat activities, high-risk occupations include agriculture,
mining and construction- often with a relatively high proponion of children, youth,
or migrant workers, who have substantially hlgher rates of fatalities, exposure
Lo chemicals and injuries. Vulnerable groups also include tl10se living in poverty
and those at greater risk owing to certain occupations. livelihoods and locations.
Widespread land and coastal degradation greatly exacerbates tbe effects of extreme
weatl1er, destroying people's livelihoods and food security, increases risks to health
33
Environmental Management - A business management approach
and well-being, for example through contaminated water, and subsequently oflen
forces people into migration, with attendant social upheaval and conflict, rurrher
harming well-being. TI1e social and economic groups that are vulnerable to these
environmental impacts oflen also suggest an environmental injustice at play, as the
rich reap benefits from the activities that create the degradation and ii is the poor
and vulnerable groups who are most affected.
Oima te change is acknowledged as a major health risk multiplier, with cl'fects
that are expected to increasingly affect human health, including through overall
higher cemperatures inducing hea t stress, panicularly for those working outdoors
such as in Ille agricultural sector, and negative changes to land. oceans, biodiver:sity
and access to freshwater, and the increasing frequency and higher impact of
extreme events. Cautious estimates from the WorJd Healili Organization (WHO
2016) under a medium- high emissions scenario indicate that 250 000 additional
deaths could potentially occur each year between 2030 and 2050 as a result
of climate change. It may also lower the national quality of dietary intake and
worsen obesity. Environmental degradation is estimated to cause 174 to 234 times
as many premature deaths as Ille number occurring in conflicts annually. Menial
health issues also rank amongst the 10 largest non-fatal threats in most countries.
3.2.2
Well-being
Well-being can be defined as a stare of being with others tha t arises where human
needs are met, where one can act meaningfolly to pursue one's goals and where
one can enjoy a satisfactory quality of life (McGregor 2008). This definition
acknowledges that well-being is a slate ilia! human beings ex.peclence, but also
implies that a person's needs must be met, tlleir valued freedoms must be achieved
and tlley must experience a good quality of life in order to attain well-being.
Needs, f-reedoms and quality of life will diJTer according lo geographical, societal
and cultural contex.L Well-being does not only refer to basic human needs, but also
to social and psychological needs; therefore it bas an objective and a subjective
dimension. Well-being is an outcome that is constantly generated through
conscious and subconscious participation in social, political, economic and cultural
processes. People are therefore not only concerned witll Ille material aspects of their
lives. Different strategies for and visions of well- being held by different groups are
ofien incompatible (Coultliard, Johnson Et McGregor 2011 I. This makes It extremely
difficult to manage impacts related to well-being, since what one group may see
as an advantage may be a disadvantage to anotller group. Perceptions play an
important role in people's experience of well-being.
Well-being has tllree interrelated dimensions: material (wha t a person has) ;
relational (what a person does lhrougb social relationships); and subjective [how
a person thinks and feels about their lives) [Gough a McG regor 2007). Lmpacls on
the natural environment, for example air pollution, water pollution, inc.re.ase in
noise and loss of habitat, affect the well-being of communities. Sudden adverse
34
Three: The social dimension of environmental management
changes Lo the local environment can have a negative impact on subjective feelings
and emotions flllomas 2014). Physical environmental impacts can have human
rights implications; for example, access to clean water and air are seen as universal
human rights and essential to the well-being of people.
3.2.3
Quality of life
The quality of life experienced in a community can directly impact on community
member.;" sense of well-being. Quality of life and Lite ellvironmenl are intcrrelated
as people's Jives are strongly affected by the quality of L11e physical environmem
(Strcimlliene 2015: 140). The WHO (Whoqol Group 1995: 1403- 9) defines quality
of life as:
an indlvidual"s perception of their position in life in tl1e context of the
culture and value 5Ystems in wliich they live and in relation to their
goals, expectations, standards and concerns. It is a broad rang.ing concept
affected in a complex way by the person·s physical health. p5Ychologic-.tl
state, personal beliefs., social relationships and their relationship to salien1
features of their environment.
People"s perceptions of quality of life differ, and therefore both objec:,tive and subjective
indicators are used to m = quality of life. Objective indkators can be economic,
based on aspects like income, employment. access to housing; or social. based on
aspects such as infant monality. litcracy, crime rates and the quality of the enviromnenL
Subjective indicators relate 10 the life satisfaction of a person, and the pleasant and
unpleasant influences in bis/her life (0inch et al 2008). It is imponant lo consider both
objective and subjective measures when one considers quality of life. Environmental
quality can be defined as an essential pan of the broader concept of·quaJity oflife", the
basic qualities such as health and safety in combination with aspec:15 such as cosiness
and attractiveness (RIVM in Bouwman, Van Kamp Et Van Poll 2002). Any inipact on
Lhe environment can potentially inipact on the quality of life of communities.
3.2.4
Socio/ impacts
A social inipacl is someLhlng that is experienced or fell. in a perceptual or corporeal
sense at the level of an individual. social unit (family/household/community) or
community/society (Vanclay et al 2015).
Social inlpacts are cl1anges 10 one or more of the following [Vanclay 2003):
•
•
People"s way af life- how they live, work, play and interact with one another
on a day-10-day basis.
Tl,eir culture-their shared beliefs. customs, values and language or dialect.
•
Tl,eir community-its cohesion, stability. cliaracter, services and facilities.
35
Environmental Manageme_nt - A business management approach
•
TT,eir political systems-the extent to which people are able to participate in
decisions that affect their lives, the level of democratisation tha Lis taking
place, and the resources provided for this purpose.
•
TTreir e111,iro11111em- the qualliy of the air and water prople use, the
availability and quality of the food they eat, the level of hazard or risk, dust
and noise they are exposed to, the adec1uacy of sanitation, i.heir physical
safety, and their access to and control over resources.
•
TT,eir /1ea/1/1 and wel/-beillg-health is a state of complete physical, mental, social
and spiritual well-being and not merely the absence of disease or infirmity.
•
TTreir personal and property riglrrs- particularly whether people are
economically affected, or experience personal disadvantage wWch may
include a violation of their civil liberties.
•
Tlreir fears 011d aspirations-their perceptions about their safety, their fears
about the future of their community, and their aspirations for their future
and the future of their children.
Any change linked to a policy, plan, programme or project tha L affects or concerns
any impacted individual or stakeholder group can be considered a 'social impact';
therefore almost anything c-,m potentially be a social impact in so far as it is valued
by, or imponant to. a specific individual or group of people. Some have argued that
environmental impacts are invariably social impacts because people depend on the
enviromnent for their livelihoods and communities may, for example, actach a sense
of place to project siies (Ibid). The loss of cultural heritage, important habitats and/
or biodiversity can also be a social impact because people attribute various values to
these (Vanclay et al 2015). Therefore, impacts on people's health and well-being are
considered social impacts.
3.2.5
Social change
Social change is any change in social relations, and Is an ever-present phenomenon
in any society. It refers to the cha nge of mechanisms witllin the social structure
of society. characterised by changes in cultural symbols. rules of behaviour, social
organisations or value systems (E11cyc/opcrdia Brita1111ica 2017).
Social change processes are set in motion by project activities or policies. A
social change process is a discreet, observable and describable process that changes
L11e characteristics of a society, raking place regardless of the societal context
(ie independent of specific groups, religions etc). These processes may, in certain
circumstances and depending on the context, lead to the experience of social
impacts [Vanclay 2003). lf managed properly. however, these changes may not
create impacts. Whether impacts are caused will depend on the characteristics and
history of the host community, and tl1e extent of mitigation measures that are pu t
in place (ibid). Social change processes can be measured objectively, independent
of the local contex t. Examples of social change processes include migration,
36
Three: The social dimension of environmental management
availability of employment change of land use, segregation, resettlement and
tecbnologkal changes such as U1e internet and the development of mobile phones.
3.2.6
Human rights
The concept of human rights is complex and much debated. The United Nations
( 1987) provides the following general definition:
... those rights, which are inherent in our nature and without which we
cannot Live as human beings. Human rights and fundamental rreedoms
allow us to fully develop and use our human qualities, our intelligence,
our ialents and our conscience and to satisfy our spiritual and other
needs. Human rights are based on mankind's increasing demand for a life
in which tlte inherent dignity and worth of each human being will receive
respect and protectiotL
The basic understanding is tltat all human beings are entitled to human rights by
virtue of being human [Reichert 2011 ). Human rights can be divided in10 three
·generational· groups, namely: (a) civil and political rights (first generation);
(b) social, economic and cultural rights (second generation); and (c) the right 10
development, the right to peace, the right to a healthy environment and the right
to intergenerational equity (third generation) [Lombard 8: Twikirize 2014). It is
important to consider that all rights are equal and 001 one of the three groups is
more important than tlte others (Reichert 2011).
Civil and political rights can be described as the group of rights that afford
people the right to participate in political and social life. These ftrst generation rights
(ibid) are seen as constituting the core of human rights. Civil and political rights are
individual rights, and states are expected not to infringe those (Stohl Et Stab! 2010).
Social, economic and rultural rights can be seen as the group of rights which
give people access to certain basic resources, opportunities and services. These
rights include aspects such as the right to an education, work, social security, food,
an adequate standard of living, and self-determination [Ruppel 2008). These second
generation rights can be seen as group rights or collective rights, and pertain to tbe
well-being of societies (Reicl1ert 20LI). Second generation rights involve more than
just freedom, but also
'the right to participate in ihe daily life of society, sucl1 as the right to
marry and form a family' (Honey 2009). Economic ri.gh1s are defined as
'the right to participa te in an economy, as well as 10 bave basic needs met:
Cultural rights are defined as 'tbe righi to express one's cullllre, including
language, religion and patterns of social engagement' (ibid).
Third generation human rights dilTer from fust and second generation human rights
in that the realisation of these rights is not only determined by the positive and
negative duties of the state, but also by tbe behaviour of each individual (Ruppel 2008).
37
Environmental Management - A business management approach
Third generation human rights focus on the rights of humankind or the collective
humanity (Reichert 2011). 1l1ey include Lhe righr to development, the right lO peace,
the right to a healthy environmeni and the righi 10 intergenerational equity (Ruppel
2008). The promotion of third generation rights often requires in1ergovernmen1al cooperation on global issues (Relcben 2011).
With the adoption of the United Nations Guiding Pri11dp/es 011 Business mid
llunum Rights [UNGP) in 2011, the corporate responsibility to respect human rights
was confirmed. This responsibility requires that companies exercise due dlligence to
identify and addre~ any adverse human rights impads with which they are involved
(Vanclay et al 2015).
3.2.7
Environmental and social justice
Justke can be defined as 'the state of aJTairs where e-dcb individual has exact.ly those
benefits and burdens whJch are due 10 them by virtue of their personal characteristics
and circumstances· (King 2012). Environmental justice is closely rela1ed to
Lhird generation human rights, while social justice relates to second generation
human rights.
There are many definitions for environment.a l justice, a nd the term is used
across a number of discipllnes. Environmental justice can be defined as the fair
treatment and meaningful involvement of all people regardless of ethnicity, income
o r nationallty with respect to the development, implementation and enforcemen t
or environmental law. Fair treatment means that low-income and minority
groups do not bear a disproportiona1e share or negative environmemal impacrs
of government action (Bass 1998). One can distinguish between procedural justice
(the fairness of decision-making) and distributional justice (social patterning of
costs and benefits) (Walker 2010). Substantive justice concentrates on minimum
standards such as a universal right to a clean and healthy environment [Larsen,
Gunnarsson-Ostllng El Westholm 2007) and must be considered when dealing with
environmenta ljustice. Environmental injustice can be seen as an uneven distrfbution
or environmeotaJ quality between different social groups, where decreasing socioeconomic s1atus is related to an increasing burden or environmenta l hazards
(Hornberg Et Pauli 2007). Environmenta l j ustice acknowledges that some groups
wi1hJn the population face a larger risk from exposure lo environmental haz.a rds
than others (lkeme 2003).
Social justice can be described as an ideal condition in which all members or
a society have the same basic rights, protection. opportunities, obligations and
social benefits (Patel 2005). Social justice is about ensuring resources are equi1ably
distributed. Social justice is concerned with the distribution of benefits and
burdens through a society, as it results from major social institutions (King 2012).
Social justice is a moral and political concept aimed al equal rights and shared
unity. advocating for a fairer society, guaranteed by the redistribution of wealth
and understanding its continuous sta re of injustice (Balaceanu, Apostol Et Penu,
38
Three: The socia l dimension of environmental management
2012). Social justice is based on equal rights of any person and the possibility of
all human beings, w.ilhout discrimination, 10 benefit from economic and social
progress, irrespective of political or social-economic policy.
3.2.8
Public participation and stakeholder engagement
Public participation is defined as the involvement of individuals and groups that
are positively or negatively alTected by a proposed intervention leg a project.
programme, plan or policy) ~-ubject lo a decision-making process, or are inrerested in
it (Andre el al 2006). In South Africa public participation is a srarurory requiremem
of many environmenlal Acts. The aim of this kind of public participation is to inform
the public and to aUow them to give their input on projects o r activities planned
in their area. Public participation is the only requiremen1 of the environmenial
impact assessment process for which exemption cannot be given, unless no rights
are affected by an application. This stems from the requirement in U1e National
Environmental Management Act 107 of 1998 that pea pie have a tight lo be infom1ed
about potential decisions that may a!Tect them and that they must be given an
opportunity lo influence those decisions. The term "stakeholder engagemeni' is
often used as a synonym for publlc participation, but generally refers to deeper
engagement than the statutory requirements for publlc participation.
Stakel1olders include all individuals and groups who are affected by, or can
affect, a given operation. Stakeholders consist of individuals, interest gtoups
and organisations. Stakeholder analysis is a deliberate process of identifying all
stakeholders of a project- the individuals and groups that are Likely 10 impact or
be intpacted by it-and understanding their concerns about the project and/or their
relationshlp with it (Vanclay 2003). Stakeholder analysis assists the proponent with
understanding the local cultural and political context. PubHc participation and
stakeholder engagement fonn an important pan of any environmental process, as
they are the instruments used to involve local communities in decision-making.
3.3
Policy and legal mandate underpinning the social dimension
Policy and legislation underpin various environmental management approaches
and instruments. Therefore we provide an overview of what we consider to be
key global and local poHcy and legislation underpinning the social dimension of
environmental management.
3.3.1
Global initiatives
There are various global policy initiatives that relate to and facilitate the incorporation
of social considerations in local policy and decision-making. The United Nations
(UN} is the origin of many of the sustainability initiatives and international ideals.
The UN Global Compaci is a strategic pollcy initiative fo r businesses that are
39
Environmental Management - A business management approach
commiued to aligning their operations with 10 universal principles in the areas of
human rights, labour, environment and ami-corruprion (UN 2013). The UN Global
Compact has two main objectives, which are lo mainstream the.i r 10 principles in
business activities globally, and lo catalyse actions in support of broader UN goals.
including ll1e Millennium Development and Sustainable Development Goals.
The International labour Organisation (110) was the first specialised agency in the
UN, and its main aims are to promote rights at work, encourage decent employment
opportunities, enhance social protection and reinforce discourse on work.-rclated
is.'11.les OLO n.d.). Numerous !LO conventions and standanls relate ro social justice.
3.3.1 .1 Loca l Agenda 21
Local Agenda 21 [LA2I) is the outcome ofa host ofinte.rnational policies and events
that refl ect ll1e growing importance of sustainable development. Local Agenda
21 arose out of the United Nations Conference on Environment and Development
[UNCED}-the 'Earth Summit"- held in Rio de Janeiro, Brazil, in 1992, and is the process
used around the world to translate Agenda 21 into actions at local level. Chapter 28
of Agenda 21 sets oul the importance oflocaJ authorities in the global move towards
sustainability (Urquhart Et Atk.inson 2000). At the 2012 United Nations Conference
on Sustainable Development also known as Rio+20, held in Rio de Janeiro in 2012.
U1e representatives, including South Afcica, re.aiTtrmed their commitmeoi lo Agenda
21 [UN 2012).
LA21 is a long-term strategic process intended to help local communities and
loca l councils deal with economic development and employment, environmental
protection, and equity and justice concerns. It seeks to reflect the needs, resources
and hopes of a local community. and place lhesein a global coDLexLA charactecistic
of LA2I is that a multi-sectoral integrated approach is followed, wilh the emphasis
of working through partnerships with business, labour and community groups,
facilitating a co-ordinating local authority rather than a dictating local authority.
LA21 therefore allows communities 10 rake responsibiliry for developing a vision
and strategies for improving their quality of life, in llne will1 the principles for
social development. The W/rire Paper 011 Local Govemmelll (Ministry for Provincial
AlTairs and Constitutional Development 1998) contextualised LA21 as part of a
new local government system in South Africa.
3.3.1.2 Global Reporting Init iative
There is a profusion or global initiatives aiming at assisting companies to make their
operations more sustainable.. Human rights, environmental protection and social
justice are gaining support from industry. The socia l agenda fonns an important
part of this trend.
The Global Reporting Initiative (GRJ) is a leading organisation in Uie sustainabiliry
fteld that promotes sustainability reporting as a way for companies to become
more sustainable and contribute to sustainable development. Companies publish
40
Three: The social dimension of environmental management
sustainability repons on the economic, social and environmental impacts of 1.helr
everyday aCLivities, their va lues and governance model, and the link between Lbelr
strategy and Lbelr commitment to sustainable development {Global Reporting
Initiative n.d.J. The GRl has strategic pannerships wil.b I.be United Nations
Environment Programme, tl1e United Nations Global CompaCL, the Organisation for
Economic Co-operation and Development and the International Organisation for
Standardisation, amongst others. The social category relates to I.be impact of the
company on Lite social systems in which it operates. Tite social category consists
or rour subcategories, namely labour practices and decent work; human rights;
society; and product responsibility. Each of the ca tegories Is unpacked by using a
number of aspects that should be considered.
3.3.1.3 Lender requirements
Many of I.he multilateral funding agencies, such as I.be World Bank, have social
standards that they must uphold. The most frequently used in the Environmental
Impact Assessment (BAJ industry are I.he principles of I.be lniemational Finance
Corporation (lFC) (lFC 2012). The lFC is a member of the World Bank group, and
as a part of their sustainability framework I.bey created performance standards on
environmental and social sustainability. The standards specifically relevant to the
social environment are the following:
•
Performance Standard 1: Assessment and Management of Environmental and
Social Risks and Impacts.
•
Performance Standard 2: Labour and Working Conditions.
•
Performance Standard 4: Community Health, Safety, and Security.
•
Performance Standard 5: Land Acquisition and Involuntary ResettlemenL
•
Performance Standard 7: Indigenous Peoples.
•
Performance Standard 8: Cultural Heritage.
Issues such as gender, climate change, water and human rights are addressed across
the standards. A guidance note accompanies ead1 standard (ibid). Environmental
and social risks and impacts must be managed by using an environmental and
social management system. The standard applies to all I.he activities fonded by the
IFC for I.he duration of I.be loan period. A number of private banks adopted most
of I.be lFC standards in an initiative known as I.he Equator Principles (Esteves,
Franks a Vanclay 20l2). Other international standards and guidelines include
indusily standards such as the lnte_marional Counsel on Mining and Meta ls and
the International Petroleum Industry Environmental Conservation Association,
and individual company standards like the Socio-economic Assessment Toolbox
from Anglo American (ibid). In summary, a number or national and international
standards relevant to the social environment exisL The aim of all I.he standards is
to improve I.be weJJ-being or affected people, therefore it can be assumed I.bat I.bey
4-1
Environmental Management - A business management approach
Favour social development outcomes, but it is debatable as to how well they are
utilised, measured and achieve sta ted outcomes.
3.3.2
The South African context
The Constitution of lbe Republic of South Africa, 1996 states that reasonable
legislative measures must be used to secure ecologically sustainable development
and use of natural resources, while promoting justifiable economic and social
development. IL therefore recognises that in order to achieve sustainable
development, the social and economic environment should also be considered.
In this section we provide a summary or relevant South African environmental
legislation that also addresses social dimensions of U1e environment from a rightsbased perspective.
It is worth pointing out Uiat at a national scale, the environment- human health
nexus is emphasl~ed across different sectors. for example, in a rece.11I report the
Centre for Environmenta l Rights (CER 2017) quotes numerous studies revealing
the devastating impacts on air and waler quality, and as a result, on huma.11
health, of South Africa's continued use of coal as a primary energy source. In
summarisiug the various studies, the CER highlights the fiudlngs that the health
impacts of coal- fired power plants in SouU1 Africa create a substantial burden on
human healU!, leading to premature death and increased illness widely w.iiliia the
population. The total quantifiable economic cost or air pollution from coal-fired
energy generation in South Afr:ic-d is in the region of R33 billion per year, made
up of impacts in terms or early deaih, chronic bronchitis, hospital admissions for
respiratory and cardiovascular disease, and a variety of minor conditions leading
Lo restrictions on daily activity, including lost productivity. These health impacts
affect the more disadvantaged members of society the most severely, particularly
those with underlying health conditions. 1l1e repon also cites a 20 14 study on the
health impacts and social costs or Eskom's coal- fired power stations, wWch study
concluded that atmospheric emissions from those stations were then causing an
estimated 2 200 premature deaths per year, due to exposure lo fine particulate
matter. This included approximately 2 200 deaths or young children. The economic
cost 10 society was estimated at RJO billion per year, including premature deaths
from particulate matter exposure and costs from the neurotox.ic effects of mercury
on children.
3.3.2.1 The Constitution of the Republic of South Africa
The social dimensions of environmental managemen t foUow a human rightsbased approach, since development projects have the potential 10 infringe on the
rights or people. Human rights are enshrined in the Constitution of the Republic of
South Africa, 1996, which fonns Ute basis or aU the coun.t ry's legislation. Chapter
2 consists of a Bill of Rights, which explicitly spells out U!e rights of every South
African citizen. Human righ ts have played an imponant pan in attempting to
42
Three: The social dimension of environmental management
create equitable societies globally since the middle of the 20th century, therefore
Lheir inclusion in the SouU1 African Constiiution is signilicant. The human righrs
that are safeguarded by the Constitution of the Republic of South Africa, 1996 in
the Bill of Rights include:
•
•
the right to a healthy environment (s 24)
right of access to land and to security of tenure (s 25)
•
the right to adequate housing and protection against evictions and
demolitions (s 26)
•
rights of access to health care services, sufficient food and water, social
security, including social assistance, as we!J as the right not to be refused
emergency medical treatment (s 27)
•
children's rights to basic nutrition, shelter, basic health care services and
social services (s 28)
•
•
the right to education (s 29)
prisoners' rights to adequate accommodation. nutrition, reading materials
and medical treatment [s 35).
TI1e right to a protected biophysical environment, U1e promotion of social
development aud transgenerational equity is explicitly inc.luded in s 24 of the
Constitution, which states the following:
Everyone bas the right (a) to an environment that is not harmful to their health or well-being; and
(b) to have the environment protected, for the benefit of present and future
generations, through reasonable legislative and other measures that -
(i)
(ii)
prevent pollution and ecological degradation;
promote conservation; and
(iii) secure ecologically susrainable developmen t and use of natural
resou~es while promoting justiliahle economic and social
development
When considering an environment that is not harmful to peoples· health and wellbeing, it is important to reflect on the int=onnectedness of biophysical, economic
and social aspects. The impact of development on people, and the true cost of
development as we!J as the consideration of ·who pays the price?' versus ·who reaps
the benefits?', are important considerations in r.he environmental management field.
3.3.2.2 The National Environmental Management Act
The National Environmental Management Act (NEMA) 107 of 1998 stales that
the state must respect, protect, promote and fulfil the social, economic and
environmental rights of everyone and strive to meet the needs of previously
43
Environmental Management - A business management approach
disadvantaged communities. It slates furtlter lltat sustainable development requires
1.he integration of social, economic and environmental factors in ihe planning,
evaluation and implementation of decisions to ensure that development serves
present and future generations.
Chapter I of NEMA contains a list of principles and states clearly that
environmenta l management must place people and their needs al ihe forefront of
its concern, and serve their physical, psychological, developmental, cultural and
social interests. 11 stales further ihat negative impacts on the environmeui and
on people's environmenral rights musi be antitipaled and prevented, and if they
c3JIJlot be prevented, they should be minimised and remedied. 11 elaborates on Lite
equity of impacts, and ihe fact that vulnerable communities should be protected
from negative environmental impacts. It refers to ihe principle ihat everyone should
have equal access to environmental resources, benefits and services to meet tl1elr
basic human needs.
Anoiher important aspect of NEMA in ierms of ihe social dlmension is the
principle of public panlcipation as described in ch I s 4(ll. lt states ihat people
should be empowered to participate in ihe environmental governance processes,
and that thelr capacity to do so should be developed if it does not exisL All decisions
regarding the environment should take the needs, interests and values of ihe public
into account, including traditional and ordinary knowledge (NEMA. 1998). There
are also specific environmental management Acts that Fall under NEMA, such as the
National Environmental Management: Air Quality Act (NEMAQA) 39 of 2004 and
the Nationa l Environmental Management: Waste Act (NEMWA) 59 of 2008. These
Acts require similar public participation processes to NEMA and the principles of
NEMA also apply to tltem [Department of Environmental Affairs and Development
Planning 2010).
Chapter 6 of NEMA elaborates on tbe publlc participation requirements.
Thls was supplemented by EJA regulations that provide requiremerus for public
participation, lite minimunt legal requlrements for public participation processes,
the generic steps of a public participation process, requirements for planning a
public participation process and a description of the roles and responsibilities of
the various role players. A compulsory public participation guideline complements
1.bese requirements.
The principles of NEMA in ch I s 4[b) declare further that community well-belng
and empowerment must be promoted through environmental education, lite raising
or environmental awareness, sharing of environmental knowledge and experience,
and any other appropriate means. They state that lite social. environmental and
economic impacts of activities, .including disadvantages and benefits., must be
considered, assessed and evaluated, and decisions taken must be appropriate given
1.be assessment and eva luation. NEMA recognises tbai 1.be environment is held
in public trust for the people. and therefore tbe beneficial use of environmental
resources must serve the people's interest and protect the environment as the
people's common heritage.
44
Three: The social dimension of environmental management
3.3.2.3 The National Water Act
Oiapter I of the National Water Act (NWA) 36 of 1998 states that Su5tainability
and equity are identified as central guiding principles in the protection, use,
development, conservation, management and control of wa ter resources. It affirms
that the guiding principles recognise tbe basic human needs of present and future
generations, and the need to promote social and economic development using
water. Chapter 2 of ihe NWA states that U1e purpose of tbe Acl is, amongst others,
to ensure chat everyone bas equitable access to water, and that the results of past
racial and gender discrimination are redressed. IL aims 10 promote the efficient,
sustainable and beneficial use of water in the public interest, and ln facilitate social
and economic development
The NWA promoies the establishment of suitable institutions 10 achieve its
purpose and aims to ensure that these institutions have appropriate representation
with regards to race, community and gender. These institutions are called Water
Users Associations and Catchment Management Agencies, where members of the
public can participate in the management of water resources that a!Tec1 them.
The NWA recognises that U1e nation's water resources are held in public trust for
the people, and therefore the sustainable, equitable and beneficial use of water
resources must serve tl1e people's interest
Tue legislation and policies for which the Departmeat of Water Affairs (DWA)
is responsible indicate the commitment of the department to public participation,
but do not prescribe the way in wWch it must be done or the extent of the public
panicipation. In 2001 the Department of Water Affairs and Forestry (as ii then
was) published a generic public participation guideline to try to address the issue
(Department of Water Affairs and Forestry 2001). The aim of the document is
lo assist U1e department with the implementation of public participation in its
activities. It provides the U1eory of public participation as well as some techniques
and best practice suggestions.
See chapters 6 and LI for more on fresh water and water quality, respectively.
3 ..2.2.4 The Mineral and Petroleum Resources Development Act
The Mineral and Petroleum Resources Development Act (MPRDA) 28 of 2002 is
the only environmental Act that explicitly requires a social development output.
in addition to a public participation process, in the form of a Social and Labour
Plan (SlP). the preamb le to the Act recognises the need 10 promote local and rural
development and the social upliftment of communities affected by mining. ln s 2 it
states U1at the objectives of the Act are, amongst otl1ers:
•
to substantially and meaningfully expand opportunities for Wstorically
disadvantaged persons, including women, to enter the mineral and petroleum
industries and to benefit from the exploitation of the nation's mineral and
petroleum resources;
45
: ]
l_j
Environmental Manageme_nt - A business management approach
•
to promote economic growth and mineral and petroleum resources
development in the Republic;
•
to promote employment and advance the social and economic welfare of aU
South Africans; and
•
to ensure that bolder.; of mining and production rights contribute towards
the socio-economic development of the areas in which they are operating.
The MPRDA acknowledges that mineral and petroleum resources are tl1e common
heritage of all the people of South Africa and that the state is the custodian thereof
for the benefit of all. It states that the Minister of Mineral Resources must ensure
the sustainable development of South Africa's mineral and petroleum resources
within a framework. of national environmental poHcy, nonns and standards while
promoting economic and social developmenL
Section 37 of the MPRDA endorses the principles set out in ch I of NEMA. ln
s 39 of the MPRDA the Act expHcitly requires a social impact assessment as wcll as
an environmental impact assessment when it states that applicants must:
... investigate, assess and evaluate the impact of his or her proposed
prospecting or mining operatio11s on(i) the environment;
(ii) the socio- economic co11ditions of any person who might be directly
affected by the prospecting or mining operation.
Section 3, ch 2, Part L of the Mineral and Petroleum Resources Development
Regulations (RepubHc of Soutl1 Africa 2004) published under the MPRDA refers to
the pubHc participa1lo11 process, which must be followed according Lo the AcL IL
includes advertising and an invitation to comment on the process. See chapter 17
of this book for more on the MPRDA.
3.3.2.5 The National Heritage Resources Act
Al though the National Heritage Resources Act (NH.RAJ 25 of 1999 is not an
environmental Act per se.. it is relevant in the field of environmental managemenL
TI1e NH.RA affirms that every generation has a moral responsibility co act as trustee
of the oational heritage for later generations and that the state is obliged to manage
heritage resources in the interest of all South A[rlc-,ms. The general principles
for heritage management in chapter 5 of the Act slate that in order lo ensure that
heritage resources are effectively managed, the sk.ills and capacities of persons
and communities involved in heritage resources management must be developed.
The Act further elaborates on the fact that heritage resources form an important
pan of the history and beliefs of communities and must be managed in a way tha L
acknowledges the right of affected communities to be consulted and to participate
in their managemenL
46
Three: The social dimension of environmental management
The general principles (chapter 5) state that the identification, assessment and
management of the herirage resources of Souih Africa must:
•
•
•
cake account of aJI relevant cultural values and indigenous knowledge syscems;
rake account of material or cultural heritage value and involve the least
possible alteration or loss of it;
promote the use and enjoyment of and access to heritage resources, i.o a way
consistent with their cultural significance and conservation needs;
•
contribute to social and economic development; and
•
safeguard the options of present and future generations.
The NHRA therefore protects the cultural rights and heritage of the people of South
Africa. It does not require explicit public participation, or give any guidelines on
how the public snould participate. lt does refer. like NEMA and the NWA, to social
and economic developmenL Public participation processes may be requested by
the South African Heritage Resources Agency (SAl:IRA) if deemed necessary for a
specific projecL
3.3.2.6 The Promotion of Administrative Justice Act
TI1e Bill of Rights staces tha t everyone has the right to administrative action
that is legally recognised, reasonable and procedurally jusL The Promotion of
Admlnlstrative Justice Act (PAJA} J of2000 gives effect to tnis right. PAJA applies
lo all decisions of all state organisations exercising public powet or performing a
public function in tetms of any legislation that negatively affects the rights of any
person. The Act prescribes what procedures an organ of state must follow when
it takes decisions. lf an organ of state implements a decision that impacts on an
i.odividual or community without givi.o.g them an opportunity to comment, the final
decision will be illegal and may be set a!>ide. PAJA also forces stale organisations
to explain and give reasons for the mannet i.n wnich they have arrived at their
decisions and, if social issues were Involved, how these issues wete considered i.o
the decision-making process.
3.4
Environmental management approaches and instruments
Policy objectives are pursued through the promulgation of legislation as discussed
i.o the previous section. To implement the legislation certain approaches and
instruments are introduced. This secLion presents different approaches and
instruments that speak 10 the social dimension of envi.ronmenlal managemenL
Again, the list is not exhaustive but it does reflect what we consider to be key
approaches and instruments with a particular relevance and applicability to Lhe
South African CODLexl.
47
Environmental Management - A business management approach
3.4.1
Interface between social and environmental dimensions
The social and health implications of a degraded environment and degraded
ecosysteins have been long understood and have led to the development of a
number of approaches towards making these links explicit and gaining a more
holistic understanding of the human/environment interface. Such interactions
are numerous, for examp le excessive nutrients in fresh and coastal rL-cciving
waters from land-based activity leads io eutrophication, negatively affecting
ecosysteins and freshwater and marine resource productivity, thereby having a
negative impact on food security, livelihoods and health. Ecosystem degradation
means that important ecosystein services (see below), such as freshwater provision,
pollination, naturnl pest control and access to herbal and traclitional medicines
important for a large proportion of the world's population, are lost. Funbermore,
many ecosysteins are also carbon sinks, resulting in a declining capacity to absorb
and coun ter-balance anthropogenic carbon emissions. In the following sections,
we introduce three approaches which aim to deal with the interface between social
and environmental dimensions, namely ecosystem services, sustainable livelihoods
and social-ecological systeins.
3.4.1.1 Ecosystem services
The clirect link between the components of well-being and ecosystem services is well
established (Fi.sher et aJ 2014). Ecosystem services underpin all human existence
and development and yet continue in many sectors to be viewed ralher narrowly
as contributing most significantly to tbe well-bcing or the global poor wbo often
depend directly on these services for thclr livelihoods. Ecosystem services can be
categorised as provisioning, regulating, supporting or cultural (ibid). Provisioning
services are material benefits such as fresh water, food, raw materials, and genetic,
medicinal and ornamental resources. Regulating services control a wide variety
or processes important for human functioning and flourishing such as air quality,
erosion, climate, nawral floods and extreme events. Cultural services refer to
recreation. spiritual and religious values, ed ucational information and other similar
intangible ecosystem contrihutions. Supporting services secure and maintain the
production of other ecosystem services and include primary production, nutrient
cycling and photosynthesis. Provisioning, regulating and cultural services
contribute directly to human well- being. whilst supporting services provide an
imlirect, albeit crucial contribution by ensuring optimal health or the former
(Pollshchuk El Rauschmayer 2012). In addition to the influence or ecosystein services
on human well-being depicted in Figure 3. 1, other factors such as economic, social,
technological, political and cultural foctms also influence human wcll-bcing, and
ecosysteins are in tum affected by changes in human well-bcing (Millennium
Ecosystem Assessment 2005).
48
Three: The social dimension of environml:'ntal management
CONSTlllJENTS OF Will- BEING
ECOSYSTif-1 SERVICES
--
Provisioning
s..urity
- ~U'I'
~~
- SEOlilltT l'IIMDMSUS
• flttSlfftAtUI
- 'MXIDANDFalll
_.,.
- -Supporung
- IIIJtllt!ltCY'OMI
- SOILKmMtDI
Rqul11Ung
-D..IMAlt.aoow1mt
-ru:ar.lllll.U,tDI
-01KAM.lllGI.UhDIII
•IUJUftaffD.1101
--..
--Cuttur.ll
,.,........
-liNlllUAL
_
.IIKll,A]IQU,I.
--
llcalih
-f-UlafGWlll.
-~JOCl.l-MIM
MOW.UC.
_ _mea,
Good ,oml n:llltlam
~
-tahutiLll£5f'la
-MUJn' 10 Hll.l'Oll&.D,
LIFE ON EARTH - alOOMRgn'
AJIIOW'S l"DlD"
.._...,__.Ulllalot
_,._..__liallol
-
....
Mnllwn
-•'oh
----
ARROW'S WIJTH
lmfflMYfllW,....._,_,,.._
wnfca-"-~
C=:! Medl11•
(=is...,
Rgurc 3.1: Erosys1= services and human well- being. Ecosystem servicrs can be defined as
the benefits people obtain from ecosystems. The arrows depict the strength of the linkages
between categories of ecosystem serviees and components of human well-being, as well as
how these may potentially be mediated by socio-economic factors.
Source: Adapted from the Millennium Assessment (2005)
Optimal dclivery of ecosystem services is extremely vulnerable to environmental
impacts, and the consequences of these impacts on 1he buman environment can be
severe, especially to vulnerable people.
3.4.1.2 Sustainable livelihoods
A livelihood comprises the capabilities, assets (including both material and social
resources) and activities required for a means ofliving (Scoones 1998). A livelihood
is sustainable when it can cope with and recover from stresses and shocks, maintain
or enhance its capabilities and assets, and al the same lime no1 undermine the
natural resource base. Therefore, a sus1ainable livelihood is one that can persist
in tl1e present and in the future witl1out depleting the resources upon whlch it
depends and without depriving other people of a livelihood. It can endure in spite
of shocks like natural disasters or cl1anges such as seasonal cycles. Developmentinduced change can also have a significant impact on sustainable livelihoods in
a number of ways. People can lose access to certain assets sucb as waler and
land, or pollution can impact on the quality and availability of their producL
On the other hand, development-induced change bas the potential to improve
49
Environmental Manageme_nt - A business management approach
the livelihoods or parts or the affected population by creating new primary and
secondary opportunities. TI1e sustainable livelihoods approach is a useful way 10
understand how livelihoods runction, and can assist with conceptualising tbe effect
of tbe cumulative dimension of impacts on Livelihoods (see Fig 3.2).
TI1e sustainable livelihood approach has four main components (Brocklesby l't
Fisher 2003). The first is that people are understood to live in a certain vulnerability
context in which they are exposed to risks, through shocks, trends over time and
sea.~ona l change. As mentioned above, these e.,cposures can result from nature or
human interference. TI1e second component comprises the number or capital assers
that people draw upon lo make their livelihoods. These assets include social capital
(social networks and relationships of trust); natural capital (natural resource stocks);
financial capital (savings, income, credJt); physi.cal capital (transport. water, energy,
shelter, communication); and human capital (skills, knowledge, labour). The assets
are susceptible 10 social and environmenral impacts. TI1e third component or the
sustainable livelihood approach entails that the assets are drawn on within people's
livelihood strategies- where 'Livelihood strategies' means the choices people make
and activities in which they engage to make a living or generate positive livelihood
outcomes. Social or environmental impacts can affect these outcomes in a positive
or negative manner. The fourth component of the sustainable livelihood approach
concerns existing policies, institutions and processes, as these can shape people's
access ro assets and livelihood approaches, and the vulnerability context in which
they live (ibid). Policies, institutions and processes in areas exposed to development
are often subject to change, especially if more than one developer is aL'live in the area.
..,
.. ......... Qlllut
,, ._ s..i
.....
l"lplgl Qflll,11
F • l"l••d.a~ul
M • Mnlllll~
ILM11t111ull auol'b
I
\
figu~ 3.2: Sustainable livelihoods framework
Sou=: Department of lntrrnational Development (DFID) (1999)
50
Three: The social dimension of environmental management
3.4.1.3 Socio-ecological systems approach
The socio-ecological systems approach is not a formal methodology, but rather a
way of looking at natural resource management (Pollard. Biggs 8 Du Toit 2008).
II encourages holistic thinking and was developed as a critique of the tradJtionally
narrow view of natural resource management that is considered ill-equipped
to meet the challenges of a complex and fast-<:hanging world. The approach
encourages scientists to explore how potentially threatened ecosystems services can
be mobilised and sustained in a way that the balance between natural assets and
human communities can be readjusted to secure growth and equity without putting
future options at risk. A key feature of this approach is to uy to view the system
as an integrated socio-ecological one (ibid). la order for this approach to reach its
full potential Ii would be imperative to get input from social as well as natural
scientists. Social capital can play a role in the management of natural resources
and the emergence of local groups can in fact be a more effective management
option than strict regulation, and potentially result in long-term sustainable use nf
natural resources (Pret1y 2003).
Resilience theory provides a model for thinking about the management or
socio-ecological systems [ResilienL't' Alliance 2007). .It provides suategies for
buffering or coping with unexpected change. Rather than attempting to control
natural resources for stable or maximum production and sl1ort-1erm economic
gain, resilience management assumes an uncertain and complex context for
natural resources and seeks to achieve sustainable long-term delivery of benefits.
Resilience can be described as the capacity of a system to experience shocks while
retaining essentially the same function, structures. feedbacks and, as a result,
identity (Walker et al 2006).
Attempting to address the social dimension of resource management without an
understandJng of 1l1e dynamics in ecosystems and resources will not be sufficient
[Falke el al 2005). In a similar fashion it ca n be argued that an undemanding or
the dynamics in social systems is essential for effective ecosystem and resource
managemenL BuildJng resilience offer.; some protection for maimaining lhe flow
or ecosystem goods and services and for coping wilh unexpected shocks to the
system, by nurturing a capacity to learn and adapt. The ability to adapt and respond
lo change is therefore an important requirement for resilience (ibid). There is a clear
link with environmental management and impact assessment here, as mitigation
measures can be interpreted as measures Lo adapt to and manage change. Managing
for resilient systems is a necessary component for achieving sustainable futures.
The framework for a resilience assessment is based upon the concept of a system.
A system is a combination of elements that interact to form a more complex entity or
whole. A systems approach is holistic in that it does not focus exclusively on a detailed
undemanding of parts, but on key linkages between components that contribuce
to dynamics or the whole entity. The word ·ecosystem' is a contraction or the te:nn
'ecological systems'. which refers to an entity comprised of interacting living and non-
51
Environmental Manageme_nt - A business management approach
living componenls. Resource systems refer to systems of people aod natur.tl resoun:es
(Resilience Alliance 2007).
Resource problems and managemeni issues arc not just ecological, social or
economic issues, but have multiple inlegrdled clements. These systems in wbkh
cultural, political, social, economic, ecological and lechnological components
interact arc referred to as socio-ecological systems. The tenn is used to emphasise
that this is a system that focuses on the interactions between the (non-human)
natural world and the human-constructed world (ibid).
3.4.2
Interface between socio/ and economic dimensions
So-called economic or fiscal approaches to environmental management are
gaining more traction internationally and in South Africa. These approaches
typically aim 10 use the market mechanism and/or price to influence decisions
and behaviour. TI1is is particularly pn.-valent in the energy sector in Sou th Africa
where the changes in energy prices have significantly influenced behaviour around
energy consumption. This section highlights what we consider 10 be prominent
approaches and instruments that aim to make tl1e link between the social and
economic dimerisions of environmental managemenL
3.4.2.1 Corporate social responsibility
Corporate social responsibility (CSR) is a set of actions aimed to further some social
good, beyond the explicit financial interests of the furn. that are not rec1uircd by law,
and practices ihai improve the workplace and benefit society In ways that go beyond
legal compliance. It covers at least voluntaty attention lo the ethical, social and
enviromnental implications of business (Babiak a Trenclaftlova 2011). Corporate social
respoOSJoility is a way in which comparues voluntarily contribu1e to a beuer society
and cleaner environment (Hartman 2008).
The first standard on (corporate) social responsibility, ISO 26000. was published
on I November 2010 [ISO 2010). Social responsibility is defined in the slandard as
tl1e responsibility of an organisation for the impacts of its decisions and activities
on socie1y and the environment, through transparent and ethical behaviour that
contribuces 10 sustainable developme:ot, including health and weJrare of society;
takes into account the expectations of the stakeholders; complies with applicable
law and is consiscent witli international behaviour norms; and is integrdted
tluougbout the organisation and practised in its relationships.
The South African Bur eau of Standards (SABS) adopted the ISO 26000 as a
South African National Standard (SANS) 26000:2010. The standard states the
following (SABS n.d.);
TI1e social environment includes social equity, cultural issues, traditions,
heritage issues, human bealth and comfort, social infrastructure and safe
and healthy environments. ILmay, in addition. particularly in developing
52
Three: The social dimension of environmental management
countries, include poverty reduction.job creation, access to safe, affordable
and healthy shelter, and loss of livelihoods.
The document identifies seven principles for social responsibility and seven core
subjects that should be addressed by organisations. Economic aspects, health and
safety, gender issues and the value chain are dealt with tltrougbout the seven core
subjects.
Table 3.1: Principles and mre subjeds for social responsibility
Principles
Core subjects
Accountability
Organisational governance
Transparency
Human rights
Ethical behaviour
Labour practices
Respect for stakeholder interests
Environment
Respect for the rule of law
Fair operating practices
Respect for international norms of behaviour
Consumer issues
Respect for human rights
Community Involvement and development
The development of the standard should be applauded, as it offers a means by which
social performance can be rooted in tbe management systems of organisations
(Vanclay a Esteves 201 I). It therefore creates legitimacy for social impact assessment
processes to lead to the development of a social impact management plan (SIMP)
that can be linked to a company's systems and processes.
3.4.3
Project-level instruments
Internationally and in South Africa various project-level environmental management instruments have been developed. These instruments aim to inform decisionmaking related to individual projects and therefore have a local and even
site-specific focus. The following sections highlight project-level instruments with
specific relevance to the social dimension.
3.4.3.1 Social impact assessment
Social impact assessment (SIA) Is a field of researtll as well as a framework used
to manage the social issues associated with development (Esteves et al 2012).
Originally SIA was only viewed as a technique for predicting impacts as part of an
environmental impact assessment [EIA) process. Since EIA is regulated in South
Africa, SIA often Forms pan of the regulacory requirements in the EIA process,
but it is also used in the broader Field as a decision-making tool. As the field of
53
Environmental Manageme_nt - A business management approach
SIA developed, the understanding of the real extent of social impacts expanded,
and the official definition adopted by the International Association for Impact
Assessment (IAIA) reflects this. Social impact assessment is defined as:
... the process of analysing [including predicting. evaluating and
reflecting) and managing the intended and unintended consequences
of planned interventions (policies, programs, plans, projects) on the
human environment and any social change processes invoked by those
interventions in order to bring about a more sustainable and equitable
biophysical and human environmenr (Vanclay 2003).
Social impact assessment is a philosophy of development and democracy that
considers the patholog.ies of development (eg harmful impacts), goals of development
(cg poverty alleviation) and processes of development [eg panidpation and capacity
building). One of the objectives of SIA is to ensure that any development that occurs
maximises the benefits and minimises the cost of that development, especially the
costs carried by the community (ibid). Social impact assessment deals with the
process of managing social change and the impacts of social change arising from
specific projects.
The SIA process is well established [compare Burge 2004; Taylor, Bryau 8:
Goodrich 1995; Finsterbusch 1985; Inter-organizational Commiaee 2003; Vanclay
1999). Based on the established proL-ess and taking new trends in the field into
consideration, Esteves et al [2012) identify current international good practice in
SIA as follows:
•
Create a paniclpatory process and space for community discussions
about future outcomes. acceptability of likely impacts and benefits, and
community Input into the SIA process. This will assist Ute community to
negotiate an agreement with the developer based on free, prior, informed
consent (FPIC).
•
Get a good understanding of the communities Likely to be aITected by the
proposed developmenL This includes a stakeholder analysis to assist with
understanding the different needs and interests of various sectors in the
communities.
•
Identify community need.~ and objectives.
•
Scope the key social issues, including negative impacts and opportunities for
creating benefiL~.
•
Collect baseline data.
•
Forecast the social changes that may result from the proposed project.
•
Establish the significant changes that may result from the proposed changes
and predict how the various affected parties may respond.
•
Examine olher options.
54
Three: The social dimension of environmental management
•
Identify ways of mitigating negative impacts and maximising positive
opportunities.
•
•
Develop a monitoring plan to infonn the managemem of change.
Facilitate an agreement-making procl'SS be1ween communities and tbe
developer 10 ensure the FPIC principles are followed and human rights are
respected. leading to the drnrting of an impact and benefit agreement (IBA).
•
Draft a SCMP thal activates all benefits, mitigation measures, monitoring and
governing arrnngements that were agreed lo in the IBA. The SIMP must also
include plans for dealing with unamicipated issues.
•
Pu1 processes in place to assist all parties involved 10 implemen1 the IBA and
SIMP and to internalise them in their organisations.
A number of concepts that emerged recently in the SIA field are included In tlte
process. Concepts like FPIC, IBA and SIMP are not frequently used in the South
African contexl. or different terminology exists for similar local concepts.
3.4.3.2 Health impact assessment
A health impact assessment fHIA) encompasses a broad range of applica1ions and
can be defined as:
... a combination of procedures, methods and tools thal systen1atically
judges the potential, and sometimes unintended, effects of a policy, plan,
progranime or project on the health of a population and the distribution
of those effects within the population. HlA identifies appropriate actions
to manage those effects (Quigley et al 2006).
Health is impacted by a number of determinants that are not necessarily under the
control of the health sector. As with SIA, intersec1oral co-operdtion is imponant
An l:llA predicts and anticipates the healtlt implications of proposed projects,
programmes, plans or policies. It informs decision-makers about options 10
maximise the positive impacts and minimise the negative impacts and to manage
these impacts appropriately. An HlA considers quantitative and qualitative impacts
(Manuzzi el al 2014).
An BIA investigates the pathways of bow the interrelated det=inants may be
affected by a proposed intervention. It aims lo trace tbe changes through to their
impact on health status. Some of the pathways are direct (such as poUution and asthma
admissions to hospitals); others may be indirect (such as traffic density and community
severance, leading to changes in several health outcomes) (Dahlgren 1995).
The dimensions of HIAs (scope and time frame) will vary. An HlA is contextspecific and must be alTonlable and suiiable for the conrext within which ir is
undertaken. A nexJble approach is critical for maintaining the practical use of an
HJA. The size of a team carrying out a given HlA will vary accordingly (Quigley et
al 2006).
55
Environmental Management - A business management approach
Ultimately the pu.rpose of an HlA is Lo inform and influence decision-making on
proposals and plans, so health protection and promotion are effectively integra ted
into them.
3.4.3.3 Life cycle assessment'
In developing countries there are some negative perceptions anached to life cycle
assessment (LCA] as it can be considered 10 be ·anti-developmenl"-orientated [Benoit
Et Mazijn 2009). It often only provides a picture of the negative environmental
consequences, but does not reflect on any of the positive aspects of development.
such as social and economic benefits. A justification for the high costs is also lacking
as it does not address the most significani concerns of developing countries, namely
poverty eradication together wlih other social aspects such as en1ployment rates,
wages, accidents, working conditions and human rights. The need was recognised
lo integrate social criteria into LCA (ibid), which re.7.tltcd in the development of
socio-economic life cycle assessments (S -LCAs).
According to the UN£P Guidelines for Social Life Cycle Assessment of Products
(Benoit a Mazijn 2009) an S-LCA is an SIA technique that alms to assess the
social and socio- economic aspects of products and their potentially positive and
negative impacts along their life cycle, from the extraction and processing of raw
materials 10 final disposal- also including manufucturing, distribution, use, re- use,
maintenance and recycling. The social and socio-economic aspects assessed in an
S-LCA would be those that may alTect stakeho lders directly during the Life cycle
of a product and may be Linked to the behaviows of enterprises, socioeconomic
processes or impacts on social capitaL ll must be nOled that the S-lCA com1ilements
tl1e environmental life cycle assessment (E-LCAJ with social and socio-economic
aspects and can be applied either on its own or in combination with E-LCA.
TI1e ultimate goal of an S-LCA technique is to promote improvement of social
conditions throughout the life cycle of a product. and as such human well-being
is a central concept. An S-LCA is intended to assess product and productionrelated social, and to some extent economic, impactS using a life cycle perspective.
Social and socio-economic aspects that are assessed in an S-LCA are those that
may directly affect stakeholders positively or negatively during 1.b e life cyc:Je of a
product. These may be linked 10 the behaviours of enterprises, lo socio-conomic
processes, or to impacts on social capital. An S-LCA provides information on
social and socio-economic aspects for decision-making, instigating dialogue on
the social and socio-economic aspects of production and consumptioa, to improve
performance of organisations and ultimately the well-being of stakeholders [ibid).
The S-LCA approach identifies a number of stakeholder categories (with Lhe
main categories being workers/employees, local community, society, consumers
and value-chain actors) and a list of impact areas. The stakeholders will vary
from one study to another. hut also within each step of the supply chain. When
conducting an S-LCA, appropriate indicators need to be found for assessing the
1
Contributed bv San-Marie Aue.amp.
56
Three: The social dimension of environmental management
subcategories and these indicators need to be adapted to the particular context
and understanding.
There are certain differences between LCA and S- LCA. In general S-LCA
practitioners will need to incorporate a large share of qualitative data, as numeric
information will be Jess capable of addressing the issues at hand. Even in situations
where numeric data are useful, additional data wilJ still be needed to address their
meaning. Sometimes in S-LCA subjective data is the most appropriate information to
use and the use of performance reference points (eg thresholds) is specific to S-LCA.
An S· LCA includes both positive and negative impacrs of the product life cycle
because beneficia l impacts are often of imponance and encourage perfom1ance
beyond compliance.
3.4.4
Strotcgic-lcvel instruments
TI1e previous section dealt with project-level instruments. However, projecis are
tYPicaUy the outcome of policy, plans and programmes, also the result of socalled tiering of decision-making. Therefore, to be more effective, environmental
management needs to also engage with strategic-level instruments so as to
proactively inform policy, plans and programmes. This section introduces
strategic-level instrumenis with particular relevance to the social dimension of
environmenta l managen1enL
3.4.4.1 Integrated development plans
The South African government is horizontally structured arou"nd three spheres,
namely local (municipal), provincial and national. Integrated development plans
(ID?s), the South African version ofLA2t, are the primary planning instrumenis of
loca l government, mandated through the Local Government: Municipal Systems Act
32 of 2000. Integrated development planning is a process by which municipalities
prepare five-year strategic development plans. The ID? is the written plan that
resulis from the IDP process. It is the principal strategic planning Instrument that
guides and informs all planning, management, investment, development and
implementation decisions and actions in the local area and supersedes all other plans
that guide local development (Coetzee 2002). It is necessary to look retrospectively
at the development of the IDP in order to fully understand its importance as a tool
for empowering local authorities and communities.
According to Coetzee (2002), IDP can be seen as the South African response to
LA21, and can be seen as one of the many varied approaches to LA21 across the
world. TI1e idea of integrated planning evolved as a response to the fragmented,
ad hoc project-based approaches to planning of the 1980s, and pressure from
environmen1alis1s for a more holistic perspective ou deveJopmenl
The legislative framework for integrated development planning was put into
place during the period 1996 to 2000. The loca l Government Transition Af"l 97
57
Environmental Manageme_nt - A business management approach
or 1996 Second Amendment Act outlined the IDP as a specific. legally prescribed
product or an IDP process in the local sphere of government.
The Whire Paper 011 Local Govt"nrme/11 (Ministry for Provincial Affairs and
Constitutional Development 1998) contextualised thelOP as a tool for developmental
loca l government with i.he intention of enabling municipalities io:
•
help lo alJgn scarce resources behind agreed policy objectives and
programmes;
•
make sure that actions are prioritised around urgent needs;
•
ensure i.he necessary integration with other spheres or government. serving
as a tool for communication and internction with them; and
•
seive as a basis for engagement between local government and communities/
residents.
The governance function of the lDP involves three aspects, namely, development
or environmentally related legislation al i.he local level; executive mandate to
implement legislative arrangements; and a law-enforcement function. The local
municipality is responsible for the development of new local by-laws 10 ensure
that all the relevant environmental aspect5 are governed \vii.bin a legislative
framework.The local mu_nicipality also has an executive function (including
co-operative governance arrangentents) coupled with enforcemenL Titis refers
specifically to environmental aspects such as air pollution, land use management
and waste managemenL
IDP documents are an imponant source or information for environmental and
socia l impact assessments and the IDP process provides an excellent opponunity
for intersectoral co-operation.
3.4.4.2 Provincial Growth and Development Strategy
Provinces play an imponant role in contextualising Acts and other tools or
governance and grou_nding them within the realities or each province. The
provincial govemtuents must guide the local government in the implementation
and development of IDPs and other progr.munes for sustainable developmenL The
Provincial Growth and Development Strategy (PODS) is a critical tool to guide
and co-ordinate the allocation of national, provincial and local resources and
private sector investment to achieve sustainable development ou_tcomes. It is not
a provincial government plan, but a development framework for the province as a
whole (Depanment or Provincial and Local Government 2005).
A PGDS is not a legislative requirement. but plays an imponant role in ensuring
effectiveness and co-ordinating delivery of the overall objectives of South Africa
as a developmental state. The PGDS is based on a long-term view or i.he province's
development route. Its primary purpose is to provide a collaborative framework to
drive implementation within a province.
58
Three: The social dimension of environmental management
The PGDS is the provincial perspective on which 1ypes of investment should be
prioritised by different localities. II is imponan110 include all relevant role playersgovernmen1 bodies and privale and civil organisations. II is a developmental
approach lo government. wWch implies a proactive and facilitative approach lo
development, and not one based on formulating and applyi11g regulations and
restrictions. The PGDS is a strategic document that gives direction to meeting critical
developmental issues in government It is a platform for co-ordinated action.
The challenge facing PGDS is the need lo play a stra1egic role in traJIS!ating
national priorities and perspectives into Lhe regional context whilst remaining
focused on driving delivery and removing blockages al municipal and sec1oral
service levels. One of the challenges facing the government of South Africa is
to integrate, co-ordinate and align tl1e actions of its three constituting spheres
(national, provincial and local) effectively 10 acl:tieve the desired developmental
outcomes.
3.4.4.3 National Development Plan
A national development plan (NOP) was undertaken lo envision what South Africa
should look like in 2030 and wha1 actions should be taken to acWeve tWs (Sout/1
Africa Yearbook 2012/2013). The National Planning Commission released the
NOP: Vision for 2030 for South Africa in 2011 (NPC 2012) and ii was adopted as
government policy in August 2012.
The aim of the NOP is to eliminate poveny and reduce inequality by 2030.
The National Planning Commission consists of 26 individuals appointed by the
President to advise on issues that impact on long-term development. The plan
identifies nine central challenges to developme11t in South Africa:
• Too few people work.
•
•
•
The s1andard of education for most black learners is of poor quality.
infrastructure is poorly located, under-maintained and insufficien1 to foster
Wgher growth.
Spatial patterns exclude the poor from the fruits of development.
•
The economy is overly and unsustainably resource intensive.
•
•
A widespread disease burden is compounded by a failing public health system.
Public services are uneven and often of poor quality.
•
•
Corruption is widespread.
South Africa remains a divided society [NPC, 2012).
TI1e plan focuses on creating an enabling environment for development and aims 10
shift from a paradigm of entitlement to a parad.igm that promo1es the develop men I
of capabilities, the creation of opponunities and the involvement of all citizens.
59
Environmental Manageme_nt - A business management approach
The following are the aims of the NDP:
•
An economy that will create more jobs
•
Improving infrastructure
•
•
Transition 10 a low-carbon economy
An inclusive and in1egra1ed rural economy
•
•
Reversing the spatial effects of apartheid
Improving the quallly of education, training and innovation
•
•
Quallly health care for all
Social protection
•
Building safer communities
•
•
Reforming the public service
Fighting corruption
•
Transforming society and uniting the country.
Each of the points above is a chapter in the plan, and contains a range of targets and
proposals. Some are genera l statements of polky intent, wbile others are specific
policy proposals, actions or processes that should iake place. Unfortunately, the
NDP takes very little cognisance of the finite and increasingly degraded stale of
South Africa's natural resources, despite a plethora of evidence of this; for example,
a semi-arid country with limited, over-subscribed and increasingly polluted
fn-shwater resources, a stale which will he exacerbated by climate change. As suc:h,
the NDP a.~ currenlly constructed will be unable 10 fulfil its role as a blueprint for
sustainable developmenL
TI1e NDP is a detailed document consisting of 444 pages. 11 is not a cast-ins1one policy document, but rather one that provides direction, identifies blockages.
and proposes targets and timelines ITerblanche 2013). The success of the NDP will
depend on the implementation of individual policy initiatives, programmes and
depanmen1al action plans. The outcomes of the NDP were influenced by the intended
outcomes of the 2015 Millennium Development Goals (MDGs), the internatlonal set
of goals aimed at improving the overall quality of life of humanity. The MDGs were
succeeded in 2015 by the 2030 Sustainable Development Goals, which were buil t
on the foundation of the MDGs but wider-reaching. The Sustainable Development
Goals give greater recognition to the underpinning nature of the environment, the
critical role of biodiversity and ecosystems services in sustaining humanity and
the need 10 improve governance of all elements of the natural environment. Their
overarching goal is reversing the rapidly increasing degradation of natural systems
and biodiversity loss, without which the sustainable development goals will not
be achievable.
60
Three: The social dimension of environmental management
3.4.4.4 Social and labour plans
The Mineral and Petroleum Resources Development Act (MPRDA) 28 of 2002
requires a social and labour plan (SL.Pl from every mine in South Africa. Sections
40 to 46, ch 2, Pan n of the regulaiions published under the MPRDA deal with the
SLP requirements (GN 527 of 23 April 2004). The Depanmen1 of Mineral Resources
provided guidelines for the development of the SLP (Departme_m of Mineral
Resources 2010). The guidelines specify lhe objectives of the SlP as:
•
promoting economic growth and mineral and petroleum resources
development in the Republic;
•
promoting employment and advancing the social and economic welfare of all
South Africans;
•
ensuring that holders of mining or production righls contribute towards the
socio-economic development of the areas in which they are operating as well
as the areas from which the majority of the workforce is sourced; and
•
utilising and expanding the existing skills base for lhe empowerment of
historically disadvantaged South Africans and serving the commllllity.
An SLP must include human resource development programmes, a mine community
developme111 plan, a housi.ng and living condilions plan, an employment equity
plan and processes lD save jobs and manage downscaling or closure. Apart from
transformation. the aim of SlPs is to promote employment and advance the social
and economic welfare of all South Africans, and to ensure economic growth and
social development. The management of downscaling or closure aims 10 minimise
Lhe impact of mine closure. irregularity of commodity prices and economic volalility
(ibid). All mines in South Africa must have an SlP In order to receive mining or
production rights, which are held by the govemmenL The SLP is only applicable to
mining activities and is not a requirement in other industries.
The SLP is a legislated agreement between the mines and the government,
and communities have limited input in the SlP and its outcomes. The SlP
guidelines state that communities should be consulted when drafting an SLP.
but they do nol specify the level of consultation and merely state that il1e mine
should 'through consultation with communities and relevant authorities provide a
plan'. The expectation is that Sl.Ps should align with municipal !DPs (ibid). There
is a consultation procedure associated with lhe IDP process where grassroots
communities can participate in planning meetings (Coetzee 2002). ln reality,
government officials play a major role in the negotiation about SLP projects; iL
is frequently politicised aod community consultation is oft.en superficial due 10
time constra ints. The priorities of govemmeni officials and those of communities
regularly differ, but communities are frequenily excluded from SLP negotiations
for various reasons. Mining houses are sometimes reluctant to engage with local
communities, as they are concerned about creating expectations, and ilte legislation
is written such U1a1 the SLP must be submiued and approved before a mining right
61
Environmental Management - A business management approach
can be approved and the ElA process is initiated. ln this context SIA is still viewed
as part of the approval process in Sou ch Africa and a once-arr occurrence, although
some mines, notably the large corporates, are starting to engage SIA practitioners
earlier in the process.
SlPs are confidential documents, and it is only the annual reports of the mines
that provide any indication of their impact in the public domain [Franks et al 2009).
This means that communities often do not know the contents of the SLP, and what
benefits they may or may not receive. Communities do not have access to mining
royalties, as these accrue 10 Lhe central government in line with the provision in
the MPRDA that all minerals belong to the state, and the slate must redirect these
royalties to affected communities (Curtis 2009; Sorenson 2011 ). Although SLPs have
lofty aspirations, their contribution to making the lives of communities affected
by mining better are questionable (Andersson 2010; Rogerson 2012). The SLP
guidelines are vague and there is a lot of co nfusion about the derailed coment of
an SLP, also amongst authorities. For example, any SLP must contain at least one
infrastructure and one income-generation project, depending on the size of the mine.
This requirement is not explicit in the SLP guidellne. It seems as if the interpretation
of the MP RDA differs on local and national levels. ll is common practice for an SLP
10 be resubmitted several times before being approved [Andersson 2010). Mines are
also not allowed to address proje<:t-related social impacts via their SLP. An SlP is
1.berefore nor really a social impact management instrumenc.
3.4.4.5 Strategic assessment and planning instruments
The main strategic assessment and plannlng instruments relate to strategic
environmental assessment (SEA), environmemal management frameworks (EMFs)
and spatial developml'llt frameworks (SDFs). The outcome of these instruments
should promote social development and give effect to the environmental right
contained in the Constitution. From a social perspective. the main challenges in
the implementation of these instruments are gaining a holistic and integrated
understanding of the interface between biophysical, social and economic aspects
as well as impll'ml'Dting co-operative governance arrangements in order to align
environmental assessmeat [NEMA-based instruments such as EMF and SEA) and
planning instruml'nts (SPLUMA-hased instruments such as SDF).
3.5
Charting a way forward
The previous s!'ctions have iligWighted our growing understanding of how a
deteriorating natural environment generally, and the negative impacts of human
activities locally, are compromising the overall healtil and well-being of much of
humanity. We also introduced the legal and policy context for South Africa in
relation to the social dimension of environmental management and the different
instruments available 10 give effect to these polices and legislation.
62
Three: The social dimension of environmental management
In recognition of Lhe global development imperatives as well as the need to align
and integrate policy outcomes, the United Nations Environmenral Assembly [UNEA)
anemp1ed 10 'chan a way forward' for policy responses in their 2016 repon 'Real thy
Environment, Healthy People' [UNEP 2016a). The UNEA2 repon recommends a
framework of four integrated lines or policy interventions to address the nexus of
environment and health. These are as follows:
•
Detarify: Remove harmful substances from and/or mitigate their impact
on the environment in which people live and work. This will, for example,
address alr pollution, lhrougb reducing black carbon emiiled by household
and non-household sources and other polluta.ms; ensure that emission
concentrations do 001 exceed WHO recommended targets for particulate
matter and carbon monoxide, and reduction in use of pesticides, through
the promotion of integrated pest management and organic and sustainable
fanning systems. h will require stronger focus on U1e sound management
of chemicals through life cycle approaches and improved management and
reduction of waste.
•
Decarbo11isl'.: Reduce the use of carbon fuels and thereby emissions of carbon
dioxide (CO,) through substitution of non-carbon energy. Over their life
cycle, I.he pollution-related human heallh and environmental impacts of
solar, wind and hydropower are a factor of 3 to 10 Limes lower Utan fossilfuel power plants. Investing in green energy ai household level will accrue
al.her bene.fiLS, including more time for income-generating activities, reduced
health risks from carrying heavy loads of firewood over long distances,
and more leisure time av.iilable for women, among othen;. 1l1e nationally
determined contributions (NDCs) committed under the Paris Agreement
on climate change can be important vehicles for decarbonisation, and
consequent health and well-being improvements.
•
Decouple resource use a11d c/,angl'. lifestyles: Generate the needed economic
activity and value to sustain the world's population with less resource use,
less waste, less pollu lion and less environmental destruction. Important
health bene.fiLS can be gained from decoupling opportunities in the food
sector, in water use, in energy consumption and through recycling and more
sustainable housel1old consumption. For example, shifts in consumption from
animal co plant-based products, and improved diet composition and quality
as well as increased access to urban green areas have positive implications
for health and addressing non-communicable diseases and menial health.
Youl11 engagement. awareness-raising and education in particular need 10 he
prioritised 10 achieve this.
•
En/ranee ecosystem resilie11ce and protectio11 of tire planet's natural
systems: Build capacity of the environment, economies and societies to
anticipate, respond 10 and recover from disturbances and shocks through:
protection and conservation of genetic diversity and terrestrial coastal
63
Environmental Manageme_nt - A business management approach
and marine biodiversity; strengthening ecosystem restoration, in particular
of wetlands, dryland vegetaiion, coastal zones and waiersheds including
through reforestation as well as agro-ecosystem restoration and sustainable
fanning systems; reducing pressures from Livestock production and
Jogging on natural ecosystems to increase resilience and mitigate extreme
weather conditions. Sustainable land and forest management, along with
conservation and restoration, will protect and enhance biodiversity and
ecosystem services. These restorative activities will not only ensure food
security, but also nunure cultural, social and recreational activities, and
bring economic growth for local populations and businesses.
While the lJNEA repon admits openly that analyses of past successes reve-d! that
U1ese endeavours are far from trivial, ii suggests Uial they can, however, be achieved
when supported by a context-appropriate mix of targeted, integrated development
strategies, such as:
• strengthened multi-level governance at the nexus of environment and health;
• integrated evidence-based policies and instruments, including lega l and
fiscal. that translate policy into action across sectors and industries;
• cross-sectoral partnerships and platforms 10 incubate, catalyse, accelerate,
and scale bealth- environmenl research, innovaiion, rechnologies, innovative
financing, and practices;
• improved individual, houseliold, and societal knowledge, attitudes,
behaviours and practices through systematic communication, awarenessraising and education interventions;
• assessment. measurement, research and monitoring to ensure an adequate
formative process; and
• a research framework that engenders the evidence base that all investment
and action demand.
While the above framework seeks to address the nexus at a broad macro. iatersectoral
level, the following are leverage points requiring urgeni policy attention and action
based on Lbe evidence:
• restore and protect degraded ecosystems and mitigate stresses to Lbc Earth's
natural systems in order to enhance ecosystem services that support human
health, reduce exposure to natural disasters, enhance food security, prevent
emergence of novel pathogens and disease outbreaks and contribute to the
improvement of nutritional diet quality;
• intensify progress in providing safe water, improved sanitation and hygiene
services to reduce mortality, morbidity and losses in economic productivity;
• replace and reduce the utilisation of hazardous che.mlc-JIS and generation of
toxic waste, and ensure sound management of chemicals aad wastes; and
• improve indoor household and ambient air quality to enable reduction
in morbidity and enhance the quality of life of local populations and
64
Three: The social dimension of environmental management
across bortlers, including lhrough sustainable urban design which can also
contribute to increased physical activity through the provision of green
spaces, to prevent and reduce non-communicable diseases and poor health.
The repon concludes that clirectly tacl<ling the in terlinkages between the
environment and human health can provide a common platform and multiplier
effect 10 sustain progress across many of the Sustainable Development Goals
and deliver on the Agenda 2030 for Sustainable Development in a more costeffective and beneficial manner. Investments in preserving, improving or restoring
environmenta l quality can bring aboui positive interactions and be catalytic,
avoiding contradictions between sector stra1egies and delivering multiple benefits
across all goals fo r enhanced well-being and quality of life.
3.6
Conclusion
This chapter emphasises that the social dimensions of the environment cannot be
separa1ed from the physical and ecological aspects. Human health and well-being
depend on the s1atus of the physical environmeni. and without a well-functioning
and healthy planet the survival of tlte human population, at least in a desirable
stale, cannot be guaran1eed. Moreover, there is an incre-.ising awareness of the
importance of recognising Ute links between Ute social and physical dimensions of
the environmeni. as can be seen by the policy and global mandate underpinning
the social dimensions. The approaches 10 environmental management and the
instruments used to reflect the social dimensions of the environment have changed
and developed rapidly in the past two decades, reflecting the sig.nificance of these
aspects. It is acknowledged that the protection of the physical environmen1 requires
changes in human beltaviour. On the highest level, it starts with changes in policy,
as is reflected in the UNEA2 report ('Healthy Environment. Healtlty People'). The
report focuses on tlte relationship between health and tlte environment, but taking
into consideration that the definition of bealtlt includes well-being, it can be read
as tlte relationship between people and their social well-being.
The draft of poliq• and implementation changes recommended by the UNEA2
report can easily be adapted to national policy, and also incorporakd in local
municipal policies. On the project level. EAPs can play a role by ensuring that the
social dimension of environmental management is adequately addressed in their
reports, and that social and environmental justice is incorporated in decision-making.
Addressing the social dimensions of environmemal management is critical to creating
a more sustainable future. and we have shown in tltls chapter tba1 ample provision
is already made in policy and legislation to incorporate tlte social dimensions in
stra1egic- and polil-y-level decision-making. We tlterefore trust that Utis chapter
provides an introductory reference point for scholars and practitioners to give effect
to ihe incorporation of tlte social dimension inro environmenial managemenL
65
Environmental Management - A business management approach
Review questions
I.
What does the 2030 Agenda for Sustainable Developme.nt and the
L7SDGs entail?
2.
Describe the role of the LINEA and UNEA2.
3.
Describe the tontept of sustainable development
4.
What does the concept of health entail?
5.
What is the importance of well-being and the related sttaregies and
dimensions?
6.
What does quality of life entail?
7.
Describe social impacts in terms of environmental ma.nagement.
8.
What changes constitutes social impacts?
9.
What does social change entail?
JO. Outline the concept and role of human rights.
IL Describe environmental, social and other related just.ices.
J 2. Explicate public participation and stakeholder engagement.
13. What Is the dlffuence between public participation and stakeholder
engagement?
14. Summarise the various global initiatives that underpins the social
dimension of environmental management.
15. Describe the South African legislation that is applicable to the social
dimension of environmental management.
16. What are the human rights that are safeguarded by the Bill of Righis?
17. Explain what section 24 of the Constitution entails.
18. Explicate the three approaches aiming Lo deal with the interface between
the social and environmental dimensions.
19. Describe wbar ecosystem sei:vices entail.
20. Illustrate the links between ecosystem services and the ronstituents of
well-being.
2J. What constitutes asustainablelivelibood?
22. Depict the sustainable livelihoods framewor.k.
23. Describe resilience theory.
66
Three: The social dimension of environmental management
24. What does corporaie social responsibility (CSR] entail?
25. What does 150 26000 and SANS 26000:20!0 entail?
26. Discuss the principles and core subjects for social responsibility.
27. Provide a detailed description of the vadous project-level instruments.
28. Whac are current international good pl'actice in terms of SlAs?
29. What does S-LCA entail?
30. What are the differences between LCA and S-LCA?
31. Describe the strategic-lt>vel instruments aimed at proactively informing
policy. plans and programmes.
'.32. Identify the nine central challenges LO developmenl in Solllh Africa.
'.3'.3. What a re I.be aims of I.be NOP?
'.34. What are I.be objectives of an SLP?
'.35. Ex-plain the UNEA2 report framework of polky interventions.
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72
Learning Outcomes
After studying this chapter, you should be able_ to:
•
understand and explain the importance of the King reports
• discuss the six capitals and their impatt on our environment
• differe_ntiate between lhe issues covered in \he King m,. and King IV"' reports
• explain the important concepts of the triple bo11om line and the (riplecontext
• explain the difference between a law and a voluntary code of conduct
• discuss the Global Reporting Initiative guidelines
•
be conveISant In the principles or sustainability
•
Indicate If the codes of corporate governance can prevent company failures in
the futu,e
• clarify ethics in South Africa
• explain lhe difference between the King C:ode'" and the King Report"'.
Glossary of terms•
,erm
Meaning in the King IV Report on Corporate Governance'"in South Africa 2016
Capitals and six
Capitals
Capitals are stocks of value that are aff«ted or transfonned by the
activities and outputs of an organisation. The framework categorises
them as financial. manufacrured, intellectual, human, social and
reJationshlp, and natural. Across these six categories, all the forms of
capital an organisation uses or affects should be considered (IIRC 2019).
King IV
King IV Report on Corporate Governance• for South Africa 2016. It
refl!rs to the complete document tha t includes all its parts.
King IV Code
Part 5 of the King IV Repo~
King IV Report
King IV Report on Corporate Governance• for South Africa 2016. It
refl!rs to the complete document tha t includes all its parts.
NGO
Non-governmental organisation
NPO
Non-profit organisation
NPOA<-t
Non-Profit Organisations Act 71 of 1997, as amended
:,
Environmental Management - A business management approach
Term
Meaning in the King r.t Report on Corporate Go=nanci,•in South Africa 2016
Organisation
A company, retiremt'l\t fund, non-profit organisation, stat~wned
entity, municipality, municipal entity, trust, voluntary association and
any other juristic pe™>n regardless of its manner of incorporation
Outcomes
Out~omes in the context of the outcomes of the activities and
outputs of an organisation means 'the internal and external
c;onSt'<Juences (positivt or negative) for the capitals as a rcS\Jlt of an
organisation's business activities and outputs' (IIRC 2013). It also
refers to the internal and external consequences of the business
activities and outputs on the triple context In which the organisation
operates.
Outputs
'The products, services, by- products and waste that are produced by
an organisation' (IIRC 2013)
PBO
Public benefit organisation
PRI
United Nations-supponed Principles for Responsible Investment
Sector supplements
Pan 6 of the King IV Report•
SME
Small and medium enterprise
Society
The broader society or community as part of the triple context In
which the organi.sation operates, and the social and relationship
capital that the organisation uses and affects. Society includes the
organisation's internal and external stakeholders, which In turn form
part of the broader society as a whole.
SOE
State--0wned entity
Transparency
The unambiguous and truthful exercise of accounrabllity such that
decision-making processes and business activities, outputs and
outcomes (both positive and negative) are easily able to be discerned
and compared with ethical standards
Triple context
The combined context of the economy, society and environment in
which organisations operate
Values
Convictions and beliefs about how the organisation and those who
represent it should conduct themselves; how resources and stakeholders
should be treated; what the ~ purpose and objectives of the
organisation should be; and how work duties should be performed.
· consult the King IV Report,.. (2016) for a more detaikd list of terms.
- Copyright and trade marks are owned by tb.e Institute of Directors in South.em Africa NPC
and nil of its rights are reserved.
Source: loDSA (2016]
74
Four: The King reports and ,nvironmental management
Overview of this cha pter
Chapter 4 focuses on sustainability aud the triple bouom liue. The Kiug 1, IL ID
and IV reports are dis(_-USSed and the key differences between them are highlighted.
TI1e difference between a law and a voluntary code of conduct is explained.
Corporate failures are discussed in liue with the codes of ethics. We also exp lain
the triple context aud six capitals. Ethics in South African businesses is briefly
considered, alongside sustaluabillty and i111egra1ed reporting (JR).
4.1
Introduction
Environmental problems require nexible and transparent decision-making tha t
incorporates a diversity of knowledge and values.
In the macro business environment, stakeholder participation in environmental
decision-malciug has been increasingly embedded in national and international
policy. In order 10 incorporate tile ideals of the Kiug ID and IV recommendations. a
more participatory process is required with all the relevan t role playcrs. This may
seem risky, but tbere is evidence that If management designs this well, tbese risks
may be well worth taking.
For many years, corporate management abdicated its responsibillties towards
environmental issues raised by activists and scientists. Businesses focused only on
malciug profits, irrespective of the cost to the environment and the safety of people.
As a result, environmental resources were overexploited for many years.
TI1e management of the environment was seen as non-critical and did not have
a high priori ty in the stra1egk plans of companles. Euvironmeutal issues were
viewed as a necessary evil that ale into company profits.
In tl1e past, the sustalnability of a business was only measured in terms of its
financial results. Managers and shareholders wanted greater profits and nigher
dividends. If these we.re not delivered, shareholders moved their investments
elsewhere.
During the Industrial Revolution, the need for environmental protection was
not taken Into account. All that martered was the interests of companies whose
main aims were economic progress and economic development at any cost and
U1e elaborate use of resources. Companies and governments transformed the
environment into an economk competition between U1e industriallsed nations.
In rhe 1990s, environme111al issues began 10 play an increasingly importam
role in organisational acdvities. In South Africa, tWs became evident with the
introduction of the King I, II, W and now IV reports. Originally these codes only
applied 10 public companies. With U1e new King N code, other businesses like
closed corporations, private companies. non-profit companies (eg environmental
NGOs, voluntary associations or any other juristic persons, including religious
entities) have 10 follow suit in order to be seen as ethically responsible entities in
the socieiy.
75
Environmental Manageme_nt - A business management approach
A number of tools for analysis and control bave been created to monitor and
improve environmental performance. Examples are the environmental managemem
systems (EMSs) and environmental audits used by many governments and
companies across the world, such as lhe United Nations Sustainable Development
Goals (UN 20l5a), the African 2063 Agenda [UN 2015b) and the Soutl1 African
National Development plan 2030 (NOP 2012).
South Africa is not tl1e only country with governance codes such as ilie King
codes. Australia, Canada and Uniied State.~ bave similar codes.
4.2
The King reports
4.2. 1
King I Report
TI1e first King report on corporate governance (King I) was published in 1994.
Titis was the first corporate governance code for South Africa. King I established
recommended standards of conduct for boards and directors of listed companies,
banks and certain state-owned enterprises. It included not only financial and
regulatory aspects but a.lso advocated an integrated approach that involved all
stakeholders.
4.2.2
King II Report
King 11 included new sections on SUstalnabllity, the role of corporate boards and risk
managemenL This revised code of governance becan1e applicable from March 2002..
In addition to me types of organisations listed in King I, the code of
governance became applicable to state departments and national, provincial or
loca l governmem administration falling under the Loca.l Government: Municipal
Finance Management Act (MFMA). The code was a.Isa applicable to public
institutions or functionaries exercising a power or performing a function in terms
of the Constitution, or exercising a public power or performing a public function in
terms of any legislation. but excluded courts or judicial officers. King ll encouraged
al.I companies to adopt the applicable principles from the revised code.
4.2.3
King Ill Report
This report. released In Septen1ber 2009, recommended that organisations
produce an integrated report in place of an annual financial report and a separate
sustainability report, and that companies create sustalnabillty reports according to
the Global Reporting Initiative's (GRJ) Sustainability Reporting Guidelines.
Companies in South Africa now have a framework for reponing Lo help them
achieve good governance in the context of the King reports. It is premised on the
philosophy that governance in any context must reflect ilie value system of tbe
society in which it is based and operates.
76
Four: The King reports and environmental managt'ment
The King ill philosophy or leadership, sustainability and corporate citizenship is
outlined below:
•
Good go11ema11c1" is ess1"11tially about effective leaders/rip. Leaders should rise
to the challenges of modern governance. Such leadership is characterised by
the ethical values of responsibility, accoumabiliiy, fairness and transparency,
and is based on moral duties that find expression in the concept of ubuntu.
Responsible leaders direct company strategies and operations with a view to
achieving sustalnable economic, social and environmental performance.
•
Susrai11ability is tire primary moral a11d l.'co11omic imperative of tire 21st
century. It is a source of both opportunities and risks for businesses. Nature,
society and business are inrerconnected in complex ways that sbould be
understood by declslon makers. Most imponantly, current incremental
changes in sustainability are not sufficiem - a fundamental shift in the way
companies and directors act and organise themselves is needed.
Tire co11cept of corporate c-itize11slrip flows from tire fact tlrat tire co111pa11y
is a person and slro11/d operate in a s11srai11able man11er. SUSlainability
co nsiderations are rooted in the South African Constitution. which is the
basic social contract that Sooth Africans have entered into. The Constitution
imposes responsibilities upon individuals and juristic persons for the
realisation of the most fundamental rights:
•
It is leadership for efficiency in order for companies to compete effectively
in the global economy for probity, because investors requlre confidence, tha l
management or a company will behave honestly and with integrity towards
the owners of rhe company"s capiral, and leadership with responsibility as
companjes are increasingly called upon to address legitimate social welfare
concerns relating to thcir activities.
4.2.4
King IV Report
TI1e King N Report was released in November 2016 and was effective from company
year-ends of I April 2017 onwards. This implies that aJI companies should now
comply with the code. irrespective their registration status, economic status or size.
Although King IV builds on King Jl1, it was revised to bring the code in line
with the latest international governance codes and best practices. It further brings
an alignment with the moves in the new approaches to capitalism. It takes account
of the specific corporate governance initiatives such as governing bodies, improved
compliance reqwrements, and structures such as social and ethics commitcees.
The code also impacts on new technologies as well as reporting and disclosure
reqwrements.
The King IV Code also incorporates the six capitals Framework for integrated
reporting [IR), originating from the International Integrated Reporting Council
(JIRC 2019): financial, manufactured, human, intellectual, natural, and social and
relationsh.ip capital.
77
Environmental Manageme_nt - A business management approach
The King IV Code contains m:ommendations and principles aiming 10 achieve
Lhc desired governance ourcomes. TI1is means that King IV has a more outcomesbased approach as compared to King Ill's more rules-based approach.
Although at present the King IV Code is voluntary, it could in future be
prescribed by law or the stock exchange·s llsting requirements.
The creators of the King I. U, III and IV reports were mindful of the need to embrace
South Africa's unique business culture, different as it is 10 that of America and
Europe. Tue reports therefore incorporate the African value sysiem that emphasises:
•
collective over individual good;
•
principles of mutual interdependence and co-existence;
•
a spirit of humanity, in which individuals are entitled to respect;
•
a hierarchical political ideology. based on an inclusive system of consultation
al various levels;
•
a preference for consensus over dissension; and
•
a mentality of inherent trust and bellef in the fairness of human beings.
The reports require a shift .in organisational emphasis from a decision-making
hierarchy to more consultative and consensus-based techniques.
By m:ognising the existence of an Afrocentric view on corporate governance,
the King codes aim lo bring on board those people who previously felt excluded
or alienated by the Eurocentric character of corporate governance in South Africa,
regarding it as an al.tempt 10 impose European value systems on Africa.
The King II and W reports advocate that corporate governance is essentially
about effective leadership. The philosophy of the King Ill report revolves around
leadership, sustainability and corporate citizenship.
King IV will apply to all organisations no matter the manner of their
incorporation. It presumes that the King fV Code principles of good governance
will apply, and the practices recommended will be on a basis proportionate to the
size, complexity and nature of the organisation.
4.2.5
Key differences between King II and King Ill reports
Table 4.1: Key differences between King II and King Ill rq,orts
Area
King II
King Ill
AIRrnative dispute
resolution (ADR)
This is not dealt
with in King II.
In recognition of the fact that litigation is not
always feasible (it is often costly, may take
years to finalise and does not always lead
to the best outcome), the practice of ADR
has been Introduced as part of the board's
overall duty to act in the best interests of the
....
company.
~
78
Four: The King reports and environmen tal management
Arca
King II
King Ill
Its intrnded purpose is to ensure the effective.
efficient and expeditious resolution of disputes
through mediation.
Application of the
code
It applies
to 'affected
companies' (ie
those listed on the
JSE, banks, financial
and insurance
entities and srateowned rnterprises).
It is an aspirational
code for other
companies.
It applies to all companies, regardless of their
size or structure. Like its predecessor. King
Ill sets aspiratlonal best practice corporate
governance standards for these companies.
Audit committee
The board should
appoint an audit
committee.
In terms of the Companies Act 71 of 2008,
shareholdm of the company must appoint an
audit committee in the grneral meeting.
King Ill largely mirrors the provisions of the Act
concerning the criteria for audit committee
members as well as the significantly increased
scope of the audit committee's duties. Under
the Ac~ the audit committee has a statutory
role as well as a number of additional
responsibllitles which King Ill recommrnds
(eg the review of a company's integrated
reporting).
In South Africa, the King lll Repon encouraged an era of accountability and
responsibj)jty for all role players in the various industries by expecUng companies
to report not only on their financial well- being but also on tha t of all the
stakeholders and the environment. Companies listed on the JSE had to become
more environmentally responsfble in order to continue attracting investors. As
investors have become increasingly aware of environmemal issues, they want to
invest in companies wWch are perceived as etWcal.
King Ill follows an inclusive approach towards stakeholders, in wWch the
legitimate interests of stakeholders (employees, suppliers, customers, regulators,
environment, community, etc) are recognised over and above the interests of the
shareholders, in a manner that benefits the long-rerm snstai nabllity of an entity.
The implications of this are that the board should identify important stakeholder
groupings and management will have to engage with them to ascenain their
legitimate expectations.
79
Environmental Manageme_nt - A business management approach
Judge Mervin King introduced the principle of the triple bonom line into the
South African corporate environment. thereby changing the responsibility landscape
not only of South Africa but also of other parts ofihe world. Multinational companies
that do business in South Africa also have lo comply with these new requirements.
4.2.6
Key differences between King Ill and King JV reports
Most of the King Ill principles are retained in the King IV. The King IV is more
refined than its predecessor. The King Ill coniained 75 principles against the 17
of King IV. Although there is a reduction in ihe number of principles, King IV
slill contains all of them, but ihey are updated to be more suitable for cucrenl
circumstances. Each of these l 7 principles are linked to specific outcomes that
must be achieved. The most significant change is the outcomes orientation of all
the principles. Sixteen of these principles apply to the organisation or board of
direccors, and one principa l applies Lo institutional investors. These 16 principles
have a staggering 208 recommended practices and the 17th principle has an
additional 6 recommended practices for instilutionaJ investors.
TI1e code makes provision for small medium enterprises [SMEs); non-profit
o rganisations (NP0s); state-owned enterprises (S0Es); municipalities and even
rt'Lirement funds through various sector supplements. These make the King IV
Code adaptable to the variety of different organisations operating in South Africa
Within these supplements, the terminology is adapted 10 that of Lhe specific sector
in its own environment.
King IV builds on the previous reports. It seems to focus more on transparency,
suggesting an ·apply and explain· environment versus ·apply or explain' in King
Ill. It emphasises that organisations do not operate in a vacuum. It portrays
organisa tions, irrespective of their incorporation details and size. as an integral
pan of our society.
It funher fo,:__mes on moving companies away from a tick-box mentality to a
rather mindful application of the code. It recommends practices of the organisations
to be interpreted and applied in ways that are appropriate for the sector, type of
organisa tion and area of operation.
The major difference between King Ill and King IV is that the King Ill prindples
are now recommended practices linked to desired outcomes in King IV.
In previous ver.;Jons. the Klug Code and King Repon were published separately.
The King IV Code and Repon are now one document more relevant to its intended
audience. Since the new King IV is easier to read and uudeIStaud. it is more
accessible for smaller entities to implement the practices and desired outcomes.
Since the Cybercrimes and Cybersecurity Bill was introduced just before King
rv, it had to incorporate and address these risks.
80
Four: The King reports and environmental managt'ment
The following aspects are new within King IV:
• King IV can L,e applied to listed and unlisted entities, whether profit or
non-profit, private or public. The code therefore refers to 'organisations' and
·governing bodies'.
•
Remuneration requires greater disclosure and minimum requirements for
remuneration policies are stipulated.
• 111ere is now a distinction between information and technology. King
IV requires disclo~'Ufe on structures and processes for information and
technology including but not limited to focus areas, monitoring and
management of information.
•
Social and ethics commiilee recommendations tha Lgo beyond what is
expected In the Companies Act have been established.
• All legitimate and reasonable stakeholder needs, interests and ex pectations
should be considered as part Lite governance process.
•
A greater emphasis is placed on risk management and its interdependencies.
TI1e code recommends au overlap between Lite audit committee and risk
comminee. Further, the risk committee should consist of ai least Lhree
directors, witJ1 Lite majority being non-executive.
• The audi t committee is responsible for overseeing auditor independence.
•
A new principle is that a governance framework should be agreed upon
between the group boanl and the subsidiary board.
The main principals of Lite King IV Code can be summarised as follows (see the code
for more details):
•
Principles I.I to 1.3 deal with Lite elhical culture of the organisation or board.
•
Principles 2.1 and 2.2 address Lite performance and value creation of ilie
entity.
•
Principles 3.1 to 4.5 deal wilh adequate and effective control within the
organisation.
•
Principles 5.1 to 5.2 are about truSt, good reputation and legitimacy.
4.3
Apply principles and explain practices
The principles iodicated in ilie King IV Code are ideals that organisations can st-rive
10 implement in their progress towards good governance, thereby realising Lheir
board's governance outcomes.
Organisations should provide a narrative account 10 explain their processes,
indicating which recommendations and/or practices are beiog implemented and
how they are being achieved.
81
Environmental Management - A business management approach
4.4
The difference between law and a voluntary code of conduct
4.4.1
What constitutes law?
Law is an enforceable collective of legislation. It is established and/or regulated by
judges through precedent in courts of law.
In South Africa. we generally follow a combination of two systems Lhat originated
in Europe. English law is used in criminal and civil procedures, company law, law
of evidence and constitutional law. Roman-Dutch law is followed in contract law,
law of persons and law of dclict, family law and law of things (Barratt 2018).
We generally have four types of law: criminal, civil and common law and
statutes.
In Soulh Africa, laws passed by national or provincial government must be
measured against our Consiliution. Municipalities can also pass bylaws in their
local environment.
Law serves as a norm for citizens on acceptable ways of conduct in their
communities. The law establishes cenain standards for maimaining order or
resolving any disputes between parties involved. The Constitution protects cenain
rights and provides certain responsibilities to all citizens. Most people tend 10 focus
on Lheir own rights and forget Lhat wilh them comes a tremendous responsibility to
respect those of olher people as well
4.42
What is a voluntary code?
The King reports are an example of voluntary codes of practice. A volumary code
'influences. shape, control or set benchmarks for behaviour in Lhe market place'
(OCA n.d.).
The King codes encourage companies and organisations lo conduct their
business in ways Lhal would benefit themselves and the communities Lhey serve.
Tite main aim of King I 10 King 111 was to get all JSE-listed companies, stateowned companies and oilier Chapter 9 government entities Lo comply wilh the
codes of their own volition. Over time, however, many of Lhe principles have been
incorporated imo law, and especially company law. Many companies have realised
that adopting the practices and rules in the codes will encourage investors and
attract customers.
II should be noted that the King reporu and codes can be amended by means
of practice notes lo address any unforeseen issues Lhai arise.
4.5
Triple bottom line (TBL) versus triple context
The term 'triple bottom line' f[BL or JBL) was first coined by John Elkington in 1994and later gained prominence after beiug discussed in his article in TI1e Economist in
2009. Since then, many authors have used this term in relation 10 companies and
their social and environmen1al responsibilities.
82
Four: The King reports and environmental managt'ment
After the release or the Kin.g 11 report in 2002, investors evaluated potential
investment options by looking at whether a company was making a profit and whal
the prospects were of it continuing to do so. Over the last two decades, however,
investors have realised that malting money and being a sustainable business require
more thanjusr a focus on the financial bottom line. This has led Lo the development
of the notion of a triple bottom line: 'economy, society and the environment:
The triple coniexl referred to in King ID and TV recognises that a 'bottom line' should
not solely reflect the economic return on investment of a business. Other aspects
dealing with issues of environmental sustainability and social capital, ranging from
product responsibility and labour practices Lo community upliftment, should also
be included. TI1e rriple context is still underpinned by these three objectives:
•
Economic prosperity
•
EnvironmentaJ sustainability
•
Social responsibility.
The ability of a business lo continue in a sustainable manner will result from a
positive and balanced return on the triple context or capital (economic, environmental
and social] as well as the six capitals [financial, manufactured, human, intellectual,
natural, and socia l and relationship capital).
The process of identifying, assessing and reporting on a company's business
activities in terms or Its economic prosperity. environn1ental sustainability and
impact on society can be defined as the triple contexL This has been expanded
by U1e integration of the concepts of the six capitals to provide broader, more
sustainable and integrated reporting and thinldng.
This will im pact on the core values of a company and all its activities.
Reporting in terms of the triple context focuses not only on the financial returns
to shareholders but also on the non-financial returns. The triple context can be
viewed in two ways:
I.
As a reporting device in annual reports
2.
As a tool in decision making and reporting lo explain the implications of
decisions of management.
In King IV, this is no longer vo luntary, which means you cannot report or explain,
you now have to report a,rd explain.
Annual reports no longer focus only on the financial aspects of reporting. Companies
are now measured by the triple context and the six capitals for disclosure of
information. Using I.be triple context and six capitals effectively in the annual
report of the company can serve as an effective tool to:
•
promote a company:
•
market its goods and services;
•
attract high-calibre employees;
83
Environmental Manageme_nt - A business management approach
•
explain the reasons for the existence of a company; and
•
attract investors.
Corporate success is measured against a company's performance in terms of the
triple context and the six capitals, which have created new rules for businesses.
The new generation of business leaders need to incorporate triple context and
six capitals reporting into their vision and mission statements, as well as into
the daily activities of the company irrespective of the registration format of the
company. This also needs to filter through to the empowerment of its staJT and the
communities in which they operate.
TI1e performance indicators of the Global Reponing Initiative (GRTI Guidelines,
both qualitative and quantitative, need to be at the core of a sustainability report
(SR). GRJ bas now also expanded its scope to include both SRs and integrated
reporting (IR):
•
The sustainability report (SR) covers three categories, namely the economic,
environmental and social dimensions of the sustainability of a company's
actions. The sustainability report should communicate the environmental
and social issues that influence the company and how the company manages
these issues.
•
Integrated reporting [fR) takes (SR) one step further. fR must communicate
the long-term value created by the organisation. This would include
traditional and sustainability risks incorporating the triple context and six
capitals.
Each of tl1e.~e triple context categories have certain core indicators and additional
indicators tliat management should identify:
•
Economic prospl!rily: The main focus of this section is concerned with an
organisation·s impact on the economic resources of its stakeholders and with
economic systems at local, national and global level~. Economic prosperity
refers to the profit-making business of a company, which is after all tlie main
reason for a company's existence.
•
E1111iro11111~11tal sustai11ability: This covers an organisation's impact on
Living and non-Living natural systems, including land, air and water. and
ecosystems. It also covers tbe environmental impact of a company's:
■
products and services;
■
use of materials;
■
water usage;
■
energy usage;
■
greenhouse gases and other emissions;
■
effluents and waste generation;
■
recycling policy;
■
waste reduction methods;
84
Four: The King reports and environmental management
■
■
■
■
possib le impact on biocliversity;
use of hazardous malerials;
other environmental programmes; and
environmental expenditures.
Environmental responsibilily also includes heallh and safety issues.
•
Soc:io/ respo11sibiliry: Tb.is can be grouped into three main clusters:
■
■
■
Labour practices, ie diversity, employee heallh and safety
l:Iuma.n rights, ie child labour and compliance issues
Broader social issues, ie bribery, corruption and community relalions.
Social responsfbility relates to lhe different expectations of a diverse group
of internal and external stakeholders (shareho lders, employees, customers.
supplim, and community and other interest groups that comprise civil society).
•
•
•
•
•
Go11crna11ce: A company board (or board of clirectorsJ responsible for
corporate governance needs to shin its thinking in order to become more
inclusive. Titls can be accomplished by developing clialogues with a diverse
range of stakeholders.
Values: There is a need lo shill [rom focusing on the 'hard' value of
profitability to the ·soft' values of integrity, community truSt, respect for
employees and sustainability. Many of these factors cannot be measured
against clirect financial returns. There should be a steady growth in these
factors lhat can be ascribed to the values of an organisation and its
employees.
Markets: Organisations need lo follow more sustainable business
practices, and in such a way gain a competilive advantage. Operating in
an environmentally responsible manner will also have an impact on an
organisation's markets. If its market is business to business, it will have
to ensure lhat its customers also comply with triple context reporting
requirements.
Life cycle-: Organisations need to shift lheir focus from product to function
and the inclusion of the impacl and behaviour of suppliers. This places a big
responsibility on supply chain managers to ensure that their own company
is not negatively affected by their suppliers, for example by the use of child
labour.
Tra11sparrmcy: Organisations have Lo shift towards a transparent reporting
structure in lheir reporting to the public and the aulhorities. Greater
transparency is required due 10 shareholder and public pressure for r.he
'right to know·. Organisations have also increased reporting requirements
owing to compliance leg.islation implemented by the government. A laclt
of transparency in reporting runs the risk of involuntary disclosure by a
globalised meclia.
85
Environmental Manageme_nt - A business management approach
•
Parmerships: Organisations need to move to new symbiotic partner..h.ips
to help detect change, foresee problems and achieve results. Through
engagement with a range of non- governmental organisations and
environmental groups, organisations are more able 10 discern changing
public concerns. Many organisations have formed partnerships with groups
that will complement the organisation"s ph.ilosophy and values.
•
Time: Jncreasing demands are made and more events happen in a single
moment than ever before. Sustainable development therefore requires a mind
shifi aboui time. Organisations need lo remember U1al environmental change
occurs over a geological time scale, which means decades, not minutes.
Whilst the triple context fornses on the needs, interests and expectations of the
various stakeholder.. of the organisation, the six capitals is used as an alternative to
review each form of capital which can have one or more stakeholders.
King N and its predecessors, promote a stakeholder-inclusive approach. This
process ensures that governing bodies give equal slarus to all sources of value
creation, which includes social and relationsh.ip capital. Part 5.5 of the King IV
Code contains the principles and practices dealing with the stakeholder-inclusive
approach.
King IV leaves it up to governing bodies to decide where these disclosures will
be made: in their sustainability repon, social and ethics comminee reports, online
or printed reports, or their integrated report. They could also do it in more than
one of these repons. These reports must be updated and approved annually by the
governing boards and be available publicly.
4.6
Sustainabili ty principles
The Brundtland Commission, assembled by the United Nations in 1983 to investigate
the concept of sustainable development, developed the following definition, still
widely used today: ·sustainable development is development tltat meets the needs
of the present without compromising the ability of future generations to meet their
own needs' (UN 1987).
TI1e new and updated United Naiions Sustainabil ity Development Goals as
agreed by all governments in 2015, as well as the Africa 2063 Agenda and the
South African National Development Plan 2030 [NOP), underpin the common
U1eme of value creation In a sustainable way. We see that this is also a rundamental
part of King IV.
There is increased emphasis on sustainability and its inseparable interface with
strategy and control. King Ill called for integrated reporting and recommended that
a company's audit commiltee engage an external assurance provider to substantiate
the ma1erial aspects of the sustainability reporting in the imegrated repon. King
IV now requires companies to implement and explain what they are doing with
regards to sustainability. King TV defines sustainable development as 'development
86
Four: The King reports and ,nvironmental management
that meets the needs of the present without compromising the ability of Ute future
generations to meet their needs' (loDSA 2016).
The key drivers of King ill and King IV are constantly under pressure in our cucreot
environment:
•
Economic su.stoinabiliry: Our world has changed a lot since the release of
Klng ill. We have experienced a number of financial crises, Including the
looming one with the seemingly interminable Brexlt negotiations. The trade
wars between the USA, Russia and China, a battle for dominance, continue.
•
E11viro11111e111a/ sustainability: There is the ongoing pressure of climate
change and constant de_bate on who is 10 blame. We have seen in rel-ent
times rhe impact of severe weather. TI1is has botl1 a financial and social
consequence that hampers sustainahlliiy of companies, the environment
and humans alike. It is also a fact that we as humans are using our natural
resources faster than nature can general.e or re-generate tl1em. The African
and Asian continents are experiencing exacerbated population growth. TI1e
United Nations is expecting the world population 10 grow to a staggering 9.3
billion over the next 26 years. Our resources will not last forever.
TI1e new King rv Repon had ro consider tl1e impact and role of tl1e information
(or big data) era, ie tile 4th Industrial Revolution. Enoanous amounts of data and
information are created daily, and new ~-ystems are developed on a regular basis
to interpret tills data. We also see the huge advances in technology relating to
anlficlal intelligence, 3D printing, robotics, nano- and biotechnology, all of which
disrupt the usual way of doing business. Social media is playing a bigger role Limn
ever before and tltis bas resulted in countries enacting new laws with regard to the
protection of personal infoonation (POPIA).
We have seen that civil society is in greater confrontation with organisations,
including the government. For example, businesses are being exposed regularly
online for their neglect with regard to sustainability or for poor service. Millennials
now make up the highest percentage of the population worldwide and we experience
1.h is impact in all spheres of our society.
The King IV Code was developed on the foUowing foundations:
•
Ethical leadersWp
•
The organisation in socieiy
•
Corporate citizenshlp
•
Sustainable development
•
Stakeholder inclusiviiy
•
Integrated thinking
•
Integrated reponing
87
Environmental Manageme_nt - A business management approach
King IV connects Lhese foundations to three co1111ected paradigms:
•
from financial capitalism to inclusive capitalism:
•
from shon-tenn capital markets to long-term sustainable capital markets; and
•
from siloed reponi.Jlg 10 integrated reporting.
The implications are as follows:
• Organisations and boards should rellec1 the interconnectedness of the
organisation's activities and affect the six capitals and tbe triple context
wherever they operate.
•
The skills set of an audit committee will have to include member(s) proficient
in sustainability issues.
•
Integrated reportlng may require registered auditors and assurance providers.
This is likely to have an impact in terms of associated costs and director
liahlllty in the event of misrepresentation.
A board bas U1e following responsibillties:
•
10 institute controls to ensure the Integrity of the integrated repon (the report
should be prepared annually, cover financial and sustainability performance
in sufficient detail, focus on substance over form and describe how the
company made its profits);
•
to comment on the company's financial results;
•
•
to disclose if Lhe company Is a going concern;
to convey the positive and negative impact of operations and bow these will
be improved in the foUowin.g yea r; and
•
to delegate the oversight, reporting and evaluation or a company's
sustainability performance lo the audit committee (wbo should ensure that
sustainability reporting and disclosu.re are independently assured).
The ·bottom line' for any business is making profit (this is essential), but sustainable
d~elopmenl must start from within. Tue financial well-being of a business ls
portrayed in its financial statements and annual repons; these repons are often
presented as a reference when seeking new contracts.
However, the world at large is now seeking more environmental commitment
from business by demanding sound reporting. which not oaly discloses a company's
financial status, but also its commitment to the environment.
TI1e practices in the King IV Code promote scaling in proponion to the following
considerations for the organisation concerned:
• the size and turnover as well as the workforce;
•
•
88
the resources available; and
the complexity and extent of the organisatlon·s activities and the impact on
the organisation's triple context
Four: The King reports and ,nvironmental management
4.7
Ethic.s and companies in South Africa
The King ill and N reports stlpulaie that organisations have to consult with all triple
context and six capita l stakeholders and interest groups with regard to policies.
activities, products and services, with specific reference lo the environment and the
communities in which they operate.
Companies and organisations are corporate citizens and an integral part of
society. This status places certain rights, responsibilities and obligations on
organisations in relation to society and the natural environment on which they
depend. This is dealt with in sectlon 7 of the Companies Act, which includes the
promotion of and compliance with the Bill of Rights as provided in the Constitution.
As previously seated, rhe Companies Act compels certain compa nies to establish a
social and ethics commitiee: rhe King N Code now e.'Clends this to all organisations
in a man ner that is in relation lo their size.
Regulation 43 of the Companies Act. issued after King ill was published, only
mentions the name of the ethics committee. King IV ascribes the ro le of oversight
and reporting on organisational ethics, sustainable developmen t. stakeholder
relationship and responsible corporate citizenship, 10 the social and ethics
commiiiee. King IV encourages organisations that are not required by law to have
one, 10 consider doing so in any case.
King IV requires a higher standard than the Companies Act for these social and
ethics committees. King N requires that lhe majority of members of ibis committee
be non-executive members of the governing body ro ensure independentjudgemenL
Organisations are legally required to repon to shareholders and other
stakeholders regularly on their activities. Management is also responsible for
consulting with their health and safety committee on preparing and reviewing
policies. plans and documents that relate to all organisational activities.
The extensive nature of the natural environment demands that organisations
must engage all other interested parties in developing and implementing an
environmental management system to deal efTectiveJy with environmental
d1allenges. An explicit objective and directive of the National Environmental
Management Act (NEMA) is to 'ensure adequate and appropriate opportunity for
public participation in decisions that may affect the environment'. Directives such
as these lay the basis for organisational transparency with regard lo developing
and implementing an environmental management programme.
The International Standard ISO 140001 :2004 requires every organisation
involved in activities that relate to production and service delivery to establish and
implement an environmeniaJ policy within tbe framework of an environmental
management sysiem (EMS). See chapter 9 for details on the development and
implementation of an extensive EMS, which deals with different types of
environmental hazards and environmental aspects.
89
: ]
l_j
Environmental Management - A business management approach
In addition to the International Standard ISO 140001, companies in South
Africa muse comply with environmental management directives specified in NEMA.
4.8
Conclusion
In this chapter, the importance of sustainability was discussed, and the concepts of
the triple bonom line and the triple context were introduced. TI1e King n, King Ill
and King N reports highli.g ht these conceplS and what they mean for South African
businesses. Sustainability is a tenn used throughout this book; this chapter defined
the principles of SUSlainabiliiy in terms of both environmental and business practices.
Review questions
I.
Explain. the importance of the King reports.
2.
What are the six capitals and their impact on our environment?
3.
Differentiate between the issues covered in the King m and King N
repons.
4.
Explain the important concepts of the triple bottom line and the triple
context.
5.
Explain dte difference between a law and a voluntary code of conducL
6.
Discuss the Global Reponing Initiative gu.idelines.
7.
Describe the principles of sustainability.
8.
Indicate how the codes of corporate governance can prevent company
failures in the future.
9.
Oarify ethics in lhe Soulh African contexL
10. Explain the difference between the King Code and the King Report.
Re.ferences
Barratt. A Et Sayman, P. 2018. Researd1i11g South African law. Update by Lutchman,
S. http://www.nyulawglohal.org/g.lobalcx/South_Africa 1.htntl (Accessed 14
April 2019).
E.lkington, J. 1997. Cannibals with forks: Tire lriplr bal'rom line of 21st ce11t11ry
business. Oxford: Capstone.
E.lkington, J. 1998. Accounting for the triple bouom line. Measuring Business
£rcelle11ce, 2(3): 18-22.
90
Four: The King reports and ,nvironmental management
Elkington. J. 2009. Triple bot1om line. Tile Economisr. 17 November. Availab le:
bttps:/lwww.econorrust.com/news/2009/ 11/17/triple-bottom-line [Accessed 14
April 2019).
Hendrikse, JW a 1-lefer-Hendrikse. L 2012. Corporot~ go11ema11ce l,a11dbook:
Pri11ciples and practice. Cape Town: Juta.
DRC. 2013. The i11tenwtia11a.l - framework. Available: bttps:/lintegrdtedreporting.
org/wp-content/uploads/20 15/03/ 13-12-08-THE-fNTERNATIONAL-IRFRAMEWORK-2- l.pdf (Accessed: 14 April 2019).
loDSA. 2009a. King code of cor11orate govenw11ce for Sout/1 Africa. Johannesburg:
loDSA. Available: bttps://www.iodsa.co.za/resource/collectlon/94445006-4F I 84335-B7FB-7FSA8B2JFB3F/ King_lll_Code_ for_Govemance_?rinciples_.pdf
[Accessed 14 April 2019).
loDSA. 2009b. King report 011 corporate go11ema11cefor Sour/, Africa. Johannesburg:
loDSA. Available: https://wwwjodsa.co.za/page/kinglll [Accessed 14 April
2019).
loDSA.2012.Ki11gW0111pter9: Tl,e inregrated ~port.Johannesburg: loDSA.AvaUable:
hnps://cdILymaws.com/www.iodsa.eo.za/resource/coUection/94445006-4F 184335-B7FB-7FSA8B23FB3F/King_lll_Amendment_2_May_2012.pdf [Accessed
14 April 2019).
loDSA. 2016. King JV"' practice 11ores. Johannesburg: loDSA. Avallable: helps://
www.iodsa.eo.za/page/lCIVPractlceNotes (Accessed 29 May 2020).
loDSA. 2016. King N report 011 corporate go11er111111ce for Sour/, Africa.
Johannesburg: loDSA. Available: https:/lcdn.ymaws.com/www.iodsa.eo.za/
resource/collection/684B68A7-B7 68-465C- 8214-E3A007F I SASA/loDSA_
Kiag_lV_Repon_-_WebVersion.pdf (Accessed 29 May 2020).
ISO. 2009. E,111iro1111umtol mn11ogeme111: Tl,e ISO 14000 family of i111ema1io11ul
sta11dards. bttps://www.iso.org/ftles/live/sites/isoorg/ftles/archive/pdf/en/theiso
14000f.unily_2009.pdf (Accessed 14 April 2019).
ISO. 2014. ISO 14000 - E1111iro11me11ral ma11age111e11t. Available: hnps://www.iso.
org/iso-14001-environmeniaJ-management.html [Accessed 14 April 2019).
Kiben, CJ, Monroe, MC, Peterson, Al, Plate, RR El Thiele, LP. 2012. Working towards
sus1ai11abiliry: Erl,ical decisio11 maki11g i11 a 1ec/1110/ogica/ world. Hoboken, NJ:
John Wiley a Sons.
Republic of South Africa. 1993. OccuJJational Hea/c/1 a11d Safety Aci 85 of 1993.
Pretoria: Government Printer.
Republic of South Africa. 1996a. Co11siitu1io11 of rl1t' Republic of Sour/, Africa.
1996. Pretoria: Government Printer.
Republic of South Africa. 1996b. Mirre Health a11d Safety Act 29 of 1996. Pretoria:
Government Printer.
91
Environmental Managem~l - A t>usiness management approach
Republic of South Africa. 1998. National E1iviro11me111a/ Ma11ageme111 Acr .107 of
I 998 (NEMA}. Pretoria: Government Printer.
Republic ofSouU1 Africa. 2012. No1io110/ devdopmc/11 plan 2030. Available: bltps:/1
www.poa.gov.za/news/Documents/NPC%20NaLional%20Development%20
Plan%20Vision%202030%20-lo-res.pdf (Accessed 14 April 2019).
OCA. n.d. Voluntary codes: Wl1a1 is a volunLary code? A guide for their development
and use. Available: btlp://www.ic.gc.ca/elc/~iie/oca-bc.nsf/eng/ca00963.btml
(Accessed 229 may 2020).
SA.BS. 2005. SANS .14001 :2005. Pretoria: SA.BS Standards Division.
Smit, SJ a Esterhuyzen, E. 2014. The basics of safery hazards and tl,e origins of
safety risk. Pretoria: Business Print.
Stringer, lC a Reed, MS. 2007. land degradation assessment in soutllern Africa:
Integrating local and scientific knowledge bases. Land Degradation and
Development, 18: 99-116.
UN. 1987. Report of tl,e World Co111111issio11 011 E1wiro11111r111 and Dc11dopme111:
Our co111mo11 future. Available: bttps://sswm.info/sires/defaull/ftles/reference_
anacllments/UN%20WCEDC\b201987%20Brundtland%20Report.pdf (Accessed
29 May 2020).
UN. 20 I Sa.Sus/ ai 11abledevelop111e11 I9011 ls. Availa b1e: Imps ://sustainabledevelopmenl.
un.org/?menu= 1300 (Accessed 29 May 2020).
UN. United Nations. 20 I Sb.Africa 2063 agenda: The Africa we wo111.Available: h1tps:/ /
www.un.org/en/africa/osaa/pdf/au/agenda206J-fustl0yearimp1eme.atalion.pdf
(Accessed 14 April 2019).
92
Learning Outcomes
After studying this chapter, you should be able to:
• summarise the origin and development of the contept of sustairiability
• analyse the models of sustainable development
• differentiate between economic, environmental and social sustalnabilit;y Issues
• explain the importance of the Sustainable Developml!nt Goals (SDGs)
•
ldl!ntify various sustainablllty indlcatol3 appllcable to economic sectol3
• explain, by means of sectoral examples, how government cou ld Incorporate
sustainability within their strategic plannlng
• explain the appllcabilit;y of the three pnla13 of sustainable development within
the tourism sector.
Overview of this chapter
lbis chapter is introduced by explaining the origin and history of the concept of
'sustainability'. The chapter proceeds by examining va.rious models of sust.ainable
development ai ming co clarify the meaning of tJ1e concept of ·sustainable
development: Since sustainable development bas 10 consider social, environmental
and economic issues, sustainability issues are discussed. Based on the 2030 Agenda
for Sustainable Development, the Sustainable Development Goals (SGDs) are
outJioed. The chapter tben elaborates on tbe applicability of sustainability wilhiu
some economic sectors of South Africa (eg agriculture, mining and tourism sectors).
Finally, the critical issue of responsib le leadersWp is descn1ted.
5.1
Introduction
The concept of sustainability has a long developmental history, dating back lo the
1960s, reflecting sWfiing priori ties in society. During the rnid- 1960s, a growing
awareness of environmental problems, such as destruction of natural resources,
biodiversity loss and pollution. indicated the binb of the environmental era. People
staned Lo question uncontrolled growth of economies, and realised that the eartJ1's
lintited resources could 001 indefinitely support current levels of population and
industrial growth. These questions have resulted in the need to move iowards more
·sust.aloable' practices and a new approach to development was required.
Environmental Manageme_nt - A business management approach
The Brundt!and Repon ( 1987) indicated the relevance or 1.he tenn ·sus1.ainable
development: 1l1e most widely accepted definition or sustainable development,
cited from the Brundtland report. is: · Deuelopme11t 1ha1 meds the needs af the
present without compromisi11g the ability uf future ge11erutio11s to meer Llreir
ow11 11eet1s:
The lirst United Nations Conference on Environment and Development
(UNCED), also known as Eanh Summit, was held in Rio de Janeiro, in 1992. Here,
the lirst agenda for environment and development, a global plan of action called
Agt'llda 21, was developed. Agenda 21 is a blueprint on how to make developmem
economically, socially and environmentally sustainable. In 2002, Tbe World
Summit on Sustainable Development (WSSD) was held in Johannesburg, South
Africa, where the implementation of Agenda 21 was strongly affirmed. In 2012,
the United Nations Conference on Sustainab le Development (UNCSD), also known
as Rio+20, was held as a 20-year follow up io UNCED. In September 2015, the
2030 Development Agenda entitled 'Trnnsformlng our World: The 2030 Agenda for
Sustainable Development' was adopted by the 193 countries of the United Nations
General Assembly.
The following section explains different models of sustainable development
5.2
Sustainable development models
To this day, there remains conf1.1Sion and a lack of agreement on the conceptualisation
and defmilion of sustainability and sustainable development. Indeed, the terms have
led to much controversy and debate in terms of scientific concepts. philosophy and
practical application. A number of researchers and authorities proposed sustainable
dt'Velopment theories or models to clarify the meaning of sustainable development.
These models also assist in analysing and sharing information to educate and train
policymakers, proressionals, and the public on sustainable development Some or
the sustainable development models are discussed next.
5.2.1
Egg of sustainability model
The International Unions of Conservation of Nature (lUCN] designed the ·egg of
sustainability model· in 1994. The relationship between people and ecosystems is
explained as an egg-shaped circle. The egg of sustainability model thus consists of
people (the yolk of ibe egg) within the ecosystem (Lhe white part of the egg). 1ltis
shows Lhat people are within the ecosystems and implies ibat the one is dependent
upon Lhe other. Consequently, a society w.ill be well a nd susiainable if boib Lhe
ecosystems and people are well. According to this model sustainable development
can be described as follows:
Sustainable development = human well-being + ecosystem well-beiug
94
Rve: Sustainable development and the triple bottom line
5.2.2
Atkisson's pyramid model
Atk:issou's pyramid model could be used as a blueprint for Lhe sustainable
development process. This model supports and accelerates the progress oridentifying
Lhe vision or sustainability through a plan or action, analys.is and brainstorming.
The model guides the process or building the firm based on undemanding through
sean:hing and coUecting relevant information for sustainable development
TI1e 'compass of sustainability· defines what sustainability is and forms the
basis on which tile pyramid or sustainable development is built. Tile compass
or sustainability consists or four elements, namely, nature, economy, society
and weU- being.
The pyramid consists of five levels representing the process of sustainable
development:
•
fodicators - signals that explaln something about the state of a system.
Indicators reflect the status of critical elements in the system, and help to
determine how healthy that system is.
•
Sysrems - groups or discrete elements that work together 10 make a whole.
Undem·a nding how the various elements work together is critical to
managing a system successfully.
•
•
•
/111,ovation - the process of developing and introducing a change to a system.
Straregy - planning for the successful implementation of an envisioned change.
Agreement ro act - after working through a process of developing indicators,
analysing systems, selecting innovations and creating strategies, the group
must then agree to take action on sustainability.
TI1e pyramid process supports and accelerates a government, organisaiion or
business' progress on the sustainable development journey. From early engagement
with the vision of sustainability, through analysis and brainstorming, to a consensus
on a meaningful plan of aCL:lon.
5.2.3
The MAIN prism of sustainable development
TI1e prism or sustainable developmcm is based on four dimensions, namely,
economic (man-made capital], environment (natural capital), social (human
capital) and institutionaJ (social capital). Because of the perceived predominance of
U1e economic dimension in U1e prism of sustainable development, the model was
amended to the MAIN prism fo r sustainable development
MAIN stands for mind, artefact. institution, and nature:
•
Mind - this represents the social dimension that involves the awareness of
the individual subject (eg worldview, experience and knowledge).
•
Artefncr - this represents the economic dimension that encompasses all manmade material assets (eg buildings and roads).
95
Environmental Management - A business management approach
•
lllstit111io11 - this represents 1.he social dimension that is concerned with tile
•
Nanire - this represents the e1111iro11me11lal dimension that consists of natural
reJationship between people and the organisation of society.
capita l (eg non-renewable and renewable resources).
Interaction between the four dimensions is essential, since sustainable development
can onJy be achJeved by regarding aJI four dimensions simuJtaneously. One of
the common models for sustainable development (created using three dimensions
known as triple bonom line, namely economy, environment and society) is
discussed next.
5.2.4
Three-pillar made/ af sustainable development
The three-pillar model is based on three dimensions, namely, environmental
(conservation), economic [growth) and social (equity). See Figure 5.J.
Sustainable development
Economic
sustainability
Environmental
sustainability
Social
sustainability
'Triple win' outcomes that strengthen all three strands
of sustainable development
Figure 5.1: The three-pillar model of sustainable development
Source: Adnp1ed from Cooper (2012: 122); k Grange. Loubser a Le Rowe (2017: 133).
96
Rve: Sustainable development and the triple bottom line
The three pillars of sustainable development are interlinked and are mutually
reinforcing economic, social and environmental sustainability. Eacb pillar should
be given equal weight or attention when striving for sustainability and well-being
in all endeavours.
TI1ls model recognises the inierrclationsWp of critical issues, such as
environmental degradation, wasteful consumption. poverty, urban decay,
uncontrolled population growth, gender inequality, health and the violation of
human rights. Sustainability issues are outlined in the next section.
5.3
Sustainability issues
Sustainable development has 10 consider social, environmental and economic
issues. Sustainability issues can be summarised according Lo three sustalnabillty
dimensions - environmental, economic and social sustainability. Each dimension
can be subdivided into relevant themes (Mukherjee et al 2016):
•
Economic
■
Compe1itfre11ess - efficiency, productivity, profitability. investmelll.
employment innovation/Ran.
■
Value fo r money - whole life cosLs, life cycle assessment, dsk assessment,
value management, lean construction, affonlability, budget constraint.
road users cost during maintenance work.
•
Environmental
■
Energy - energy efficien~-y. use of renewable vs non-renewable.
■
.Mal'erials - efficiency of use of materials, use of renewable vs nonrenewable, embodied energy, transport, energy, use of local outsource.
■
Water - efficient use of water. pollution of surface and groundwater.
■
Land - ethical use of land, use ofbrown-fteld vs green-field sire,
degradation/pollution.
■
Waste - elimination, source reduction. re-use, recycle, treatment and
disposal.
■
Air - local air pollution, noise pollution.
■
Nature conservation - protection of wildlife habitats.
•
Social
B11ilr c1111iro11111c11t - quality of build environment, equality of access,
disruption to road users.
■
Employees - working environment, health and safety, training and
development, equal employment policy.
■
Ca1111111111i1y - construction impacts, contribution to viable, safe and
cohesive communities, community involvement
■
Wit/er sociery - industry accountability.
■
97
Environmental Manageme_nt - A business management approach
Each of the sustainability issues mentioned here needs to be weighed against each
othl'r, since each of the sustainability dimensions are dependent on the other. For
example, a sound economy is critical 10 ensure a society that bas a decent standard
of living, wbich includes having access to employment, health care. education etc.
Oo the other hand, most economics are built on using il1e natural resources which
are derived from the environmental sustainability dimension.
The Sustainable Development Goals (SDGs) are goals set by the United Nations
General Assembly and cover social, economk and environmental developmeat
is.'11.les, such as poverty, hunger, health, education, gender equality, clean water,
sanitation, affordable energy, decent work, inequality, urbanisation, global
wanning, environment, social justice and peace. 1l1e SDGs are discussed next.
5.4
Sustainable development goals
Ai the United Nations World Summit on Sustainable Development held in
Sep1ember 2015, world leaders adop1ed the agenda ·transforming our World: The
2030 Agenda for Sustainable Developmen t· which indudes the 17 Sustainable
Development Goals (SOGs). With these new goals that universally apply Lo all,
countries wiU mobilise efforts 10 end all forms of poverty, fight inequalities and
tackle climate change, while ensuring that no one is le.ft behind. The SDGs build
on the success of the Millennium Development Goals and ainl 10 go further to end
all forms of poverty.
The goals are unique in that they call for aclion by all countries. poor, rich
and middle income to promote prosperity while protecting the planet. The SDGs
will stinlulate action in Ute following areas, wWch are of criiical inlportance for
humanity and the planet:
• People - end poverty and hunger, in all their forms and dinlensions, and to
ensure that all human beings can fulfil their potential in dignity and equality
and in a healthy environment.
•
P/011e/ - 10 pro1ect the planet from degradation, induding through
sustainable consumption and production, sustainably managing its natural
resources and taking urgent action on climate change, so that it can support
the needs of the present and future gene.rations.
• Prosperity - 10 ensure that all human beings can enjoy prosperous and
fulftlling lives a nd that economic, social and technological progress occurs in
harmony with nature.
•
98
Peace - to foster peaceful, just and indusive societies wWch are free from
fear and vio lence. There can be no sustainable developme111 withoul peace
and no peace without sustainable development.
Rve: Sustainable development and the triple bonom line
•
Partnership - to mobilise tile means required 10 implemen1 thls agenda
lhrougb a revitalised Global Partnership for Sustainable Oevelopmem, based
on a spirit of strenglhened global solidarity. focused in particular on lhe
needs of the poorest and most vulnerable and with lhe participation of all
countries, all stakeholders and all people.
Table 5.1 describes the 17 Sustainable Development Goals.
Table 5.1 : Sustainable Development Goals
Goal 1:
End poverty in all its forms everywhere
Goal 2:
End hungtr, achieve food seeurity and improved nutrition and promole sustainable
agricullure
Goal 3:
Ensure healthy lives and promole well-being for all at all ages
Goal 4:
Ensure inclusive and equitable education and p,omote lifelong leaming opportunities for all
Goal S:
Achieve gender equality and empower all women and girls
Goal 6:
Ensure avallabflity and sustainable managcrnenl of water and sanitation for all
Goal 7:
Ensure aeeess 10 affordable. refiable, sustainable and modern energy for all
Goal 8:
Promote sustained, inclusive and sustainable economic growth, lull and productive
employment and decent work for all
Goal 9:
Build resilient infrastructure, promote sustainable industrialisation and foster innovation
Goal 10: Reduce Inequality within and among countries
Goal 11:
Make cities and human settlements inclusive, safe, r,:sHlent and sustainable
Goal 12: Ensure sustainable consumption and production panerns
Goal 13: Take urgent action to combat climate ehangc and its impacts
Goal 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable
development
Goal IS: Protect, restore and promote sustainable use of terrestrial ecosystems; sustainably
manage forests; combat desertification; and halt and reverse land degradation and halt
biodiversity loss
Goal 16: Promote peaceful and inclusive societies for sustainable development provide aeeess to
justice for all, and build effective, acrountable and inclusive institutions at all levels
Goal 17: Strcnglhen the means of implementation and revitalise the Global Partnership for
Sustainable Oevefopment
SustaJnabilily indkalo13 cover all dimensions of sustainability and are discussed next
99
Environmental Management - A business management approach
5.5
Indica tors of sustainability
Sustainability indJcaiors could be presented from broad categories to specific
indicators and are created on a sector or case basis. They are used at different levels
for building national economies to business areas and to product development
or services. Sustainability indicators identily which aspects or pei:formance must
be improved and they give direction for change rather than measure increme.ntal
improvements. Table 5.2 summarises the sustainability indlcators from a sectoral
perspective, according to economic, environmental and social sustainability.
Table 5.2: Sustainability indicators per major rconomic srctor
~ctor
Sustainability indicators
Economk
Agriculture
.
.
.
.
.
.
.
.
income of
agricultural
producers
contribution of
agriculture to the
GDP
insured area
farm Income
dependency on
direct and indirect
subsidies
dependency on
external finance
agricultural
activities
market activities
• farmer's professional
.
.
.
100
training
Environmental
.
.
.
.•
.
.•
.
.
economic
dependence on
agricultural activity
.
soil cover
.
.
nitrogen balance
phosphorus balance
pestkide risk
use of irrigation
water
energy balance
supply of quality air
function
supply of soil
function
supply of water
function
agricultural
employment
stability of the
workforce
risk of abandonment
of agricultural
activity
food security and
safety
• physical well-being
.
.
of the farming
community function
psychological wellbeing of the farming
community function
wellbeing of the
society
• supply of energy
function
inter-generational
continuation of
farming activity
.
land tenure
arrangements
• supply of habitat
adaptability of the
farm
Social
.
supply of biotic
resources
function
:,
Rve: Sustainable development and the triple bonom line
Sector
Surulnabllity indicators
Economic
Mining
.
contribution to GDP
and wealth creation
• costs, sales and
.
profits
distribution of
revenues and wealth
• investments
(capital, employees.
communities,
.
.
pollution prevention
and mine closure)
shareholder value
value added
Environmental
.
.
.
biodiVClSity loss
emissions to air
.
.•
.
other environmental
imparu
land use,
managemcnt and
rehabilitation
nuisance
solid waste
.
.
.
.
.
and lcachates
(including acid mine
drainage)
remuneration and
benefits to staff
investment In staff
development
quality of service
experience for
clients
value-for-money
banking
share price
performance
• commitments 10
renewable energy
.
lend Ing with
deliberate social
and environmental
outcomes
• carbon footprint
• social and
.
finance assessed
under Equator
Principles
• regulatory fines or
• operational water
.
penalties
direct, indirect and
staff taxes
.
.
.
.
.
education and skills
development
equal opportunities
and non-discrimination
hcalth and safrty
human rights and
business ethics
• labour/management
.
.
.
relationship
relationship with
local communities
stakeholder
involvement
wealth dist,ibution
• consumer finance
education
.
.
total socio-economic
spend, contribution
to society
supporting local
supplier.;
environmental
management system
dividends for
shareholders
.
bribc,y and corruption
creation of
employme.nt
• employee
product toxicity
resource use and
availability
• water use, effluents
Anandal
.
energy use
• global warming and
.
Social
.
usage on campus sites
waste to landfill
waste to recycling
:)
IOI
Environmental Management - A business management approach
Suruinabllity indicators
Sector
Economic
Tourism
.
.
.
Environmental
visitor satisfaction,
returning visitors for
economic survival
.
.
local businesses
(turnover of local
industry)
• pollution
ecological value
of area (income
resource)
.
.
biod i11Cl5i ty
=
Social
.
r'50urce
(use of
energy, water, and
material)
(contamination of
air, water, soil)
changes in land
use (cg reduction
of forest area,
wetlands, protected
areas)
green design
• wasR (water)
management (eg
treated, recycled and
reused waste and
wasRwater)
.
.
.
environmental
awareness of
visitors, staff and
neighbouring
community
healihy living (cg
security, health,
education, income,
recreation)
cultural heritage
[potential for
indigenous people to
retain/exercise their
traditions)
educational
opportunities
• long-tenn water
availability
Source: Adnpr.-d from Azapngic (2004: 644); Multherjcc et al (2016); Ncdbank (2017: 4) ;
Schiaru,12 a Kavanngh (2008: 608).
5.6
Sustainability: sectoral approach
To attain economlc growth, employment, decent work and sustainable livelihoods,
it will be necessary to consider various industries an d sectors. However. the role of
environmental management - how to utilise the environment in an ecologically
sound way for nigher production - is essentia l in developing and growing sectors
and econonties. The contribution of the agriculture, energy and mining, financial
and tourism sectors in South Africa are tllerefore included in the discussion. Among
others, ihese sectors have also been identified as those with subsrantial porential
for growth stimulation or en1ployment in the National Development Plan of South
Africa. 2030: Our Future - Make It Work.
5.6.1
Agricultural sector
Agriculture is seen as a crucial component of the South African economy and
is important for socio-economic development. In Soulh Africa, the agricultural
102
Rve: Sustainable development and the triple bottom line
sector represents about 7<lb of formal employment and contributes about 3% to the
country's gross domestic product (GDP). If i:he entire value chain of agriculture is
taken into account. its contribution to the GDP reaches about I 2<lb. As one of the
most employment-intensive sectors of the economy, agriculture's potential impact
on empowerment. and poverty relief is much larger than its actual weight in the
economy suggests. However, the future of this sector depends on critical issues
such as climate change, population growth, skills shortages, changes in consumer
needs and shifts in the global economy and related markets.
TI1e mand_ate of the Department of Agriculture, Forestry and Fisheries (DAFF)
(South Africa) is to address production and consumption in the agriculture, forestry
and fisheries sectors.
TI1e department's strategic goals over the medium term, whicl1 are organised
around the key priority areas of food secucity, job creation, and rural and economic
development, are to:
•
provide effective and efficient stra tegic leadership, governance and
administration:
•
increase production and productivity in the agriculture, forestry and fisheries
sectors to enhance employment and economic growth;
•
•
provide an enabling environment for food security and sector transformation; and
ensure the sustainable use of natural resources in the forestry and fisheries
sectors through the conservation, protection, rehabilitation and recoveiy of
natural resources within ecosystentS.
According to the South African government's 2014-2019 medium-term strategic
framework. DAFF wW focus on improving food security, creating decent jobs, and
sustainably increasing the contn1mtion of the agriculture, forestry and fisheries
sectors to GDP. Through pursuing these objectives, Ute department contributes to
the realisation of the goal of the National Development Plan (NOP) to eliminate
poverty and reduce inequality by 2030. It also contributes to specific outcomes of
the st.rategic framework, namely:
•
•
Outcome 4 - decent employment through inc.lusive growth.
Outcome 7 - comprehensive rural development and land reform.
•
Outcome 10 - protect and enhance our environmental assets and natural
resources.
Take DOie of how sustainability and a balance between economic, social and
environmental sustainability is 1aken into account in the strategic goals and
outcomes in the Soulh African government (DAFF]. lf U1ese objectives can be
ob1aincd, South Africans should be able to look forward to a sustainab le, productive
agricultural sector that can feed not only South Africans. but also act as a valuable
contribu1or of foreign exchange.
Sustainability planning in the mining sector of South Africa is discussed next.
103
Environmental Manageme_nt - A business management approach
5.6.2
Mining sector
South Africa is rich in minerals and has developed as one of the leading countries
in lhe field of mining technology. Wlth over J 700 mines and quarries across lhe
couatry, Soulh Africa is a leading producer and supplier of a range or minerals.
From an economic per.;pective, mining contribu1es about 8% directly 10 Soulh
Africa's GDP and just under 460 000 direct jobs. wir.h an estimated USS2.5 trillion
to USS3 trillion non-energy mineral resource base.
The Deparunent of Mineral Resources (DMR) (South Africa) promotes
and regulates the minerals and mining sector for socio-economic growlh and
development, ensuring lhat all South Africans derive sustainable benefit from the
country's mineral wealtlt.
The DMR's strategic goals are as follows:
•
Promo1e and facilitate an increase in mining activity and in value added 10
mineral resources extracted in South Africa
•
Implement transformation policies tl1at redress past imbalances through
broader participation in tlie mineral sector.
•
Provide a rramework for managing health and safety ris ks, enforce
compliance and promote best practice in the minera l sector.
•
Promo1e sustainable rl'Source ma11ageme111, and contribule to skills
developmenl and the creation of suslainable jobs in lhe mining sector.
•
Contribute to a reduction in tlie adverse impacts of mining on tlie
environment; attract. develop and retain appropriate skills; and ensure the
optimal utilisation of resources.
•
implement risk management strategies and promote corporare 9011ema11c:e.
TI1e DMR accepts the custodianship or all mineral resources in Soutli Africa on
behalf or all its citizens. The Soutli African government is committed lo ensuring
a cond ucive environment to promote economic, social and en vironmental
sustainability.
Sustainability in tlie tourism sector of Soutli Africa is discussed next.
5. 6.3
Tourism sector
TI1e 10urism sector in So utli Africa is a key driver or 1he national economy and
contributes 10 job creation. Tourism contribu1ed about 2.91\b [R l36. I billion) or the
country·s total GDP in 2017. The tourism sector supported about 1.5 million jobs
directly and indirectly in 2017, 9.5% of total employment, and there is potential
to grow employment in tlie sector to 2.1 million j obs by 2028. This is especially
significant as government, business and many socia l partners in SouLh Africa are
collaborating 10 accelerate employment and economic growth.
104
Rve: Sustainable development and the triple bottom line
The South African National Depanmen1 of Tourism's (Non strategic goals over the
medium term are 10:
•
•
maximise domestic tourism a nd foreign tourist arrivals in South Africa;
expand domestic and foreign investment in the South African tourism indusay;
•
expand tourist infrastructure;
•
•
improve the range and quality of tourist services;
improve the tourist experience and value for money;
•
•
improve research and knowledge management;
contribute to growth and developmem;
•
•
expand the tourism share of GDP;
improve competitiveness and sustainability in tbe tourism sector; and
•
strengthen collaboration with 1ouris1 organisations.
Take note that economic, social and environmental susiainabiliiy is representative
in the strategic goals of the NDT.
Table 5.3 provides a summary of examples illustrating the benefits that can
be derived from tourism. A summary of the three pillars - economic, social and
environmental sustainability - are given according to (1) sustainable tourism
objectives, and (2] examples of benefits or impacts derived from tourism.
Table 5.3: Summary of «anomic, social and environmental sustainabllity relating Lo
sustainable tourism
The pillars of
sustainable
tourism
Eronomic
sustainability
Environmffltal
sus_tainability
Social su.nainablnty
1. Sustainable
tourism
objective
Sustainable tourism
should 'fflsure
viable. long-term
economic operations,
providing socioeconomic benefits to
all stakeholders that
are fairly distributed,
including stable
employment and
income-earning
opportunities and
social servkes to host
communities, and
contributing to povenv
alleviation'.
Sustainable tourism
should 'make optimal
use of fflVironmental
resources that
constitute a key
element in tourism
deve.lopment, focus
upon the stewardship
of resources,
maintaining essential
ecological processes,
and helping to conserve
natural heritage and
biodiversity'.
Sustainabk tourism
should ·respect
the socio-cultural
authenticity of host
communities, eonserve
their built and living
cultural heritage and
traditional values, and
contribute to intercultural understanding
and tolerance'.
:,
105
Environmental Manageme_nt - A business management approach
The pillars of
sustainable
tourism
Eronomic
sustainability
Environmental
sustainabflity
Social sustainablnty
2. BeneJits
Primary ttonomk
impacts of tourism
relate to foreign
exchange earnings,
contributions to
governmeni revenues,
the generation of
employment and
income, and the
stimulation of regional
development.
Sustainable tourism
is an environmentally
conscious activity that
provides ttonomie hope
for many threatened
natural areas around
the world.
The prottttion
of species and
their habitat can
lead to sustained
environmental
integrity, !hereby
providing sociO<Ultural
sustainability benefits
(eg Improving quality
of lik, maintaining
natural heritage).
or impa1!15
derived from
tourtsm
A primary benefit of
sustainable tourism is
that participants gain
a greater awareness
of the values of
Sustainable tourism
biodiversity and
potentially provides
conservation of natural an alternative
resourcts.
source of income
and employment, for
example local guides
in rural areas.
The economit cfkct
of sustainable tourism
on the travel and
retail marltet include
food and beverages.
accommodation and
transportation.
Tourism creates
multi plier effttts for
the ttonomy of local
communities.
Non-cash benefits,
ie local ownership
and strength of
local property rights,
education, equity and
empowerment. are often
more important than
monetary incentives for
conservation.
From Table 5.3, it is evident that sustainability principles apply to economic, social
and environmental aspects of tourism. A suitable balance should be achieved
between these interconnected clements to guarantee the long-term sustalnabillty
of tourism. This implies that the main concern of sustainable tourism is to find
an equilibrium between the needs of the host community, the tourists and the
environment. This rclationsWp requires careful consideration lo maximise the
benefits and minimise the negative impacts of tourism. Sustainable rourism
therefore does not imply a 'no growth' policy. but recognises that llmlts to growth
exist and that tourism must be managed with a long- term view.
TI1e preceding section mainly focused on how the government Includes
sustainability in its strategic planning for various economic sedors. Sustainabillty
should, however, be applied by the government, sectors, organisations and businesses.
106
'
"'
·'
'
'
'
'
~
---
Rve: Sustainable devtlopment and the triple bottom line
5.7
Conclusion
This chap1er introduced sustainabilily and sustainable development as an essential
pan of loday·s world and the future 10 come. Firstly, the origin and histol)' of
the concept of ·sustainability' was explained. The concept arose from questions
asked about uncontrolled growth of economies. and a realisation tbat tl1e earlh"s
limited resources could not indefinitely suppon the currem levels of population
and industrial growth. Thi~ could lead 10 the so-called environmental crisis, which
means that humans are in the process of destroying the earth and the vel)' resources
on which they depend. The questions have resulted In the need to move towards
more 's11stai11abte· practices and a new approach to developmenL
TI1erefore, in this chapter, we explored various models of sustainable
d~elopment, and discussed sustainability issues from an economic. environmental
and societal perspective. The chapter then outlined the 2030 Agenda for
Sustainable Development. which includes the Sustainable Development Goals
(SGDs). Sustainability indicators for some economic sectors [agriculture, mining,
finance and tourism) were summarised according to Lite three pillars of sustainable
d~elopment - economic, environmental and social sustainability. To artain
economic growth, employment, decent work and susiainable livelihoods, it will be
necessary to consider various Industries and sec1ors. Therefore, the contribution of
some economic sectors in South Africa were included in the discussion.
Review questions
I.
By means of a timeline, illustrate the orfgin and development of the
concept of_sustainability.
2.
Discuss the components of the MAIN prism of sustainable development.
'.l.
Explain the dimensions of sus1ainability and indicate why these
dimensions should be in equilibrium.
4.
The SDGs will stimulate action in areas of critical rmportance for
humanity and the planet. Discuss the areas of critical importance.
5.
Explain. by means of a 1able, the sustainability indicators of the financial
sec1or according to economic. e:nvironmen1al and social sustainability.
6.
Summarise the three pillars - economic, social and environmental
sustainability - from a lourism sector perspective. Make use of practical
examples to support your anSWer.
107
Environmental Manageme_nt - A business management approach
References
AtKisson, A, Hatcher, RL, Green, S a Lovins, H. 2004. Introducing pyramid: A
versatile process and planning tool for accelerating sustainable developmenL
Draft paper for publication in 77,e natural advanrage af nations. Australia:
EA Books.
Azapagic, A. 2004. Developing a framework for sustainable development indicators
for the mining and minerals indusuy. Journal of C/ea11u Produdion, 12:
639- 662.
Biggs. D. 2013. International handbook on ecotourism. In Ballantyne, R a Parker, J.
(eds). Birding, susrainability ond ecoraurism. Cheltenham: Edward Elgar.
Cooper, C. 2012. Essentials of rourism. England: Pearson Financial Times/Prentice
Hall.
Government Communication and Information System (GClS). 2018. Sour/, Africa
Yearbook 2017/18. 25th ed. Pretoria: GOS.
Hashlmo10. A. 2015. Tourism and socio-cultural development issues. In Sharpley,
R a Telfo·. DJ. (eds). Tourism and de11elopnm11: Concepts and issues. 2nd ed.
Bristol: Channel View Publications.
Keyser, H. 2009. Developing tourism in Soutlr Africa: Towards compl'litive
desti11ario11s. 2nd ed. Soutb Africa: Oxford Universiiy Press.
Le Grange, L, Loubser, C a Le Roux, C. 2017. Suslainabilily and education: A
critical discussion. In Loubser, CP. (ed). £ 1111iro11111e11tal education and education
for sustainability: Some Soutlr African perspectives. 2nd ed. Pretoria: Education
Association or South Africa.
Mukherjee. A, Kamarulzaman, NH, Vijayan, G Et Vaiappuri, SKN. 2016. Sustainability:
A comprehensive literature. In Christiansen, B. (ed). Handbook of researclr 011
global supply c/1ain ma11agc111ent. !GI Glocal.
National P lanning Commiss.i on South Africa. 2015. National Development Plan
2030: Our fu111re - make ir work. Soulh Africa: Sberino Printers.
Nedbank Group. 2017. Sustainable De11e/opme111 Reuierv. Available: https://
nedbank.co.za/content/dam/nedbank/site-assets/AboutUs/lnformation'lb20
Hub/lntegratedl\b20Repori/201 7 /2017'1b20SustainabilityC\b20Review.pdf
(Accessed 29 March 2019).
Page, Sa Connell, J. 2014. Tourism: A modem symlresis. 4th ed. Andover: Cengage
learning.
Seltercioglu, CH. 2002. lmpacis ofbirdwatdling on human and avian communities.
Enviromnemal Conservaria11, 29(3): 282- 289. Available: http://www.stanford.
edu/~cagan/SekerciogluOrnITourismEnvCons2002.pdf (Accessed II February
2008).
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Rve: Sustainable development and the triple bottom line
Schianetz, Ka Kavanagh, L. 2008. Sustainability indicators for tourism destinations:
A complex adaptive ~)'Stems approach using systemic indicator systems. Jou mu/
of Sustai11ablt' Tourism, 16(6): 601-628.
Statistics South Africa. 2017. S11srai11able Dr11elop111ent Goals: Baseline report 2017
- Soutlr Africa. Pretoria: Statistics South Africa.
UN [United Nations). n.d. Transforming our world: TT,e 2030 agenda for sus1ai11able
development. Available: hnps://sustainahledevelopmenLun.org/post2015/
transfonningourworld [Accessed 17 July 2017).
UNWfO [United Nations World Tourism Organization). 2017. Definition: Sustainable
development of tourism. Available: http://sdLunwto.org/conlent/about-us-5
[Accessed 17 July 20 I7).
WCEO (World Commission on Environment and Oevelopmen1). 1987. Our common
future. Oxford: Oxford University Press.
109
Learning Outcomes
.A:fte.r studying this chapte.r, you should be able to:
•
understand the nature of the natural environment in which humans live
• explain the Impact of human activities on the natural environment
• discuss the natural driving forces that inHuence change in corporate behaviour
• discuss business endeavours to protect the environmenL
Overview of this chapter
Chapter 6 reflects on four interrelated components that are of specific concern for
safely, health and environmental management. namely:
• the natural environment;
•
•
the i.mpact of human activity on the natural environment;
naiural driving forces influencing change in corporate behaviour; and
•
business endeavours to protect the natural environment.
The discussion focuses on the nature and characteristics of the natural envi.ronment,
human interaction with the environment and the i.mpact of thi.s interaction on the
environment, changes in corpora1e behaviour resulting from natural driving forces
in the environment and corpora le efforts to prevent any adverse effects of corporate
endeavours on the envi.ronmenL While people are dependent 011 the environmenl
10 sustain an acceptable quality of business operations, the environment also
needs protection from human activities. Let's ge1 10 grips with the nature of the
environruen1, with specific emphasis on the natural envi.ronmenl.
6.1
Introduction
It i.s not possible to engage in environmental management without a basic
understanding of the nature and characteristics of the environmenL Comprehending
1he Features of 1he na1ur.tl environment provides a basis for pUiposeful involvement
in protecting the environment against any adverse impact resulting from human
endeavour or from na1ural forces.
Six: The natural environment
6.2
The nature of the general and natural environment
The human environment comprises two distinct but interwoven parts. These parts
are the natural and the man-made elements. This section will describe the nature
of the natural environment.
The natural environment consists of numerous substances. All things (subslances)
in the universe are made of matter. Matter is ihe universal material. The material
basis of all things makes all things tangible and contactable. Matter is the common,
universal and essential characteristic that forms the basis of each and Nery different
tangible thing. If a thing or object has no substance, il is not tangible, because lt is
not made of matter. Maner defines substance solidity. Matter is the property that
holds things together and retains the shape of objecis. Matter is composed of atoms;
atoms comprise a core and rotating protons, neutrons and electrons. TI1is implies
that all substances of the natural world basically possess inherent kinetic energy.
Substances exist in three different formats, namely single or pure substances,
compound elements and multiple elements. Single or pure elements are listed on the
periodic table. The well-known periodic table arranges the basic natural elements
in nature. of which things are made, in order of increasing atomic number. Many
things (subsrances) consis1 of mixtures of substances. Such miXlures are compound.
Compound substances are made of or are formed by two or more single natural
elements. Compound substances appear in the form of a single entity because of the
integrated combination of the different substances. A good example is U1e nature of
water that comprises two distinct elements, namely oxygen and hydrogen that are
integrated into a single compound sub~-rance. A multiple substance distinguishes
itself from a single or compound substance on the basis of the multip le substance
bast:.-s of which it is composed and the multiple threats th.at it poses to all other
substances. Multiple substances are formed when different single and/or compound
substances form a separate unlty. A bunch of keys and a fork with separate tines
are examples of multiple substances.
All substances that are made of matter are contactable via one or more of
the human senses. If a substance is conractab le ii has the potential 10 t-ause harm
10 humans and dam.age to other substances (property) and to the environment.
For example, air that is contactable can cause any level of loss, from minute to
disastrous. If a substance is contactable and has U1e potential lo create Joss it is
a safety hazard. Anything that bas no substance and is not contactable is not a
safety bazanl All members of Lbe anlmal kingdom, fauna and flora meet the
requirement of being made of matter and being contactable. ln terms of the natural
environment, Ibis implies that everything whlch is made of matter and which is
contactable is a safety hazan:l; it does not apply to things such as a dream, a
thought, a story, etc. As material things present themselves in different formats, all
such tilings in any form.at are safety hazards. Therefore, all elements of the natural
environment such as water. oxygen, rocks, trees, flowers, smoke, bees. lions, the
sun, the moon, planets, meteors, etc are safety hazards.
Ill
Environmental Manageme_nt - A business management approach
6.3
Characteristics of safety hazards
All safety hazartls have certain common characteristics U1al contribute lo safety
and environmental risk. Such characteristics relate 10 the structure and functioning
of each particular safety hazard.
6.3.1
Structural charocteristics of substances
Substances possess the following characteristics:
•
Tangibility relates lo a substance's material basis lhal makes ii contactable.
Remember, a substance has no contactability there is no safety or
environmental risk.
•
Density implies the amount of matter, which sets the framework for
solids, liquids and gases. Each of these formats present different types of
environmental risk.
•
Size relates to the volume of substances, which contributes to environmental
risk in different contexts.
•
Weig/Jr relates 10 the amount of material substance of things and can
contribute 10 environmemal risk in different ways.
•
Shape relates 10 the impact of the point of con1ac1 between substances and
can contribute 10 environmental risk in different situations.
•
Texture or surface relates co the effect in terms of environmental risk of 1.b e
contact between different substances.
6.3.2
Functioning characteristics of substances
The diJTerent functioning characteristics of sub~"tances that contribuLe to
euvironmen1a l risk are the following:
•
Energy relates to the kinetic energy that is an indispensable part of the
rnnsteUation of the atoms of each substance. Energy is seen as the capacity
lo do work.. Tue two very basic energies that all substances have are kinetic
and potential energy.
•
Consis1e11cy (also cal.led symmetry) relates to substances, whether single,
compound or multiple, functioning in accordance with natural laws under
given circumstances. For example: waler heated sufficiently will always boil
and vapoudse; a piece of iron heated sufficiently will take a liquid format;
1Jgbb1iog can start a ftre, e1c.
•
foreracJion relates lo the ability to make contact with other subslaaces and lo
exchange energies with one another; tltls always coincides with the exchange
of energies between such substances. For example, dragging a heavy tree
trunk on gravel will result in generating heat on the trunk and ploughing
some furrows in the gravel.
112
Six: The natural environment
•
The ecosystems that function i.n the natural environment set examples or the
interaction of different rypes or systems in diITerent situations in the natural
environmenL
•
It is imponant 10 remember that the contribution or the different
characteristics of substances lo safety and environmental risk. is always
situa1io11ally determi11ed. For example: petrol vapour is more dangerous than
petrol fluid in given situations because it can ignite. likewise, one can drown
in petrol fluid, but not in petrol vapour.
•
Humans form an incegraced pan or the natural environment. Humans have
one additional characteristic that contributes to safety and environmental
risk, namely inconsistency. Although the human body's structural and
functioning organ systems are bound by natural laws, the human mind
operates on the basis of norms. Humans have the freedom and ability
10 decide upon their conduct in every situa tion in life. Such freedom of
choice often results in behaviour that is inconsistent Lo the requi.rements of
environmental safeiy.
6.4
The appearance of the natura l environment
The natural environment comprises millions of substances. Because such
substances are tangible and contactable, they can pose a threat to the safeiy of
other substances. In this context, all tangible substances are safety hazards. Safety
hazards exist as pure hazards, compound hazards or multiple hazards. Safety
hazards (substances] come in different formals. namely solids, fluids and gases. All
hazards each have a set of eight common characteristics that contribute to safety
and environmental risk. However, humans have an additional unique characteristic
that distinguishes them from alJ other substances. More about this will follow later.
Substances appear in the natural environment in a countless range of types of
safety hazards.
6.5
The origin of safety risk and environmental risk
When substances come into contact they interact, during wWch energy or energies
are set free. Such energy or energies present the risk that could impact on the
environment. For example: lightning strikes a tree on a game farm. Thermal energy
is set Eree. Tite tree and grass catches fire. The wind spreads the fire very rapidly.
A group of antelope is burnt ro death. Thus, safety risk originates when hazards
inieract and energy or energies are set rree.
113
Environmental Management - A business management approach
6.6
Environmental hazards and environmental aspects
An environmental hazard ls ·any situation or state of events that poses a lhrcat 10
I.he. surrounding environment: In a real sense a hazard stays a hazard because of
its contactability and its potential lo exd1ange and release energy upon interaction
wilh any one or more al.her safety hazards. A condition or state of events cannot
be hazards because I.hey do not meet such criteria for the definition of a safety or
environmental hazard. The basic requirements that apply are that ·any tangfble
object that has lhe potential to complement or interfere with the performance of a
task' and thai possesses 'closing and collision potential. is a safety hazard'.
Using the term "environmental aspect" establishes an acceptable recognition of
the origin of damage to the environmenL An aspect can be regardetl as a particular
part or feature of a situation. As such, the risk threat forthe surrounding environmeat
still originates via the interaction of hazards and the resultant release of one or more
energies. An aspect represents the event that flows from the interaction and energy
release. For example: air is a hazard. Safety risk originates wbe.n the interaction of
air, sun, earth and moisture results in a hurricane. Such interaction and resultant
risk is an integral part or aspect of the natural environment. Thus, an aspect of the
natural environment offers a threat to the surrounding e.nvironment as a result of
the risk that comes from the interaction and e.nergy excbaoge of safety hazards.
E.nvironme.ntal aspects refer to any organisational activities, products and
services that are involved in dealing with any environmental hazards aod their
associated energy exchange. Environmental impacts refer to aoy chaoge that may
occur in the environment. whether good or adverse, U1ai may result from dealing
with environmental hazards and their energy exchange.
6.7
The impact of human activity on the natural environment
The environment comprises water, land a.ad the atmosphere surrounding the earth,
micro organisms with flora and fau.na, the combination of and interrelationships
between such elements, as well as the chemical and physical properties and
conditions that can aJTect human health and general well-being. Safety hazard
interaction could result in different incidents that are normal incidents or pan of
the natura l environment and e.ach could result in di1Teren1 levels of magnitude or
severity of adversity.
l:luman activity is one of the major elements that impacts on the natural
environmenL Such impact can be positive, but is currently more negative.
Human activity that impacts on the natural environment relates 10 a range of
human involvement for cliITe.rent reasons or purposes. Humans are almost in all
respects of life dependent a.a the natural environment. Huma.n involvement aod
activities penainl.ng to life arise from specific issues, namely the need to sustain
human life, Ute purpose of enhancing the quality of life and the quest to establish
and prove supremacy.
U4
Six: The natural environment
6.7.1
Depletion of sources in sustaining life
Humans use many elements of the natural environment to maintain life. Fanning
in diJT-erent contexts, as well as fishing and hunting to provide food. are major
activities. The use of pesticides to deliver more and better crops bas detrime.ntal
impacts on the natural environmenl Deforestation to create space for dwellings
and more inteusive farming diminishes the generation of oxygen. with negative
effects on U1e atmospliere surrounding U1e eanh. Slaughtering and eliminating
large animals, birds and fish badly impacts on the quality of natural life and
its benefits for humans in Su5taining life. EITorts to maintain and sustain life in
conjunction with other activities adversely impact on the natural environmenL
The over-population of the eanh in order to ensure human existence threatens the
quality of the natural life inadvenently. Human activity bas encouraged the spread
of deserts, the depletion of soils. and the destruction of forests.
6.72
Enhancement of the quality of life
Human activities Lo enhance the quality of life and to provide ever increasing needs
result in major negative impacts on the natural environmenL Establishing industries of
different kinds, factories and mines, skyscraper buildings, sewerage plants, fanning on
a massive scale, squaller camps, transport systems of different kinds, and many more
threatens the trouble-free development of the natural environment Factory emissions,
electrical and nuclear power plants, electricity dist.ribution installations, velticle and
airplane emissions (eg ~-arbon monoxide), pesticides, ground falls, overpopulation of
certain areas, water and ground contamination and pollution, and many more human
activities aimed at improving the quali!y of life impac t the natural environment
negatively. 1l1e creation of electrical power via the utilisation of fossil fu el and nuclear
energy is another example of human activi!y that impacts on the natural environment
severely. Carbon leakage as the main element of greenhouse gas has detrimental
impacts on U1e natural environmenL Such eITects are directly related lo global climate
change as a result of the steady increase in the mean 1ernpera1ure of the world's climate.
Acid deposition from agricultural and industrial activities impacts negatively on warer
and soil quality, which affects the ecosystems in the natural environment advrnely.
Emissions from industries, as weU as from petrol- and diesd-using vehicles, create
major air pollution that at times aln1os1 suffocates people in major cities. Oil spills
endanger the continuation of plant and animal eco5YStems in the seas with adverse
eITects on beach pollution and reduction of sea food sources for p~-ople and animals.
Human traits such as inconsistency and irresponsibility are in many ways
instrumental to forms of pollution, for example water and soil pollution, with
the resultant damage to tl1e natural environment's capacity to maintain effective
growth. Sewage slu dge that spills from sewerage cleansing plants serves as aa
example in this regard. Buman endeavour to sustain and enhance U1e quality of
human life has therefore affected the natural environment in numerous ways. The
majority of such effects, however, are inclined to be negative.
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Environmental Management - A business management approach
6.7.3
Establishing supremacy via conflicts and wars
People have the tMdl'flcy to wan t to try to prove themselves stronger and superior
compared to others, for example the competition to conquer outer space or conflict
in the form of waging war. Many of these human acLivities affect the natural
l'flVironml'fll adversely. Warfare always has a negative effect on the natural
environml'flt, for example the use of weapons of mass destruction to gain the
upper hand on the l'flemy. Regional and foctional fighting is renowned for iis
destruction of many parts of the oatural environment with regard 10 fauna, flora and
ecosystems. The negative impacts of warfare are evident in the natural disastrous
effects of chemlcal, biological and nuclear weapons on humans, on civilisation
and on parts of the natural environment, for example land mines make former
farmland worthless. Another example is the extremely negative effects of the atom
bombs dropped on Hiroshima and Nagasaki during World War lL The quest 10
conquer outer space has added to the adverse effects of nuclear power on different
aspects of the natural environment, The waste that accompanies successful, futile
and failing efforts Lo conquer space resul ts in sea pollution, for example rocket
debris and more.
6.8
Natural driving forces that influence change in corporate behaviour
Natural fon:es which are based on the consistency of natural laws as well as on
forces U1at have their natural off-spring in the nature of human civilisation affect
cl1anges in corporate behaviour in order 10 accommodate requirements and needs
that flow from such natural laws and human needs and interests.
Examples of natural fon:es that have an impact on corporate behaviour in one
way or anoU1er include isunarnis, global climate change, urbanisation, population
growth, excessive rain, drought, hurricanes. earthquakes, snow falls, heat waves.
eruption of volcanoes, destruction of fauna, flora and ecosystems, water, soil and
air pollution. human needs for security and general well-being, the quality of
communiry life, a nd humans' need for self-development, ro list only some of the
most evidl'flt issues. These natural fon:es usually relate to conditions of excessive
energies, a lack of specific needed energies, the presence of unwanted energies, and
societal pressure to accommodate people's needs.
6.8. 1
Excessive energies
ln most cases tbe presence of unwanted excessive energies has adverse effects
on the natural environment. The occurrence of tsunamis, volcanic outbursts,
emissions of carbon, sulphur and other chemicals via industries and vehicles, acidic
wa ter from mine works, sewage sludge from urbanisation, rain storms, galeforce
winds and hurricanes, beatwaves, various kinds of fires, smoke. smog, pesticides
and orher chemicals From industrial and farming activi ties, explosions via mining,
earthworks or wars, and more all affect the environment badly.
116
Six: The natural environment
Human urbanisation has introduced special energy needs as a result ofvasl numbers
of people and lheir corresponding needs for water, electricily, gas, transpon,
buildings, beal1h, recreation. shclter and forms of labour involving different kinds
of activities to sustain life in meaningful ways. Society produl-eS ever-growing
rubbish dumps and landfill sites, leading 10 major concerns about the challenges
of dealing with the resultant increase in different lypes of energy and the potential
impact of such waste on the environmenL These excessive energy effects impact
on the normal functioning of businesses; such impacts require and affect changes
in corporate behaviour ro maintain surviva l and a competitive edge.
6.82
lack of specific energies
A lac.It of specific energies can also change corporate behaviour. During winter
and snow storms, for example, there is a lack of wanted thermal energy [heat).
TI1ermal energy is also necessaiy to prepare most foods. Water energy is necessary
for moisturising (eg human sustenance), cleansing, growing crops, sustaining
fauna and Bora, and more. Natural wind. natural sunlight and natural thermal
energy [heat) are necessary to perform a great variely of corporate functions and
responsibilities. For example, no wind turbine can tum to generate energy if no
wind blows. Growing specific crops or manufacturing specific products cannot
occur wbeu certain specific chemical or physical energies are not present or
available. The unavailability or lack of specific wanted energies can therefore have
adverse effects on corporate performance and on the achievement of objectives.
In such instances, companies may need to change their behaviour in order to s1ay
in business. The decline of certain lypes of energies that goes with the decline of
cenain substances, like waler, oxygen in the atmosphere, soil erosion and more,
requires management 10 develop different strategies to sustain the livelihood
of business.
6.8.3
The presence of unwanted energies
Corporate behaviour is 10 a large extent determined and changed by the presence of
unwanted energies. In order lo be successful. businesses cannot tolerate unwanted
energies. The presence of unwanted energies associated with carbon dioxide, heat of
1.be sun, rain, lightni ng, volcano lava and ashes, earthquakes, smoke, radioactivity,
chemical acids. tsunamis, noise. viruses (Ebola, malaria. yellow fever. etc). animals
(eg birds at airports), and more as a result of the presence or absence of a range of
substances [environmental hazards) forces management 10 adjust their strategies,
approaches and activities in order 10 ensure continuation of business within a
stress-generating environmenL
117
Environmental Management -A business management approach
6.8.4
Societal emphasis to consider human life and human needs
Urbanisation of people has a wide range of effects on the natural environmenL
Megacities witJ1 Lheir industrial giants. railroads, tarred roads, congested vehicle
traffic and more, aimed at accommodating the needs of humans in LTying to sustain
and enhance Lheir quality of life, depict the destruction of the natural environmenL
However, at Lhe same time. these activities are unable to prevent me development
of ghettos. slums and squatter camps that illustrate people's inabiliiy to care for
and sustain Lhe quality of the natural environment. Deforestation and drying of
wetland areas that result in desertification, the creation of industries to provide for
a wide range of human needs and Lhe emphasis on prosperity inevitably represent
and generate different types of natural energies and collective human energies that
management bas LO cope with to survive and grow Lheir businesses.
6.9
Business endeavours to protect the environment
Corporate responses to protect the environment have gradually changed from fairly
ignorant co responsible goal-directed business managemen t. Prominent corpora te
behavioural changes that have been instituted are disnissed below.
6.9. 1
Establishing and implementing a multi- faceted corporate policy
Civilisation requires that corporate policy provides maximum protection of the
natural environment. Such protection applies to wa ter, soil, air as well as all fauna,
flora and all forms of ecosystems in which businesses operate. Such protection
must also include ful l engagement in combating global climate change in Le:nns
of Lhe development of tl:te greenltouse effect with its unwanted temperature
wanning and disastrous adverse results. Most of these requirements are framed in
proper applicable legislation, which sets clear directives that need to be followed
and implemented in order to protect tbe natural environmenL Tue International
Standard ISO 140001 :2004 sets requirements for every organisation involved in
activities that relate to production and service delivery to establish and implement
an environmental policy within tbe framework of an environmental management
system. See chapter 8 for details oo tbe development and implementation of an
extensive environmental management system (EMS), which deals with different
types of environmental l:tazards and environmental aspects.
6.9.2
Compliance with environmental management legal requirements
In addition to the International Standard ISO 140001, companies in Soulh Africa
must comply with environmental management directives that are specified in the
National Environmental Management Act 107 of 1998 (NEMAJ.
118
Six: The natural environment
The basic elements of this Act, which focuses on providing an environment rha1
enhances the heallh and well-being of every member of society, contains all the
lega l prescriptions and regulations required 10 sustain continuity and profitable
endeavours. Prescribed legal and self-determined directives direct organisations
lo utilise a variety of resources Lo develop and implement an EMS that fuJJy and
effectively complies wirh such requirements. Sucb compliance places a heavy
burden on the fLDancial capacity of organisations. Sections 33 10 35 of NEMA
set out clear legal requirements, wilh which organisations mus1 comply, with
regard ro establishing, developing and implementing an environment management
programme fEMS). Section 24 of NEMA specifies the content of an EMS. The
purpose of NEMA is to ensure integrated environmental management and Lo
promote ihe integration nf the principles of environmental managemeni. [n order
to comply. an organisation needs to utilise different resources; this has specific
lioancial implications. All environmental management programmes are ro be
accepted, registered, certified and amended in accordance with legal requirements.
No company is allowed to develop and implement an EMS without the deliberdle
approval ofihe applicable competent authority. The Minister of Minerals and Energy
is the legally accepted competent auihority, while the Department of Minerals and
Energy administers NEMA.
G.9.3
Utilisation of cross-functional teams
Cross-functional teams (CFTs) provide the bes1 and only integrative approach 10
managing Lhe development and implementation of an EMS effectively. Businesses
realise ihat Lhe nature ofihe natural environment and interaction with environmental
hazards via business activities, products and services results in different types of
environmental aspects, with potential levels of environmental impacts. Dealing
effectively wilh sucb challenges requires a broad spectrum approach and strategy,
which is derived from deliberation and consuhatioo with CFfs Lhat comprise a
range of expertise.
Robbins (2001) stipulates that the members of such teams come from almost
similar hierarchical levels internal and external 10 an organisation. Sucb teams
are multi-disciplinary in nature, because Lhe members come from differen1
professions or discipli.nes Lhal convene to produce the bes1 available solution 10
any environmental aspeclS and actual or potential environmental impacts. Workers
from lower levels may also be included, depending on tbe nature of Lhe cballenge.
CFTs can play an important part in innovation and change. The members of CFfs
can be regarded as complementary professionals on Lhe basis that !hey are all
concerned with challenges relating 10 environmental protection, but that their
approaches lo Lhe challenges will differ in accordance wilh the focus of their
panicular discipline. CFfs are purpose dciven and do 001 function beyond the
scope of Lhe challenge for which they need to find solutions. Members of a CFf
each have their own focus, but these foci are all complementafY to the challenge
119
Environmental Manageme_nt - A business management approach
and the solution to challenges. This applies to addressing all issues conceming all
types of environmental aspects and environmental impaCIS re.laced 10 the EMS of a
specific organisation. Utilising dillerenl experts from various fields of siudy in the
application of the EMS implies specific financial resources additional to the main
course of activities, products and services.
6.9.4
Corporate consultation with interest groups
Toe natun: of the natural environment and tJ1e interaction with vadous
environmenta l hazards require that busines.~es have to consult with various groups
and slakeholdci:s, within and external to the organisation, that have a vested interest
in an organisation·s impact on the environmenL The King Repons™ stipulate that
organisations have lo consult with all stakeholders and interest groups with regard
to their policies, activities. produclS and services, with specific reference to the
environment and the community in which they operate. Organisations are legally
required to repon to shareholdl'IS on a regular basis about activities. Additionally,
management has the responsibility to consult with ilS health and safety committee
on preparing and reviewing of policies, plans and documents U1a1 relate lo all
organisational activities. The extensive nature of the natural environment demands
that organisations must engage all other interested parties in developing and
implementing an environmental management system to deal effectively with
environmenta l challenges. An explicit objective a nd directive of NEMA is 10
·ensure adequate and appropriate opponunity for public participation in decisions
that may affect the environment'. Such directives set the scene and requirements
for organisational transparency with regard to developing and implementing an
environmental managen1ent programme.
6.9.5
Corporate culture and corporate climate focus
People are more inclined to achieve goals and objectives that they set individually
or witltin a gro up context. The impact of consultation with employees and other
interest groups sets the basis for achlevemenl orientation. Such orientation forms
the foundation of employee endeavours and behaviour to focus on engaging
with the environml'Il l safely at all times. Developing a corporate culture and
corporate focus on the importance of and enhancement of an environmental safety
policy. which informs an organisation·s products and services in dealing with the
natural and man-made environmenlS, has become a major focus i.11 establishing
and sustaining a competitive edge in business longevity. The ultimate point of
departure in developing an organisational culture and climate is to create and
utilise emp loyees· passion for driving the importance of environmental protection
and emphasising ihe importance of dedicated efforts 10 realise company objectives
in this regard.
120
Six: The natural environment
Organisations must consider all potential environmental impacts which could
result from their adivlties, produces and services during their involvement with
e11vironmen1a l hazards and their energies that could result in environmental
aspects. Negligence in this regard could have majo r adverse implications for the
environment and for organisations.
6.1 O Conclusion
It is quite clear tha1 organisations must effectively focus on dealing with
environmema l conservation in 1.bc execution of their business activities, products
aud service delivery. Efforu in this regard must consider the actual physical
and chemical elements of the natural environmenL lt has lo be remembered
that all substances possess energy or energies and Uial involvement in business
endeavours implies interaction with environmental hazards and their energies.
Organisations need 10 identify all environmental aspects that could be present
via lhcir interaction with e11vironmen1a l hazards. Funbermore. all organisations
need to assess the actual or potential environmema l impacts lhat could flow from
environmen1al a~pects.
Organisations need to understand the effects of their activities, products
and services, as well as societal activities, on the natural environmenL Such
understanding needs to be reflected in the development and implementation of au
environmema i management programme (EMPJ and environmental managemem
system (EMS). Businesses also have to develop aud apply their EMPs and EMSs in
accordance with the specific legal requireme111s of local, national aad in1ematioaal
origin. Organisations have to indicate clearly their actual involvement in the pursuit
to protect the natural enviroamenl against any adverse effects of environmental
aspects aud environmental impacts.
Review questions
I.
Explain the basic physical and chemical structureS and functional
characteristics or the natural environment.
2.
Explain the difference be1ween environmental hazards, environmental
aspects and environmental impacts.
J.
Briefly slci:tcb the impact of human activitfes on the natural environment..
4.
Stipulate and discuss the natura l driving forces that influence change in
corporate behaviour.
5.
Qui.line corporate efforu to protect the cnvironmenL
121
Environmental Manageme_nt - A business management approach
References
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discerning practitioner. Pretoria: Van Schalk Publishers.
Cresser, M, Baity, l , BoxaU, A a Adams, C. 2013. lntrod11ctio11 to e1111ironme11tal
science: Eartlt 011d 111011. New York.: Pearson.
Crowell, B. 2006. Discover pltysics. Fullerton, CA: Crowell [Self-published].
Geller, ES. 1996. Worki11g safe: How to ltdp people actively care for /tea/tit a11d
safety. Bacon Raton: CRC Press.
Goe1sch, DL. 2010. 77,e basics ofoccupatio11al safety. New Jersey: Pearson Education.
loDSA. Institute or Directors in Southern Africa. 2009. King Report 011 Corporate
Governance fo r Sour/, Africa. Sand1on: loDSA. Available: bttp://www.iodsa.
co.za/?kingIU (Accessed 7 April 2015).
Kurtus, R. 2013. Stares of mar~,. http://www.scbool-for-champions.com/science/
matter_states.ht:ml.VYklJUbdWSo (Accessed June 2013).
McDonald, Gl a McDonald, EL 1994. A 1a.ro110111y of fmalities i11 rite primary
aluminium industry. Crestmead, Queensland: Geoff McDonald a Associates.
Republic or South Africa. 1996. Mine Healt/r and Safery Acr 29 of 1996. Pretoria:
Government Printers.
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107 of 1998. Pretoria: Government Printers.
Republic of South Africa. 1993. Occupatio11al Hea/tlt and Safery Acr 85 of 1993.
Pretoria: Government Printers.
Robbins, SP. 2001. Organizational be/raviour. New Jersey: Prentice Hall
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Seruau. SC. 2014. Global problems: 1'1,e searclt for equity, peat·e, and sustainability.
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Smit, SJ Et Esterhuyzen, E. 2014. 71,e basics af safety lrazards 011d the origins of
safely risk. Pretoria: Business Print.
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2013).
TI1ompson, AA, Strickland lll, AJ Et Gamble, JE. 2005. Crafting a11d e.rrcuN11g
strategy: Tire quest far compeiitive advantage: Concepts and cases. New York:
McGraw -Hill/Irwin.
Van Fleet, E. 2000. Debunking safety myths. ln Swartz, GS. (ed). Safery culture.
Chicago: National Safety Council.
Zumdahl, SS a Zumdahl, SA. 2007. Clremist,y. Bosion: Roughton Miffiin Company.
122
Learning Outcomes
After studying this chapter, you should be able_ to:
• position the International Organization for Standardization (ISO) within a world
context
• explain the objectives of the ISO
• rlicit and define appropriate terms uniquely relevant to ISO 14000
• discuss the structure and functioning of the elements of ISO 14000
• clarify the scope of the dlrectives that ISO 14000 sets for the implementation
of an environmental management sysiem (EMS)
• motlvatr the rationale for registration with ISO 14000
• state_ the applicablfity or ISO 14000
• briefly explain the srructute and functioning or the POCA cycle_
Overview of this chapter
The focus of chapter 7 is on the international role of the lSO in setting acceptable
standards for safety and health on an international basis. The endeavour is to
provide an explanation of the nature and functioning of ISO 14000, combined with
the valid basis for set ling directives for developing an organisational environmental
management programme [EMP) and an environmental management systen1 (EMS).
TI1e explanation will add value to the clear understanding and context applicability
of ISO 14000 tennlnology.
7.1
Introduction
It is essential to gain a perspective on the origin and objectives of ISO 14000.
Such an understanding creates a framework for understanding its structure and
functioning. 1n order to enhance an understanding of the nature of ISO 14000,
specific rerms that uniquely relate lo the nature of ISO 14000 will be introduced
and clarified. Understanding the context of lSO 14000 enhances the underscoring
of the applicability of standards that provide directives for safety and health on
an international basis. Tue initial departure of Ute explanation focuses oa Ute
need for international standardisation, plus the po~ition and objectives of U1e ISO
in U1is regard.
Environmental Management - A business management approach
7.2
Th e need for international standardisation
A workplace in a particular business operation in a specific counuy seiS safety
requirements that are unique lo such business and counuy. When creating safety
directives for such a workplace, the directives usually apply 10 the immediate
environment within which the business operaies. Such requirements or directives do
not necessarily apply internationally. However, the safety risk that can resul t from
activities in a particular business may affect the environment of adjacent countries
or the international world. lf the global environment could be adversely affected,
U1e_n such directives need 10 meet certain quality standards. Such standards should
meet international requireme_nts in ortler 10 e11Sure that the global environment is
kept inract. Such requirements need 10 be made acceptable prescribed srandards of
practice for dealing with and preventing safety and health risks that may affect the
international e_nvironment adversely.
Guidelines for arc welding activities, for e_xample, are usually determined by
the specific conditions in which such an activity takes place, because it mainly
a!Tects the local environment. Not all countries worldwide engage in arc welding
on a large scale.
Many countries in the world are highly industrialised. The emission ofindustrial
smoke, for e_xample, on a great scale will affect U1e quality of cbe environment on
a global scale. In this instance there is a need to set guidelines for directing the
prevention or conirol ofsmoke emission. Such guidelines should apply as standards
iliat effectively deal with the emission of industrial smoke in all industrialised
countries. The international standardisation of such guidelines will ensure that all
industrialised countries meet the same standards In dealing with the emission of
industrial smoke.
7.3
The posi tion and purpose of the ISO
The fntemational Organization for Standardization [ISO) was established in 1947.
This non-governmental organisation, which is based in Geneva, Switzerland,
resulted out of an international need for srandards to control processes of
international trading. The ISO was created with the purpose of enhancing the
standard of trading, communication and manufacturing on an international basis
through the development of appropriate international standards.
The ISO bas to re_spond to the needs of organisations to develop standards
that relate 10 boili specific and general trade and industry. Such standards set
practical standardised directives for imple_menting specific programmes, with a
view 10 enhancing quality related m specific industrial or business needs. Any
country can become eiLher a full, a correspondent or a subscriber member of the
ISO. South Africa is a fuJJ member of the ISO represented by the South African
Bureau of Standartls. lntemational committees, which comprise different members,
are responsible for developing international standards. However, the ISO has no
124
Seven: ISO 14000
authority to enfon:e the application of standards created. The application of any
international standard of the ISO is completely optional; however, customers· needs
for quality assurance may pressurise organisations to implement and adhere to
international standards developed by the 150. Specific directives are built into
standards to enhance adherence to particular quality imbcdded in standards.
ISO I 4000 is a very good example of an international standard that sets
requirements with guidance for use applicable to the implementation of
environmenta l management 5Ystems (EMS).
7.4
Orig in of ISO 14000
Many orgauisations are concerned with the effects of their business operations
on the quality of the natural and man-made environments. Such concems relate
to specific or all types of activities, products and services. These concerns now
mostly from new stringent le.gislation as well as from customer, stakeholder and
shareholder demands related to the protection of the environment for generations
Lo come.
A major concern about the environment is the serious threat to ecology
and the world"s ecological systems. The uncontrolled polJution that nows from
industrialisation and urbanisation, which depicts people"s disregard for the
preservation of nature·s eco5Ystems, bas led to a realisation of the urgent need
Lo develop a prevencative and turnaround strategy to combat the adverse (and
in some ways, irreversible) effects. Global warming and ozone layer depletion,
which offer numerous possibilities of threats to humans, cause a great deal of such
ecological degradation.
A serious focus on environmental standards began in 1993. The ISO established
the Technical Committee 207 (TC207) with the aim of developing a uniform
international EMS, as well as directives and tools for its implementation. TI1e 50
participants ofTC207 generated ISO 14000, which was published in 1996.
7.5
The basic objectives of ISO 14000
The ISO played a vital role in developing a range of standards in order to
assist organisations in exercising a proactive approach to the management of
environmental concerns. The basic objective of ISO 14000 focuses on assisting
organisations lo prevent environmemal impacts that could flow from any
business activities, products and services. The c.rucial focus of ISO I 4000 is to
provide support to organisations in their efforts to protect the environment, and to
balance pollution levels against socio-economic needs. The service that ISO render..
includes assisting organisations to make continual progress in meeting applicable
regulatory and policy requ:irements.150 14000 provides all the necessary elements
for implementing an EMS efTectively. However, setting environmental goals or
125
Environmental Manageme_nt - A business management approach
prescribing absolute requirements that apply to environmental performance are
nor part of such elements. Measuring organisations' compliance Lo ISO 14000
international standards, as well as to applicable national and local regulations, lies
within regulatorY agencies. The ISO's international standards merely set guidelines
for the valid and internationally acceptable uniform implementation of an EMS.
7.6
Scope of ISO 14000
TI1e ISO presents an all-inclusive ponfolio of standards for selecting and testing
methods to hone in on environmental management challenges. ISO 14000
substantiates such approaches and practices and culminates in the most recognised
constellation for developing and implementing an EMS.
The scope of ISO 14000 specifies requirements with guidance for use pertaining
to an EMS. Such scope simultaneously elicits the elements or componen t parts
of the international standard. Continual improvement is an essential focus of
ISO 14000. Continual improvement is seen as a process that recurs often in order
to enhance an EMS to achieve and confirm environmental performance, according
lo an organisation's environmental policy. Lo its scope the ISO 14000 addresses
a range of foci to improve an EMS, validate congruency between organisational
environmental policy and EMS endeavours and activities, provide confirmation
of conformance with appHcable legal requirements via internal and l'Xtemal
assessment and eva luation, and to verify recognition of interested parties in the
organisation. such as stakeholders, customers and employees.
7.7
Elements of ISO 14000 as an international standard for an EMS
ISO 14000, wliich serves as an international standard fo r an organisation to develop,
implement and improve an EMS, consists of diJTercnt integrated and inseparable
elements. The foUowing elements apply:
I.
2.
Design a11 EMS i11 accorda11c:e willi sra11dardised requiremems. An EMS can be
regarded as an indispensable part of the normal managen1ent systems of an
organisation. An EMS establislies and appHes an organisation's environmental
policy and manages all related dealings with environmental aspects and
environmental impacts.
Formulate au e1111iro11me11tal policy tltot sers tlte basis of the total EMS effort.
An organisation's environmental policy must stipulate aU its intentions, as
well as its directions that relate to setting the parameters for its environmental
performance as expressed by top management. in consultation with
stakebolde.rs, employees and other applicable interested parties. Policy plays
an important role in the context of environmental activities and a policy
statement provides llte benchmark for measuring all organisational activities
and endeavours.
126
Seven: ISO 14000
3.
Specif.v a11d elicit e1111iro11me11tal aspects that could generate safety and health
risks that could affect the environment adversely or positively (an environmental
aspect refers to any element of the activities, production processes or services
provision ofan organisation that can interact with elemems in the environment).
In this case, interaction implies making contact with auy one or more
observable or unobservable substances in the nearby or distant environment
Such interaction with substances, which represents safety hazards, sets one or
more energies free wbich couJd create any level of safety risk. Safety risk could
4.
List and scope all legal anti otl,er requiremems which the organisation
subscribes to and that apply to its environmental aspects. ISO 14000 sets clear
legal directives that apply to developing and implementing an EMS. Such
requirements are not absolute. Directives in organisational policy clarify the
focus of legal and other requirements with which an organisational EMS must
comply. Applicable fields of focus include ground, air and water pollution,
global warming, preservation of energy, and many more. International,
national and locaJ legal and regulatory requirements apply. The input of
stakeholders, clients, customers, employees and other ap plicable interested
group.s or parties must aJso be reflected in accordance with prescriptions
that apply to requirements pertaining to consultation. Interested parties are
seen as any individual or group that may be affected by the development
and implementation of an environmental management programme (EMP)
or EMS.
result in any form of adverse or positive eJTect or e!Tects.
5.
Esrablislr all abjecrilles, targets anti pla11s for de1,elapi11g and implementi11g 011
EMS. An organisation's environmentaJ policy must establish environmental
objectives to measure the achievement of clearly specified targets. Compliance
with legislative and regulatory requirements and directives specified in its
environmental policy must be the basis for setting environmentaJ objectives.
All objectives must elicit particular Largers that serve as a mea~-ure for
determining the achievement of environmental objectives, as elicited and
explained in the environmental policy. Explicit plans to achieve all objectives
in par with targets musi be realised as an essentiaJ part of an EMS. Periodic
review must be done to confirm progress towards achieving environmental
objectives. Such a review is a crucial pan of an EMS and uillises the Deming
POCA cycle as suggested in the ISO 14000 application.
6.
hrform a tmi11i11g 11eeds analysis a11d implement rrai11i11g. A training needs
anaJysis must focus on the competence to prevent the ocmrrence of any
significant environmental aspects. Such an analysis must include training
in realising ihe implementa tion of organisational policy within the context
of an organisatioaaJ EMS. Employees need to be familiar with significant
environmental aspects and the potentia I of each with regard to eavironmentaJ
impacts. Emphasis must he laid on mastering and consistent improvement of
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Environmental Management - A business management approach
personal competence pertaining to roles and responsibilities conceming the
implementation of the EMS.111e required sralf must be knowledgeable with reganl
to emergency preparedness, emergency rei.-ponses, as well as the implementation
of appropriate emergency procedures. All staff must be informed of the potential
elfects of not complying with particular relevant and accepted procedures of
operation. Continuing learning in the form of retraining and additional training
must be standard practice to keep all applicable staff informed of Cum.'lll and
new additional elements of environmemal aspects, environmental impact5,
as well as roles and responsibilities associated with new developments in
organisational activities, products and services. The emphasis must be a focus
on the continual improvement of personal and organisational efficiency.
7.
Create, maintain and improve i11temal and e.rremal commu11ication. All staff a t
all levels and fuuctions within an organisation must at all times be kept fully
informed on all environmental aspem; and environmental impacts related to
organisational activities, products and services. Ute organisation is responsible
for c.reating., developing. utilising and improving appropriate procedures to
ensure effective communication for such purposes. The ftTSt priority in this
regard is the effective communication of the organisation's environmental
policy. Al l staff must be conversant with all sig:nificanl environmental aspects
associated with organisational activities, products and services, as well as
potential environmental impacts. The necessary internal communication to
enhance and maintain an effective level of information of staff may take
different forms, for example grnup meetings, newsletters, bulletin boards.
intranct sites, reports and personal notes. Feedback and reaction on all
communiques sbould be standard procedure lo ensure that information is
received and read. The emphasis is on ensuring that employees are consistently
informed of the progress, success and improvement iu achleviug objectives
and targets that are set in the organisation's environmental policy.
Besides iutemal communication procedures. interaction with iuterested
parties must also be established. lutcrested parties can be regarded as iudividuals
or groups that can be affected by an organisation's EMP and EMS. Transparency
enhances iuvolvement, teamwork and commitment of external resources iu
working towards achieving an organisation·s envirnnmental performance.
Interested parties may include employees, non-governmental organisations,
governmen t departmenlS, stakeholders, Jabour unions and customers.
Information concerning emergency planning and emergency procedures should
be a high priority and communicated 10 external interested parties. Such an
approach applies especially to joint efforts in en1ergency procedures.
8.
128
Create a11d disseminate dacume111atio11 regarding tire EMS. Documentation of
aJI elemems of an EMS plays a very imponanr role in enhancing the successful
implementation oftbe EMS. Documentation should explain the overall ~,ructure
and functioning of an EMS, plus how all the different facets of the EMS work
Seven: ISO 14000
together. All staff must be conve.rsant about sources wbere information on
any elements of the EMS can be ob tained. 1l1e format of documentation, and
communication via sucl:t documentation, will be affected by factors such as tbe
size of the organisation in terms of numbers and levels or Slaff to be informed.
for example differences in cultural groups, and by geograpWral distribution.
The purpose of establishing and using appropriate documentation is to ensure
that all employees are equally well informed concerning the sta tus quo of the
progress or the EMS in relation lo objectives and targets postulated in the
environmental policy. The focus should be on the consequences or not meeting
such ends; demonstrating compliance with legal and other requirements;
stating gap analyses in order to enhance diligent and effective dedication
towards goal achievement; and enhancing team involvement in all functions
at all levels. Documentation should explicate measurement of success and
provision of directives 10 improve where and when necessary.
In order to ensure qualitative record keeping of activities and their effects
on the EMS, specific guidelines and Standards should be developed lo generdle
documents to provide proof of and valida1e implementation.
9.
Establis/r proct'dures a11d means ta mai111ai11 a11d control doc11mt'11tatio11.
Specific procedure and means must be instigated in order to ensure that relevant
and appropriate documentation is crealed and maintained with regard to all
struc1ural and functioning elements and facets of the EMS. Communication
on all such issues of the EMS should be created and dissentlnated on a regular
basis. The creation of documentation. such as progress and evaluative reports.
mtc,"t be implied in the environmental policy, plartned and constituted to be
produced at different stages and disseminaled with dedicated precision. All
documentation must be maintained in order to keep record of all activities
of the EMS and the effects thereof. Procedures for keeping and maintaining
documentation should be standardised.
To ensure proof of activities and tha1 their na1ure and effects are available
at all times, strict control must be kept with regard to documentation of all
elements of an EMS. The application of directives on the recordiug of the
contents of reports and other documentation will contribute to quality control
of documentation. However, strict control must be implemented to control
access to documentation with the purpose of keepiug and producing valid
proof of all elements, stages and facets of an EMS. Such documents mus1 be
kepi safely and must be readily available and easy lo present.
10. De11elop proct"d11res to deal effectively with significant en11iro11111e111a/ impacts.
1l1e SABS depicts an environmenlal inlpact as any change in the environment
as a result of one or more organisational environmental aspects rela1ed lo
its activities, products or services, which could imeract wirb environmental
hazards in the natural world. Such change could be adverse or positive ill
nature. The change could be panial or whole in size. Such hazards could be in
129
Environmental Manageme_nt - A business management approach
the immedia1e or distant environmeuL For example. organisational activities
may disturb the bees in a nearby hive which could result in a team of employees
getting stung. In contrast, an explosion at a nuclear plant cou ld have a major
effect on human life far away from the location of the explosion. Typic-.il
environmental impacts are air, ground and water pollution, global warming
and ozone depletion.
An organisation needs to establish, develop and implement procedures for
dealing eITectively with any of the possible environmental impacts that could
resuli from environmental aspects that could flow from its activltles, products
or services. Specific criteria and methods should be established and applied
to de1ermine si.gnificani environmental a<;pects and associated environmental
impacts. It is neeclless to reiterate that the focus in dealing with environmental
impacts should be on prevention. coupled with emergency preparedness and
emergency procedu.res, should any foreseeable or unforeseeable environmental
impact occur.
11. De11dop a11d assess effective11ess of emergency prepared111'5s 1111d respo11se
proced,m~s. Emergen~)' preparedness and emergency response procedures
constitute important indispensable elements of any effective EMS. Emergency
preparedness and emergency procedures should focus on:
• dealing with safely hazards and unsafe behaviour on site, because they
are the culprits that lead to environmental aspects;
•
mitigating all unacceptable levels of safety risk on she and in the
environment in onler to prevent any environmenta l intpact;
• dealing with inciden1s a nd accidents with rega rd ro preventing such
occurrences and using lessons learnt as a basis for corrective and
preventive action;
• communicating an an internal and external basis 10 keep all interesl
groups within the organisaiion, as well as interest groups in the
community, informed on the progress and successes of the EMS;
• mini.ousing environmenlal damage of any kind in order lo lessen any adverse
effects of slgnificanl environmental aspects and environmenta l impacts;
• compiling and e.ffectively using lessons learnt from any incident or
accident on site or in the environment;
• selt!ng regular scl1edule.s for testing of emergency response procedures
and emergency preparation in order to confirm and vaHda1e the
efficiency of such plans and implementation;
• confirming the effectiveness of evacuation exercises, evacuation routes
and associated training via regular training, drills and practical exe.rcise.s;
•
testing and proving, via regular practices, the e.JTectiveness of utilising
the assistance nf contributory external resources (eg neighbouring
organisations) in dealing with envi ronmental impacts; and
130
Seven: ISO 14000
•
verifying, via regular vinual exercises, the appropriateness of the
list of key personnel and aid agencies in 1.he prompt and speedy
implementation of emergency response procedures.
An effective EMS requires that all these imponant issues pertaining lo
emergency preparedness and emergency response procedures are in place,
tested and continuously improved.
12. Detem1i11e tire key qualities of operations ilia/ could sig11ifica11tly impact 011
r/re e11vironme111. An organisation needs to determine the key cbaractcristics of
the operations that can have a significant impact on the envitonmenL Specific
procedures have 10 be developed in order 10 monitor and measure the qualities
and effectiveness of all operations and related activities. information obtained
via such monitoring and measurement forms an lmponant basis for developing
and implementing corrective and preventive action. Key characteristics 10
focus on are the effectiveness in managing significant envitonmental aspects,
the contribution in acltieving envitonmental management objectives and
targets as well as 1.he extent 10 which environmental performance is improved.
ln LernationaJ and national measurement standards applkable to determining
the quality of an EMS should serve as criteria for judging effectiveness. All
equipment used for measuring effectiveness and quality must be valid and
calibrated in accordance with prescribed legal requitements.
IJ. Evaluate complia11ce with tire view to implement corrective and preue11tiue
ncrion. ISO 14000 has no legal authority 10 enforce compliance; however, the
proof of the effective implementation of an EMS comes through confirmation
of compliance wiclt applicable legal and other requitemenlS with wWch the
organisation has chosen to comply. Such complianL'l' includes obtaining
and applying applicable licences and permits. A specific issue that needs 10
be clarified is the identification of any non-conformity which occurs when
an organisation does no t meet or fulfil a requirement. ln the event of the
identification of non-conformity, the necessary steps need 10 be put in place
to prevent any future occurrences of non-compliance. ln the event of tbe
identification or a potential non-conformity. action to prevent such an
occurrence needs to be put in place.
14. Compile a11d mai11tain procedures related lo listing a11d keeping EMS records.
Keeping records that prove the effectiveness of an EMS forms an essential pan
of an EMS. Four levels of documentation and records apply to an EMS. The first
level ref= to aJJ issues related 10 an organisation's environmental policy. The
second level cover.; all the procedures that apply to working on and implementing
the EMS. Level U1ree focuses on all U1e practices and work instructions as per
relevant levels and functions of employees. Finally, level four provides proof
of achievements and associated corrective and preventive actions.
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Environmental Management - A business management approach
The best way 10 demons1rate effectiveness is by producing observable
proof 1hai underscores the acllievemeni of an organisation's environme.nral
objectives and targets sel out in its environmental policy. Observable proof
can be presenled via wriuen dorn.menlation and many forms of tecbnologic-.il
assistance. SABS lists records and documents tha1 stale remits obtained or that
produce evidence of activities that were performed in meeting set objectives
and achieving set targets.
An organisa1ion must put in place procedures for identifying, storing,
preserving, retrieving and disposing of EMS records. Procedures lo ensure
the legibility, idemification and traceability of records musi be established
and maintained.
15. Desig11 and apply a programme for a11diri11g EMS comp/ia11ce by qualified
auditors. lmplementing ISO 14000 goes band-in-hand with auditing quality.
An organisa1ion is required to introduce and operate a system of periodic
auditing. The purpose of an audlt is 10 confirm and ensure compliance with
applicable legal requirements contained in ISO 14000. Audit reports must
inform management about the efficienq• of implemen.ting the EMS and serve
as a basis for working on continual improven1en1 of the EMS. Audlt procedures
must be established and applied. Such audit procedures must detail the scope
of each audit, the frequency of audits, the methodology of the auditing
process, and the requirements and responsibilities for performing the audits
and producing il1e auditing results. 1l1e audit report must s1aie 10 whai extent
the EMS achieves ils objectives and targets a.~ se1 ou1 in an organisation·s
environ.mental polky, with due consideration Lo the requirements of the
international standards depicted in ISO 14000. An audit report must also
verify 10 wha1 extent such standards have been effectively implemented and
maintained. Such results must define lhe context of a management review of
the complete utilisation of ISO 14000 in implementing an EMS.
16. Establislr a review process 10 ensure EMS efficiency and effecrille11ess.
Management mus1 periodically review an organisation's EMS. The review will
focus on the suitability, adequacy and effectiveness in creating opportunities for
continuous in1provemenl via valid chauges. The focus will be on scrutinlsing the
environmental policy, EMS objectives and targets. Management must review a
range of documentation and records in order to evaluate lhe audit results, the
efficiency of its communication, its overall environmental performance, the
achievement of objectives and targets. the status and effectiveness of corrective
and preventive action, the outcnme of previous managen1en1 reviews, the
effectiveness of emergency preparedness and any circumstantial changes that
may a!Tect the EMS, and must provide recommendations Lo improve its EMS.
The process of review by management needs Lo happen frequently
througbou1 the overall implemenlation of an EMS. Such a review should
132
Seven: ISO 14000
happen as part of the Plan-Do-Check-Act cycle. This cycle of actions should
be implemented w.ith regard 10 all acliviLies, products, se.rvices and procedures.
The management review Ills into the check. stage. However, a management
review mus1 be applied during every element and its sectors. For example,
the ou1come of management review with regard to organisational resourres
sets the basis for planning during the development of an organisation's
environmental policy. See chapter 5 for a more detailed explanation of the
structure, functioning and application of the POCA cycle. This cycle should be
applied on a micro and macro level, depending on Lhe focus and associated
range of activities. Application of the cycle takes the form of a rising spiral as
the focus grows in terms of the range of contents and the level of difficulty.
7.8
Applicability of ISO 14000
ISO 14000 has applicable value for any organisation whose activities, products nr
services could have an impact on the environmenL Such applicability has value for
organisations of different sizes and kinds, whether private or public, or informal or
formal ISO 14000 provides guidelines and directives for implementing, malmainlng
and improving an EMS; ensuring compliance with international standards and
elements formulated in Ute environmenial policy; validating and demoostmting
compliance to all interested parties; seeking and acquiring registration and
certification of an EMS by an external world-renowned institution; and for
confirming conformance that an EMS meets the requirements of ISO 14000 as a
recognised inleroational standard.
TI1e implementation of the ISO 14000 family of standards has a wide range of
applicability and provides a basis for building organisational image and stature on
a local, national and international basis.
7.9
Rationale for ISO 14000 regist ration
Implementing ISO 14000 is optional for all organisations; no organisation can be
forced to do so. An organisaLion has to decide independently whether ta dedicate
specific resources and finances to undertake such an effort. Once an organisation
has decided to implement ISO 14000, it can register and obtain a certi.ficaLion nf
registration from the ISO. Obtaining certification for implementing ISO 14000 has
specific advantages or benefits. The following are important benefits for registration
and certification:
•
The common and general application of the accepted intemaLionaJ standard
will enhance trade and increase profits.
•
Compliance with ISO 14000 requirements increases acceptance of products
and services, Lhereby contributing to a competitive edge and to building au
organisation's image and stature.
133
Environmental Manageme_nt - A business management approach
•
Certification improves credibility penaining to organisational seriousness
about environmemal conservation.
•
Implementing ISO 14000 contributes to the elimination of challenges and
problems with regard to implementing an EMS.
•
Following the guidelines and cllrectives contained in ISO 14000 in
implementing an EMS reduces liability and risk. as well as associated
financial implications.
•
Tbe level of acceptable efficiency that goes with implementing ISO 14000
in an EMS will add to profitability and reduce pressure from stakeholdCIS,
customers and other environmemal interes1 groups.
Expenses pertaining to insurance will be less because an organisation can
present proof of effectiveness in reducing enterprise risk associated with
significant environmental aspects and significant environmental impacts.
•
7.1 O Relationship between ISO 14000 and regulatory requirements
ISO 14000 has no interest in dictating any prescriptions or Strategising any objectives
for environmental performance to any organisation. 111is imernational standard
sets guidelines and directives for the effective development, implementation and
continual improvement of an organisation's EMS. Regulatory bodies worldwide
are inclined to establish environmental regulations that apply to the different
countries within which they operate. ISO 14000 was created to assist organisations
in managi ng their EMS in response to, and in accordance with, all applicable
regulatory requi=ents. In order to ensure qualitative uniformity, all registered
organisations must comply with ISO 14000, as well as with local government
regulations Uial apply to implementing an EMS. ll is the responsibility of each
organisation to ascertain. list. explain, communicate and apply all statutory and
regulatory requirements that pertain to implementing an EMS in the organisa tion's
coun1ry and vicinity of operation. Sucb legal clements set the scene and context
within which the organisation has to develop, implement, mailllain and continually
improve its EMS. ln1ernal and external auditing of an organisation's EMS must
declare and report to what extent an organisation complies with statutory and
regulatory requirements that apply to such a particular entity in a specific
societal environmeaL
7.11
Conclusion
From the preceding explanation it is clear thai the nature, structure and functioning
of ISO 14000 stipulates the imernational standard for developing., implementing,
evaluating and in1proving an organisation·s EMS. Organisations can benefit
immensely by tapping in10 the wide spectrum of expertise and guidance U1al ISO
14000 offers lo help them to implemelll an EMS effectively.
134
Seven: ISO 14000
Review questions
I.
Explain the differences between environmental aspects and
environmental lmparu.
2.
What advantages does registration of an environmental management
system with the lmernational Organization for Standardization have for
an organisation? Set ou1 a ra1ionale in iltls regard.
J.
List all tJ1e elements of ISO 14000 that set guidelines and directives for
the effective development and implementatio11 of an environmental
management system.
4.
Can you sei out all the elements of ISO 14000 1ba1 11eed lo be addressed
when implementing an environmental management system? Explain very
briefly in nol more than two to three pages.
5.
Briefly sketch the origin and objectives of ISO I 4000.
6.
What does the scope of ISO 14000 entail? Explain.
7.
What is the relatiouship between ISO 14000 and its regulatory
requirements? Briefly outline the relationship.
References
Blunden, T a Thirlwell, J. 2013. Masteri11g operational risk. 2nd ed. Harlow, UK:
Pearson Educa1ion.
Denting, WE. 1982. Quality. productillity. and competiri,~ position. Cambridge: MIT
Press.
fuller, CW Et Vassie, LH. 2004. Health and safety management. London: Prentice
HalL
Goetsch, DL a Davis, SB. 2001. ISO 14000 c1wironmcntal managemc11I. New Jersey:
Prentice-Hall.
loDSA. lnstitu1e of Directors of Southern Africa. 2009. Ki119 Report on Corporate
Gavenwncefor South Africa. Sandton: loDSA.
International Organization for Standardization. 2009. Er111ironme11tal
111a11agcmt'.III: The ISO /4000family ofimemalional standards. Available: http:{(
ISO.
www. lso.org/lso/tbeiso 14000family2009.pdf (Accessed 18 November 2014).
Kolk, A. 2000. Economics ofenviro11111e111a/ ma11agrn1e11t. Harlow, UK: Pearson Education.
SABS. South African Bureau of Standards. 2009. SANS 14001 :2 005. Pretoria:
SABS Standards Division.
Srui1, SJ a Esterhuyzen, E. 2014. Tire basics of safety hazards a11d tire origi11s of
safery risk. Pre1o ria : Business PrinL
135
Learning Outcomes
After studying this chapter, you should be able to:
• explain t~e contenl5, purpose. structure, functioning and necessity of an
environmental management system (EMS)
•
understand the apptkable terminology that applies to an EMS
• explain the relevance of the Deming wheel to an EMS
•
understand and explain the responsibility of management within an EMS
• outline the importanc:e and value of documentation in an EMS
• clarify the integrity of EMS driving forces that influence change in corporate
behav[our
• explain lhe spiral cyclical nature of an EMS
•
moliva~ rhat it is important to control the implementation of an EMS
effectively.
Chapter 8 explains the nature of an environmental management syS1em (EMS) in
its foll conrex1. Specific issues that will be focused on are:
•
the integration of lhe Deming wheel in the implementation of the EMS:
•
the importance of meticulous and diligent accounting for the effective
management ofan EMS:
•
the establishment of a sound and directive company environmental policy;
•
the rigorous assessment and evaluation of EMS practices; and
•
the indispensable role of an EMS in maintaining a company's competitive
edge.
TI1e explanation hones in on the nature and characteristics of an EMS. The focus
is on the requirements to implen1ent an EMS effectively, while maintaining links
with the Deming wheel. The preventative and corrective actions needed to sustain
an effective EMS are briefly specified. Intematlonal requirements for implementing
an EMS are also brieDy listed.
The South African National Standard (SANS) 14001 :2005, which is an identical
copy of ISO 14001:2004, forms the basis of the explanation of an EMS in
1.h is chapter.
Eight: The environmental management system
8.1
Introduction
The EMS is of international origin. Companies and organisations which endeavour
10 develop their business lo a level of international acceptance and recognition
apply an EMS, wiU1 a view to achieving an acceptable competitive edge. Modem
global society requires Uiat businesses focus on ensuring that the environment
is left as far as possible in a state of high quality for generations Lo come. This
provides per.;pectives on maintaining the quality of the environment via effective
implementation of an EMS.
8.2
The structure and functioning of an EMS
An EMS bas a fairly unique nature and corresponding structure. As part of an
organlsation·s general management function, an EMS represents all management
elTons to develop and implement a planned environmental policy with due focus
on dealing with environmental aspects and impa cts eJJectively. An EMS comprises
different clements that function on a cyclical basis. The purpose of the total
functioning of an EMS is lo Stc>"tain continual improvement under all possible
conditions. The different elements follow one upon the other in consecutive order,
alU1ough, at times, a return Lo a preceding clement or clements does occur. An
EMS has a relatively permanent structure in tbe form of specific clements that are
always present. These elements function as an integra red cyclical sy~"tem within
whicll all clements affect each 0U1er reciprocally.
The basic structure of an EMS appears in figure 8.1. The structure comprises
the elements of environmental pollcy, planning, implementation and operation,
cllecking, management review and continual improvement. These clements function
on a systematical and ~-ycllcal basis within Uie framework of Uie Deming wheel.
The phases of the Deming wheel are Plan-Do-Check-Act {PDCA). The different
clements come into play during the different phases of the cyclically systematically
functioning wheel. The structure and functioning of an EMS need to meet specific
requirements as depicted in an EMS model for sustainable environmental protection.
137
Environmental Manageme_nt - A business management approach
Environmt':ntal
policy
Management
Planning
rt"vir:w
Checking and
rorrccti111: action
Agu~ 8.1: Ekments of an EMS
8.3
Th e context of the Deming wheel
TI1e POCA cycle with its differenc phases is increasingly recognised by
organisations for its strategically important contribution to ensuring consistent
quality management.
TI1ls cycle provides the context within whlcb an EMS functions. The application
of the consecutive POCA cycle phases ensures tliat the EMS is consistently focused
on achieving its objectives in accordance with applicable standards. TI1e phases of
the Deming wheel comprise the following elements:
DO
PIAN
•
•
Set obj«tiVt:5
Establish standards
•
Review J)':rformantt'.
•
Implement plan to
achieve objectives and
standards
•
Measurt'.progrt'.55
against plan
ACT
against 512ndards and
ta.Ice action
Figure 8.2: The Deming wheel
138
CHECK
Eight: The environmen tal management system
Scope of an EMS
8.4
The Imernational Standard ISO J4.0 0I :2004 sets specific requirements for an EMS to
assist organisations to establisb and apply an environmental policy and objectives.
It focuses on applicable environmental aspects that can have a significan t elTecl
on organisational efficiency. The efficiency of an EMS is judged in relation to the
scope that a particular international standard implies.
8.5
EMS requirements
When implementing an EMS an organisation must consider specific requirements
set out by the International standard mentioned above. Such requirements are in
the form of directives, which pertain to establishing, documenting, implementing,
maintaining and continually improving an EMS, with due consideration to the
suggested prescribing international standa rd. Particular elements must be put
into place.
8.5. 1
Environmen ta/ pa/icy
An organisation must establish an environmental policy. An organisation is defined
as any combi nation of individuals that forms a legally recognised functioning
unit that has recognised functions and administration. Environmental policy is
established during the planning phase of the PDCA cycle. An organisation's EMS
policy provides perspectives on intentions and acl1ievements that Ute organisation
will endeavour to attain with regard to environmental performance; this will
demonstrate practically measured results with regard to organisational aspects and
related environmental impacts.
Environmental aspects refer to any organisational activities and services that
may interact wiU1 any environmental hazanls and their associated energy exchange.
See chapter 6 for more on environmental bazanls.
Environmental impacts refer to any changes that may occur in U1e environment,
whether good or adverse, that may result from dealing with environmental hazards
and rheir energy exchange.
The cl1aracteristics of an environmental policy are outlined below:
•
•
The policy correlates with the activities, products or services of an
organisation with due consideration to the nature and scale of environmental
hazards and the Impacts of the associated energy exchange during activities,
production or service delivery.
There is a commitment to continual improvement of all efforts to prevent
environmental loss. Top management m1.e,1. demonstrate their intention and
dedication to Identifying and applying the EMS to fit new demands.
139
Environmental Manageme_nt - A business management approach
•
•
•
•
The policy contains an explicit undertaking to comply with legal and other
requirements related Lo environmental aspects and impacrs. Sucb legal
requirements may be of local, national or international origin.
Environmental objectives that correlate with continual reviewing and
renewal of environmental targets are set. Proof must be evident tbat tbe
policy is a working document that provides directives and acknowledgement
of policy achievements.
Proof or documentation or plans is kept, as well as proof or the
implememation and maintenance or activities related to all elements or an
organisation's EMS, including non-conformities or non-fulfihnent or any one
or more requirements. Appropriate records must be kfpt and be available.
Proof of intentions and practical proof of the communication of all elements
of an EMS to all persons working for or on be.half of the organisation must
be evident. Regular and reciprocal interaction in either technological or
direct personal format is essential to keep the EMS effectively functional.
•
The environmental policy must be available to the public. Access must exist
for any person to view and comment on the document.
•
There should be consultation pertaining lo environmental policy coments,
objectives and processes with all employees and relevant interested parties
and stakeholders, who are internal or external to lite company. Interested
parties refer Lo individuals or groups whose i.nterests could be affected by
organisational environmenta l activities.
An environment·al policy instigates momentum for the application and consistent
improvement or an EMS in order for an organisation lo achieve and sustain its
competitive edge. A policy statement provides the benchmark for measuring
all organisational activities and endeavours. Such EMS policy must depict top
management"s commJtmenl lo realising effective environmental protection under
all circumstances.
8.5.2
Planning
An organisation's environmental polit)' sets tbe framework for planning the different
facets of the EMS. A wide range of activities needs lo go Jato planning tbe execution or
the directives and the intentions that are set out in the organisation's environmental
policy. Stranks (2010) is of the opinion that to be successful an organisation needs
to follow a planned and systematic approach 10 policy implementation. The aim is
Lo prevent and minimise environmenral aspects associa ted with an organisation's
activities, products and services. Important issues need Lo be considered.
140
Eight: The environmental management system
£1111iro11me11ral aspecrs
An organisation needs 10 identify, implement and maintain specific procedures that
now forth from its environmental policy. Procedures that focus on environmental
aspects that can occur when organisational activities, production or service delivery
interacts with environmental hazards are of particular importance. Procedure.s
specify steps to perfonn activities or processes. The focus should be on control and
preventative measures, especially of those environmental aspects that origina te
in new or modified procedures related to changes in activities, production and
service delivery. The emphasis shou ld be on those environmental aspects Lhat can
result in significant adverse environmental impacts on the environment. Keeping
a record of all such planning on an ongoing basis is essential in planning for
any deviances.
Environmental aspects that can result in significant environmental impacts must
receive high priority to ensure the effective implementation of the EMS. Operating
conditions under all circumstances, including shut-downs, commissioning and
emergency situations, must be considered. Any form of environmental pollution,
whether air. water or soil/land pollution and environmental loss must be taken
into account. The purposeful use and conservation or energy or energies are also
of great importance. Due consideration needs to be given to all issues related to
the processes and outcomes of activities, products and services that could result in
environmenta l aspects via the handling of environmental hazards. Examples in this
regard are the manufacturing, packaging. distribution and disposal of products.
Planning must focus on the prevention of potential environmental impacts, as well
as on dealing with any effects or actual environmental impacts. Such preventive
action focuses on eliminating the likelihood of any nonconformity.
Legal a11d olht>r requireme11/s
Organisational EMS planning must include the establishment and maintenance of
specific procedures in order to access and identify applicable EMS requirements.
whether legal or any other, to which an organisation may subscribe. l egal
requirements may be of local govemmemal, departmenta l, national, provincial or
international origin. Other requiremenis may relate to agreements with specific
groups or authorities, customers, codes of practice, company requirements,
product stewardships. and more. Plannfog needs to address the appHcability
and potential e!Tects of environmental aspects associated with an organisa tion's
activities, products and services and the potential environmental impacts on its
EMS. Tite requirements of legal and other types of documentation are of particular
significance in this rega rd.
Objectives, ,argets a11d programmes
An organisation must formulate and instigate a measureable EMS polky, based on
objectives and targets at all hierardtlca l functional levels within the organisation.
14-1
Environmental Manageme_nt - A business management approach
Such objectives and targets, which represent shon- and long-teem endeavours.
must be documented and easily accessible. EMS objectives and targets must be
related to legal and other requirements, and must set directives for conunilmeat
and for continual improvemenL The main focus must be oa preventing and
minimising environmental impacts via environmental aspects when dealing with
environmental nazards during activities, production and service delivery.
In its efforts to achieve EMS objectives and targets an organisation must focus
oa developing, applying and maintaining oae or more progralllllles with specific
procedures. Programmes should spedry lhe designation or responsibiliry and
accountability for the realisation of objectives and targets al applicable function
levels in the organisation. Specifying time frames for achieving objectives and
targets must be an integral part of all programmes. Ute POCA cycle must be utilised
in planning and implementing each progralllllle. The dilTerent characteristics of
project management phases of planning, designing, constructing, commissioning,
operation evaluating, decollllllissioning and management reviewing could apply in
implementing programmes.
Programmes oeed to be in place for the impll'lllentation of each element of
the EMS and the utilisation of the POCA cycle. Specific objectives, targets and
procedures should apply to each ell'lllenl and cycle in order to determine the
effectiveness of the EMS.
8.5.3
Implementation and operations
Jmplementat!oa and opl'Iatioas within an EMS forms part of the 'do' phase of the
Deming wheel. TI1ere are a number of particular issues penaining 10 the operations
of and implementation of an EMS.
Rtsources. roles. respo11sibiliry and autltority
All applicable and adequate hum an. tecbnologic-.tl, infrastructural and financial
resources must be made available lo implement an EMS practically in its total
contexL Responsibilities, authority and accoun tability pertaining to positions
at dilTerent hil'nlrcbical levels must be clear. This particularly applies to top
management representatives in the EMS team. Tue EMS team must ensure that an
appropriate EMS is established, effectively applied, aad maintained as required by
the International Standard ISO 14001 :2004. Regular reporting oa the effectiveness
of the EMS is an essential part of implementing the EMS. Such consistent feedback
focms lbe basis of management reviews and leads to continual improvement
of the EMS.
Com11ete11ce trai11illg a11d aware11ess
All s talT involved in implementing an EMS must acquire and maintain relevan t
expertise (training and experience). Records must be kept of their existing and ongoing competence. Such competence must directly relate to the needs aad require-
142
Eight: The environmen tal management system
ments of implementing an EMS effectively. Procedures must be implemented to
ensure that all relevant staff is kept aware of the following issues:
•
The effects of non-conformity with the requirements of the EMS, which are
listed in the environmental policy, procedures and international requirements.
•
The existence of significant environmental aspects and their potential
environmental impacts (in terms of likelihood and severity), with due
emphasis on the eJTeclive and continual improvement of performance.
•
The importance of their roles and responsibilities in effectively implementing
the EMS according lo sped lied procedures.
Commu11icario11
In order lo keep staff informed about the implemenralion of an EMS, an effective
internal organisational communication system involving all positions at aU
hierarchical levels must he developed and maintained. The consistent sharing of
information on implementation, progress and improvement is crucial for achieving
EMS objectives and targets. The development of procedures for communication
with external sourres and interested groups can be established in accordance with
the needs of, and agreements with, such entities.
Docu111c111atio11
Documemarion on the implementation of an EMS must include the followi ng:
•
The basic va lues, intentions and directing objectives and targets specified in
the environmental policy.
•
The EMS scope that defines the focus of investment of resources of different
kinds for a range of environmental objectives and targets.
•
An explanation of rbe nature and interactive functioning of the main
elements of the EMS, with reference to applicable documents.
•
All documen1alion required by the lnremational Standard ISO 14001:2004 to
verify international accountability.
All organisationally required documentation, including records that relate to
rbe effective development, implementation, maintenance and improvement of
the EMS.
•
Co11trol of docu11m1is
An organisation must keep control of all documents in connection with the
dt'Velopment and implementation of an EMS in accordance with the International
Standard 1S0 14001 :2004, as specified in section 8.53 above. 1n rbis regard. an
organisa tion must develop and mainrain appropriate procedures that focus on
the following:
143
Environmental Manageme_nt - A business management approach
•
Clarifying and validating the adequacy of all documents by the appointed
authorities at difTeRnt functional levels before such documents are used;
such consent confirms reliability.
•
Confirming the revision, reviewing, updating aud reapproval of documents
on an ongoing basis to ensure continual improvement
•
Confirming and ensuring the availability of copies of relevant current and
revised documents whenever necessal)'.
•
Ensuring that documents 3J'{'_ correctly identifiable and fully legible at aU times.
•
Ensuring that documents that originate externally to the organisation are
relevant to the EMS and are correctly distributed to the different fU11ctional
levels within the organisation.
•
Reviewing documents to ascertain whether they have become obsolete a.ad
are therefore no longer valid; preventing the application of such documents
i.n the EMS.
Operatio11al co11trol
An EMS must concentrate on esta.bli.shing operations that relate to environmental
aspects and their potential environmental impacts that are identified as significant
in terms of organisational environmental policy, objectives and targets. Care
must be taken to ensure that such operations are applied correctly under aU
circumstances. La order to ensure such control all procedural steps in aU operations
must be documented to give execution lo environmental polJcies, objectives and
targets. TI1e cdteria that apply during operations must also be stipulated in writmg.
Procedures and operational requirements that apply within all operations related
to potential environmen1al impacts that may flow from significant environmental
aspects associated with organisational activities, products and services must be
developed aud communicated to all entities involved or to those who have a
vested interest in the implementation and outcome of the EMS. Operational control
coutdbutes lo ensuriug the effective achievement of EMS objectives and targets.
Emcrge11cy preparedness a11d response
In order to identify and deal with emergency situations and potential environmental
impacts, an organisation mus1 put appropriate procedures in place. Applicable
operations with relevant procedures must be developed and applied in deali.ng with
emergency situations and environmental impacls. i.n order to prevent or mitigate
potential or actual environmental loss. With the focus on continual improvemenl,
the organisation must instigate regular reviews to revise the effectiveness of
emergency preparedness, as well as the response procedures to emergency situa Lions.
This applies specifically after immediately dealing with an emergency situation.
TI1e regular testing and possible revision of emergency response procedures must
fonn part of the effective implementation and continual improvement of an £MS.
144
Eight: The environmen tal management system
8.5.4
Chming
01ecking. the third step in the Deming wheel, focuses on determining the cllicie.ncy
of the development and implemen1atlon of an EMS. Checking focuses on the
following specific issues of an EMS.
Mo11itori11g 011d measuring of progrl'ss
II is important that the organisation monitor the applicabilii:y, validii:y aod
effectiveness of EMS practices in dealing with significant environmental impacts
via the development and implementation of control and measuring procedures.
Applicable documentation of all monitoring activities and the measurements of
elTecis form essential parts of the checking elemen t of an EMS. The appropriate
validity and calibration of monitoring and measurement equipment must also be
verified and documenred.
Eva/ua 1io11 of complio11ce
The following issues penaining 10 compliance need to receive attention:
•
Commitment to compliance forces the organisation to put appropriate
procedures in place to evaluate compliance 10 applicable legal requirements
on a regular basis and to produce documentation on the outcome of such
checking.
•
An organisation must also determine its compliance to all other requirements
to which ii subscribes and must produce the appropriate ou tcomes of such
checlciog of docwnentation.
Action 10 correct 011d pre11e111 11011-co,ifonnitks
An organisation must outline procedures to deal with potential and actual nonconformities, as well as to implement preventive and corrective action. Such
procedures will stipulate requirements pertaining to the following:
•
dealing with non-conformities, with the focus on mitigating the effects of
their environmental impacts;
•
identifying r.he causes of non-conformities U1rough incident analys.is
and applying appropriate actions Lo prevent the recurrence of sud1 nonrnnformities:
•
determining whether a need for the prevention of non-conformities exislS
and instigating actions to prevent U1eir occurrence;
•
documenting the procedures and actions taken to correct or prevent nonconformities. 1ogetl1er with Ute results of such i111erventions; and
•
validating the effectiveness of action(s) taken to prevent or correct nonconformities.
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Environmental Manageme_nl - A business management approach
All preventive and corrective actions must ctirectly relate to the significance and
loss potential or environmental impacts foreseen or dealt with. EMS dorumen1ation
must be changed and adjusted in accordance with aU newly identified issues
pertaining lo the handling of non-conformities.
Record ccmtrol
An organisation must generate applicable documental proof in order to confirm
conformity lo all the requirements that apply within an EMS, whether legal, selfdetermined or U1ose relating lo the International Standard ISO 14001 :2004: the
results that were achieved must also be recorded. Appropriate procedures must be
instigated, applied and maintained m ensure that records related Lo all activities
involved in implementing an EMS are kepi in an acceptable fonctional condition.
Internal audf-r
Auctiting represents a unique opportunity to assess an organisation's performance
with reganl to its EMS. Internal auctiting delivers support to management with
regard to the achievement of organisational objectives and targets. Implementation
of the EMS requires that internal auditing of such implementation be applied at
stipulated intervals.
Auditing forms an in tegral part of the dteck phase or the Deming wheel.
Such auctiting is necessary In order to veriry the congruency of the planned
arrangements and procedures of the EMS in aL-cortlance with the International
Standard ISO 14001:2004. Furthermore, an audit must determine to what extent
an EMS has been eJTectively intplemented. TI1e outcome of the audit will serve as a
basis for a management review of the overaU EMS. Toe objectivity and impartiality
of EMS auditors and the auditing process are non-negotiable in order to deliver
valid information concerning the achievement of objectives and ta rgets, as wcU as
shortfalls that require intensive management review. Tue effectiveness of an audit
is determined by its focus on continual improvement with specific reference to the
prevention and reduction of non-conformities.
8.5.5
Management review
Determining the continuing applicability. quality and effectiveness of an EMS is an
essential runction of top management. Management performs such responsibility
via management reviews al predetermined intervals. Such overviews serve as
bases for decisions on improvements and adjustments of the EMS. Management
reviews need to be intensive and extensive. Continual improvement requires valid
evaluation. Changes may apply to the environmental policy, objectives, targets and
procedures. TI1e outcome of management reviews and decisions about change need
to fonn part of EMS overall documentation.
146
Eight: The environmen tal management system
Management reviews of an EMS must consider:
• the outcome or internal audits, especially assessment of legal compliance
(eg with ISO 14001 :2014) and compliance with any other self-determined
requiremen IS;
•
information (eg recommendations and complaincs) provided by interested
parties externa l to the organisation;
•
success in achievi.ng obj ectives and targets as the basis for determining the
efficiency of an EMS;
•
•
the relevance of, and progress in, applying corrective and preventive actions;
the extent to which recommendations of previous reviews have been
implemented:
any new or changing conditions and circumstances. especially changes
in legal requirements that apply to environmental aspects and changes to
environmental impacts;
directives Lo improve the EMS and to advance continual improvements in
order to sustain a competitive edge;
accident statistics, related recommendations, lessons learnt and eff~cdveness
of the implementadon of recommendations;
•
•
•
•
rnrrective actions and their effects carried out since the previous review;
•
recorded instances of any ineffective procedures. with a view to
improvement; and
•
the adequacy or emergen~-y procedures as a basis for determining emergency
preparedness.
Managemen t reviews must in all cases focus on recommendadons with regard
to environmental policies, objectives., and targets and associated changes Lo any
one or all elements of an EMS, thereby demonstrating that they are committed to
continual improvement.
8.5.6
Continual improvement
Continual improvement represents an ongoing process. lt is an integral part of the
act phase or the Deming wheel because recommendations of ma nagemenr reviews
are in1p lemented by EMS actions. Management needs to be fully committed to
and focused on creating an organisational culture of continua l improvement.
The emphasis must be on advancing performance in order to improve the EMS
and to phase out wealmesses that adversely impact on the implementation of an
EMS. Maintaining qualitative development and implementation or an EMS is the
ultimate endeavour of an organisation. Continual improvement to keep abreast
with innovation and Lo sustain a competitive edge in terms or products and services
is absolutely essential.
147
Environmental Management - A business management approach
As depicted in Figure 8.3, the process of developing and sustaining an effective
EMS takes place in rhe context of an inclining spiral. TI1e managemenc review
provides lhe directives and guidelines for increasing the quality of an EMS to an
advanced level of effectiveness. Such spiralling runs consecutively with the phases
or the POCA cycle.
Environmental policy
Management review
Checking and
corrective action
Planning
lmplemffltation
and operation
Figure 8.3: An EMS spirals to advanced levels of effectiveness
8.6
Conclusion
Th.ls chapter bas focused on the nature and functioning of an EMS. The context of
tbe POCA cycle of the Deming wheel was incorporated inlD the discussion. Tlle role
and effects oftbe International Standard ISO 14001 :2004 were also highlighted. The
importance of an EMS policy and the consistent measurement to determine progress
and success were also explained. The leading contribution of top management in
detennining and enhancing the effectiveness of an EMS was clearly elucidated.
Finally, the focus on the clfectiveness and continual improvement of an EMS to
sustain organisational continuation was discussed.
148
Eight: The environmental management system
Review questions
I.
What clements constitute an environmental management system and
how do they relate to one another? Use a diagram 10 support your
answer.
2.
Explain the functioning of the Deming wheel
3.
Clarify where the different phases or U1e PDCA cycle link in with the
cleme-nts ofan environmental management system.
4.
Why should a management review focus on continual improvement?
5.
An internal audit represents organisational effons 10 check to what
extent an environmental management system policy s1atemenl is being
realised. ls this statement true or false? Motiv-dle your choice.
6.
What lmernational instinu.lon sets legal requitements tha1 management
must consider and apply in an organisational environmen1al
management system? Explain.
ReJerences
Blunden, T 8 Tbirlwcll, J. 2013. Mastering operational risk: A practical guide to
u11derstm1di11g operational risk and /,aw ta ma11age it. 2nd ed. Harlow. UK:
Pearson.
Deming, WE 1982. Quality. productfoity, a11d c:ompetirivc positio11. Cambridge: MIT
Press.
Fuller, CW Et Vassie. ill. 2004. Hea/1/1 and safety ma11agemr-111. London: Prentice
Hall.
Geller, ES. 1998. Working safr-: How ro help people acl'ivrly care for 1,ealth and
safety. Bacon Raton: CRC Press.
IoDSA. lnstitu1e or Directors of Southern Africa. 2009. King Rl'port 011 Corporate
Govemancefor South Africa. Sand1on.: JoDSA.
Pain, SW. 20IO. Safe/}\ /,ea/ti, a11d en11iro11me11tol auditing: A practical guidl'.
London: CRC Press.
SABS. South African Bureau of Standards. 2005. SANS 14001 :2005. Pretoria:
SABS Standards Division.
Stranks, J. 20IO. Hea/1/r and safety al work: An essenriol guide for managers. 9th
ed. London: Kogan Page.
149
Leaming Outcomes
After studying this chapter, you should be able to:
•
understand the nature of the main functions related 10 the managing of EMSs
•
provide a brief overview of the types of EMS Information resources
• indicate the relevant stages at whith environmental laws can be developed
•
provide an overview of International interventions practised by gov~nments
•
understand environmental legislation in a SQuth African context
•
mo1lva1e the Importance of applying the appropriate environmental regulations
in an organisation
• define what an EIA entails
• elaborate on the-drafting of an environmental management plan
• explain the purpose, structure and steps of environmental auditing
•
indicate the relevance for U1e improvement of EMSs
• elaborate on EMS approaches to ensure thesustainablllty of the environment
Overview of this chapter
In chapter 8 an overview was providL'<I regarding Lhe fundamental Features or an
environmental management system (EMS). With this in mind. various concepts
were explored and discussed to present a general idea of what an EMS cnr.ails. In
chapter 9, the focus moves more towards the elaboration of structured procedures
related lo EMSs in greater detail This will include strategies, resources, specific
legislation, sy~"tematic plans and an outlook on the potential future of EMSs.
9.1
Introductio n
EMSs materialised as a way of ensuring adherence Lo Ieg.i slation and lo address the
consequential environmental cases in Lhe interest or the society as a whole. The key
theme of an EMS in tbe context or an organisation is Lo improve environmental
performance on a continuous basis. lntcmational standards should be taken into
consideration by organisations Lo incorporate an efficient EMS into Lheir cm:renL
Nine: The practical natu re of the environmental management system (EMS)
business operations. Within the sphere of ISO 14001, an organisation should
customise and modify an EMS structure U1a1 will serve the needs of their business.
Titis chapter will present a more comprehensive description of EMS procedures in
an organisation.
9.2
Strategic approach to EMS
EMSs can assist an organisation with the identification and controlling of
risks, disadvantages and expenses, and evaluation of business and environment
enhancement opponunities. AL the same time, eco-control can facilitate the
foundation of a holistic EMS. An environmental policy is required for all EMSs
in conjunction with well-defmed and quantifiable yearly objections to protect
U1e environmenL lt is important for senior management lo integrate EMS into
organisational objectives wWch will ensure commitment towards development of
environmental strategies.
Information management is regarded as the central point of EMS and can
be enhanced through Ute development of environmental accounting. Records
should be kept of data regarding environmental accounting and environmental
involvements to create a foundation for decisions taken around eco-efficiency. The
focus of tl1e decision-making system is lo assist policymalters to malte clear and
realistic decisions based oo the recorded data from information systems.
TI1e imponance of talting implementation med1ods inro account is overlooked
in a lot of environmental instruments. Piloting this implementation strategy
does not foL1.lS on the responsibility of top management only but impacts
management at operational level as well. The connection U1at exislS amongst an
organisation·s accomplishments and environmental strategies should be defined,
and improvement against goals set should be recorded. Toe significant growth
of externa l communication about environmental maners is a result of the rapid
increase in environmental reports. These repons show wel l-defined environmental
strategies and activities aligned to EMS approaches ta achieve tlmn.
In tlte auditing and review stage, the number of times audits are conducted
will be influenced by the particular situation of eco-managemenl and audit scheme
(EMAS) issues in U1e organisation. Jn addition, it would be advisable to reassess EMS
objectives annually and set new goals in place. Each organisation may be unique in
its own way but several main functions were outlined to promote strategies aligned
to EMSs in organisations (Figure 9. 1).
151
Environmental Management - A business management approach
Significant EMS standards
EMAS
BS 7750
ISO
Main functions
Setting goals Information
management
• •
O"lsion
support
[ Lifr cyde assessment J
ITOM I
• •
I
I
Environmental
accounting
PIioting and Communication Auditing and
control
reviewing
•
•
I
TOEM
I Environ~ental
I
reporting
I
I
Environmental
auditing
•
Managing approach for EMS procedur~
Figure 9.1: Purpose and implementation approach~ of EMS
9.3
EMS information sources
An approach used by government to distribute information is 10 publish brochures
continuously. varying from general to highly im11onan1 information. Three
classifications are usually evident for this kind of information shared, namely
·11orict"S of proposed rule111aki11g-, ·111teri111 rules' and 'final rult"S'. A clear distinction
can also be made between primary and secondary information sources as follows:
•
Primary information sources - comprise of confirmed legislation and law
systems.
•
Secondary information sources - comprise of non-legalese assessments and
explication subjected to the particular issue being researched.
It is important to bear in mind tbal information regarding environmental conformity
Is adapted at a fasl pace. In light of this, ii would be recommendable 10 crea1e
a high-quality information database extracted from different forums 10 access
infoanation sources. Furtheanore, anention should be drawn 10 the legitimacy of
the presenters and wri1ers to ensure the credibility of the infonnation selected.
152
Nine: The practical nature of the environmental management system (EMS)
A rational staning point to seek information would be from books. although they
can nor be depended on predominantly as they become oui of dare over the course
of time. In addition, tl1ere are other types of sources that can also be used Lo access
information, which include but are not limited to news sheets, videotapes, looseleaf
services, journals, magazines and libraries.
If we move to more recent times, a much easier and readily available way
of obtaining information would be electronically. Electronic information can be
gained by tlJe means of memory devices for computer systems, magnetic storage
disks and lapes, or online through the use of computer-based devices.
Online services are a real-time information source that generally providl'S the
most recent information such as amendments of legislation linked to environmental
issues. There are different online platforms thai can be used as Information
sources for EMSs due to tlJe fast-growing reputation of the internet, presenting an
international community.
9.4
Environmental law
In context of the environment.. an environmental law is viewed as 'all 1/re legal
pri11ciples w/rich haiir i11 common not so much their special c/1araC1er but 11,r
subject 11,ey regulale'. An environmental law framework exists by wlticb a country
may form part of international conventions and agrees Lo abide to these pledges
made regarding intercontinental initiatives. There are numerous advantages linked
to these types of conventions for a nation. which include pannership in rese-drch
projects and accesslbillty to global funds.
There are a number of stages where the formulation of policies takes place to
address various environmental cliallenges. These stages can be divided into four
categories as illustrated in Table 9. 1.
Table 9.1: Various stages policy development
Stage of policy
K"/ Coordinator
Ex.ample
locally
Provincial government
local governments, local munkipalities etc
Nationally
Federal government
South Africa
Regionally
Regionalised
institutions
Sub- regional Institutions such as the Southern
African Development Community (SAOC)
Globally
Global forums
World Trade Organisation (WTO), United Nations
(UN) etc
Environmental law comprises of forums focused on legislation and agreements
wWch provide an overview or appropriate ways for people, organisations and
countries to act on. within the environmental framework. These environmental
forums created constitutional and lawful procedures at dilTerent government levels
153
Environmental Manageme_nt - A business management approach
to s1.abilise tbe concerns or the various S1.akebolders. Concurrently, political science
along with environmental research should be considered when environme.nral
policies are being formula ted.
9.4.1
lntemationol environmental legislation
Different interactions have been led by govemmeniS or numerous countries to
force various stakeholders to comply with environmental legislation as a way of
protecting the environment. Contradictory and approving views transpired about
the interventions put into practice by governments and are classified as follows:
•
•
•
Command and co111rol met/rod - an approach that involves matters
concerni ng a rise in expenditure and impractical iimelines.
/11ce11tive-based approac/1 - a method that is well liked by industry leaders,
economic experts and environmental influencers. This approach employs
economic indicators in terms of the market to increase ground-breaking
initiatives for environmental protection.
/1111avario11-frie11dly approac/r - this is a more feasible method as businesses
are allowed more freedom to achieve the specific objectives set by
government in a manner that they see fit. As a result, businesses can become
more marketable and compete globally through the use of environmentally
friendly practices, along with profitable returns.
In the last rew years numerous businesses have acknowled.ged the competitive and
economic benefits associated with the enhancement ofenvironmental developments.
A noticeable benefit identified by businesses is that the caplial amount S1.akebolders
invest is influenced by a favourable environmental reputation. On top of that,
businesses can reduce costs and enlarge financial gains by means of improved
environmental initiatives.
Several vo luntary interactions have been undertaken by a number or
businesses without the enforcement or regulations over the laSl JO years to enhance
the sustainability of the environment. Altltougb these kinds or interactions are
imperative, they do not totally surface as voluntary approaches but as a reaction
by adopters based on laws foreseen and public concerns mised In the sense of a
controlling mechanism, it is desirable for these types of voluntary initiatives Lo
have well-defined systems in place to ensure compliance.
9.4.2
South African environmental legislation
In section 24 of the Sou lb African Constitution, environmemal rights are outlined
in the follow ing way. Every individual bas a right to:
•
•
154
an environme111 that does not pose any danger to their physical condition or
we! fare; and
have the natural environment protected, and to ensure the welfare of the
current and next generation to come, through realistic regulations and
various other activities.
Nine: The practical natu re of the environmental management system (EMS)
Within the frame or state-owned sectors. the nature or environmental management
is regarded as mulLiplex and consists orthe following factors:
•
•
environmental law;
the concept or being ruled by someone else; and
•
environmental management allied to certain interactions, goods and
services, including the provision of international products and services being
control.led and protected.
Each of these faetors tied 10 environmental management should be endorsed
by depanments across the government sectors in South Africa ou all levels or
governance, ie locally, provincially and nationally. It is regarded that governmem
depanments at a local level are not properly equipped to address the various types
or environmenta l challenges that are emerging. There are a number of ractors that
can contribute towards the inadequacy or local government departments, especially
a shortage in resources and technical expertise. A recommendable suggestion that
was made was for a higher degree of authori ty to assist wilh reinforcement at lower
public levels. Additionally, a decemralised process suitable for Lhe state or affairs
will enable the optimisation or political involvemen t and accountability or duties
in larger regiollS.
At a national stage the National Environmental Management Act 107 or 1998
(NEMA) presents an overall framework. in South Africa for the protection of the
environmenL On the basis or NEMA there are three categories or tile legislative
system that can be applied for environmental protection: firstly, the strengtl1ening
or environmental ntatters being constituted by regulative procedures; secondly.
the provision of environmental protection systems by means or an environmental
legislative structure; thirdly, a system to enable the endorsement of certain
environmental regulations that can reacb the mass environmental media to a great
extenL It should be noted that authorities primarily make use of a mixture of each
one or these systems to ensure the protection or the environmenL
9.4.3
Applying reltvant regulations for EMS
TI1e ISO 14001 standards play a ro le in ensuri ng that organisations comply with
the appropriate environmental regulations. Legislative compliance has become
progressively vital and has been iniegrated in numerous principles or main clauses.
Within the comext of Africa, a lack of government regulations is expecienced
on a day-to-day basis, whicb presents a bindrance for organisations to comply
fully with the necessary regulation standards. However, organisations should strive
towards accomplishing legislative compliance tbrough the use or the ISO 14001
standards in accordance with procedures in their organisation.
155
Environmental Manageme_nt - A business management approach
An organisation should establish systems that are accessible and recognisable in
terms or appropriate legislative standards associated with environmental issues.
The legislative standards that organisations comply with should be aligned to
issues linked to their business and during the course or EMS being aclrulnistered.
All U1e legislative standards relevant lo an organisation should be connected to its
business operations, functions and region.
Awareness should be created amongst workers lo make sure they commit
themselves to the organisation's legal compliance. Access to legislative data should
be granted 10 workers through registers so that ihcy may obtain regulations at
any time. Registers should be kepi up to dale and employees notified about any
amendments regarding regulations that need to be applied.
9.5
Environmental impact assessment (BAJ
Environmental assessment forms an important part of the current environmental
managemen1 ash is one of the foremost procedures focusing on the advancement
or a sustainable environment. The lindings regarding the impact of assessment are
recorded in an environmental assessment repon. The report findings should entail
certain informed data which comprise of the following:
a.
E.rplauation of tire rcquiremc:11t and appropriateness fo r an i111c11ded project
The purpose in terms of necessity and suitability of the project is to make SUTe
that the alternative options selected are applicable to the planned activities.
A desirable approad1 would be for the relevant authorities to measure the
aftermath of the various alternative options by consideri ng the advantages,
risks and ra1ionali1y of unrealistic options.
b.
Esrablishl'd possible altmwtive options
The possible alternatives should be examined to determine the mos1 efficient
way or achieving the proposed project by improving environmental advantages
and preventing possible negative effects. The assessment should take into
account each one of the alternative options to ensure the best course of action
for an unprejudiced and unambiguous process.
Only the alternative options cons.idered desirable for an intended project
should be examined. The alternative options are established during the initial
phase or the project and extended throughout ilie explorative stage of an EIA.
Emphasis should be placed on the imponant alternative options to remove the
remaining ones 001 required. A clear description of the reasons why specific
ahernatives were not selected mus1 be recorded.
c.
£stab/is/ring tire importance of possible e1111iro111nerrral effects
Alternative options tha1 are considered must be wcll delined and practical
given the fact that the analysis happens througboul the ElA
156
Nine: The practical natu re of the environmental management system (EMS)
Several fundamental elements must be taken into consideration as follows:
• environmental regulations, policies and goals;
• degree of Ute co mmunlty ·s interests; and
•
analytical and specialised proof regarding any disturbances and adverse
elTects of important resources, environmental activities and the social
well-being of society.
The establishment of alternative options is noi a simple task and a11ention
should be paid to the following factors:
d.
•
•
level of risk based on Ute welfare of the community:
disputes amongst stakeholders;
•
level of unpredictability regarding certain issues;
•
•
risks that appear to be undesirable;
whether Ute project being developed involves a unique environment;
•
•
whether a prototype will be developed; and
whether there are any objections against the project by the community.
E.rpla11alio11 and compamtiue assessment for each of rhe alrernarille options
identified
The primary functious in the procedure of Ute comparative assessment is
based upon the establishment of alternative options wlticb include the below
overlaying sreps:
• Jde111ijicarion - impacts are linked to all Ute stages of a project and
interrelated to activities established.
e.
•
PTl'tlic1io11 - the essence, scope, measure and time span of the significant
effect should be forecast.
•
•
E11a/11atio11 - ilie value of the ~idue of u1e afieonalh should be established.
Drawing up 011 e1111ironme11ra/ ma11ageme11t plan - the design must take
into account the significant effects and identify a preventive plan of
action to be executed when required.
E.rpla11atio11 011 sltoncomi11gs pertaining ro e.rpertise. presumprio11s and
unpTl'dictabiliry
£IA are affiicted by unpredictability as uncenainties are seen as inevitable and
can L,e the result of various clements, such as Uu~ following:
• Scientific 1111ccrtaintics - iliese happen in instances where insufficient or
no knowledge exists regarding procedures.
•
•
hrfornrarion u11crnai11ties - these take place when limilatinns are
presented by insufficient data or inadequate assessment processes.
Pa/icy 1111ccnai11ties - these happen in instant-es where the goals are disproved
and policy guldcllnes regarding appropriate impact stages are vague.
157
Environmental Manageme_nt - A business management approach
•
Accuracy and rPliabilit_v af data - a high level of accuracy may result in
unspecified data as processes can be utilised ro resolve issues they are
not crea1ed for.
•
Significance of rite 11ariaus kinds of impacts - the effect on the welfare
of people should be of greal significance at all times.
•
Usual 11ola1m1y af rite e1111ironme11t - the biophysics scope demonstrates
a grea1er extent of diversity in contrast to the chemical or physical
scope.
•
J111rinsic uncertainty of models - models based upon environmen1al
restriciions cannot replicate correctly, as they utilise uncomplicated and
invalid cocrelatlons that genera1e inaccurate results.
The following additiona l Information should also he specified In an EIA:
•
An explanation on rhe imponance of each ma1ter, including suggestions on
approaches considered through endorsemenl of alleviation estimates.
•
An explanation on shortcomings pertaining to expertise, presumptions and
unpredictability.
•
The identilicarion of strengths and weaknesses that might possibly impact
society and the environmenL
•
A comprehensive reporl about rhe environmen1al impac1.
•
A summarised report on rhe results of exclusively practised procedures.
•
A specification on relevam environmen1al ma tters.
•
Designing of an environmental impact plan.
•
Any specified date tltat might be required by authocised bodies.
•
A number of duplica1es based on exclusively practised procedures.
9.5.1
Drafting an environmental management plan
An environmental management plan (EMP) is viewed as a planning mechanism
that is utilised prior 10 the operational stage of a project. An EMP is a document
that is continually updated and edited; it should be revised and adjusted every year
as ii forms part rhe 13.lA drafted plan. There are importanl elements rhat an EMP
should address which comprise of the following:
•
Summing up rite undesirable effect 011 rlre euvironmenr - as decided on in the
ElA.
•
•
An e.rpla11ation of cite planned control programme - a1tainable and panicle
alleviation methods to decrease the impact on the environment to a more
desirable 01 easure.
Justitutio11al e11gagements - well-defmed tasks for alleviation and controlling
activities.
158
Nine: The practical natu re of the environmental management system (EMS)
•
Legalised e1rforcemerr1 - a legislative system to protect 1l1e environment and
the foundation for alleviation.
•
lmplemerr1ario11 lime/irres arrd reporrirrg processes - regularity, time frame
and time span or alleviations.
Processes 10 supply daro 011 de11dopmerrrs. and findings of alleviation and
controlling methods.
Estimated cosls - estimation on the start-up capital and recurrent
expenditures to implement alleviation methods.
•
•
•
Acco11111abi/i1ies fo r e11viro11me111t1I manage111e11t - affiliated 10 the resoUICes
impacted by lhe intended activities and organisations accountable for the
achievement of the various components or the project.
Each project undergoes dilJerent phases throughout the life cycle of environmeotal
management and all these phases should be maintained lo encourage
environmenta l protection.
9.52
Environmental audit
TI1e standards or an eovironrmmtal management system (EMS) audit is based on an
organisation·s declaration oLintention. The processes, methods and proposed activities
are formulated by an organisation. General and statutoty requirements may be
generated from different sources which may comprise of environmental management
standards or standards set by government agencies. TI1ere are several attributes that
are associated witl1 environmental auditing which consist or the following clements:
•
•
•
•
•
It is structured and not unprepared or informal.
The procedure is recorded and carried out in a way that is app ropriate to the
particular situation.
The team of auditors will searcl1 and assess data. and provide proof relevant
lo EMS in an honest manner.
The purpose is to establish if all the spheres of activities connected to EMS
comply with the auditing standards.
The findings of the audit procedure will be made known 10 rhe organisation
that mandated the aud1L
The significance of the advancement and upgrading of EMS enables an organisation
10 accomplish specific goals such as the following:
•
•
A statement received from unbiased, qualified external experts declaring
that EMSs have been applied and practised can assist the organisation in
achieving their statutory obligations and environmental goals.
The approved sratement can enhance an organisation's profile and sraius by
raising awareness amongst different stak.ehold= about its environmentally
friendly business practices.
159
Environmental Manageme_nt - A business management approach
•
tr creates knowledge that an organisation is on a self-contained environmental
pathway tha Lshould continuoU5ly be enhanced and prevent accidents.
The registrar and team of auditors have nunlffilll5 goa ls 10 reach when conducting
audits which involve the followin.g:
•
Conduct fair aod unprejudiced audits.
•
Establish the compliances to ISO 14000 and EMS.
•
Establish the successful implementation and sustainability of EMS.
•
Establish the preparedness and proficiency of management to assess EMS
procedures for cootinuoll5 development, appropriateness and efficiency.
•
Determine the scope of opportunities for improvement.
II should be taken into account that the goals of the registrars are not in relation
Lo the organisation's certifications as the audit should be carried out in a righteous
and truthful manner.
EMS audits have three primary steps that consist of various activities, which
can be conducted by either internal or external auditors or by both. TI1ese steps can
be characterised and described in the following way:
a.
Pre-audit step
During the course of the pre-audit step. official communiques will be sent in
the fonn of a notice letter, open-letter, audit schedule and audit survey. The
communications will be sent to the environmental management representative
and facility administrator before U1e commencement of the audit to give them
sufficient time co prepare. A team of auditors will be chosen and responsibilities
will be allocated to each learn men1ber.
b.
Auditing step
The purpose of an opening meeting during the auditing step is to obtain a
comprehensive understanding regarding an organisation·s EMS and internal
measures of control. Asses.~ments are conducted 10 evaluate strategies and the
advantages and limltations of internal control systems. Evidence is collected
and verified as all the findings should be authentic as well as in ag.r eement
with the investigation conducted. Continuoll5 communication takes place
throughout the auditing step to make certain that the workforce comprehends
the evidence based on the matters addressed. At a closing meeting the
audit team will present the results and discuss the fundamental call5es of
the investigation.
c.
Posr-auditi119 srep
During the post-auditing step, a drafi of I.he audit report Is circulated and time
is allocated ro make provision for any amendments. After r.he adjustments
10 the audit report have been made. a final report will l,e circulated with
160
Nine: The practical natu re of the environmental management system (EMS)
supporting evidence in instances where it is necessary. A plan of action
will be implemented and a due date will be set for compliance with the
findings presented.
In figure 9.2 the environmental audit steps a.re outlined with the various interactions
involved in the procedure.
Pre-audit step
•
planning audit
scope
• choosing audit
team
• analysing indust,y
• engaging lhe
•
•
.
•
workforee
(
:
Auditing step
Post-audit step
inspecting reports
investigating
policy of
OnJanisation
investigating
lines of
management
physical
examination
• assessing results
• reporting results
• formulating a
plan of action
Parties involved
.
·-."i
i
i • registrar
i
i • facility manager
i
i • team of auditors
! • environmental
i
management
represrntative
!
l • organisation
\
mandating audit
i
li
j
!
i
·······••·••···••·•·••························
Figure 9.2.: Environmental audit steps
9.5.3
Improvement of EMS
An improvement should be implemented when the complete compliance det:ennined
by the objectives is not met. There are numerous advantages both internally and
externally In regard to the enhancement of complJance performance. Management
should facilitate full compliance in organisations as it is an ongoing process.
The compliance plan is a process for continuous improvement as depicted in
Figure 9.3.
161
Environmental Manageme_nt - A business management approach
•
Measurrs
•
Internal auditing
Establishing existing
eompliance performance
• Compare to objectives
• Iner= expectfd value
Does the performance require
development?
.................
!
Yes
• Apply quality improvement
principles and procedures
• View organisation's culture
Formulate an
improvement programme
• Calculate estimated
expen= and gains
• View subjective advantages
Are these improvements justifiable?
I
•
•
Form self-sufficient
Improvements
Involve people
'
Execute the
implementation of
improvement plan
Figure 9.3: Compliance improvement procedure
Several key elements can be used to improve an organisation's EMS, which is based
on basic elements to enhance the compliance plan and improvements to achieve
compliance. A clear distlncdon is shown in Table 9.2 witb regard to these two
categories of improvement and the approaches 1.h ai can be applied.
162
Nine: The practical natu re of the environmental management system (EMS)
Table 9.2: Improvement elcmenlS of EMS compllanee
Basic rcallstk co111pllancc
.
.
.
.
.
.
9.6
a clear defined dtclaration by senior
management stating that complete
compliance is the objective
a register with legislation requirtrnenlS
consisting of aspects related to:
• operational requirements
• reporting nequlremenlS
• training of workforee requirements
• maintenance of records requirements
allocation of assigned accountabilities to
specific functions
training initiatives appropriate to the
protection of the environment and
employees
legal assistance accessible for statutory
regulations
Additional compliance ptrformanee
.
.
easily operated register of requiremenlS to
simplify regulations
modifying requircrnenis consisting of
aspects related to:
• outJeach and support of Intended laws
• revision of new and amended laws
• rulings of court
• enforced rulings
• open communiques
• inspections on events
• knowledge on the possibility of
infringements
•
decreased dependency on audits
audit procedures
Future outlook on EMS
ll is important io look at lhe differem reasons why organisaiions consider
innovativeness and creativity as critical factors in the operation of their businesses.
At the same time. stronger emphasis is also placed on environmental practices in
businesses, in particular EMS compliance. Ute fundamental reasons identified for a
shift more towards inoovative perfonnances by organisations include the following:
•
Computer-based data tec1lnologies enable a lot more individuals to be
innovative.
•
Organisations have become aware iha t intcl lecruaJ propeny rights are of
greater significance than tangible assets.
•
•
To progress, organisations should continue to redevelop their business.
Several employees from the l990s business cycle want to become more
active in innovative work.
Consumers a.re exercising a greater degree of preference regarding the goods
they buy.
•
163
Environmental Manageme_nt - A business management approach
•
International trade offers transaction across countdes on a global level and
also by electronic means.
•
An increasing transfonnation is noticeable in the way management is
thinking about cultivating innovativeness which is completely opposite 10
stilling it
A popular trend amongst organisations is cutting-edge technology systems that
can streamline processes in organisations in a much shorter period of time.
Environmental management infonnation systems (EMlS] software application can
integrate Information to improve efficient decision-making regarding legislative
requiremen!S. There is also an increase in the outsourcing of business functions
such as environmental managen1ent, which Include the contracting of certain tasks
related to compliance programmes. Strategic alliances with other organisations are
established to gain a more competitive advantage In the market and build a more
collaborative effurt in Ute area of environmental services.
TI1ere are a great number of innovative approaches that organisations can
adopt to overcome challenges encountered by EMS. Toe different factors displayed
in Figure 9.4 can be implemented In organisations to enhance EMSs.
• Collaboration in solving
eco-challenges
• Goals for <'.re-achievement
•
•
•
Ero-marketing
and management
meetings
Newly reformed
report
requirements
•
•
•
Eco- friendly
management.
t<'.Chnology,
training and
communications
• More considerations for
green products
• Enhancentent of openness
and practicality
Figure 9.4: Sustainable EMS approaches
164
Creation of
reward systems
for ecoach ievemen ts
EMISs and new
investment
assessments
Highlighting
of well-being
of staff
• Raising of
awareness of
tto-i nitiatives
Nine: The practical natu re of the environmental management system (EMS)
9.7
Conclusion
This chapter re-emphasised the imponance of EMS in an organisation 10 ensure
the suslai.nability of the environment. The management of EMS was looked at
from both a public and private sector poinl of view. The need for compliancy to
environmenta l legislation was shown through 1he various EMSs and 1he need 10
apply lo lhese processes. TI1e development of a clear environmental management
plan was reflected on in respect of I.he fundamentals pertinent to EAl, EMP and
environmental auditing. EMSs should be appropriate to the specific need that arises
In an organisation lo make sure that the objectives of a business are met. The
growing number of strategised policies and procedures to be followed should make
allowances for continual improvement.
Review questions
l.
Describe the main functions in controlling EMS.
2.
List the various EMS information sources that can be used.
J.
Explain the difference between an EAJ. EMP and environmental auditing.
4-.
Brie.Dy explain the diJJerent environmental audit steps.
5.
Explain the compliance improvement procedure that can be implemented.
6.
Oulline I.be sustainable EMS approaches that can be followed.
References
Aucamp, PJ. 2014. E1111iro11me11ta/ impact assessment: A practical guide for the
discerni11g practitioner. Pretoria: Van Schalk.
Barnard, D, Barnard, C, Massyn, Na Botha, T. 2011. Road map to e1111iro11me111a/
legislat"iorr. George: Impact Books.
Crognale, G. 1999. Errvironmenral marragt'me,11 sm1regit's: Tlte 2/sr century
perspccti11e. New Jersey: Prentice Hall.
Goetsch, DL a Davis, SB. 2001. ISO 14000 c1111irorrmental ma11ageme11I. New Jersey:
Prentice-Ball.
Kolk, A. 2000. Ec:orromics ofe11viro11merrtal ma11ageme111. London: Pearson Education.
Miller, GT Et Scali, ES. 2015. Lfoi11g i11 rl,e e1111iro11111e111. Stamford: Cengage l earning.
Peattie, K. 1995. E11viro11111e111a/ 111arketi11g managemenr: Meeting t/1egree11 c/1al/enges.
London: Pearson.
Russo, MV. 2008. E,,viro11111e11tal 111011.age111e11r: Readi11gs and cases. Thousand Oaks:
Sage.
Suydam, HA a King, ND. 2015. E11viro11mental 111a11age111e111 i11 Sou//, A/Tica.
Claremonl: Juta.
165
~
apter Ten
Learning Outcomes
After studying this chapter, you should be able to:
• explain the importance of energy in the development and functioning of an
economy
• describe the pollutants emitted in the production of energy
• explain access to and consumption of energy (globally and locally)
• define the different types of energy
• outline South Africa's primary energy consumption
• describe coal as South Africa's dominant source of primary energy
• describe South Africa's electricity generation capacity
• explain what the Southern African Power Pool (SAPP) entail.s
•
provide a brief description of the working of a typical coal-based power plant
•
provide more infom,ation about South Africa's nuC'Jear power plant
• explain the role and working of Eskom's peaking stations
• explain South Africa's current usage of wind and solarene.r_gy
• outline own electricity _generation in South Africa
• destrlbe lhe_state of affairs regarding th!! production and consumption of transportation fuels in South Africa
•
provide an ove_rview of household energy consumption in South Africa
• describe the global trtnds in energy pro<Juction and consumption
• outline South Africa's coal and nuclear e.ne_rgy re.sources
• de.scribe. what the biggest constraints are to using coal
• discuss re_ne.wable. ene_rgy resources
• explain grid-scale. en~y storage
• de.scribe the_ different costs associated with tt,e four major sources of energy
• explain what the CSIR's detailed alternative analysis and fuwre-e_ne.rgy sce_nario
for South Africa entails
• describe the aNions that can be taken to ensure improved energy effici,ncy
• describe tt,e tontrlbution of the World Energy Council [WECI to the. current
e_nergy debate
Ten: Energy
• outline international law applicable to the energy sector
•
identify and !!Xplain the general princ:ples and rules of international environmental
law
• outline treaty law applicable to the International energy sector
• describe the regional developments regarding sustainable development and 1he
!!Xploitation of energy resources
•
lder,tlfy south African law and pg!lcy relating to the: energy sec:tor and highlight
their focus.
Chapter overview
In I.his chapter, the importance of energy in all industries is highlighted. We will also
look at different rypes of l'nergy, energy consumption, the South African energy
economy, the production and consumption of tran.~ponation fuels. household
energy consumption. the way forward for South Africa, energy efficiency and
energy demand management. and the legal and regulatory framework.
10.1
Introduction
Energy is of central importance in the development and func1ioning of an economy.
on both the global and national (South African) levels. lt is required for industrial
activity, mining, agriculture, food production, comnterce and for househo ld energy
consumption- for cook.Ing, heating, lighting and powering electrical devices. AL the
individual and household level, the access to energy is as important as access to
safe water, food and cleau air. Energy is essential not only for survival bu1 for the
enjoyment of the benefits of modem life.
South Africa, in common with much of the res1 of the world, remains highly
dependent on fossil fuels for its primary energy supply. Fossil fuels were formed
from ll1e accumulated remains or plant and other living organisms buried millions
of years ago. Pressure, beat and time transformed the organic matter into one
of the three major types or fossil fuels, which are coal, oil and natural gas. The
combustion of fossil fuels and the products of fossil fuels are the largest soun-e of
emissions or carbon dioxide, the main greenhouse gas (GHGJ. 111e use of fossil fuels for
energy is therefore in1egrally linked Lo ll1e global Lhrea1 of climate change.
South Africa has one of the most energy-intensive and CO2 emissions-inlensive
(which pertains to concentration of CO2 or total GRG emissions, expressed as tons or
CO, (orCO,eq). emitted per unit or GDP) economies of middle-income countries, ranked
third after Turkmenistan and Ukraine in 2014-see Figure 10.2. ILhas a preponderance of
energy-intensive industries, the economy is relatively energy inefficient and. uniquely.
South Africa uses the extremely carbon-intensive coal-to-Uquids 1echuology lo
167
Environmental Management - A business management approach
produce a significant 25 to 30% of its Lransponatiou fuels. The coal-to-liquids
plant, which uses locally available coal raLher ll1an imported crude oil 10 produce
petrol and diesel, is a legacy of Lbe apanheid goverument"s response to international
sancLions during the 1980s.
Emissions of the pollutamssulphur dioxide, oxides of nitrogen [NOx) and particulaLe
matter [PM) from coal-fired power stations, used to produce about 9()(lb (Eskom coal
stations In 2016/17 produced 88%, non-Eskom about 2<11>; see Table 10.1) of South
Africa"s electricity, have major human health and environmental impacts.
In addition, coal mining results in extensive water and dust pollution and
leaves a legacy of land sterilised for agricultural use. In urban areas, petrol and
diesel vehicle exhaust emissions are the main sources of air pollution.
Globally, access to and consumption of energy are Wghly skewed and uneven.
There bas been a rapid increase in access to electricity in South Africa since
1.be advem of democracy, from 36% of households in 1994 to 84% in 2016. The
percentage of households that used paraffin and firewood declined from 16.2%
and 19.3% respectively in 2002 to 4.7% and 9. !<lb respectively in 2016. However,
a very significant proportion, 22-47% [Ute percentage depends on ihe criteria used
to deline the term), of South African households still suffer from ·energy poverty·
because they use unsafe and highly polluting focls (mainly fuelwood and para!Ttn)
for pan of their energy needs and/or because more than 10% of bousehold income
is spem on energy (SratisLics Souih Africa 2017; Depanmem of Energy 2012).
The energy sector has a major inlluence on the South African economy. The cost
of energy (primarily of electricity and transportation fuels (petrol and diesel)) is an
input cost for all goods and services using energy- industrial products, transportation
and agricultural products. Far households, U1e cost of energy (electricity) directly
a!Tects the total budget and the availability of money for other necessities. The
energy industries are a large part of the total SA economy. Eskom is the largest SOE
(state-owned enterprise), with annual sales of abouL R 177 billion: and with 'primary
energy· (mainly coal and uranium) purchases of R83 billion per year (Eskom 2017).
The transportation fuels sector also constitutes a large component of the South
African economy, with annual (2015) sales of petrol and diesel totalling about
25 billion litres; at R 12 per litre (Ute approximate average price, 2015) the an.uual
sales total about R300 billion. Annual Eskom electricity sales plus petrol and diesel
sales thus total about R477 billion, equivalent to about one- third of governmeut·s
annual budget of Rl400 billion (2016/17) o r about 15% of the gross domestic
product of R3. J trillion (Department of Energy (DOE) n.d.). In South Africa. energy
sector (electcicity generation and transport) direct emissions of carbon dioxide (CO,),
Lbe main antbropogenlc GHG responsible for climate cliange, account for 85% of
total (2010) GHG emissions (Department of Environmental Affairs fDEA), 2013),
I. 7 times the (2010) global average of 49% for ll1ese sectors {Intergovernmental
Panel on Climate Change (IPCC] Working Group Ill 2014).
Some of the consequences of cllmate cliange are already evident, including
U1e differential impacts on vulnerable communities. lf the world. including South
168
Ten: Energy
Africa, is to avoid catastrophic consequences of climate change in the coming
decades, likely to occur if global average temperatures continue rising to exceed
2 •c, the use of fossil fuels for energy has to be rapidly cun:ailed and replaced with
renewable energy, and energy bas to be used with far greater efficiency. At the
same time widespread energy poverty bas io be addressed to ensure a sustainable
and just energy future for South Africa and all humankind.
The imperative to respond to climate change has resulted in rapid and
fundamental dl.'Velopments in the global energy economy over the last five years,
including advances in the more efficient use of energy, the deployment of largescale renewable wind and solar energy systems and the incipient deployment of
grid-scale energy storage systems. Technological advances in wind and solar energy
have resulted in rapid decreases in the generation cosiS, to be cost competitive and
increasingly significantly cheaper than new coal or nuclear power. even wben
cost externalities of coal and nucle_ar power generatio n are not accounted for
(Bloomberg New Energy Finance 20 I7). The development of disruptive technologies
in the transport sector, wWcb bre-.tks dependence on fossil fuels, has lagged behind
that of renewable energy in the power generation sector. but advances in electric
veWcle (EV} technology bave seen rapid growth in global BEV (battery electric
veWcles) car sales, exceeding 0.75 million veWcles in 2016. China has become,
and is commiued 10 remain, the world leader in the development and deployment of
renewable energy technologies both in the power generation and BEV. Modal shifts
in passenger transport. from private passenger veWcle to much more energy-efficient
public transpon, and ride-sharing schemes. are occurring unevenly and slowly
(lniemational Energy Agency (]EA] 2017; Bloomberg New Energy Finance 2017).
Abundant renewable energy (wind and solar) resources and rapid global
technological developments in the production and efficient use of energy are
available to South Africa. This holds lhe prospect of dl.'Veloping an alternative
energy economy wW.c h combines a rapid reduction (to eventual elimination] of
dependence on fossil fuels, a decline in GHG emissions, lower future e_oergy costs
and the re-industrialisation of a significant section of the South African economy.
lo spite of these factors, the deployment of the new technologies has been hesitant
and is proceeding off a low base, and markel penetration remains, in 2017, low.
South Africa's energy economy appe_ars locked into, if not a captive of vested
fossil fuel (coal and oil) inieresiS, and a regressive dominant power utility, Eskom.
For two years (2015 to the present) Eskom bas effectively baited the Renewable
Energy Independent Power Purchase Programme (REIPPP] roll-out by refusing to
sign REl Power Purchase Agreements. Tbe current energy regulatory framework
and planning proce_sses, exemplified by current (2016/17) drafts of the Integra ted
Resource Piao (IRP] and Integrated Energy Plan flEP], appear incapable of adequately
pursuing these al1emative energy pathways or of developing a rational energy plan
tha t responds 10 national needs, national and global clirnate change mitigation
obligations, and responsibilities to rapidly transition from the current fossil fueldependent energy economy to one with a rapidly decliniug GHG footprint.
169
Environmental Management - A business management approach
10.2
Sources of energy; energy transformation; the demand for energy
services
Access to 'energy· (a working definition of energy suitable for this coniext is 'the
ability to do work') or to 'energy services' (according lo Fell (2017), 'those functions
performed using energy which are means to obtain or facilitate desired end services
or states', ie the use of energy to provide Ughtiog, transponation, heating or cooling)
is as essential to modern life as access to water, food, shelter and clean air. Energy
is used in homes, industries, agriculture, commerce, for transport (of passengers and
rrnght), for communications and a myriad of information technology applications..
The energy services or end-uses of energy include lighting, heating and cooling,
cooking, transportation of passengers or freight, heating of water (in housel1olds) and
Lhe powering of machinery and processes in industries and agriculture. Worldwide,
energy demand patterns are in a Slate of rapid evolution. For example, the data centreS
that power computer cloud services and social media platforms have evolved rapidly
over the last five to 10 years, co1lSI.Ulling about 3% of global energy supply in 2016.
The energy contained in primary non-renewable energy sources such as coal.
crude oil, natural gas, uranium and renewable sources-wind and solar- is convened
and delivered to end -users via 'energy carriers'. predominantly as electricity and
as transportation fuels- petrol and diesel. Paraffin and natural gas are (in South
Africa) minor but still significant energy carriers.
The efficiency of conversion oftbe energy available in primary energy sources to
Lhe energy available in energy carriers varies considerably. For example, an average
(Eskom) South African coal power station converts only about 3 !<lb of the energy
in coal lo electrical energy sent out into the national grid; the remaining 6.9 % of
the energy is discharged as hot gas (61-62%) or consumed within the power plants
as 'auxiliary power'(7--8<lb) (Stats SA 2017). A further 9% of the energy sent out (ie
about 3% of the energy-in-coal) from tl1e power plants is lost in the transmission and
distribution systems (Eskom 2013). Crude oil ref1neries use 7- IO'lb of the energy in
their crude oil feed in their refining and conversion processes, and are large users of
grid electricity, to produce petrol, diesel, paraffm and liquefied petroleum gas [LPG).
Tue (Sasol) coal-to-liquids process of producing hydrocarbon liquid fuels (petrol and
diesel) is considerably less energy efficient (and more carbon-inrens:ive) compared
with the crude oil relining process route [Hook l't Aleklett 2010).
The energy required to produce a product or to provide a service, such as
transportation or lighting, depends on the energy efficiency of the: 'end-use
technologies' used. For example, for a comparable lighting requirement, a modem
LED light uses about SO'lb of the energy of a CFL (compact nuorescent light) or
about IO'lb of the: energy of an older incandescent llghL Petrol and diesel engines
have energy efficiencies of 15- JO'lb, compared with EV energy efficiencies of 59 to
80% (USG website; Wikipedia). Passenger and freight rail transport may use half to
one-seventh of tl1e energy of equivalent road transport; household appliances such
as refrigerators and washi ng machines are rated for energy efficiency, with the most
efficient unii consuming a half to one-fifth the energy of the least efficient uniL
170
Ten: En~gy
11u• demand for energy services, and the energy required to satis:fy this demand, must
therefore be carefully distinguished from the demand for primaiy energy resources.
10.3
The South African energy economy
70.3.1 Primary energy consumption
In 2014 South Africa produced 261.5 million tonnes (Mt) of (mainly bituminous)
coal. exporting 74 Mt (29%) and using the remainder of 187.0 Mt (711\b) locally.
Of lhe 2014 local consumption of 187.0 Mt. U9.2 Mt (64% of local consumption)
was used in Eskom power plants for electricity production and 39.6 Mt (21%) was
used for Synfuels (coal to transportation fuels) production. The remaining I 5% of
coal was directly used in a variety of industries, including the steel, metallurgical,
chemical and cement industries, botb for energy and as a reductanl . Total coal
production bas declined gradually from a peak of 146.6 MTOE (million tonnes oil
equivalent) (or 258.7 Mt coal: 1.765 t SA coal = I TOE) in 2012 to 142.4 MTOE
(251.3 Mt coal) in 2016 [BP 2017).
In 2016, Soutl1 Africa·s primary energy consumption was 122.3 MTOE [5.12
million TJ
Joules)). comprising energy source (fuel share) of oil 22.0'lb; natural
gas 3.8%: coal 69.6%: nuclear 2.9%; hydroelectric 0.2% and renewables 1.4%. Thus
fossil fuels- oil, natural gas and coal- supplied (in 2016) 95.4% of Soutb Africa's
primaiy energy, a significantly higher percentage than the 2016 global average
of 85.5% (BP 2017). The contribution of renewable wind and solar PV increased
significantly through to 2016, but the contribution of tbese energy sources is still
(2016) only about 1% of primary energy consumption- see Figure 10.J.
rrera
South Africa: Primary energy consumption, by
source (2016)
■ 01 1
■ Natural Gas
■ Nude.ir
• Hydroeliectnc
■ Renew1bhK
Agure 10.1: South Africa: Primary energy consumption, by ruel share (2016)
Source: BP (2016); author's own graphic
171
Environmental Management - A business management approach
The extreme dependence on fossil fuels for energy, the relative preponderance
of energy-intensive industries [a large coal-to-liquids (CTL) plant; mining,
steel, metallurgical, chemicals, glass manufacturing, pulp and paper, aluminium
production industries), and poor energy effidency, result in South Africa having
one oflhe most C01 emissions-intensive economies (CO, emissions per unit of GDP)
in the world, ranking in the top 10 mast emissions-intense countries. Figure 10.2
compares South Africa's CO, emissions intensity with those of various regions of
the world and with selected countries.
s
_ LOO
0.90
0
0.11)
; 0..10
N
...,. 0.(,0
8 a.so
!'. O.«I
i:" (UO
; 0.20
... O.JO
g 0.00
e'
Agurc 10.2: Comparison or CO, emissions intensities expressed as CO, emissions per unit of
GOP, for world regions and selected countries, including South Africa.
Note: GOP: Gross domestic product; PPP: purchasing power parity
Sourc~ IEA (2016)
10.3.2 Coal
Coal is SoutJ1 Africa's dominant source of primary energy, supplying, in 2016,
70% of i1s total primary energy and about 90% of energy for electricity generation
(see Table JO. I); it is the feedstock for about 2511b of its lr311sponation fuels (petrol
and diesel). However, the continued reliance on coal as a source of energy is not
sustainable. The combustion of coal is the main source of SoutJ1 Africa ·s GHG
emissions and coal mining, both opencast [surface) and underground, bas a large
environmental inlpact on all tltree media- air, water and soil.
Opencasl or stTip mining, used in abou1 50% ofSA's coal mines (Eberhard 201J),
involves removing the overburden [overlying soil and rock), blasting of the coal
loading and transporting (hauling) the coal to a location for further processing
172
Ten: Energy
(crushing, screening and washing) or stockpiling. Underground mining generally uses
one of two methods. In longwall mining, a pairofparallel corridors is cut underground
through the coal seam, creating a ·Jongwalr between them. Tue longwaU is then
mined away, using a moveable roof support system. allowing the roof to collapse. ln
room-and-pillar mining. coal is removed from two seis of corridors at right-angles
to each other, the pillars being used to support the roof of tbe mine. TI1e pillars may
later be mined away as well Both methods lead to subsidence of the surface.
Surface mining destroys the usefulness of the land for agriculture or other
purposes. Fine marerial and discard coal from the coal preparation and deaning
processes have to be landfilled (Spath, Mann Et Kerr 1999). Coal LrallSport emissions
are considerable. The haulage of coal on unpaved roads is the main source of dust
emission from the mining operations; blasting operations generaie both blasting
and dust emissions impacts [ibid). Coal mining is by far the largest source of
dust (PM JO) (panicula1e matter less than JO microns in aerodynamic diameter)
emissions in the Elighveld Priority Area [South African Air Quality lnfonnation
System [SAAQIS), 2011), the location of 11 ofEskom's c urrent 15 coal-fired power
stations. Typical water requlremeniS for coal cleaning are 0. 17 m1 /ton of raw coal,
with 0.35 tons of discard coal generated per ton of raw coal (Spath et al 1999). At
2014 coal production rates, coal cleaning consumed about 44 million m' (44 billion
litres) of water; discard coal accumulated at about 90 Mt per year. The blasting
and crushing processes produce fine material with a high surface area, exposing
sulphur-bearing components of the ore to air and water, resulting in the formation
of sulphuric acid and acid mine drainage. The acidic {low pH) water solubilises a
range of toxic meials, creating a highly polluted effluenL
10.3.3 Electricity generation capacity
The state-owned utility Esk.om owns the national electricity distribution grid, and
90C\b [44 195 MW] of total electricity generation capacity, consisting of 15 coal -fued
power stations (including the partially commissioned Medupi and Kusile plants). with
total capacity 36 441 MW (84% of Esk.om 's capacity); one nuclear power plant,
capacity1860 MW (4.2%); four diesel turbines 2409 MW (5.5%); three pumped
storage plants 2724 MW (6.2%); two hydroelectric plants 600 MW (1.4%); one
windfarm JOO MW (0.2%); and four small hydroelectric planrs 61 MW (0. 1%).
The diesel turbines and pumped storage sdlemes are ' peaking' plants, intended to
respond 10 short-term peaks in demand only. Independent power producas (JPP),
including coal, gas, wind, solar, biogas and hydro power plants, own the remaining
JO% (5027 MW] of capacity.
The total Esk.om and IPP generation capacity (March 2017) is 49 222 MW, comp~'CI
with the 2016/17 peak demand on tbe integrated system of34 122 MW. Tue counuy
thus has a massive over-capacity and does not need new fossil fuel or nudear plaut
built for the foreseeable future, and probably never will, a~ the world rapidly transitions
to renewable energy teclmologies.
173
Environmental Management - A business management approach
Table 10.1 and Figure 10.3 show the currem electricity generation capacity, by
energy source.
Table 10.1: South African electricity generation capacity, by sourtt (2016/ 17)
Energy source
Coal (Eskom and IPP)
Capacity (MW)
Ill,
36896
75.0
Nuclear
1 860
3.8
Oiesel- peaking
2 409
4.9
Hydro-pumped storage
2 724
5.5
Hydro
684
1.4
Wind
1 519
3. 1
Solar PV and CSP
1 674
3.4
Gas (IPP)
1 258
2.6
Biomass
41
0. 1
Other (IPP)
157
0.3
Total capacity
49 222
100.0
■ bloom co.,I
• Esl<om hvd•~lectri<:
■ Eslcom•g.,s
• Esl,im- wind
■ Es1'om nuclur
■ IP"' • l'lclUd,nggH,
coaJ. v.lnd, K>lar,
blogM and ,mal hydro
Figure 10.3: South African electricity generation capacity, by energy source (total capacity,
2016/ 17: 49 222 MW). Fossil fuels (coal, dlesd, gas) are the sourtt of energy for more than
821\'o of electricity production capacity. if 'own generation' production capacity is included.
174
Ten: En~gy
Table 10.2 and Figure 10.4 show South African electridty production (2016/ 17), by
energy source.
Table. 10.2: SA electricity g~eration, by ene'!Jy source (20'1 6(17)
Ene'!JY source
GWh
'lb
Eskom-<oal
200 893
88.0
Eskom-hydroelec:tric
579
0.3
Eskom~as
29
0.0
Eskom-wind
345
0.2
Eskom-nuclear
15026
6.6
IPPs-including gas, coal, wind, solar,
biogas and small hydro
Total gfneration (2016/17)
11 529
5.0
228 401
100.0
• Eslcam-co,J
■ Esl<otn-h'l(lrll4!lec!rlc
■ Eslcam-p.s
■ Eslo:,m -wlnd
■ Eslcom- nuci.11
■ tPP,
lndudinaa•s.
co,1, "Mnd, iol.\r,
biqM1nd ..,,.. hydro
Agure 10.4: South African energy generated during 20 16/1 7, by souret'.
10.3.4 Bectricity production ond consumption
South Africa is a member of the Southern African Powe.r Pool (SAPP), comprising
South Africa, Dotswana, Lesotho, Mozambique, Namibia, Swaziland. Zambia and
Zimbabwe, connected through an integrated grid. Eskom impons electric:iry from
Lesotho, Mozambique, Zambia and Zimbabwe and exports electricity to Botswana,
175
Environmental Management - A business management approach
Lesotho, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe. Ln 2016/17.
Eskom's incemational purchases were 74 18 GWh and its sales were 15 093 MWh.
Ln 2016/17, Eskom sold 199 028 GWh (716 501 Terajoules [T.JJ) of electricity
to about 800 municipalities in bulk; and 2 700 industrial. I 000 mining, 51 000
commercial, 81 000 agricultural and 5.8 million individual customeis (Eskom 2017).
Table 10.3 and Figure 10.5 show annual sales by category of consumer.
Table 10.J: 2016/17 South African electricity sales, by category
GWh
South African sales
Total
199028
Distributors (metros and municipalities)
89 718
'lb
45.1
Resid~tial (direct Eskom)
11 863
6.0
Commercial (dirtt't Eskom)
10 339
5.2
Industrial
48 295
24.3
Mining
39 559
19.9
Agricultural
5 405
2-7
Rail
2 849
1.4
Figure 10.5: SA eltt'tridly sales, by category (2016/17)
176
'
,
~~
'
'
'
'
'
'
~
-
Ten: Energy
2SOOCII
2000CII
.JI!
3
C)
ISOOCII
1000CII
50000
0
Roll
• Ae,lcultvrel
• Ml,;,,.
1
2012/U
2013/14
2014/15
2996
3125
3093
2015/16
2016/17
SW
31 611
5191
30(,67
5• 01
...... 5733
S405
29933
30629
53467
9519
54650
96015
10 390
!II 386
UOl7
91261
11536
91 O!lO
50150
l0150
11917
2852
2849
30559
■ 1~s,~
.,
-s-,--~--.--,---.---....--
■ eomme""''
• RH!de-1
■ D«lllhuto,,
954,q
89591
~
l0339
11863
89718
figure 10.6: F..e-year trend in Eskom electricity sales by customer category, 2012/13 to 2016/17
figure 10.6 shows that Iota! Eskom electricity sales and sales lo the three largest
customer ca1egories-distrihutors (metros and municipalities) , industrial and
mining- have remained static or declined slightly over the past live years. During
tl!is period, lite overall economic growth has been positive although che growth
rate has been low. The extent and effect of off-grid energy production (roof-top
solar, own-generation by large industries and improving energy efficiencies in the
system) may be partly or wholly responsible for the stagnation in deniand for grid
electricity. A decrease in demand due to successive above-inflation tariff increases
over the five-year period may be a factor as well.
10.3.5 Coal- fired power plonts
In a typical coal-based power plant, coal is reclaimed from stockpiles, crushed and
pulverised 10 a fine powder 10 facilitate combustion; tlte pulverised coal is fed inlo
a burner mixed with air; the combustion of the coal- air mix releases heal, which
is used to generate high-pressure steam in a boiler system. The ash formed during
the combustion process is filtered out of the partially cooled exhaust gases using
electrostatic precipitators or fabric filters before being discharged to atmosphere via
tall chimneys (stacks) , 150 lo 250 m in beighl In addition to containing residual
177
Environmental Management - A business management approach
levels of duct (particulate matter), the stack gas contains the gaseous products of
Lhe combuslion process, including CO2, sulphur dioxide a nd nitrogen oxides. The
' fly asb · captured by the electrostatic precipitators or bag filters, combined wilh the
'bottom asb', is disposed of on a large stockpile (landfill). sized to accommodate
Ute total asb accumulated over the life cycle of the plant. Coal power plants require
large quantities of water, mainly for their cooling systems; cooling system water
requirements vary greatly depending on U1e design- with ·wet' (evaporative)
systems having the highest and 'dry' systems tbe lowest water requirements per
unit or power produced. The majority of Eskom power stations use ·wei' cooling.
The lligh pressure steam from the boUer system is used to drive a turbine, which in
tum drives an electricity generation set 10 produce electricity.
In 2016/2017, Eskom generated 200 893 GWh of power from its coa l-fired
power stations, emitting 211.1 miUion tons of CO 2, 1.766 mUlion tons of SO2,
2782 tons of N,O, 0.885 million rans of nitrogen oxides (NOx) and 65 130 rans of
particulate matter [Figure 10.7). lu addition, lhese power stations produced 32.6
mUlion tons of ash and used 307.3 billion litres of water [Eskom 2017). The annual
CO, emissions equate 10 1.05 kg CO 2/kWh (1050 kg CO,/MWb) of power generated;
the average water consumption is 1.53 litres/kWh of power produced from its coal
plants. SA emission standards for SO 2, NOx and particulate matter are far more lax
compared with EU, US and China.
---
3S(X)
0
30(1)
.,
l,
!.
2500
]
2000
~
~
E
1500
J0
1000
1
500
l!
Q.
..
C
C
0
'1IJ(1I
~
-c.,,bon diOJ!lde (CO,~ Mt
1008 2009 2010 lOll 12012 20U 201• 2015 1 2016
a
M
m m m
M
m m m
223.6 221.7 22U 230.3 231.9 227.9 233.3 223.• 21~6 2IL1
-Suf)llurdlorldo: 1so.i U --+-19_50 ~74 11856 11810 1 184¥3 1 1975 1834 1699 11766
Nlttouso.lde IN,O), t
7Jl72 2801 7Jl2S 2905 2957 I 2980 2969 1919 27S7 278l
-Nlttogeno<1dt(NO•IHNO,.k1 !184 957 959 fT17 gn I 965 954 937 11513 885
- P•1t1<ullt• ""'''""""- kt
50.M 55.64 88.27 I 75.84 n.•2 11).68 78.92 82.34 78.37 65.13
Figure 10.7: Eskom mal power stations- 10- yearemissions trends
178
,
'
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'
~
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Ten: Energy
Five of Eskom's coal power stations a.re more lhan 30 years old, and average energy
efficiency has gradually declined over the past JO years, from 33.4% in 2007/8 10
31.2<\b in 2016/ 17: see Figure 10.8.
250
200
ISO
100
51)
O 2007/ 2008/1200912010/'ZOU/ ZOU/ 2013//2014/12015/ 2016/1
8
9
~ U
U
l3
14
IS
16
17
j
222.9 211.91215.9 210.2 1 21&2 214.8 209.5 204.81199.9 200.~
9
-CO.lburni. N'!
125.3 121.2 U2.7 124.7 125.2 123 U2.4 U9,2 U4,8 U.3.7
-AvorasealorflcY>lue, MJ/kg l&.St 19.l 19.zz119.4-;+-19.6119.76 19.n 119.68 19.57 20.05
1
-A-.gush<o,11,nt.ll
29.09 29.7 29~29.o3T28.8a 28.69 28.56 27.63 28.19 28.62
-Co1~flr•d1,.1lon1,1Wh(n,1]
I
I
-A.,.,1gesulphuru,n1ef11.""-ID 8.7 8.3 ~
--over.I lh,rmol efflr.lency,"
33.4 33.4 33.l
J
7.8
32.6
7.9
3L4
88
32
87
8 1 10.7 84
31.3 l 3L4 31.1 l.U
Figur,, '10.8: Eskom coal plants- 10-ycar tr,,nd in total power gr,nerated and avrrage energy
efficiency.
10.3.6 Nuclear pawt:r
Eskom owns and operates South Africa's only nuclear power plant, the Koeberg
plant located in the Western Cape, consisting of two reactor systems with an
installed capacity of970 MW each (total 1940 MW). built in the 1980s. Eskom now
rates the total capacity of the plant al 1860 MW. In 2016/17 the Koeberg plant
sent out 15 026 GWb. at an exceptionally Wgh capacity utilisation rate of 92'lb,
against a 10-year average annua l output of 12 985 GWh, 80<\b capacity utilisation
capacity rate.
In 2016/17 tl1e Koeberg plant produced 174 m' (10-year average 197 m' /year)
of low- and intermediate-level radioactive waste and 40 tons (10-year average 49
tons per year) of Wgh-level radioactive spent fuel rods. The cumulative total of
high-level radioactive spent fuel rods, stored on site, is 2289 (1534 tons). The safe
disposal of high-level radioactive nuclear plant waste. which remains radioactive
for thousands of years, remains an unresolved problem of nudear power generation.
179
Environmental Management - A business management approach
70.3.7 Eskom 'peaking stations·
Eskom operates a number of ·peaking' stations, designed to respond 10 short-term
fluctuations In power demand : diesel- fuelled turbines, witb a combined capacity of
2409 MW, pumped-water-storage schemes, with a combined capacity of 2724 MW
and two small hydroelectric plants, with a combined capacity of 600 MW. The total
'peaking plant' capacity is 5733 MW.
10.3.8 Renewable energy (wind and so/or PV power}
In 2016/ 17, wind and solar plants provided about 6.5% of total capacity ffable JO.I)
and generated about 3-41\b of total electricity sent out. The once comparative.ly
rapid roll-out of renewable wind and solar projecis has stalled since mld-2015, due
to Eskom·s refusal to sign any further power purchase agreements.
10.3.9 'Other· generation capacity
Sasol group companies operate significant ·own· electricity generation facilities
- 725MW of coal and 425 MW of gas-fired capacity on their Synfuels and lnfrachem
slies; tbe Department of Energy operates a 1005 MW 'peaker· plant; the pulp and
paper manufacturers Mondi and Sapp! own a total of 311 MW of capacity. The total
capacity of tbese and other minor ·own generation' producers is 2930 MW.
10.4 Transporta tion fuels (petrol and diesel)-production and consumption
Transportation fuels (petrol and diesel) are produced via tbree different J>TOCess
routes: four conventional crude oil refining plants, a CTL plant owned and OJ>erdted
by Sasol Sy nfuels and a gas-to-liquids plant owned and operated by tbe parasta tal
PetroSA
Table 10.4: Oil refining capacities in South Africa
Refinery
location
Fttdstock
Capacity ('lb)
Capacity
(barrds/ day)
Sapref
Ourban/Ethekwini
Crude oil
180 000
26
Engen
Ourban/Ethekwini
Crude oil
120000
17
Chevron
Cape Town
Crude all
100000
14
Natref
Sasolburg
Crude oil
108 000
15
Sasol-Synfuels
Secunda
Coal
150000
21
~troSA
Mossel Bay
Natural gas
45000
6
Total
703 000
Sources: South African Petroleum Industry Association (SAPIA): Eberhard (201'1): Chamber
of Mines (n.d.)
IBO
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Ten: Energy
In addition to producing liquid fuels locally, South Africa imporls and exports
these ruels. In recent y ears il has been a net imponer of petrol and diesel: see
Figures 10.9 and 10. to.
3,000
a 1mparu (million litres)
"'
g
C:
J
2,500
■ Exporis(m1Illon 111ml
2,000
fll•I lm119r'iH!XpQfU
(million litres)
1,500
·e 1,000
500
0
2006
2007
2008
2009
2010
2011
20U
2013
2014
2015
Figur,, 10.9 : South African ~trol imports and exports, 2006-2015
Sourt't': 0oE (n.d.); author's own graphic
8,000
■ trnporu {millu>n tum)
7,000
■ C..ooru (milllo• ffUMI
6,000
11
Ntt lmp(llrU-t~p0f1l
fm\Ulon lhret,
s,ooo •
ca
~ 4.000
~ 3,000
2,000
l.000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Figur,, 10.10: South African Diesel imports and exports, 2006- 2015
Sourtt: DoE (n.d.); author's own graphic
181
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~
---
Environmental Management - A business management approach
:0
~
0
"'
C
~
~
16000
14000
12000
10000
8000
6000
4 000
2000
0
- -Petrol
k
- - Olesel
-
--
;;;
:.-------
........
2006 2007 2008
2009
2010 2011 2012 1 2013
2014 2015
11279 11556 E:_069 ,.:1321111455 11963 11714 11153 11344 120n
8706 9755 9762
- Paraffin 738
696
-
Jet fuel 2260 2402
- -Fuel oil 476 46S
--LPG
--
605
532
9437 10170 ll225 11262 U800 13169 14173
551
-
2376 2349
S55
724
545 I s61
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2308 2434 1 2367
466 4n 568
S58
S73
2223
2197 2441
523
487 ,_591
- ~ L612 111 656 465 396 566
636 [ 613
554
1
Figure 10.11: liquid fuels ronsumption, 2006- 2015
Source: SAPIA
1l1e consumption of petrol and jet fuel has been approximately stagnant; fuel oil
and LPG consumption have declined slightly over the last JO years; only diesel
sales have increased significantly over tl1e period [Figure 10.11).
10.5 Househol d energy consumption
A significant proportion (about 14% of households or 8 million people] of South
African households, generally the poorest, con1inue to use ·dirry' or •highly
polluting' fuels (coal, wood and paraffin) for domestic energy: see Figure 10.1 2.
The poor pay a high price for household energy, both in the cost or energy
and tllrough adverse health and safety im(>acts of domestic fuels-paraffin, wood
and coal. The poorest (monthly income < RI 500] spent about 261\b or their income
on energy, compared with 4J\b for those witl1 a montl1ly income of more than
R5501 (Kula ti 2012]. The use of these fuels is declining slowly. from 32.1% in 2006
to 14.3!\b in 2016, but their consumption and the proportion of the population
exposed to the health risks (exposure 10 air pollutants-PM2.5 , S02• VOCs, CO 2, and
the risk of injury and death due to fires] of using these fuels remain significant. In
addition to being hazardous, the use of paraffin for cooking is more expensive than
using electricity rrait, Merven El Senatla 2015].
182
Ten: Energy
100
90
80
70
60
so
40
30
20
10 I
0
2013 201~ I 2015 2016
- -Elo<trlcltv 65.l
- -Co•I
78.4
2.1
- -- -14.0
-
--Wood
13.8
15.7
79.ij_?&.l 1 76.8
0.6
o.s 0.5
- - ·- - 9,1
- -Par•fnn
16.0
14.2
10.3
--Gas
2.3
2.3
3
2.2
2.2
2.1
3.3
--Other
0.6
0.6
0.6
o.s
2A
3
1.3
9.8
9.3
S.l
S.4
4.7
3.2
2.7
3.5
3.7
0.8
2.1
3.2
5.3
7.1
Figurc '10.12: Distribution of main sources of houRhold energy for cooking, 2006-2016
('Other' includes the 4.8% I.hat used a generator for ekctrlcity in 2016)
Source; Stats SA (2012)
1l1e connection or households ro tJ1e elec1Ticity grid, as a percen1age of total
households, appears 10 have peaked in 2014, and has declined by 1.8% Lhrougb lo
2016: see figure 10.13.
g].0
86.0
85.0
84.0
83.0
82.0
81.0
110.0
79.0
78.0
-
~
Percenllr~
necu.
-
'1W1 200! 2009 2010 20ll 2012 2013 I 2014 2015 2016
82.0 81.9 82.7 82.9
83.8 1853 185.4 86.0 85.5 84.2
~~--1~--~--~--~-~-~~
Figure 10.13: Connection of households to mains electricity, 2006- 2016
Source: Stats SA (2012)
10.6 South Africa's energy trajectory
Global trends in ene.Jgy production and consumption. in panicular Lhe imperative
of responding to climate change. have an important impact on South Africa 's
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Environmental Management - A business management approach
energy trajectory. The levelised costs of renewable sola.r and wind. both onshore
and offshore, energy are predicted 10 conlinue 10 drop: solar PV by a rurtlier 661\'o
by 2040; offshore wind by 711\b by 2040 (New Energy Outlook 2017).
Global investments in renewable power capacity continue lo increase rnpidly,
with investments in renewable energy [in 2016] more than double ioial investment
in fossil-fuel generating capacity. Grid-scale battery energy stornge is in the early
stages of deploymem, b u1 set 10 grow rapidly with L11e
in costs. China is the
world's largest energy market and the largest emitter of CO 2• Over the past live
ran
years, however, Ofrna has become cite world's largest investor in renewable energy,
both in technology development and dcploymem. and has curtailed production
from hundreds of coal mines. Coal consumption appears to have peaked in 2014,
falling 3Clb in 2015 and a further 2% in 2016. China bas also enlbarked on Ute rapid
development and deploymem or EVs (Green 2016].
10.6. I South Africa's coal and nuclt:ar energy resources
South Africa bas abundant cnal resources, between I 5 and 55 billion tons, with
U1e majority or reserves and mines located in the Central Basin (Wiibank, High veld
and Ermelo coalfields), also the location of the majority of coal power plants, with
the second largest coal resou rce being located in the Waterberg. Water scarcity,
particularly in the Waterberg, is also a major constraint (Eberhard 201I) although
many or ihe existing mines are nearing U1e end or U1eir lives and significant
investment would be required 10 extract Lile coal.
However. the biggest constraints to using coa I are Lile emission of CO2 during
combustion, and Ute healU1 impacts and environmenial degradation associated with
coal mining and coal power production. Technological developmem of renewable
wind and solar power have resulted in these two sources being cheaper, per unit of
power, than coal-based power, even wiiliout factoring in externalities associated
wiili coal power. While it is theoretically possible to mitigate CO2 emissions through
mooted carbon capture and storage (as yet commercially and environmentally
unproven), to improve energy efficiency, to mitigate air emissions and to reduce
water consumption, all U1ese measures will drive up the costs of coal-based power,
rendering it even less competitive with wind and solar power. Emissions of CO2
and other pollu[ants, as well as water consumption, will still be fa r higher by
comparison with wind and solar.
Although SA bas low- gr.ide uranium deposits, it no longer bas ur,miumenrichmenl facilities. Fuel-grade, enriched uranium is imported. Nuclear power is
expensive due 10 the extremely high capital costs of U1e planL long-term n uclear
accident risks remain, as does the unresolved problem of the long-term safe dlsposal
and storage of high-level nuclear waste, which may have a half-lire of several
thousand years (United States Nuclear Regulatory Commission n.d.].
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Ten: Energy
10.6.2 Renewable energy resources
10.6.2. 1 Wind resources
A recent (201 G) report by the Council for Scientific and Industrial Research (CSIR)
confirmed that South Africa bas abundant high-grade wind energy resources.
The total technical wind power potential in South Africa if wind farms were
to be installed all across the country except in exclusion areas (National Parks,
settlement areas, etc) is 6700 GW, which is a wind neet large enough 10 supply
the entire world·s electricity demand. 1n order to genenite 250 TWb/yr, which is
approximately today·s South African electricity demand, 0.6<lb of the available
South African land mass would have to be dedicated for wind farms with an
instalJed capacity of approximately 75 GW.
The primary findings of the study include the fol.lowing:
•
More than 80<lb of South Africa's land mass bas enough wind resource for
economk wind farms with very high annual load factors of greater than 30%.
•
The vast size of the South African power system allows for a very strong
por1folio effect. Short-term fluctuations in the aggregated wind power feedin are significantly reduced by wide spatial distribution. Where an individual
wind farm's power output can nuctuate by+/- 90% of its installed capacity
within 15 ntinutes, a widespread wind neefs 15 minutes nuctuations are
reduced to +/- 4% of iru.,alled capacity (CSlR 2016).
Figure 10.14 shows the distribution of areas suitable for economically viable wind
farms, areas with wind speed at 100 m of greater than 6m/s.
Figurte t0.14: Wind map of South Africa
Source: CSIR (n.d.J
185
,
'
.
'
~
'
'
~
'
'
-·
·-
Environmental Management - A business management approach
10.6.2.2
Solar resources
South Africa also has abundant high-quality solar energy resources, areas with the
annual sum of irradiation greater than 2000 kWh/m2: see Figure 10. I 5.
---
______..,..__
Figur,, 10.15: Global horizontal irrndiation (GHI) map of South Africa
Sou=: Solargis Global (2015)
10.6.3 Grid-scale energy storoge
The intennittency of wind and solar energy, and short-tenn variation in electricity
demand, will lead to periods with an excess or a deficit in energy, requiring the
inclusion of ·aexible power· (gas, pumped-wa1er storage or grid-scale baltery
storage) 10 be included in the grid to ensure srability of supply. The cos1 of gridscale [up 10 100 MW) baneries has dropped dramatically since 2013. and is expec1ed
to continue to decline. The cost of Bthium-ion batteries, currently tl1e most widely
deployed laige-scale battery storage technology, is expected to decline by 36%
over the next five years [Lazard 2017).
10.6.4 Comparison of /eve/ised costs
A general comparison of the leveBsed cost of electricity ob1ained from different
sources-coal, nuclear, gas, wind and solar - yields a wide range of results because
of the variations in local costs of tl1e different technologies. However, Lazard·s
recent aoalysis [Lazard 2017), reflecting primarily North American costs bu1 broadly
186
Ten: Energy
reflective of global costs, shows that the cost of utility-scale renewable solar PV
and wind power continues to fall, and Lhal these tostS were, in 2017, subsrantially
lower than nuclear ( I /3 of the cost) or coal (50% of the cost) (figure 10. 16).
160
140
120
.r.
100
~
80
""'::,'
60
3:
40
20
0
2014
2015
104
111
117
2016 _j_ 201~
117
148
105
109
108
102
102
98
79
64
70
59
55
55
47
45
2013
---
--Nuclear
--coal
SolarPV
--Wind
r
50
Agurc 10. 16: LrveJised cost of clectricity: nuclear, coal, solar F'V and wind
Source: Data from Lazard (2017)
10.6.5 South Africa's energy planning process
In response to the draft IRP, 2016 (DoE 2016], the CSlR presented a detailed
alternative analysis and future-energy scenario for South Africa (Wright et al 2017;
Baker. Newell El Philips 2015).
Based on very conservative assumptions (that there would be no further declines
in wind and solar energy costs, for example), the main findings of this study are:
... least cost for any new investment in the power sector to be solar PV,
wind or flexible power. Solar PV, wind and flexible power generators
(eg gas, CSP. hydro, biogas) are the cheapest new-build mix. There is no
technical limitation to solar PV and wind penetration over r.he planning
horizon until 2050. A >70% renewable energy share by 2050 is costoptimal, replacing all plants that decommission over time and meeting
new demand with the new optimal mix.
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Environmental Management - A business management approach
Soulh Africa has I.he unique opportunity to decarbonise its electricity
sector without pain. By this, the authors mean that clean and cheap are
no longer trade-offs anymore. 1l1e l east Cost scenario run is the mix that
is the cheapest, emits less CO 2, consumes less water and creates more jobs
in I.he electricity sector than both Draft IRP 2016 Base Case and Carbon
Budget scena.rios.
Furthermore,
- Toe lRP 2016 Base Case is R70 billion/yr more costly, emits twice as
much CO 2, two and a half times more wa ter is consumed and provides
10% less jobs by 2050.
TI1e CSIR study also con cluded tl1ai no further coal o r new nuclear capacity shou ld
be built as both were more expensive (in levelised cost temts) I.ban wind or solar,
based on the actual bid costs of the latter, and that there is no technical j ustification
for 'baseload· coa l or nuclear energy.
Unfortunately, the South African energy planning and production processes are
currenrly mired in u nreso lved allegations of corruption and secret commitments,
which appear set to override a scientifically rigorous analysis to dete:rmine the
optimal (mininmm) cost energy trajectory, on e which a lso responds lo our climate
change responsibilities.
While Eskom has, for a pe.riod of nearly iliree years, refused to sign further power
purchase agreements (REIPPPs) to defend its near-monopoly of power su pply.
significant rooftop residential and commercial solar PV installations have already
occurred. TI1ese off-grid installations will continu e to grow ('grid defection'), driven
by the decreasing solar PV costs and rising grid tariffs. [f I.he Ciiy of Cape Town is
successful in its court bid demanding the right of the city to purchase power direL-ily
from independent power producers (Yclland 2017), Eskom will increasingly lose its
single-buyer Slatus. The Energy intensive User Group (of South Africa), whose
menihcrs account for over 40'lb of I.he energy consumed (Energy Intensive User
Group of Southern Africa n.d.), is investigating and considering generating their
own power from renewable resources (Voueler a Brent 2016). The cost of largescale (greater than 50 MW wind and solar farDJS) renewable energy is already lower
than current Eskom tariffs and average production costs. 1hls gap will increase
as Eskom demands above-inflation tariff increases to compensate for declining
sales and steep increases in average production costs as its very expensive new
coal power plan!S are commissioned, and as RE cos!S continue to decline, cl.riving
farther g.rid defections and decreases in grid demand. The utility appears to have
already entered a 'death spira l', and some of its c urrent gene.r ation assets, p laced
into 'cold reserve' in the vain hope that demand for coal power will increase in
the near future, are already 'stranded'. The looming demise of the power utility has
serious implications for the national economy. On the positive side, declining sales
of coal -based power implies declining emissions of CO2 from this sector.
188
Ten: Energy
10.7
Energy efficiency and en ergy demand management
10.7.1 Energy efficiency, demand management
Energy efficiency may be defined in 1enns of the amount of energy used lo achieve
a given resuh. It may be defined in many contexts. Some of the examples are the
energy needed for a given level of lighting, heating and cooling in homes and
buildings, the energy needed to transport goods and pl'Ople, the energy needed to
produce industrial products such as cement. aluminium and steel, or the energy
needed to grow food.
A reduction in energy use 10 achieve the same result may be regarded as
an im proveme111 in energy efficiency, but such a simple approach may not be
enough to produce the substantial and radical reductions in energy use required 10
avoid both catasl:rophic climate change and addres.~ the energy poverty currently
experienced by 50<\b of the wortd·s population.
A large-scale and rapid migration from fossil fuel combustion as the main
source of energy ro renewable sources is required as well as changes such as a
reduction in 'food miles· [the large distances that food ls transported from fanns to
consumers) and a switch from road [private) passenger transport and road freight
transport to much more energy-efficient rail and public transport.
A few examples of possible and actual improvements in energy efficiency
follow.
10.7.1.1
Hom e and commercia l lighting
One of the highly successful responses to the need for greater energy efficiency for
lighting has been the development of, first. compact Auorescent lights (Cfls) and
even better, light emitting diodes [LEDs). CFLs use about one-fifth the energy of a
comparable incandescent light, until recently I.he standard light available in homes,
and last about six times longer. 1l1e disadvantages of CFLs are that they contain
toxic mercury and require careful disposal, and take a few seconds 10 acllieve full
brightness. In I.he past year LEDs with comparable or better lighting characteristics
and even better energy efficient)', witl1 energy usage 50% tl1al of a CFl and greater
durability [25 000 to 50 000 hours· life), have become available for domestic use
at competitive prices.
10.7.1.2
Solar water heaters
As an alternative to electric water heaters ['geysersl so lar water heaters (SWH]
directly capture energy from tile sun to beat and store the energy as hot water.
Water healing for bathing and washing constitutes a significant proportion of
daily energy usage, thus SWHs reduce household energy demand. Modem SWHs
include a back-up electrical element and controller 10 ensure the availability of
hot water under adverse weather without drawing grid power during peak demand
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Environmental Manageme_nt - A business management approach
periods. The replacement or conventional geysers with SWHs is usually the single
most cost-effective and significant Intervention ro reduce household energy
demand. to reduce aggregate demand and shift load away from peak demand.
Under conservative assumptions, the installation of one million SWHs (1EP2016
Base Case, 61\b of households) would reduce annual demand by I. I TWh or 051\b
of 2016/17 coal production; installation of 5 million SWH.s (IEP2016 ·oeaner
Pastures' scenario, 30% of households) would reduce annual demand by 5..5 lWb
or 2.7%, equivaleni to 1000 MW of coal capacity (author·s own calculations, based
on an average usage of 25 litreS of hot water per person, 20'\b heat loss and 75'lb of
demand satisfied by solar energy).
10.7.1.3
Energy-efficient appliances
Energy-efficient household appliances (fridges,
household energy consumpiion.
10.7.1.4
washing machines)
reduce
Energy-efficient homes
Designing more energy-efficient homes reduces the need for heating and cooling
while maintaining or improving comfort levels. This reduces overall energy
consumption.
10.7.1.5
Energy-efficient production processes
Industrial processes can achieve significant energy savi11gs tltrough replacing
pumps and fans with more efficient units and ensuririg that these u11its operate
at or close to optimal efficiency and through hea l conservation measures. Deep,
undergrouud mines in particular that use large amounts or energy for ventilation
fans and for cooling can achieve sig.nificant energy savings by retrofitting with
more energy-efficient systems.
10.7.1.6
Commercia l and household rooftop solar
Although South Africa bas not introdm:ed a regulatory regime that encourages
commercial and household solar installations, this sector has developed in response
to rising electricity tariffs and falling installation costs.
10.8 The legal and regulatory fra mework
10.8. I Introduction
It is trite lo say that energy is a key driver or social and economic developmenL
lo a world approaching 10 billion inhabitants, energy resources are not only
critical for the well-being or humankind, but essential for sustaining the growing
economies of the world, which, by 2050, will contribute to a potential doubling of
the world's energy demands. However, as much as energy is a key driver oLbumao
190
Ten: Energy
and economic development, the world is now faced with an unstable global energy
acces.~ structure lhar raises vital questions about its economic, environmental and
security costs. It is therefore understandable why energy sustainability has become
such a key challenge for governments and private sector entities the world over.
especially now tha t evidence of global warming is unequivocal and the reduction
of emissions, particularly from the energy sector (which accounts for twoLhirds of Lota! greenhouse emissions) has internationally become an issue of the
greatest urgency.
In 2007, the World Energy Council (WEO contribu1ed extensively to the current
debate through the publication of three reports, dealing respectively with energy
policy scenarios to 2050, energy resources, and energy and climate change. The
WEC, esiablished in 1923, is the world"s foremost multi-energy organisation, with
member commlttees in nearly a hundred countries. The organisation, of which
South Africa is a member, covers all types of energy, including oil, natural gas,
nuclear, hydro and renewables (see htip://www.woridenergy.org).
In the fust of these reports, the WEC re-emphasised its three sustainability
objectives, established in 2000 in a millennium statement, whlclt should guide
government policy and other measures for achieving targeted result:s by 2050 in
an effort to promote the sustainable supply and use of energy for the greatest
benefit of all, namely accessibility, a11ailabiliry and acceptability (see World
Energy Council (WEC) 2007). Under the accessibiliry objective the aim is ro make
available commercial energy services at both affordable and sustainable prices,
taking into a~-count that, worldwide, roughly 1.7 billion people were without
re.liable commercial energy of any kind, with sub-Saharan Africa accounting for
500 milllon people wiU1out a modem form of energy (see Kenya Environmental
and Political News Weblog 2007; Lighting Africa 11.d.). Low rates of achievement
in Africa with regard to all th.ree aims have been ascribed to a 'lack of investments
in infrastructure, lack of capacity in institutional capabilities., and a low capacity
of cbe private secior to provide energy services' (WEC 2007: I SJ. The plight in subSaharan Africa has again been noted in a 2015 report by T/11.• Economist on the
prospects of solar energy where allention was drawn to the following:
In the absence of electricity. the usual fallback is paraffin (kerosene).
Lighting and cooking with that costs poor people the world over $23
billion a year, of which $10 billion is spent in Africa. Poor households a.re
buying lighting at tbe equivalent of $100 per kilowatt bow; more than a
hundred times the amount people in rich countries pay. And kerosene is
not just expensive; it is dangerous (The- Economist 2015).
The issues hlgblighted above became part of the publlc debate in South Africa as
a result of the electricity supply crisis that emerged in 2008 and were aftmvards
amplified by lbe ensuing public discontent with rising electricity rarlffs. These have
increased by 350% over the past decade amidst numerous reports of a deepening
corrosive culture of corruption and mismanagement within the state and state-
191
Environmental Management - A business management approach
owned entitles [SOEs), most notably in the energy sector, all mailers which feature
laier in this cbapcer. See, for instance, the 14 December 2-017 press release by the
Helen Suzman Foun-dation on its pending litigation in the High Coun to recover
from Eskom and key state officials, funds and other benefits that accrued to certain
individuals as a result of a series of unlawful and corrupt exercises of public power
(available at https://www.scribd.com/document/367182340/Press-Release-FromHelen-Suz.man-Founclation-and-Magcla-Wienycka).
lo its 20l3 World Energy Issues Moni1or Report, the WEC bas poin1ed again to
Lhe widening gap between energy supply and demand in Africa as well as the fragile
na1ure of South Africa's electricity supply system, which remains beset by W.gh costs
and uncertain prospects of increased supply, especially with regard to renewable
energy resources [World Energy Council 2013). Although power outages have
diminished, South Africa's overall energy trilemma (energy security; energy equity;
and environmen1al sustainabilicy) remains worrisome according io 2-016 figures.
The country ranks 84 out of 125 states on the trilemma scale and environmental
sustainability is considered as i1s weakest trilemma as a result of its predominanlly
coal-based electricity generation (WEC n.d.). In terms of the availability objective,
the challenge is not only to provide a short-term quaJhy service, but to have in
place diverse energy options that will ensure continuity of supply in the long term,
witbou1 wWch economic development and sustainability will be compromised. This
objective has a close iniertonnection with the third objective, namely ensuring
acceptability. which covers public attitudes, environmemal concerns such as
deforestation, land degradation, pollution. GHG emissions and climate change, and
security concerns such as nuclear safety and waste management (ibid). Relevant
in this regard is the WEC's 2016 report (WEC 2016) wWch points out that limiting
global warming to no more than 2 •c will require an 'exceptional and enduring
effort far beyond already pledged commitments and very high carbon prices·
[WEC 2007). Moreover, since demand for electricity will double to 2060, meeting
this demand with cleaner energy resources will require substantial infrastructure
investment and systems integration (WEC 2016).
The enabling legal and regulatory frameworks that must be pu l in place in
responding to the energy needs and challenges of the 2 1st century are now largely
informed by the United Nations Sustainable Development Goals (SDGs), also known
as Agenda 2030 (General Assembly resolution 70/ I of 21 Ociober 2015). Jo Goal 7,
states have committed themselves to ensure access lo affordable, sustainable and
modem energy for all by 2030 and to increase substantially by that time the share
of renewable energy in the global energy mix, in line with Goal 13 on combating
climate change.
As in other areas of environmental protection aud economic and social
development, the global concern with sustainable and diversilied energy supply
and production has caused an increase in the commitments and legal obligations
of states. As usual this raises the further concern about the capacity of states to
comply. assuming that the requisite political will is presenL Whal follows is an
192
Ten: Energy
explanation of the main international and national legal and policy developmenis
relevant to this chapter.
10.8.2 International law
At lhis juncture, the ensuing duties of states cannot stand apart from the enlarged
concept of international peace and security that has entered international debates
since the 1990s. When, for the firsi time, lhe Security Council met at the level
of heads of state a nd government in January 1992 to discuss new challenges to
lilicrttat:lonal peace and serurity. it was also to convey rn states the cle.a.r message
that the absence of war and armed conflict does not in itself guarantee international
peace and security. What now warranis our a11ention are the so.-caJJed ·nonmilitary sources of instability in the economic, social, humanitarian and ecological
fields' (UNSC Doc S/23500 of 31 January 1992 at 3). In the energy sector, as in
other cases, there should now be sufficient awareness of !he fact that growing
demands on access Lo finite resources create conditions conducive Lo conflicts over
such resources. Some 12 years after the 1992 meeting of Ute Security Council, the
High Level Panel Report of !he Secretary-General of the United Nations once again
drew attention to this phenomenon in pointing out the deficient and incoherent
responses of states. especially in mau= of governance and compliance (UN 2004:
paras 54-6):
Rarely are environmemal concerns factored into security, development
or humanitarian strategies. Nor is there coherence in environmental
protection efforts ai the global level. Most attempts lo create governance
structures to tackle the problems of global environmenta l degradation have
nol e!Tectively addressed climate change, deforestation and desertification.
... International institutions and States have not organised tht'Jnselves lo
address the problems of development in a coherenr, integraied way, a nd
instead continue to treat poverty. infectious d.isease and environmental
degradation as stand-alone lhreats. The fragmented sectoral approaches
of international institutions mirror Ute fragmented sectoral approaches
of Governments. ... Existing global economic and social governance
structures are woefully inadequate for the challenges ahead.
With lhese obseM1tions in mind, it is interesting to note !hat the High level Panel
Repon, still under the chapter on tollective security and preventio n of conflicts, urged
states, in addressing the problems associated with climate change, lD reduce their
dependence on hydrocarbons, by paying special attention to lhe development of lowcarl>on energy sources, including natural gas, rrnewable power, nuclear power, and
the development of low-GHG technologies (ibid: para 71). lf these are lhe concerns
Lhai globally have captured lhe attention of international institutions, governments,
t'11virnnmentalists, and a range ofnon-govemmemal institutions, it remains for currem
purposes to cover some of lhe main legal responses in international law lhat either
gmerally or specifically lo the energy issue determine the responsibilities of states.
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Environmental Management - A business management approach
10.8.2.1 General principles
Over time a number of general principles and rules of international environmental
law have ays1allised oui of state practice, treaties, resolutions or international
organisations and non-binding instruments on environmental protection. These
principles are general in nature and they apply potentially across a range of
activities and in =-peel of all aspects of the environment 1n tbe absence of a
binding multilateral instrument of global application, setting out ihe general
rights and obligations of states on environmental matters, their significance in
determining how states should conduct tbemselves when faced witb environmental
challenges Is uncontested. Thus. their relevance In the area of energy production
and provision hardly needs specia I explanation.
The first principle is rooted in the sovereign right or stales to exercise control
over and to exploit their natural resources. Unequivocal recognition is given to
Lhis in Principle 21 of the Stockholm Declaration. But Principle 21 at Lhe same
time also limits tbis right of sovereign Slates by d.e termiuing that stales have the
responsibility 10 ensure tha L activities within their jurisdiction or control do not
cause damage 10 other states or to areas beyond their jurisdiction (see also the Rio
Declaration principle 2). In 1996, tbe International Court af Justice confirmed, in
an advisory opinion, that tbis principle aow reflects cus10mary international law
(ICJ Reports, 1996: para 29), a position that was confirmed by the International
Court of Justice in tbe Pulp Mills case (Case Concerning tbe Pulp Mills on tbe River
Uruguay (Argr111ille II Uruguay) ICJ General List no 135, 20 April 2010 at 38).
The =-ponsibWty not lo cause environmental damage or to allow activities tbat
wW have a hannful effect to commence or continue, also known as the no- harm
rule, is not limited to the protection of the environmental integrity of other states.
but may apply to environmental interests in common areas such as Ute hlgh seas,
Antarctica and tbe earth's climatic system. The obligations of states in tbis regard
are also closely related to rlte obligation to take preventive action. However, it may
be distinguished from tbe firs1 principle in that the preventive action principle
does not derive from tbe principle of sovereignty over natural resources, but is an
objective in itself, even obligating the state to prevent damage to the environment
within its own jurisdiction (see Scbrijver 1997: 125-127). ThJs preventive duty,
often lirtked to Ute duty of care or due diligence principle, requires Lhe state to
introduce legislative, administrative and otber measures to prevent environmental
harm, irrespective of whether tbe harm originates from public or private sources
(see also Birnie a Boyle 2002: 109- 113).
In complying with the no-harm rule, states assume substantive as well as
procedural obligations. In lemts of the former the state is prohibited from causing
significant transboundary harm and obligated to take adequate measures to
control and regulate in advance activities that potentially could cause significant
Lransboundary baan. Over time, relevant international treaty practice has also
contributed to the development of certain procedural obligations tbe state of
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origin (where Lhe potentiaUy hannful activity takes place) must implement. These
obligations i.nvolve the dury to consuli with the aim of preventing transboundary
harm; to exchange information in timely fashion about potentially harmful
activities; to notify or emergency situations; to u.ndenake envirorune01al impact
assessments; and to provide for access lo environmental information and for
participation in decision-making processes (Beyerlin a Marauhn 201 I: 44).
The principle of diligent prevention also u.nderlies another basic norm
determining slate conduct, namely the duty to take precautionary action in the
case of ihe likelihood of actua l and serious hann. 1ltis arises where ihere is a known
risk of haan or where the harm is foreseeable with regard to both its potential
occurrence and its gravity [Birnie a Boyle 2002: 115). Principle 15 or the Rio
Declaration states in lhls regard Lhat 'Lhe precautionary approach shall be widely
applied by States according to their capabilities. Where tl1ere are threats or serious
or irreversible damage, lack of full scientific certainty shall noLbe used as a reason
for postponing cost--effet:tive measures to prevent environmental degradation'. At
its 52nd session, the International Law Commission. in dealing with tbe Liability of
slates for hannful consequences arising out of acts not prohibited by international
law, pointed out Lhat since the precautionary principle was already part of the
principle of prevention and of prior au lhorisation, it was not necessary to include
it as a separate element of liability in the Draft Articles on Liabj]jty the Commission
was working on al the time [(LC 2000: para 716). In essence what this boils down to
is that Lhe precautionary approach (or principle as in the Rio Declaration) 'lower[s]
the standard of proof required before preventive action is called for. It does not
allow states lo proceed with proposed activities on the basis that risk of harm has
not been proved conclusively. but neither does it require proof that there is no risk
of harm" [Birnie El Boyle 2002: 117).
The duty to prevent or to take precautionary measures is given further substance
through the requirement of international co-operation concerning tbe protection
and Improvement of Lhe environment. Such co-ope.ration, which, in terms of
Principle 24 of the Stockholm Declaration should take place through multilateral
or bilateral arrangements, is essentially aimed at etTet:tively co11trolli11g, preve11ti11g,
reducing and elimi11ari11g adverse environmental effet:ts in such a way that due
accoum is taken of the sovereignty and interests of all states (see also principle 27 of
the Rlo Declaration). The duty to co-operate in good faith cannot be delinked from
the duty to notify, especially since the dissemination of envirorunental information
is now indisputably a key ingredient of International and nationa l environmental
law. Ibis is, inter alia, reflected in Principle I 9 of the Rlo Declaration, which
determines that stares ·shall provide prior and timely notification and relevant
information to potentiaUy affected Stales on activities that may have a significant
adverse transboundary environmental effect and shall consul t with those stares a t
an early stage and in good falih'. These fu.ndamental principles of international law
have also been affirmed by the General Assembly of the United Nations as laying
down the basic rules governing the international responsibility of slates in regard
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Environmental Management - A business management approach
to the environment (General Assembly Resolution 2996) and are now reflected
in lhe decisions of iniernational tribunals and a large number of international
conventions (see Sands a Pt.'el 2012: 187 et seq; Beyerlin a Marauhn 201l: 49 et seq].
10.8.2.2
Treaty law
T/11• Paris Agreemellf
If it is considered that energy production and use account for two-thirds of the
world's GHG emissions (see lEA 2015), it stands 10 reason that lhe energy sector in
each counny has a critical role to play if global effons to reduce emissions are to
succeed. Thus, when the parties to the United Nations Framework Convention on
Climate C11ange [UNFCCC] met in December 20 I 5 to adopt the Paris Agreement,
U1cy also acknowledged the 'need to promote universal access io SUS1ainahle energy
in developing countries, in particular in Africa, through the enhanced deployment
of renewable energy· [UNFCCC COP Decision I /CP.2I (29 January 2016) preamble;
see the annex for the Paris Agreemen1).
As a binding multilateral treaty (see also Bodansky, 2016: 142), the Paris
Agreement is intended to enhance the implementation of the UNFCCC (Paris
Agreement art 2( I)) following the lapsed commitment period or the Kyoto Protocol
but without Ute categorical dilTerentiation between Annex I and non-Annex I
pan:les that characterised the commitments regime of developed and developing
countries under ihe UNFCCC and Kyoto Pro10col Following a bottom-up approach,
the Pads Agreement brough t an end to Utis rather inflexible arrangement by
irttroducing a common global framework that allows For self-differentiation by
stales parties when communicating ilieir nationally detennined contributions to
the global response to clintate change and with a view to achieving the purposes
of the agreement, a requirement that applies to all parties (Paris Agreement art
3). Advanced invitations to communicate their irttended nationally decennined
contributiollS was already extended to UNFCCC parties in 2013 [UNFCCC 1/CP. 19
para 2(b)) and reiterated again in 2015 (UNFCCC J/CP.2I para 13) with a view to
creating an opportunity for bringing clarity, transparency and understanding to
national contributiollS prior to the adoption of the Paris Agreement.
It is against this background that South Africa's response must be read. South
AFrica acceded to the UNFCCC as a non-Annex I party in 1997 and ratified
the Paris Agreemeni on I November 2016. LiS intend~ nationally determined
contribution (INDC) was communicated to the Secret-ariat or the UNFCCC on 25
September 20 15, some iliree months before the adoption or the Paris Agreement
(see Climate Action Tracker n.d.). TI1e country's INDC is based on a mitigation
commitment from what is called a ·relative deviation from bw.;.ness as usual' to an
'absolute peak. plateau and decline greenhouse gas emission trajectory raoge' (ibid).
Thls assessment is informed by wbat tbe government describes as the country's
development needs with overriding priorities, some of which are the elimination
or poverty, the eradication or inequality, and the creation or decent employment
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Ten: Energy
opportunities. Among the challenges obstructing economic development. the INDC
men lions acute energy shonages and the lack of modern energy services as a result
of the country·s heavy dependence on coal as an energy source (ibid; however see
Table 10.2 and figure 10.4 for a description of over-capacity if IPP generation is
included). Given these circumstances and the mix of policies under development
for moving towards a low-carbon and climate-resiUent society, the peak, plateau
and decline (PPD) trajectory pol forward in the INDC-considered by government
as an ambitious and fair effort in tbe context of national circums1ances- promises
Lo enab le South Afrira·s GHG emissions 10 peak between 2020 and 2025, followed
by a plaieau for about a decade and a decline in absolute terms thereafter (ibid).
Climate Action Tracker (CAI) (ibid) is of the view that South Africa"s commitments
are inadequale and not in line with tl1e interpretations of a fair approach lo reach a
2 'C pathway. According 10 this assessmen1. if most other countries were to follow
South Africa·s approach global warming would exceed 3-4 •c. Also q uesiioned is
South Africa's reliance on its current policy framewo rk 10 bend the curve of the
country's emissions to a PPD trajectory range. To reach these targets, CAT is of
tl1e view tl1at additional policies will be needed. However, even so, there is still the
crucial element of timeous and effective implementation of policies to be reckoned
with, a governance issue in respect of which the country has a dubious record.
For a clearer picture to emerge. an assessment of each of the five-year periods of
imp lementation the govemmeDL has committed itself 10 will be necessary. In the
mitigation seciion of its INDC, government has undertaken 10 focus on developing
and demonstrating its mix of policies and measures in the 2016-2020 period in
order to meet its Cancun pledges (see Climate Change Tracker 201 I), and the periods
2021 - 2025 and 2026-2030 for giving effect to the current INDC.
The Co11ve11tio11 011 Biological Diversity
It should not be in dispute that ' biodiversity is a central issue to consider in the
production, distribution and consumption of energy·, and that the ·ecological
footprint of the energy sector with respect to exploration, extraction and
infrastructure developments is signlficaJ11° (JUCN 2006). Parties 10 the 1992
Convention on Biological Diversity (CBD) must therefore reckon with the twin
elements of the convention, namely that biological diversity has an intrinsic value
as well as, (among others), an acquired economic value [UN 1992: preamble).
Convention obligations co-extensive with these elements and a.imed at achieving
the objectives of the conveniion therefore co-determine the intemaiional normative
framework within which the energy sector at the national level must be regulated.
Of further relevance is the Strategic Plan for Biodiversity (20U-2020) adopted by
the 10th meeting of the Conference of the Parties (COP) under the CBD [available at
https://www.cbd.in1/sp/) and which contains the Aichi goals and targets which go
beyond the proteclion of biodiversity 10 address importalll aspects of sustainable
developmem. Parties account for the measures they have taken through a rt 6 of
the CBD, which requires tl1at parties submit national biodiverslty strategies and
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Environmental Management - A business management approach
action plans [NBSAPs). South Africa ·s latest response in this regard is con1ained
in its second NBSAP (2015-2025) (available at htrps://www.cbd.int/doc/world/za/
za-nbsap- v2-en.pdf).
70.8.3 Regional deve/opmen ts
The sustainable development and exploitation of energy resoUices and the link
between such resources and the socio- eronomic deve.lopmeut of Africa have been
the subject maner of several regional instruments, such as the Lagos Plan of Action
(1980), U1e Cairo Agl'llda for Action (1995) and the resolutions of the Filst Pan
African Energy Ministers· Conference in Tunis ( 1995) and of the First and Second
Regional Conferences of African Ministers responsible for the Developmen t and
Utilization of Mineral and Energy Resources in Accra and Durban ( 1995, 1997)
respectively.
TI1ese initiatives were taken a step further in 2001 with the adoption of
the Convention of the African Energy Commission (AFREC). The Commission·s
mandate to assist. inter alia, with the development of energy policies, plans and
strategies for Africa is linked Lo a number of principles in art 3, such as energy
use for economic development, the eradication of poveriy, and the combating of
desertification, co-operation between African states through the joint development
of energy resources, the development and utilisation of environmentally sustainable
energy, and the security and rcllabWty of energy supply.
At the sub-regional level, in 1996 the Southern African Development
Community (SADC) adopted a Protocol on Energy (available at http://www.sadc.
int/documents- publications/show/Protoco ll\b20onl\b20Energyqb20( 1996)), based on
the same principles and wide-ranging objectives now reflected in AFREC. This
duplication of overlapping instruments at the regional and sub-regional level has
become a trademark of African institutions, without any clear indication of how
the different initiatives are reconciled and co-ordinated by the organs responsible
for their implententation. Wha t remain.~ is an ever-expanding paper trail lacking
real and effective results in almost all areas where Uigent action is needed.
Following a different angle, and somewhat more focused, is the 2003 ECOWAS
Energy Protocol (available al http://wwwJus.uio.no/englisb/services/library/
treaties/09/9-02/ecowas_energy_protocol.xml). Although also motivaied by a
desire LO secure regionally efficient and reliable electriclcy supplies, the Economic
Community of West African States (ECOWAS) instrument is essentially an
investment tool. According to art 2 the Protocol provides a legal framework for
tbe promotion of long-cerm ro-operation in the region 1vitb a view ·to achieving
increased investment in the energy sector, and increased energy trade in the West
African region: In its trade- related endeavours, the Protocol is mindful of tbe
Word Trade Organization (WTO) obligations of some of its members and prohibits
trade-related investment measUies that are inconsistent with wro regulations (arts 4
and 5).
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Tue EC0WAS Protocol follows the acclaimed example or the Energy Charter
Treaty and Protocol between European and Asian countries, signed in 1994, and
which entered into force in 1998 [available ar hitp://www.ena.lt/pdfai{[reaty.pdl).
This multilateral approach to energy problems is a result or the need for greater cooperation after the end or the Cold War and aims at strengthening the rule of law,
ensuring fair competition and mitigation or risks in energy trade and inveslmenL
It mll!.'1 also be noted that with the transformation or the EC0WAS Secretariat into
a Commission in 2007 [see http://www.ecowas.int/inslitutions/ecowas-<:ommission/),
a new legal regime, consisting or Community Acts, regulations and directives, has
replaced the time-consuming practice of adopting and implementing supplementary
protocols and/or treaties to give effect to the EC0WAS Treaty. Community Acts,
dlretiJves and regulations are directly applicable in member states and do not need
domestication by means of lengthy parliamentary processes in the member states
as was the case with treaties and protocols (see bttp://www.ecowas.int/ecowas-law/
find-legislation/). Under tbls new dispensation EC0WAS adopted a supplementary
Act in 2013 on an EC0WAS Energy Efficiency Policy with the objective, inter a.lia. to
improve energy efficie.ncy in the EC0WAS region to levels orlmemailonal standards;
to achieve universal access to safe, clean, affordable and sustainable cooking for the
entire population ofEC0WAS by 2013; and 10 create instruments for the Hoa.acing of
sustainable energy {ECOWAS Supplementary Act NSA.2/W/ 13. available at btrp://
www.ecowas.int/wp-con ten t/u ploads/2015/01 / 2-Energy-Efficiency-Policy.pdf).
l.n 2013, South Africa concluded three agreements with Botswana covering
co-operation i.n the field or energy, the environmental and social assessment of
coal-based projects along the border between the two countries, and the setting
up or a bi-national commission. Tue immediate cause of these developments is
most likely the environmental and social ills associated with the com.'"truction and
future operation of the Medupi power station in the Limpopo province close 10 the
Botswana border. Oaimed to be the fourth largest coal-fired power station in the
world wlih an operationa l lir5'jlan of 50 years, this monumental project bas drawn
criticism from e.nvironme.ntallsts right from the beginning, arguing that the project
will simply add 10 South Africa's already problematic GHG emissions, air pollution
and water scarcity problems.
TI1e energy agreement, concluded on 28 August 2012, relates io both countries·
membership of the SADC Protocol on Energy and alms at the promotion or cooperation in the fields or hydroca rbons, electricity, dean coal technologies,
renewable energy and energy sufficiency. This was followed by a memorandum or
understandi.ng (MOU) on coal-based projects, signed on 29 August 2012. providing
a framework for the assessment of transboundary impacts of coal-based energy
production in view or the shared ecosystems that straddle the common border
between the panics. The envisaged assessment will determine the cumulative
enviromnen1al and social impact of coal-based energy projects over a period or 20
years, with a view to adopting measures for mitigating or curtailing the negative
environmental and social consequences of such projects.
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A fau:ly comprehensive bilateral agreement between South Africa and the Democratic
Republic of the Congo (DRC) was concluded on 29 October 2013, governing the
implementation of the Grand Inga Project This follows an MOU signed by tbe two
countries on 12 November 2011 on the same topic. The project, which is one of the
largest in the world, involves the development of a hydroelectric complex on the
Congo River for the generation and distribution of electricity, which is of strategic
importance for many African countries, including South Africa, given tbe chronic
struggle to decrease the reliance on coal-based energy supply.
In tenns of the agreement South Africa undertakes ro procure 2500 MW of
energy during the initial phase of the project. and ro start negotiating For a further
2500 MW as soon as reasonably possible. However, the amount of energy available
to South Africa is conditional upon tbe prior right of the DRC to satisfy domestic
energy needs fim.
TI1e construction, operation and maintenance of a rransmis.~ion infrastructure
for the delivery of energy form an integral pan of the project during the first phase
and wW be the responsibility of the DRC. ReciprocaJ obligations are assumed by
South Africa between the Kolwezi substation and the poini of delivery to South
Africa which, by agreement, will be the border between the DRC and Zambia,
prov ided that concessions acceptable to South Africa are granted by the DRC to
this end. With further phases of the project stW und.etermined. the parties have
agreed in principle LhaL future developments will provide for the expansion of the
transmission infrastructure from Inga to South Africa. This. too, will be subject to
the granting of concessions by the DRC.
TI1e agreement makes it possible for U1e private sector in Ute whole of ilie
SADC region to benefit from tl1e project. In pursuing this objective the parties have
undenaken to make reasonable efforts to ensure that enti lies in the SADC region are
invited to participa te in the tender processes for the provision of goods and services.
Protection of the environment and the accommodation of social considerations
have also received auention. The parties must therefore take reasonable measures
to ensure that international ly recognised standards applicable to the protection of
Lhe existing quality of the environment are complied with, and thaL due regard
is paid to the maintenance of the welfare of persons and communities directly
affected by Lhe project Vague and over-broad as Lhey are, these co ncerns are
slowly making their way into development projects of this nature, although their
enforcement remains unsatisfactory.
Being a joint project, bol11 parties agree to make reasonable efforts to facilitate
the financing of phase I of the project as well as subsequent phases, to the extent
of their respective involvement The implementation of the project will be entrusted
to a joint ministerial commission, which wW be assisted by a joint permanent
technical commission. Following the conclusion of the treaty berween the DRC and
South Africa, a bidding process for the development of the project commenced, the
outcome of which was still pending in 2017 (see https://wwwJntemationalrivers.
org/resourcrs/grand-inga-hydroelectric-projeci-an-overview-3356; Bavier, 2009).
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70.8.4 South African low and policy
The transformation of the energy sector after 1994, the search for alternative energy
sources and the challenges faced by South Africa as a developing staie have all
played a role in the reshaping of the counuy's legislative and policy fr.unework
on energy, as lhls section will illustrate. However, apart from the energy-specific
imperatives necessitating the enactment of new laws, the Constitution's role in
ensuring respect for the rule of law, equal treatment, accountable government,
rational and justifiable decision-making. environmental protection, and reasonable
and fair administrative processes is directly responsible for the new values embodied
by the legal changes that have taken place in recent years.
How easily this can be undone bas been illustrated by the stale capture saga that
staned to unfold in 2016 as a result of the publication of tl1e Public Protector's report
relating 10 complaints of alleged improper and unethical conduct by tbe President of
South Africa and other functionaries and their business panners. At the heart of the
mailer were incidents of alleged improper relationships and the role of the Gupta family
in the removal and appointment of ministers and directors of state-owned entities
(SOEs), resulting in the .improper and potentially conupt award of state contracts and
benefits for the Gupta family's business enterprises, from which government officials
and their business associates also seemed 10 have benefited (Public Proteccor of South
Africa 2016). The outcome of the Public Protector's investigation showed that the
extent of tbe issues, the likelihood of unethical, unlawful and improper conduct on
the part of Slate functionaries, including the President. and the resources necessary
to investigate further what bad been uncovered, necessitated the appointmeJII of a
commission of enquiry in terms of s 84(2)(/} of the Constitution, a recommendation
that was still being ignored by the President at the time of writing, 10 months after
completion of the Public Protector's report.
Following this investigation several other reports have emerged, making the
Issues investigated by the Public Protector even more compelling. Of special
significance are the South African Monitor Report No 7 (year-end 2016) (available
at
bups://sa-monilor.com/wp-content/uploads/2017 /01/SAM-7-Year-End-2016.
pdf), the 'Unburdening Panel' report by the South African Council of Churches
(SACC) (May 2017) (SACC 2017), tl1e report by a team of academics acting under the
Public Affairs Research lustitute with the ti lie: 'Betrayal of the promise- How South
Africa is being captured ' (May 2017) (available at lmp:1/pari.org.za/wp-concent/
uploads/2017/05/Betrayal-of-tbe-Promise- 25052017.pdf), tl1e 'No room 10 bide:
A President caught in the act' Report by tbe Organisation Undoing Tax Abuse
(June 2017) (available at ht1ps:l/www.scribd.com/documen1/352459853/FuJJ-OutareporilfTom_embed), and tbe Trillian Report (June 2017) (available at bnps:f/www.
scribd.com/document/352523499/Trillia.n-Report/ffrom_embed). What provided
significant support and strengtl1 ID the claims made in tl1ese reports were tl1e 'Gupla
e-mail leaks' which started at the end of May 2017 and which, several months later,
were still ongoing. The combined result of these reports is best summed up by the
following excerpt from the SACC report above:
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11 now seems that the problem is far greater titan corruption, but
organized chaos. We bave now come to learn that what appears to be
chaos and instability in govemmeni may well be a systemic design or
the madness that ills our governmental environment- a chaotic design.
A careful analysis makes the case for the following observable trends or
inappropriate control of Stale systems through a power-elite that is pivoted
around the President of the Republic that is systematically siphoning the
as.~elS of the State. They do this by:
I. Securing control over staie wealth, through the capture of slate-own ed
companies by chronically weakening their governance and operational
structures.
2. Securing control over the public service by weeding our skilled
professionals.
3. Securing access to rent-seeking oppnnunities by shaking down
regulations 10 their advamage, and 10 the disadvantage or South Africans.
4. Securing comrol over 1.h e country's fiscal sovereignry.
5. Securing control over strategic procurement opportunities by
intentionally weakening key technica l instltutions and foanal
executive processes.
6. Securing a loyal intelligence and security apparatus.
7. Securing parallel governance and decision-making structures that
undermine the executive.
There is widespread agreement that the information that became public knowledge
through the above soun:es coru.1:itutes at least a prima fade case of systematlc
and widespre-dd abuse of power for pasonal gain which bas been rendered even
more problematic by the persistent lack of action by investigating and prosecuting
authorities to further look into the matter with a view to weighing the prospects
or criminal prosecutlons or other sanctions. TI1e frustration about this inaction
has led to a call for the formation of an inter-ministerial committee in August
2017 10 provide a forum for liaison with the law enforcement agencies and other
stakeholders on these and related mauers (see bttp://businessday.new~11aperdirecL
com/epaper/viewer.aspx].
Although the state caplllre phenomenon bas financial, governance and
service delivery impllcations across a wide spectrum of stale functions it bas
specific relevance for the energy sector. The reason is that the energy and mining
departments feature prominently in the state capture documents referred to
above, and Eskom, the key national energy provider a nd strategic state-owned
enterprl~e. has been at the centre or controversy ever since the energy provision
crisis surfaced in 2008. Given the mineral wealth South Arnca is endowed with and
U1e developments in the energy provision sector, iL is clear that the rent-seeking
opportunities, particularly in these areas, are especially tantalising and perfectly
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Ten: Energy
sui ted for a mafia-style control over the relevant governing institutions and their
transactions. However, It would be naive to ignore the coinddental role played
by the newly grafted legislative measures- covered in this chapter- in facilitating
the capturing of the relevau t state-owned enterprises and a new understanding
or rights and entillemenis tbat are distributed by means of a web of connections
between senior state offidals, tbcir families, friends and business assodates. So,
while the new laws speak innocently of state custodianship and the expansion of
opportunities for formerly disadvantaged communities, gainsaying the role of the
distribution of the spoils of power, political control over development projects and
the neo- patrimoolal link between closeness to the ruling elite and access to markets
and opportunities, is to ignore the actual context in which transformational laws
are administered.
10.8.4.1
The Constitution
II stands to reason that activities in I.be energy sector are subject to s 24 of the
Constitution (see more on tbe Constitution in chapter 7). According to this section.
everyone has the right to an environment that is not harmful to their bealtl1 or
well-being. To ensure the enjoyment of this right aU inhabitants a.re entitled to
proper protection of the environment, also in the interests of future genera tions,
through reasonable legislative and other measures that prevent pollution and
ecological degradation, promote conservation, and secure ecologically sustainable
development and use of natural resources. However, tlte measures in question must
also promote justifiable economic and soda! development (for a more extensive
discussion ofs 24 see Glazewski 20 13: 72 el seq).
10.8.4.2 The National Environmental Management Act 107 of 1998
Tl,e Natio11al E11vironmt'lllal Ma11agemc111 Act (NEMA) (see also clmpter 7;
Glazewski 20LJ: 131 et seq) 11ro11ides a f ramework fa r co-a11erative e1111ironmental
go11en1a11ce [see also ch J of the Constitution) through the enactment of a set of
pri.ndples tbat must guide decision-making on matters affecting the environment,
by establishing institutions that are supposed to promote co-opera tive governance,
and by laying down procedures for the co- ordination of environmental functions.
Since tl1ese issues form tbe focus of the Act, ii must be noced tbat from a governance
perspective environmental maliers faU within the national and provindal
governments' concurrent legislative competence (see scbed 4 and ss 76(3) and 104
or the Constitution).
The Act defines pollution as any change in the environment caused by
substances, radioactive or otber waves, noise, odours, dust. or heat if
emlt'ted from any activity, including the storage or treatment of waste or
substances, construction and lhe provision of services, whether engaged
in by any person or an organ of state, where that change lms an adverse
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Environmental Manageme_nt - A business management approach
effect on human health or well-being or on the composition. resilience
and productivity of natural or managed ecosystems, or on materials useful
10 people (NEMA: s I 'Pollution').
When used in connection witb tbe principles on integrated environmental
management (NEMA ch 5) tbe Lenn "activity' will refer to 'policies. programmes.
plans and projed5' (NEMA s I 'Activity']. The environmental principles according
to which these and related matters must be dealt with as a consequence of the Act's
environmental management objectives include norms that are now firmly embedded
in international conventions and standards and which were referred to earlier on. Of
specific relevance is tbe principle of sustainable devclopmenl. which NEMA defines
as 'the integration of social economic and environmental factors into planning.
implementation and decision-making so as to ensure that de-velopment serves
present and future generations' (s I ·sustainable developmenf].. lltls incorporates,
inter alia, the obligation to take preventive measures for the avoidance, minintlsation
or remediation of disturbances to eco~-ystems. !he Joss of biological diversity or the
pollution or degradation of the environment; responsible and equitable use and
exploitation of non-renewable natural resources; and the development, use and
exploitation of renewable resources and ecosystems of which tbey are part in a
manner !hat will sustain their integrity: responsibility (liab!llty) for the harmful
consequences of a policy, programme. project. product, process, service or activity.
including the cost of remedying, preventing or minimising environmental degradation
and adverse consequences resulting therefrom; and assessment of the social. economic
and environmental impact of activities [s 2(4); see also Fuel Retailers Assaciario11
of Soutliem Africa u Di=tor-Geneml: Ei1uiro111m:111a/ Ma11ageme111. Department of
Agricultun?, Ca11sen,atio11 a11d E1111i-ro11111e11t, Mpumalanga Pra11i11ce 2007 [6) SA 4 (CC).
10.8.4.3
The genera l energy framework
In November 2008 parliament assented to the Nationa l Energy Act 34 of 2008. The
Act provides for.
•
•
the supply, oprintlsation and utilisation of energy;
integrated energy planning;
•
the establishment of a South African Energy Development Institute that
would incorporate energy research and the implen1entation of renewable
energy and energy efficiency measures;
•
the security of supply, including strategic stocks; and
•
investment in and maintenance of energy infrastructure.
The maners the Act aims at regulating were given a new urgency wben, in early
2008, a national crisis in electricity supply erupted during which the major, slatecontrolled service provider, Eskom, bad lo resort to 'load shedding' (planned power
disconnections) to aven what was called ·a collapse of the national electricity
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supply system' (see DME 2008; Cohen 2008a: 6 and 2008b: 4; Dyvie 2008a: 6- 7
and 2008b: 3). What emerged in public debates and comments on the crisis was tha L
a combination of bad planning, a lack of institutiooal capacity, mismanagement,
increased electricity demands, and coal supply problems we.re among the many causes
or U1e crisis. However, it must be noted U1at the government and 0U1er role players
had been aware of the underlying problems for some time. In the government's
2005 Energy Efficiency Strategy, which forms the policy background to Lhe Act.
it was acknowledged that few energy-efficiency measures bad been implemented
despite ·many years of work by universities and other research instiruiions tlta L
have pointed the way' (DME 2005: i). Thi~ stra1egy is a consolidation and updale
of the 1998 WWte Paper on Energy Policy in which the urgent need fo r energy
efficiency in South Africa has already been documented. Also acknowledged was
the government's lack of capacity to undertake energy-efficiency programmes
(ibid: 2).
TWs perhaps explains 1he strong focus in the Act on ensuring uninterrupted
energy supply; the promotion of diversity of energy supply and ils sources; the
effective management of energy demand; and the promotion of energy research
(s 2). ln giving effect to these and the other objectives specified in the Act, three sets
of provisions seem to be of special significance. The first set is contained in s G in
cha pier 3 of the Act. wWch deals with in1egra1ed energy planning. TI1ere, provision
is made for a n IEM, with a planning horizon of 20 years. The lEM must deal
with issues relating 10 the supply, transfoanation, transport. storage and demand
of energy in such a way that account is given of a balanced considerntion of
security of supply, economic resources, affonlabWty, accessibility, social eqttily,
employment. sustainable development. environment, international commitments
and consumer protection.
The second set is contaiued iu cbapler 4, whjch deal.s with the establishment and
functions of the South African National Energy Development Institute. Essentially,
the institute will uudertake energy-efficiency measures throughout the country and
energy research and technology development in all fields of energy (s 3).
The Utinl se_t is contained in chapter 5 of the AcL In ss 17 and 18 respectively.
the Minister of Minerals Resources may. in ensuring security of energy supply.
direct any scare-owned entity to acqttire, maintain, monltor and manage national
stralegic energy feedstocks and carriers and 10 undertake security supply measures,
provide for adequate investment iu energy infrastructure and maintain all critic-.u
energy infrastruclure.
Tue National Energy Regulator Ac1 40 of 2004 (NERA) eslablishes a single
National Energy Regulator for the regulation of tbe electricity, nuclear, J>iped-gas
aod petroleum pipeline industries [s 2). The Regulator performs the functions set
out in s 4 of i11e Electriciry Ac1 2006 [see below), in s 4 of the Gas Act 2001 (see
below) and In s 4 of the Petroleum Pipelines Act 2003 [see below). Decisions taken
by the Regulator in terms of these provisions are subject to judicial review in terms
of the Admirustratlve Justice Act 3 of 2000 [NERA s 10[3) and (4)).
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Environmental Management - A business management approach
10.8.4.4
Electricity
The Electriciiy Regulation Act 4 of 2006 [ERA), which t.une into force on I August 2006,
repealed Lhe old Electricity Act 41 of 1987. The main aim of ERA is to establish
a regulatory framework for Lhe electricity supply industry. TI1e execuiion of Lhe
Acfs regulatory functions is assigned to Lhe National Energy Regulator of South
Afrita [NERSA), establisbed by s 3 of NERA, a body Lhat is assigned Lhe function
of custodian and enforcer of the electricity regulatory f-ramework through a system
of licensing and registration for U1e generation, transmission, distribution, trading,
and import and export of electricity [s 3). Notable amongst the objects of Lhe Act is
the focus on governance, efficiency, effectiveness and long-term sustainability of
the electricity supply industry, and on tbe promotion of Lhe use of diverse energy
sources and energy efficiency (s 2).
In terms of ERA. NERSA is given wide powers wilh regard to Lhe licensing and
operation of a faciliiy used for Lhe generation, transmission or distribution of electricity,
the import or export of electricity, or trading in eleca:iciiy [ss 4, 7, 13, 14. 16, 17, I 8,
30, 32, 33 and 35). However, the minister may, after con~-ultation with Lhe regulator
and stakeholders in the advisory forum (s 5) determine by notice in tbe Govemmeni
Gazelle that any of the above activities will t-e-dSC to be licensed activities (s 8). Jn such
instances, the minister may, in consultation with the Energy Regulator, determine by
notice in the Government Gazette that the person involved in these activities must
nevertheless register with the Energy Regulator (s 9(11). lt is then within the discretion
of the Energy Regulator to refuse the regi~"tration on the prescribed grounds, or aUow
Lhe registration subject 10 cenain conditions (ss 9(3) and (4)).
The requirement to consult with Lhe regulator also applies when Lhe minister
wants to determine that new generation capacity is needed for ensuring the
continued, uninterrupted supply ofelectricity; the types ofenergy sources from which
elecrricity must be generated; to and by whom electricity thus produced must be sold
or purchased; or new generation capacity must he established through a rendering
procedure (s 34). The minister's determination under this section for the procurement
of new generation capacity in the case of nuclear energy has recently become the
subject of public scrutiny and litigation in the High Court. This is dealt with in ilie
next section.
10.8.4.5
Nuclear energy
In recent years tl1e nuclear energy plans of tl1e Soulh African government have
been the cause of discordani views in public debates. Apart from concerns about
Ute cost implications associated with esiablishing a nuclear energy infrastructure,
potential environmen1al impacts and nuclear safety, U1e constitutional chaUenge to
Lhe government"s procurement process in the High Court (see below) lias, more than
anything else, caused apprehension about tbe govemment"s conduct in the whole
matter. Before these issues are dealt with. it is necessary to introduce the legislative
Framework that applies ID nuclear encrgy.
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Ten: Energy
The Nuclear Energy Act 46 of .1999 (NEA) provides for the establishmeni of the
South African Nuclear Energy Corporation, a public company wholly owned by
the state with the main function of undenaking and promoting research and
development in the field of nuclear energy. As a mechanism for realising the state's
long-term vision of becomlng globally competitive in the use of nuclear technology
for peaceful pu111oses, the Act is premised on Article N of the Treaty on the Nonproliferation of Nuclear Weapons (1968). whkh amrms the inalienable right of
states to research, develop, produce. and use nuclear energy for peaceful pUiposes.
South Africa acceded to this trt'Jly in 1991. From an environmental perspective the
NEA has little significance. Of relevance Is lite minis1er·s responsibility to exercise
authority over the management and discarding of radioactive waste and the storage
of irrndlated nuclear fuel. In exercising tltis auUtociiy the minlster, when making
regulations prescribing the manner of rnanagen1ent. storage and discarding of
radioactive waste, must consult with the Minister of Environmental Affairs (NEA s 45).
The protection of the environment features somewhat more strongly in the
National Nuclear Regulator Act 47 of 1999 in that the main objective of this
Act is to provide for safety standards and regulatory practices for the 1>rotectlon
of per..ons, propeny and the environment against damage arising from nuclear
activities. Apart from setting safety standards and granting nuclear autl1orisations,
the National Nuclea.r Regulator has a compliance assurance function, must see to it
that South Africa fulfils its international obligations with regard to nuclear safety,
and must ensure tbat provisions for nuclear emergency plannlng are in place
(National Nuclear Regulator Act 47 of 1999 ss 5, 7). Another notewonhy feature of
Ute Act is Ute inclusion of the strict liability principle in the case of nuclear damage.
Under this principle tlte holder of a nuclear installation licence, irrespective of
whether there Is intent or negligence on the pan of the licence-holder, becomes
liable for all nuclear damage caused by, or resulting from. a nuclear Installation
during the holder's period of responsibility. This will be the case if the dantage
bas a causal link with anytltlng being present or witb anything being done at or
near the installation, or with contaminated material being discharged or released
from the installation, or transported to any other place in the Republic while in
the possession or under the control of the holder of the licence [National Nuclear
Regulator Act 47 of 1999 s 30(1)). In rhe latter instance tl1e Act creates a presumption
of possession or control if the contaminated material is being conveyed on behalf
of the holder of the licence (ibid: s 30(4)).
Two remaining maiters regarding tlte role and function of the above two pieces
of legislation in the nuclear energy field must be mentioned. The first is that a
number of secondary legislative sources could, depending on the subject mailer in
question. also be of relevance (see for instance the Hazardous Substances Act 15
of 1973; Mlne Health and Safety Act 29 of 1996; Mineral and Petroleum Resources
Development Act 28 of2002; NEMA: National Water Act 36 of 1998; and ERA). and
second, the government"s nuclear energy policy could add various new dimensions
to tl1e energy provision question.
2(17
Environmental Management - A business management approach
This policy, wltic.b was published for public comment in 2007 by Lhe Depanment
or Mineral Resources [Deparrment of Minerals and Energy 2007), acknowledges the
need for achieving energy security in South Africa Lhrough the diversification of
primary energy sources, to increase electricity generation capacity for Lhe facilitation
or economic growth and social progress, and 10 mitigate GHG emissions and global
warming through the development of carbon-free sources of power (ibid: 7). Key
elements in all this are Lhe sizeable uranium deposits Lhe countiy is blessed with
and the exls1ence of an ex1ensive uranium mining industiy. To the extent lhai the
policy bas lhe objective of promoting nuclear energy as an important electricity
supply option. coupled wilh the expansion or the industrial complex tluough wltich
this should be realised, it stands to reason lhat the regulatory framework for the
safe, secure and effective utilisation of nuclear energy will also have to live up 10
expectations, bolh here and abroad. Equally important, though. from a management
and governance perspective, is lhe question or the responsiveness and ability or
existing enti1ies, such as the National Nuclear Regula1or, to perform these tasks in a
manner that will sustain and enhance the objectives spelt out in the policy.
TI1e debate in South Africa with regard to the development and regulation or
nuclear energy musl also be seen in Lhe context of developments in other parts
of the world. Ai the second review meeting by contracting parties in terms of
lhe Convention on Nuclear Safety ( 1994), U1e president of the meeting made tbe
following statement [Pelzer a Wagstaff 2002: 297, 299):
Significan1 progress has been observed In a number or key areas, such
as strengthening legislation, regulatory independence, the availability
of financial resources, enhanced emergency preparedness and safety
improvements at nuclear power plants built to earlier standards. ...
the legislative framework is well-established in most countries. New
legislation has been adopted or existing legislation bas been improved
in a number or contracting parties since the flrs1 review meeting. Such
legislation mainly focuses on es1abllshing an independent regulatory
body, on emergency preparedness, on decommissioning and on radiation
protection provisions.
These phenomena coincide with a rise in the number of countries who are
considering the potential beneflts expanding nuclear power bas 10 offer for the
global environment and for economic growth. 1llis is also because nuclear power
has become attractive where energy demand is gro\ving and alternative resources
are scarce, and where energy security and reduced air pollution and GHG are a
priority (ibid: 274). Projections made by the intergovernmental Panel on Climate
Change and by ibe IAEA estimate an increase in nuclear power by 2.5 times by
2030, wltich will equal 27<\b of global electricity production. It is common cause that
among the factors affecting rhis growth in production is climate change. Nuclear
power plants emit only 2- 6 g of carbon per kilowatt hour from uranium mining to
waste disposal, which includes reactor and facility roastructioa (ibid: 275).
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Ten: Energy
The growth globally in nuclear power output has been slowed down but certainly
not halted by 1.h e March 201 1 Fukushima Daiichi nuclear accident in Japan.
For instance, the International Atomic Energy Agency (IAEA) found that, although
the accident had a negative impact on public opinion, with a few countries even
deciding not to build nuclear reaciors, the majority of countries have indicated
their intention to go ahead with existing o r future plans. According to the IAEA,
the imponant considera Lions in the energy planning of these states are still the
global energy demand. climate change concerns. volatile fossil fuel prices and
security of energy supply (lAEA lntemational Ministerial Conference on Nuclear
Power in the 21st Century. 2013). However, what the Fukushima incident has caused
is a renewed focus on the ongoing safety obligations of states parties under the
Convention on Nuclear Safety [ 1994) in operating nuclear facilities by emphasising
six key areas in wWch action is needed to enhance nuclear safety, namely external
events, technological design, accident management, preventive and mitigating
duties of national regulatory authorities, emergency preparedness and postaccident response, and international co-operation. See, for instance, the final
summary report of U1e second extraordinary meeting of the contracting parties to
the Convention on Nuclear Safety (CNS/ExM/2012/04/Rev.2. 27-31 August 20 12).
It is against this background that we must now tum to the steps taken by the
South African government between 2013 and 2016 in funherance of its nuclear
power procurement programme U!at became rhe subject of litigation in the High
Court. as indicated above. The case in question (Eart/r/ife Africa Jo/ra11n~sburg 011d
A11oc/rer v Minister of Energy and Others 2017 (5) SA 227 (WCC)) concerns, first.
lega l challenges to two separate determinations made by the Minister of Energy
in 2013 and 2016, respectively, under s 34 of ERA, the Electricity Regulation Act
4 of 2006 (see above), and second. to the tabling in parliament of three bilateral
agreements South Africa has concluded with foreign states relating to nuclear cooperation. The s 34 determination by the minister was challenged on the basis that
both the minlster·s decision and NERSA's concurrence in that declslon constiruted
administrative action and as such failed to comply with the constitutional and
legislative requirements for just administrative action (see Constitu tion of the
Republlc of SouUt Africa, 1996 s 33 and Administrative Justice Act 3 of 2000).
In proceeding on the basis tl1a1 a determination in s 34 of NERA constitutes
administrative action- which must he lawful, reasonable and procedurally fair- the
process followed by the minister and NERSA in making the determination became
immediately relevant as a result ofNERA:s own provisions. Section 34(1)[e)[i) , for
iustance, requires that new generation capacity ' must be established through a
tendering procedure which is fair, equitable, transparent, competitive and costeffective: Furthermore, as pointed out earlier on, the minister's determination must
be made •jn consultation with the Regulator' whose own decision in the matter
must comply with the provisions of s 10 of NERA. This section determines in
pan that;
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Environmental Manageme_nt - A business management approach
(I) Every decision of the Energy Regulator must be in writing and be(a} cousistent with the Constitution and all applicable laws;
(d} taken within a procedurally fair process in which affected p=ons
bave the opponunity to submit their views and present relevant racts and
evidence io the Energy Regulator;
(e) based on reasons, facts and evidence that must be summarized and
recorded; and
(fl explained clearly as to its factual and legal basis and the reasons
therefore.
fl is evident Uial U1ese requirements are intended lo ensure that NERSA's decisions
are in compliance with the Promotion of Administrative Justice Act and hence also
subject to judicial review under this Act as a genus of administrative action (see
NERA s 10(3); Earr/1/ife Africa paras 36, 37).
Within tWs legal framework, the s 34 determinations met wilh several legal
obstacles. For current purposes the focus will be on the need for public input
as a basis for rational decision-making, a process both tbe minister and NERSA
failed lo follow with regard 10 the 2013 and 2016 determinations. On this issue the
coun was of the view that tbe scope and public imponance of the government's
nuclear energy generation procurement project necessitated a public comment and
consultation process as a prerequisite for fair and rational decision-making. The
court loolt into aL-count:
( I) that Ute expansion of the nuclear procurement programme was or
national imponance and one of the most important decisions to be
talten at the time;
(2) that it had far-reaching consequences for the South African public in
terms of the programme's financial layout and infrastructure
requirements; and
(3) that it had potentially far-reaching implications for the environment
(Earr/1/ife Africa paras 42-4).
In the light of such circUD1Stances tbe coun was or lhe view that 'a rational and fair
decisioa-makin.g process would have made provision for public input so as to allow
botb interested and potentially affected parties 10 submit their views and present
relevant facts and evidence' before a decision was lalten on the matter (ibid: paras
45, 67). Consequently, a failure to follow such a process renders the decisions taken
'procedurally unfair and in breach of lhe provisions of s 10( t)(d) of NERA read with
s 4 of PAJA' (ibid: para 46). Moreover, in the circumstances of the case, and taking
into account in particular NERSA's non-compliance with its statutory duty to act in
the public interest and in a trnnspa.rent and justifiable manner, the coun was also
or the view Uta! NERSA's conduct (or lhe combined decision or lhe minister and
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Ten: Energy
NERSA) also Failed the rationality test based on this procedural ~gularity alone
(ibid: paras 47-50).
The second main issue in the case is the challenge to the tabling in parliament
of the bilateral agreements with fon'ign states. For current purposes I.be court's
ruling on the tabling of the bilateral agreement with Russia is most relevant in
view of I.be questions it raises concerning the sepa.ration of powers under s 231 of
Lhe Constitution, which dere:nnines the ro le of Lhe executive and the legislature,
respectively, with regard to the treaty-making process, and whelher the courts may
decide on the correct process for tabling inremational agreements under s 23 I of
the Constitution. Of specific relevance ares 231(2) and(3). Under I.be former. to
be binding on the state, a treaty negotiated and signed by the executive must be
approved by resolution in both houses of parliament. Under s 231 (3) parliamentary
approval unders 231(2) is not required in the case of an international agreement of a
technical, administrative or executive nature, or a n agreement that does not require
either ratification or accession. The only requirement in such instances is I.bat the
agreement must be tabled in both houses of parliament 'within a reasonable time:
bi casu, the government tabled tlte Russian agreement under s 23 1(3) and it is
tllis decision the applicants challenged as unconstitutional, by virtue of the fact
Lbat, since the Russian agreement contained binding commitments (as opposed to
the agreements wilh tlte US and South Korea) in relation to nuclear procurement, it
should have been cabled under s 231(2) in order to give parliament the opponuniry
to consider whether to approve the agreement or not (ibid: paras 80- 2).
In seeking a ruling from the coun on the constitutionality of the governmem's
conduct concerning Ute signing. approval and tabling of Ute Russian agreement,
the court was not asked to rule on tlte international law validity of the agreement
(as the government alleged and objected to on the basis of tl1e separation of powers
principle), but on the constitutionality and lawfolness of the relevant governmental
decisions (ibid: para 90). The court's point of depanure, therefore. is that. since tile
cooclusion and tabling of U1e agreement involved tlte exercise of public power,
tile government's conduct in this instance, as in all cases of the exercise of public
power, is justiciable and can be tested for lawfulness and rationality (ibid: para 103).
To undertake a review of this kind and to determine under which provision the
Labling of the agreement should have occurred, rhe coun considered it not only
permissible to llave regard LO I.be nature and content of the agreement, but that it
was also its duty to do so (ibid: paras 104, 105).
TI1e court's ensuing enquiry into the nature and content of the agreement
provided strong evidence that the tone and content of the provisions, the deg.rec of
specificity, the frequen t use of peremptory language, and the parties' commitments
to key elements of an agreement with far-reaching consequences. suggested a firm
lega l commitment to enter into a binding agreement in relation to the procurement
of new nuclear reactor plants. The combined effect of these faciors suggested that
what the panies llad in mind was not the kind of routine agreement tllat could fall
under the exceptions listed in s 231(3) (ibid: paras 106-11). Whal strengthened the
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Environmental Management - A business management approach
coun's hand in this assessment was an explanatory memorandum by tbe senior
State Law Advisor suhmirted to the minister and the President in which it was stated
that the agreement fell within s 231(2) or the Constitution and that parliamentary
approva l was therefore required. Why government dismissed lhis advice became
clear in the course of the proceedings when counsel for tbe respondents placed on
reconl that the minister acted in the way she did because she considered the advice
of the State Law Advisor to he wrong. However, no explanation was given to justify
the minister's rejection of the advice or her subsequent decision 10 proceed with the
matter under s 231[3] insiead (ibid: para 115].
Given these facts, the coun ruled against a classification of the agreement as one
that falls within the ambit ofs 231(3): its nature and ramifications, tbecourtfound, were
such that parliamentary scrutiny unders 231(2) was required, which rendered the minister's
decision 10 table the agreement in terms of s 231(3) 'at the very least, irrational'
(ibid: 11 6). However, potentially more incri minatory was the coun's very nexL
statement.. namely that ·[a)t best the Minister appears 10 have citber failed to apply
her mind to tbe requirements of sec 231 (2) in relation to the contents of the Russian
!GA o r at worst to have deliberately bypassed iis provisions for an ulterior and
unlawful purpose' (ibid: II 6).
Even prior 10 Lhe High Court j udgment, media reports suggesting underhand
tactics used by the minister and other government officials Lo put Russia in an
unassailable position as procuremenL panner (Faull 2015] had ruelled speculation
tha t corruption at the highest levels of government was Lo he blamed for the
manner in which the deal with Russia was bandied. At the centre or it all was the
highly problematic relationship between the President, Lhe Presideni's son and the
Gupta family whose holding company, Oakbay. owned tbe only mine in South
Africa earmarked for Lhe production of uranium (see also Bhorat H et al, 2017), all
matters that formed an integral part or I.be state capture reports referred 10 in tbe
introduction to this section.
10.8.4.6
Pet roleum
Adopted during Lhe oil embargo against apanheid South Africa, the Petroleum
Products Act 120 of 1977 provides for measures aimed at tbe saving of and
trading in petroleum products, lhe control or petroleum product prices and tbe
regulation of the disclosure or information concerning petroleum produru. Given
the purpose of the Act and its underlying rationale at the time or its adoption, iL is
understandable Uiat references to environmental considerations are not spelt out
in crucial areas such as tbe regulatory powers given 10 tbe minister (Petroleum
Products Act 120 of 1977 s 2), tbe prohibition of certain activilies (s 2A), or the
licensing requirements provided for in tbe Act [s 28). The old Minerals Act 50 of
1991 [ch VI) did slightly better by recognising environmental considerations in
the rehabilitation or land in mining are.as. However, this is or no relevance any
more, since an entirely different legal regime for tbe regulation of the mineral
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Ten: Energy
and petroleum industry came into being in 2002 with the adoption of the Mineral
and Petrole-um Resources Devdopment Act 28 of 2002, here-after re-ferred to as
the MP RDA. The CLIITl'Dl ve-rsion of the Act thai applies to tbls section reflects the
amendments brougl:u about by the Minerals and Petro leum Resources Development
Amendment Act 49 of 2008. By virtue of s 94(2) of the Jailer Aci, read with s
14(2) of the National Environmental Management Amendment Act 62 of 2008,
Lhe coming into cITect of certain provisions relating Lo prospecting, mining,
exploration and production-re-lated activities has been suspended for a period of
18 months arter commencemem of s 2 of the Minerals Amendment Act or the
National Environmental Management Amendment Act. wWchever is the later.
Based on this and the subsequent government proclamations affe-cting the coming
into effect of the above amendment laws, the dale for Ute commencement of the
affected provisions is set al 7 December 2014 (Mineral and Petrolewn Resources
Devdopment Act 28 of 2002, as amended).
The MPRDA belongs to a category of legislative measures that the courts and
commentators arc fond of referring to as transfoanative or remedial legislation (see,
for instance, Agri South Africa v Minister for Minerals anti Energy 201'.l (4) SA J
(CC); Van der Schyff, 2016). In the case of the MPRDA the main mischief the Act
sought Lo remedy is Ute historical exclusion of formerly disadvantaged segments of
the South African population under apartheid from benefiting from tlte country's
vast mineral resources (Van der SchylT 2016). This is de-ar from the long title
and preamble of tbe Act wbich emphasise, as objectives of tl1e Act, the provision
of equitable access to the nation's mineral and petroleum resources, in order lo
eradicate all forms of discriminatory practices in the relevant industries and to
redress the results of past racial discrimination. Lt is also apparent from s 2 of the
Act, which again lists amongst the Act's objectives, equitable access as well as the
expansion of opportunities for historically disadvantaged communi1jes to benefit
from the country's mineral and petroleum resources and to advance the social and
economic welfare of all South Africans (MPRDA s 2(c), (d) and [bl).
Of inlmediate rdevance, though, are the environmental focus of the Act and its
management paradigm. Already in the preamble of tbe MPRDA there is affirmation
of the state's obligation to protect the environment for the benefit of present
and future- generations and lo ensure the ecologically sustainab le exploitation of
mineral and petroleum resources. In s 2(b) of tile Act this is specifically linked to
s 24 of the Constitution, which the Act purports to give effect to. All prospecting
and mining operations are also subject to Ute environmental management
principles enumerated in s 2 of NEMA (see ch 4 for more on NEMA), which also
serve as guidelines for Lhe interpretation, administration and implementation
of the environmental requirements of the MPRDA [s 37( I)). Moreover, it is also
require-d tha t prospecting and mi ning operations are- conducted in accordance with
generally accepted principles of sustainable devdopment, wWch means that social,
economic and environmental factors must be integrated into the planning and
implementation of such projects to ensure- that resource exploitation serves present
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Environmental Manageme_nt - A business management approach
and future generations (s 37[2)). TI1e above principles apply equally Lo petroleum
exploration and production (s 69).
The managemeat paradigm of the Act is rooted in the roncept of the state
as custodian of the nation's mineral and petroleum resources which must be
taken care of as the common heritage of all i.he people of South Africa [s J{ I)).
To perform its custodial function under the MPRDA. the Minister of Mineral
Resources is invested with wide powers concerning the granting, issuing, refusing,
controlling, administering and managing of rights, permissions and permits
relating 10 prospecting, mining and production activities under the Act (s 3(2)1a)).
In performing these functions i.he minister is obviously bound by the specific
powers assigned to him or her under the AcL We are no! concerned wii.h these in
U1e rnrrent contexi, but focus on the broader legal and constitutional framework
that constitutes an ancillary body of norms 10 be observed in U1e implementation
of the Act. Of relevance are Ute following:
Tl,e legal 11at11re of a prospecl"i11g, 111i11i11g, aploratio11 a11d productio11 right
According lo tbe MPRDA these rights, when granted in terms of the Act and
registered in terms of the Mining Titles Registration Act 16 of 1967, are limited
real rights in respect of the mineral or petroleum and the land 10 wWch such rights
relate (s 5( J)). The holder of sucli a right is entitled lo the rights under this provision
as well as such other rights granted lo, acquired by or conferred upon U1e holder uuder
the Act or any other law [s 5(2)). TI1e rights the holder may exercise in terms of this
provision are:
(a) the right to enter the land to which the right relates;
(b) to prospect, mine, explore or produce on or under that land;
(c) to remove and dispose of minerals found, subject, in the case of
diamonds, lo s 59B of the Diamond Ac! 56 of 1986;
(d/ lo use water from any natural source on such land, subj ect to the
National Water Act 36 of 1998; and
(e) 10 carry out any other activity incidental lo the main activities specified
in this provision (s 5(3)).
Although the real rights in question here derive their existence from lhe Act, tha t
is they are created a lege, their granting by the minister 10 a specific person
or other legal entity is, in view of the custodianship paradigm, in the nature
or an administrative acL Rejecting i.he possibiliiy of a contractual relationship
between the minister and the applicant of a right by means of which a real right
comes into existence (see Meepo v Kotze and Others 2008 ( I) SA 104 [NC), Van
Der Schyff (2016: 339-40) has explained the new position under the MPRDA
as follows:
As custodian of the nation's mineral estate, i.he state is bouud by the terms
of the MPRDA to grant, issue, refuse, control, adminisler and manage the
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Ten: Energy
vaciety or rights, permits and pennissions provided for by the MPRDA in
an effort to ensure rhe sustainable development or South Africa's mineral
and petroleum resources. In granting, pro~11ecting, mining, exploration
or production rights in tenns of the MPRDA, tbe state does not transrer
io another any inherent interest. vested right or entitlement that it may
execute. The state bas no contractual capacity in this regard, but only a
purely administrative duty lo regulate the exploitation of the nation's
minera l and petroleum becitage.
Based on this premise the argument is that the granting of a right under the MPRDA
scheme is merely an 'administrative authorization' which amounts to nothing
more than a 'permission to do something which would otherwise be prohibited',
an 'entitlement of a new kind' that is statutorily 'defined and sculpted as a limited
real right' (ibid: 340).
Once granted and duly registered, the s 5(1) limited real rights. when exercised,
burden the private property in which the mineral and petroleum sources are found
as well as the minerals, which, by operation of the MPRDA, now form part or the
nation's mineral estate and are therefore public propeny s11i ge11eris and thus not
regarded any more as part or the landowner's private estate. However, as registered
real rights they remain enforceable against everybody else (ibid: 343-6) .
Tl1e applicability of administrative j11stice 11rinciples
All administrative processes and decisions taken in terms of the MPRDA are subject
Lo the principles or administrative justice in the Promotion or Administrative Justice
Act 3 of 2000 and must therefore comply with the requirements or lawfulness,
reasonableness and procedural fairness (MPRDA s 6). An aggcieved party whose
rights or legitimate expectations have been materially or adversely affected by
an administrative decision in terms of the MPRDA has a right of appeal to (a}
the Din-ctor-General of the Department of Minerals and Energy in the case or a
decision by a regiona l manager or other official to whom a power or dury bas been
delegated, and (b) to the minister in the case or a decision taken by the Director-General
or a designated agency (s 96(11). Recour..e to the courts for review of an administrative
decision is subject lo the exhaustion of these internal remedies (s 96('.l)).
Erwiro11111ental requiremt'nts and co11ditio11s
The need for compllance with environmental requirements and conditions is
pervasive throughout the MPRDA. These requirements and conditions apply to an
appllcation for a prospecting right (s 16]; the renewal ofa prospecting right (s 18(2)
(c) and (31); the appllcation for a mining right (s 22); the renewa l or a mining right
(s 24(2)(b) and (3)); the application for a mining permit (s 27); and the granting
or issuing or these rights and permits (ss l7(1)1c) and (2); 23(1)ld) and (3): 24(2)
(b) and (3); and 27 (6)). lo addition, the principles enumerated in s 2 of NEMA
apply to all prospecting and mining operations and serve as guidelines for the
interpretation, administration and implementation or the MPRDA's environmental
215
Environmental Management - A business management approach
requirements (s 37( I)). It is further required that prospecting and mining operations
must be conducted in accordance with generally accepted principles of sustainable
development Accordingly, social, economic and environmental factors must form
an integral part of the planning and implementation of prospecting and mining
projects to ensure tha t the exploitation of mineral resources are conducted in a way
that will accommodate the needs of present as well as future generations (s 37(2)).
Liability of the /raider of a right or pem1i1
lo the case of a holder of a prospecting right. mining right. retention permit. mining
permit, or previous holder of an old order right (these are rights that accrued under
a legal dispensatio n prior to lhe MPRDA) or previous holder of works. the liability
of the holder of the right or pennit for environmental damage and for compliance
with the conditions of an environmental authorisation remains in place until the
minister has issued a closure certificate to the holder or owner concerned (s 43(1)).
On written application by the holder of the right or permit. this liability may he
transferred by the minister to another person with the necessary qualifications (s 43(2)).
This liability arrangement is part of a larger statutory regulated management
plan aimed at ensu.ring that the prescribed environmental and procedural
requirements for closure or cessation of mining and prospecting operations have
been compiled with before a closure certificate is issued by the minister (s 43(31).
Role oft/1e mi11istui111l1ee11forceme111 ofe111riro11me11tol requiremetrrs 011d condirio11s
TI1e minister is the responsible authority for implementing the MPRDA's
environmental provisions in accordance with NEMA (s 38A( I)). Tltis duty coincides
with the state's custodianship over mineral and petroleum resources by virtue
of which the mirtister is mandated to
the sustainable development of
South Africa's mineral and petroleum resources within a framework of national
environmema l policy, norms and srand.ards while promoting economic a nd social
development' [s 3(31). An environmental authorisation issued by the minister is
therefore a pre-condition for the issuing of a permit or the granting of a right in
terms of the MPRDA [s 38A[2)).
ln the context of this general framework the minister is assigned certain
specific powers. In the case of ecological degradation, environmental harm or
contravention of an environmental authorisation, the minister, In consultation
with the Minister of Tourism, is entitled to direct the holder of a right, permit
or environmental authorisation to investiga te, evaluate, assess and repon on
the impact of the degradation, harm or contravention and lo take the measures
specified in the direction witllin a specified period of time. Lf the bolder fa ils 10
comply with the directive, the minisier may take the measures necessary to remedy
the situation and may, for that purpose, apply to the High Coun for an order to
seize and sell the propeny of the bolder to cover the expenses for implementing the
measures. In addition the minister may also recover from rhe holder the funds chat
were necessary 10 implement the remedial measures fully (s 45; see also s 46 on the
position of holders of old order rights).
·=
216
: ]
l_j
Ten: Energy
Tue minister may also suspend or cancel rights, pecmits or pecmissions if the
holder or owner thereof breaches a macerial cerm or condition, has contravened
any condition in an environmental authorisation or has submitted inaccura1e, false,
fraudulenl or misleading information. Prior to exemsing his or her power.; of suspension
and cancellation, the minister must comply with the principles of administrntive justice
by notifying the bolder or owner of the impending suspension or cancellation and
the reasons therefore and by affording the holder or owner the opportunity to show
reason why 1he suspension or cancellation shnuld not 1ake place (s 47).
Having regard IO ihe national interest, the straiegic nature of the mineral in
question and the need to promote the sus1ainable development of the nation·s
mineral resources, the minister may prohibii or restrict the granting of permissions.
rights or permits in respect of certain land or a specific mineral or minerals for
such a period and on such terms and conditions as the minisler deems necessary
(s 49( I); s 48).
The MPRDA also assi.g ns the power of expropriation 10 the minister. In such
instances s 25 oflhe Constitution will apply and compensation for the expropriation
will be due (s 55).
10.8.4.7
Gas
TI1e piped gas indusay is regulated in terms of the Gas Act 48 of 2001. Here, as
in other developments of late, the Act merely provides for a regula1ory framework
within wWch a regulatory body, i11 casu the National Gas Regulator (now the
National Energy Regulator- s I ·gas regulator: also NERA s 4), must promote, under
the guidance of sustainability, the efficient, effective and orderly operation of gas
transmission, storage, distribution, liqueficatiou and regasificatiou facillties (s 2). Titis
objective of the Act must be achieved through the licensing (ss IS-21), moni1oring
and regulation of related activities (s 4). Apart from mentioning sustainability in
the objects of the Act, which could also mean economic sus1aioabUi1y, there are
virtually no substantive provisions dealing with the environment. Not even the
conditions under wWch a licence could be granted or revoked make provision for
environmental considerations. 1n essence, the Act is an economic empowennen1
mechanism for formerly disadvaniaged groups. Environmental concerns are
mentioned only towards the end where the Act deals with the power of tbe minister
to make regulations. For instance, the minisler is empowered 10 make reg.ulations
regarding the ·rehabilitation of land used in connection with Ute u-ansmlssion,
storage, distribution, llquefication, or re-gasification of gas or the trading therein ·
(s 34( t)(d)). The regulations were only published in 2007 [Piped Gas Regulations
GG 29792 of 20 April 2007). In terms of reg 11(1) and (21(d) the licensee of a
licensed activity under the Gas Act must submit to the Gas Regulator six months
prior to the termination, relinquishmen1 or abandonn1en1 of such an activity a plan
for the closure. removal and disposal of all installations relating to lhe activity.
The plan must include information on an environmental impact assessment of the
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Environmental Management - A business management approach
termination. etc of the activity. The regulator may require confirmation in writing
From the licensee that it is in compliance with the requiremenrs ofNEMA (reg 11(6))
and may not consent lo the termination of the financial security arrangemeai nader
reg 11(4) and (5) before it has received a cenificate from an independent impact
assessment consultant confirming that the site has been rehabilitated (reg 11(7)).
la September 2001, before the Gas Act was assented to, a regul atory ag.r eement
between Lhe South African government and SASOL Ltd was signed for the imponatioa
of piped gas from Mozambique. where SASOL, through its subsidiaries, held rights
Lo produce natural gas from certain gas fields. l11e purpose of this agreement was
to provide a regulatory dispensation for the SASOL project to import and distribute
piped gas in South Africa that would be binding on the Gas Regulator once the
Gas Act took. effect. which happened in 2002 (GN 217 of 2002). The agreement
was endorsed by the Gas Act wWch also stipulates that the agreemem binds the
Gas Regulator natil 10 years after natural gas is first received from Mozambique
(s 36(2)), that is from 2004 when the facility became operational (see Endeavor 1Ld.).
During this period the Gas Regulator was obliged to issue the licences specified in
U1e agreement and coul d only impose such conditions that were not contrary to ilie
agreement (s 3(4)). But even so, the Gas Act and the regulations promulgated nader
it provided no adequate basis for the granting of licences under the agreement
subject Lo environmental conditions during the JO-year period, which raises the
spectre of rhe relationship between NEMA, the MPRDA and the agreemem during
the JO-year period specilled in the agreemenL
However a future gas production concern with potentially more far-reaching
consequences are the shale gas extraction operations planned for the Karoo
basin (Esterhuyse, De Lange a Glazewslci 2016; Avenant et al 2016; Todd et al
2016). Debates about shale gas exploration and extraction in the Karoo staned
to emerge in 2009 and 2010 when four international companies and a South
African international corporation lodged pmnit applications nader the MPRDA to
nadertake shale gas exploration in the Karoo. In =1>onse a flood of civil society
objections, commissioned reports. and government attempts at getting a regulatory
framework for shale gas exploration and extraction established, followed (for a
detailed chronology of eveats concerning the shale gas saga, see Glazewslci a
Esterhuyse 2016). As far as the latter is concerned, the first concrete result occurred
in 2015 with the expansion of the Regulations for Petroleum Exploration and
Production (GG 38855 of 3 June 2015]. By virtue of this measure shale gas is now
included in the definition of ·gas· (s 84) and the use of hydraulic fracturing for
the extraction of shale gas made subject to a range of technical specifications and
conditions (regs 110-29). Ln addition, exploration and production activities are
subject to the environmental requirements of NEMA and before the commencement
of such activities rhe holder of a right must be in possession of an environmental
authorisation issued in terms of the 2014 Environmental Impact Assessment
Regulations (regs 86 and further; for the 2014 ElA Regulations see GG 38282 of 4
December 2014). This brings shal e gas exploration and production under the One
218
Ten: Energy
Environmental System [OES) which took effect in 2014 and was brought about by
legislative amendments to NEMA and other primary laws as well as the adoption
of sever.ii sets of regulations. (For a more detailed discussion of these developments
and their relevance for shale gas exploration and extraction, see Humby 2016:
87 - 91.)
The 2015 regulations also have the effect that shale gas development has become
subject to strategic environmental assessment (SEA) as one of the instruments of
environmenta l management established by NEMA (s 24(5)(bA): on the development
or !his instrument in South Africa, see Humby 2016: 95). Al a junrrure where it
ls uncertain wbetl1er shale gas development will indeed occur and if so, when,
it is of significant importance that a credible science-based assessment is done
and made public beforehand. Apparently aware of tltis. the government in 2015
appoimed the CSIR, SANBI' and the Council for Geosciences to undertake a SEA
for this purpose and to address tlte full life cycle or the fracturing process, from
exploration, to production, to closure and finally to restoration of sites (for more
det-ail see Humby 2016: 95). In 2016, the CSlR published its full SEA report [Scholes
et al 2016). This report is intended to provide government and other stakeholders
with evidence that will lead to a better understanding of the opportunities and
risks associated with shale gas development and ls therefore essential for rational
decision-malcing processes regarding specific shale gas-related activities. Wlth the
report now available the detaUs or the government's plans on the future or shale
gas development in the Karoo are eagerly awaited.
10.8.4.8
Biofuels
The 2006 regulations promulgated in terms of the Petroleum Products Act 120 or
1977 included biodiesel under tl1e term ·petroleum products', defined as ·a fuel or
fuel component for diesel engines derived from natural oils extracted from vegetable
matter: This opened up manufacturing and trading possibilities in biofuels within
the framework of the AcL More sig.nlficant, though, ls the publication in December
2007 of the government's Biofuels Industrial Strategy. As with the other policy or
legislative measures tl1e Bio fuels Strategy has a dual objective: to create employment
and economic development in the nascent energy crop and biofuels indusuy, and
to expand the utilisation or cleaner and environmentally more friendly energy
sources In a bid to limii global wanning. At the time tl1e strategy aimed to achieve
a 21\b penetration level of biofuels in tbe liquid fuel supply within five years and
has identified sugar cane and sugar beet (bioetbanol), sunflower. canola. and soya
beans (biodiesel) as crops for the production or these biofuels. One imperative in
identifying and setting aside agricultural land for this purpose is that food security
must not be jeopardised. The stracegy also stated categorically that a predominant
aim of the government ls 10 address poverty and economic development and that
the focus is therefore on the development or fanning areas previously neglected
by the apartheid system and areas without market access for their produce.
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Environmental Management - A business management approach
In pursuing this goal, the stra1egy also aimed al creating a developmen1 balance
berween previously disadvantaged farming areas and commercial Farming areas
(DME 2008).
Following the Biofuels lnduslrial Stra1egy, the Depanment of Energy published
a set of very general and limited cri1eria for biofuel manufacturing licences
(available at http:/{www.energy.gov.za/files/esources/petroleum/Biofuels/pdf). The
following are relevant:
•
•
•
Crops used for the production of biofucls must not have negative
environmental impacts on South Africa during processing and storage.
Maize and jalhropa are not permlited crops for biofuel manufacturing.
Feedstock imports are 1101 allowed except in times of adverse agricultural
circumstances, in which case the carbon footprint of the imported product in
the country of origin must be considered.
In 2012, the Minister of Energy published a set of regulations on the mandatoTY
blending of bio-ethanol or biodiesel with petroleum petrol or pe1roleum diesel,
respectively 10 produce a biofuel blend 1hal may be sold in the Republic (GG 35623
of 23 August 2012). ln a subsequent government notice iL was derennlned that the
MandalOTY Blending ReguJatiorL~ would take effect on I October 2015 (GG 36890
of 30 September 2013). However, it is still not clear whether the necessary blending
infrastructure has been created.
Despite these developments South Africa is still witbou1 a proper regulatOTY
framework for the production and use of biofuels. In 2014, the Minister of Energy
published a drafl position paper on a biofuel regulalofY framework for South Africa
(GN 240 in GG 37232 of I 5 January 2014) explaining that the absence of a biofuels
pricing framework stands in the way of finalising the regulatOTY framework.
Apparently, the pricing framework is a prerequisite for attracting efficient investments
in the industTY and for bringing clarity 10 return on investments, manufac1uring
costs and the levels al which manufacturing emities will be subsidised. In 2017, it
was still unclear when the pricing framework will be finalised.
The apparent general accep1ance of a biofuels future for South Africa is
unlikely to escape the impact of the global debate that has ensued in the wake
of new studies showing that the economically driven rush for faID1-grown fuels
and Farmland is accelerating global warming through deforestation as well as
further endangering the poor through an unprecedented rise in basic foodstuffs. In
2016, the global biofuels market was val ued al$ 168.18 billion and is projecled 10
reach $246.51 billion by 2024 (Biofuels ln1ernationaJ 2014). Commentators have
called this development tile 'beginning of one of the great tragedies of hlsloTY· in
warning about unprecedented food price inflation, food shortages, social unrest
and the translation of economic stresses into political ones, especially in failing
s1a1es, if U1e diversion of crops for food to crops for fuel continues in this Fashion
(Brown 2008).
220
Ten: Energy
While it could be counter-argued that food shonages and high food prices are
actually the consequence of climatic conditions, futures speculation in agricultural
products, natural disastel5, civil wars, corruption, mismanagement and bad domestic
policies. and lhat government policies encouraging the development of biofuels are
merely coustituting an additional problem, evidence of harmful biofuel productioninduced ecological consequences seems to be piling up. A seminal study published
in Scie11ce magazine (Searchinger et al 2008) showed that previous studies linking
biofuels with decreasing GHGs have ·failed to couni the carbon emissions that occur
as fanners worldw.ide respond 10 higher prices and convert forest and grassland
to new cropland to replace U1e grain (or cropland) divened to biofuels'. Using a
widely accepted agricultural model to estimate emissions from land-use change,
U1e study found that 'com-based ethanol, instead of producing a 20Clb savings,
nearly doubles greenhouse emissions over 30 years and increases GHGs for 167
years. Biofuels from switchgrass, if grown on US corn lands, increase emissions
by 50%' (ibid). In explaining the carbon costs, carbon storage and sequestration
sacrificed by divening land from its existing uses- factors not accounted for in
previous studies- the following was pointed out:
To produce biofuels, f.mn= can directly plough up more forest or
grassland, which releases to Ute atmosphere much of tl1e ca rbon
previously stored in plants and soils furnugh decomposition or fire. TI1e
loss of maturing forests and grasslands also foregoes ongoing carbo n
sequestration as plants grow each year, and fuis foregone sequestration is
the equivalent of additional emissions. Alternatively, farmers can diven
existing crops or cropland into biofuels, whiclt causes similar emissions
indirectly. The diversion trigg= higher crop prices, and farm= around
the world respond by clearing more forest and grassland to replace crops
for feed and food (ibid).
In the 2014 draft position paper on a biofuel regulatory framework mentioned
above, Ute South African government acknowledged that 'there is much
international concern about the unintended potential adverse impa~"tS on the
environment, the global economy and Ute society at large'. Almost in U1e same
breath, it st.ated that a ·cautionary approach ought to be adopted when introducing
sustainability criteria for liquid biofuels as compliance thereto normally comes at
a premium for investors' (Biofucls International 2014: 12). The draft policy maltes
no attempt Lo explain how Lite imperatives of environmental susrainabiliry and
economic viability will be reconciled, except to snow enthusiasm for the 20!0
SADC Framework for Sustainable Biofuel Use and Production and its sustainability
guidelines (ibid). If the intention is to look elsewhere for guidance in this regard,
it may be useful to investigate also the development and implementation of me
European Union's sustainabiliry criteria for biofuels contained in the EC's 2009
Renewable Energy Directive (EU Directive 2009/28/EC of 23 April 2009; see also
the 2016 proposa l by the European Commission for updated renewable energy
221
Environmental Management - A business management approach
sustainability criteria, Com-mission document COM (2016) 767). Also relevant is
Lo note that for 2020 U1is direcLive bas sei a 2()(1b 1arge1 for the overall share of
energy from renewable sources (including biofuel) and a lO<lb target for eoergy in
the trnnsport sector as achievable objectives. Mandatory targets of this kind were
also found necessary to c.reaie certainty for investors (EU Directive 2009/28/EC
of 23 April 2009 paras 8, 9, 13 and 69 et seq). Moreover, in 2014, a new proposal
for increasing the EU target for renewable energy to 27<\b was put forward by the
European Commission and accepted by the EU member states for the EU's 2030
Energy and Dimare Framework (see hrtp://eur-lex.europa.eu/legal-rontent/EN/
TXT/PDF/?url=CELEX:52014DC0015ftfrom=EN]. The 2030 framework also takes
the position that after 2020 no publk support will be provided for food-based
hiofuels anymore. In 2016, an EC proposal for a directive on the promotion of the
use of energy from renewable resources was adopted in which U1e 2030 target of
27<\b was Justified wirh reference ro the EU's colJective commitments under the 2015
Paris Agreement (see btq1:f{eur-lex.europa.eu/resource.html?uri=cellar:3eb9ae57raa6-lle6-8a35-0J aa75ed71 a 1.0007.02/DOC_ 1aformat=PDF).
Agreement on the sustainability of biofuel production and use is still a long
way off. This is appa rent from the concerns raised by the UN Special Rapporteur
in ltis 2014 Report on the Right to Food (UN Doc A/HRC/25/57 of 25 January
2014). He lists three priorities that must be attended to in the field of sUS1ainahle
consumption and the threat 10 food systems. One of these is 10 constra in the
demand for liquid biofuels in the transport sector of high-income countries which
ltas caused a significant increase in the demand for agricultural commodities, and
is a major factor explaining the 2008 global food price crisis. These developments,
i1 is pointed ou1.
have strengthened the links between the food and energy markets: the
conversion of crops for ethanol or biodiesel represents an economic
opponuni1y especially where oil prices are high, which in itself already
impacts on food prices. The push for biofuels bas also exacerbated
pressures on natural resources. as the production of energy crops competes
for land and water with other uses, including Ute production of food,
feed and fiber, environmental conservation and carbon sequestration, and
urbanization or industrial producLS (ibid: para 19).
In addition lo these reasons, the Special Rapporteur's call for abandoning mandates
on the consumption and production of biofuels in rich countries is also based on
other factors. such as the direct link between a higher demand for biofuels and
higher food prices, speculation on farmland and land grabs on a large scale (ibid:
para 20). The combined negative impacts of industrial livestock production
(ibid: para JS), food losses and was1e (ibid: para 21), and biofuel demand confrom
the imemationa l communicy wilb challenges, according to the Special Rapporteur,
that 'result from globalized markets connecting populations with widely diverging
purcltasing powers, in the context of finite resources' and in the ·Juxury tastes of
222
Ten: Energy
the richest paru of the world being allowed to compete against tl1e satisfaction of
1.he. basic needs or the poor· (Ibid: para 23).
10.9
Cone.fusion
Reflecting international trends, South Africa's legislative and other measures on
energy have become dominated by economic development and environmental
sustainability concerns. Scientific evidence on carbon emissions and climate
change has contribuied significantly to this change of mind. In addition, the
coun1ry's international treaty obligations also bad to be given effect at the national
level under the growing international focus on compliance by states with their
environmental obligations [see also contributions in Beyerlin, Stoll a Wolfrum
2006). However, the new regulatory frameworks must also be seen and assessed
against the internationally worrisome question about energy security. This question
is as much the result of the potential unreliability or some primazy energy sources
such as oil, which comes mainly from an endemically unstable region or the world,
as it is a function or the potential tension that co11trol over 11011-renewable energy
sources could harbour.
In large part the regulatory fram~ork that must facilitate U1e .realisation or
the new o~jectives is now in place. However, one should not lose ~ight of the
po1e.11tial impact on existing poUcies and legislative measures regulating the energy
supply industry or the. government's climate change commitmer1ts. As pointed out
earUer, the National CHmate Change Response White Paper acknowledges South
Africa ·s international legal obligations under the relevant treaties to reduce. the
country's GHG emissions by, inter alia, investing in renewable energy resources.
In mainstreaming climate resilient development one of the measures identified in
the White Paper is the auditing of existing policies and legislation with a view
Lo e.nsuring their 'alignment with the objectives of 1.he National Climate Change
Response Policy and [promoting] the Integration of climate change resilience intll all
sectoral planning instruments' (see https://www.er1vironment.g0v.za/si1es/default/
files/legislatio11s/11ational_climatechange.response_whltepaper.pdl). With South
Africa ·s signing of the Paris Agreement, a new set of international commitments
has become relevant with impUcations for the country's renewable energy project
and policy objectives.
TI1e ultimate test, however, is the suitability of Lhe transformed regulatory
Framework for achieving Lhe rigln balance between the need for economic
development. environmental sustainability and energy security. In essence this
raises the question of the regulatory framework's efficient utilisation or various
compliance and enforcement measures Lhal can promote compliance with
suscainability objectives witl10u1. compromising S!ability in energy production
and service de.Livery. As a national condJtlon for social and economic we.Jfare and
sLability in the modern state, the importance of the state's function in securing
energy supply and in maintaining the stability of an energy provision service
223
Environmental Management - A business management approach
cannot be divorced anymore from lbe concept of state sovereignty itselE Failure of
1.h e state in these key areas, ii has been argued, places national independence and
state competence in question (Schmidt- Preuss 2007). This also explains why the
European Court of Justice has been unequivocal in its argument lbat because of
the exceptional importance of energy resources in U1e modern economy, they are
now fundamental to a country's existence, since not only the national economy,
but above all its institutions, public services, and U1e survival of its inhabitants
depend on iL This makes ii a matter of public security (Campus Oil Lrd v Minister
for llld11sl1J' mu/ Energy I 1984] ECR 2727). Ir is these sovereignty and public
security elements that are put in jeopardy when corrupi self-interest strategies
of the kind documented in the state capture reports referred to earlier on become
U1e dciving force of Uie setting up of an extra-legal shadow stale wWch then
secures a symbiotic relationship with lbe lawful, constitutional state by means of
a dispersed patronage network for the acquisition and distribution of financia l and
other sources benefiting a power elite. Whether under current conditions there is
the requisite political will and state capacity 10 effectively break up these corrupt
networks and deprive them of the financial gains of their unlawful transactions is
a debatable point.
However apart from these arresting domestic developments, individual states
cannot ignore high-level perceptions of what constitute issues of uncertainty for
1.h e glohal energy agenda of the future and how 10 develop greater resilience in the
race of adverse condjtions. According to the World Energy Council's 20 I7 World
Energy Issues Monitor (WEC 2017) the main issues that will dictate the speed and
breadth of the energy transition we are currently experiencing in the world in the
con1ex1 of increased decarbonisation are: regional integration, the new climate
framework, electric storage, energy efficiency, rencwables, electricity prices and
economic growth. Uncertainties or threats world energy leaders and government
decision-make.rs consider to significantly impact on decision-making are !base
relating 10 the following (ranked in order ofimpact) (see WEC 2016 ch J for a more
detailed account):
•
First, commodity price uncertainty as the glohaJ number one issue impacting
decision-making or energy leaders.
•
Second, increasing acceptance or lower economic growth as a reality.
•
Tlrird, new physical and digital risks posing increasing threats to the energy
sector. In mis instance regional differences musi he noted. While Europe, East
Asia and North America are on alert for cyber threats, the energy- waterfood nexus top uncertainty issues in China, Ute Middle-East and parts of U1e
Americas; and extreme weather conditions in the Asia Pacific region, Latin
America and Africa.
•
Fourth, gee-economic relations, in view or i:he fact !haL half of the world's
invested capital is tied up In energy and related infrastructure which causes
the energy transition to be highly politic-.u as well as geo-political.
224
Ten: Energy
Apart rrom the global situation, the Monitor Repon also assessed regional
developments and select countries in each region. For obvious reasons South Africa
Is included in the list of 10 African countries analysed. Critical uncertainties for
South Africa. given the recent economic and political developments, the Monitor
Report notes, are commodity prices, electric slorage and exchange rates, and, not
surprisingly, as action priorities, the report singles out economic growth, corruption
and electricity prices [WEC 2016: 53, 54).
In linaUy starting to take action in response Lo the crisis at Eskom, whose
name has become synonymous with l11e worst corruprion scandals in the country,
the South African government in early 2018 announced the appoinuaent or a
new board at the energy utility. By all intents and purposes this was done to
steer Eskom away from a final collapse that could potentially also have serious
consequences for the national economy. Although the long-standing governance
and management ills dta! plagued the company could have played a role in the
government's clean-up operation, two developments in early 2018 finaUy brought
home the need for urgent and decisive acliorL One was the release by Esltom or
its long-awaited interim financial results whicl1 showed debt levels of over RJOO
billion and a 34% plummet in profits; and the other a downgrade by Fitch Rating
Agency of the ulility's long-tenn local currency Issuer Default Rating [IDR] and
uaguaranteed local c1.1ITency senior unsecured ratings from BB+ to BB-.
Since this first attempr al an overhaul at Eskom has taken place with the active
intervention or the ruling pany's new leader, Cyril Ramaphosa (elected in December
2018), there is much hope that thls will not stop with Esltom {https://www.iol.
co.za/ news/south-a frica/gauteng/fi tclt-downgrades-esk.om-ra ling-1303 3504;
https://www.lin24.com/Economy/Eskom/fitch-downgrades-eskom-20180131).
Review questions
I.
Explain the importance of energy in the devclopment and functioning of
aa economy.
2.
What pollutants are emitted in tile production of energy?
3.
Explain access to and consumption or energy [globally and locally).
4-.
Define the different types of energy.
5.
OuLline Souili Africa•s primary energy consumption.
6.
Describe coal as South Africa's dominant source of primary energy.
7.
Describe South Africa's electricity gene.ration capacity.
8.
Explain what the Southern African Power Pool (SAPP] entails.
225
Environmental Management - A business management approach
9.
Provide a brief description of Liu~ wodcing of a typical coal-based power
plant.
10. Provide more information about South Africa"s nuclear power planL
11. What is the role and worJting of £skom"s peaking ~"tatioos?
12. What is South Afric-d'S current usage of wind and solar energy?
13. Outline own clectddty generation in South Africa.
14. Descn"be the slate of affairs regarding the production and consumption of
rransponation fuels in Saudi Africa.
IS. Provide an overview of household energy consumption fo South Africa.
16. Describe the global trends in energy production and consumption.
17. Outline South Africa's coal and nuclear energy resources.
18. Describe what the biggest constraints are to using coal.
19. Discuss renewable energy resourees.
20. Explain grid-scale energy storage.
2 I. Descn"be the different costs associated with the four major sources of
energy.
22. Explain what the CSIR"s deLailed alternative analysis and future energy
scenario for South Africa ent;ails.
23. Describe the actions that can be taken to ensure improved energy
efficiency.
24. Describe the contribution of Lhe World Energy Council {WEC) to the
current energy d.e bate.
25. Outline international law applicable to the energy sector.
26. ldenLify and explaJO the general principles and rules of international
environmental law.
27. Outline treaiy law applicable to the international energy sector.
28. Describe the regional developments regardfog sust'lllnable development
and the exploitation of energy resources.
29. Identify South African law and policy relating to the energy sec1or and
highlight their focus.
30. What is the role of NERSA?
31. What does the MPRDA email?
32. What are the main Jssues that will dictate energy transl Lion?
226
Ten: Energy
References
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232
••
• I •
Learning Outcomes
After studying this chapter, you should be able_ to:
•
provide a brief overview of pollution and waste managemr.nt
• define pollution
• describe the types of pollution
• explain the relevance of the National Environmental Management Air Quality
Act 39 of 2004 (Air Quality Act) regarding air pollution
•
indicate the importance of the National Water Act 36 of 1998 (Water Act) and
the Water Services Act 108 of 1997 !Water Services Act) with regard to water
pollution
• explain the appncability of the Environmental Management: Biodiversity Act 10
of 2004 [Biodiversity Act) with tegard to soil pollution
•
indicate the relevance of the Environment Conservation Act 73 of 1989 regarding
noise pollution
• define waste
• l!lucldate the Importance of the National Environml!ntal Managl!ment: Waste
Act 59 of 2008 (Waste Act)
• elabotate on sustainable development
• describe businessstr,itegles for managing pollution and waste
• explain some co~uences or polluting pracUces
• explain the meaning of the 'cradlt. to grave' and 'polluter pays' principles.
Overview of this chapter
Waste and pollution are two aspects of environmental concern that need lo be
managed properly. This chapter will clarify the meaning of pollution and waste
and indicate some of lite types of pollution. As sustainable development is of great
importance, waste and pollution should be incorporated into business strategies in
order co ensure that corporate social responsibility is raken into account and also 10
ensure legal compliance. This chapter will briefly depict some applicable legislation
and business strategies with regard to pollution and waste.
Environmental Management - A business management approach
11.1
Introductio n
Due to the ever-increasing global population rate aad industrialisation. more strain
is constantly being pul on the environment. More waste is generated aad, coupled
with increased pollution rates, this has led to rapid environmental degradation and
social as well as economic problems.
11.2
Pollution and waste management - a brief overview
As indicated in chapter I , everyone has the constitutional right to have an
environment that is aot hannful lo his or her health and to have the enviroameat
protected for the benefit of present and future generations. Section 24(a) of the
Constitution, as well as the Waste Act, indicate that this is achieved by reasonable
legislative and other measures that:
•
•
preven t pollution and ecological deg.radation;
promote conservation; and
•
secure ecologically sustainable development aad the use or natural resources,
while promotingjustifiable economic and social development.
Pollution prevention (or minimisation) and the conlrol of the potential impact of wru."te
are the responsibility of all sector.; of society. Private households. businesses and indusay
(such as mitring) impact on the environment. Both pollution and waste management
are regulatory requirements and therefore necessitate careful consideration,
11.3
Definition of pollution
The National Environmental Management Act [NEMA) defines pollution as any
change In the environment caused by:
•
substances
•
•
radioactive or other waves
noise, odour.;, dust or heat.
The above can be the result of:
•
any activity, including the storage or treatment of waste or substam:es
•
•
construction
proviision or services.
TI1e above can be caused by:
•
any per.;on or
•
organ of state.
234
Eleve_n: Pollu tion and waste management
Such a change in the environment has. or will in the future have, an adverse effect on:
•
human health or well-being
•
the composition, resilience and productivity of natural or managed ecosystems
•
materials useful to people.
From the above. it can be seen that pollution is much more than what one can see
at any given point in time. Titis definition specifically includes negative elTects on
the environment that might only be realised in future.
11.4
Types of pollution
Pollution can take many forms: the air that we breathe, the waler that we drink
and use, the ground in which we grow our food. and even the increasing noise we
hear every day, Lo name a few. These all contribute to a lower quality of life and Lo
health problems. In this section, we will briefly look at some of the major types of
pollution: air, water, soil and noise pollution.
11.4.1 Air pollution
Air pollution is seen as
the condition in which air is contaminated by foreign substances, or the
substances themselves. Ai r pollution consists of gaseous, liquid, or solid
substances that, when present in sufficient concentration, for a sufficient
time, and under certain conditions, tend to interfere with human comfon,
health or welfare, and cause environmental damage. Air pollution causes
acid rain, 020ne depletion, photochemical smog, and other such phenomena.
Tue Air Quality Act states that air pollution encompasses any change in the
composition of the air which could be caused by, among others, solid pa.rticles.
gases, fumes and dust.
11.4.2 Water pollution
Water pollution is defmed as
the presence in water of harmful or objectionable material in sufficient
quantity to measurably degrade water quality.
The Water Act further iodicates that water pollution iocludes direct and indirect
cl1anges io the physical, chemical or biological properties of any water resource.
11.4.3 Soil pollution
Soil pollution is mainly due to the presence of man-made waste. Soil, which bas
different names such as ground, din and mud. mainly becomes contaminated due to
humans - waste produced by nature itself, such as dead animals, plants and rotten
235
Environmental Manageme_nt - A business management approach
rruiL. rather increases the rertilliy of the soil. Man-made waste contains chemicals
not naturally found in nature, thus causi ng soil pollution. The main causes or soil
pollULion are: industrial activities. agricultural activities, waste disposal, accidental
oil spills and acid rain. The effects or soil pollution include: the effect on human
health, U1e effect on plant growU1, decreased soil fertility. toxic dust and changes
in the structure of soil.
11.4.4 Noisr: pollution
Noise pollution is seen as any noise that is disturbing or excessive and may
negatively impact on human or animal lire. Excessive noise levels might lead
10 cardiovascular effects and elevated blood pressure in people, among other
conditions. Such pollution affects beallh and behaviour, damages psychologic-.il
heallh and leads to incre.a sed levels of stress. Any noise which disrupts normal
activities, such as conversation and sleep, can be seen as noise pollution. A noise
nuisance is seen as
any sound which disturbs or impairs or may disturb or impair the
conven ience or peace or any person.
11 .5
National Environmental Management: Air Quality Act 39 of 2004
The National Environmental Management: Air Quality Act 39 of 2004 (Air Quality
Act) sets out 10 protect the environment by providing reasonable measures for
pollution prevention, Lhe prevention of ecological degradation and securing
ecologically sustainable development. All of Lhe above should he achieved while
enhancing economic and social development. Furthe.rmore, the Air Quality Act
provides national norms and standards for lhe regulation, management and
monlioring of air quality in Soulh Africa.
The quality or the ambient air in parts of South Africa does not provide for a
heal lhy environment for the people Jiving in Lhose parts of the country. The Air
Quality Aci rurther indicates that the poor are mostly affected by the polluted air.
Air pollution leads 10 high socia l, economic and environmental costs. Air pollution
should be minimised through control, technology and production processes I.bat
are cleaner. l egislation (such as the Air Quality Act) protects the environment and
ensures that the ambient air is not harmful 10 the health or well-being of people.
Businesses should ensure that they adhere to applicable legislation in order to
minimise the pollution thal they cause. Each business should include an air q uality
management plan (AQMP) in its environmemal manage.me.at plan. According 10
the Air Quality Acl. such an AQMP must:
•
•
improve air quality;
identify and reduce negative impacts on human health and Lhe environment;
•
address issues arising from the use of fossil ruels in residential areas;
•
address issues with regard 10 emissions from industrial sources;
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Eleven: Pollution and waste management
•
•
implement South Africa's obligations in respect of international agreements; and
ensure that best practice is followed with regard to air qualii:y managemenL
11.6
National Water Act 36 of 1998 and Water Services Act 108 of 1997
The National Water Act 36 of 1998 {Water Act) states that the control of water
resources should focus on sustainabilii:y and equity, as the guiding principles, with
regard to the protection, use, development, conservation and managemenl of water.
By adhering to the guiding principles ofsustainabilii:y and equity, the basic human
wa rer needs of the presem and future generations should be protected and fulfilled.
The Water Act also indicates that social and economic development should be
promoted through the use of water resources. Water resource management needs to
be implemented to ensure the sustainable use of water for the benefit of all users.
As is well known. water is a scarce resource and is unevenly distributed
nationally (some areas of South Africa have a lot of water and others do not). Care
needs to be taken in order to conserve water. Conservation of water includes tbe
efficient use of water and the saving of water. which can be achieved by taking
appropriate measures such as implementing water efficient processes; managing
the demand for water; making use of water saving devices; and rationing water.
As described above, water pollution refers to the direct or indirect change to
the physical, chemical or biological elements of a water resource. The Water Act
indicates tbat such waler pollution causes water to be:
•
•
less fit for any purpose for which it could reasonably be used; and
harmful or potentially barmfuJ to the he-dlt.b. safety and/or welfare of humans;
to any organisms in the water; lo the quality of tbe resource; and to property.
The Water Services Act 108 of 1997 (Water Services Act) makes provision for the
rights of access to basic water supply and basic sanitation in order to ensure an
environment that is not harmful to health and well-being. Basic sanitation refers to the
prescribed minimum standard of services necessary for the safe, hygienic
and adequate collection, removal. disposal or purification of human
excreta, domestic waste-water and sewage from households.
Basic water supply refers to tbe prescribed minimwn standard of water supply
services necessary for tbe reliable supply of a sufficient quantii:y and qualii:y of
water to households which is necessary 10 support life and for personal hygiene. It is
important to note that both rights (basic water supply and basic sanitation) also apply
to infonnal settlements.
As previously mentioned, it is the poor who suffer most from tbe adverse
effects of pollution. The Waler Services Act also makes provision for the disposal of
industrial waste water which needs to be collected, removed, disposed of or treated
in such a way as to avoid or minimise pollution.
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Environmental Manageme_nt - A business management approach
11.7
National Environmental Management: Biodiversity Act 1O of 2004
The National Enviroomeolal Managemeol: Biodiversity Acl 10 of2004 (Biodlversity
Act) supports the conservation of both plant and animal biodiversity, also including
the soil and water upon which it depends. This Act further sets out Lo enhance
the sustainable use of indigenous biological resources and the fair and equitable
sharing of benefits involving these resources.
The sustainable use of bio logical resources implies the use of resources in such
a way and al such a rate that does not lead to long-term decline, that does not
change the ecological integrity of ecosystems and that ensures that U1e needs of
present and future generations of people will be met. Pollution and waste must
clearly be managed in such a way Iha! the sustainability of these biological
resources is not banned.
11 .8
Environment Conservation Act 73 of 1989
The environment is defined in Ute Environment Conservation Act 73 of 1989 as the
sum of all surrounding objects, conditions and influences that may affect the life
and habits of humans or of any other organism or collection of organisms. As any
kind of polJution may affect the life of bumaus or any other organism or collection
of organisms, the management of pollution is clearly necessary. Fu rthermore. s 25
of this Act indicates that noise (also vibration and shock) must be prevented, or if
prevention is not possible, it shou ld be reduced or eliminated.
11 .9
Definition of waste
In a gener.il sense of the word, waste refers to anylhlng that is no longer required
and is therefore discarded. The decision to discard something can be one that
is taken lightly, without realJy thinking about it. for example throwing away an
empty can. The decision to discard something can a.lso take a lot of thought, for
example deciding to Uu-ow away a family heirloom that is no longer of any use.
The National Environmental Management: Waste Act 59 of 2008 (Waste Act)
defines waste as any substance, whether or nor that substance can be reduced, reused, recycled and recovered • that is surplus, unwanted, rejected. dl~carded. abandoned or disposed of:
•
•
which the generator bas no further use of for the purposes of production;
that must be treated or disposed of; and
•
that is identified as a waste by the Minister by notice in Ute Go11emme11/
Gaze/le, and includes waste genemted by the mluiog, medical or other sectors.
It is importaut to note that the Waste Act further indicates that a by-product is
not considered waste; and that any part or portion of waste that bas bee.a re-used,
recovered or recycled is no longer considered waste.
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Eleven: Pollution and waste management
11.1 O National Environmental Management: Waste Act 59 of 2008
The minimlsatlon of pollutlon and the minimisatlon of the use of natural rcsourres
are priorities in the National Environmental Management: Waste Act 59 of 2008
(Waste Act). In order to ensure that Lhe environment is protected from the impact of
waste, the Waste Act indicates that the following should be implemented:
•
•
•
•
Vigorous control measures
Cleaner technologies
Cleaner production and coasurnplioo practices
Waste tninlmisat:!on.
TI1e Wasce Act sets out 10:
•
reform Lhe law regulating waste management in order to protect health
and the environment by providing reasonable measures for the prevention
of pollution and ecological degradation and for securing ecologically
sustainable development;
•
provide for institutional arrangements and planning maners;
•
provide for national norms and standards for regulating the management of
waste by all spheres of government;
•
•
provide for specific waste management measures;
provide for Lhe licensing and control of waste managen1en1 activities;
•
•
provide for Lhe remediation of contaminated land;
provide for a national waste information system;
•
•
provide for compliance and enfon:emenl; and
provide for matters connected therewith.
Waste management practices in many areas nf South Africa are not conducive
lo a healthy environment; such improper waste management practices impact
disproportionately negatively on the poor. Such negative impacts may reflect
locally as well as globally (such as global warming).
It is importaui to remember that waste can, under cenain circumstances, be
a resou rce and as such offer economic opportunities. An example of this is when
cooldrink cans are recycled to produce other products. As mentioned earlier, waste
(such as discarded cans) stops being waste as soon as it is recycled.
TI1e Wasce Act indicates that waste and related waste managemem practices
are ma cters that:
•
•
•
require national legislation to maintain essential national standards;
require uniform norms and standards Lhal apply chroughoul the country, in
order to be dealt wilh effectively;
have to apply uniformly, in order to promote and give effect to the right to
an environment that is not harmful to health and well-being; and
239
Environmental Management - A business management approach
•
requlre strategies, nonns and standards which seek to ensure best waste
practices witbln a system of co-operative governance.
From the above, ii is clear that the regulation of waste management practices
should be applied throughout South Africa and is the responsibility of all emities
generating waste (includlng individuals. businesses and the government).
The objective of the Waste Act is to protect health aud well-being, as we.II as
the environment, by promoting the following measures (this list is not exhaustive
as further measures are included in s 2 of the Waste Act):
•
Keep cnnswnption of natural resources to a minimum.
•
Avoid or minimise, if it cannot be avoided, the generation of waste.
•
Reduce, re-use. recycle and recover waste: treating and disposing of waste is
a last re.son .
Prevent pollution as well as ecological degradation.
•
•
Make sure tbal development is undertaken in an ecologically sustainable way,
while also promoting economic and social development that is justifiable.
•
•
Ensure remediation of polluted land.
Ensure waste management reponlng and planning.
•
Ensure that people are aware of the impact that waste might have on their
healtJ1 and well-being and on the environment.
11.11 Sustainable development
Sustainability is seen as belng able to grow and endure, wblle taking care of
the present generation and those to come, and is key lo economic and social
development while protecting the natural enviroDDlenL Sustainable development.
according to the National Environmental Management Ad 107 of 1998 (NEMA),
should ensure tJ1al the environment is preserved for present and future generations.
In ensuring this, social, economic and e.uvironmental factors mus1 be integrated
wlien plannlng, implementation and decision-making is undertaken.
This is reiterated in the Waste Act. as it indicates that sustainable development
requires that the generation of waste must be avoided, or where ii cannot be
avoided. that ii is reduced, re-used, recycled or recovered: only as a last re.son is it
treated and safely disposed of. Development should be sustainable and should be
carried out In suclt a way that the environment is protected for present and future
generations by, for example, effective waste and pollution mauagemem.
South Africa is currenlly experiencing an unsustainable scenario in which
the supply of natural resources is decreasing and tJ1e demand for these re.sources
is constanlly increasing. Pollution and waste are two of lite factors leadlng to
a decreasing supply of natural resources as it leads to contamination of natural
resources, which in turns leads 10 less resources being available. One example oflhis
Is the contamlnatioa of drinking waier, rendering ii unfit for human consumption.
240
Eleven: Pollution and waste managt'ment
Pollution and waste can have devastating effects on the quality of human,
animal and plant life. It can lead to diseases and death; economic losses (for
example, in the tourism industry, no one wants to visit a polluted wetland where
aU animals and plants are sick and/or dying); Lhe depletion of natural resources;
and long-tenn financial burdens (refer to the 'polluter pays· principle in section
LI. I 5). Soil pollution may lead to less soil that is conducive for Farming purposes,
leading lo a shortage of food for the population.
Businesses and individuals alike may encounter legal liabilities if they do not
comply with legislation applicable Lo pollution and waste. TI1ey may be unaware
of such legislation or they may hope to get away with their actions. l:lowever,
ignorance is not an acceptable defence when in contravention of a legal Liability.
Managers, in particular. should be aware of applicable legislation in order to ensure
compl.iance to avoid prosecution and/or fines.
Sustainable devclopment is of great importance as it indicates the ability of a
generation to take care of its own needs and to do so without compromising the
ability of furure generations 10 take care of their needs.
11.12 Managing pollution and waste - business strategies
As pollution is caused by waste, we will look at some of the legal regulations
which apply 10 businesses. 1lte Waste Act specifically mentions business waste as
being waste coming from premises that are used mainly (or totally) for commercial,
retail, wholesale, entertainment or government administration purposes. Waste
management includes waste collection, treatment. recycling and disposal. [u terms
of the Waste Act, disposal of waste includes the
burial, deposit, discharge, abandoning, dumping. placing or release of any
waste into, or onto, any land.
Businesses need to take special care to ensure legal compliance with regard 10 waste.
In order to deal with waste in a legally compliant way. businesses need strategies.
This can include plans, objectives. guidelines, systems a.ad procedures. Provision
is made in the Waste Acl for the preparation of waste management plans aimed
at avoiding or minimising the generation of waste, reducing negative impacts 011
health and the environment, and conserving natural resources.
11.12.1 Elements of o waste management plan
Section 30 of the Waste Act outlines what sl1ould be included In a business's waste
management plan. These elemen1s include:
•
the amount of waste that is generated:
•
•
measures to prevent pollution as well as ecological degradation:
targets for waste minimisation (through waste reduction. re-use, recycling
and recovery);
241
Environmental Manageme_nt - A business management approach
•
programmes to minimise Lhe generation and final disposal of waste;
•
reduction of waste by changes to packaging, product design and/or
production processes;
•
informing the public of the impact of waste-generating products or
packaging on the envirorunen1 and the financial contribution that needs 10
be made in order to support consumer-based waste reduction programmes;
•
the period that is required for the implementation of tbe waste management
plan; and
•
methods for monitoring and reporting the waste management plan.
From the above elements, ii can be seen that pollution prevention should form pan
or the waste management plan or businesses.
11.12.2 Waste management activities
Waste management activities are lis1ed in the Waste Act in onler to ensure that
businesses do not undertake any such activities without meeting tbe set standards
or having a waste management licence, ir required. As wasre can easily lead 10
pollution, the following are some of the activities listed as waste management
activities and are regula ted: transportation or waste; accumulation and storage
or waste; transfer of waste; disposal or waste; treatment or waste; collection and
handling of waste; reduction, re-use, recycling and recovery of waste; and also the
generation or waste.
11.12.3 lntegroted waste management (/WM)
Integrated waste management [TWM] refer.; 10 a holistic and lmegrated system
(refer to tbe Deming PDCA cycle in chapter I) wbicb is aimed at the prevention
and minimisation or waste impacts during the entire life cycle or products and
is driven by the need for sustainable developmenL In order 10 achieve such a
holistic approach ro sustainable development, social, financial and environmental
aspects should be taken into consideration. Section I 2 of tbe Waste Act outlines the
colllent of an IWM 11lan. An IWM plan should include:
•
A description of the population and development profiles of tbe area to
wWcb U1e plan relates.
•
An assessment of the quantities and types of waste that are generated in
the area.
•
A description of U1e services related to waste collectioo, minimisation, re-use,
recycling a nd recovery, IR'3tmenl and disposal.
The !WM approach is linked 10 the principle of 'cradle 10 grave· as discussed in
section I I.I 4.
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Eleve_n: Pollution and waste management
11.13 Consequences of polluting practices
Businesses need Lo be competitive in order to survive. However, polluting practices
may have devastating consequences for businesses. As indicated above, businesses
need Lo be legally compliant in order Lo avoid prosecution and liability. Besides
this, being identified as a polluter and causing harm to the health and well-being
or people and/or to the environment [contamination and degradation of scarce
natural resources) may lead to the destruction of a business's public image, cause
a drop in share prices (if applicable) and have long-term financial implications.
The 'polluter pays· principle discussed below will explain tltls point in more detail.
11.14 'Cradle to grave' principle
A business is responsible for its products from creation to disposa l, in other words,
throughout I.be entire lire cycle of a product. This meaus Lhal as we have the right
to use natural resources, we have the responsibility to prevent environmental harm.
lo a business context. a business should take responsibility from the conception of
a product right through to the end of its life cycle. Businesses should be moving
towards a 'cradle to cradle' approach and recycle products instead of sending
them 10 their grave. One example of how this can be achieved is when a business
produces primer cartridges; it can buy back the used cartridges from its customers
in order to recycle and re-use them.
11.15 'Polluter pays' principle
This is the rule that says the cost of pollution control, prevention and remediation
should be borne by the entity which profits from the process that causes the
pollution. IL is imponant to note here tltat this principle does not give anyone the
right to pollute. even if there is money 10 pay for the cost of such pollution. lf a
business wants to produce something, for examp le recycling motor vehicle tyres to
manufacture Ooor coveriug, and tl1e community feels that it mJght pollute the air,
the burden or proof lies with the business that the activity will not cause pollution.
The business will be liable for any damage caused by their actions.
As discussed previously in the defiuition of pollution, pollution may not be
immediately visible. However, even if the pollution only becomes apparent later.
the polluter will still have 10 pay. Remen1ber that 'paying' does not ooJy include
money; it can also include legal responsibilities and associated fines and/or
imprisonment. Furthermore. the business stays responsible, even when making use
or contractors.
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Environmental Management - A business management approach
11.1 6 Conclusion
This chapter showed that it is possible to manage wasie properly and to integrate
this into business strategies. As sustainable development is of g.reat importance,
waste and pollution management should be incorporated into business strategies in
order to demonstrate corporate social responsibility and to ensure legal compliance.
TI1e needs of growing populations place increased strain on the environment;
sustainability measures and legal compliance become ever more vital. Not only
will current and future generations be responsible for their own sustainable
development and waste management. but they will also have to find a way to deal
with the damage caused by past generations.
Review questions
I.
Define pollution.
2.
Describe the dillerent types of pollution and give an example of each
type.
3.
Explain the relevance of the National Environmental Management: Afr
Qua lity Ai:t 39 of 2004 (Air Quality Act) regarding air pollution.
4.
Jndicate the importance of the Water Act and the Water Services Act with
rega rd lo water pollution.
5.
Explain the applicability of tl:te BlodlveISlty Act with regard lo soil
pollution.
6.
lndlcate the rE!levauce of the Environment Conservation Act 73 of 1989
regarding noise pollution.
7.
Define waste.
8.
Elucidate tl:te importance of tl:te Waste Act with regard to waste
management.
9.
Explain the concept of sustainable dl'VelopmenL
JO. What are the business straregies chat can be utilised in managing
pollution and waste?
JI. Explain some of the consequences of polluting practices.
12. What is meant by the 'cradle to grave' and 'polluter pays· principles?
244
Eleven: Pollution and waste management
References
Business Dictionary. 2015. Available: http://www.businesscliclionary.com (Accessed
9 March 2015].
Conserve Energy Future. 2015. Causes a11d effects of soil pollul'io11. Available: http:/
/www.conserve-energy-future.com/ causes- and-effects-a f-soil-pollulion.pbp
(Accessed 9 Marclt 2015].
Co11stitutio11 of the Republic of Sour/, Africa, I996. Pretoria: Government Printer.
Mann, K. 2014. Noise pollution: Wlrat is legal a11d 111/,a/ isn't? News24.com, 20
August 2014. Available: bttp://www.news24.com/MyNews24/Noise-PollutionWhat-is-legal-and-what-isnt-20H08!9 (Accessed 9 March 2015).
Republic of South Africa. 1989. E11viro11me11r Co11seniation Act 73 of 1989. Pretoria:
Governmem Printer.
Republic of South Africa. 1997. Wati-r Services Act 108 of I 997. Pretoria:
Government Printer.
Republic of South Africa. 1998. National E1111iro11111r-111ol Ma11age111e11t Act 107 of
I998. Pretoria: Government Printer.
Republic of South Africa. 1998. Nario11al Water Act 36 of I 998. Pretoria:
Government Printer.
Republic of South Africa. 2004. Nariorral E11viro11111e111al Ma11age111e11i: Air Quality
Act 39 af 2004. Pretoria: Government Printer.
Republic of South Africa. 2004. Natio11al En11iro11111e11tal Manageme11t: Biodil!ersil)•
Act JO of 2004. Pretoria: Government Printer.
Republic of South Africa. 2008. National E1111ira11mr-11tal Ma11age111e11t: Was11· Act
59 af2008. Pretoria: Government Printer.
Semau, SR. 2014. Global probli-ms: Tire searc-/1 fo r equity. peace, a11d sustai11abiliry.
3rd ed. London: Pearson.
245
Learning Outcomes
After studying this chapter, you should be able to:
• briefly sk.eh:h a viewpoint on waste management and integrated waste
management
•
understand the various categories or separating and processing waste
appropriately
• discuss the selection and applic:ation proc:edure for handling, treatment and
storage or waslt!
• briefly disctJss what the management of munlclpal and c:omme.rc.ial waste entail
•
understand safety standards and environmental damaging prac:tlces in a work
environment
• clarify the pote,nial impllc:ations of toxic waste
•
list and explain the minimum prerequisites for collec:tlng and transporting waste
•
understand what is meant by best practlc:able environmental options (BPEO)
• discuss the possible c:onsequences on the environment
• tlucldate the Importance education and awareness
• indicate the relevance of keeping accurate and up to date rec:ords
•
identify the various types of waste
•
list and explain the differt!nt elements or source reduction
•
identify the various sources or waste generation
• distinguish between e-waste and industrial waste
• c:ategorlse the dlffemn types or indus\rial waste
• explain what waste minimisation entails
•
understand what is meant by cleaner production (CP)
•
lndlc:ate the importan~e of landfill management
• cluc.ldate the relevance of wastewater management
Overview of this chapter
A clear distinction is presented on tJ1e dilTerenr categories related ro the t;ypes
of waste and appropriate treatment procedures. this chapter will elucidate the
importance of selecting the best practical options about the collection, transpon
Twelve: Focusing on waste management
and security measures in regard to waste managemenL In light of this, the various
sources of waste generated and landfill management are considered in further
detail Lo provide more clari ty. The aims affiliated 10 cleaner production practices
and waste minimisation activities are described to the full extenl of the impact
on industry.
12.1
General view of waste management
TI1e objeCLive of this section is to provide a broader perspective about the differem
components that foan part of waste management. More insight wW be given in
terms of the various concepts and principles related to it An overall outlook will
be presented about key elements consisting of the handling and storage of waste,
transferring of waste, control measures and record keeping.
12.2
Introduction
Waste is any substances that has been discarded, irrespective if ii can be reused,
recovered, recycled and reduced. In essence, waste can be categorised into two
groups based upon the risk it poses, namely, general waste and hazardous waste.
General waste does not present any immecliace harm or danger to cbe enviroruneni:
inert waste, construction wasre, household waste and business waste. On cbe
contrary, hazardous waste compose of threatening, dangerous and chemical
features that can have a harmful effect on welfare and environment.
12.3
Handling methods
There is not a grea t variability in domestic waste water in light of its content
(organic or inorganic materials), cbe treatment is normally the same throughout
large districts. However, the content of Industrial effiuents differs from one sector
to another and as a result requires different treatments, based on the particular
sector producing it The specification for releasing different kinds of industrial
effiuents into the public sewer systems or to surface watercourses determined hy:
•
•
concentration of biological oxygen demand (BOD):
chemical oxygen demand (COD};
•
suspended solids; and
•
whether the content contains organic and inorganic parts.
Thls may differ from counLry to country.
Over and ahove, the selection of treatment met11ods for industrial effiuents depends
largely on the following elements:
•
Identification of cbe different pollutants iu cbe effiuent.
•
Characterisation of the efiluent.
247
Environmental Management - A business management approach
•
•
Controlllng the sewers and the separation or waste flows.
Selection of the treatment technology in acconlanct' to U1e various physical,
biological or chemical treatments capacities at disposal.
12.4 The separation of waste
The municipal solid waste industry comprises of various activities which consist
of key steps.
12.4. 1 Collection
The functional reature or collection encompasses the collecting of solid waste and
recyclable materials, including transponation of these maledals to the located area
where the vehicle is unloaded. Thls location might be a material processing plant,
a depot or a waste disposal site.
12.4.2 Separation and handling
The separation and handling of waste includes operations linked to waste
management up to when the waste is in storage containers and ready for collection.
Handling involves around the transfer of loaded containers up until the point of
collection. An imponant step in the separation of different kind of waste content is
the handling and storing of solid waste at the main source.
12.4.3 Processing and transformation
The kind of facilities used to recovery waste materials that were separated from
their sourct' comprise of curb-side collections, drop off sites and buy back centres.
Processing and transformation generally take place al depots, combustion stations
and disposal sites.
12.4.4 Transfer and transportation
Firstly, waste is collected from a smaller vehicle and transrerred to a larger mode
of transportation. Thereafter, the waste is generally transported over long distances
to a reprocessing or disposal site. At present, the disposal of waste by land
dissemination or landfilling is the eventual outcome of all the solid wastes such as
residential wastes collected and directly transfe.rred to a disposal site, remaining
substances or material reclamation facilities, remainders or 1.h e combusting or
solid waste, fertiliser, or other materials from numerous solid waste reprocessing
facilities. A contemporary sanitary landfill is not a dumpsite but an engineered
facility utilised for the disposal of solid wastes onto land without causing nuisance
or threats to public well-being or sarety, suchlike the propagation or insects and
pollution of ground waler.
248
Twelve: Focusing on waste management
12.4.5 Energy generotion
Municipal solid waste could be utilised to generate energy. A number of technologies
were crea1ed lo make the handling of municipal solid was1e [MSW] cleaner for
energy generation and economical than before, consisting of incineration, pyrolytic
1reatmen1, gasification and landfill gas collection. The recen1 adjustment 10
regulations and latest technologies have to a great extent minimised the concerns
regarding the older waste combustion facilities etnicting a high level of pollution.
12.4.6 The environment concept
The environment is viewed as a ra1ional concept: •it denotes an interrelationship
between man and his surroundings' (Strydom a King. 2015). Subject to how
comprehensive 1hese surroundings are considered to be. various approaches can
be identified.
12.4.7 Waste collection
TI1e was1e collection forms part of was1e managemen1 process. h is regarded as
1he transport of solid waste from the usage and disposal point to the handling or
landfill s1ation. Waste collection may also encompass the curb-side collection of
recycled substances that are 001 waste products, as a segment of municipallties
landfill divertissement programme.
12.4.8 Household waste
Household waste in developed nations will normally be set aside in recycling bins
or waste con1ainers before collection by waste collectors with a waste collection
motor vehicle. In South Africa, rei,idents musl haul out their refuse bins on the day
the waste collection vehicle comes around their area.
The waste collection vehicle will usually transport the waste 10 a recycling
station where ii would be uploaded into a larger motor vehicle and dispatclt ro a
landfill or other was1e handling plants.
12.4.9 Commercial waste
The consideration matter of waste collection includes the size and kind of bins.
placement of ihe bins, and how frequently the bins are serviced. Overfilled bins
leads 10 the falling out of waste while its being tipped. Hazardous waste such as
empty petrol containers could result in fires lighting up olher trash while Lhe truck is
working. The hins can be loclr.ed for storage in secured areas 10 prevent non-paying
parties from putting waste into the bins. local authorities are accountable to ensure
that services are delivered to the public Lhey serve. Collections could be carried
249
Environmental Manageme_nt - A business management approach
out by the local authorities, normal contractors or emergency entrepreneurs. Tims.
numerous factors should be taken into consideration when an applicable waste
management approach is selected for a specific community which will impaci the
waste treatment and disposal selet."tions.
12.5
Selection and implementation of handling, treatment and storage
procedures
Environmental awareness has given rise lo a rapid change in waste management
practices. TI1e interpretation of this transformation ls needed before the procedures
applied In waste management and the handling of residuals can be examined in
greater detail. The current principles or waste management are in accordance with the
paradigm of a geared link between the biosphere and the anlhrop-sphere. All substances
extracted from the environment tum out as waste either directly (production indusuy)
or indirectly (recycling industry). taking into account that all consumption wru.'te runs
back to the recycling industJy whether it is for recycling or dumping.
In context or this, recycling can be defined in a broad sense .i n the following way:
starting from the recycling of whole hems (returnable goods), recycling of hems
for cena in spare pans (computers and cars); manufacluring or new materials
(paperboard boxes and tin cans) or manufacturing of akin items (recycling. downcycling, etcetera). In the long run, the model can be envisaged as a steady-state
meihod wherein good come to pass as waste after a couple of days or sometimes a
couple or years. There is one key requirement that needs to be met to improve the
efficiency or recycling which include: waste to be recycled (new materials from the
second generation) should be as clean as possible [free of undesirable components
that would prevent recycling). This would be attainable through the application of
a comprehensive policy of not mixing domestic, commercial and industrial waste
at the source. The sorting involves separation, nevertheless the idea is not 10 focus
on the separation by storing the different groupings or waste in distinct containers
or places while waiting for collection. TI1e current model of waste management is
Llms unmixed waste at rhe source 10 facilila1e an increase in the eITectiveness or
recyciing and as a result accomplish a better radio of merchandises per material
extracted from the environment.
12.6
Management of municipal and normal commercial waste
The collection or these type of wastes can be transported - directly o r by land via
mad or rail - 10 inland locations or watenvay dl!pots and long-distance transport
- or a handling station for material recycling - mechanical separation, fertilising,
bio-mechanlsatioa - o r for energy renewal - L11ermally decomposed - incinerator.
Handling stations manufacture a small percentage of residue that could be more
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Twelve: Focusing on waste management
harmful to the environment than the initial waste. For instance, incinerators spread
ny ash that contains a great amount of heavy meral and intricate chemical conten t.
The byproducts are usually categorised by legislation as harmful waste and need
to be managed properly. These handling stations are different to landfills as it has
open systems along with Inflows and outflows, though landfills are basically sinks.
12.6.1 Industrial and household equipment
The current L-rend, Lhal also includes commercial contributions, is for many
manufacturers in the waste industry (eg computers, cards, machines) to be in
charge of the reprocessing. Byproducts could either be harmful waste or similar to
ordinary waste from companies.
12.6.2 Demolition and construction
TI1e rise in prices of landfills is au inducement for Lhe improvement for separation
of waste. Sorting out harmful and burnable wastage from tbe large quantity of
inorganic substances enables the Lauer to be discarded at a much lower level than
mixed waste.
12.6.3 Special waste
Chemically harmful waste should be handled through mineralisation, neutralisation
and in-solubilisaLiou or rendered impotent before L,eing placed at spedal landfills.
Special indnerator is seen as the best way to bum infectious waste. Radioactive
waste is based on very stringent legislative regulations.
12.7
A safe workplace
All work conducted in this type of environment musi be done in line with the
organisational requirements and processes. All employees must be trained in
relation to the policies and procedures. Training should include personal protective
cloihing [PPEl/equlpment - the relevant and accurate PPE should be used. Titis
will include ensuring that the clothing or equipment is ready to be worn and
used, and lits the person using it. PPE should be donned prior to beginning with
the work. Safe working practices should form part of organisational policies and
procedures and these need 10 be available to all employees working in the field. All
employees must be fully aware of these practices and appliance should be closely
and regularly monltored. The same applies to appropriate methods and processes
used for the treatment of waste - employees should be regularly monitored to
ensure they are following the required organisational policies and procedures.
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Environmental Manageme_nt - A business management approach
12.7.1 Environmentally damaging practicrs
There is insufficient information about the significance of waste management
between all stakeholders, inclusive of nominated political agents in government.
panicularly local government. and the public al large. This negatively impacrs
the planning. budgetary provision and workforce in municipalities. This problem
usually results in the failure of waste collection systems and pollution to the
environment through illegal disposal of waste. The creation of awareness amongst
all key stakeholders is crucial for sustainable and efficient waste management
service deli very.
A broad spectrum of approaches could be utilised Lo raise awareness. A
combination of methods or the la rgest numhcr possible, can help achieve tbe
desired effects Lo enlighten people more about the imponance of maintaining a
clean environment and the significant function recycling can perform. However, it
is imperative Lo decide on communication networks and materials that are suitable
for the respective target audience, particularly for municipalities, for example
catchphrases, bulletin boards, leallels, brochures, campaigns, exhibitions, personal
visits and oasile teaching.
12.7.2 Implications af toxic waste
Toxic waste can cause death, injwy or birth defecLS Lo living beings. It can spread
easily to pollute the atmosphere, watenvays and lakes. The term ·toxic waste' is
usually used homogenously with "hazardous waste· or discarded substances that can
present health or environmental risks in the long run. Hazardous wastes are toxic
derivatives of production outputs from agricultural, city septic systems, auwmotive
garages, research laboratories, construction, hospital facilities and other sectors. The
waste can be in the form of fluid, mud or solidified and it encompass metal with high
density, cbemicals. radioactivity, hazardous pathogens or other poisons. Households
also produce toxic waste such as broken or outdated computerised equipment, and
remains of paints or insecticides.
12.8
Minimum requirements for collecting and transporting waste
Table 12.1 illustrntes the minimum requirements for waste treatment, storage and
transpon.
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Twelve: Focusing on waste management
Table 12.1: Minimum requirements of waste eollection and transport
Subject
Minimum requirement
Disposal sites
When waste is kept at a spillage location for more than three months,
the location automatically meets the requirements as a waste disposal
station and should be regimred as a disposal site.
Short-term storage
A temporary storage should have a stable, water-resistant base and
drainage network. It should be developed and eonuolled to prevent any
form of pollutants to escape in th, environment
Identification of
waste
The transportu should be given the correct details regarding the
specific features and particularities of the consignmenL
Documentation
The transport operator should be given the a.ppropriate transport
documentation for the load.
Security of load
The eonsignment should be correctly and securely loaded on the site.
Hazchem placard
The uansport o~tor should be provided with the relevant Hazchem
placards to make sure that its appropriately s«ured to the vehicle.
Vehicle
roadworthiness
The accountable pl'tSOn should make sure beforehand that the vehicle
departing the sendu's locations, is not ovuloaded or displaying any
noticeable defic.iency that could affect the safety.
Escape of
hazardous spillage
at site
The relevant authorities should be informed immediately if it's evident
that rol<ic waste at a location is impossible to be eonuolled.
Protection against
effect of accident
The generator or agent e.g. transporter - should make sure that the
appropriate steps are undertaken to minimise the impact that an
incident or mishap might have on the community and environment
Spillage on site
The generator should take remedial measures to clean any leftover
spillages onsite after any mishaps.
Notification
The Deparunent ofTransport should be notified of all road accidents on
an official documenL
The selectio n of appropriate options in terms of best practicable environmental
options (BPEO) comprise of the following aspects:
•
The BPEO is a 10olkit adopted with I.he objective of controlling waste and
other environmental challenges.
•
Tbe BPEO highlights the safeguarding and conservancy of the environment
throughout air, land and water.
•
The purpose of BPEO processes is to provide the greatest advantages or the
less polluting destruction to the environment, entirely, at cost-effective ways
in the short and long run.
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Environmental Manageme_nt - A business management approach
12.9
Potential consequences to th e environment
12.9.1 Social costs
Waste management is an imponant environmental judicial mauer. Several of
the environmental problentS are most commonly endured by disadvantaged
people, namely women, eilutlc minorities and citisens of developing countries.
The requirement for developing and locating waste-handling and d.isposal sites
is growing internationally. There is currently an increasing market in the transboundary Bows or waste, though lhe vast majority of waste movement between
nations happens amongst developed countries, a considerable number of waste is
also transferred from developed 10 developing countries.
12.9.2 Economic costs
The ecooomic costs of handling waste are large and are usually paid by local
authorities or municipalities; funds could generally be saved through more
effectively developed collection routes, modHication of momr velticles a nd public
teaching. Environmental policies like 'as pay as you throw· can decrease the
expenditure of management and decrease the amount of waste.
TI1e recovery of waste through recycling and reusabillty could curb ecooomic
costs as it prevents removing raw materials and generally reduce transport costs.
TI1e location of waste handling and disposal sites normally has an innuence on the
value of properties because of noise level, dust, contantination, unattractiveness
and undesirable stigmatisation. The informal waste industry comprises generally of
waste pickers U1al rummage for plastic, glass, metals, fabrics and oilier substances
and then do trading with them for proceeds. This industry can significantly change
or decrease waste in a specific system, though other unfavorable economic impacts
comes along with the impoverishment, dl~ease, mistreatment and violation of its
workforce. Actions should be raken to avoid, rectify or solve hazards or harm to
l1ealil1, safety or environment are explicated properly.
12.10 Security of th e facili ty, equipment and resources
General conditious for the safe disposal of waste on a landfill comprise of the
following:
•
Landlills facilities should be appropriately closed off lo people and animals.
•
Children, pickers and domesticated animals should not be permitted omo any
landfill facilities due 10 sareiy reasons.
•
Controlling access al the gate is a prerequisite for the monitoring of the kind
and amounts of waste being discarded al facilities.
•
A sign post at the gate must specify the kinds of waste permitted and the
hours of operation for the facility.
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Twelve: Focusing on waste management
•
Well managed lanclfill involves around day-to-day compaction and ground
coverage of waste at the workface lo avoid ny breeding and wind scalier.
•
Compaction utilises airspace more effectively.
•
Record should be kept of lhe income waste types and arnounlS to ensure
accuracy based on the local drcumstances due to significance for planning
and reporting.
•
More precise systems should be explored to approximate waste amount or
wcighis such as wcighbridges.
•
Fires should be prevented - fires on landfill facilities are difficult to resolve
because of landfill gasses being presenL
•
Moreover, fires release hazardous substances through the air.
Strict enforcement regardin.g the minimum prerequisites for land.ftl~ licensing and
disposal fees may potentially result to Illegal dumping incidenis due to the absence
of law enforcemenL
12.11 Education and awareness
TI1e education and awarenes.~ aspect of waste management is progressively
significam from an International standpoint of resources maaagemenL The Tailors
Declaration (Strydom 8: King 2015) is a sustainability proclamation related ta the
unprecedented level and rapid pollution or lhe environment and deterioration, and
exhaustion of natural resources. lmemational, regional and local air pollution,
amassment and dispersal of harmful wastes, demolition and exhaustion of foresis,
water and soil, exhaustion of the ozonospbere and release of green-house gases
endanger the existence of human beings and many lhousands of living organisms,
the wholeness of the world and its variety of life, the safety of countries and
the inheritance of generations to come. Numerous universities have employed
U1e Tailors Declaration through the development of waste management and
environmental management programmes. University and occupational training are
encouraged by several organisations.
12.12 Records are accurarely updated, processed and completed
It is a prerequisite for municipalities to control and address the following matters:
•
•
Finances in relation to t.he Municipalities Finances Management Act 56 of 2003.
Delivery of services performed (as well as waste management) wilh regard to
!he Municipal Systems Act 32 of 2000.
•
Waste management with respect to the Waste Act 59 of 2008.
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Environmental Manageme_nt - A business management approach
•
lnfonnation should be collected for report pwposes to the National Waste
lnfonnarion System (SAW!S} - details on the amount and kind of categorisation
of waste produced. transferred, stored, handled, transfoaned, diminished,
recycled, reused, restored and discarded.
•
SAWlS may contain data on the degree and scope of waste management
services delivered by municipalities.
•
Progress reports toward meeting the objectives set out in the integrated waste
management plans should be disclosed.
•
The idea behind monitoring and reporting is to assist with prospective planning.
TI1e moniroring will allow insufficiencies 10 be brought to light in tl1e delivery of
services and necessity 10 make improvements.
12.13 Integrated waste management
In thls section, integrated wasie management will be discussed in more detail
10 provide an in-depth understanding regarding the key aspects it
entails. The
different factors involvi ng around integrated waste management will be explored
in particular the waste categories, recyclability of waste, sources of waste produced
and management of landfill sites.
Waste can be divided into two categories In terms of the risk it presenrs namely,
general waste and hannful waste. General waste does not pose an immediate danger
or threat 10 the state of health or environment. On the contraiy, harmful waste is
hazardous and sometimes listed by name but the list is not exhaustive and are at
times regulated.
12.13. I Types of waste
Overall, waste could be in a liquid or solid fonn which can be classified into o rganic,
recyclable and reusable waste. The various classification of the types of wastes can
be broadly outlined as follow:
a)
Liquid waste
Waste could also be in a non-solid foTDL Solid waste could in certain instances
be transformed to a liquid waste fonn for discarding. Within this context, point
source and non-point source releases exisi suchlike wastewater and stoan
water. For instance, liquid waste consists of wash water from households,
liquids u tilised for the cleaning in businesses and waste cleaners.
b)
Solid waste
Solid waste is maillly viewed as any litter or refuse that people generate in their
households and elsewhere. Thls may contain any non-liquid waste, discarded
food, used newspapers, old automobile tires and broken furnitu re.
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TweJve: Focusing on waste managt'ment
c)
Hazardous waste
Harmful waste poses a tlU'eat 10 public healthcare or environmenL This type
of waste is cousidered problematic due 10 various charac1eristks such as
nammability, reactivity, corrosivity, quantiry and mobility. In several nations,
a prerequisiie by-law is to include lhe relevan1 authorities to manage the
disc-.uding of hazardous waste. Examples ofthls include fire extinguishers, old
propane containers, insecticides, mercury-containing devices and lamps.
d)
Orga11ic 111asre
Organic waste originates from plant sources. Generally. this consist of food
was1e, vegetable and [ntl1 peels, Hower trimmings and dog excremenL They
are decomposable and can easily be broken down furthcr by otl1e.r organisms
afler some time and transfonn in10 manure. Organic waste is turned in10
rompost by severaJ people for usage in their gardens.
e)
Recyclable waste
The recycling processing of use materia l is to transfonn was1e into new
and useful product types. In this way the usage of raw materials is reduced.
Recyclable waste is defined as waste that can possibly be recycled. Aluminumrontaining goods (eg soft drinks, tomato cans}, glass goods (e.g beer and wine
bottles), plastics (eg shopping bags, bottles) and paper goods (eg old new~'J)rints
and paperboard boxes) can be reprocessed. Waste managers also look at the
types of sites lhat receive specific hazardous waste such as their proximity
to human popuJations, conlainment integrity, locaJ groundwater hydrology,
potential in1pact ion Dora and fauna tltrough transmission. geological lmegrity,
and the uJtimate level of controlling the waste. Tile more well-known the
characteristics about waste are, the hener infonned decision makers will be as
to the treatment of waste.
fJ
Rural waste
Disposal of solid waste is a matter of great concern in rural districts. It couJd
possibly endanger publ.ic heaJthca.rc. damage the environment, and obstrucis
economic development due to the generaJ poor perception of l11ese type of
areas. The public should start initiating more innovative ways in discarding or
handling solid waste namely paper, plastics, motor oil and other garden waste.
A critical mailer for llle public might be I.he challenge 011 how 10 execu1e
new initiatives, particularly in rural societies with scarce resources. Moreover,
a guideline for smaJJer communities and people involved in llle evaJuation
of these type of matters would be to begin with the planning of practical
programs (availabilily of infonnation resources).
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Environmental Manageme_nt - A business management approach
12. 13.2 Source reduction
The objective is to reduce the quantity of waste that is created initially. This can be
accomplished in a number of ways which comprise of the foUowing:
a)
Ri-usability
The reusability of goods refers to the reusage of a product rather than
discarding it Examples include repairing old appliances, refurbishing old
furniture, repairing old vehicles and refilling bottles as its currently done to a
limited extent with beer bottles).
b)
foci11eratio11
The process of burning waste has been employed for centuries because it
destroys waste that decomposes and significantly decreases tl1e vo lume of
waste requiring disposal When accompanied by the capture of heat energy for
gene_rating of electricity and other purposes, it is seen as a form of recycling.
1n fact, ii is often caUed the "fourth R~
c)
Trecllme11I
Waste can be chemically or pbysicaUy treated prior 10 dl'i)loSal 10 improve its
properties. Treatment can reduce the toxicity of waste, remove further useful
components, and improve waste properties for disposal
d)
Lnnd jilli119
Ultimately the waste will remain, even after vigorous application of other
strategies. This waste will be pla~d in landfiUs., since no alternatives are in
commo n use at present. The landfill does not necessarily represent the end of
the road. Although, it's not commonly done, landfills can be exhumed and
their contents recycled and/or incinerated for energy.
e)
Waste ge11eraH011
Waste generation involves around activities where materials have no value
anymore and are either discarded or collected for disposal. It is important lo
keep in mind tl1at was1e generation includes an identification phase which
may vary form one individual to the nexi. Currently, waste generation is an
activity which is not quite manageable.
.ll Disposal
Disposal of land spreading or land filling is the final outcome of solid was1es,
even if they are household wastes gathered together and transferred straight 10
a landfill stations, residual substances, residue from incineration of solid waste,
compost. or other materials from va.rious solid waste processing focilities.
Modem sanitary landfill sites are a method of discarding solid wastes into or
0010 land without causing community endangerments or problems.
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Twelve: Focusing on waste management
In addition, the reduction of waste is not limited lo the aforementioned methods
but also includes processes such as recyclability; collections; waste separation
and treatment. storing and processing at source; transrer and transport; and
transformation and reprocessing of waste.
12.13.3 Sources of waste gc:nc:rotian
Waste as a topic is an ongoing discussion and a growing trend towards reducing,
rl'USin.g, recycling and restoring. The demand for lhe recovering of waste is
changing due 10 l11e advancement or 1echnology and cost or initial raw materials.
The differen1 sources, producers and types of waste generated is displayed In
Table 12.2.
Table 12.2: Sources of waste generated
Souree
Fa~ilities, activities or locations
Waste ty~s
Household
Single family and multi-family
dwellings; low-, medium - and
high density apartments, etc.
Food waste, paper, cardboard,
plastics, textiles, leather, glass,
timber, aluminum, other metals,
dust, special waste (as well as
large items, electronic devices,
white goods, baclcyard wastes,
gathered separately, oil, batteries
and tires) and harmful household
wastes.
Commercial
Shops, restaurants, marketplaces.
office blocks, lodging houses,
hotels, printing stores, lilting
srations, mechanic shops. etc.
Cardboards, food wastes, glass,
paper, metal wastes, dust,
plastics, special wastes (see
preeeding). timber. toxic wastes,
etc.
Institutional
Schools, medical instiMions,
jails, governmental eentres, etc.
Plastics, cardboards, food wastes,
paper, metal wastes, dust, glass,
special wastes (see preceding),
wood, toxic wastes. etc.
Industrial (nonproeessed wastes)
Construction, manufacture,
small- and large-scak producers,
fineries, chemical prints,
demolition, power stations. etc.
Wood, glass, cardboards, metal
wastes, food wastes, special
wastes, dust , paper, toxic wastes,
etc.
Municipal solid
waste
Alt above-mentioned
All above-mentioned
:..
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Environmental Manageme_nt - A business management approach
Sourer
Facilities, activities or locations
Wa:ste types
Construction and
demollshment
Buildings under construction,
roadworks, restoration worksites,
raising of buildings, damag~
pavements, etc.
Steel, timber, mud, concrde, etc.
Municipal services
(aside from
treatment plant)
Cleaning up of streets, catchbasin cleanups, landscape
architecture. beaches and parks,
other leisure zones, etc.
Special waste, street sweepings,
catch-basin refuse, tree
trimmings and landscaping,
general wastes of parks, refuse,
beaches and recreation zones.
Treatment plant
Water, sewage, industrial
handling system. etc.
Waste treatment plants,
predominantly consists of
household sludge and other
household substances.
Industrial
Construction, fineries,
manufacture, small- and largescale produci,rs, chemical plants,
demolition, power stations, etc.
Process for industrially wastes, scrap
materials, as well as non-industrial
waste consisting of refuse, dust,
food wastes, demolition wortc and
construction waste, special wastes
and toxic waste.
Agriculture
Arable crops (field and row).
Agrarian wastes, rotten food
vineyards. dairy farming, plantations. waste, refuse and toxic wastes.
feed yard, farmland, etc.
Furthennore, there arc two additiona l aspects that also aeed lo be specified and
talten into considerntion wbich include lhe following:
i)
£- waste
Waste from electronics such as computers, cell-phones and televisions is a
growing coacem because of the short life span of the products aad the lack of
consumer ltnowledge about what to do with them when tlley become obsolete
or stop functioning. In the past, most items were simply discarded into the
regular waste without any consideration for tile materials from which they are
made. However, lhese products' components, ranging from lead to cadmium
lo mercwy to various plastics used in circuit boards, cables, covers and
connectors, pose a number of risks. The waste is not suitable for incineration
because of some components for toxic substances when burned. When placed
in landfills, they can leach into the soil.
ii)
Medical waste
Medical waste (which includes waste generated from human activity) is
importan1 because ir involves multiple stare authorities, blood suppliers,
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Twelve: Focusing on waste management
laboratory facilities, universities canying out research and medical ireatmems.
transport operators and disposal companies and other medical instituLions.
Medical waste is regulated and described as waste or reusable substances
which could comprise a contagious material created in prognosis, treatment or
vaccination, research on the prognosis, treatment or vaccination. or production
or analysis of biologica l products.
12. 13.4 Categories of industrial waste
TI1e different cacegories of industrial waste can be classified as follows:
a)
Emission
Discarding and handling of waste C-dJl generate emissions of numerous
greenhouse gases (GHGs) that greatly in1pact climate change. The most notable
GHG gas generated from waste is methane. This is emitted throughout the
breakdown of organic substances in landfills. There are otl1er types of waste
disposal tllat generate GHGs which are primarily by tlle means of carbon
dioxide. Even the reprocessing of wasce generates some emissions [though
these are balanced by the decrease in fossfJ fuels which are needed to acquire
new raw materials].
b)
Sludge
Sludge originates off from the procedural handling of waste water and is likely
to be contaminated by distillate heavy mecals and organic substances including
pathogens [bacteria, viruses etc.]. However, sludge is rich in nutrients such as
phospboms and nitrogen, maki ng it suitable as a fertilizer or an organic soil
conditioner.
c)
EJJ1ue11r
Effiuent is the ouUlow of gas or water from a human-induced structure or
natural water body. lt can also be descdbt'd as 'wastewater' which is eitlier
processed or unprocessed and originating from sewer systems, process plants
or industrial outlets.
d)
Slurries
Animal slurry encompasses plant nutrients which are inlportant for crop
production, however intensive scock production can cause a surplus of
plant nutrients on farmland and therefore mlght generate emission to the
environment. Methods have been created to decrease the nutrient content of
slurry through separation to ensure lbat the sluny used to fields meets the
nutrient requlsites for tlie specific crops.
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Environmental Management - A business management approach
e)
Hazardous
This is type of waste presenis a considerable or possible hazard 10 the wellbeing
of communities or environmenl. There are nine classes of hazardous waste and
eaclt needs to be bandied, stored, transferred and discan!ed in a way tha t will
nol bann Lbe eovironment or people who work wilh iL
fJ
Radioactille
Radioactive substances are polluted wil.h radlo-nuclides al densities or
activities higher I.ban lhe safety level as detennined by Lhe NNR (National
Nuclear Regulator). Radioactive waste could be categorised in accordance
10 radiological c.haracteristics (kind of radioactivity and capacity), physical
c.haracteristics (fonn wherein I.he substances appears such as liquefied gas
or solid) and if its generating heal or nol. the lYPe of ltazan! entailed and
final disposa l melhod applied for lhe waste is also playing a role in I.he
caiegorisation. Radioactive waste l~ generated through Ute nuclear fuel chain
in Soulh Africa. The Safari researc.h reactor at Pelindaba of the The South
African Nuclear Energy Corporation (Necsa's) and Eskom·s Koeberg nuclear
power station generates nuclear fuel as well as radioactive waste lhrouglt
Lheir operaiions. At Necsa nuclear waste is generated from radioisotopes
manufacturing operations. Added to Lhis, radioactive waste is generated by
the iThemba LABS and waste is also created by several research operations
sucl1 as lhe minerals processing industry. Altogether, the naturally occurring
radioactive waste materials NORM are generated by numerous facilities in
the minerals processing industries, mining sector 10gether with industrial and
commercial users.
7213.5 Waste minimisation
The overall aim of I.he waste management hierarchy is to obtain the greatest
operational value from goods and to produce U1e smallest amount of waste. The
waste management Werarclty is a globally approved manual which fonnulates
waste managemen L practices 10 accomplish Lhe most optimal environmental
results. A kt.'Y objective of waste management is to reduce Lbe creation of waste
l.hrough educational and manufacturing enrichment processes, contrary to the
advancement of tec.hnology 10 en.ha nee waste treatmenl and minimise toxicity of
waste. The general concept around minimisation is nol focused on technological
development, but rather a process of managing available resources and technology
wil.h the purpose of minimising the effectiveness of existing resources utilised.
Minimising waste generation could polentially decrease costs or grow profits
Lhrough Lhe optimisalioa of resources used along with Lhe reduction in the
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Twelve: Focusing on waste management
capacity of waste discarded and cost of waste managemenL Waste maximisation
is probably the most significant part of the waste hierarchy and also offers the
most difficult challenges. Despite Lbe increased awareness rega rding the reduction
of waste in communities, the degree of waste generation bas continued to grow
in accordance to the standard of life. Examples of avoidance meU1ods include the
purchasing products in bulk, rethinking unnecessary purchases, buying goods
in recyclable packaging, use composting and vermin-culture (w orm farming)
practices and reduction of documents being printed.
Considerations for industry to be taken into account include the following:
•
•
•
Modilication in product design m decrease the usage of material.
Utilise crates in tbe place of pallets to prevent tbe requirement for shrink
wrap.
Integrate eco-design technology within the meU1ods of manufacturing.
•
Adopt cleaner production activities Lo ensure prevention Utrough effective
measures.
•
Carry out frequent audits and control waste resou.rce recovery activities.
Take local government into consideration.
Promote avoidance practices in communities e.g. suppon reward initiative
through competitions for resource recovery.
Provide infrnstructures and facilities Lo suppon businesses, industry and
communities to implement resource recovery activities e.g. curb-side
recycling and resource exd1anging registries.
•
•
•
12. I 3.6 Cleaner production (CP)
Deaner production (CP) aims for a prevention or reduction of waste generation
using cleaner production processes wbkh implies that less resources are used,
therefore less waste will be produced, either in terms of liquid waste dumped
into waterways. solid wastes moved to landfills or gasiform wastes dispersed into
the air.
The objective of cleaner production is viewed as three-fold:
I)
To prevent and decrease the production of waste and pollution (usually reduces
costs and risks, and recognises more opponunities).
I)
To recycle and reuse waste praducLS.
ii)
To handle and discard waste after aU other alternatives have been considered.
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Environmental Manageme_nt - A business management approach
Cleaner production is implemented through the following measures:
•
Records of consumption.
•
Using indicators and monitoring mechanisms to determine losses from
inadequate planning, insufficient education and training, and any mistakes.
•
Rep lacement of raw materials and supplementary materials particularly
recoverable materials and energy.
•
Improved monitoring and atomisation.
•
Reuse of waste both internal and external
12. 13.7 Landfill management
The landfill management team is mainly accountable for waste compaction. This
is essentiaJ for the protection of the environment and surrounding communities.
Optimal compaction expands I.he life cycle expectation oflandfills by optimising I.he
use of space available. II is also regarded as a clear indication of a welJ-controlled
landfilJ. Landfill management requires highly developed managerial skills as it
is a compiica1ed and clrallenging task. with major implications in the event of
failure. The latest advanced technology management cools can be used 10 decrease
risk and enhance the level of efficiency. Machine election decisions are of utmost
importance to the success of a landfill both operationally and financially. It advised
Lo work wi1h an experienced machine supplier with specific waste procedures and
established track record. There are a number of factors that coul d contribute to the
success of landfill management such as Lhe geographical structure of a location,
design of landfill, kind of waste, water component, liner technology elc. Moreover,
a general misapprehension is Lhe overall concept that solid waste management is
an easy, unexperienced, low-tech industry.
12.13.8 Wastewater treatment
There are various methods Lhat can be applied for the cleaning of wastewater which
depend on the na Lure and degree of contamination. Wastewater is mostly trea ted in
industrialised energy-intensive was1ewater treatment plants (WWIPs) consisting of
biological, physical and chemical handling procedures. Nonetheless, the util.isation
or septic lank. system and other on-~ite sewage facillties (OSSF) is spread across
rural regions. An aerobic treatment system of utmost imponance is the activated
sludge process, witJt regard 10 the recycli ng and maintenance of multiplex biofuel
composites by bacterium. Anaerobic wastewater handling methods are also broadly
used in the handling of biological sludge and industrial effluents.
264
Twelve: Focusing on waste management
A certain amount of wastewater can be Wghly treated and reused as recycled
water. Tertiary ireatment is an advanced trearmem method that is being used 10
a great extent and technologies usually include artificial membranes or microfiltr'dtion. The wastewater is practically the same quality (excluding its minerals]
as normal drinking water of natural origin after il1e membrane filtration. Removal
of waste from industrial facilities is quite a challenging and expensive problem.
Tue majority of oil refineries, chemical and petroleum plants have waste treatment
facilities onsite so that the concentrations of pollutants In the wastewater is treated
ro comply witll U1e legal systems regarding wastewater disposals into community
treaunent facilitil's or any nalllral sources of water.
12.14 Conclusion
Waste management is important to assist botll government organisations and
corporate sectors in the diminishing of pollution. This chapter demonstrated the
various waste management processes that can he implemented Into business
practices by different sectors. Wiiltin the framework of waste management,
numerous industries can benefit simultaneously through Lllese operational activities
that may decrease costs and allow them to explore new opportunities. Tue minimum
requirements related to tile measure of waste management need lo be adhered to in
order to prevent any accidents [ro m happening. All organisations and businesses
should ensure that Ute advancement of waste management operations are practised
to full extend and are applicable to the specific industry.
Review questions
I.
Explain what effiuents are.
2.
Describe the different categories to separate and process waste
appropria.tely.
3.
Explain the selection and implementation for handling, treatment and
storage procedures.
4.
8.aborate on the management of municipal and commercial waste.
5.
Ouiline the safety measures and environmental damaging practices in the
workplace.
6.
Explain the potential impact of toxic was(e.
7.
Illustrate the minimum requirements for the collection and transportation
of was\e.
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Environmental Management - A business management approach
8.
Define best practicable environmental options (BPEO).
9.
Describe the potential consequences on the environment.
10. Outline the relevance of education and awareness.
11. Explain the fmponance of keeping accurate and updated records.
12. Describe the dilTerent types of waste..
13. Elaborate 011 the different classification of source reduction.
14. Explain the various sources of waste generation.
15. Differentiate. between e-waste and medi.cal waste.
16. Describe difTerenl types of industrial waste.
17. Explain the concept of waste minimisation.
l 8. Define cleaner production (CP).
19. Outline the relevance of landfill management.
20. Explain the importance of wastewater treatmenL
References
Deparnnent: Energy Repu.blic of South Africa. 2019. Acts Et legislatio11. Available:
http://www.energy.gov.za/ftles/policies_ frame.html (Accessed 3 May 2019).
Department: Environmental Affairs Republic of South Africa. 2019. Soutli Africm,
Woste J11formotion Centre. Available: lurp://sawic.environmenLgov.za/
[Accessed 3 May 2019).
De.panment: Water and Sanitation Republic of South Africa. 2019. DWS Docu111e11ts.
Available:
lmp://www.dwaf.gov.za/Documents/de.faulLaspx?type=poUcy
[Accessed 8 May 2019).
Government Printing Works. 2019. Published National Regulations Gazettes.
Av a ilabl e :h rtp ://www.gpwonline.co.za/G aze t te.s/ Pages/Pu bl isbed-N a lio naJRegula tioa-Gazette.s.aspx (Accessed 9 May 2019).
National Solid Waste Association of India (NSWAl). 2019. Waste Portal Available:
bitp://www.nswaLcom/ (Accessed 9 May 2019).
Nuclear Energy Corporation South Africa (Necsa). 2019. A111111al Reports 2017201 8. Available: hllp://www.necsa.co.za/anaual-re.ports/ (Accessed 9 May
2019).
Parliamen1ary Monitoring Group. 2019. A1111unl &ports 2017-2018. Available:
https://pmg.org.za/page/AR2017-20!8 (Accessed: 8 May 2019).
266
,
'
.
'
~
'
'
'
'
~
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Twelve: Focusing on waste management
South African National Energy Development lnstit1Jte. 2019. Reports. Available:
bttp://www.sacccs.org.zafRepons/ (Accessed 8 May 2019].
Strydom, HA l't King, ND. 2015. E11viro11mental Ma11agcme11t /11 South Africa.
Oaremont: Juta.
WasleNet. 2019. Programs. Available: https:f/www.wastenet.nel.au/programs.aspx
(Accessed 10 May 2019].
267
Learning Outcomes
After studying this chapter, you should be able_ to:
• explain what climatt change and global warming entails
• describe wtiat Influences climate change
• describe the impact of climate change
•
Identify the legfslation, agretments and protocols regarding climate change in
the world and South Africa
•
provide an overview of the causes. impact and relevant le_gislation regarding
climate change.
Overview of this chapter
The focus of this chapter is to illustrate the impact business practice has on climate
change and consequently what effect it has on the environment and economies.
A brief history is lhus given, followed by how climate change has already
impacted businesses and an outline of the imporrance of lhis consideration within
business practice.
13.1 Introduction
Oimate change and globa l warming have been contested subjects for many years,
witlt some sc.ientists and politicians becoming a driving force behind reformation
and the need io make environmentally responsib le decisions, while other scientists
and politicians still believe that it has not yet been proven that any threat to
our current way of life exists. Some of the arguments that attempt to disprove
the existence of global warming appear to be rooted in personal agendas. Other
arguments are due to a misunderstanding of the science behind global warming. The
purpose of this chapter is not to convey the science of climate dtange and global
warming in detail, but to provide a brief overview of the current circumstances and
how ii impacts on busi ness decisions.
The fact remains t1tat lhe state of a natural environment is significantly
dependant on its climatic conditions. Oimate in this sense refers to the general
weatJ1er conditions found within a particular place. The biotic (eg humans, animals,
plants, etc) and abiotic (soil, water, air, etc) environment are also largely influenced
by climatic conditions. TI1ese conditions have remained mostly stable and changed
Thirteen: Climate change
slowly relative to historical time, wiU1 the exception of major events such as
volcanic eruptions, meteor strikes, etc.
This all changed. however, with the coming of the industrial age, a process which
bt>gan in Britain during lhe I 8th ct>ntu,y. where businesses and agriculture became
more efficient but at the same time more resource intensive. Such innovation came
at a cost. as pollution per capita increased, resulting in negative impacts to the
natural environment. These practices have shaped the world into what it is today
and have transformed our natural environment so much U1a1 climatic conditions
have changed within shorter and shoner periods of time, and continue to do so as
population numbers and industrialisation increase.
It was also during this time that the idea of global warming and the ·greenhouse
effect" was fust raised and discussed. This concept came from a French physicist
named Joseph Fourier in I 824 - he suggested that the composition of the atmosphere
might change, which might lead to eanh warming like a greenhouse.
13.2
What is climate change?
The Lutergovernmental Panel on Climate Change (IPCC] (2007) defines climate change
as observable changes in the climate system. These changes can be measured and
compared LO historical data in the form of ice core samples extracted from the polar
regions of the eanh. This means that major changes in the observable weather, and
the origin of these observ.ible changes, can be traced back to changes in ocean levels,
average rainfall panerns, increases in the average global temperature, and more
regular and prolonged occurrences of extreme weather events. The United Nations
Framework Convention on Climate Change (UNFCCC) (2014) makes use of a different
definition for climate change. According to the UNFCCC, climate change is defined
as the changes in climate as a result of buman activities thai are changing the
composition of the atmosphere, resulting in changes in weather systems and sea
levels. These changes are in addition to the natural changes in the climate system.
Although weather changes daily and seasonally, when weaU1er pattems are
compared to available historical data, it is clear that the eanh"s overall climate bas
changed dramatically in the past 30 10 70 years. Any major changes In temperature
and rainfall pattems impact on whole ecosystems. In recent years a lot has been
written about the melting ice caps. Nol only does this cause a rise in sea levels, it
also results in a smaller physical environment for cold climate creatures to live in.
The re.al danger of climate change is that it is happening at such a rapid rate that
1he species inhabiting the earih do noi have the time to adapL Key e.'<amples of lbe
effects of climate change are ocean current changes, sea-level height increases, land
degradation, beat waves. etc. These phenomena Ltave been weJJ documented over
the past century by the scientific communhy. The earth"s natural climate change bas
also been influenced by anthropogenic activities where natural climate oscillations
such as the B Niiio and la Niiia have been intensified. These terms refer to periodic
surface temperature changes in the Pacific Ocean sea surface temperature. EJ Niiio
269
Environmental Manageme_nt - A business management approach
is also referred to as the cold phase while La Nitia is referred to as the wann phase.
TI1ey influence weaiher across the world and last from nine 10 12 months while
occurring every three to five years. lf scientisLS are able to discern a difference in
climate which is significant enough to give them cause for worry, it makes sense
lltal a ·nonnal· syS1em exists as a base for comparison. However, the climate system
is very complex.
Tue most important aspect that influences the earth's climate is known as
the great ocean conveyor belt. Tilis conveyor belt acts as a weather buffer for
temperatures across the globe. Ir is responsible for the gradual changes in seasons,
wWch balance heat and cold around the world. Without this conveyer belt. the
earth would look qu.ite differenL This great ocean conveyor belt includes deep
ocean currents and surface ocean currents that circulate the earth in a I 000-year
cycle. This circulation cycle results in the foUowing two processes: warm surface
currents carry less dense waler away from the equator, towards the poles, whlle
cold, deep ocean currents carry colder, denser waler away from the poles towards
the equator. This circulation cycle is vital for the distribution of heat energy, the
regulation of weaiher and ihe cycling of gases and nutrients.
Figure 13. 1 iUustrates the flow of the ocean currents described in this section. It
is important to note that climate change should not be confused with El Nifto and
La Nifta cycles. These cycles are the two opposite phases of the El Nino-Southern
Oscillaiion [ENSO) cycle. The ENSO cycle is a scientific tl'Jlll rhat describes the
variation.~ in 1emperature between the ocean and the atmosphere. These deviations
from normal surface temperatures have a global impact, not only on ocean
processes hut also on weaUter and climate. Tite difference between ENSO cycle
climate change and the clima1e change we should be worrying abou1 lies in the fac1
that ENSO cycles foUow a pred.ic1ahle pattern of occurrence.
Figure 13.1: The great ocean con~or belt
Source: NOAA (20 15)
270
Thirteen: Climate change
13.3
What in'fluences climate cha nge?
Oimate change does not have a single cause but is the product of various different
environmental impacts that act syoergisticaUy. Causes can be natural or humaninduced. The factors that induce climate change include temperature changes,
changes in rainfall patterns and humidity, and changes in wind and pressurt'.
Tempe.r ature changes are predominanlly caused by carbon emissions that trap
lteal emlrted from the sun instead of allowing it to reflect through the atmosphere.
Carbon gases are emitted by power-generation activities, various factories, and
motor vehicles. Power-generation activities are responsible for 24% of emlsslons,
wbile industry and transpon each contribute to 14% of greenhouse gas emissions.
Agricultural activities contribure 14% 10 greeohouse gases - as much as is contributed
by industry.
As explained e-drtier, climate change c-dn be natural or human-induced. Volcanic
eruptions are a good example of natural elemeols causing climate change. When
a volcano erupts, it spews large quantities of greenhouse gases such as carbon
dioxide and methane. These greenhouse gases build up in the atmosphert'. Heat
builds up in the sunshine; this bear is not released by the gases. As the beat builds
up over time, ii affects 1.b e local and global climate, which i.n rum innuences plam
growth and natural ecosys!eolS.
Human-induced carbon e.missiora have the same effect but on a larger scale,
since human activities are so numerous. Live.stock, farmed on an agricultural
scale, produce immense quantities of methane gas - a lot more than would
occur naruraUy. In order to meet human consumption demands, large numbers
of live.stock, for example cows, are bred for milk and meat. TI1ese unsustainable
agricultural activities contribute to methane gas production on a large scale, which
in tum contributes to global warming.
There are many other examples of human activities impacting on gree.nbouse
gas emissions on e.artl1. If L11ese emlssions are not drastically reduced, the e.anh
could face devastation. Society and economy are secondary drivers 10 climate
cl1ange because they exploit primary drivers such as water resources, energy
generation and land use.
Water impacts the environment, and conscque.ally climate, once its natural
path is changed by bumarLS, for example where a major river is diverted to a
dam and impacts the natural ecosystem, resulting in environmenta.l change
beyond Lliat particular action, such as drought. Human dependence on energy is,
however. considered the most influential driver of climate change as its impact
is felt globally. Wiili an increase of population comes an increased demand for
power generation.
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Environmental Management - A business management approach
13.4 Impact of climate change
Oimate change forces wildlife 10 adapt to life on a warmer earth, due 10 changing
weather patterns. Normally, these changes would occur over thousands of years,
but species are now forced to adapt or become extinct
Oimate change contributes to deforestation; deforestation contributes 10
greenhouse gas emissions and climate change. Forests act as air filters in a certain
sense and are responsible for cl1anging human-produced carbon dioxide into oxygen.
Rising temperalures and changing rainfall and snowfall patterns force trees
and vegetation 10 move towards the colder polar regions and up mountain slopes.
These shifts undecmine much of the work that the conservation community has
accomplished over the years. TradiiionaJly, the na1ural environment was protected
by using conservancy preserves, local land trusts and national parks. lf the stale
of vegetation changes, animals will uy lo migrate but will come up against manmade borders. Some species will be left without viable habitats, putting much of
our treasured wildlife at risk. Polar bears are the most well-known example of this.
Higher temperatures also increase the amount of moisture that evaporates from
land and water, leading to d.roughis in areas that never previously had a problem
with lack of water. l and affected by droughrs is more vulnerable to llooding.
These floods will increase as global temperatures continue to increase. Agricultural
activities will be forced to change since such practices will no longer be viable in
U1e affected areas. 1bJs has already happened in certain areas in Africa and Asia:
the effects can be seen in the changes in water supply, hwnan health and human
activities. These warmer and drier conditions increase the risk of both veld fires
and forest fires. In the western parts of the USA, conifer foreSIS are dl)'ing out due
to decreased snowfall and increased swnmer temperatures. In South Africa, fynbos
fires in the southern pans of the country have been worsened by longer, honer
summers and a decrease in the traditional winter rainfall.
The e!Tects of climate change on businesses and economies can be felt around
the world. lf climate cl1ange is threatening the moSJ basic elements of human
life, it is definitely U1e responsibility of the business envimnmen1, as well as of
international governments, 10 address the issue.
The projected cost of climate change on annual gross domestic product (GDP]
averages 5- 10%. However, if governments acted immediately to reduce the effects
of climate change, it would only cost 1% of annual GDP.
Many industries are Wiable to continue with business as usual due to the
impacts of climate change. The fisheries industry struggles with species whose
numbers are threatened by the stresses of beat and growing parasites in oceans, due
to rising temperatures. Rising sea temperatureS are also threatening the survival of
coral reefs. These reefs generate billions of dollars· worth of goods and services. Ski
resorts are often unable to open during ski seasons because of a decline in snow fall.
These businesses cannot obtain loans to get them through periods of decreased
income, as banks have realised that they may never return to normal.
272
Thirteen: Climate change
Lowering lake and dam levels cause irreparable damage to shoreline inrrastructure
and force the relocation of harbours al a cost of millions. Hurricanes and rainfall
are becoming more intense, causing damage to infrastructure and property that
amounts to billions or dollars.
Furthermore, it is the poorest who suITer the most. The impacts of climate
change pose a grave threat to the poorest countries. These developing countries,
whlch depend on agricultural activities for survival, are already at a geographical
disadvantage as a result of warmer climates and shortages of water. These countries
are also plagued by poor heallh care systems and poor public service systt'Ills and
are therefore struggling to cope with the additional climate challenges they face.
Although traditionally colder countries will initially see benefits in climate
change through increased crop yields, a reduction in heating requirements and
reduced winter mortalities, the long-tenn damage to infrastructure, the economy
and biodiversity wilt be irreversible.
Despite the bleak outlook on the future of the world when taking the impact
of climate change into account, the economic world powers do not have to choose
between the promotion of economk growU1 and limlting the impact of climate
change. With improvement in power generation and transport technologies, the
future looks less bleak.
13.5
Legislation, agreemen ts an d protocols regarding climate change
in the world and South Africa
TI1e National Environmental Managemem Act 107 or 1998 (NEMA) forms the basis
of all environme111al legislation. With specific reference to carbon entissions, the
While Paper 011 Renewable Energy focuses on climate change as one or the major
threats facing the environment and introduces the concept of carbon entissions tax
in South Africa.
Carbon emissions tax has been cJ13rged since 2015. Souili Africa is the II th
biggest polluter in the wodd: this is very concerning since ilie SouU1 African
economy only makes up 1% or the world 's economy. According 10 811si111'ss Day,
however, South Africa is the 13th most active country when it comes to its attempts
to reduce carbon emissions.
TI1e Kyoto Protocol was adopted by U1e UNFCCC in 1997. This protocol was
introduced to do more than merely suggest that industrialised countries should reduce
their greenhouse gas emissions. The protocol commits industrialised countries to
reduce greenhouse gas emissions and has been ratified by 195 countries. The Kyoto
Protocol also makes use or other mechanisms to reduce greenhouse gas entissions
by industrialised countries and has given rise to the phenomenon of entissions
training, also known as the carbon market, which encourages Joint efforts between
participating countries to address the issue.
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Environmental Management - A business management approach
The countries in the southern part of Africa belong 10 the Southern African
Development Community [SADC), established in 1992. The SADC member coumries
are: Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar,
Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa. Swaziland,
Tanzania, Zambia and Zimbabwe. The goal of this alliance is to increase economic
growth, improve the living conditions of people in the region and support
sustainable development and democratic principles. SADC countries have poor
access 10 water and many people llving in the region ~-ulfer from malnutrition. As
explained earlier, it is the poorer countries who suffer the most when it comes to
cllmate change since they are already hauling harsher clima1es. The SADC region
is one such example. Not only do the people living in this region struggle with the
HIV/Aids pandentic and child-run households, but they also face daily challenges
of water insecurity and malnutrition.
SADC countries have a number of agreements and protocols, as well as numerous
intergovernmental programmes, in place to monitor, mitigate and support countries
with regard to climate change. These programmes include a drought monitoring centre
(DMC) to act as an early warning system; the regional Programme for Biomass Energy
Conservation [ProBEC], and the Common Market for Eastern and Southern Africa's
(COM.ESA) climate change initiative aimed at reducing the impact climate change has
on a social and economic level. TI1ese are just a few of the intergovernmental projects
running at the momenL In addition, there are numerous civil society projects to
assess climate change in1pacis, drive alternative enugy production, tnitigate disasters
and support conservation.
TI1e first UN environment conference was held in 1972, which led to the
establishment of the United Nations Environment Programme. This la1er led 10 the
establishment of the Intergovernmental Panel on Clintate Change (IPCC] in 1988,
a panel that does no1 carry out its own research but which looks al the literature
published elsewhere. relying upon the work of thousands of scientists over
the world.
la 1987 the Montreal Protocol was agreed. which restricts chemicals that
damage the ozone layer. This protocol was not established with climate change in
tnind but bas a greater impact on greenhouse gas emissions than the Kyoto Protocol,
which was agreed in 1997, where developed nations pledge to reduce emissions by
an average of 51lb for a given peciod. Later, in 2005, the Kyoto Protocol became
international law for couotries who pledged.
13.6
Conclusion
Clinrnle change affects not only the natura l environment, but bas an economic
impact as well. We investigated what climate change is and what influences climate
change. This chapter also looked at more information about legislation, agreements
and protocols that shows how this issue fits into the real world in which we have
Lo live and work.
274
Thirteen: Climate change
Review questions
I.
Ex-plain what climate is.
2.
Describe the difference between Lhe biotic and ablolic environment by
providing examples of each.
3.
Whal ls climate change?
4.
What are the dangers of climate change?
5.
Describe the ENSO cytle and the rol e of the g~r ocean conveyor belt.
6.
How does the normal clima1e system wade?
7.
What infit1ences climate change?
8.
Describe the impact of clima1e change.
9.
List a n d discuss the leg.l slation. agreemenrs and protocols that are in
place to manage climate change.
References
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BBC News. 2013. A brief /ristory of climate dia119e. Available: https://www.bbc.
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Chishakwe, NE. 2010. Sout/rcm Africa sub-regional framework 011 climate c/ra11gc
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Elum, Z, Madise, D a Marr, A. 2017. Farmer's perception of climate change and
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Environmental Manageme_nt - A business management approach
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Godsmack, C. ldam, J, Van der Merwe. F, New. M a Rother, H. 2019. Priority
focus areas for a sub-national response to climate change and health: A South
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IPCC. 2007. Climate c/ra11ge 2007: Impacts, adaptations and v11lllembility. Available:
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UNFCCC. 2014. Kyoto Protocol. Available: Lmp://unfccc.int/kyoto_protocol/
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277
Learning Outcomes
Af!e.r studying this chapter, you should be able to:
• elicit and define the. important terms relevant to climate change and the impact
of human activity on the environment
• explain the importance of biodiversity
• briefly explain the impact of various industries on the environment
• explain the differences between natural and agroecosystems
• identify and explain the impact of the great ocean conveyor belt on climate and
how this acts as proof of the human-induced climate change phenomenon
• state the causes of climate change and how climate change impacts on the
Mvlronment and on eronomies
•
provide a brief overview of the appllcable legislation, agreements and protocols
•
Implement businessstrategles that will mlnimlse the impact of Industry.
Ove rview of this chapter
The focus or this chapter is the impact of human activity on the environmenL
These activities, botl1 industrial and agricultural, can be reduced by implementing
responsible business practices. The aim ls lo explain climate change at a very basic
level and to expand on the role businesses and iodividuals can play to limit the
emiss.i on or greenhouse gases. The responsibility businesses and individuals liave
towards the environment will also be discussed.
14.1
Introduction
II is io1portanl to understand tlial human activity has a great impact on the
environmenL Understanding the extent or this ioipact and how it can be managed
is the first step towards becomiog responsible global citizens. This cliapter provides
a brief overview of the daniage human activity is inflictiog on the environment
as well as how tliis damage might be mitigated and possibly reversed. In order to
understand tlie foll extent of it, iliis cllapter wW iovestiga1e the Impact of iodustry,
agriculture and human-induced climate change.
Fourteen: Impact of industry and agriculture on the environment
14.2
Impact of industry on th e environment
14.2.1 Important ddinitions
In chapter I. lhe term ·environment' was de.fined as the surroundings within which
humans exisL TI1ese are made up of the land, water and atmosphere of the earth;
micro-organisms, plant and animal life, or any pan or combination of this; the
interrelationship among and between them; and lhe physical, chemical, aesthetic
and cultural propenies and conditions of the foregoing that influence health and
well-being. Before we can look at Lhe impact Lhat indusuy bas on Lhe environment,
we fust need to define the term 'industry'.
Industry includes commercial activities. commercial agricultural activities.
mining activities and the operation of power stations. The economic sectors in
South Africa that can be classified under indusuy are: foresuy and fishing; mining ;
manufacturing; electricity, gas and water supply; construction: trade; transport.
storage and communication; real estate; and community, social and peisonal services.
In orderto understand the impactofindustryand agriculture on the environment,
the terms ·ecosystem' and ·agroecosystem· also need to be defined.
An ecosystem is defined as any self-sustaining and self-regulated community
of organisms and tlte interaction between such organisms wiU1 one another and
with lheir environment The National Environmental Management Act 107 of
1998 (NEMA) defines an ecosystem as a dynamic system of plant, animal and
micro-organism communities and their non-living environment interacting as a
functiona l unit. Ibis phrase was first used by Roy Oapham in an attempt lo de.fine
tl1e physical and biological components of an environment in relation lo each other
as a unit. When looking at the definition of an ecosystem. it is notable that it is
made up of living organisms - plants, animals and micro-organisms. The definition
also includes their environment - soil, rock, water sources, and lhe atmosphere of
1.his system. FinaJly, rhe definition of an ecosystem looks at the interaction of lhese
living organisms wich the physical environmeni and vice versa.
A natural eco~-ystem provides the environment with oxygen, produced by trees.
and with clean waler, filtered by wetlands.
An agroecosystem. in contrast. is an ecosystem that has been changed for
agricultural activity. IL is usually a farm or field and its boundaries have bee.a seL
for the purpose of agricultural activity. Agriculture Is defined as the science, art.
or practice of cultivating lhe soil, producing crops, raising livestock. and preparing
and marketing the resulting product.
Biodiveisity is the variety of llfe on earth. It includes all organisms, species.
and populations, the genetic diversity among these, and their complex assemblages
of communities and ecosyslen1s. If we look at lhis definition more closely. it
highlights three levels of biodiversity: genetic diversity, species djveisity and
ecosystem diversity. Different genes in all living tltings, different species within a
natural environment and different environments making up the earth are vital to
tl1e survival of everything on earth. Biodiversity is important for the sustainable
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Environmental Management - A business management approach
production of crops needed for food and for indusay components. Biodiversity
is also important for the ecological services provided by a natural e<:osysrem and
the biological support ii provides to the production of crops. Finally, biodiversity
protects against ecosystem instability. The loss of biodiversity is caused by habitat
loss, changes in ecosystem structures, the invasion of alien species, unacceptable
agricultural practices, over-exploitation of natural resources, pollution and
degradation, deforestation, desertification, illegal trade in species, and finally by
climate change. Wegal trade in species is the second biggest threat to wildlife, after
habitat loss.
14.2.2 Impact of industry an the environment: overview
The impact that these activities have on the natural environment and on resources
depends on the number of people who have access 10 these resources and who
make use of ii; it also depends on the rare of consumption. Population growth is
at a record high and it is therefore understandable that resource consumption will
bt> very high as well For many yt>ars there were no practicl'S in place to ensure
that resources were consumed at a sustainable rate. The greatest impact on natural
resources is usually seen in urban areas where there are larger quantities of people
in a small space, consuming immense quantities of resources and producing vast
quantities of waste with little regard for the environmental impact of their aclions.
TI1e more advanced a civilisation is, 1.he more waste it produces.
Any economic activity relies on natural resources in direct or indirect ways
and all economic activity impacts on natural resourcl'S in direcL and indirect ways.
These economic activities cannot Just be stopped since they contribute to job
opportunities and income for South Africans. Unfortunately the benefits are only
calculated in terms of monetary value and the da.mage Lo the natural environment
is not calculated. If natural resources are over-used and depleted it will have a cost
on the future wealth of the counay, but this is not re.fleeted in calculations that are
done today.
Some industries have commercialised the direct use of natural resources. These
industries include agriculture, fishing and forestry, and other natural product
industries. Otber sectors rely on natural sources at a subsistence level For lhe most
basic needs of food, shelter, fuel and medicine. Even lhese basic survival activities
can cause unsustalnabilicy and degradation.
Ecologital processes are responsible for lhe direct transformation of natural
systems. These ecological processes include tl1e generation of soil, pollination
of crops, pest conlrol and water purification processes. Many industdes rely on
Lbese processes, but al the same lime tbey are over-exploiting these processes or
inadvertently cle.'itroying lhe components that make these processes possible.
Pollution is not tbe oaly damage lhat occurs in the process of over-exploitation.
Any changes in tbe physical landscape can cause long-lasting damage by caming
land degradation . As explained earlier in this chapter, indusay and other buman
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Fourteen: Impact of industry and agriculture on the environment
related activities impact on the environment The impact of these activities on
biodiven,icy can be summarised in tbree broad categories: habiral loss and
fragmentation; over-exploitation of species; and the introduction of invasive alien
species. Habitat loss is caused by the expansion of buma.n activity. specifically
in food production activities, to meet tbe increasing demands of an increasing
population. Research bas shown that about 85% of species are under serious threat
as a direct resul t of habitat Joss.
14.2.3 Impact af industry an the environment: fisheries and forestry
Ftsheries and forestry industries cause damage ro the environment and biodiversity
by removing indigenous vegetation and replacing it with species that grow faster
and are more commercially viable since their yield is greater. Sometimes indigenous
species do not have to be removed; simply introducing alien species overwhelms
and destroys indigenous species. Fishing gear and destructive fishing practices
cause damage 10 the physical environment. These destructive practices include
bottom trawling, cyanide fishing and dynamite fishing. Endangered species are
accidentally caught up in commercial fishing activities aimed at tl1e harvesting of
other species.
Most fishing activities are unsustainable and threaten the future of many
species. Oceans do not receive sufficient protection and it is very difficult to police
those areas since tl1cy cover such a vast area of the planet. Fish farms, often cited as
a solution to unsustainable ftshing activities, also contribute lO the damage of the
natural environment Fanned fish threaten local species by invading their habitat
and introducing parasites U1at are increasingly resistant. The fisheries indUStry
is characterised by the waste of fish. Not everything !bat is caught will be sold
and eaten and these practices have placed many marine species, such as dolphins,
sharks and coral reefs, under threat
The impacl of the fisheries industry is worsened by pira te fishing vessels who
have no respect for laws and 1realies, as well as the harvesting and sale of juvenile
fish species, that have not yet had the chance to reproduce.
14.2.4 Impact af industry on the environment: mining
Mining is one of rhe major industries in Sou ch Africa; mining activities have
a large in1pact on the natural environment, rivalled oaJy by local and regional
municipalities in this regard (this is discussed in further de1ail below). Oace an area
has been mined, ii will never be the same again. Milling companies can only try to
return Lhe environment to some state of functionality after their operations have
ceased. The impact of mining activities on U1e natural environment has resulted
in regulations and legislat.ion specifically for the governance of this industry.
Mining activities L.iuse great disturbance to the laud and physical habitat; they
make use of great amounts of water that need to be removed from somewhere else.
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Environmental Management - A business management approach
Chemlcals and run-off from mining operations can poison whole water systems.
including underground wacer. Any processed material has the potential 10 become
a leaching llazard given the right circumstances. One example is rainfall which
falls on these material dumps, causing them to leach into the groundwater. This
occurs when fadllUes are not buill according to regulations and il1ese fadllties are
not lined or the membrane is damaged.
However, even strict regulations and legislation do 1101 prevent business
practices that damage the environment. Many companies deem it too expensive to
treat waste by-products as per regulation and Lhey simply store these dangerous
materials in big reservoirs that pose a danger to the environment in numerous
ways. One of these hazardous elements is chromium(VJ] (CR+6), which has been
classified as a carcinogen. Carcinogens are cancer-causing agents. Chromium(VIJ is
used in many industrial and metallurgical processes and water contaminated with
cl1romium(Vl) and its by-produces are very dangerous 10 the health of people and
animals consuming such water.
Steel and gold mining has resulted in serious incidents of poUution. Goldficlds
have been re;ponsible for the contamination of groundwater around the
Witwatersrand basin in southern Gauteng. Past mining activities have led to the
pollution of three basins to such an extent that they now need to be treated. Their
levels are rising to environmentally critical levels and risk the contamination of
natural groundwater resources a nd the rest of the area wiilt water that contains
high levels of acidic sulphur, as well as W.g h levels of various heavy metals. Any
of these components wW have seriously adverse effects on both the environment
and human healilL The Department of Water Affairs has built new water treatment
plants in response to tWs. These plants are said to be the biggest of their kind in the
world. Al this stage, the cost of treating water in these facilities to acceptable levels
so that it can return to rivers runs in the area of R2 IO million rand, excluding the
capital costs lliat have been incurred.
Coal mines have also caused serious damage 10 the environmenL In 2012, the
water in the BoesmanspruH Dam, which supplies water to the town of Ca rolina, was
contaminated by acid mine drainage from the nearby mining enterprises. It took
over seven months to get the problem resolved and funher investigation revealed
that nearby wetlands had been heavily contami:na1ed as well. The contamination
was allegedly caused by a rain stoon, wWch caused an overflow of the holding
ponds at the coal mine.
14.2.5 Impact of industry on tile environment: energy and water supply
Electricity. gas and water supply activities require a lot of infrastructure. In order
to supply water. it fim needs to be gathered or pun:hased. The construction of
dams and the infrastructure required to tranSfer water impacts in the same way as
other construction activiUes impact on the natural environmenL However, there are
additional impacts on the natural environment further downstream from where a
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Fourteen: Impact of industry and agriculture on lhe environment
dam has been constructed. Most of the time there will be a drastic reduction in the
amount of water that moves through these environments in ~-omparison to before dam
consuuctio1L However, in times of heavy rain when the dams are filed and threaten
infrastructure, noodgaies will be opened, nooding the environment down river.
Power generation contributes to global warntlng and is a great contributor
to pollution. El~-i:ricity is generated by burning fossil fucls. Coal, oil and natural
gas [fossil fuels) are tl1e main source of CO 2 pollution; these emissions contribute
directly 10 the climate change crisis faced today. The ash produced by the burning
of coal also gives off very Wgh pH levels that contaminate both the air and soil.
Oil and gas refineries and the transportation of these valuable resources are
a grave threat to the natural environment as it nol only involves the mining of
na1ural resources, but also cacries wlih it tl1c constanl tbrea1 of pollution.
The energy problems experienced in South Africa are often reported in the news.
TI1e cost of fuel and electricity continues to increase at a rate tliat is unprecedented.
South Africans experience black-outs, or loadshedding, on a regular basis, as well
as fuel shortages ai times. Although government is funding numerous research
projects on ahernative energy production, and new dl'velopments arc focusing
on constructing green buildings, a definitive solution to the ever-growing energy
problems in South Africa is still a long way off. South Africa is on Ute right track
though; this was proved by the launching of South Africa ·s first solar power plant
in 2015.
The public sector, wWch supplies energy and waler 10 the population, is one
of the worst polluters. All services rhar arc provided by various municipalities
creale wasie and carry tl!e risk of pollution. Ii is just as important tha1 government
institutions be held accountable for their environmental impact as it is for businesses
and individuals to be held accountable. Local, regional and national governmental
institutions was1e precious resources by duplicating services and ignoring
the importance of envi ronmental management. TI1ese institutions determine
development and population planning and in the past numerous projects have
been undertaken with linle regard for the environmental impact of their choices.
Besides Ute provision of elecuidty. gas and water supply, domesiic households
also require waste removal and a range of other economic services, all contributing
to the impact humans have on the natural environment.
14.2.6 Impact of industry an the environment: construction
The construction of housing and other infrastructure can only be achieved by
clearing land. This means the removal of natural species through deforestation
and U1e removal of layers or natural soil Natural resources are required in the
process of construction; the construction indusuy can easily over-exploit these
natural resources, contributing 10 habicat fragmentation. Once construction bas
been completed, alien species may be introduced, dellbera1ely or inadvertenlly, in
the gardens of these newly constructed areas.
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Environmental Manageme_nt - A business management approach
The construction industry needs space in which to develop new houses, industries.
etc. This is sometimes achieved by drying wetlands. Wetlands acL as nature's filier
and play an important role in purifying water. lf wetlands are destroyed, lbere is
a loss of habitat for indigenous species and also a loss of clean water. Pollution
increases in lbese areas due io increased human activity.
Providing housing and other infrastructure for people disrupts natural ecosystems,
which, in tum, has an adverse effect on lbe future existence of numerous species.
14.2.7 Impact af industry an the environment: trode and tourism
As wilb most olber economic activities, trade and tourism require lbe construction
of infrastructure. Tourists visit areas renowned for their natural beauty and take
U1eir vehicles off-road in order to get to these areas. They cause disturbances to me
natural environment and pollute lbese areas. Tourists pay exorbitant amounts of
money for sports such as recreational fishing in order to obcain species that they
deem collectable. Although tourism does have its advamages when it comes to
environmental education and the creation of awareness regarding environmental
issues, there needs to be a balance.
14.2.8 Impact of industry an the environment: transport
So many industries and individuals make use of transport mat ii can be classified
as an industry. ln the process of making lra nspon possible, roads a nd railways
need to be constructed. As with all construction processes, a lot of damage Is done
by reshaping lbe land and removing indigenous species. Additional traffic through
natural areas contributes to pollution and threatens the biodJversity of lbese
affected a.reas. Roads causes habitat fragmentation by changing lbe landscape. If
roads are built through a natural area, the affected species can no longer reach the
other side of lbe road, for example in search of water, wilbaut exteru.ive risk. These
are all Factors that affect the biodiversity of an area, but which are seldom taken
into accoum when there is profit to be made.
14.3
Impact of agriculture on the environment
In the process of human activity, people have set boundaries U1at would not have
occurred naturally. These boundaries are devised for the purpose or producing
agricultural products effectively. The set boundaries usually have no correlation 10
the boundaries that a natural ecosystem would bave.
The characteristics of a natural ecosystem are as follows:
•
They are relatively stable over time without input or management.
•
Nutrients are recycled.
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Fourteen: Impact of industry and agriculture on the environment
•
•
There is a structured trophic system.
Nutrients are harvested by a variety of plants.
•
Soil organisms enable decomposition 10 occur, providing nutrients and
organic matter.
The characteristics of agroecosystems are:
•
•
managemeru and buman control;
human intervention;
•
•
disturbance;
regulation of the system;
•
habitat fragmentation: and
•
variability.
14.3.1 Differences between an agroecasystem and a natural ecosystem
Diversity a11d comple.ri1y
Agroecosystems are simplistic when compared 10 natural ecosysterns. There is very
little diversity in terms of the species involved and in the way these species are
arranged within a physical space. The species that are involved in an agroecosystem
may be genetically modifed; even if they are not, there is very little genetic variety
since the same crops remain in the same physical space. In an agroecosystem,
maize, wheat. rice and potatoes make up most of the food that is consumed on a
glob a I scale.
Biomass
Biomass is defined as the amount of living matter in a unit area or volume of
habitat or the biological material derived from living organisms.
The biomass of livestock in South African agriculture is much greater than
the biomass usually present in a natural ecosystem, for example a greater number
of cattle per hectare will be found in an agroecosystem U1an could be supponed
in a natural ecosystem. This happens because the goal of agricultural activities is
Lo gain the most economic profit possible, even if it means that extensive buman
interference and management will be required. The implication of Lhis increase
in biomass is an increase in resources required to sm-iain the agroecosystem, an
increase in the pollution and waste produced, and a substantial decrease in the
natural nutrients available in the agroecosystem.
Disruption
Natural disasters such as floods, lire, droughts, ere are pan of the natural ecosystem.
When these disruptions occur, it boosts the growth and survival of the organisms in
these ecosystems. A good example is the veld fires that run rampant in the nonhern
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Environmental Manageme_nt - A business management approach
pans of South Africa during the winter months. The veld ends up blackened with
seemingly nothing left alive, buL when the first rains come the grass grows back
stronger and healthier than before. There are even certain Protea species 1ha1 only
germinate after they have been exposed lo veld fires.
However, these natural disasters wreak havoc wiU1 agroecosys1ems, completely
devastating the delicate balance that exists in these man-made environments.
Agroecosystems have no natural built-in protection, since many of the species are
001 native to the region.
Erosion is also norably higher in agroecosystems than in natural ecosystems
since hwnans remove most of Ute built- in protection provided by forests and oilier
natural habits when an agroecosystem is prepared for agricultural activity.
Pollution
Agroecosystems make use of pesticides and fertilisers., both of which do not exist
in a natural ecosystem. This noi only affects the agroecosysrem in wWch these
pollutants are being used: the run-off from these high amounts of phosphor
and potassium from ag.ricultural activities also infects surrounding ecosystems,
sometimes poisooing water for hwnan consumption. Agroeco~-ysiems also produce
more waste than is found in natural ecosystenis; this waste sometimes contaminates
the surrounding wild ecosystems.
Pesticides and herbicides have been proven to cause mutations and fenility
problems in aoimals. IL is postulated that they can cause serious health problenJS
in humans as well.
Mn11ag~me111 011d comrol
Almost everything about an agroecosystem is controlled and managed by hwnans.
This includes the 1ypes of plants and anin1als that will be cultivated or rai~ed,
resources to be invested in the area, the pesticides 10 be used and the reproduction
of U1e animals and plants. In a natural ecosystem, there is a self-regulating process
in which nutrients from the soil are used by plants; these plants are eaten by aoimals
and insects and, in so doing. the animals and insects ingest the nutrients. Nutrients
are returned 10 the soil wbeu aoimals and plants die and decompose. Tilis natural
system requires very litUe management and interference, while agroecosystems
require careful management to ensure Uiat the soil is not just stripped bare, but that
enough nutrients are returned to Uie soil to ensure successfu l crops in the future.
Bou11darii-s
As explained in the definition of agroecosystems, the boundaries of these systems
are man-made and are determined by economic need. Natural ecosystems have
borders that are blended togetlier very well. Usually one would not see clear
lines separating boundaries in natural ecosystems. Living organisms have greater
freedom or movement between these diITereut systenJS. The impact of rhese manmade boundaries is called habita t fragmentaiion.
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Fourteen: Impact of industry and agriculture on the environment
E11erg_v sources and cycles
In light of Lhe factors discussed above, it is clear that there will be differences
in the energy cycles of agroecosystems compared Lo natural eco~y.aems. TI1ere
is no complexity lo I.be structure of an agroecosys1em; all locoming energy is
diverted 10 one purpose - produciog economically viable produce. Very llttle
nutrition is transferred back inlo the soil and surrounding areas and the cycle of
life is very limited. The energy from dead and decaylog organic matter is much
lower in man-made ecosystems than in natural ecosystems. Even solar energy is
d1annelled differently since agroecosysrems are designed io minimise competition
and maximise the effectiveness of the system, in order ID produce the maximum
amount of the desired crop.
Human-lotroduced crops require much more water than would be consumed
by the natural environmenL Despite the amounts of water needed to irrigate crops,
trillions of litres of water are wasted lo these processes. These losses occur due lo
unprofessional and unsustainable agricultural practices and irrigation systems lha1
leak water.
Alii-11 plams
The lo1pacl of lovasive alien plants, louoduced for agricultural purposes, may be
irreversible lo some cases. Invasive alien species are usually lotroduced as a result
of human activity. The search for better food resources tl1al can feed more people
with less energy lopul leads 10 the introduction of foreign species for cultivation
and huntiog. Invasive species threaten the habitat of native species and can cause
1he.ir extinction. Invasive alien species also cause irreversible damage 10 ecosyste.tns.
14.3.2 Implications of environmental impact by human activity
There are some serious consequences for the damage that people have done 10
the environment. Acid rain and oz.one depletion are just the tip of the iceberg.
Climate change has caused unpredictable weather pauerns; many regions tha1
were previously tropical, now receive linle or no rain and vice versa. This bas led
10 locreased locidents of water scarcity, extreme □oods and extreme droughts,
leading to a situation where consumers simply have to pay more for even the most
bask resources.
14.4
Business strategies to minimise industry impact
Simply speaking, the best solution for minimising the impact of human activity
on the environment will be 10 stan thinking before acting. Every business and
every individual will need to de1ermloe rhe threars over which tl1ey have innuence
and then take action to put policies, procedures and habits lo place to llinil
these threats.
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Environmental Manageme_nt - A business management approach
For businesses. the first step is to gather as much information as possible from
impact assessmems and ecological assessments. Awareness of base-line data and
how measurements change over time is vital. Eve:ry organisation needs indicators to
measure their impact on the environment For example, in the Florida Everglades.
U1e population of alligators is used as an indlcator for Ute entire ecosystem. If ilie
aUigator population thrives and numbers increase, iris safe to assume that the rest
of U1e ecosystem is doing well.
In a business context, awareness and education programmes are the best ways
Lo inform e.mployees and stakeholders.
14.4.1 Pollution prevention
la eve:ry Slep of a product"s life cycle there are opportunities for pollution prevention.
The same can be said for the daily activities of any business organisation, for
example a bu~iness can conduct a pollution prevention audit that will produce a
tailor-made repon on all the areas where waste can be reduced or elinlinated.
Pollution prevention Is the =1>onsibility of everybody in an organisation. All
employees need to be encouraged and their behaviour controlled and rewarded in
order to ensure U1at they behave appropriately and that lhls modified behaviour
continues. Pollution prevention needs to become pan of their daily habit and be
Laken into account in all future straregic planning. Pollution prevention should not
just be intplen1ented in the manufacturing processes, but also in administrative
processes and office functions. fl is relatively e-.isy to determine the specific actions
ilial will contribute to pollution prevention; however, the real challenge will be to
ensure consistent pollution prevention by employees.
14.4.2 Design for the environment
Designing for the environment (DIE) was prompted by stricter regulations. These
regulations forced businesses to take environmental issues more seriously and
be more innovative in all aspects of ilie manufacturing process. DfE requires
organisations to look upstream in their manufacturing and completely rethink their
processes, with the conservation of energy resources and raw materials in mind.
Co11suming fewer resoun:es in onler to generate less waste is at the hean of this
philosophy. In the process of manufacturing responsibly. businesses also need to
focus on producing goods iliat are reusable or can be successfully recycled.
Designing for the environment can be divided into the following steps:
I.
Evaluate the product life l-ycle.
2.
Determine the goals for the DfE process.
3.
Agree 011 the principles Ute organisation would like to implernenL
4.
Implement a life cycle management system.
5.
Develop the DfE process.
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Fourteen: Impact of industry and agriculture. on the environment
Each step in a product's life cycle, [rom the acquisition of raw mate.rials to the
disposal of the product at the end of its life cycle, needs to be considered.
The ideal goal of D[E is lo attain a balance between environmental concerns,
monetary goals and otber stakeholder issues, sucb as compliance, social issues and
lega l responsihilities.
14.4.3 Benchmarking and strategic design
Toe ideal way lo minimise the impact of business activities 011 Lhe eitvironment
is 10 incorporate it in company strategy from 1.b e get-go. By analysing the
long-term goals of a business. top management can integrate environmentally
responsible goals into its existing organisational goals. In this process of reflection,
a business can also investigate whether its ex.lsting environmental management
system is eJTective and reDective of its chosen environmental strategy. Once the
processes have been re-evaluated and implemented, the business can use both its
historical performance and its ideal world model, against which to benchmark
its per fa rmance.
Another part of a business that can make a vital contribution in terms of
environmenta l responsibility is its human resources department. Incorporating
principles such as work ethic and environmentally responsible decision-making
in personnel training will be greatly beneficial to the business in achieving its
environmenta l strategies. These employees can also be trained in the International
Organization for Standardization's family of standards, ISO 9000 (quality
management) and ISO 14000 (environmental management) to allow them the
opportunity to gain awareness of environmental and quality issues and where the
business stands in terms of its long-term goals and strategies.
Once the organisational strategy has been determined and the long-term goals
set in place, it is imponant to get tbe business to pull 1ogetber and commit to
anaining its set goals. Gaining a commitment to addressing environmental issues is
vital Both the highest levels of management and the lower-level employees need Lo
be committed and to demonstrate this commitment actively. A letter signed by the
CEO or an annual environmental report can motivate employees towards attaining
the organisation's environmental goals. Compiling annual reports is mostly
a voluntary gesture, but over tl1e years it has begun to carry more weight with
stakeholders to enable them to see how a business is achieving its environmental
goals. The information contained in an annual report can be used as tbe benchmark
against which an organisation will evaluate each consecutive year·s performance.
Other stakeholders, such as customers and suppliers. also attacb value to these
annual reports and to the fact that an organisation is working to make a difference
to the environmenL Improving product packaging and advertising to reflect the
environmental principles of an organisation could target a whole new customer
base. as well as improve customer retention. Since toarketing and sales managers
are more interested in sales figures than in the environment. an environmental
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Environmental Manageme_nt - A business management approach
report should also include some of U1e harder issues such as product sales and
packaging in an effort ro win such managers over to more environmentally friendly
business practices.
14.4.4 Regulatory requirements
11 is important to keep up to date with the latest industry-related regulatoiy
requirements. There are numerous ways of getting hold of these, including
subscriptions to regulatory boards, anendance or woi:kshops aud confere.111:es
and membership of professiona l bodies. Information on regulatory requirements
is contained in laws and in documents and books on regulations. Government
departments and international organisations such as the United Nations are a
treasure trove of lnformatiou on anything environmental and complian'--e related.
Some publishers provide a loose-leaf service, whereby one can purchase legislation
and regulations and, for an annual subscription fee, receive any updates. lo South
Africa, the two biggest providers of this service are the publishers, lexlsNexis
and Juta. Newsletter subscriptions will provide up-to-date information and inform
subscribers of pending and possible changes in regulations and legislation.
Voluntaiy compliance to non-compulsoiy regulations shows even more
commitment towards environmental issues and provides business with the
opportunity to stay al1ead of regulatoiy requiren1enlS. Instead of businesses being
Laken by surprise by new requirements, and spending a lot of money on meeting
these requirements, organisations can anticipate U1ese regulations and implement
them in a timely fashion. IL is also important to a.im at exceeding expectations.
instead of just meeting the set minimum requirements to Ute letter. This principle
needs to be applied to all business un.its in an organ.isation. The focus should
not simply be on compliance or on qual.ity, but also on the people within the
organisation doing things correctly and understanding why it needs lo be done
that way.
14.4.5 Root caus~ approach
A thorough audit of a business·s EMS will reveal some of the root causes of the
problems the organisation Faces. These audits provide organisations with the
information they require ro make Lbe ci1anges necessaiy for their environmental
goals Lo succeed. The root cause approacl! is aimed at fixing the core issue and
not simply fixing the symptoms. For example, if waste is not properly stored and
disposed of, U1e process that produces Lbe waste needs to be Investigated and
the employees invo lved should be tra.ined to manage hazardous materials more
responsibly. Simply fixing messes after Lbey have been made will not solve the
problem in Lbe long run. Being able to address root causes will be well worth the
money a business needs Lo spend on conductin.g an environmental audiL
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Fourteen: Impact of industry and agriculture on the environment
14.4.6 Troining and development ond awareness
Training and development is vital to an organisation's success in addressing
environmen1a l issues, as is awareness. Employees need to be aware of the proper
usage, storage and ctisposal procedures for each hazardous substance they work with.
But euvironmental training requires more than s.imply awareness and training in
hazardous substances. All employees need to be aware of emergency procedures and
how to take the correct preventative measures, so thai these emergency procedures
will not be necessary. Employees should receive training in both hard skills, such
as training associated with dealing with hazardous materials, as well as training in
soft skills, such as environmemally responsible decision-making. If an organisation
has a philosophy of simply complyin.g with the minimum requirements, this atlitude
wW be reflected in its eu1ployees. However, if an organisation has an altitude of
exceeding minimum compliance regulations and behaving in a manner that is
environmentally responsible, this attitude will also be conveyed by its employees.
14.4.7 PDCA
The POCA cycle, also known as the DCilling cycle, has already been discussed
in chapter 8. The plan-do-check-act cycle is a common prob lem-solving
technique U1at was developed in the 1930s. The POCA cycle is also applied in
ISO 14001. This cycle provides a business with a sys1ematic system on which to base
its decision-making, thercliy structuring its information gathering, implemen1a1Jon
and decision-making to maxirnwn efliciency.
14.4.8 Rroucing greenhouse gos emissions
There are four ways 10 reduce greenhouse gas emissions:
I.
Reduce the demand for emissions-intensive products and services.
2.
Increase the efficiency of manufacturing processes so that they are nol only
financially profitable, but emissions are reduced as well
3.
Reduce deforestation and 01ber human activities that inctirectly impact on
greenhouse gas emissions.
4.
Focus on technologies that are more environmentally friendly and em11 fewer
greenhouse gases. These low-carbon technologies can be irnplemcnted at any
stage of the manufacturing and supply chain process.
Initially. the cost of reducing greenhouse gas emissions may be exorbitant, but
this is outweighed by the long- term benefits of taking global warming aad climate
change seriously.
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Environmental Manageme_nt - A business management approach
14.5 Conclusion
South Africa is currently experiencing a situation of increased demand for
decreasing resources. Population growth and technology bas led to a situation in
whlch consumption and the resulting pollution is increasing al an alarming rate.
More people need more food and more space; the more advanced a society is, the
more advanced are its needs. This in tum threatens the natural order of thlngs.
Natural resources such as air, water. soil, fossil fuels. nlinerals and living organisms
are threatened. This cycle needs to be broken in order to make growth more
sustainable. Minintislng the impact of industry and agriculture on U1e environment
starts with one person - you. Everybody can make a difference by making bener
choices and living with greater environmenral awareness.
At the level of policy e.'itabllsbment, world economic powers need to focus
on taxing carbon emissions, inLroducing policies that suppon lhe development of
clean technologies and making lhese behavioural changes as easy as possible.
All business strategies lo minimise industry impacts require a champion inside
the organisation to drive lhese new ways of thinking and of doing business.
Anybody wiU1 a passion for the environment can be iliat champion and belp to
change the world.
Review questions
l.
Explain the concept of biodiversity and its imponance.
2.
List lhe elements of the environment that are impacted by industry.
J.
List the differences between natural ecosystems and agroecosystems.
4.
Sketcb the grea t ocean conveyor belt and explain its imponance in the
climate system.
5.
Ex-plain the concept of g reenhouse gas emissions.
6.
Discuss any two business strategies 10 minimise industrial impaci on the
environment and explain how you would implement these strategies in
your organisation.
ReJere nces
Biomass Energy Centre. 201I. Whal is biomass? Available: http:/fwww.
biomassenergycemre.org.uk/portal/page?_pageid=76, 1S049Et_dad=portaL
Otishakwe, NE. 2010. Soulhern Africa sub-regional framt'work 011 c/ima1e c/ra11ge
programmes rl'pOrl. Available: hHp://www.sadc.int/ documents-publications/
show/928 (Accessed 18 December 2014).
292
Fourteen: Impact of industry and agriculture on the environment
Crognale, G. 1999. Errvironme,rtal ma11ageme,rt strategies: Tire 2/sr century
perspective. New Jersey: Prentice Ha!L
De Nooy, R. 2003. Water use fo r agriculture i,r priority river basins. World Wild
Fund for Nature. Available: assets.panda.org/downloads/agwaterusefmalrepon.
pdf (Accessed II January 2015).
OM.£. 2003. W/rire Paper 011 Re11ewable Errergy. Pretoria: Government Primer.
EPA. 2013. Basic information about chromium in dri11king water. Available: http://
water.epa.gov/drink/contantlnants/basicinfom1alion/chromium.cfm (Accessed
12 January 20 15).
IPCC. 2007. Climate change 2007: lmpacrs. adaprario,rs and vulnerabiliry. Available:
btrps://www.ipcc.ch/pdf/ assessment-repori/.../wg2/ar4_wg2_full_reporLpdf
(Accessed II January 2015).
ISO. 2009. E1111ironme11tal managemem: Tire ISO 14000 family of imemational
standards. Available:
http://www. iso.org/iso/theisol4000family2009.pdf
(Accessed 18 November 2014).
JUCN. 2011. l,111asil1e species. Available: wwwjuc.n.org/about/union/secretariat/
offices/iucnmed/i uc.n_ med_prograrnme/specles/invasive_species (Accessed 12
January 2015).
Kraljevic. A. Meng, J a Schelle, P. 2013. Seven sins of dam building. WWF
International - Freshwater Programme. Available: http://www.assets.wnf.
nl/ .•./130321_ wwf:._seven_sins_o f_dam_buildiog_lorez.pdf (Accessed 13
December 2014).
lester, M. 2013. Ta:r ralk: Carbon la:r must be erplairred lO laymen. Sunday Times
Business Tlllles. Available: www.bcllive.co.za/ ... /tax-talk-carbon-tax-muSl-beexplained-to- laymen (Accessed 18 December 2014).
McCarthy, TS a Humphries, MS. 20 13. Contamination of the water supply to
the town of Carolina, Mpumalanga, January 2012. SourJr African Journal of
Science, 109(9/10]: 1-10.
NGE. 2015. Ocean cum-11rs and climate. Available: hrtp://educalion.
nationalgeographk.com/education/media/ocean-currents-and-climate/?ar_
a=I (Accessed II January 2015).
NOAA. 2012. Climare change a11d titles. Available: http://oceanservice.noaa.gov/
education/pd/tidescurrents/ tidescurrents_effects_influences.hunl (Accessed I 8
December 2014).
NOAA. 2015. What are El Ni,io a11d La Ni1ia? Available: http://oceanservice.noaa.
gov/facts/ninonina.htrnl (Accessed 18 December 2014).
OECO. 2001. E11uironmemal indicators for agriculture: Metlrotls anti resulrs. Vol. 3.
Pa.ris: OECD. Available: www.oecd.org/tad/sUSlainable-agriculture/40680869.
pdf(Accessed J December2014).
293
Environmental Management - A business management approach
Republic of South Africa. 1989. E1111ironmental Co11sernarion Act 73 of I 989.
P retoria: Government Printer.
Republic of South Africa. 1998. Natio11al E111riro1111m1ta/ Ma11ageme11t Act 107 of
1998. Pretoria: Government Printer.
Republic of South Africa. 2008. Natio11al En11iro11111e11ta/ Ma11age111e11t: Waste Act
59 of 2008. Pretoria: Government Printer.
Sea th. SG El Van Niekerk, JA 201 I. Due dilige11CT': Witwatt"rsra11d Gold Fields acid
111i11e drairr!lge (P/rase t ), Available: hnp;/fwww.amdsbort.eo.za/documents/
J01599-0511il20Dul'Oib20Diligence%20-%20Final.pdf (Accessed 11 December
2014).
Statistics South Africa. 2013. Stats i11 brief Pretoria: Statistics South Africa.
Stem, NH. 2006. Slt"m re,,iew: Tir<' economics of climate c/range. Vol. 30. London:
HM Treasury.
The Nature Conservancy. 2015. Climate c/ra11ge t/rreats u11d impacts. Available:
http://www.nature.org/ o urinitiatives/urgen tissues/global-warming-climate
cbange/lhreats-impacts/higher-1emperatures.xml (Accessed 18 December 2014).
United Nations Environment Programme. n.d. Climate c/ra11ge. Available: www.
unep.org/cllmatecbange (Accessed 18 December 2014).
United Nations Environment Programme. 2010. Wlral is biodiversity? Availab le:
brtp://www.unep.org/wed/20l0/ englisb/PDF/810 DNERSLIY_FACT SHEET.pelf
(Accessed I 8 December 20 I 4).
United Nations Framework Convention on Oimate Change. 2014. Kyoto Protocol.
Available: http ://unfccc.int/kyoto_protocol/items/2830.php (Accessed 2.3
January 2015).
World Wide Fund for Nature. 2004. Detox ca111paig1,factslreet: Co11ta111i11atio11:
What are tire a.11i111als co111plai11i11g about? Available: http://www.ww[
eu/? 1385 I /Detox-Campaign-Factsheet-Contamination -what-are-lhe-animals
complaining- about (Accessed 28 December 2014).
World Wide Fund for Nature. 2015. About our earth. Available: http://wwf. panda
org/about_our_earrh (Accessed 28 December 2014).
294
Learning Outcomes
Afte.r studying this chapte.r, you should be able. to:
• briefly ellpla1n and depict the business environmental mode.I
• describe the components of a micro business environment
• explain the impact of environmental Issues on the micro business environment
• discuss the management of ihe Impact of environmental management Issues
• describe the components of a market business environment
•
motivate turning environmental management challenges Into blJslness opportunities
• describe components of a macro environment
• briefly discuss global environmental management disasters as long-term consequences
of globalisation policies.
Overview of this chapter
This chapter provides an overview or the integration or environmental management
with the business environment A discussion of the business environment provides
insight into the impact or environmental maoagement policy on the micro business
environment, market business environment and macro business environment
respectively.
15.1
Introduction
The goal of thJs boolt is to teach students environmentally sound management
principles. The term environmentally sound management was first used in the
National Environmental Management: Waste Act 59 or 2008, wilb specific focus
on the manageme111 of was1e. Here the lean is applied to all management activities.
Environmentally sound management is the taking of all prac1icable steps Lo ensure
1ha1 business activities are managed in a maoner that will protect people's health
and the environment In order 10 manage a business in an environmcn1ally sound
manner, U1e business environment should fi.rsi be understood.
Environmental Manageme_nt - A business management approach
15.2
The business environment model
The business environmenl can be dlvided into three general environments, namely:
the micro business environment. the market business environment and the macro
business environment TI1is chapter focuses on these three environments and their
importance from an environmemaJ management perspective.
Macro environment
Rgure_ I 5.1: The_ business ~nvironme_nt modcl
As illustrated in figure I 5.1, the macro environment encompasses both the
market and micro businl'SS environments. The components of the macro business
environment are those that a business has no control over, although these factors
have a direct impact on the busines.~. 111ese componen1s include the teclmological
environment, economic environment, politico- legal environment, demographks
and cultural environment, international environment and the ecosystem. The
markel environment consists of a business's customers, competitors, inlermediaries,
supplies and labour force. This environment impacts on the business; the business
in rum impacts on the market business environment.
The micro environment is the smallest of the three business environments.
Both the macro and marke1 business environments impact on the micro business
environment. TI1e micro business environmen t consists of everything over wWch
a business has control. TI1is includes the vision and mission of the business, the
individual business functions and the resources that a business has.
Just as the business environment can be divided, environmental issues can also
be divided into local, regional and global issues.1l1e differe.nt levels of environmental
issues need 10 be addressed at diJJerent levels of the business environment.
In respo11Se to environmental impacts on a global scale, countries have
signed conventions and protocols. On a local and regional scale, the response
to environmental threats takes the form of legislation and financial incentives.
296
Rfteen: Integrating environmental management with the business environment
Legislation translates the protocols that were signed at an international level in10
measurable and enforceable rules, aimed at protecting the environment. Even before
these protocols have been translated into law. businesses can comply by adhering
to the environmental standards compiled by the International Organization for
Standardization [ISO).
Financial incentives for businesses are achieved in the form or tax cuts.
Businesses which achieve certain environmental standards and make use of
sustainable, environmentally friendly technology will not be liable for additional
emissions taxes. Individuals have received lax breaks when Ibey purchase g=er
cars since the intple:mentarlon of enlissions laxes on new car purchases.
15.2.1 Business and the environment
Most businesses in South Africa are registered as closed corporations under the
Close Corporations Aci 69 or 191l4, or as private companies, under the Companies
Act 71 of 2008. Before businesses were regulated by legislation, they started out as
sole proprietors who traded the goods they produced for other goods or, later on.
for money. As Ute population grew, so did Ute size of businesses required to provide
the necessary goods and services. Businesses, driven by population growth. grew
into the global economic systems we know today. The indus'trial revolution brought
with it a mechanisation or production systems, replacing animal and human labour
with machinery. Processes that were driven by wind and water energy, such as
mllling plants, were also replaced with machinery. Machinery was first driven by
coal and lire and later on developed into electricity-dependent processes.
Businesses exist because shareholders perceive value in such enterprises. The
goal of any business is to provide products or services in exchange for profit. When
businesses prosper, all stakeholders are supposed Lo gain from their prosperity.
Stakeholders include shareholders, employees, clients, suppliers and the surrounding
community. Clients share in the prosperity of a successful business when prices are
more competitive and products are or a Wgher quality. Sliareholders gain a profit,
not only for today but also the foreseeable future. Suppliers gain the continued
business from such a profitable business venture and communities surrounding the
business will see an improvement in their standard of living.
However, we are currently facing a situation in which business developmen1
has not been managed sustainably; this situation ha.~ been exacerbated by
globalisation. While Friedman postulated in 1970 that the concern or business was
not with social or political issues, but only with Ute goal or maximising profits,
this has since been proven 10 be untrue. Although many businesses still continue
as U1ough this statement is absolute, the truth is that everybody is responsible
for implementing sustainable business practices. This is evident in the growing
recognition of the King repons and the stricter legislation that follows in their
wake. All major organisations now Include corporate social responsibility as part
of the.i r annual reports.
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Environmental Manageme_nt - A business management approach
15.3
Environmental management and the micro business environment
As explained In U1e introduction, the micro business environment. is Ute part of
a business environment over which an individual business has the most influence
or control TI1e micro environment influences Ute market and macro environments
to a limited extent. but is greatly influenced by factors in the marllel and macro
environments. In sbon. the micro business environment consists of the business functions
of an Individual business, as well as the resources wiUtin that bminess's control.
15.3.1 Components of the micro business environment
A micro business environment consists of the following businl'SS functions:
•
General ma11agemenr. General management activities include all activities U1at
are conducted to oversee and direct all the other business functions that will
be discussed in thls chapter. Traditionally these activities include planning,
organising, le:acling and controlling activities. From an environmental
management perspective, such activities are divided according to the Deming
wheel: plan-do-check-act The principle beliind born Uiese scliools of thought
is similar, as are the eventual goals that lbe.~e activities ainl lo acltleve.
Environmen1al management systems use Uie terminology as it appears in the
Deming wheel so it will be beneficial for managers 10 undemand this cycle
in order to inlplement clianges in the organisation heller. Leadership and
management skills form an Integra l part of general management functions.
•
Operario11s 111a11agemem. Operations management focuses on activities that
allow a business to supply cus1omers with products and services. Operations
management involves activities such as the design of products and services,
the delivery of sucli services, the manufacturing of products, planning for
demand and designing production syslems.
•
•
•
298
Adminisrrntille ma11ageme11t. The main goal of administrative management
lies in the atlrninJsrration of information. Information is recorded, aoalysed
and reported. Office management also falls under Uie responsibilities of this
management function.
Marketi119 ma11ageme11r. Marketilng management can be summarised as
providing the right products at the right price to the right people. The main
focus of marketing management is the achievement of customer satlsfaclion
by balancing customer oriemation, profit orientation, ~-ystems orientation
and social responsibility.
H11111a11 n'So11rces ma11age111t'11tc Human resources management is responsible
for everything that has to do witlt personnel. Appointments, training,
payment and retention of personnel all fall under l11is management function.
Human resources management is responsible for placing the right people In
the right positions.
Rfteen: Integrating environmen tal management with the business environmen t
•
•
•
Fi11a11cial ma11ageme111. The financial management runction Is responsible for
aJI financial activities within a business. Financial management determines
the best price to ask for a product in relation to the costs involved in
production, marketing and selling these products. This function manages
cash flow and asset acquisition. It provides management with projected
earnings as well as projected costs.
Purcl,asi11g a11d supply c/,ai11 111a11ageme111. A1J businesses require resources
in order Lo dell ver their products and services. The purchasing runction
focuses on delermining the resources needed, the acquisition nf such
resources. and negotiating with suppliers nr such resources. These purchases
range from regular perishables to larger, more expensive purchases. Any
management functions that are contracted out to external suppliers also fall
under the responsibility or purchasing managemenL
Public relations 111a11agtm1e111. Public relations management is a vital function
relating to the public view of a business. A1J communications to the public
should be either wrillen or reviewed by lhe public relations manager. The
public relations manager builds relationships with many of the community
stakeholders, maklng it easier to communicate information about the
business to the public.
The nex:t section discusses each of these business functions in rerms of bow tlley
relate to current environmental issues.
15.3.2 Impact of environmental issues on the micro business environment
Environmental management issues that have come about due to unsustainable
business practices have forced businesses to change their policies and practices.
These environmental issues include the scarcity and pollution of fresh water, food
shortages, soil erosion and soil pollution, desertification, climate change, and the
decline of wetlands, coral reefs and natural ecosystems. Socio-economic issues, such
as overpopulation, unemployment, lack of access to safe water, food and sanitation
services, and unpredictable power supply have also led ta unsustainable business
practices. The various levels of management can make an impact as follows:
•
•
General 111a11ageme11t. As stated earlier, leadership and management skiUs
form an integral part or general management functions. This me.ans that
the capacity to lead employees and other stake.holders to more responsfble
business practices lies within Lltis manage.me.al runction. Manage.rial skills,
such as technical, interpersonal, conceptual, diagnostic. coinmunication.
decision making and time management sic.ills will all help to transform the
way that business is conducted.
Operatio11s 111a11ageme11t Environmentally responsible business practices
wiU increase awareness, reduce safety and environmental hazards and
thereby lead to a signilicant decrease in operational risk faced by operaiions
299
Environmental Management - A business management approach
managers. Since operations management is responsible for so mucb of tbe
manufanuring and service delivery processes, this managemenr function
exerts a lot of control over more responsible business practices.
•
Admi11is1ra1ille 111a11age111err1. Administrative management is responsib le for
tbe administration of information. Information can be administered in ways
lhai are paperless and more environmentally friendly. lu service businesses,
office management could be the one function tbat will have rhe greatest impact.
•
Marke1i11g ma11ageme11t. In terms of environmental management. ma.rketing
managemem is re5J>onslble for marketing socially acceptable products.
Tbe main focus of a business cannot simply be on the tnrudmisation
of profits. A business o rganisation forms part of a larger community. and
has a resµonsibiliiy to the community. This responsibility extends to all
stakeholders, as well as to ihe environment. Socially responsible marketing
means tJ1at a business will 1101 engage in business practices that are harmful
10 the environment
Green marketing is an excellenr example of socially responsible
marketing managemenL The steps that a business lakes in producing more
environmentally friendly products can be used as µart of their marketing
campaign. This includes making use of recycled materials or supporting
environmental rehabilitation projects. Eco-labelling forms part of g.reen
marketing and is discussed later in this chapcer.
•
Hrrma11 resources manageme11t. Having the right people in 1.b e righr positions
is CSJ>ecially vital if a business aims at implementing more environmentally
rCSJ>Onsible business practices. Appointing managers and employees, wbose
ethical values do not align with environmentally sustainable business
practices, is counterproductive. The down side of environmental awareness
is the cost involved in retraining all employees and management to be more
rCSJ>Onsihle and aware. Environmental policy changes need 10 be included in
employee training in order to increase their awareness.
•
Fi1w11cial ma11age111e11t. the financial management function will be able
to determine the long-term financial benefits of more sustainable business
practices. This management function will also be able to estimate the losses
tbat will occur in the event of non-compliance. Allbough a business may
choose simply 10 continue with its existing business practices. it is imponant
first 10 consult the financial manager in order ro determine wbai rhe cosr
implications to botJ1 ihe business and other stakeholders are. This can then be
compared with the projected savings that environmentally friendly business
practices can incur, in order lo substantiate the decision to conduct business
in a more environmentally responsible manner. A business with a proven
track record of environmenrally responsible behaviour will have easier access
10 capital, since many financial institutions and even competitors prefer
partnering with such businesses.
300
Rfteen: Integrating environmen tal management with the business environmen t
•
Purcl,asing a11d supply c/1ai11 ma11ageme111. Purcliasiog managers have a
lot to do with the resources procured for use within an organisation, as
well as with the suppliers of these resources. tr is withio the power of this
management function lo ensure that resources are procured in a sustainable
manner from sustainable sources, as well as pressuring suppliers lo be more
environmentally responsib le.
•
Public n?latio11s marragemelll. It is the responsibility of the public relations
manager to ensure that the organisation has a positive public image., that
environmental achievements are communkated to all stakeholders and
that they form pan of the business's marketing t--ampaign. It is also the
responsibility of U1e public relations management [unction to deal with
any fallout from environmenta l transgressions. This is not an easy issue
to manage and has caused the downfall of multinational companies. It is
therefore advisable 10 avoid situations that expose businesses to negative
environmental publicity.
15.3.3 Managing the impact of environmental management issues on business
activities
The impact of environmental management issues on business activities is managed
through management systems and integrated environmental management (IEM)
p ractices. The Department of Environmental AJTairs has published extensively on
this topic; lhls information can be accessed from the DEA website.
Businesses on the Dow Jones are rated according ro U1eir sustainable practices
and these ratings are recorded on the Dow Jones Sustainability Indices.. The Dow
Jones Sustainability Indices, lauoclied in 1999, analyses a collection of economic.
environmental and social factors. Every year lhe companies listed on the Dow Jones
SustainabiHly Indices are measured according to set standards and lhe Iist clianges
annually. The United Nations has also added sustainable environmental practices to
its millennium development goals (MDGs), in addition to the alleviation or poverty.
Environmental indicators are another way of managing the impact of
environmental management Issues on business activities. Almost anythlng can be
used as an indicator. lo an office environment, it could be as simple as mearuring
paper consumption and endeavouring to reduce this aspect. The usage of paper can
be compared on a weekly, monthly or annual basis and the endeavour to reduce paper
consumption can be incenrivised 10 encourage employees to work more sustainably.
Otber office-related measures could be. recycling practices (distinguishing between
paper, glass and foods), t-anridge consumption, camidge and consumables disposal
and reducing 1mwer usage. Otl1er environmental indicators work. on lhe same
principle, although on a bigger scale. These environmental indicators include: carbon
dioxide (CO,) emissions, cWorolluorocarbon (CFC) consumption, sulphates and
nitrates entissions, waste generation, municipal waste per capita, freshwater quality,
wa rer usage, fish production, energy supply per capita, and threatened species.
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Environmental Manageme_nt - A business management approach
Po/ides and audits
il is vital to create a social responsibility and environmental policy for a business.
The process of writing such a policy will afford business owners and stakeholders
the opponunity to take a closer look at currem business practices and decide bow
this will change in the future, in order to make their business more sustainable and
environmentally friendly.
Business organisations may also need to hire an auditing firm, which can
analyse their business in terms of iLS applicable standards (such as ISO 14000) and
assess what can be done to make I.bat business more environmentally friendly.
In the end, these environmental management tools can be used by businesses
on a micro environmental level lo make their products and waste more recyclable,
to prolong the life cycle of products produced, and 10 reduce the inputs, energy
and harmful waste.
15.4
Environmental management an d the market business environment
TI1e market business environment is divided imo four componenis: consumers,
suppliers, intermediaries and compelliors. Tue market environment influences
the micro business environment to a great extent and is influenced by the micro
business environment 10 a lesser extenL The macro business environment,
however, influences the market environment to a greater extenL Tilis means
that environmentally related decisions and movements that occur in the market
business environment wilJ cause changes that wilJ directly impact on the dec.isions
that businesses need to make in order to survive.
15.4. I Components of the market business environment
Consumers
The green consumption movement ericompasses aspects such as environmental
labelling, re-using shopping bags or finding 0U1er uses forthem, eating fresh organic
foods and supporting local businesses to minimise the impact of transporting goods.
The green consumption movement aims to illustrate that consumers do have power
and by making more environmentally friendly choices. they are exerting that power
and slowly changing the impact human activity has on the environmenL Green
consumption should be more than just a passing trend; ii should become a lifestyle
of making choices that are good for the eanh. Businesses, which advocate green
consumption and practice the principles of sustainable environmentally friendly
business practices. should marltet these aspects of their business 10 consumers since
it may be one of their most sought-after assets.
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Co11111etitors
Competitors operate in the same market environment as a specific business, and
provide the same or similar produ,ts and services. Competitors influence the quality
of a product or service, as well as the price at which these can be sold. Businesses
operating in the same environment compete in terms of the quality of their products
and services, the price at which these are offered, the resources available to produce
these products, the intermediaries selling their products and the consumer market,
which has limited spending power. The competitive environment directly influences
a business's strategic planning. Businesses in the same marker can also compete in
terms of their environmentally responsible business practices.
lnten11eiliories
Intermediaries play a vital role in bridging the gap between manufacturers and
consumers. l11termedlarles include insurance brokers, llankers, wholesalers and
retailers. One of the greatest changes that has occurred i11 the intermediaries'
environment is the prevalence of online shopping and to a certain extent, the
monopoly that certain retailers have in this industry.
Suppliers
Suppliers provide a business with the resources required to deliver products and services
to its consumers. These resources include raw materials, capital and labour. The quality
of products and services provided by a business greatly depend on the quality of
inpui received from supplim. This is why supplier relations are so imponanL
Environmental issues have forced businesses to manage their supplier relations
dilTerenlly. It ls important for businesses to choose their suppliers wisely. It stands
to reason that the greener the supplier of raw materials and products is, the greener
L11e end product or service will be. IL is important to e11sure tl1ai suppliers have
an environmental impact and sustainablllty policy in place, or at the very least, a
social responsibility policy. Merely having such a policy, however, does not mean
that these intentions are lra11slated into practice. ll is important for a business to
ask questions and get to know a supplier if it is serious about ma11agillg the impact
of environmemal issues.
15.4.2 Impact af environmental management issues on the market business
environmen I
Most business activities impact on the environmCJlt In production activities.
businesses consume raw materials, use natural resources and contribute to polluLion.
Business operations impact on the quality of the environment's surrounding areas
and on the quality of life of I.he surroundi11g communities.
Businesses tend to comply only with environmental issues as far as is essential
for their survival. This has forced regulations and legislation lo become stricter.
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Environmental Manageme_nt - A business management approach
According to King UP"' and the Companies Ac1 of 2008, owners and directors
or businesses can be beld personally liable for environmental and social
transgressions. These steps were in1roduced becau..~e of !he nonchalance wllh which
environmentally harmful business decisions were historically made.
15.4.3 Turning environmental management challenges into business appartunWes
If businesses are able lo implement a more holistic approach to their business
practices, !hey will become the tre:ndseliers or !heir industty. 'Cradle 10 grave' means
that businesses look at a product's llfe t-ycle from !he tin1e of conception 10 the
disposal of that product by !he cus1om~. Taking this one step rurlher. the business
can approach this from a ·cradle to cradle' point or view where the business takes
responsibility for a product·s sustainability from !he time of conception, beyond
the point or disposal, to ret-ycllng, reusing or upcycling. This holistic approach lo
business practices will increase a business's competitiveness and customer retention,
and encourage suppliers 10 follow the same approach lo their business activities.
Facing environmen1al managemen1 challenges affords a business lhe unique
opportunity to change their image within the communlty. Consumers, competitors,
intermediaries and suppliers form part or this commuoity. Many businesses claim
that they are environmentally responsible and sustainable: however, a business
which acts on these claims will attract more customers, increase its competiveness
and lherefore be more successful. Standards and regulations are not a punishment
to force compliance. They should rather be viewed as an opponunity to increase
competitiveness and market share by following marketable business practices.
When investigating the opponunities that environmental challenges presenL a
business should conduct an environmental self-assessmenL
E11viro11me11tal self-a.ssrssment
J.
Identify the environmental issues affecting your company.
2.
Jden1ify existing environmental activities (such as recycling programmes,
energy-efficient practices, partnersWps with suppliers, competitors, intermediaries a.nd surrounding commuoities].
3.
Identify environmental sbonfalls. ls U1ere an environmental policy in place: is
this policy being implemenled via an awareness programme: is environmental
awareness an imegral part or daily business activities: and are environmental
acltievements documented and communicated/marketed?
4.
Assess your organisation's capabilities.
5.
Assess your organisation's resources.
After completing the environmental self-assessment and deciding on a course or
action. it is imponant to make the suggested changes and to report back regularly,
not just lo management, but to all stakeholders.
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15.5
Environmental management and the macro business environment
The macro business environrueni exerts influence on both the market business
environment and the micro business environment.
75.5. 7 Components of the macro business environment
The macro business environmem comprises the economic, technological, sodal,
physical, institutional and imernational environments.
Political anti i11stiturio11a/ e11viro11me111
In the political and institutional environment, environmental governance is achieved
through command and control. Command and control tools include permits, licences,
environmental standards and audits. The good thing about command and control
tools is tl1at there are consequences to non-compliance, which include restraining
orders, prosecutions. penalties and fines, and criminal prosecution. Command and
control as an environmental governance tool is based on the evaluation of actual
performance against the standards set in laws and regulations. TI1e disadvantage of
command and control tools lies in its inflexible nature. Businesses may decide to
continue their harmful manufacturing practices at the risk of a Cine, since the fine is
much less than the loss of income ihey Face if they change their business practices.
TI1is will continue to be true umil the applicable legislation is updaied to penalise
violators with more realistic fines and penalties.
There are many laws in the political and institutional environment which are
used as tools to enforce environmental governance. South Africa bas been working
to make environmental legislation as comprehensive as possible. The nex:t challenge
in tl1e governance process lies in the enforcement of this legislation.
ln tbe South African political environment, as with many other countries,
politicians tend to make many promises in order 10 gain support and votes.
Unfortunately, many of these promises of environmental reform do not come to
pass after votes have been cast.
Economic e1111iromrre111
Environmental governance tools used in the economic environmem consist mostly
of market-based and fiscal insrrumems. These tools include pollution raxes,
tradable permits, trade restrictions imposed on businesses and countries which do
not comply, encouragement of green purchasing. adjustment of pricing policies.
tax concessions. and carbon entissions taxes, to name but a few. These incentive
and disincentive instruments allow for greater flexibility than can be gained with
command and control tools. They also act as a source of income for the government
and are more cost efTective to implement.
Green taxes are the most direct metlmd of influencing the way business is
conducted. Green taxes directly increase tbe price of goods and services, with tbe
irttenl' of forcing businesses and consumers alilte to make more sustainable choices.
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Social em1iro11me111
The social environment includes many of the factors that play a role in consumers·
consumption habits. such as demographics. education, urbanisation, awareness
of consumer rights, the social responsibilities of a business, business ethics
and culture.
In lhe social environment, environmental governance tools are based on civil
instruments. These civil instruments include:
•
eco-labelling, where mamtfarturing information is included on the packaging
of a product (eco-labels indicate whether a product was manufactured in an
environmentally friendly manner, whether it is recyclable and if the packaging
is biodegradable);
•
public participation processes;
•
•
civil legal action;
consumer education (there is a big movement to support products U1at are
manufactured in an environmentally friendly manner, to consume foods
that are organically produced and lo encourage consumers lo be more
environmentally friendly); and
•
social impact assessment, either as a part of environmental impact
assessments or as an assessment on its own.
Physical e11viro11me111
The physical environment includes the following clements: population, health of
this population, food and water, energy. climate and biodivl'ISity. It is vital to
Lake these elements into consideration when making environmentally responsible
business decisions. The physical environmental factors present both opponunities
and threats and these need to be assessed by businesses to help them survive.
l11tematio11al e11viro11111e111
TI1e international environment provides an even larger arena of opponunities and
threats that exen an influence on a business. Environmentally aware businesses
will find a foothold in international markets if they comply with and even exceed
international S1andards. An exemplary reputation will open doors to businesses in
the international arena.
Teclr110/ogical en11iro11me111
Conducting business in an environmentally responsible and sustainable manner
contributes lo innovation. New technologies are needed to enl1ance business
profitability while conducting busines.~ in a sustainable manner. Technological
advancement has brought the world to where it is today. Improved health care,
rnaauf-acturing processes and communication are all results of technology.
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The next wave of technological advancement should be focused on prote<:ting the
environment and on more sustainable business practices and living conditions.
15.5.2 Global environmental monogemeni incidents
All environmental disasters have an impacL This is even more so with global
environmenta l disasiers.
In 2010 an oil rig exploded. releasing millions of barrels of oil into the Gulf of
Mexico. Although this explosion occurred in April, the oil well was only capped
three months later. TI1e BP oil spill resulted in extensive damage to kilometres
of coastlines. BP budgeted $42 billion for the clean-up expenses, penalties and
damages. The coun cases and damage determination has, to date, not been
completed, but it wou ld seem that the estimated $42 billion will not be nearly
enough to cover class action payouts, penalties and civil trials. This international
incident received greater media coverage and harsller penalties because, although
ii was the largest disaster of its kind, it was not rhe first and people nowadays are
less 1oleran1 of negligence that leads 10 environmental harm.
Lead pollution in Guangdong. China. killed 160 children in 2012 when emissions
from factories in the area poisoned the air, water and food consumed by people.
Heavy metal poisoning has the greatest harmful effect 011 children: even if tiley
survive, they may be plagued by mental and physical disabilities. This incident was
preceded by numerous incidents of non-lethal pol~oning, calling for worldwide
action against heavy metal emissions.
These cases Wusirate tha t environmental disasters occur on a global scale
and these international events influence local legislation and regulation in many
coU11tries. These events also influence public opinion to a great extent and snow
that the public is becoming more informed and has a lot less patience with
environmenta l disasiers.
15.5.3 Globalisation and global environmental disasters
Globalisation is an e<:onomic phenomenon Uiat has impacted greatly on the
environmenL Economic activities have gone global in order to cut costs and
streamline processes. The world is a long way from the small communities who
provided for themselves and ouly product-'<! what was needed. Today, businesses
are producing goods and services 10 export on a global scale. Unfortunately this
has increased pressure on the environmem. The world's population has grown
exponentially, increasing the waste generated. This would be bad enough, but with
U1e advancement of te<:hnology and civilisation, the waste that is produced has
become less biodegradable and more toxic. More people need more space 10 live
and rhey need more jobs, which in turn requ ires more resources.
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Environmental Manageme_nt - A business management approach
Globalisation has caused a decline in fresh water through irresponsible agriculture,
aimed at food security. Ag.ricultural practices and waste production threaten the
quality of water that is available.
In a global environment there is a greater demand for energy. The processes
or producing more energy have greatly increased greenhouse gas emissions and
pollution. which bas contributed to the climate change crisis the world faces today.
The global tragedies mentioned above can all be traced back to the phenomenon
of globalisation in one way or another. lf globalisation is causing global disasters,
it should call ror global solULions 10 environmental issues and global collaboration
10 implement these solutions.
15.6
Conclusion
Environmental managemen1 is an aspect of 1.he global business environment that
can no longer be ignored. The impact that environmental issues have on the micro
business environment provides both challenges and opponunlties. TI1ese challenges
need 10 be planned for at all levels of busines.~ functions in order for businesses 10
survive in the long term and prove 10 be sustainable.
Review questions
I.
Defme environmentally sound management
2.
Depict the business environmental model and itS major components.
3.
Depict the components of the micro business environment
4.
Discuss the impact of environmental management issues on each of the
micro business environmental components.
5.
Depict the components of the market huslness environment, including a
summary of the most important aspects of each componenL
6.
Briefly explain the contribution of globalisation towards environmental
dlsaste.rs. Give an example.
ReJerences
Botha, S 8 Musengi, B. 2012. /11troduct'io11 to business ma11agem~111: Fres/1
perspectives. London: Pearson.
Erasmus, BJ, Strydom, JW a Rudansky-Klopper, S. 2.013. J11troduc1io11 10 busi11t>ss
ma11agcme111. 9th ed. Cape Town: Oxford University Press.
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Friedman, J. 2013. Tire blog: Mi/torr Friedman was wrong about social resporrsibiliry,
6 December 2013. Available: bttp:f/www.hu.ff1ngtonpostcom/jobn-friedman/
mil ton- friedman-was-wrong_b_34 I 7866.html.
OECD. 2008. Key e1111iro11me11tal i11dicators. Paris: OECD Environment Directorate.
Reuters. 2012. Chi11a lead pollutiorr outbreak poisons 160 cl1ildrei1: Report. Available:
https://www.reuters.com/article/us-china-lead/china-lead-pollution-outbreakpoisoas-J03-child.ren-idUSTRE7 5B0PE20110612 [Accessed 21 May 2020).
Reuters, 2014. Timdine: BP oil spill liti9atio11 at a glarrce. Available: bnps:/{www.
reuters.com/article/us-bp-gu1fmexico-ruling-timeline/timeline-bp-oil-spillLitigation-at-a-glance-idUSKBN0GZ21.X20140905 [Accessed 21 May 2020).
Robbins, P. Hintz, J Et Moore, SA. 2010. Elluironmcut and society: A critical
i11trod11ctio11. Hoboken, New Jersey: Wiley-B lackwell.
RobecoSAM Et SEtP Dow Jones Indices. 2014. Results am,ouncedfor 201 ,1 Dow Jones
Susraiuability Indices Re11ie1u; DJS/ celebrates 15 year 01111iversary. Press release.
Available: h ttps://www.robecosarn.com/ media/3/0/2/302862 l 85d89205 798bcb
d080beee658__press-release-review-2014_tcm1016- 14665.pdf [Accessed 21 May
2020).
Van Zyl, J, Van Noordwyk, A a Du Toit, R. 2012. Businessfunctious: Arr illtroductiorr.
Claremont: Juta.
World Bank Institute. 2008. Managing e1111iro11me111a/ arrd social impacts of Joe-a/
compa11ies: A response guide and toolkit. Washington, DC: World Bank Institute.
309
Learning Outcomes
After studying this chapter, you should be able to:
• elicit and define the concept micro environment and its role within the business
environment model
• explain the inHuence management and management deC!lslons have on lhe
micro environment
• briefly explain the impact of the micro environment on business activities
• identify and explain t11e inHuencc that environmental issues has on the micro
environment
• discuss the elements of the micro environment and identify how environmental
management inHuences the elements of the micro environment
• discuss the components of the miC'lo environment
•
Implement sound environmental practices within the micro environment to
combat environmental issues
• dl!S(lribe the relationshlp between small businesses and environmental management
•
identify the aspects that make small businesses unique
• explain the role or the small business owner in business decisions
• outline small businesses as innovators of environmental change
• describe the ad\/antages and disadvantages of Including environmental
management in small business strategy
• outline the concept of environmental management accounting in terms of the
small-business environment
• explain the way forward for small businesses In terms of environmental
managemenL
Overview of this chapter
This chapter provides an overview of the micro or internal business environment as
well as environmental management's influence on this environmenL The chapter
discusses the influence that management decisions have on the micro environment
and how the environment impacts business activities. The chapter forlher identifies
what the micro environment encompasses by discussing the environment's
Sixteen: Environmental management and the micro business environmen t
elements and components. An overview is given of sound environmental practices
and how these practices are implemented within 1.he micro environment to comha L
environmenta l issues. Finally, environmental management in small businesses
is discussed, outlining the aspects that make small businesses unique and how
environmental planning can be turned into an opponunlly for small business growth.
16.1
Introduction
In order for an organisation to be successrul, managers musl have an in-depth
understanding of the inner workings of the organisation. What I.be organisation is,
does and wants to acbleve will determine how the organisation makes decisions,
uses resources and competes in their external environments.
16.2
What is the micro environment
The micro environment is often also referred to as the iotemal environment. It
consists of ail the variables, factors and activities that occur in the organisation
and are directly or iodireclly influenced by management's decisions. The
micro environment therefore exists within the organisation's premises. The micro
environment is seen as the heari oftbe organisation as it iocludes the organisation·s
functions, policies, strategies, goals and resources.
The micro environment aITects all operations of I.be organisation and indicates
how well the business is able 10 capilalise on opportunities and withstand threats
within 1he organisation's external environmenl. The internal environment wiJI also
allow organisations to determine their core competencies. through analysing the
strengths and weaknesses of the organisation. wliicb are largely determined by the
organisation's resources, capabilities and competencies. Strengths are activities that
the finn excels at and can lead lo a competitive advantage for the organisation.
Weaknesses are aspects in which the organisa tion does not excel and can lead to
disadvantages. Undoubtedly, it would be advantageous for organisations 10 pursue
strategic directions tl1at encompasses thei r srrengtl1s, but how can this strategic
direction be determined? An analysis of the micro or internal environment will
allude to what the organisation can do using available resources. After establishing
wbai lhe organisation can do, an analysis of lhe macro or external environment
could help an organisation choose what to do witltin thal industry or market. The
micro environment therefore plays an important role in an organisation's ability to
provide the correct products and services, wbicb they will be able to produce within
a certain market wbicb they will be able Lo serve.
In addition, creating and maintaining a competitive advantage is no longer as
simple as achieving low labour costs, minimising competition in the market and
access to financial resources. A sustainable competitive advan tage is achieved when
organisations have the capacity for organisational learning and the ability to change
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Environmental Management - A business management approach
as the s ituation in the macro environment changes. Titis allows organisations to
make lhe most effective strategic decisions with regard to the resources, capabilities
and core competencies they possess.
Ove.rall the micro environment plays a pivotal role in knowing what the
organisation stands for, what il can and should do. and wbai it wants to achieve
in the future.
16.2.1 The micro environment within the business environment model
TI1e business environment is defined as all the ractors or variables both inside
and outside the business organisation wWch may influence the existence or the
organisation. Although the organisation has complete control and influence over
U1eir internal environment. there are still many Factors outside the organisation
above their control. Organisations may also not possess all the resources to
compete in rhe external market and to capitalise on opportunities, as well as ward
off threats from the macro environment. As illustrated in figure I 5. I, the market
environment is seen as the link between the organisation and the environment in
whlch it runctlons. The market and macro environmeni have greai influence over
the micro environment as changes in these environments create the necessity for
organisations to change and adapt. These environments can include changes in
competition withln the market, increases in operational costs and new prod uc1 and
service offerings. The micro environment can in tum also influence the market and
macro environment, as decisions made in terms of product development. improved
operational processes and exploring new markets can drastically influence product
prices or customer demands, or diminish Ute need for competing products.
For an example of how these environments inJluence one another. we can
look at the cellular phone industry. When Samsung first decided to manufacture
a cell phone with a built-in camera runction, a change that occurred withln the
micro environment. it created new expectations from customer.. and decreased
demand for inferior prod ucts, influencing the macro and market environmenL
Since then, the industry has become obsessed with innovation, constantly adding
more runctionality and advanced technology to ensure their products are superior
to competing products and meet the demands or customers. Although Samsung
made the decision in the micro environment to manufacture the camera phone,
the innovative industry now demands them ro be adaptable and innovative if they
want to stay relevant and competitive. The macro and market environments have
U1erefore also been influencing San1sung·s micro environmenL
16.2.2 The influence of management on the micro environment
The micro environment is the main environment in wWch managers operate. It
is withln this environment that managers imp lement the management process
- planning, organising, leading and controlling all activities. Management is
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Sixteen: Environmental management and the micro business environment
responsible for determining where the organisation is going and how it will ensure
it gets there. The management of an organisation has a direct influence on the
mission statement and objectives. Management is responsible for guidelines on
how the business's functions wW be managed, essentially writing the handbook for
the operations of the organisation. Managers are further responsible for grouping
resources and skills together in such a way that the organisation can produce
products or services,. achieve set goals and objectives, and achieve a competitive
advantage. The better the management decisions made by top, middle and lower
manageme111 in an organisation, i:he beuer the chances of Ll1e organisation's survival.
16.2.3 The influence of the micro environment on business activities
The micro environment is the hub of a business's activities and includes all decisions,
actions and resources. It influences what rhe business is doing, and how things
are done. The micro environment determines the destination of the organisation
(vision), the road map indicating how the organisation wW get there [strategies,
objeL1:ives and policies) and what the organisation bas available to reach rhcir
destination (resources). As the purpose of the organisation will ultimately be to
achieve the set vision, all activities and actions should be aligned in such a way
Lhat they contribute to achieving iL The micro environment therefore not only
influences bu~iness activities but outright decides them. As each organisation's
micro environment differs, the activities and action plans will also differ; however,
without alignment between these aspects success of an organisation is uncertain.
76.2.4
The influence of environmental issues on the micro environment
When business first began, an organisation's sole purpose was 10 generate revenue,
earn profirs and supply products or services. These days, there is a worldwide
focus on conservation of rhe environment and humanity's responsibility to undo
the environmental damage caused. It is clea r that rbe environmental problems
experienced requires a complex solution driven by individuals, communities
and organisations. It is increasingly expected from organisations to be more
environmentally friendly, whether ii is the products and services offered, packaging
of these products or Lhe production processes itself. With the expectations of
conservationists and environmentally aware customers on the rise, pressure is
placed on organisations Lo continue innovating and adapting all aspects of their
micro environment to decrease their over.ill carbon footprinL Active participation
in conseivation initiatives, wWch aim to combat the environmental damage already
evident. a.re funher encouraged.
Throughout the world, cities, countries and continents are introducing
environmenta l compliance regulations 10 prevent fun.her environmental damage
as far as possible through development or implementation of environmentally
sound business practices. Regulations are tailored to each indusuy to ensure the
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Environmental Manageme_nt - A business management approach
maximum effect i.n minimising contribu1ors to environmental issues. For example,
regulations for vehicle repair garages will include srorage and disposal of hazardous
chemicals or matwal sucb as oil, tires and car haueries. Within Lhe mining sec1or,
regulations govern water usage as well as disposal of aoy chemicals used as parr
or the extraction process. These regulations influence the micro environment
of organisations as it may necessitate additional costs to ensure compliance
and could even necessitate changes in an organisation's activities, objectives or
stra1egic direction.
Although environmental issues do influence lhe micro environment, it
can also create opponunilles for organisa1ions willing and able 10 adapt. The
importance placed oo finding ways to conserve the environment can create new
markets, for example upcoming zero wasie shops - organisations specialising in
green options for earth-conscious customers. Environmental issues can forther
create competitive advan1age and core competencies if organisations can develop
unique packaging matwals, production processes or decrease their overall
carbon footprint. A new opportuniiy exists to appeal to a distinct customer base,
passionate about environment conservation and looking to support organisations
aligned with their cause. The current environmental conservation movement cao
therefore either hinder organisations, for whom it can be a massive undertakiog
to ensure compliance to regulations. or can create opportunities to broaden
product and service offerings or take advantage of a new environmentally aware
cus1omer market.
16.3
Elements of the micro environment
The elements within the micro environment are responsible for the outputs of the
organisation. These elements are discussed below.
16.3. 1 Rcsoun:es
Also refern.-d to as production factors, these include the raw materials, labour capital
and entrepreneurship needed to supply products or services. The available resources
assist managers in determining the organisation's stracegic direction as it identifies
what It is capable of doing rather than what It wants to do or what its current
business is. Resources are the means at the organisation's disposal to ensure a profit
through capitalising on opportunities and warding arr threats within the macro
envirorunent. For example, if a cell phone manufacturer has human .resources with
unique technological skills and know.ledge, il can be deployed towards developing
1he mosl advanced aod innovative products before any competitor. On the otber
ham!, a lack of human resources with technological skills can constitute a threat to
U1e organisation because it is placed in a weaker position in the markei.
Resources can be categorised as tangible resources, intangible resources
and organisation capabilities. Tangible resources include physical assets such
314
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"'
;
-'
'
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'
'
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Sixteen: Environmental management and the micro business environmen t
as buildings, human resources, inven1ory and technology. Intangible resources
encompass brand names, organisational reputation and knowledge and skllls of
en1ployees. Capabilities of an organisation refer 10 lhe deployment of resources.
Capabilities allow resoum~s to perform organisational activities in an integrative
manner, serving as the glue lhai keeps the whole organisation 1ogelher. The rapidly
changing industry or business environment lhat organisations function in today
poses a dynamic and complex environment Possessing dynamic capabilities
allows lhe organisation 10 navigate this changing environment. restructuring
and integrating resources and capabilities ro achieve organisational objectives
and ob1ain a competitive advantage. Overall capabilities allow lite organisation
to extract lhe value from lhe available resources and identify which resources
have the ability to create a competitive advantage. A core compeiency is only
anained when an organisation can perform the specific function bener than the
industry average. Deploying resources in the mosi eflicient and effective manner
can therefore become a core competency for the organisation. Human capi lal also
has the ability to contribute significan1 capabilities to the organisation. not only
representing a core competency but achieving a competitive advantage.
16.3.2 Objectives
A vision and mission are regarded as the nrganisation·s reason for existence. The
vision and mission further serve as a guide for developing strategic goals and
objectives. More specificalJy, effective vision slatements push an organisation 10
see not only what it currenLly is and does but what it can become in the future.
Visions also create expectations for the organisation by including the positive
consequences of attaining the vision. The vision can be an excellent tool 10 guide
and mo1ivate employees.
The vision statement informs the mission sta1ement The mission statement
aligns the organisation in such a way that it will be able to achieve its vision
slatement An organisation·s mission clarifies wba1 the organisation·s business
is. its customer base and the products or services 10 be provided. An analysis
of l11e micro environment is done to determine llie organisation's strengths and
weaknesses and er!Sure lhe mission statemen1 is realistic and auainable.
Objectives are results 10 be anained and indicate what aJI actions and activities
should work towards. Objectives allow direction. order and meaning. Objectives
are developed along three differeru timeframes. Strategic objectives are long
teem in nature and usually span over al least five years. These objectives serve as
guidelines in formulating strategies. They can also be regarded as the benchmark
lo measure progress made 10wards attaining lhe organisation·s mission and vision.
Strategic objectives cascade down lhrougbout 1he organisation to ensure the longterm goals arc anained. Functional objectives are derived from strateg.ic objectives.
representing short to medium- term objectives. usually for a one to five-year period.
finally, operational objectives arc derived from functional objectives encompassing
3 15
Environmental Manageme_nt - A business management approach
tasks and actions to be completed in the near future, usually within a period of one
year. Objectives can therefore be seen as the plan or map of how the organisation
will go about attaining the vision and mission. It will farther dictate the activities
and action to be performed and when these ac-tivities and action should take place
in order lo achieve this.
16.3.3 Business functions
Toe buswess·s fllnctions indude general management, operations, purdiasillg,
supply chain, marketing, financial, administrative, human resources and public
relations fonctions. Tbe different functions and the way in which U1ese are structured,
in other words the organisational structure, shape the operations within the micro
environment and have a significant influence over management"s decision-making
processes. Organisations should strive to structure business fonctions in a way that
allows for efficient decision-making, which improves adaptability to changes in
the business environmenl
16.3.4 Policies
Policies are the most bask form of planning. They specify an organisation·s
response to certain problems or situations. Wimpy, for example. is a breastfeedingfriendly restaurant with supporting policies dit"tating I.bat, should a customer
feel uncomfortable with women breastfeeding within the restaurant, stalT should
respond to the situation by respecrfolly offering lo move the customer 10 a different
area. Similarly, universities might develop admission policies indicating when
admission will be granted. Within Ute micro environment, policies contribute 10 the
way organisations perform tasks or handle operational issues. TI1ey therefore serve
as a g uide lo employees of which tasks 10 complete, at which times and specific
processes that they need to follow. Policies can also serve as a quality assurance
tool as they prescribe a uniform way of doing things.
16.3.5 Strotc:gies
Strategy bas clear origins in the military because decision-makers had to design
their battlefield in a way which allowed an edge above enemies, resulting in victory.
Tite idea was 10 identify U1e enemy·s weak points and use you r strongest forces
to anack these vulnerabilities. Similarly. strategy witl1in an organisation aim.~ to
identify the organisation's strongest competencies and use them in such a way
as to gain an edge over competitors. Organisations can further capitalise on their
competitors· weaknesses, i.ncreasing the odds of organisational success.
At their core, an organisation's strategies identify aspects in which the
organisation needs to do weJL 10 eusure it can compete in the business environment
effectively and outperform its rivals. Lo order to e!Tective.ly compete, strategic
316
"'
'
;
-'
'
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'
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Sixteen: Environmental management and the micro business environmen t
decisions should have numerous key elemenlS, which include the sustainability
or lhe strategy, the llkellbood of gaining a competitive advanrage and whether
strategies are aligned with challenges and opportunities within the macro
cnvironmenL A crucial factor contributing to an organisation's success is strategies
lhal place realistic requireruenlS on an organisation's resources.
16.4
Small businesses and environmental management
Small businesses are the life blood or the South African economy, with 2.8 million
small businesses comprising 9 1% or formal emerprises. SmaU businesses also
contribute significantly to the national GDP and create approxima tely 61 Clb or
formal jobs, thereby positioning smaU businesses as a key economic and social
role player. Even in terms of the global economy, small businesses generate the
maj ority of economic ou1puL As a collective, it therefore stands to reason that
small businesses in South Africa have a significant impact on the environmenL
However, each individual business is managed separately, and this means that lhe
collective impacr is very rarely investigated.
From the perspective or small business owners, their business has a minimal
impact on tbe environment as a whole. The compliance of South African businesses
with ISO 14000 and obtaining ISO 14001 certification is extremely low, with only
929 small and large businesses that have been certified.
16.5
What makes small businesses different
Small businesses are in the unique position that their viability depends mostly on
their owner, and his or her skills. The small business owner needs la be the manager,
bookkeeper, financial man ager, human resource manager, risk manager, safety
manager, supply chain manager and environmental manager. AU of the aspects
tltal we discussed as pan of the micro business environment is tlte responsibility or
1.be sma ll business owner.
SmaU businesses also have very limited resources in comparison with larger
businesses. These resources are not limi ted only to financial and human capital
but also include lime. They are also rcliaa1 on older technology because of their
limited resources. Unfortunately, older technology is less energy efficient and
produces more waste. Because of the perception of smaU business owners that they
do not have such a big Impact on the environment as wcll as the limited resoun:es
available to them, smalJ businesses a.re much less likely to have enviromnental
plans or ro implement environmental management practices.
Although research has shown tha t small business owners are weU aware of the
importance of environmental issues, they are unlikely to address tltem themselves
due 10 the associated cost. Even if they were comfon ably able 10 afford the cost
involved, small business owners are of the opinion that there are no immediate
317
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l_j
Environmental Manageme_nt - A business management approach
economic benefits that would validate this economic expenditure. Research has
shown that the long-tenn economic benefits of implementing environme.nral
management plans greatly outwe.igh the cost involved, but the majority of small
business owners are focused on sboner-lenn survival.
Small businesses are heterogeneous, meaning thai the environments that small
businesses operate in and the demographics of small business owners can differ
substantially. Small businesses can be based in metropoles, suburbs or rural areas.
Small business owners vary in their gender, age, level of education and level of
experience. 11,is means that l11ere cannot be a 'one size lits air rype of solULion to
the envlronmenlaJ management problem that can l,e applled across the board 10
all small businesses.
Information regarding the importance of complla.nce is communlcaied to large
businesses exte11Sively and ii forms pan of the reporting tbat businesses need to
conducL However, there is a distinct lack of communication about environmental
issues between government and small businesses. This means that small business
owners do not have a~-cess to sufficient resources to improve their knowledge and
awareness. This also limits the resources tl1at are made available to small businesses
to facilitate their eovironmental education and assist them in implementing
environmental plans. Since there is limited communication from stakeholders
such as the government, the pressure to implement environmental management
practices is also reduced and small businesses are not forced Lo panticipaie in the
environment debate.
16.6 The role of the small business owner in business decisions
Small businesses are traditionally owner managed. This means that the owner of
Lhe business is actively involved in the management of the business and lias Lile
major decision-making power. Since tbe business owner is making the decisions in
a small busines.~. it should be noted that the owner·s personal views and preferences
wW greatly influence his or her business decisions. Research has shown that the
commitment of a small business to implementing environmental management plans
or systems is embedded in the owner·s predlsposiiion towards ibis implementation.
The smaJI business owner·s experience with regard to environmental aspects as
well as his or her level of education on the topic also influences rhe implementation
of environmental plans. lf you look at the ave.rage small business owner, be or
she bas experience in a certain occupation. In general, this would not include
environmenta l science or environmental management. highlighting the importance
of education. Jf small business owners do not have the relevant experience or they
do not understand what is involved in environmental management. they wiJJ be
less likely to prioritise this in their business.
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Sixteen: Environmental management and the micro business environmen t
16.7
Small businesses as innovators of environmental change
Green small business Involves a specific approach to develop an environmental
management system that is suitable for the small business environment. This
environmental management system is cost eJTective and straightforward, making
it easier for small businesses to comply with tbe requiremeats of an environmental
management system. The International Organization for Standardization developed
a new handbook with the specific aim of assisting small businesses to comply with
ISO 14001 and improve their environmental performance.
16.8 Advantages and disadvantages of including environmental
management in small business strategy
Environmental management can be a business strategy for tbe small business.
Instead of managing the way in which a business disposes of its waste, ii would be
preferable for a small business 10 follow a pollution prevention strategy. Pollution
prevention involves looking for ways that the business can avoid generating waste
in the first place. This l~ not only a more proactive method for environmental
management. but it also makes business sense since additional resources are not
spent on the disposal of waste.
Environmental management planning and the implementation of these plans
presents smaJI businesses with an opportunity ro improve their innovativeness. By
relocking at their processes and systems, UlL'Y will also be able to Identify ways
of improving quality. In the longer term, environmental management planning
in small businesses could lower costs, facilltate in job creation, and provide small
businesses with an opportunity for collaboration.
By implementing an environmental management plan, small business owners
can ensure mat their business services and products are internationally applicable
and competitive. It also opens the door for additional busines.~ fundi.ng opportunities.
There is furthem1ore a direct correlation between better environmental management
and business profitability.
TI1ere are also some disadvantages associated with including environmental
management in small business strategy. The first one of note is time, as explained
earlier. Small business owners should be aware of me Fact that impleml'nting this
strategy will take up more of their time and decide whether they can afford 10
implement iL This strategy may also require a capital investment. With mese resource
aspects in mind, ii Is clear mat products may be more expensive 10 produce and
distribute. The nature or the products may also change, making them more peri.sbable.
A shorter shelf-life places the business, its supply chain and its value chain under
additional pressure.
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Environmental Management - A business management approach
16.9
Environmental management accounting
As already mentioned, small business owners are responsible for many of the
managerial functions in their businesses. This includes finances and accounting.
In order 10 comply with their legislative responsibilities and adhere 10 sound
management practice.~. small business owners keep detailed records of the business's
accoun!S and activities. 111ese records are managed through accounting, payroll
and point-of-sales software. At the end or the financial ye.ar, the small business
will need to draw up financial statements and these statements are compared lo the
statements or previous years in order 10 determine whether the business is doing
well and in which areas the business can improve.
Small businesses need 10 approach their environmema l impact in the same
manner, although few businesses do. Such an involved process requires lime and
resources. However. small businesses can address their environmental impact
by simply keeping record of their environmenLal impact through environmental
management accounting. Other role players in a supply chain, such as customer..
and suppliers, may require detailed information on a business's accounting
practices and the implementation of environmental accounting will make ii easier
for a business 10 access this information. As mentioned earlier, environmental
management improves business perfom1ance and profiL 111c opposite also holds
true. By not implementing environmental management and environmental
management accounting, the business is liable 10 pay non-compliance fines and
harm consumer confidence in their products.
Environmental management accounting is managed through the environmental
management system fEMS) in line with ISO 14000. Environmental management
acmunting can be managed in- house, just lilte financial accounting, and the aim
is 10 monitor and manage the business's envirorunental data. This environmental
data will include information about material consumption, air emissions, waste
generation, waste disposal and recycling. The environmental management
accounting system will also give busloe.ss owners an indication of how effective
1.b e.i r control measures are.
16.10 The way forward
order for small businesses to comply with environmental management
requirements, the staff and owner will need to invest in upskilling and Lhe
identification of new opponunitie.s. Implementing environmentally friendly
practices is not just about e.nsurlog future compliance, but il also presents smaU
businesses wiLb a chance Lo obtain a competitive advantage.
Small business owners and e.mployee.s need io look for ways to recycle and
ways 10 reduce consumption. The selection and development or g reen facilities and
review of the business's value dtain and supply chain will also assisl in the process
of going green. Businesses will need to adjust their iniemal poHcies such as travel
[n
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Sixteen: Environmental management and the micro business environment
policies, and they could offer commute options to employees instead of requiring
each employ~ Lo drive with their own vehicle.
Small businesses are under more pressure to address environmental impact if they
form pan of a supply chain for corporate enterprises that take their environmental
and social responsibility seriously. This environmental and social responsibility
wW include their suppliers, partners and products. The pressure from corporate
enterprises in the supply chain should encourage more small businesses 10 ensure
that their business practices are environmentally sustainable and responsible.
16.11 Condusion
This chapter provided an overview of the micro or internal business environment,
the influence of environmental management and small businesses. It also outlined
the influence management decisions have on the micro environment and how
the environment impacts business activities. The chapter identified what the
micro environment encompasses by discussing the environment's elements and
components. The chapter further gave an overview of sound environmental
practices and haw these practices are implemented within the micro environment
to combat environmental issues. Finally, the chapter discussed environmental
management in small businesses, outlining the aspects that make small businesses
unique and bow environmental planning can be turned into an opportunity for
small business growth.
Review questions
I.
Define the concept micro environment and how it exists within the
business environment model.
2.
What impact do environmental issues have on the micro environment?
J.
Bow can management decisions infl.uence the micro environment?
4.
Discuss the different elements of the micro environment.
5.
Describe the relationship behveen small businesses and environmental
managemenL
6.
Wliich asp¢ts make small businesses unique?
7.
What is the role of the small business owner in business dec.isions?
8.
_How are small businesses Innovators of environmental change?
9.
Describe the advantages and disadvantages of including environmental
management in small business strategy.
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Environmental Manageme_nt - A business management approach
10. Oulllne the concepl of environmental managemenl accounting in terms
of the small business environment
11. Whac is the way forward for small businesses in terms of environmental
management?
References
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ma11ageme111: A balance approacl,. 2nd ed. Pretoria: Van Schailt.
Bandura. A. 20<:fl. lmpeding ecological sustainability through selective moral
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Devdopmelll, 2( 1): 8- 35.
Brevis, T Et Vrba, M. 2.014. Corrtemporary ma11ageme111 principles. Cape Town: Juta.
Cluon. 2019. E1111iro11me111ol isrues tliat affect b11si11ess. Available: btrps://
smallbusiness.chron.com/environmen taJ-issues-a ffect-business-417 5.b tmJ
(Accessed I 5 April 2019).
Digiral trends. 2013. From J-Pl,011e to Lumia 1020: A complete 1,istory of rlic
camera pho11e. Available: bttps://www.digitaltrends.com/mobile/cameraphone-lili'lory/ (Accessed 15 April 2019).
Erasmus, 8, Rudansky-Kloppers, S Et St:Jydom, J. 2016. hrtroductio11 ro b11si11ess
ma11agement. 10th ed. Cape Town: Oxford University Press.
Heald, S. 2017. Climate silenCt', moral disengagement, and self-efficacy: How Alben
Bandura ·s theories inform our climate-change predlcamenL En11iro11me11t:
Science a11d Policy for Susrairroble Developmelll, 59(6): 4 - I 5.
Hellriegel, D, Slocum, JW, Jackson. SE, louw, l Et Staude, G. 2017. Ma11ageme11/.
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Higgs, C. 2015. Small business, big impact: Environmental sustainability and
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Lazenby, JAA. 2018. TI,e straregic ma11agemt'.11I process: A Sou cl, African perspective.
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McKeiver, C a Gadenne, D. 2005. Environmental managemeni systems in small
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h ttps :/ /www.parent24.com/Baby/B reast feed.ing/wi mpy- responds-tobreaslfeeding-shaming-incident-20190313 [Accessed 15 April 2019).
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Sanchez-Medina, AJ, Romero-Quintero, L a Sosa -Cabrera, S. 2014. Environmental
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323
Learning Outcomes
After studying this chapter, you should bt- able to:
• describe th, role of local governmen t in the pursuit of urban sustainability in
South Africa
• describe how utbansuSlalnabillty relates 10 global sustainability
•
provide an overview of South Africa's urban policy framework
• explain the role of municipalities as local governmental instiWtlons
• describe Whal is meant by the term 'wall lo wall' local government
• outllne lhe responsibilities of munldpalltles in terms of local environmt-ntal
governance (lEG)
•
list th, areas of responsibility of municipalities and provid, a short description
of each
• describe the function and importance of integrated development plans (IDPs)
•
provide more information on economic development and lhe pursuit of a green
rconomy
• discuss the role of municlpalltles rt-gardlng th, realisation of substantIVt' and
procedural environmental rights
• explain the ~ncept of public trusteeship and the sustainable use of natural
resourct'S
• describ, what sustainable service delivery entails
• dt'Scribe the responsibilities of municipalities in terms of pollution regulation
• describe environmen ta l law compliance and enforcement as it relates to local
governmtnt
• dt'Scribe Who is responsible for air quality managemrht
•
provide an overview of solid waste management by local government
•
provide an overview on water servicl!S provision ,and the protection <ff wa ter
resources
• describe what municipal environmental health servfoes e.ntail
• describe whai land-USt' managemt-nt and planning entails
• explain what soil conservation and land manage.ment t-ntalls
Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
• outline the responsibilities of municipalities in terms of hazardoU5 substances
managemen t and control
• describe the roles and responsibilities of municipalities in South Africa with
rl!gard to biodiversity conseMl.lon and management
• provide an overview of the concept of urban ~ology
• describe the challenges faced by coastal municipalities
• delim: the 1erm 'coastal management'
• explain what heritage management entails
• describe the disaster risk reduction r!!Sponslbflitles of local gov,rnment In South
Africa
• describe climate change adaption and mitigation in terms of local government
responsibilities
• explain the responsibilities of local government in terms of energy
•
•
•
•
•
•
outlint what green building entails
describe the concept of green procurement and what it entails
explain how municipalities should address sustainable mobility
explain hows 24 of the Constitution relate to sustainable development
describe the rol, and impact oflEG in urban sustainable development
explain what instflJments and tools can be used to Implement LEG successfully.
Overview of this chapter
Local governments and municipaUiies an> tasked with making cities inclusive, safe,
resilient and sustainable by 2030 in terms of SDG l I. This chapter provides an
overview of why ll1is is necessary and how it can be achieved. Titls responsibillty
also stems back to the Bill of Rights in the Constitution of the Republic of South
Africa, t 996. Municipalities and local government are responsible for so much more
than just service delivery and these responsibilities link directly with sustainable
development of urban environments.
17 .1
Introduction
The world is witnessing immensely interesting global developments as far as
'the local' and the pursuit of sustainable development are concerned. As a key
global pollcy, the United Nations Sustainable Development Goals [SDGs], adopted
in 2015, for the first time explicitly mention cities and the fact that the world
needs urban safety, resilience, sustainability and inclusiveness if we want 10 see
the desired global changes. In addition to SDG 11, in 2006 the UN adopted the New
325
Environmental Management - A business management approach
Urban Agenda, wWch stipulates tha1 in an urban world, cities can be pathways lo
sustainable development. These are bu1 two or the examples directed at ·a citycentric sWft in global policy' [Parnell 2016: 529).
Urbanisation in Africa is also happening at great speed (African Development
Banlt, Organisation for Economic Co-opera lion and Devel-opmeni, Et Unlted Nations
Development Programme 2016). It is reported that the continent's rate of urbanisation
soared from 15 percem in 1960 lo 40 percent in 2010, and is projected to
reach 60 percent in 2050. It Is expected that urban populations in Africa
will triple in the next 50 years, transforming the profile of the region,
and challenging policy makers to harness the urbanlsation phenomenon
for sus1ainable and inclusive growth and development (UN Habital 2016).
The.re is also the risk thal the t-w:ren1 growth of African cities could result in the
transfer of poverty from rural to urban areas (ibid).
This is relevant in the South African context The most recent South African
Cities Network State of r/re Cities Report (South African Cities Network 2016] read
with the highlights of Lhe Jnregraml Urban Development Framework (Deparrmem
of Cooperative Government and Traditional Affairs 2016] with its Jmple11m1tatio11
Pla11 (2016-2019] and legal developments such as the adoption of the Spatial
Planning and Land Use Management Act 16 or 2013 sugges1 that cities and towns
in South Africa are simultaneously ~ites of change and conltibutors to tile country's
sustainable development challenges. South African cities were bistorically 'built to
serve a smaller, exclusive minority and to be ineffective for the majority' [South
African Cities Network 2016: 42). Our cities were not designed with ao inclusive or
sustainable foture in mind. Whal is more, pos1-apartheid, these cities have not been
static- they have ·gone through some fairly profound changes (which are still being
understood) and have been driven by various forces· (ibid].
Tue o~jective in this chapter is 10 explain why South Africa's towns and cities
and their local aulhorities form pan of Lhe total environmenral governance effon
globally and in South Africa and, funher, 10 elaborate on the nature and focus of
the existing domestic legal framework and the governance instrumentation it has on
offer. The chapter commences with a discussion of the concep111al turn in cities and
towns to tbe pursuit of sustainable development globally. The third pan elaborates on
the South African context and where municipalities fit in the focus of this volume,
le in the national environmemal governance effort. The last pan introduces the main
movements in the existing local government and environmental law and policy
framework wiU1 a focus on the exlsting suite of governance instruments.
17.2 The tum to cities and towns in the pursuit of global sustainability
SDG I I sets o ut to make cities inclusive, safe, resilient and sustainable by 2030. This
goal, together with Ute New Urban Agenda adopted al the Habita1 W conference
in Quito in 2016, is i:he latest emanation or the thickening layer of imemational
326
Seventeen: Local government and the pursuit of urban sustainability in Sou th Africa
normative guidance on questions of good urban governance. UN Habitat has been
working on this notion for some time. In general, ·good urban governance' denotes
the sum of the ways in wWch individuals and institutions, pub-lie and private. plan
and manage the common city affairs . .It is a conti11uing process through which
conflicting or diverse Interests may be accommodated and co-operative action can be
taken. It includes formal institutions as well as in-formal arrangements and the social
capital of citizens. EITective urban governance is further characterised as democratic
and inclusive; long- 1.enn and integrated; multi-scale and multi-level; territorial;
proficient and conscious of the digital age (see hrtps://unbabitat.org/governance/l.
Among the SDGs, Goal 11 occupies a pec11Uar place. J ust like the otlter goals,
it enunciates a commitment by the UN member states which have agreed to the
SDGs by consensus. Al the same lime, it introduces another level of governance
which is situated below the level of the nation-state or national government. 1n
tl1is respect SDG 11 is unique, yet expressive of several broader trends. These lTends
relate both to the disaggregation of the classical nation-state (Slaughter 2004) as
well as to the growing confidence with which cities and their governments step up
to the international level Increasingly, cities (mttnicipalities) view themselves as
globally relevant actors. The organisation and objectives of the global C40 Cities
Network serve as one example in this regard, where dry governments collabora te
to sha.re knowledge and drive meaningful, measurable and sustainable action on
climate change (see more on tl1e C40 Cities Network and its global programmes a t
lmp://www.c40.org/about).
The adoption of the SDGs represents the latest attempt by the international
communiiy to live up to the challenges of a planet under severe pressure. The
steadily growing world population is faced with the realjfy of living within the
limits of the natural resource base. Climate change is a particularly pressing issue
and is set 10 change the livelihood of people dramatically within the aext couple
of generations. Simultaneously, there is a constant trend of urbanisation. More and
more people live ia cities and other urban areas such a.~ towns and sub11rbs marked
by the density of human structures such as houses, commercial buildings, road and
railway infrastructure, and the construction necessary for basic service delivery (UN
Habitat 2016). This has led many 10 proclaim U1at we are livi11g in an urban age. It is
also undisputed tl1at tl1e current rare of urbanisation poses challenges with respect
10 environmental pressures. the sta te of the living conditions of city dwellers in
informaJ settlements, the co- habitation of diverse communities in muJillinguaJ and
multicultural spaces, and a host of other issues (ibid). The observations of the UN
Habitat in U1e World Cities Report of 2016 in this regard are insightful (ibid: ch 2):
Tracking tl1e last twenty years of development reveals a global
transformation that positions cities at the core of the development agenda.
Urbanjzation is indeed one of the most significant trends of the pasi a nd
present ceniury, providing the foundation and momentum for global
change. The shift towards an increasingly 11rbanized world constitutes
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Environmental Management - A business management approach
a transformative force which can be harnessed for a more sustainable
development trajectory, w.ilh cities raking the lead to address many of
Lhe global challenges of Lhe 2 1st centwy, including poverty, inequality,
unemployment, environmental degradation, and climate cha.nge. Oties
have become a positive and poteni force for addressiug sustainable
economic growth, development and prosperity, and for driving innovation,
consumption and investment in both developed and developing countries.
This dramatic shlfl towards urban life has profound implications for energy
consumption, politics, food security and human progress. Although some
of Lhis change is positive, poorly planned urbanization can potentially
generate economic disorder, congestion, pollution and civil unrest
ll follows that cities are increasingly viewed as important stakeholders in the
provision and maintenance of global public goods fPamell 2016). Cities are also
seen to be important partners in the concerted management of Lhe global natural
commons, to promote Lhcir sustainable use (ibid: 530). Oties and urban areas more
generally are thus seen io be simulraneously part of the problems characteristic of
the urban age and of Lhe solutions to such problems.
Despite some of its national policies being almost two decades old, South Africa ·s
urban policy framework is immersed in visions of and ideals for urban sustainability
and good urban governance (see. eg. Lhe White Paper on Local Government
(1998), the Integrated Urban De-velopment Framework (2016) and the National
D~-velopment Plan: Vision 2030 adopted in 2012). This progressiveness may be
traced back to some of Lhe rights in the Bill of Rights in the Constitution of the
Republic of Soulh Africa 1996 (di 2, including s 26; s 27(1)(b)), but also to the
influential initial set of Millennium Development Goals. As one would expect,
Lhe Soullt African domestic policy framework is directed mainly at the country's
unique needs and urban fabric, and may be seen to prioritise. issues such as u rban
form, density, transportation reform and service del ivery above matters such as
bioregionallsm, green infrastructure and open space biodi versity networks (based
on the priority issues or so-called 'policy levers· covered in the Integrated Urban
Development Framework [IUDF) (2016), for example).
It is submitted, however, that the existing South African urban policy framework
addresses most of the targeLS of SOG II while simultaneously emphasising what
people in the country desire, for example improved housing. liveability and
u rban safety. Looking at the Constitution of the Republic of Sou th Africa, 1996.
the legislative framework that applies to local governance and environmental
management in combination with recent rulings of the court, it is safe to conclude
Lhat Lhe global turn to cities and towns in the pursuit of sustainable developmen t
is not a foreign concept in Lhis country.
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Seventeen: Local government and the pu~uit of urban sustainability in South Africa
17.3
Municipalities in the clockwork of environmental governance in
South Africa
Municipalities are the smallest governmental institutions of the state, often viewed
as the cornerstones of modem democratic systems (Bekink 2006: 61; Rautenbacb
Et Malherbe, 2004: 273; Stanyer 1976: 238), and constitute the so-called grassroot level of government (Craythome 1997; Barrington 1975). Local govemmem is
perceived as a multi-faceted and multi-functional institution that has the features
of a regulator, being responsible for monitoring and regulation in a community,
and conversely also has those of a fl'gu/atcd entity, being subject 10 the monitoring
of and regulation by other entities such as other spheres of government and
enforcement bodies (Du Plessis Et Nel 2015). Put differently, local government.: (a)
is the guardian of the immediate space that communities inhabit: and (b) fulfils the
roles of governor, the governed and an entiry tha L is responsible and liable for its
own internal actions lits internal governance arrangements). l ocal government in
South Africa comprises three different types of fundamentally complex micro-state
institutions (metropolitan, dlstrkl and local municipaliiies) (as per s 155 of the
Constitution) with wide-ranging powers. functions and roles, while local agendas
are regularly influenced by diverse role players witi1 distinct and often conflicting
interest positions. When compared with other entities, both private and public. a
municipality has very distinct but complex or even potentially co nflicting powers,
[unctions and roles relevant to sustainability (Du Plessis a Nel 2015; Nel Et Du
Plessis 2015).
The global urban policy referred to earlier is concerned wiih more tltan
environmental governance in the narrow sense, but is a very good indicator of where
municipalities lit in the global scheme of ihings. The mistaken belief bas long been
held globally and in South Africa that local government exists primarily 10 provide
services to local communities (the contrary is argued by Barrington ( 1975). among
others). Global wban policy developments as well as the features of local government
show how wrong such a presumption is. Wilson and Game contend that ·nJf electoral
accountability is the primary distinguishing feature of local authorities, the second is
their range of responsibilities' (Wilson a Game 2011: 30).
local authorities have various key roles 10 play and functions to fulfil- many
of which are environmental governance roles and functions. Jackson (1976: 180)
observes with reference lo loc-.tl authorities that 'a local inhab-itant may not re-.tlise
their full extent. yet directly or indirectly ihey affect almost every aspect or his
existence, from ihe lime he is born to the moment he dies'. He states further that local
auihorities provide a comprehensive range of environmcn-tal, protective and personal
services which are essential 10 com-munity life (ibid). It is not always exactly clear,
however, where the environmental governance mandate of metropoli1an, district and
local municipalities begins and ends, one of the key reasons for ihJs being the fact
that the constitutional cllvision of governing authority between the three spheres of
government, at first glance, gives the impression ihat it is mainly the national and
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provincial spheres that are mandated with environmental governance (see Schedules
4 and 5 of Lhe Constitution). This misconceived idea has fonunately been corrected in
recen1 years by the courts (see, eg. the case of RA le Sueur v eThekwini Municipality
2013 JDR 0178 (KZP) (le Sueur case)) and has been counrer-argued by many scholars.
fl is now accepted tital generally, even though the parameters oflocal govcrnmenrs
environmental governanL-e tasks will dlJJer from one context and type of municipality
to the next, municipalities are generally authorised to ·regulate' matters from the micro
level for the protection of the environmen1. and that the innovative use of municipal
planning for conse:rvarion purposes does nor transgress ll1e constimlional or other
environmental powers of the national and provincial auti1orities (ibid: para 40).
South Africa has a system of ·wall 10 wall' local government, which means
that every piece of land in the country falls within the Jurisdiction of al least
one municipality (see s 15 1 of the Constitution). The country's municipalities
are responsible, imer alia, for local environmema l governance (LEG), defined
as the environmental and sustainability management and governance processes
that are typic-dlly condue1ed at the stralegic, tactica l and operational levels of
municipalities (Nel, Du Plessis a Du Plessis 2015]. Municipalities have a legal duly
and the accompanying powers and mandates 10 co-protect the environment and
the health and well-being of people with the provincial and national spheres of
government (see the extensive discussion by Du Plessis 2008). The environmental
powers and duties of municipalities are, however, fragmented across a wide range
of environmen1al laws and policies, some of which have specific application to
local government, while others have a more general application (Ou Plessis 2015).
Municipalities can exercise lhcir duties and niandates eitlter indirectly or directly.
Nel, Du Plessis and Du Plessis (2015 : 95) explain that they do so indirectly by means
of the role that they play in co-operative environmental government processes
and more directly by (a) ensuring complianl-e with the applicable environmental
law, including the adoption and use of compulsory LEG instruments; (b) adopting
and using voluntary LEG instruments; and (cJ tl1e creative design and use of the
volU11tary and compulsory LEG instruments.
South Africa's municipalities typically have three core but broad-based
substantive LEG duties derived from an inclusive reading of the Constitution
[Du Plessis a Nel 2015: 29). The first is tl1e duty 10 render or cause 10 render
services to communities in a sustainable manner. Second. mU11icipalities must
fulfil a developmental duty, that is to promote social and economic development
and lo participate in national and provincial development 1>rogrammes. Third,
they also have a duty to act as custodians or guardlans of natural. social and
infrastructural as.sets. Notably. the duties, mandates and roles of municipalities
are ofien exacerbated by the reality of conflictiug interests in the positions taken
by the three differl'nt sers of mU11icipal role players: politicians (councillors);
administrative staIT(officials): and civll sociery (local communities, including local
industries, and non-governmental organisations (NGOs)) (ibid).
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Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
LEG is a broad concept which needs to be fleshed out with the unique socioeconomic ma.ke-up, natural resource and development features, instiha ional design
and political environment of each and every municipality. For this reason ii is
impossible lo offer a list of environmenta l areas or duties where municipalities
actively participate in environmental governance. Extensive work on Ute interface
between local government and environmental law and governance in South Africa
has been done by Du Plessis et al (2015). While it is impossible in the limi ted space
of this chapter lo cover the details, the most prominent sector-specific areas where
municipalities parricipare in or e.ngage with maners or e.nvironmental governance
may be summarised as follows.
17.3. 1 Focus areas in local environmental governance in South Africa
Integrated development planning
Every municipality must by law have an integrated development plan (IDP). which
is a key operational plan dictating strategic decision-making in a municipality. The
IDP informs other local governance instruments such as budgets, service delivery
implementation plans and performance management systems. At a mioimum,
every IDP must have cwo environmenral sector plans: the waste management and
wa ter services management plans. Many other environmental sector plans can
also be used by municipalities as detailed extensions of the IDP. Some of these
plans are required in terms of sector legislatlon, while others can be innovatively
(voluntarily) adopted and used by municipalities. Examples of sector plans include
loca l disaster management plans, local air qualiry managemem plans and local
coastal management plans. (For a detailed discussion of integrated development
planning as a LEG focus area and LEG instruments, see Retief a Cilliers 2015.)
Economic development and th e pursuit of a green economy
Municipalities must optimise their economic impact by having a clear vision for
the local economy and working in partnership with local business lo maximise job
creation and investmenL They can increase their positive socio-economic impact
by providing basic bousehold infrastructure, establishing affrrmativc procurement
policies, linking municipal contracts 10 social responsibilities, speeding up approval
procedures for land development, providing business support services to small
businesses and communities, promoting arts and culture and providing n_"Creational
facilities etc. Municipalities can play a role in establishing enabling conditions for
the green economy, for example by way of the developmen t and rigorous defence
of a clear land-use policy based on the recognition of and suppon for ecosystem
services, the establishment of energy-efficient standards and the prohibition of the
release of certain k:Jnds of effiuent into water resources [for a detailed discussion,
see Humby 2015).
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Realisation of substantive and procedural cnvironme_ntal rights
Municipalities are jointly responsible with tl1e national and provincial authorities
for realising the substantive constiiutional envirorunental right. which gives
everyone in Souih Africa the right to an environment that is not harmful 10 human
ltealih or well-being and tl1at commands resource conservation and ecologically
sustainable development. The constitutional rights of access to sufficient water and
adequate housiug as well as access to health care services find application in the
day-to-day operations of every municipality. The rights of access to (euvirorunental)
information andjust administrative action also fmd application in the decision-making
and other operations of municipalities, while communities· right to participate in
government· decision-making and other processes must be respected (for a detailed
discussion see Feris 2015 and Du Plessis 2015).
Public trusteeship and the sustainable use of natural resources
The South African public trust doctrine is aimed primarily at the state's protection
and preservation of the eco logical integrity of public trust resources. Apart from
the National Water Act 36 of 1998, each of the statutes U1at currently forms
pan of the public trust suite appoints 'the state· as the trustee of the public tTUSI
resource in question. 1l1e stale in this instance refers to national, provincial and
local authorities. There are explicit and so-called 'residuar duties flowing from
the public trust doctrine. The meaning of the public trust doctrine for municipal
decision-make.rs is arguably most deeply situated in the doctrine's functioning as a
general principle of inrerpretation and as dictating the approach of government to
be followed in LEG (Freedman 2015].
Sustainable service delivery
At the core of the functions of municipalities is the provision of basic and other
services. The manner in which these se.rvices are provided can directly and indirectly
contribute Lo sustainability or can contribute to failing LEG. Municipalities are
responsible for a range of environmentally relevant services including waste
management. the provision of water services and electricity reticulation. These
services must be provided but they must also be provided in an 'environmentally
sustainable way·. which refers to the provision of a municipal service
in a manner aimed at ensuring U1at (a) the risk of harm to the envirorunent
and 10 human healch and safety is minimised to the extent reasonably
possible under the circumstances; (b) the potential benefits to the
environment and to human health and safety are maximised to I.he extent
reasonably possible under the circumstances: and (c) legislation inteuded
to protect the environment and human health and safety is complied wilh
(ss 1 and 73 of the Local Government: Municipal SystentS Act 32 of 2000).
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Seventeen: Local government and the pu~uit of urban sustainability in South Africa
Pollution regulation
For South African municipalities., the regulation of pollution is a twofold issue.
Firstly, municipalities are obliged to control and manage potentia l pollution
emanating from !heir own activities and undertakings, some of which pose a
pollution risk, such as wasie water and solld waste management. Secondly, along
with other organs of state. municipalities have fundamental statutory obligations
to respect, protect. promote and fulfil the Bill of Rights, and to ensure a safe
and healthy envlronmen1 for everyone. TI1e duty of care and lite polluter pays
principles in environmental law are panicularly instructive in this context. Tuey
also have specific pollution governance responsibilities, some of which are clearly
stated in legislation. and some of which may be inferred from a range of broader
environmental governance responsibilities (for a detailed discussion, see Kotze 2015).
Environmental law compliance and enforcement
In the areas where municipalities do nave policing powers, for example noise
pollution and environmema.l health, it is through the application of their
municipa l by-laws and planning instruments. for example zoning schemes, that
municipalities become pan of the broader environmental enforcement effon.
Often local government is also involved in environmental enforcement by virtue
of the delegation of environmental powe.rs to municipalities and the appointment
of municipal officials to enforce national environmental legislation. It is also
possible for environmental management inspectors to be appointed in the local
govemmeni spbt!re (for a detailed dis(_1.lSSion, see Snijman 201 SJ.
Air quality management
The management of air quality in South Africa and the enforcement of air qualityrelated issues are the responsibility of municipalities. Metropolitan and district
municipalities are designated as licensing autl1orities unless interventions in terms
of ss 19 or 238 of the Constitution have Ileen made, in which case the provincial
government acis as the licensing authority. Some mun.icipal activities may require
U1e municipality to obiain an air emissions licence. Municipalities are farther
ohliged to include an air quality management plan in their IDP {for a detailed
discussion, see Engelbrecht ft Komelius 2015).
Solid waste management
As regulators, municipalities have signi.ficani responsibility with respect to solid
waste management and the issue of .linering in the urban and rural parts of the
country. Municipalities are jointly responsible for the implementation of the waste
hierarcl1y in South Africa, namely waste avoidance and reduction, re-use and
recycling, recovery, and treatment and disposal. Municipalities must further obtain
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Environmental Manageme_nt - A business management approach
waste management licences as per s J9 of the National Environmental Management:
Waste Act 59 or 2008. The main activity 10 be licensed is the provision or waste
disposal facilities, for example landfill sites. Eve:ry municipality is obliged 10
include an in1eg.rated waste management plan in its IDP (for a detailed discu!.-sion,
see Alberts 2015).
Water services provision and protection of water resources
Municipalities are legally obliged to l'nsure tbe provision or watl'r (a basic water
supply and sanitation) and waste-waler services in a sustainable manner, together
with being jointly responsible witb national and provincial government for tbe
sustainable use, protection and management of South Africa's water resources.
Activities that require authorisation by tbe Department of Water Affairs and
Sanitation include activities tbat impede or divert water in a watercourse or that
alter tbe beds, banks, course or characteristics or a watercourse, for example when a
municipality constructs storm-water drains and roads over streams. Municipalities
are also regulated in terms of the preventing and remedying or the effects of water
pollution and the control of emergency incidents (for a detailed discussion. see
Swart fr Adams 2015).
Environmental health services
In South Africa, environmental healtb services are an Integral part of primary
beallh care but the legislative scheme designates primary health care as a
provincial functlon with the majority or environmental health services being
a local government competence. The runction of municipal health services bas
become synonymous with that or ·municipal environmental he.a lth services', which
comprises in leans orthe Na1ional Health Act 61 of2003 the following components:
wa ter-quality moairoring; food control; waste management; health surveillance or
premises; the surveillance and prevention of communicable diseases; vector contro l;
environmental pollution control; the disposal of tbe dead; and chemical safety. lo
addition lo ensuring that municipal health services are part or the municipality's
IDP, each meiropolitan and district municipali1y has a duty to ensure that their
plans form part or the imegrared planning processes and the district health plan
for tbeir particular health district. The duties of municipalities as regulators range
from monitoring and inspections lo investigations (for a detailed discussion, see
May 2015).
Land-use management and planning
With a few exceptions (eg those land-use applications where nationa l departments
are the deciding authority, that is the Depanmen1 of Agriculture, Forestry and
Fisheries and the Depanmen1 of Mineral Resources), land-use planning bas
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Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
recently become the exclusive responsibility of municipalities. 1l1e Constitutional
Coun was peninen1 in rul ing in recent years that municipalities must exercise
their original constitutional powers with respect to municipal planning free from
undue interference from tbe other spheres of governmenL The ruling led to tbe
promulgation of tbe Spatial Planning and Land Use Management Act 16 of 2013.
TI1e Act stipulates a bosl of duties fo r municipalities including that each municipality
must adopt a spatial development framewo rk and tbat land-use management
systems must include all areas of a municipality and specifically include provisions
tha t are flexible and appropria te for the managemem of disadvantaged areas,
informal settlements and former homeland areas. Land-use planning may be
regarded as one of tbe most pertinent areas where local government contributes to
U1e environmental governance effort of ihe country on an ongoing basis (see the
Spatial Planning and land Use Management Act I 6 of 2013 (and Regulations] as
well as Retief a Cilliers 2015).
Soil conservation and land management
Municipalities must often implement national and provincial land management
legislation (eg legislation applkable to veld fires, tbe fencing of roads, railways
and land as well as tile protection of agricultural land)., while some of ilie governance
instruments at the disposal of local government are particularly suitable for land
management. for example the IDP and accompanying sector management plans
such as disaster management plans. Municipalities further have a role to play In rural
development and land reform by ensuring that poor urban residents have access to
municipal commonages for food production and ilie grazing of stock, for example (for
a detailed discussion, see Meyer 2015).
Hazardous substan ces management and control
Hazardous substances are released into the environment throughout their entire
chemical life cycle, wWcl1 presents a significant risk of accidents. Some of the
most common spills involve tanker trucks and railroad tanke.rs transporting
gasoline, chlorine, acid and 0U1er industrial chemicals. Municipalities play a role
as governors [by way of hazardous substances by-laws and by rendering firebrigade and disaster risk reduction services, for example] and must simultaneously
comply with we legal framework on hazardous substances that is aimed at sound
management practices during all phases of the chemical life cycle (for a detailed
discusslon, see Meyer l't Roos 2015).
Biodiversity management
The roles and responsibilities of municipalities in South Africa with respect
to biodiversity conservation specifically include: prescribing. adopting and
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Environmental Management - A business management approach
imp lementing spatia l J>lanning frameworks and land-use management systems;
regulating land-use dtange and development app lications; and managing
large tracts of munidpal land. According to the Constitution, the mandate of
municipalities in the context of biodiversity is narrowed to tbe administration
of munlc.i pal parks and beaches. Some municipalities have promulgated bylaws lo govern these functions, the oversight of which is gene.rally attributed
Lo the municipality's environmental re.source management department or an
equivalent. However, in practice municipalities' mandare over biodiversity is
rrequently far broader Lhan simply overseeing municipal parks and beaches.
Municipalities are generally responsible for managing local nature re.serves
and conservation areas falLing within their municipal boundaries, and several
have promulgated dedicated by-laws 10 govern these nature reserves. In terms
of the National Environmenta l Management: Biodiversity Act 10 of 2004
any person wanting 10 undertake an array of activities relating to an alien
species is gene.rally required to obtain a permit prior to doing so from the
Minister. The Act and its Alien and Invasive Species Regulations set out the
permllting process. wWch indudes provision for mandatory risk asse.ssmenL
Municipalities a re naturally compelled to comply with these permitting
requirements in so far as they seek Lo 1mdertake restricted activities relating
to a lien species on land subject to their owne.rsWp or control. Municipalities
should al so ensure tha t they comp ly with the broad duty of care relating 10
alien species (adapted from the discussion by Paterson 2015).
Urban ecology
One of tbe ways in wbich tbe notion of urban ecology is understood is tbe
·ecology of ci ties as urban ecosystems'. This refers 10 cities as ecosystems in
which buman beings are an integral component, and where integration between
natural systems and the human social system is promoted. This perspective is
based on tbe understanding that the 'natural" parts of the urban ecosystem provide
several functions (eg primary productivity, hydrological functions, nutrient
and mineral cycling, biodiversity, habitat and disturbance re.gulation) that are
related to tbe specific morphology of the urban areas. The most efficient way
Lo recognise these ecosystem functions is ro focus on the impnna·n t goods and
services they provide ro ciry residents. These are often dassified as provisioning,
socio-cultural, regulating and supporting services. This approach, however, also
includes those effects of the natural environment that city residents ex.peclem:e
as negative 10 1l1e.ir well-being, the so-called ·ecosystem disservices' (eg natural
disasters, financial and environmental costs, and social nuisances). In the context
of this understanding of urban ecology, municipalities may be expected to take
proactive steps to create awareness about and to protect the services provided by
urban ecosystems (adapted from the discussion by Du Toil a Cilliers 2015).
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Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
Marine and coastal managemen t
Amongst the chalienges faced by coastal municipalities are pollution of the coastal
and marine environment, erosion, climate change impacts on the coastal zone, ruaolT and storm-water management, sewage management and coastal infrastructure
management. 1n addition, coastal munlcipallties must govern beaches, Including
human behaviour thereon, safety and security issues, the use of the beach for
evenis, beach cleanlng and beach water quality. Coastal munlcipalltles are also
burdened with managing the tension that prevails between development imperatives
along the coast, the need for environmental protection, and managing clima te
change impacts. Coastal munlcipalities in South Africa, along with other spheres
of government. a.re tasked with 'coastal management', which is defined in terms of
s l of the National Environmental Management: Integrated Coasta l Management
Act 24 of 2008 as:
(a) the regulation, management, protection, conservation and rehabilitation
of the coastal environment;
(b) the regulation and management of the use and development of r.he
coastal zone and coastal resources;
(c:J monltoring and enforcing compliance with laws and policies that
regulate human activities within the coastal zone; and
(d/ planning in connection with the activities referred to in paragraphs
(a). (b) and (cJ (for a detailed discussion, see Parramon-Gurney 2015).
Heritage resou rces management
The National Environmental Management Act 107 of 1998 (NEMA) includes aesthetic
and cultural properties in the definition of the 'environment', characteristics more
tradltionally associated with heritage. In addition, some of the environmental
management principles listed in NEMA, which are applicable to the actions of
all organs of state (including munlcipalities) , confirm the viewpoint that the
environment and culture are inten:onnected. Section 2(4)(aJ(ill) slates that 'the
distu rbance of landscapes and sites that constitute the nation's c11/1ura/ heritage'
must be one of the factors to be cons.idered in sustainable development. The chapter
in NEMA on integrated environmental management merges ·cuJturnl' heritage
with environmental management by stating that one of the general objectives of
'integrated environmental management' is to
identify, predict and evaluate the actual and potential impact on the
environment, socio-economic conditions and cu/rural /rerirage, the risks
and consequences a nd al!ematives and options for mitigation of activities,
with a view to minimising negative impacts, maximising benefits, and
promoting compliance with the principles of environmental management
set out in section 2.
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Environmental Management - A business management approach
Municipalities are responsible for the identification and management of Grade lll
heritage resources and heritage resources whkh are deemed 10 fall within their
compeience in ierms of the National Beritage Resources Act 25 of 1999 (NHRA). The
NHRA provides that municipalities must integrate the management or these heritage
resources inio their urban and rural planning processes and that they should provide
for he.ri1age management in terms of mu.nicipal zoning schemes or by means or a
by-law (adapted from the discussion by Rautenbach, Hart El Naude 2015).
Disaster risk redurtion
Considering the activities assigned Lo the local sphere of government in South Alnca
(see the Local Government: Municipal Systems Act 32 or2000 and the Constiiuiion), it is
safe 10 argue that disaster risk reduction forms a crucial part of the total package of the
functions of local govemmeoL Moreover, local government is required uoder Schedules
4 and 5, part B of the Coosiituiion 10 provide for functions that are closely allied to
disaster risk reduction and climate cliange (including air pollution control, bullding
regulations. fudlghiing services, municipal planning, municipal health care, and water
and sanitation services). To this end, each municipality may, and every district and
metropoliian munldpality must, establish a number of statutory and physical structures
to ensure that disaster risk reduction is co-ordinated and implemented. These are: a
municipal disasler risk management plan as an in1egra1ed pan or the IDP; a municipal
disaster risk management framework; a municipal disaster risk management centre; a
munlcipal disaster risk management advisory forum; and a municipal interdepartmental
disaster risk managemelll committee (adapied from the discussion by Van Niekerk 2015).
Climate change adaptation and mitigation
Oimate change impacts are global and local, and climaie change is as much a
sub-national issue as a national one. Strategic planning is a crucial instrument
for local government to help mitigate and adapt to climate change and to become
involved with climate governance efforts. TI1e principal local planning mechanism
that a municipality will use in this respect is the IDP, together with different landuse planning instruments. The IDP could be an invaluable tool for a municipality's
design of shon-, medium- and long-term local climate action plans, especially in
so far as provision is made for the incorporation of supplementary sector plans
such as spatial development frameworks (SDFs) and other forward-planning
instruments derived from the specific environmental management acts (SEMAs)
and incidental local government and environmental legislation (Du Plessis El Kotze
2014; Van der Berg. Du Pies.sis a Murphree 2015).
Energy
Local government is the sphere of government that is best situated to promote smallscale renewable energy projects, for example, and is well positioned 10 create the
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Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
regulatory incentives to promote energy choices via building and zoning regulations,
and conditions anached to properties in Lhei r jurisdictions. Energy, however, includes
not only electricity and renewable energy, but also nuclear energy, fossil fuels, gas
and biomass. Energy legislation may as such be divided i11to legislation pertaining
specifically lo electricity, renewable energy, nuclear energy, petroleum, petroleum
pipelines and gas. South African energy law provides a role for local government
sometimes as the regulator, sometimes as the custodian of people's health, safety
and the environment, sometimes as the regulated, and sometimes as a commenting
authority. 1l1e legislation also prescribes how a developer should inreracr with
municipalities and local communities. A complex matrix of applicable wblte papers,
guidelines and strategies pertaining to energy issues and climate change foresees a
role for mUJIJcipalities in the regulation of these matt.ers. The role orlocal government
relates primarily to matters of reticulation and the transition 10 renewable energy
(adapted from Lhe discussion by Du Plessis & Murombu 2015).
Green building
There are various strategies and instruments that may help local government 10
improve the quality of life in human settlements, such as the planning, design
and development of sustainable and resilien t cities; the design and development
of infrastructure and buildings on greenfield sites (vacant sites on the periplmy
of, or within, a n existing town or city); urban restructuring (which involves
improving existing areas ill towns and cities): and upgrad.iug informal settlements
(usually focusing on providillg electricity, wa ter and sanitation services. relleviug
overcrowding, creatiug public meeting places and improving public transport
services). Municipalities must, as service providers and developers, comply
with environmental authorisation requirements and erect buildiugs only on
environmentally safe shes. TI1ey should also, as commenting authorities, provide
knowledge and guidance during environmental impact assessment (EIAJ applications
10 provincial and national governments, should ensure that land-use zoning
regul ations are enforced, and should ensure that urban land-use planning considers
Lbe U11pac1 of clU11ate change and the need 10 sustain ecosystem services when
consideriug settlements and infrastructure development proposals.
Municipalities shou ld lead the energy efficiency and climate change race by
example, by raising energy efficiency awareuess and by implementing specific
energy-saving measures within their own built environment Municipalities should
also implement and monitor tl1e South African National Standard (SANS) 204
energy efficiency standards for all buildings. Furthermore. al] public buildings
must be audited by qualified energy auditors as part of tbe Energy Audit
Programme of tbe Department of Public Works. The mUJIJcipality should also, as
a water service provider and/or water services authority, limit the use of water by
limli:ing development in water-scarce regions and by promoting waler efficiency
and the reuse of waler in its own buildings and others in the municipality.
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Environmental Management - A business management approach
The municipality has a duty as an owner of any building on any piece of land to
implement poll ution prevention controls and where applicable to apply for ihe necessary
water use registrations and Licences required in terms of s 21 of the National Water Act.
ln relation to waste management in erecting or managing buildings, municipalities
must introduce and implement measures that seek 10 reduce the amount or waste that
is generated and, where waste is generated. to ensure that the waste is reused, recycled
and recovered in an environmentally sound manner, before being safely treated and
disposed o[ Furthermore, munidpatities have the duty to repon the discovery of
land 1ha1 is significantly ront.1minared as a result of historical activities during
construction and operation.
ln terms or limiting the use of natural resources in erecting buildings, the
municipality can play a critical role in promoting the uncoupling or production
and consumption from resource use by choosing and promoting the selection and
use of more sustainable goods and services. l ocal government is further obliged
to promote the design and development of buildings or lasting significance. It
should also belp identify buildings of cultural significance in order to assist tbe
South African Heritage Resources Agency (SAHR.A) in compiling and maintaining
heritage registers, and should infonn the SAHRA when such buildings have been
destroyed, for the SAHRA 10 update the relevant registers (adapted from the
discuss.i on by Wessels 201 Sa).
Green procurement
Although green public procurement is not expressly rec1uired in environmental and
procurement legislation, there is enough scope in existing legislation and policy to
justify the use of green procurement as a public procurement and environmental
governance tool The l ocal Government: Municipal Systems Act goes so far as
to require that a municipality should take into account !he direct and Indirect
costs and benefits associa ted with a project, including the expected effect or any
service delivery mechanism on the environment. This implies that municipalities
should already at the procurement stage of a project consider its environmental
implicarions. There are implications for municipalities in the sporadic and
indirect references to environmentally responsible procurement in law and policy.
Municipalities should lead by example and innuence existi ng procurement
processes as some of the metropolitan municipalities have done. Furthermore, a
municipality should consider environmental criteria when purchasing services and
also adhere 10 environmental criteria when providing services or where municipal
services are purchased (adapted from the discuss.i on by Wessels 201 Sb).
Sustainable mobility
South A.fric-d's transport secto r faces many environmentally relevant challenges.
Many of the challenges are exacerbated by the country's apartheid spatial planning
340
Seventeen: Local government and the pu~uit of urban sustainability in South Africa
ideology Utat resulted in cities being characterised by low density, sprawl, racial
segregation and exclusionary transpon systems favouring private motor vehicle
use. 1n the South African context, typical modes of shared mobility include those
in the public trdllSpon sector such as general and metro railway services, bus rapid
transit [BR11 systems, and lhe Gauteng rapid rail [Gautrain) system [Department
of Transport 2015). Other modes include the MBT industry (Nk.ambuJe Et Govender
2014) and other on-demand ride services such as Uber and Locomute. Locomule
Is Africa's 6r.it car-sharing network and is intended for short trips. Users access
the service through an app which allows them to reserve a car, locate the nearest
one and also 10 unlock lhe vehicle. Cars can be accessed in public areas in-dueling
shopping malls, street parking and filling stations. At the end of the trip, users lock
U1e vehicle using tl1e app [Thule 2016).
Several legal and policy instruments have been developed 10 promole, inter
al ia, susta inability in the transpon sector of South Africa, see, for example, the
Urban Transpon Act 74 of 1977, 1be National Land Transport Ac1 5 of 2009, the
Taxi Recapitalization Policy, 2009 and the National Transpon Mas1er Plan, 2016.
Other planned laws and pollcies for the same 1mrpose include lhe Natlonal land
Transpon Amendment Bill submitted to Cabinet in March 2017, the White Paper on
National Transpon Policy submitted to Cabinet by March 2017, and tl1e National
Railway PoHcy to be submitted to Cabinet by March 2018. Municipalities have
an important role to play in improving urban access [eg connecting jobs and
residential zones) Uuough inlproved mobility and in pursuing more sustainable and
climate-f-riendly options in the provision of shared/local public and other transport
services and infrastructure.
17.4 The law and policy framework and instrumentation for local
environmental governance
When, where and how South African municipalities should contribute to the
coumry·s environmental governance effort along the line of the sector- based areas
higbligh1ed above are relatively open questions unW one Stans to dissect the detail
of the combination of applicable local and e.nvirorunemal laws and policies.
Section 24-of the Constitution entrenches the right of everyone in the country to
an environmeot that is noi harmful to health and well-being, and the protection of
the country's natural resources for the eojoyment of present and future generations,
without compromising economic or social development. Section 24 protects and
demaods sm1ainable development and since its inception has sparked the total
overhaul and further development of environmental law in the rnuntry. In 2007
lhe Constitutional Court coaunented on the extended scope of application of lhe
environmental right and explained the interrelationship between the environment
and developmeot as foUows (Fuel Re1aikrs Association of Sourhem Africa v Din'ctorGenera/: E11viro11111e11tal Ma11a9emei11, Dep11rtme11r of Agriculture, Co11sema1io11 and
E,111iro11merrr, Mpuma-/anga Pro11incc, and Otl,ers 2007 (6) SA 4 [CC) para [45)):
34-1
Environmental Management - A business management approach
The Constitution recognises the interrelationship between the environment
and development; indeed ii recognises the need for the proiection
of the environment while al il1e same time it recognises the need for
social and economic development. It contemplates il1e integration of
environmental protection and socio-economic development. 11 envisages
thai environmental considerations wilJ be balanced with socio-economic
considerations through the ideal of sustainable development. This is
apparent from section 24/bJ(iii) which provides that the environment
wilJ be protected by securing 'ecologically sustainable developmeni
and use of natural resoun:es while promoting justifiable economic and
social development'. Susiainable development and sustainable use and
e.,c_ploitation of natural resources are al the core of the protection of
the environment.
The adoption ofa constitutional environmental right with broad application resul ted
in the design, development and in1plementation of several national environmental
laws, the most signilkant of wliich is NEMA As is explained elsewhere in this
volume, NEMA and a range of other specific and sector environmental laws
collectively call for a strategy to deal wiili natural resources that is aimed at
shaping and changing the behaviour of people in their environment 10 achieve the
appropriate interrelationship between matters environmental, social and economic.
As part of its transition to a democratic country Souih Africa has since the
early 1990s also wiinessed fundamenta l change in the design and functioning of
local government. Loc-.tl government has been institutionally transformed into a far
more autonomous sphere of government wiill greater 11.'SJJOnsibillty and increased
legally entrenched powers and functions. 1l1e transition that took place after 1996
is described, inter alia, in s A of the While Paper 011 Local Govemme111 GN 423
in GG 18739 of 13 March 1998. Local government in South Africa bas far more
constitutionally entrenched power a nd autl1ority than in pure federal government
systems such as the prevailing systems in Australia, Germany and the United States
of Ame.rica, for example. Today, the Constitution, the Local Government: Municipal
Systems Act 32 of 2000 and the Wlrile Paper 011 Local Govemme/11 (1998) among
other local government laws and policies reiterate ilia! municipalities must not
only provide services and be 'developmental', bur they must also promote a safe
and healthy environment (s I 52(1)(d) of the Constitution; s 4(2)(,1 of the Municipal
Systems Act), and they sliould contribute, together with other organs of Slate, to the
progressive realisation, inter alia, of the constitutional environmental right [a 4(3]
of the Municipal Systems Act). Developmental local government is described in the
W11i1e Paper 011 Local Govem111e11t [Section Bl as 'local government committed to
working with citizens and groups within the community to find sustainable ways
Lo meei their social, economic and material needs and improve the quality of their
lives: Developmental local government is furil1er expected to 'play a central role
in representing our communities, protecting our human rights and meeting our
basic needs:
342
Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
It follows that since 1996 South African municipalities ltave had to extend tile
provision of conventional municipal services ro all communities wltile also being
developmental. Titis extended, constitutionally entrenched development task must
be executed in tandem with concomitant environmental duties. Environmental laws,
among other legal provisions, lnfoon and guide the execution of the municipal
developmental mandate and service dellveiy function, that is wltat local government
busies itself witlt daily. Not only the constitutional environmental right. but also
the objectives and principles of tbe entire body of environmental law in general
are directed at SUS!alnabillty in the broad sense. In so far as enviro nmemal law also
binds local government, municipalities are required to internalise the meaning of
sustainability witlt each of its dimensions as well as the elements necessary for local
government action (Ne! a Du Plessis 2015). The elevated status that local government
acquired after 1996 means. among other things, that local governments have become
jointly responsible organs ofs1ate that are answerable to communities and that incur
responsibility together with the national and provincial spheres of government. This
means that. in so far as local government is an autonomous sphere of government,
the duties of "the state· or "the government" are, al least for some part, duties also of
municipalities where it is not explicitly stated that this is not so.
Ne! et al (2015: 91) contend pertinently that the ·(s)uccessful implementation of
LEG ... depends on the selection, adoption and use of a range of management and
governance methods, mechanisms and techniques·, collectively referred to as "LEG
instruments'. They explain that the concept of instruments (or tools) is relatively
well understood by most in the governance, management, public administration
and policy fields (ibid). In these fields instruments are perceived as the tools used
by decision-makers. managers and governors to achieve specific outcomes. LEG
ire.1:ruments have diJTerent objectives, addressing specific needs, while they often
also function on different scales. They can range from strategic, tactical and polilical
instrumerus (cg strategic environmental asst.-ssments (SEAs), inicgrated development
plans (IDPs). environmental management frameworks [EMFs), municipal policies and
policy frameworks) to operalional and technical instruments [cg sector management
plans for waste, water, disaster management, biodiversity and air quality) as well as
to instruments ensuring sound engagement with stakeholders (eg public participation
and consultation processes and wan) commiitees). Nel et al funber bold that only
when a municipality uses ·a careFuJJy assembled portfolio of LEG instruments on the
mos1 appropriate scale can an instrumentation-driven transition towards improved
environmental performance commence' (ibid: 94).
As U1e discussion above suggests, Soutlt African municipalities face many legal
requirements to adopt and use LEG instruments. Their adoption and successful use
should be part of the legal compliance management portfolio of all municipalities.
Some of these mandatory instruments are often creatively used to achieve more
than rl1eir design objeclives. Some instruments are not necessarily required by law
and policy, but they are adopted and used on a voluntary basis to achieve outcomes
that exceed legal dictates or other expectations.
343
Environmental Manageme_nt - A business management approach
The functions. powers and duties, and hence also the instruments that municipalities
may adopt and use, are provided for by the Constiiution, as well as by national and
provincial environmental and local government legislation. While municipalities
may be aware orthru functions, powers aod duties as prescribed by the Constitution
and local government legislation, some are unaware of the numerous other roles
they have to fulfil or the duties and mandates that they have in terms of sectorspecific national and provincial e1111ironml'11tal legislation. Such legislation may,
for example, empower, or demand or municipalities to issue a by-law or a policy;
prepare a plan; iake municipal anion; submit comments to other organs of Slate;
obtain a permlsslon or authorisation; or undertake a risk assessment. A municipality
may in addition also use available common-law principles to achieve environmental
goals in its area of jurisdiction, for example by instituting an Interdict against a
person 1101 complying with the conditions in an environmental authorisation, or to
stop a polluting or an environmentally degrading development or activity.
Environmental management and governance instruments can therefore
be deemed 10 be anything that can be used to achieve an environmental or
sustainability-related outcome. [nstruments are a means to an end and not an
end in themselves. A considerable suite of LEG instruments is available to
municipalities. The availability of instruments that are lit for purpose in local
government is generally believed not to be a problem. A range of tried and tested
instruments is available m those municipal office bearers interested in adopting
and using them. What may be a challenge is the ability of local government
officials and politicians to select the correct instrument, or suite or instruments.
and use it to its fullest potential. Anoti1er challenge is to understand that no
single LEG instrument offers a definitive and complete solution to users. No one
LEG instrument or class of LEG instruments is applicable Lo all circumstances.
Many LEG Instruments have limited performance capabilities, since they have
been designed to do and achieve very specific things, while others have extended
or cross-functional application capabilities. A combination or instruments is
thus required to assure optimal performance. The successful improvement of
LEG performance depends on the use or a suite or LEG instruments (Emilsson,
Tyskeng 8 Carlsson 2004). Different LEG instruments may be required for different
phases of local decision-making, or for different management and government
cycles. wbile I.be outputs or one instrument are often likely to lnfonn another
(ibid). Municipalities must select a suite of LEG instruments carefully to avoid
dupliL.ilion and overlap, thus preventing injudicious and fruitless expendllure,
for example.
344
Seventeen: Local government and the pursuit of urban sustainability in South Africa
17.5
Conclusion
The environmental governance effort of the public sector, thai is governmeni,
depends on a deep understanding of the role and functions of its constituent
parts. This chapter focused on the local sphere of South Africa-the approximately
257 municipalities Uta! cover South Africa's land from coast to coast and wall to
wa ll. The departure point was that towns and cities form a key pan of Ute total
environmental governance effort globally and In South Africa. Cities are made up of
two key assets: space (their territories] and people (the agglomerating community).
On this basis it is agreed that 'for South Africa lo achieve an inclusive, sustainable
growth trajectory depends on strengthening the ability of cities to suppon spatial
transformation and dynamic ... livelihoods' (South African Cities Network 2016:
42) and further on how municipalities govern others, respond to how they are
being governed, manage their own environmental footprint and co-manage the
national environmental resource base within their areas of jurisdiction (Ne.I el al
2015). ln our country an extensive law and policy framework exists that carves out
a role for municipalities with respect lo various ·environmental sectors', but most
notably a duty to help realise I.be constitutionally entrenched right of everyone to
an environment that is not harmful to human health or well-being. This duty bas
been judicially confirmed by the South African couns and mirrors the focus on
cities in the latest body of global urban policy- the most prominent of which is
probably Goal II of Ute SDGs.
A range of LEG instruments is scanered across South African environmental and
local government law and policy. This means Utat, to a large extent, municipalities
are legally enabled lo take on their environmental governance mandate and bring
about positive change. 1n addition to using governance instrumenis voluntarily
or as pan of the legal duties of tbe municipality. every municipality is further
responsible for its own compliance with applkahle environmental law and for
operating internally in a fashion that supports instead of stifles sustainable
development in the local sphere.
In conclusion, South African cities need to be able 10 respond 10 global
opportunities and build resilience against potential environmental and other
threats, while simultaneously meeting the local needs of communities. This is a tall
order. The macro issues involving local government include the effects of climate
change and increasing regional and global linkages. In contrast. responding to
local needs by planning and implementing the municipal mandate demands more
urgent shon-term projects and action. Responsive local government Is a key
in.gredient in the success of all LEG efforts- the urban resilience and sustainability
of South African cities hlnges on the ability of city leadershlp and managers to find
a balance between the long-term impacts of global systems, immediate domestic
developmental demands, and the opportunities presented by the LEG instruments
provided for in environmental and local government law and policy.
345
Environmental Manageme_nt - A business management approach
Review questions
I.
What is the role of local government in the pursuit of urban
sustainability in South Afrira?
2.
How does urban sust ainability relate to global sustainability?
3.
Provide an overview of South Afrira's urban policy framework.
4.
What ls the role of municipalities as lol!llJ governmental institutions?
5.
What is meanl by the term 'wall to wall' local government?
6.
What are the responsibilities of municipalities in terms of local
environmental governance (LEG)?
7.
List the areas of responsibility of municipalities and provide a short
description of eacb.
8.
What is the fun11tion and importance of integrated development plans
(!DPs)?
9.
Provide more information on economic developmem and the pursuit of a
green economy.
10. What ls the role of municipalities reganilng i.he realisation of substantive
and procedural environmental rights?
IL &plain the concept of public trusteeship and the sustainable use of
natural resources.
12. What does sustainable service delivery entail?
lJ. What are the responsibiliLies of municipalities in terms of pollution
regulation?
14. Describe environmental law compliance and enforcement as It relates Lo
local government.
15. Who is Ie1Jonsible for ait quality management?
t6. Provide an overview of solid waste management by local government
17. Provide an overview on water servites provision and the protection of
water resources.
I 8. What does municipal environmental health services entail?
19. What does land-use management and planning entail?
20. What does soil conservation and land management entail?
21. What are the responsibiJitles of municipalities in terms of hazardous
substances management and control?
346
Seventeen: Local government and the pu~uit of urban sustainability in Sou th Africa
22. What are the roles and responsibilities of municipalities in South Africa
with regard to biodive:rsit;y conservation and management?
23. ProvWe an overview of the coni;epl of urban ecology.
24. Describe the challenges faced by coastal municipalities.
25. Define the term 'coastal management'.
26. What does heritage management entail?
27. Describe the disaster risk. reduction responsibilities of local government
in South Africa.
28. Describe climate change adaption and mitigation in (erms of local
govemmeni responslblUties.
29. Explain. the responsibilities of local government in terms of energy.
30. What does green building entail?
31. Describe the concept of green procurement and what it entails.
32. Explain how municipalities should address sustainable mobiliiy.
33. How does s24 of the Constitution relate to sustainable development?
34. Describe the role and impact of LEG in urban sustainable development.
35. What instruments and tools can be used to successfully impleml!Tlt LEG?
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350
Learning Outcomes
After studying this chapter, you should bt- able to:
• id,ntify and dt'SCrib, the units that make up the World Bank Group
• describe the safeguard policies of the IBRD and IDA
• distinguish between the four categories of projects as dassified by the World Bank
• outline the IFC's sustainability frameworks
• describe the eight petformancestandards that an lfCcflent must meet throughout
the lift of an lnvt'stmcnl by the IFC
• describe What an ESMS entails
• explain how the risk management proct'SS addresses the performance standard
of the IFC
• describe tht' role of management programmes in the risk management process
• explain how IFC Performantt Standard 1 rtlates to and addre= stakeholder
engagement
• outline the purpose of a stakeholder engagement plan
• describe
•
tne role of the griMnct mechanism In terms ofIFC Performanct Standards
provide a detailed description of the goal of the Environmental and Social
Framework (ESF)
• describe the 10 key process Environmental and Social Standards (ESSs}
• explain why banks would adopt the Equator Principles (EPs}
• explain the application of EPs
• describe the 10 EPs in detall
•
provide an outline of the policies adopted by the African Development Bank
Group (AffiB)
• describe tht- fllle Operatfonal safeguards formulalt'd by thl! AfDB
• describe the roles and responsibilities of country development programmes
• discuss the revised Integrated Environmental and Social Assessme_nt Guidanct
Notes ln detail
•
provide an overview of the way forward In terms of tht- safeguard policies of
international financial institutions.
Environmental Manageme_nt - A business management approach
Overview of this chapter
This chapter is intended to help you understand the important concepts of the
safegua rd policies of international financial institutions. These international
financial institutions include the World Bank Group. the Equator Principles, and
the African Development Barut.
18.1
Introduction
Almasi all developing countries have promulgated laws and created fonnal
governmental structures 10 ensure that environmental considerations are taken
into account in development planning. Most have formal requirements for the
preparation and submlssion of environmental and social reports as a required
step in the authorisation of new projects and plans. Environmental practitioners1.hose persons and companies producing these repons- need to accommodate
country-specific requirements when preparing their submissions. However, the
international financial institutions that contTOI the resources needed by developing
counlries have also developed their own policies and standards lo ensure that
social and environmental concerns are addressed: these may impose more stringent
requirements than country legislation and therefore place additional demands on
those assessing lhe social and environmental dimensions of d~elopmenl projects
and plans. 111ese safeguards require borrowers 10 mitigate certain risks in order
10 receive rmancing. Exan1ples include conducting an environmenta l and social
impact assessment. consulting with affected communities, respecting the rights of
indigenous peoples, and restoring the llvclihoods of displaced people. Titis chapter
is intended to provide readers with an overview of the safeguard mechanisms that
fmancial institutions have adopted: it does not address the challenges of their
implementation nor provide a critique of their effectiveness.
The larger commercial banks that finance development projects have a.Isa
developed a banking industry framework and set of p dnciples for addressing
environmental and social risks in project financing. The founding banks wanted the
adoption of the principles 10 be globally applicable (to fmancial institutions in the
northern and southern hemispheres] and the equator represents that balance- thus
1.he name, Eq uator Principles (EP). TI1e founding banks concluded that the best, most
commonly known and widely tested environmental and social policy framework
in the finance sector was the performance standards established and used by the
International Finance Corporation in emerging markets. These standards included
environmental and social safeguard policies, pollution prevention and abatement
guidelines, and criteria for assessing risk. As most of the world·s largest banks have
embraced the Equator Principles, these principles now also influence the work
undertaken by risk, social and environmental assessors.
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Eighteen: The sar-eguard polldes of international financial Institutions
18.2
Th e World Bank Group
Alter World War Il, Europe and the rest of the world embarked on a lengthy period
or reconstruction and economic development to recover from lhe devastation
inllicted by the war. The Bretton Woods Agreement was developed al the United
Nations Monetary and Financial Conference held in New Hampshire. USA, during
July I944. Major outcomes or this conrerence includetl the formation or the
lnternational Monetary Fund and the International Bank for Reconstruction and
Development [[BRO). The fBRD was lhe original 'World Bank"- but the World Bank
Group is now made up or the following five separate but inter- related units:
• The International Bank for Reconstruction and Development [[BRO) aims to
reduce poverty in middle-income countries and crediiworthy poorer countries
by promoting sustainable development through loans, guarantees, risk
management products, and analytical and advisory services.
• Tue International Development Association (IDA) is the part or the World
Bank that helps the world"s poorest countries. Established in 1960, IDA
aims to reduce poveriy by providing loans (called credits) and grants for
programmes that boost economic growth, reduce inequalities and improve
people's living conditions.
•
The International Finance Corporation [IFC) focuses exclusively on the
private sector in developing countries. ll does so uy making medium- and
long-term loans; purchasing clients· debt instruments which do not carry
sovereign guarantees; making equity investments; mobilising fonds from
other leaders and investors; and providing a variety of financial and
technical advisory services. Jt was established in 1956.
•
The Multilateral Guarantee Association (MIGA} is the member of the World
Bank Group U1at provides guarantees 10 promote foreign direct investment
into developing countries to foster economic growth. reduce poveriy and
improve people's lives. It was established in 1988.
The International Centre for the Settlement of Investment Disputt.-s' (ICSJD)
primary purpose is to provide facilities for conciliation and arbitration of
international investment disputes. The ICSID Convention is a multilateral
treaty formulated by the executive directors of the International Bank for
Reconstruction and DevelopmenL It came into force on 14 October L966.
•
Starting in the lace I 970s, the World Bank Group recognised that to be sustainable
their projects must consider more than economic Issues. A number of policies
were thus developed to 'safeguard' environmental and social aspects or projet:ts.
Initially the safeguard policies were only applicab le to fBRD and IDA projects. IFC
projects were subject to the safeguard policies between 1999 and 2006, but since
2006 IFC investments have been subject to eight separate 'performance standards',
which govern the borrower·s role and responsibilities with respect 10 people and
their environment
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Environmental Manageme_nt - A business management approach
Because or the somewhat diffuent approach and requirements of the public sector
(IBRD and IDAJ and private sector [JfC) units or the World Bank Group. it is
necessary that those compiling environme111al and social assessments for projects
requiring World Banksuppon ltoow with which unit they are involved and precisely
whai that unit"s requirements are. In August 2016 the bank's executive direciors
approved a controversial new Environmental and Social Framework to expand and
harmonise these approaches. The date on which the new rramework will become
effective had ant been aru1ounced as of October 2017.
18.2. 1 The safeguard policies of IBRD and /DA
Sa[eguard policies are board-approved mechanisms for l111egratlon of environmental
and social issues into the decision-making process. They provide a set of
documents (operatlonal policies-DPs; bank procedures-BPs; guidance notes; and
an environmental assessment sourcebook) to suppon development processes and
support participatory approaches and trnnsparency. Nine of lhe safeguard policies
are specific and cover.
•
physical cultural resources OP/BP 4. U
•
disputed areas OP/BP 7.60
•
•
forests OP /BP 4.36
indigenous peoples OP/BP 4. JO
•
•
international waterways OP/BP 7.50
involuntary resettlement OP/BP 4. I 2
•
•
natural habitats OP/BP 4.04
pest management OP 4.09
•
safety of darns OP/BP 4.37.
The 10th safeguani policy. environmental assessment (OP/BP 4.01), is the umbrella
policy for environmental and social management which is used in the bank to
examine the potential environmental and social risks and benefits associated with
bank investment lending operations. It is the main IBRD and IDA mechanism for
integrating environmental and social concerns into stra regies, policies, programmes
and projects. II does so by specifying the minimum requirements that all bank
investment lending operations must meeL
As it is the overarching operatlonal policy for safeguaniing the environmentboth bio-physical and social-the requirements of OP 4.01 will be detailed funher.
As the safeguard policies and procedures are modified and updated from Urne to
time, the World Bank safeguani policy website should be accessed for derails of
ocher DPs and for l11e current version of OP 4.01.
The first parngraph of OP 4.01 requires environmental assessment (EA) of
projects proposed for bank financing to help ensure that they are environmentally
sound and sustainable, and thus to improve decision-malting. EA is regarded as
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Eighteen: The safeguard policies of international financial institutions
a process whose breadth, depth and type of analysis depend on the nature, scale
and potential environmental impact of the proposed project. EA must evaluate
a project's potential environmental risks and impacts in its area of influence;
examine project alternatives; and identify ways of improving projl.'l-1. selection,
site, planning, design and implementation by enhancing positive impacts and
preventing, minimising, mitigating or compensating for adverse impacts. EA
includes the process of mitigating and managing adverse environmental impacts
throughout projet_1 implementation. Preventive measures must take precedence
over mitigatory or compensatory measures.
EAs are required to take Into account the natural environment (air. water and
land in their geographic, ecological and temporal context); human health and
safety; involuniary reseUlemeni, indigenous peoples and cultural property; and
trans-boundary and global environmental effects. EA must consider natural and
socia l aspects in an integrated way. EA is initiated as early as possible in I.he project
cycle and must be in1egra1ed closely with the economic, financial, institutional,
social and technical analyses of a proposed projecL
TI1e bank undertakes environmental screening of each proposed project 10
determine the appropriate extent and type of EA. The bank classifies the proposed
project into one of four categories, depending on the type, location. sensitivity and
scale of the project and the nature and magnitude of its potential environmental
impacts. A proposed project is classified as category A ifit is likely to have significant
adverse environmental impacts that are sensitive. diverse or unprecedented. These
impacts may affect an area broader than the sites or facilities subject to physic-.u
works. EA for a category A project examines the project·s potential negative and
positive environmental impacts, compares them with those of feasible alternatives
(including the ·without project' situation), and recommends any measures needed
to prevent, minimise, mitigate or compensate for adverse impacts and improve
environmental performance. For a category A project, the borrower is responsible
for preparing a report, nom1ally an E1A (or a suitably comprehensive regional or
sectoral EA).
A proposed project is classified as category B if its potential adverse environmental
impacts on human populations or environmentally imponant areas- including
werlands, forests, grasslands and other natural habitats- are likely to be less adverse
than those of category A projects. Category B impacts are site-specific; few if any of
them are irreversible; and in most cases mitigatory measures can be designed more
readily than for category A projects. The scope of EA for a caiegory B project may
vary from project to project, but it is narrower than that of category A.
A proposed project is classified as category C if it is likely to have minimal
or no adverse environmental impacts. Beyond screening, no further EA action is
required for a category C projecL
A proposed project is classified as category Fl if it involves invesunent of
bank funds through a financial intermediary (Fl), in sub-projects that may have
adverse environmental impacts. The bank requires that each FI screen proposed
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Environmental Management - A business management approach
sub-projects and ensure that sub-borrowers cany out appropriate EA for each
sub-project. Before approving a sub-project, Lhe Fl musL verify (Lhrough irs
own sLa_ff. outside experts or existing environmen1al institutions) that the subproj('(·t meets Lhe environmental requirements of appropriate national and loc-.il
authorities and is consistent with OP 4.01 and other applicable environmental
policies or the bank.
For all category A and B projects proposed for IBRD or IDA financing, during
1he EA process, the borrower- lhrough Lhe consultants contracted to compile the
EA repon- musi consuli project-a!Tecied groups and local non-governmental
organisations (NGOs) about the project"s environmental aspects and mus1 take their
views into accounL The borrower is responsible for initiating such consultations as
early as possible. For category A projects, the borrower must consul! these groups
al least twice: {a) shortly after environmental screening and before the teons of
reference for the EA are finalised; and (bl once a draft EA report is prepared.
In addition. the borrower must consult with such groups tbroughou1 project
implementation as necessary to address EA-related issues that affect them. For
meaningful consultations between the borrower and project-affected groups and
local NGOs on alJ category A and B projects, the borrower mus! provide relevant
material in a timely manner prior 10 co11sulta1lon and in a form and language thal
are undemandable and accessible to t.he groups being consulted. For a category
A project, t.he borrower mUSl make the draft EA repon available at a public place
accessible 10 project-affected groups and local NGOs. Any category B report for a
project must be made available lo project-affected groups and local NGOs. After
an EA report bas been submit1ed 10 the bank, t.he bank makes the report publicly
available through its lnfoSbop.
Under the safeguard policies, t.he onus of ensuring t.ha1 Lhe policies are
implemented resides with bank staff and not with the borrower. The onus is
reversed in the IFC Performance Standards and when these standards are used lo
ensure envlronmen1al and social sustainability of projects, ii is the client, and no1
bank staff, that musl take responsibilily for compliance. When 18.RD or IDA or a
borrower is allegetl to be causing harm by violating any safeguard, complaioLS can
be lodged through the Inspection Panel, an independent body formed in 1993 tha1
enables aITec1ed parties to requesr an invesrigarion imo the bank"s role in projects.
As or September 2017 the pane.I bad received 120 requests for inspection. Of these,
30 were found to be ineligible as they did not fall wilhln the panel"s mandate.
Fifty-six requests were resolved without the need for detailed investigations and
34 cases were subjected to full investigation. Details of U1e requests and subsequen1
findings and actions may be found on the Inspection Panel"s website.
18.2.2 The sustainability framework and performance standards of the IFC
In I 999 the IFC, U1e private sector lending ann of U1e bank, adopted the bank"s
safeguards. However, since 2006 ii has followed eight separate ·performance
356
Bghteen: The safeguard policies of international financial institutions
standards' that govern the client's role and responsibilities. These environmental
and social standards were developed to be better suited to Lhe private sector Lhan
the safeguard policies that· were designed for the public sector. These performance
sLandards are:social and environmental assessment and management systems; labour
and working conditions; pollution prevention and abatement; community, bealtit,
safety and security; land acquisition and involuntary resettlement; biodiversity
conservation and sustainable natural resource management; indigenous peoples;
and cultural heritage. Following an extensive review process. the IFC developed
a Sustainability Framework that consists of a Policy on Environmental and Social
Sustainability. Performance Standards, and an Access to lnfom1ation Policy.
The Sustainability Framework and the revised Performance Standards were
issued in January 2012. The revised standards slill cover the 2006 topics but
also address issues that are increasingly irnponant to sustainable businessessupply chain managemenr, resource efficiency, climate change, and business
and human rights.
IFC's Sustainability Framework is an integra.l pan of its approach to risk
managemenL The Policy on Environmental and Social Sustainability describes
IFC's commitments, roles and responsibilities relaLed to environmenta l and social
sustainability. IFC's Access to Information Policy reflects its commitmem to
transparency and good governance in its operations, and outlines 1.he corporation's
institutional disclosure obligations regarding its investment and advisory services.
The performance standards are for clients, providing guidance on how to identify
risks and impacts, and are designed to help avoid, mitigate and manage risks and
impacts as a way of doing b1.e,;ness in a sustainable way. They also include guidance
on SLakebo lder engagement and disclosure obl igations of the clien t in relation to
project-level activities. The eight performance standards establish standards that
an IFC client must meet throughout the life of an investment by IFC. TI1e 2012
perfoanance standards arc as follows:
•
Performance Standard I: Asses~,nent and Management of Environmental and
Social Risks and Impacts.
•
•
Performance Standard 2: Labour and Working Conditions.
Performance Standard 3: Resource Efficiency and Pollution Prevention.
•
Performance Standard 4: Community Heal th, Safety, and Security.
•
•
Performance Standard 5: Land Acquisition and Involuntary RescnlemenL
Performance Standard 6: Biodiversity Conservation and Sustainable
Managen1en1 of Living Natural Resources.
•
Performance Standard 7: Indigenous Peoples.
•
Performance Standard 8: Cultural Herliage.
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Environmental Management - A business management approach
ln the same way that OP 4.01 is an overarrhing safeguard policy, Perfonnance
Standard I establishes:
the importance or [i) in1egra1ed assessment 10 identify the environmental
and social impacts, risks, and opportunities or projects; (ii) eITectlve
community engagement through disclosure or project-related infonnation
and consultation with local communities on matters that directly affect
them; and (iii) the client's management. of environmental and social
perfonnance throughout the life of the project.
Perfoanance Standards 2 Utrough 8 establish objectives and requirements
10 avoid, minimize, and where residual impacts remain, to compensate/
oITset for risks and impacts to workers, Affected Communities, and
I.be environmenL While all relevant environmemal and social risks
and potential impacts should be considered as part or the assessment,
Perfoanance Standards 2 Uirough 8 describe potential environmental and
social risks and impacts that require particular attention.
Where environmental or social risks and impacts are identified, the
client is required to manage them through its Environme111al and Social
Management System (ESMS) consistent wirh Pe.rformance Srandard I.
Perfoanance Standard I applies 10 all projects that have environmental and social
risks aod impacts. In addition to meeting the requirements under the performance
standards, ffC clients must also comply with applicable national law. including
those laws implementing host country obligations under international law. Clients
are also required to adhere 10 the World Bank Group's Euvironmental, Health and
Safety Guidelines (EHS Guidelines). These are:
technical reference documents with general and industry-specific
examples of good international industry practice. lFC uses U1e EBS
Guidelines as a technical source of infocmation during project appraisal.
Tue EHS Guidelines contain the perfoTJnance levels and measures that
are nonnally acceptable lo IFC, and that are generally considered 10 be
achievable in new facilities al reasonable costs by existing technology.
For IFC-financed projects, application or the EHS Guidelines to existing
facilities may involve the establishment of site-specific targets with an
appropriate timetable for achieving them. The environmental assessment
process may recommend alternative (higher or lower) levels or measures,
which, if acceptable lo IFC. become project- or site-specific requirements.
When host country regulations differ from the levels and measures
presented in the EHS Guidelines, projects are expected to achieve
whichever is more stringent.
358
Eighteen: The sareguard polldes of international financial Institutions
The rFC performance standards require the following:
111e c.lienl, in coordination with other responsible government agencies
and third parties as appropriate, will conduct a process of environmental
and social assessment, and establish and maintain an Environmental and
Social Management System (ESMS) appropriate lo the nature and scale of
the project and commensurate with the level of its environmental and social
risks and impaccs. The ESMS will incorporate the follO\ving elemems: (i)
policy: (ii) identification of risks and impacts; (iii) management programs;
(iv) organizational capacity and competency; (vi emergency preparedness
and response; (vi) stakebolderengagemenl; and (vil) monitoring and review.
The ESMS must define the environmental and social objectives and principles that
will guide the project 10 achieve sound environmental and socia l perfoanance. The
ESMS provides the framework for Ute environmental and social assessment and
management process. The client mus1 also establish and use a process consistent
with good international practice for identifying and managing project-relaled risks
and impacts.
The process may comprise a full-scale environmental and social impact
assessment, a limited or focused environmenlal and social assessment, or
straightforward application of environmental siting, pollution standards, design
criteria or construction standards.
The risk management process must be undertaken by competent professionals
and consider all relevant environmental and social risks and impacts of the project,
including the issues identified in performance standards 2 lo 8, as well as all parties
wlto are likely to be affected by such risks and impacts. TI1e risks and impaccs
identification process must also consider the emissions of greenhouse gases, the
relevant risks associated with a changing climate and potential trans-boundary
effects, such as pollution of air and 1he use or pollution of international waterways.
Risks and impacts must be assessed for the project's entire area of influence and
consider the risk of cumulative effects and impacts on biodiversity and ecosystem
services. With respect to affected parties:
the client will identify individuals a.ad groups that may be directly and
differentially or disproportionately affected by the project because of
their disadvantaged or vulnerable status. Where individuals o r groups
are identified as disadvantaged or vulnerable, the client will propose and
implement differentiated measures so that adverse impacts do not fall
disproponionarely on them and they are not disadvantaged in sharing
development benefits and opportunities.
To address identified risks and impacts the client is required to establish a
management programme. This programme mus1 first seek to avoid impacts and,
where this is not possible, to minimise them. Unavoidable residual impacts may
require compensation or offsets.
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Environmental Management - A business management approach
Where the identified risks and impacts cannot be avoided, the client
will identify mitigation and performance measures and establish
corresponding actions to ensure the project will operate in compliance
with applicable laws a nd regulations, and meet the requirements or
Perfoanance Standards I through 8. The level of detail and complexity
of this collective. management program and the priority of the identified
measures and actions will be commensurate with the project"s risks and
impacts, and will take account of the outcome of the engagemen1 process
with AJTected Communities as appropriate.
The management programmes will establish environmental and social Action
Pla ns, whidt will define desired ou1comes and actions 10 address the issues raised
in the risks and impacts identification process. as measurable events to the ex1ent
possible, with elements such as performance indicalors, targets or acceptance
criteria that can be 1.racked over defined time periods and with estimates or the
resources and responsibilities for implementation. As appropriate, the managemeat
programme will recognise and incorporate the role or relevant actions and events
controlled by lhlrd parties lo address identified risks and impacts. Recognising the
dynamic nature of the project, the management programme will be responsive
to changes in circuntSlances, unforeseen events, and lhe results of moniloring
and review.
The management programme must identify the persons responsible for
environmental and social performance and allocate sufficienl human and financial
resources on an ongoing basis 10 achieve effeCLive and continuous results. External
experts may have to be appointed. Responslble personnel must have the knowledge,
skills and experience necessary lo perform tbeir work, including current knowledge
or the host country's regulatory requirements and the applicable requirements or
performance sta ndards I 10 8. Personnel must also have the knowledge, skills
and experience to implement the specific measures and actions required under
the ESMS and the methods required 10 perform the actions in a competent and
efficient manner.
The ESMS is also required to establlsh and maintain an emergency preparedness
and response system so that the client, in collaboration with appropriate and relevant
third partles, will be prepared to respond to accidental and emergency situations.
It must also establish procedures 10 monitor and measure the effectiveness of
the managemen1 programme, as well as compliance with any related legal and
contractual obligations and regulatory requirements. Where appropriate, clients
should involve representatives from affected communities in monitoring activities
and retain independent experts to verify monitoring information. The cllent's senior
manage.rs must review monitoring results and take appropriate steps to ensure the
intent of the cl ient's policy is met, that procedures, practices and plans to ensure
the health and sarety or people and the environment are being implemented, and
tha t they are seen to be effective.
360
Bghteen: The safeguard policies of international financial institutions
lFC Pe.rfocmance Standard I gives significant attention to meaningful stakeholder
engagement as this is seen to be:
the basis for building strong, constructive, and responsive relationships that
are essential for the successrul management of a project's environmental
and socia l impacts. Stakeholder engagement is an ongoing process that
may involve, in varying degrees, the following elements: stakeholder
analysis and planning, disclosure and dissemination of information,
consultation and participation, grievance mechanism. and ongoing
reponing to Affected Communities.
The re<1uirements for meaningful consultations with affected communities are detailed:
When Affected Communities are subject to identified risks and adverse
impacts from a project, the client will undertake a process of consultation
in a manner that provides the Affected Communities with opportunities to
express U1eir views oa project risks, impacts and mitigation measures, and
allows the client to consider and respond to them .... EITective consultation
is a LWo-way process that should: (I) begin early in the process of
identification of environmental and social risks and impaclS and continue
on an ongoing basis as risks and impacts arise ; (ii) be based on the prior
disclosure and dissemination of relevant, trauspareOL, objective, meaningful
and easily aL-cessible information which is in a culturally appropriate local
language{s) and format and is understandable to Affected Communities; (iii)
focus inclusive engagement on those directly affected as opposed to those
not directly affected; (iv) be free of external manipulation, interference,
coercion. or Intimidation; (vi enable meaningful participation, where
applicable: and (vi) be documemed. The client will tailor its consultation
process to the language preferences of the Affected Communities, their
decision-making process, and the needs of disadvantaged or vulnerable
groups. If clients have already engaged in such a process, they will provide
adequate documented evidence of such engagemenL
Stakeholder engagement plan
A stakeholder engagement plan must he developed to identify and communicate
with the range of stakeholders likely to be alTected by the projecL This plan
should specify how communication and elTective dialogue will be implemented. It
should detail how affected communities will be provided with access to relevam
information on;
(i) the purpose, nature, and scale of lhe project; (ii) the duration of
proposed project activities; (iii) any risks to and potential impacts on
such communities and relevant mitigation measures ; (iv) the envisaged
stakeholder engagement process; and (vi the grievance mechanism.
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Environmental Manageme_nt - A business management approach
For projects with potentially significant adverse impacts on affected communities
an infonned consul tation and participation IICP) process must occur. ICP involves
in-depth exchange of views and infonnation, and an organised and iterative
consultation, leading to the client's incorporating into their decision-making
process the views of tl1e affected communllies on matters Uiat affect them directly,
such as the proposed mitigation measures, the sharing of development benefits and
opportunities, and implementation issues:
For projects with adverse impacts to Indigenous Peoples, the client is
required Lo engage rhem in a process of ICP and in certain circumstances
the client is required to obtain their Free. Prior, and lnfoaned Consent
(FPIC). The requirements related 10 Indigenous Peoples and the definition
of the special circumstances requiring FPIC are described in Perfonnance
Standard 7.
Grievance mechanism
Another important requirement is establishment of a grievance mechanism 10
receive and facilitate resolution of affected communities' concerns and grievances
about the client's environmental and social perfonnance. It should seek to resolve
concerns promptly, using an understandable and transparent consultative process
that is culturaliy appropriate and readily accessible, and at no cost and without
retribution lo the pany ihat originated the issue or concern. The mecl1anism should
not impede access to judicial or administrative remedies. The client must inform
the affected communities about the grievance mechanism in the course of tbe
stakeholder engagement process.
IFC clients must address project-related grievances or complaints from affected
parties. If clients fail to address grievances, complainants can allege violations of
the performance standards and approach the IFC Compliance Advisor Ombudsman
(CAO), an internal watchdog that re-pons directly to the president of the World
Bank Group. The CAO caseload represents approximately 11\b of the overall IFC and
MIGA ponfolios.
IFC safeguards have also played a standard-setting role in developiug countries
and amongst private banks involved in project finance. The Equator Principles.
a set of social and environmemal standards based on rhe JFC's perfonnance
standards, have been adopted by most responsible private financial institutions.
These principles are discussed below.
78.2.3 The Environmental and Social Framework
In August 2016 the executive directors of the World Bank Group adopted a draft
Environmental and Social Framework [ESF). However, tl1is document must be
finalised and supplemented with guidanre documents before it can become effective.
An assessment of the bank's readiness to implement the proposed framework is
362
Eighteen: The safeguard policies of international financial institutions
also required. It is envisaged that the safeguard policies will ruo in parallel with
1.he ESF for approximately seven years after the launch of the ESF, that is until all
projects approved under the safeguard policies have dosed.
The as yet incomp lete ESF is the outcome ofa six-year review. Following a 2011
report from U1e World Banlc."s Independent Evaluation Group (IEG). the executive
directors instructed bank management to revise and harmonise the bank·s existing
safeguards policies. The revision was intended to: (a) increase coverage and
harmonisation of safeguards across the bank group; (b} enhance client/borrower
capacity, responsibility and ownership; (c) strengthen safeguards supervision,
monitoring and eva luation, to ensure rigorous implementation of bank pollcies:
and (di improve accountability and grievance redress systems.
TI1e resulting framework aims to advance sustainable development through
effective and more efficient risk management while seeldng to harmonise the
safeguard policies approach of IBRD and IDA with the IFC's performance standards.
The IFCs eight pei:formance standards have been la.rgely adopted with the addition
of two funher standards re.lated to financia l intermediaries and to stakeholder
engagement and information disclosure. TI1e proposed Environmental and Social
Standards [ESS) establish the borrower·s responsibilities to provide adequate
protection for people and the environment in projects supponed by the World
Bank under OP 10.00, Investment Project Financing. Controversy bas arisen over,
inter alia, the proposed ESF aim of increasing the use of borrower frameworks to
meet environmental and social outcomes and a Jack of a11ention to hwnan rights.
ESS I and ESS 10 are the key process ESSs. The remaining standards address
specific U1emes. Many of the standards are further elaborated upon in the World
Bank Group"s Environmental, Health, and Safety Guidelines:
ESS I: Assessment a11d Ma11ageme111 0JE11vira11111e111a/ and Social Risks and Impacts
This is the overarching standard that provides the procedural basis for an integrated
environmenta l and social assessment of investment projects. It is based on a ciskdriven. outcome-based and proponionate assessmeni of project impact. How
disadvantaged and vulnerable groups may be affected by projects and how impacts
may be addressed must be disclosed. It incorporates the concept of ecosystem
services, and measures to manage risks are required. It builds on U1e existing
OP/BP 4.01, Environmental Assessment. and, together with ESS 10, applies to all
investment projects.
ESS2: Labour and Worki11g Cor,ditio11s
This standa rd provides a set of operatfonal pollcy requirements for labour and
working conditions in investment projects. The standard prohibits child and
forced labour and supports freedom of association and collective bargaining. lt
requires the provision of a grievance mechanism for project workers, and addresses
occupational health and safety.
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£553: Resource Efficie11cy and Pollution Preve11tio11 a11d Marrageme11t
Titis standard addresses the efficient management of energy, water, raw materials
and other resources. II also requires borrowers co characterise and estimate
emissions of air pollutants, including project- related greenhouse gas entisslons. It
also deals witb pest management.
ESS4: Community Heu/ti, arrd Safety
A projects' risks io and impacts on communities is the focus of this standard. It deals
with the design and safety aspects of d;uns, infrastru~ture, equipment, services,
traffic and bazardous materials. It includes requirements for the deployment of
security personnel
£555: Land Acquisitio11, Restrictio11s 011 La11d Use orrd h111oluntary Resettlement
The key provisions ofOP/BP 4.12, lnvolun1ary Resettlement, including the principles
of compensation at replacement cost and assistance in restoring o r improving
livel ihoods are re1ained. l1 gives explicit recognllion 10 the importance of exploring
ways for affected people to share in the benefits of tbe project.
£556: Biodiversity Conseroation and Sustainable Ma1wgeme,1/ oflivi11g Na tum I Resoun:es
This standard incorporates key provisions OP/BP 4.04, Natural Habitats, and OP/
BP 4.36, Forests, requiring borrowers lo assess and take measures to mitigate the
impacts of tbe project on biodiversity, including loss of habitat, degradation and
the introduction of invasive alien species. It also establishes principles to govern
the sustainable use of living natural resources, such as forests and fisheries.
£557: Indigenous Peoples/Sub-Salrararr African Historically Und~rsen,edTraditional
Local Communities
ESS? mailllains key provisions ofOP/BP 4. 10. lndigenous Peoples, while recognising
that different terms are sometimes used to describe Indigenous Peoples. It requires
Free, Prior and Informed ConsenL For the purpose of this standard, consent refers
to U1e collective suppon of affected indigenous peoples/sub-Saharan African
historically underserved traditional local communities.
£558: Cultural Heritage
This standard reaffians the objectives of OP/BP 4.11, Physical Cultural Resources.
IL requires projects to use chance finds procedures and otber approaches to protect
cultural heriiage. It also requires consultation with affected communities. lt
broadens the definition and treatment of cultura.l heritage lo include both tangible
and intangible cultural heritage.
£559: Financial Intermediaries
Financial Intermediaries must, through Ibis new standard, put in place an
environmentaJ and social management system with associated procedures. 11 draws
on existing financial intermediary requirements under OP 4.01 and OP 4.03, as well
as IFC's approach to such operations.
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Bghteen: The safeguard policies of international financial institutions
ESS 10: Stakeltolder Engageme11r and J11formotio11 Disclosure
Titis new standard consolidates and improves provisions related to borrower
engagement with stakeholders, including meaningful consultation, access 10
infoonation and grievance redress. Ii provides for ongoing dialogue between
the borrower and stakeholders, including projec1-affec1ed parties, throughout
Ute life of a project, and lays out requirements for infoonation disclosure and
grievance redress.
18.3
The Equ at or Principles
By adopting the Equator Principles [EPs), ordinary banks can show their commitmem
10 financing development projects I.hat are socially and environmentally sustainable:
tliis is achieved through assessing and managing environmental and social risks in
projects that Utey fund. The EPs were launched on 4 June 2003 and were inltially
adopted by JO of the world's largest commercial banks; JO years later 79 hanks
have committed ro I.he principles. The EPs have been subject 10 two rounds of
revision; the revised principles apply from I January 2014. Titree South African
banks liave adopted the EPs.
The fim paragraphs of the Preamble 10 the EPs read as follows:
Large infrastructure and industrial Projects can liave adverse impacts on
people and on the environmenL As financiers and advisors, we work in
partnership with our clients 10 identify. assess and manage environmental
and social risks and impacts in a structured way, on an ongoing basis.
Such collaboration promotes sustainable environmental performance
and can lead to improved financial, environmental, and social outcomes.
We, the Equator Principles Financial Institutions [EPF!s). liave adopted
the Equator Principles in order to ensure that the Projects we finance
and advise on are developed in a manner Uta l is socially responsible and
reflects sound environmental management practices. We recognise the
importance of climate change, biodiversity, and human rights, and believe
negative impacts on project-affected ecosystems, communities, and the
climate should be avoided where posslbie. lf these impacts a re unavoidable
they sliould be minimised, m iiigated, and/or offseL
The E!Ps apply globally and to all lndustey sectors and cover four financial
products: project fmance advisory services and project fmance when total project
capital costs exceed US$ JO million; project-related corporate loans (subject to
certain conditions); and bridge loans. While the EPs are not intended 10 be applied
retroactively. the EPFI will apply U1em to the expansion or upgrade of an existing
project where changes in scale or scope may create significant environmental
and social risks and impacts, or significantly change the nature or degree of an
existing impact.
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Environmental Manageme_nt - A business management approach
The EPs consist of 10 fonnally stated principles together wilh two annexes (Climale
Change: Allematives Analysis, Quanrificatian and Reporting of Gr!'enhou.se
Gas Emissions and Minimum Reporting Req11iro11r-111s). TI1e implememation
requirements detailed in these annexes are an integral part of the EPs and are
mandatory requirements for EPF!s.
The first of the EPs relates to review and categorisation:
When a Project is proposed for financing, the EPP! will, as part of its
internal environmental and social review and due diligence, categorise
it based on the magnitude of its potential environmental and social risks
and impacts. Such screening Is based on the environmental and social
categorisation process of the International Finance Corporation (IFC).
Using categorisation, the EPFrs environn1en1al and social due diligence
is mmmensurate with the nature, scale and stage of the Project, and with
the level of environmental and social risks and impacts.
The categories are:
Co1egory A - Projects with potential significant adverse environmental and
social risks and/or impacts that are diverse, irreversible or unprecedented;
Ca,egory B - Projects wiil1 potential limited adverse environmental and
social risks and/or impacts that are few in number, generally site-specific,
largely reversible and readily addressed through mitigation measures; and
Calegory C - Projects with minimal or no adverse environmental and
social risks and/or impacts.
Principle 2 specifies the requirements for environmental and social assessmenL
For all category A and caregory B projects, an EPFl requires the client to
conduct an assessment process to address, to the EPFl's satisfaction, the relevant
environmentaJ and social risks and impacts of the proposed project. The assessment
documentation should propose measures to minimise, mitigate and olTset adverse
impacts in a manner relevant and appropriate 10 the nature and scale of the
proposed project. Tue assessment documentation needs to be an adequate, accurate
and objective evaluation and presentat.ioa of the environmental and social risks
and impacts, wbeU1er prepared by the client, consultants or extema.l expens.
For all ca tegory A, and as appropdaie for category B projects, the assessment
documentation must include an environmental and social impact assessment (ESIA}
together with such specialised st udies as may need to be undert.aken. Io limited
hlgh-dsk circumstances, it may be appropriate for the client co complement its
assessment documentation with specific human rights due diligence. For category C
projects, a limited or focust-'tl environmental or socia l assessment. or application of
environmentaJ siting, pollution standards, design criteria, or construction standards
may be deemed adequate.
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Bghteen: The safeguard policies of international financial institutions
Principle 3 sets out the applicable environmental and social standards.
A distinction is made between countries based on their legislation systems
and institutional capacity to protect their people and the natural environmenL
Designated countries are those countries deemed to have robust environmental and
social governance. The list or designated countries can be found on il1e Equator
Principles Association website. No African countries are listed.
An EPFI requires that the assessmen t process evaluates compliance with the
applicable standards as follows:
I. For Projects located in Non-Designated Countries, the Assessmen1
process evaluates compliance with the then applicable IFC Perfonnaoce
Standards on Environmen tal and Social Sustainability (Perfonnaoce
Standards) and il1e World Bank Group Environmental, HeaJU1 and
Safety Guidelines (EHS Guidelines).
2. For Projects located in Designated Countries, the Assessment process
evaluates complia nce with relevant host country laws, regulations,
and pennits that penaio to environmental and socia l issues. Host
country laws meet the requirements of environmental and/or social
assessments [Principle 2), management systems and plans (Principle
4), Stakeholder Engagement [Principle 5) and, grievance mechanisms
[Principle 6).
The assessment process will establish to tbe EPFl's satisfoction the project·s overall
compliance with, orjustified deviation from, the applicable standards. The applicable
standards (as described above) represent the minimum standards adopted by lbe
EPFI. The EPFl may, al their sole discretion, apply additional requirements.
Principles 4, 5 and 6 relate respectively to the necessity for an environmental and
socia l management plan, stakeholder engagement and establishment of a grievance
mechanism. These principles are congruent with the equivalent requirements of IFC
Perfonnance Standard.
Principles 7, 8, 9 and 10 are specific to the EPs, although based on rhe quality
assurance mechanisms of the IFC Performance Standards.
Equator Principles 7 and 9 relate 10 independent review 10 ensure compliance
with the requirements of ilte EPs. Principle 7 applies to compliance with assessment
documentation:
(For) Project Finance
For all Ca tegory A and, as appropriate, Category B Projects, an
lndependen1 Environmental and Social Consultant, not directly associated
with the client. will carry out an Independent Review of the Assessment
Documentation including the ESMPs, the ESMS, and tbe Stakeholder
Engagement process documentation in order to assist U1e EPFI's due
diligence, and assess Equator Principles compliance.
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Environmental Manageme_nt - A business management approach
The lndependen1 Environmental and Social Consultant will also propose
or opine on a suitable Equator Principles Action Plan (AP) capable of
bringing the Projec1 in10 compliance with the Equa1or Principles, or
indica1e when compliance is not possible.
(For) Project-Related Corporate Loans
An lndependen1 Review by an Independent Environmental and Social
Consultant is required for Projects with potential ttigh risk impacts
including, but not limi1ed to, any of the following: adverse impacts on
indigenous peoples: Critical Habi1a1 impacts; signilicam cuhural beri1age
impacts: large-scalr reseulemenl.
In other Ca1egory A, and as appropriate Category B, Project-Related
Corporate Loans, the EPFI may determine whether an Independent Review
is appropriate or if in1emal review by the EPFl is suffidenL Titis may take
into accoum the due diligence performed by a multilateral or hila1eraJ
financia l institution or an OECD Export Credit Agency, if relevanl.
Principle 9 requi.res independent review of all monitoring and reporting aclivities
required by the EPs:
To assess Project compliance with the Equator Principles and ensure
ongoing monitoring and reporting after Financial Close and over the life
of the Joan, the EPFI will, for all Category A and, as appropriate. Category
B Projects, require the appointment of an Independent EnvirollllleOLal
and Social Consultant. or require that the client retain qualified and
experienced external experts 10 verify its monilocing information which
would be shared with the EPFl.
For Projects where an Independent Review is required under Principle 7.
ilie EPFl will require the appointment of an Independent Environmental
and Social Consultant after Financial Dose, or require that the client
retain qualified and experienced external experts to verify its monitoring
information whlcl1 would be shared with the EPFl.
The eighth EP requires formal covenants bet:WL'CD clients and EPFls: the covenants
link compliance with the EPs to project finandal documen1ation. For all projects,
1he clienl must covenant in the financing documen1ation to comply with all
relevant host country environmental and social laws, regulations and permits in
all maiecial respects. For category A and category B projects, the client must also
coveaanl the financial docume111ation:
(a) 10 comply with the ESMPs and Equator Principles AP (where
applicable) during the construction and operation of the Project in all
material respects: and
(bl lo provide periodic reports in a fom1at agreed with the EPFl (with the
frequency of these reports proportionate to the severity of impacts, or
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Bghteen: The safeguard policies of international financial institutions
as required by law. but not less than aunuaUy). prepared by in-house
stalT or third party expens, that
(i)
document compliance with the ES MPs and Equator Principles AP
(where applicable). and
(ii) provide represen.t ation of compliance with relevant local, state
and host counby environmental and social laws, regulations and
permits; and
(cl to decommission the facilities, where applicable and appropriate, in
accordance with an agreed decommissioning plan.
Where a client is noi in compliance with its environmental and social
covenants. the EPFI will work with the client on remedial actions to bring
the Project back into compliance to the extent feasible. lf the client fails to
re-establish compliance within an agreed grace period, the EPFI reserves
the right to exercise remedies, as considered appropriate.
The final and 10th Equator Principle Is devoted lo reporting and transparency.
Reponing by both clients and EPF is specified. A client is required to make a
summary of the environmental and social impact assessment available online and is
also required to report greenhouse gas (GHG) emission levels ducing the operational
phase for projecrs emitting over 100 000 tonnes of CO2 equivalent annually.
TI1e EPFI must report on the total number of project finance advisory services
mandated during the reporting period. The 1otal must be broken down by sector
and region. The EPA must also report on the total number of project finance
transactions and total number or project-related corporate loans that reached
financial close during the reporting period. TI1e totals for each product type must be
broken down by category (A. B or C) and then by: sector (ie mining, inErastrunure,
oil and gas, power, others; region (ie Americas, Europe Middle East and Africa, Asia
Pacific); countty designation (ie designated country or non-designated country);
and whether an independent review has been carried ouL This information must be
published on the EPFl's website.
18.4 The African Development Bank
On 17 December 2013 the hoards or the African Development Bank Group (AJDB)
adopted a new integrated safeguards system {[SS) to be the cornerstone of the
bank's strategy to promote growth that is socially inclusive and environmentally
sustainable. The ISS seeks to promote best practices in these areas and to encourage
greater transparency and accounrabiliry. It provides for input from people who are
affected by bank-funded operations, especially the most vulnerable communities. by
providing, inter alia. project-level grievance and redress mechanisms-a slructured,
systematic and managed way of allowing the voices and concerns or alTected
people to be beard and addressed during project planning and inlplementation.
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Environmental Manageme_nt - A business management approach
TheAIDB adopted its first Environmental Policy in 1990: Environmental and Social
Assessment Procedures fESAPs) in 2001; the lnvolun1ary Resettlement Policy in
2003; and a revised Policy on the Environment in 2004. Although superseded, these
policies underpin the bank's 2013 environmental and social safeguards, which set
out the requirements for environmental and social assessment and management
measures to mitigate project-related risks.
The AIDS also has cross-cutting and sector policies that contain commitments
10 promote environmeot·al and social sustainability in bank operations: policies
on health (1996); imegrated water resourres management (2000); agriculture
and rural developmeot (2000]; gender (2001): co-operation with civil society
organisations (2001); involunlal)' resettlement [2003); poverty reduction (2004);
as well as a civil society engagement framework (2012). However, none of these
policies provide specific safeguard requirements that ensure that environmental
and social sustainability are built into AIDS investments as condltions for funding.
Titis shoncoming is addressed in the 2013 ISS, which supersedes all provisions in
previous policies on environmental and social safeguards and compliance.
The ISS consists of four interrelated components:
I. The Integrated Safeguards Policy Statement describes co,nmon
objectives of the Bank's safeguards and lays out policy principles. It
is designed 10 be applied to current and future lendlng modalities, and
it takes into account the various capacities and needs of regional
member countries in both the public and private sectors.
2. Operational Safeguards (OSs) are a set of five safeguard requirements
that Bank clients are expected to meet when addressing social and
environmental impacts and risks. Bank staff use due diligence, rt'view
and supervision 10 ensure that cl ients comply with tl1ese requirements
during project preparation and implementation. Over time the
Bank may adopl additional safeguard requirements or update existing
requiremeoLS 10 enhance effectiveness, respond 10 changing needs,
and reflect evolving best practices.
J. Environmental and Social Assessment Procedures (ESAPs) provide
guidance on the specific procedures that U1e Bank and its borrowers or
clients should follow to ensure that Bank operations meet the
requiremenlS of the OSs at each stage of the Bank's project cycle.
4. Integrated Enviro nmental and Social Impact Assessment (IESIA)
Guidance Notes provide technical guidance to the Bank's borrowers
or clients on standards on sector issues, such as roads and railways,
hydropower, or fisheries, or on methodological approaches clients or
borrowers are expected to adopt 10 meet OS standards.
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Eighteen: The safeguard policies of international financial institutions
The AIDB bas formulated five Operational Safeguards:
•
OS 1: £1111iro11111e11tal and Social Assessmem. This overarching safeguard
governs the process of determining a project's environmental and social category
and the resulting environmental and social assessment requirements. It covers
the scope of application; categorisation; use of a strategic environmental
and social assessmeni and social impact assessmeni; and environmental and
social management plans. It addresses assessment of vulnerability to climate
change; public consultation; community impacts; appraisal and treatment of
vulnerable groups; and grievance procedures. It updates and consolidates the
policy commitments set out in the bank"s earlier policies on the environment.
•
OS 2: Involu11tary Resettlement: umd Acquisition.• Populatio11 Displace111e111
and Compensation. This safeguard consolidates the policy commitments and
requirements set out in the AIDB"s policy on involuntary resettlement, and it
incorporates refinements designed to improve the operational effectiveness of
those requirements. In particular, it embraces notions of livelihood and assetsaccounting for tl1eir social, cultural and economic dimensions. It also adopts
a definition of community and common property tlta t emphasises the need to
maintain social cohesion, community structures and ilie social inter-linkages
thai common 1>roperiy provides.
The safeguard retains the requiremem to provide compensation at full
replaceme.m cost; reiterates the imponance of a resettlement plan that wiH
improve s1andards of living, income-earning capacity and overall means of
livelihood; and emphasises ilie need to ensure tltat social considerations, such
as geuder, age and stake in the project outcome, do not disenfranchise projectaffected people.
OS 3: Biodiversity and Ecosystem Sen1ices. The objective of this safeguard is
to conserve biological diversity and promote the sustainable use of natural
resources. It translates into OS requiremenis the AIDB's commitmems in irs
policy on integrated water resources management aud the UN Convention on
Biological Diversity. The safeguard recoguises the imponauce of biodiver.;ity
on the African continent and the value of key ecosystems to the population.
It emphasises the need to respect, conserve and maintain the knowledge,
innovations and practices of iudigenous and local communities and to
protect and encourage customary use of biological resources in accordauce
with traditional cultural practices that are compatible with conservation or
sustainable use requirements.
OS '1: Pollution Prl'11e11tion and Control, Gree11/1ouse Gases. Hazardous
Materials and Resource Efficiency. This safeguard cove.rs ilie range of impacts
from pollution, waste and hazardous materials for which tl1ere are agreed
intemational conventions and comprehensive industry-specific standards that
other mulrilaieral development banks follow. II also introduces vulnerability
•
•
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Environmental Management - A business management approach
analysis and monitoring ofGHG emissions levels and provides a detailed analysis
of the possible reduction or compensatory mt"asures framework.
•
OS 5: Labour Co11dirio11s, Healrh a11d Safe1y. Titis safegu an! establishes the
hank"s requirements for Us borrowers or clients concerning workers" conditions,
rights and protection from abuse or exploitation. it cover.; working conditions,
workers· organisations, occupational health and safety, and avoidance of child
or forced labour.
In November 2015 the third component of the AfDB's Integrated Safeguards System,
the revised Environmental and Social Assessment Procedures were published. The
revised ESAP details the procedural basis for the operationalisation of the lmegrated
Safeguards Systems. It lists the specific procedures that I.be bank and its borrowers
o r clients should follow to ensure that bank operations meet the requirements of
U1e operational safeguards at each stage of the bank"s project cycle. The ESAP
describes how the bank and its borrowers should work togeU1er to ensure that
environmema l, climate change and social considerations are integrated into the
project cycle from country programming to post completion.
Country development prog.rammes must update their policies, programmes aod
capacities so that environmental and social dimensions are given due weight when
determining lending priorities. At the project identification phase, the screening
exercise places a project in one of four categories based on the potential adverse
environmental and social impacts of the project. Ihls is followed by a scoping
exercise to define the scope of the environmental and social assessments [ESA)
to be completed by the borrower. The preparation of these assessments requires
consultations with primary and secondary stakeholders. The procedures require
public disclosure of summary documents. For category 1 projects, documents
must be disclosed for 120 days for public sector projects and at least 60 days for
private sector operations. All category 2 operations mw.'l be disclosed for JO days
before board deliberations. Throughout the project cyde, the joint participation of
environmentaJ and social expertise in project screening. scoping, field missions aod
audits is required. The ESAP places I.be re.~ponslbility for integrating environmental
and sociaJ considerations into sponsored projects squarely on the shoulders of the
borrower. Borrowers must ensure that environmental and social management plans
are developed and implemented to ensure that adverse impacts of projects are
addres.~ed. The AffiB assumes responsibility for monitoring the project impacts and
results, and 1viJJ verify compllance through supervision missions and environmental
and social audils, to assess the environmental and sociaJ sustainabilit:y of projects.
TI1e bulk of the ESAP document comprises 25 annexes. These are extremely
detailed and specific: the steps required to complete an ESA are specified; who
has responsibility for these steps; and the specific outputs required at all stages of
a project.
1l1e revised Integrated Environmental and Social Assessmem Guidance Nares
were published in December 2015 and fomt I.be fourth componeni of the ISS.
372
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l_j
Eighteen: The safeguard policies of international financial institutions
They are intended to be helpful resources for regional member commies when
undenaking environmenta l impact assessmems for AIDS-financed projects or
prog.rammes. A priority aim of the guidelines is developing the capacity or counuy
safegua rd and environmental management systems throughout Af-rka.
The guidance materials are organised in three volumes:
•
Volume I: E11viro11111ental a11d Social Assessme11I btstmments and Outputs
In Operationa l Safeguard I (OS1) and the ESAP, environmental and social
assessment instruments and outputs are introduced. These include tbe use
of strategic environmental and social assessment for policy and programme
lending and the use of environmental and social management frameworks
and systems for programme lending and financial iniermediaries. There is
emphasis on compliance monitoring during project implementation as well
as attention to country systems. Ute guJdance is designed specifically to
complement the ESAP Annexes, which provide templates and report formats
in many cases.
•
Volume 2: E1111ir1mmn1tal and Social Assessment Topics
Tbe operational safeguards introduce or elaborate on a number of ESA
requirements and topics. They provide bank and borrower staff with clear
guidance to ensure a high level of understanding of what is requJred, good
practice on meeting the requirements and, where appropriate, sources
of good technical irtformation. Some of these topics reflect specific OS
requirements such as applying safeguards to policy and programme lending.
public (free, prior and informed) consultation and grievance mechanisms.
Some address specific areas or environmental and sodal risk: resettlement.
pollution control, vulnerable groups, cultura l heritage, environmental Hows,
biodiversity, GHG emissions and labour standards.
•
Volume J: Guida11ce 011 Specific Sectors-Sector Keysheets
Thlrty specific project types within four kL'Y sector areas are addressed.
Checklisrs are provided 10 identify typical project componl'nrs, sources of
impacts, commonly applied as.~essment methods and likely management options.
These are for use both by AIDB staff to assist in the process of screening projects
in the early stage of the project cycle, as well as for borrower tailoring of
terms of reference for environmental and social assessments.
Through the implementation of its ISS, the AIDS anticipates tbat iL will: (i) promote
social and environmental benefits, (ii) protect against harm, (iii) pursue a sustainable
approach ID development that will generate benefits in terms or environmental
security and hmnan well-being, and (iv) manage projects' trade- offs in tbe best
interest of Africa's development. The ISS is the primary tool that the AIDB will use
to promote the well-being of Africa's people while tbe ESAP and the IESIA Guidance
Notes are intended to provide a strong procedural basis for the operationalisation or
the ISS in member countries.
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Environmental Management - A business management approach
18.5
Adaptations and lessons learnt
The current environmenial and social policies of most international financial
institutions are in a state of flux with more attention being given to human rights,
gender inequality and labour practice. 1n August 2016, the World Bank Group
adopted a new set of environment and social policies called tbe Environmental and
Social Framework (ESF}. Preparaiions 10 implement the ESF are unde.rway, with
implementation starting in 2018. The ESF will incrementally replace the Safeguard
Policies; the two will operate in parallel for about seven years to govern projects
approved before and after the date the ESF starts 10 be applied. The intention of
tbe ESF is 10 increase transparency, non-discrimination, social inclusion, public
panicipation and accountability - including expanded roles for grievance redress
mechanisms- in project platllling and implementation. These changes emanate from
the most extensive consultation ever conducted by the World Bank. IL concluded
nearly four years of analysis and engagement around the world with governments,
development expens and civil society groups, reaching nearly 8000 stakeholder..
in 63 countries. The framework is part of a far-reaching elTort by the World Bank
Group 10 improve development outcomes and streamline its wnrk.
TI1e Inspection Panel and CAO have also undenaken reviews of1J1eirexperience
with projects that have not had desired outcomes and have published the lessons so
as to promote institutional learning a.ad cliange. The Inspection Panel bas published
four numbers in its Emerging Lessons Series: these are lessons learned concerning
involuntary resettlement; indigenous peoples; environmental assessment; and
consultation, participation and disclosure of information.
TI1e CAO has also identified environmental and social concerns that emerge from
its rnseload and has provided advice based on this analysis to the World Bank Group
president and the management teams of IFC and MIGA. As in the case of the Inspection
Panel, the intent is to promote institutional learning and change. The CAO has drawn
on the perspectives of project-affected people to improve policies and practices.
During the last decades of the 20th century. international financial institutions
began to accept increasing responsibility for the consequences ofU1eir investmentsespecially the problems that result from projects in developing countries.
Recognising their role in causing significant socia l and environmental damage,
financial institutions introduced accountabllity mechanisms to prevent or reduce
harm. Following ihe lead of their international counterparts the private financial
sector has also created independent mechanisms, mediation procedures, to give
people harmed or pntentiaUy harmed by projects financed by their Institutions
access to redress. The most notable initiative is the commitment of the banks ihat
subscribe to the EPs. The role and requirements of the major financial institutions
responsible for financing large projects cannot be ignored by those intent on
ensuring sound planning. managemeni and implementation of projects so as to
protect people and the environment from their unintended consequences. Tiiis
cl1aprer reflects policies at October 2017.
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Eighteen: The safeguard policies of international financial institutions
Review quest ions
I.
Wentify and describe the units that make up the World Banlt Group.
2.
What are the safeguard policies of Liu~ IBRD and IDA?
'.l.
Distinguish between the four categories of projects as classified by the
World Bank.
4.
Ouiline the IFC's sustainability frameworks.
5.
What are the eight performance stru1dards that an IFC client must meet
throughout the life of an investment by the IFC?
6.
Describe what an eSMS emails.
7.
Explain bow the risk management pro<!ess addresses the performance
standard of Lhe IFC.
8.
What is the role of management programmes in the risk management
process?
9.
How does IFC Performance Standard 1 relate to and address stakeholder
engagement?
10. Oulllne llte purpose of a stakeholder engagement plan.
11. What is the role of the grievance mechanism in 1e.rms of CFC Performance
Standards?
12. Provide a detailed description of the goal of the Environmental and
Social Framework [eSFJ.
lJ. What are the 10 key process Environmental and Social Standa.rds [ESSs)?
14. Explain why banks would adopt the Equator Principles [EPs).
15. Explain the application of EPs.
16. Describe the 10 EPs in detail
17. Provide an outline of lhe policies adopted by lhe AIDB.
18. What are the five operational safeguards formulated by the AIDS?
19. Describe the roles and responsibllities of country development
programmes.
20. Discuss the revised Integrated Environmental and Social Assessment
Guidance Noles in detail
21. Provide an oveiview of the way forward in terms of the safeguard
policies of international financial institutions.
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Environmental Manageme_nt - A business management approach
References
African Development Bank Jntegroted Safeguards Syswn: Policy Statement ond
Operational Saf~guards [AIDB 2013) 5 I.
African Development Bank, Safeguards and Sustainability Series Volume 2, Issue
I, December 2015 Integrated Safeguards System- Guidance Materials-Vol I:
General Guidance on Implementation of OS I; Vol. 2: Guidance on Safeguard
Issues; Vol. 3: Sector Keys beets.
African Development Bank, Safeguards and Sustainability Series Volume 2, Issue
I, December 2015 Integrated Safeguards System- Guidance Materials- Vol 3:
Sector Keysbeets , Executive Summary, 2.
Center for International Environmental Law NGO response: Proposed World
Bank sta ndards represeur dangerous set-back ta key er111ironme11tal and social
protecrions, 22 July 2016. Available: http://www.ciel.org/news/safeguardpolicy-endangers-rights/ (Accessed 09 July 2020).
Equator Principles Association. June 2013. Avialable: http://www.equatorprinciples.com (Accessed 9 July 2020).
Equator Principles Association. 'Designated Countries'. Available: http:/{www.
equator-principles.com. [Accessed 9 July 2020)
FirstRand, Nedbank and Standard Bank. are the South African banks that have
adopted the Equator Principles.
Guidance Notes, companion documents 10 the performance standards, provide
guidance to clients (and IFC Stan) in meeting the performance standards.
Available: www.lfc.org [Accessed 9 July 2020).
IFC ·sustainability Framework.' and 'Performance Standards on Environmental
and Social Sustainability- Effective January I, 2012'. Available: www.ifc.org
[Accessed 9 July 2020).
The htspectlon Panel's mandate, procedures, and contact details may be found
at: htspection Panel ·Tue Inspection Panel'. Available: www.lnspectionpanel.org
[Accessed 9 July 2020).
World Bank Group, Asian Development Bank, European Bank for Reconstruction
and Development, African Development Barut, and Inter-American Development
Bank. Available: ht1p:{/www.lfmLorg/iliLis1.php [Accessed 9 July 2020).
World Bank, Environmental and Social Framework, 3"' Draft, 20 July 2016, 322.
Available: hirp://documems.worldbank.org/curated en/7484514691074428~ I/
pdf/ I07175-BR-R2016-0145-LDA-R2016-0198-Box.396279B-PUBLIC.pdf
[Accessed 9 July 2020).
World Bank, Environmental and Social Framework, Setting Environmental and
Social Standards for Investment Project Financing Proposed Third Draft 20
July 2016, 24-59.
376
Bghteen: The safeguard policies of interna tional financial institutions
World Bank, Independent Evaluation Group, EvaluationBrief J 5,Ev11/uative Directions
for rlie World Bank Group's Safeguards and Susta.i11abiliry Policies, 20U.
World Bank press release dated 4 August 2016. Available: hnp://www.worldbank.
org/cn/news/press-release/2016/08/04/world-bank- board-approves- newenvironmental-and-social- framework (Accessed 09 July 2020).
World Bank 'Safeguard Pol.icies'. Available: lmp://go.worldbank.org/WIAIODE7T0
(Accessed 9 July 2020).
377
Learning Outcomes
After studying this chapter, you should be able_ to:
• define ethics
• briefly eJ(plaln the relationship between tlhics. religion, etiquette and laws
• discuss the development of envlronme_ntal management ethics
• diffe.re_ntiate_ bc!twte.n intrinsic values. lnstrume_ntal values and prudential values
• discuss the. concept of sustainable development
• define the concept of business e_thlcs
• explain ethical decision-making
• define and discuss ethical dilemmas
• explain how environmental ethics should Influence business policy
•
link moral and ctJ ltlJral values to the application of ethics to life.style decisions
•
indicate whar a compromise trap is.
Overvi ew of this chapte r
Thls chapter provides an overview of ethics in general. as well as a more focused
view on environmental ethics and environmental management ethics. The chapter
then discusses business ethics and the role of environmental ethics on business
policies. Finally, there is an overview of moral and cultural values and the
application of ethics to lifestyle decisions.
TI1e goal of L11is chapter is co provide the knowledge and tools to enab le etJtlcal
decisions in borh personal and business environments.
19.1
Introduction
Dealing with ethical and environmenta l problems is complex, djverse, uncertain
and multifaceted. These problems aJTect multiple participants and role players.
Interacting with these multiple role players demands tram.'J)arent decision-malting
1.ha Lis flexible 10 changing circumstances. The decision -malting should embrace a
iliveisily of knowledge and values.
Nineteen: Ethics of environmental management
As people become aware of theirenvironmeni. pankipation in these decision-making
p rocesses is regarded as a democratic righi. TI1is right is ensltrined in the United
Nations Economic Commission for Europe's 1998 Arbus Convention. Titis democratic
right is instilled in the Constitution of the Republic of South Afrkd, 1996, in Chapter
2, section 24, wblch deals with the Bill or Rights. The following is an extract from
the Bill of Rights:
ENVIRONMENT
You hove the right to o healthy environment.
You have the right to live in o protected, heolrhy environment
One thing 10 keep in mind is the counrer-balance for den1ocratic rights, namely our
responsibility in tenns of how we use or abuse these rights, ie our responsibility to
use our rights ethically before we decide ro acL
TI1e counter-balances on our environmental righr could, for example be, as follows:
•
•
Educate others with regard to a healthy environment.
Encourage others 10 live responsibly and treat the environment with the
same dignity and respect as we would treat our loved ones.
•
Help people ro protect our environment so that we can live hea lthy lives in a
healthy environmen1.
Get people to pick up their rubbish and dean up around them.
•
Ethics, eihJcal dilemmas and eihJcal codes are a part o f today"s professional
environmenl. These codes and principles can be found in almost all fields of study.
with environmental management being no exception.
Stakeholder paniclpation bas progres.~ed through a series or recognisable
phases throughout the years:
•
•
•
•
•
•
Awareness raising in the l960s was the o rder of the day.
The incorporation of local perspectives in data collection and planning
occurred in the I970s.
The development or techniques in the 1980s that recognised local knowledge,
such as farming systems research and partlcipatory rural appraisals, look place.
An increase in the I 990s in the use of participation as a norm, with the
sustainable development agenda of the UN Conf=ce on Environment and
Development (UNCEDJ, occucred.
There is current more and more pressure on governments to ensure the reduction
of CO2 greenhouse gasses that are pumped into the almosphere since the
Industrial Revolution began around 1750, and 10 find cleaner energy resources.
Finally, there has been a growing consensus over what. constitutes best
practice by learning from the ntistakes and successes in history.
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Environmental Management - A business management approach
The integration of environmental management into the modem management of
business is a very young science and was assisted in its accomplishments by the
introduction of the King repons [loOSA 2009 and 2016) wWch were discussed earlier
in this book. Since the King Code III"', many companies adopted the principles of
the code. With the release or the King Code TV"' in 2016, further changes were
recommended for all forms of businesses to adopt, irrespective of their registration
status, size or business focus. The King Code IV"' replaces the King Code Ill"' in its
enti.reiy. The King IV Report'" is structured as a framework applkable to both listed
and unlisced companies, non-profit, public and private organisations, including
state owned enterpcises and mllllicipalities.
King IV uses a principles-and-outcomes-based method, wWcb moved away
from the previous tick box mentality. It now focusses on comply and explain.
19.2 Ethics of environmental management
Ethical questions are often raised in the areas or business management, ecological
research, and environmental and biodiversity managemenL The questions include
issues such as responsibilities and duties to management, the scientific community
and U1e welfare or use of research animals and other living creatures. Lately,
questions have also been asked about inter-species communication and interaction.
Many people are asking questions regarding our ecosystems and U!e abuse, use or
misuse by businesses. How long can we continue with this trend to make money at
whatever cost before U!e system inclutling the ecological system collapses?
There is no simple way to deal wicb U1ese questions. They remain a challenge
because most of the role players do not have an established field of expertise.
with a support network that is focused mainly on U!e environment to guide them
in making ethical decisions. This is very true in tl1e small business environment.
where resources are scarce and expertise are expensive. Small business can spend
between 30 to 60 percent or their income on statutory compliance and red tape.
Smulders et al (2016) indicate U!at on tax compliance alone. excluding U!e new
carbon taxes, smali businesses face serious challenge. The regulatory and legislative
burden increases U!e amount of time and money to be spent in order to comply,
despite the expectations U!at they should also contribute to economic growth. Add
to U!is U!e increasing environmental regulations U!at are intplememed annually.
TI1e cost or no n-compliance can even be higher due 10 fines and pena lties.
Some insight is provided Into environmental va lues and the duties these impose
on humans Utrough environmen tal eU!ics. There is a long-standing trdtlition or
e thical values and decision-makJng in the broader scientific community. especially
in the field of medical eUucs, perhaps because it deals with human interactions.
The question now arises if U!ese same e thical principles should be extended to our
animal coumerpans?
380
Nineteen: Ethics of environmental management
Most other disciplines have not considered many of the common responsibilities
and obligations !hat are relevant ro their field of expertise. Many universities
and colleges, as well as professional bodies, now require a component or subject
relating lo the field of ethics. Many of these professional bodi.es also requ_ire that
their members complete annual continued professional development tbat includes
a minimum hours' traini.ng just on ethics.
There is a need to bring togetber people across disciplines, such as ethicists,
religious leaders. scientists, and managers in the fields of biodiversity. environment
and business and community le_aders. TI1ere are a number of cases rhat illustrate
the types of ethical questions faced by researchers. and managers in the area~ of
biodiversity, environment and business practices. We will have to consult with the
communities in which these role players will need to be consulted.
From a management perspective, we can draw on the ethical traditions in the
philosophical, medical, animal and environmental research fields. As said earlier,
there is a strong ethical tradition in ho~11itals and research centres in the fields of
bioethics, research and medic-.tl ethics. Scientists and doctors often consult directly
with ethics comminees or qualified bioethJcal personnel before making any ethical
decisions, especially where there a.re no past historica l decisions in this regard.
With tbe implementation of Lhe King Codes I, II, Ill and now IV"'. more and more
emphasis is placed on eUlical behaviour of companies, big or small, for profit and
non-profit, sole proprie10r or listed. Each of the different sectors have a separate
section in the King Code IV"'. King Code LV"' move away from the King Code III"'
comply or explain, to comply and explain.
King Code JV"' requires greater expectations from the various stakeholders than
before. Greater emphasis is placed on the six capitals as set out in the International
Integrated Reporting Council"s [llRC) Integrated Reporting (IR) Framewo rk, which
includes financial, human, manufacturing, natural, intellectual, relat.ionsbip and
social capital.
Bioethics and medical ethics provide a recognised forum for the discussion of
ethical issues. This is seen as one of the more established scholarly areas of research.
These discussions regularly yield many new resean:h findings; support networks also
exist to assist researchers, doctors and scientists in making practical etbical decisions.
Professional bodies in various industries have a strong etl1ical component and
requirements that their members have to subscribe to and comply with. Part of
the board examinations for professional designations, contains sections on eLbic-.tl
compliance. With the continuous professional development (CPD) requirements,
many professional bodies requires a compulsory ethics component as part of the
annual compliance to 'be in good s tanding:
79.2. 7 Ethics defined
Where did ethics originate? The ethics in the scientific community today is largely
considered as a branch of philosophy. Etbics is also known as moral philosophy. The
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Environmental Manageme_nt - A business management approach
early philosophical fotl1ers held many debates and much bas been written on the
1opic of ethics. Yet ii seems lhai many people still battle becween ibe concepts of
morally good and evil. and morally right and wrong. Many religions have their own
and in many cases very similar ethical values around human behavioui:
How iben can eiblcs be defined? A definition of ethics could include the following
aspects:
•
It is a methodical study of morality and human behaviour. It deals with
moral judgements and moral principles.
•
•
•
•
•
•
It is the concepts on which society's morality is based, namely moral
codes and basic beliefs. This is hugely influenced and controvei:sial in our
workplaces.
Eiblcs can be viewed as the science of morals in human conduct
Ethics can be said 10 be entrenched in wha1 a particular society defines as
accep1ahle behaviour.
Ethics or the lack there of influences our decision- making.
lt struggles with the questions of whose ethical values we adopt.
We have so many societies with differing value systems imeracting with one
another al many places and for many purposes.
What people perceive as ethical values may therefore varY drastically between
societies. What may be accep1able in one society may not be acceplable in another.
Ethical values are found in most societies in the world. There seems to be a ba~ic
set of common beliefs among various cultural and religious groups. Most societies
in the world would, for example, find murder unacceptable.
The terms moral (mores) and ethics (ethos) come from Latin and Greek
respectively. Some philosophers believe that morality refers 10 the customs, practices
and principles of cultures or of people. Ethics is said Lo refer 10 U1e domain of
morality. Moral or ethi.cal values can be judged by measuring tbc good or bad. (or
right or wrong). in human character, behaviour and decisions. This is based upon
accepted societal rules, laws and regulations. All societies have standards of human
behaviour that are regarded as acceptable or unacceptable; these standards portray
1he dominant feelings of a particular culture abou1 various ethical issues, such
as abortion, human sacrifice, animal sacrifice, prostitution, animal rights, war or
issues relating to business practices.
What may be deemed moral to one person. culture or society may not be
deemed moral by another person, culture or society. Reflect for a moment on some
crucial differences in your circle of friends o r colleagues. In our modern day life
some of these rules of acceptable behaviour might seem out of da1e or unnecessarY,
However, there may be consequences Lo neglecting these rules, which are 001
always immediately apparenL One only realises later when one sees the negative
impacts or past decisions. This is where our South African Constitution. provides
us with a common se1 of values and principles tba1 all who slay, live, and work in
382
Nineteen: Ethics of environmental management
our country, have to comply with, irrespective of our religious, cultural or other
o rientations.
Aa example of unforeseen consequences can be seen in the development of the
motor car. As a replacement for horses, it was believed that cars would advance
humankind. However, cars are a source of pollution, for example leaded fuel and
g reenhouse gases. No one thought about the long-term impacts at alt If we think
about the computer waste, the uses and abuses of internet and other technology.
What wW the long-term impact be of the many micro- and radio waves that are
currently being e_mined from cell phones, televisions, wilis, radios, sacellites, Nc.7
Echlcs therefore involves making moral choices and contemplating the values
that lie behind these choices. Making bad choices ran impact oa a person's or
societies·, life, sometimes only years later, and Ute choices Utal are made often have
a price to pay.
19.2.2 Ethical dilemmas
As stated earlier, ethical values are concerned with j udging whether something. or
some decislon, is right or wrong, good or bad. Sometimes it is difficult lo judge
whether something is right o r wrong; such a scenario is called an ethical dilemma.
This ran occur when au organisation or person may benefit from something,
however, it may have a negative consequeure for someUting o r someone else. The
question, tbe.11, is does one go ahead o r not?
Another situation mlght be where you have to make a decision, but the normal
measurements of good or bad a nd right o r wrong, does not guide us to make aa
easy decision. For e.xample. failure to declare one's income to the South Africa.11
Revenue Service results in more money for one's personal use or for the company
Lo be utilised for the benefit of the shareholders o r staJT. How eUlical would that
be? Who decides? The easiest way to deal with an ethical dilemma is to follow the
standard problem-solving tool.
First is the recognltion of the d.llemma. Second, gather all Ute facts. Thlrd,
identify all the options, both positive and negative. Then test each one of the
options for factors such as legality or illegality, and rigbLness or wrongness of
the option, as well as the benefits of each option. Make a decision as to which
option or options could be taken. 1l1e final stage is to decide wha t family, friends
or employees would say and do regarding the choice that has to be made. Do not
forget Lo consult the guidance of the law aa the topic. Once a decision has been
made, take action aad re-evaluate [rom time to time to determine if Ute original
decision is still relevanL
For example, many years ago, it was socially acceptable to smoke in restaurants
and other public places. Is this still true for today? Take a moment to thlnk about
the reasons why this is ao longer the case.
In asking wbat the right tiling is to do or what the good is in something, the
answer might be a choice or wrong and wrong or bad and bad. Wben faced with
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Environmental Manageme_nt - A business management approach
such a scenario. many people Lty and find answers by approaching the courts and
have someone else make the decision for lhem or give them guidance on which
direction would be acceptable.
An ethical dilemma can be summarized as a situation where there is multiple
options and no clear guidelines or previous precedence. or law stipulation what
should be done. As our society develops. new things are implemented, for example
the use of drones. May questions arises, and until recently there were no laws
regulating the use of drones. TI1ese regulatlous are vital if we take into account
LhaL drones can access spaces and invade privacy on a scale Um was previously
unknown.
79.2.3 Values, culture and behaviour
What then are values? Values can be described as people or organisations core
principles or srandartls by which they live or ope_rate. .It could also be argued that
ii is the judgemeot of what is valuable and important in the life of an individual
or organisation. Examples of societa l structures which have an influence on values
and ethical bel1aviour are outlined below.
•
Etlrics deals with the right or wrong or good or bad of a situation or decision
as discusses above. Tilis influences our reputation and conscience through
praise or assigning blame. This sometimes leads to the battle of dilemmas,
where there seems to be no right or wrong. good or bad.
•
Rdigiorr, in contrast, defmes right and wrong as I.he sin in people's lives.
lt also deals with what is permissible or not as de_fmed by the religious
authority or the person's conviction. A person who beliaves and does well
will be rewarded; those who do wrong or commit a sin will be punished. This
punishment will be carried out by a supernatural agent or being.
•
TTre law determines if someone acted legally or illegally, as defined by the
judicial system. Punishment for illegal deeds is detennined by law and
sanctioned by the judicial system.
•
Erique/le can be described as societaJ conventions regarding proper or
improper behaviour. Behaviour is seen as appropriate or inappropdate.
Inappropriate behaviour leads to social disapprobation. This is another
challenge is our multi-cultural societies, where things can be interpreted
differently.
•
Values constitute a shared conviction of an organisation's desired objectives
in the business environment: values are influenced by factors such as
religion, law, or etiquette to name but a few. In business. U1ere are also
unwritten laws or rules that dictate how one should behave or act as a
business person. South African regulations are increasingly focusing on
vacious business codes of ethics and codes of conduct influenced and guided
by the Kirrg Codrs and tl1e Camparrirs Ac,, Act No. 71 of 2008.
384
Nineteen: Ethics of environmental management
•
Integrity is another concept when dealing with the field of values or ethics.
Integrity can be defined as a more restricted concept of ethics and refers
10 a person's character. Integrity is often associated with concepts such as
fairness. consistency, uprightness and wholeness. Integ.rity c-.in be described
as the constant appllcation of ethical behaviour by an individual
•
Culture is de.fined by Merriam-Webster Dictionary as: 'The customary bellefs,
social fonas, and material traits of a racial, religious or social group. Also:
the characteristic features of everyday existence (such as a diversions
or a way of life) shared by people in a place o r time.' This can also refer
to a group of people or researchers in a specific discipline. for example
environmentalists. Does our country for example have an African-, Wes1ern-.
Eastern-, European- or Middle East Culture? Do we have a multi-cultural
society and how does that impact our daily llves, opinions and work ethics or
work culture?
What do you consider your live core va lues 10 be in relation lo what we discussed
above? r-Iow does your culture and belief or moral values influence how you see the
world around you, your wodcplace or university, community or church?
The question wWch arises now is what is the purpose of morality in a society?
Much bas been written on this topic; a search of the internet will bring up many
websites debating this topic. Morality serves a number of purposes in a society.
For a start, it keeps a society from faJJing apan or disimegrating. It reduces human
suffering in the world we live in and entourages humans to flourish and grow.
Morality assists humans to reso lve conflicts of Interest in ajusl and orderly fashion.
Morality also assigns praise and blame, reward and punishment and guilt within
a particular society or environmenL TI1ink about the morality of our country over
the last decade. You might have your own insight an opinion in this regard. which
is unique to your specific beliefs, values and culture.
There Is a constant interaction between our culture, values and behaviour. Our
values inform our culture and our culture reflect our values and vice versa. Our
behaviour reflect our culture and our culture exhibit our values. The interaction is
true between our values and behaviour. Our values drives our behaviour and our
behaviour empowers our values. These three are in a dance together, wheu Lhey are
out of sync or chythm it makes you uncomfortable. Titls dance is underpinned by
o ur drummer namely ou r conscience.
The United Nations Environment Programme Finance initiative (UNEP Fl), is
an example of a global pannership with the private financial sector. They work
closely with more than a 170 financial institutions. They provide linkages between
the environment, financial institutions and sustainable developmen1 with regards
lo Environmental, Social and Governance (ESG) behaviour of companies.. These
partners' ainls are 10 assess risks 10 environmental damage before considering long
Lena investments, for example the effects of the long term investment on c.l imate
385
Environmental Management - A business management approach
change. "ESG investment" is intended to refer broadly to investment decisionmaking thai takes account or environmental, social and governance consideraLions.
None of the above are the sole purpose of morality, but each of tbem is part
of a comprehensive purpose. which enables humaus lo live a good life in a just
society. This should re.Deel a sensitivity and mutual rei;pect for our environment,
including other humans and animals in all our interactions with each other. Think
or an additional purpose tbat can be ascribed to morality tbat was not mentioned.
Whal do you think influences your v-.ilue system?
19.2.4 Environmental ethics
Environmental- and environmental management eihJcs is only two of the many
fields of study in ethics. Most or the fields or study address an area of ethics. code
of conduct or eihJcal values of some kind.
Environmental ethics according to Srmrford E11cyc/opac·dia of Pl1ilosapl1y
(Brennan Et Lo 2016) is 'the discipline in philosophy tbat studies the moral
relationship of human beings to, and also the value and mora l status of. the
environment and its no-human contents'.
Western ethics bas long focused on Ute moral values, rights and obligations
or humans. Echical questions that are asked are those such as: what is good for
humans? Whal value should we place on a human life or person? What obligations
or duties dn we have to our Fellow humans? Whal moral rights, if any, do humans
have? The nonhuman animals, the plams, the waters, the land - these only matter.
if al all, largely because they affect the well-being or humankind.
Environmental ethics is ·a branch of applied ethics, which explores questions
about the value of nature and its constituents, the relationship between the
environment and humans, and the moral obligations that humans have towards
Ll1e environment'.
19.2.5 Environmental management ethics
Environmemal management ethics is a way in which organisations try to face
the challenges or ethics and ethical questions in the business environmenL
Environmental management ethics is considered Lo be a field that aims lo provide
moral justification for the need for global environmental protection.
Environmental managen1ent embodies sustainable development through
various mechanisms. Environmenta l management combines various processes
in the production of goods and services, such as teclmology, sustainability and
economic growth. Environmental management is not the direct management or
Ll1e environment itself, but deals wirh the impact or humans on the environment.
Enviromnental ethics at1en1pts to apply principles and moral v-.ilues to the
environmenL lt tries Utat in the same way in which etbics in general has bad an
impact on the business world, Ute medical environment, the engineering field and
on technology areas.
386
Nineteen: Ethics of environmental management
Environmental etWcs invites one 10 reflect on three key propositlons:
• The earth and its Living beings have intrinsic value.
•
The earth and its Living beings have moral status, worthy of concern.
•
Human beings should consider 'sum totals' that Include other forms of life in
the environment.
Environmental management systems, when correctly implemented, contribute to an
increase in an organisation's competitiveness and the reduction of an organisation's
environmental impacL
There are a nwnberof main reasons for management to implement an environmental
management programme in an organisation.
•
Professional ethica l reasons are imponanl, especially in the field of research
or in the provision of professional services.
•
National and/or International regulations need to be adhered lo. Companies
need to follow standards related to products and goods to stay in business
with their export partners, for example Ute European Union countries.
•
Economic profitability is enhanced. A business may Jose contracts if the
contracting company is not satisfied with the goods and/or services U1a1 are
supplied. Refer to the discussion of the triple conrext In the King Code IV
repon in cltapter 4.
•
It is the right thing lo do.
The King Code IV requires or management to apply and explain what they have
done and have ool done. They must in future, as from financial years starting
in April 2017. provide details of their monitoring and compliance inspections by
tbe environmental regulators and they have to explain their findings on noncompliance with South Africa's environmental laws. They also have disclose and
explain any criminal sanctions and prosecutions.
79.2.6
Environmental resource management
Environmental resource management deals with the protection and maintenance
of the environment for future generations. Managers need to consider, as the King
Code rv triple context suggests. Ute economic ethical, social, technological and
sciemific variables involved in maintaining the integrity of an ecosystem. Since
the release of King Code ill there were a remarkable developments internatiooally
with regards to the Integrated Reporting Framework by the Integrated Reporting
Council (IJRC) in 2013. TI1e King Code rv has reaJllnned the philosophy of the
integrated Urinldng, even if there is no fonnal requirements to do as such. King
Code rv requires a more onerous disclosures than ever before with regards co how
they manage their stakeholder relations.
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Environmental Manageme_nt - A business management approach
Businesses need to realise that Lhere is a constant tension between meeting the
needs of humans and protecting environmenta l resources. Managers who can find
this balance should be able 10 protect the environmeui and find a way to have
socially responsible sustainability.
19.3
Instrumental value, intrinsic value and prudential value
The word value is normaUy associated with the financial value of something.
Managers need 10 value everything they do and j ustify it in terms of returns, profits
and money. Boards will not give approval to any projects which are noi financiaUy
viable. Business ventures must contribute 10 the financial bottom line.
In a discussion of the financial value of ibe environment. economic approaches bave
a number of limitations. Value is not only linked to the financial value of something;
one can also distinguish between things that have intrinsic value, instrumental value
or prudential value. Let's look at the differences between these aspects of valuation.
19.3.1 Intrinsic value
Something has intrinsic value if it is good in and of itself. Intrinsic value is not
merely a means of acquiring or accomplishing something else in the process.
Intrinsic value has nothing to do with something's usefulness. Intrinsic value is
ascribed to something that is valuable in itself. When something is of intrinsic
val ue it is pursued for what value it has and what use it will have for humankind.
Intrinsic value is never given by someone but is always recognised. Things with
intrinsic value possess value in themselves. Their va lue Lies in what they mean or
what they stand for. These values could be spiritual, moral, symbolic or cultural. As
an example, uappiness can be seen as having an intrinsic value because happiness
is good for you. It is good because it's good 10 be happy, not because happiness
would lead to or accomplish something else.
The King IV code refas to the interests of shareho lders and other stakeho ldas
10 have intrinsic value for decision- making thai must be in the best utterest of the
o rganisation over time. Since the company is a separate legal entity apan from
their owners o r directors, these directors have to act in the entity's best utterest on
all aspects ad interactions. These interests are shareholders, consumas, employees.
environment and commun ities.
19.3.2 Instrumental value
Something that possesses instrumental value always refers to its function or
usefulness. Objects such as a watch, a pencil o r a ceU phone possess instrumental
val ue because they can be used to generate. increase o r accomplish something
of value.
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Instrumental value is always ascribed by humans to tJlings that will benefit tltem.
TI1e instrumenral va lue is not in the object, bur in tJ1e usefulness of the object. The
value of a watch or cell phone lies within iiS usefulness in checking the time or
making a call to accomplish or attain sometJling of value. 1f such a.n object stops
working, ii becomes useless and loses its value.
Think about modern technology that has become outdated because no one uses
it anymore. Would you prefer a typewriter or a computer? If you prefer a computer,
would you lilte tJ1e ltind tJ1at worlts with Doppy drives on a DOS operating system
or do you want the latest model that money ran buy and technology can provide?
When we think of natural objects as resources we are treating them as sometJling
that has an instrumental value. As human interests and needs change, so loo do
human values and uses of me environment.
19.3.3 Prudential value
Prudential values relate to I.hose values that communicate a person's own interests.
There a.re ma.ny debates as to whether one should consider prudential values as
values at all TI1ere is, however, no doubt that we value nature by reminding
ourselves of what nature does to support our survival and well-being. Prudential
value is often related to well-being. This means to know what is good far you. IL
displays tJlings like what is best for me, when we try and worlt out our options, or
1.h e kind of life we want ro live.
19.3.4 Instrumental value veISus intrinsic value
Some people would say I.hat biodiversiiy has an intrinsic value. The question that
arises is how do we put a price on tJ1e very existence of an ecosystem or a species
if ihe ecosystem or species bas iiS own value independent of humans?
How do you determine the value of some nearly extinct animal, for example?
Is it the price of the highest bidder? What if it is the only one of a species left? Is it
then priceless? What is, far example, tJ1e price thai we can attach to the loss of our
South African rhinos? We might feel that something that is intrinsically valuable
must be of infinite value. If this is true, then we should be willing to pay almosLany
price lo save iL Would someiliing this scarce be cloned to ensure the continuance
of species? Would I.his be considered unethical?
19.4
Applying environmental ethics to business policies and decisions
Environmental eth ics and business management have been considered lo be two
opposing or sometimes even incompatible areas. This situation has led to conflict
between tJ1e need for economic performance and environmental responsibilities
witWn organisations.
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With 1.he implementation of I.he King IV Report"', companies have to implement.
report and explain I.he recommendations witl1 regards lo environmental, social and
governance (ESG) requirements as provided in different supplemenl5 for differem
types of organisations.
Every investment that an organisation wants lo make to grow tl1e company,
must comply with the recommendations for ESG. They need to ensure that 1.hey
can improve I.he risk management and long-term sustainability and returns on
investmenl for aU stakeholders. Organisation is an integral part of the conununlty
and sodery in which rhey operate. They need to cake responsibility for the ESG
outcomes of their activities and outputs affecting these communities as a whole.
Let us take an example of a manager facing financial problems and wbo bas
to make a choice between savit1g the company finandaUy or implementing an
environmental management programme. If the manager chooses 10 consolidate tl!e
financial position of the company, he or she will have lo defend this action in a
coutext where more and more companies are analysing their environmental impact
and choosing to implement environmental management policies to reduce their
environmenta l risks. This is where the Freshfields el al report UNEP Fl projeci would
set 1.he benchma rk for sustainable long term investmenl5 in companies, to ensure
protection of our environment. Economics and economic analysis plays a major
role in any environmental policy or management programme. This is true at local,
national and international level. Many companies have incorporated what they call
sustainable development programmes or pollcies. Sustainabiliiy is a concept that
has continued lo gain inroads into a wide range of sectors and institutions in Soulh
Africa and internationally.
19.4.1 Sustainable development
The Brundtland Commission, commissioned by the United Nations in 1983 to
investigate sustainable development, came up wir.h r.he following definition still
widely used today: 'Sustainable development is development Lha1. meel5 Lhe needs
of the present without compromising Lbe ability or future generations to meet r.hcir
own needs.
Various books and articles have been devoted to contemporary challenges to
sustainable development Some or the issues that businesses need to tltink abou L
regarding Lhe sustainable development of companies include:
•
population growth and consumption
•
climate change
•
non-renewable resources
•
loss or biodiversity
•
overfishing
•
eutrophication (over-enrichment of water bodies)
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•
desertification and acidification
•
poverty
•
ecosystem services and quality orufe.
Similar to the King Ill model, Klben el al suggest that sustainable development has
three components:
•
environmental
•
social
•
economic.
19.4.2 Business ethics
Ethical behaviour in a business context consists of the collective behaviour of the
individuals who own or are employed by a business. These values and conduct guide
the actions and decis.i ons in the work environment. If the owners of the business
(and senior management) value ethical behaviour highly, they will implement an
ethical framework within the business to guide employees with regard to what is
considered to be ethical behaviour.
On the other hand, if the owners do noL value ethical behaviour highly, it
is unlikely that they will pay much allention to the question of ethics within a
business context.
Ethical behaviour covers a wide range of different activities within a business,
including how clients and employees are treated, as well as the environment. The
cllllllenge is to find the balance between the conflicting interests of the business and
those of clients and other stakeholders. Ethical behaviour is about recognising there
may be a difficult choice to be made, takin.g the appropriate action or decision, and
then accepting responsibility for that action or decision.
Rossou w defines business ethi.c s as:
The specific appllcation of thls general principle (what is good or right for
human beings} to business activities. To act morally within the business
environment, means ensuring that the consequences of business actions
are not detrimental to others. Altemative.ly, to put it more positively:
ensuring that business activities contribute towards personal well-being,
the well being of others and the societies who are influenced by these
actions.
An eUtical framework creates a standard against which to evaluate possible ethical
choices that need to be made. It also sharpens awareness of ethical and moral
issues by consciously examining personal values and choices. This awareness is
extremely useful when faced wit11 a diflicuJt ethical choice. Most important:ly, a
srrong eth.ical framework also builds trust and credibility between the business and
the stakeholders.
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However, even though people often face ethical dilemmas and questions in their
work environments, business el.rues have yet to be Fully integrated inco the strategies
and daily operations of a business. Although strides have been made locally in this
dire<·tion. with the publishing of the King Code on Corporate Governance and
various other means of promoting ethical behaviour, unethical behaviour in I.be
business world is still rife.
19.4.3 Ethical Dilemmas in a Business Environment
Some of I.be ethical dilemmas I.bat staff can experience on I.be job are:
•
conflict of interest between what is best for I.he client and what is best for
I.be company
•
acting with honesty and integrity versus the pressure to compromise
•
being loyal versus speaking 1.he truth
•
deciding whether to blow the whistle.
19.4.4 Business factors that could cause damage to the environment
The environment is affected by a number of factors. These factors can generate
destructive effecLS that might have a long-term or even permanent impact on
the environment. This can be ascribed Lo a lack of minimum ethical principles in
some individuals and organisations. Factors I.bat most often bring damage to the
environment include:
•
•
•
Over-co11s11mptio11, the main destructive factor affecting the environment.
011er-developme11L, the long-term effect of economic downturn.
Lack of e1miromne11tnl educatio11 (too few educational institutions include this
in their management l:rnlnlng and school cucricula).
•
Researr:/1 respo11sibilil)', which promotes the profit motive irrespective of the
environment.
•
•
•
Technology, which leads to incn-ased consumption of energy.
Religion, which can promote tJ1e idea I.bat I.be only reason namre exists is 10
serve humankind.
Social respo11sibiliry, which sees the main objective as the achi.evement of profit
Business etJtics are influenced lly the leadership of I.be company. Leadership is tJte
ability of a manager to guide and direct subordinates, staff or colleagues to achieve
specific goals. This in tum will inlluence the company's values.
19. 4.5 Corporate governance
What do we mean by corporate governance? We can identify it as the oversight
of senior management by a company's board of directors. A board of directors is
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normally responsible for hiring, firing, disciplining and remunerating Ute CEO of
a company in South Africa. l11e management of a company is responsible to the
general public, and Lo the employees, investors and consumei:;. In terms of the
Companies Act 71 of 2008, directors and sha reholders can now be held personally
responsible for the attivities or in-activities of a company.
The Ki11g N Report"' and subsequent codes provides a principle-based,
practical methods Lo corporate governance. It moves away from a mere compliance
mentality lo something that will add value and bring about better results. Corporate
governance refers 10 a differentiation fonn other fonns of governance and the
corporate pan forusses on the legal incorporation part of the organisation, whether
a company, trust, municipality, state owned or voluntary association.
Kiug IV emphasises the importance of the whole board of lbe organisation 10
focus on the governance issues and not just for example the CEO or the company
secretary. IL recommends that even if organisation are not required io appoint a
company secretary, that they consider doing so, or that they acquire the services of
other professionals to provide the service to the governing body.
Corporate governance should always be underpinued hy Ute various legislation
that affects the organisation in their particular field of operations and core business.
It can never exist separate from the law. Even though King IV Code is voluntary.
it can still trigger legal consequences for the organisation and lead Lo court cases.
19.4.6 Codes of conduct
A code of conduct can indicate the responsibility a profession takes towa rds the
environment. Many of today's professions have a code of conduct or ethical values,
wbicb includes:
•
a general code of conduct. designed to guide members' conduct and
behaviour; and
•
a specific code of conduct, designed for specific guidance for individuals
within a profession.
Many of South Africa's professional bodies have an ethical code for their
members. Most new legislation makes provision for regula tions that would contain
codes of conduct for the individuals in a particular industry.
In response 10 unethical practices in the business environment, a number of
ethical codes have been developed, particularly in relation to the professions.
However, although an ethical code governs and specifies the requin'CI level of
eth ical behaviour wiiliin a business, having a code does nol necessarily mean that
a business will always be ethical. For a code to be effective, the provisions of the
code must be integrated into the processes and procedures of tl1e business.
Ethics must also form an important pan of the culture and identity of a business.
However, this can only be acltleved if ethics is given su fficient attention through a
top-down approach. There are a number of different tenns for ethjcal codes:
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•
•
credo
code of conduct
•
declaration of business principles
•
•
value statement
standard of conduct
•
code of business practice.
In some industries, especially where self-regulation bas not rt'Su!ted in eLhic-.tl
behaviour, legislation bas been enacted in order to ensure that ethical guidelines are
followed. This legislation and its subordinate legislation provide for boLb general
codes and more specific codes of conduct 10 regulate iodusuy.
Codes have been developed by professional member.;bip bodies, as we!] as
by companies, to guide hoLb their members and employees in practising eLhic-.tl
behaviour. Professional industry bodies have developed codes of elhics to set
standards of conduct for Lbeir members.
In the King IV there are separate codes for a variety of dilTerent organisations
and sectors. For example a detail code of conduct is included in the section relating
Lo Municipalities, for councillors.
19.4.7 Environmental ethics and business policy
Environmental management systems [EMS) encourage companies lo accept
responsibility for protecting the environment. Companies can also ensure
continuous improvement in Lbe way in whkb Lbey manage their environment.
When companies implement an EMS Lbey must adopt environmental strategies and
implement environmental polides. The difficulty fo r companies in implementing
environmental strategies is to find a balance between economic and social factors.
An investigation into organisations· annual reports clearly indicates Lbat most
companies have embarked on the road of establishing a value statement. Jo most
cases, one of the core values in tltese value statements is eLhicaJ behaviou.r. often
supponed by an ethical code of conduct. King IV code now requires all companies
irrespective of Lbe way they are incorporated. to apply Lhe codes of good practise
and display that in Lbeir policies, and explain why have implemented or not
implanted the codes for their sector.
An imponaot question is: how does government influence business policy and
business alTairs? This can be done through legislation and regulating what
businesses are allowed to do or not to do. There is a great deal of legislation that
influences business policy or business behaviour in all sectors of the economy.
Examples include:
•
Consumer Protection Act 68 of 2008
•
•
Protection of Personal Information Act 4 of 2013
Protection of Access to Information Act 2 of 2000
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Nineteen: Ethics of environmental managt'ment
•
•
labour Relations Act 66 or 1995
Competition Act 89 of 1998
•
Occupational Health and Safety Act 85 of 1993
•
National Environmental Management Act 107 of 1998 (NEMA).
The World Wide Industria l and Systems Engineers or WWISE in short, indicates a
number or benefits for companies in adopting EMS. They indicate that organisations
have reported increases and improved benefits such as financial performance,
profitabiliiy, environmental product and service performante, opportunities for
growth and a reduction in costs and environmental violations.
19.5
Applying ethics to lifestyle decisions
Business ethics can be divided inio tltree main categories:
•
Micro-e1/rics relates to the accountability of owners and management towards
the business with regard 10 the vison, mission, policies and procedures, and
legislative compliance.
•
Mnrke1 e1/rics relates to accounrability towards customers, competitors and
suppliers.
•
Macro-t't/rics is the collective social responsibility of a profession or
professionals within a company with regard Lo technology use, the economic,
cultural, polilical, legal and interoational environments and tlte ecosystems
or natural environmenL
19.5. I Moral and cultural values
Companies can advance thcir reputation by implemenring strong value-based
e1hical programmes. The result should be access to more capital, increased
economic prosperity, a positive effect on employees and improved customer loyalty.
Organisations wWch display ethical behaviour will also find that ii has a positive
impact on the nature and quality of the johs that employees perform, which can
lead to beuer morale and work performance.
Business etWcs sets standards of conduct and identifies appropriate behaviour for
an organisation based on values, beliefs, judgements and attitudes concerning issues
such as what is good or bad, or right or wrong. This includes Lbe way humans interact
with one another.
According to Rossouw and Van Vuuren, ·when eihlcs is applied io business we
consider ihe implications of economic activity on the interests of all wbo are part of
such activity. 111e eihical impact of economic activity is studied in business ethics, but
so loo is the economic imp act of ethkality'.
The institutionalisation of business elhlcs bas Ix-come strategically vital for a
business's survival Traditionally organisations made use of the compliance approach
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to institutionalise ethics into their organisations. Titis approach forces business ethics
upon employees. However, a potential problem with this approach is thaL it forces itself
on all stakeholders. Toe question thus is whether all stakeholders will internalise the
same set of values. This means that a value shift needs to take place.
Acconiing to Rossouw and Van Vuuren. 'the modes of managing morality model
explains the changes in modes of managing ethics within organisations'. These modes
indicate the strategy of an organisation in managing its ethics. The model ~-onsists of
ave modes describing organisations' preferred choice of strategies for managing ethics.
TI1ere are a number of differenr sources of ethical standards:
•
Legislation encourages ethical behaviour. lo South Africa, the Constitution,
through the Bill of Rights, lays down the foundations for etWcal standards.
•
77,e 11olicies and procedures of an organisation sei ethical standards, for
example, on issues such as sexual harassment and whistle-blowing, and
outline general and specific codes of conduct.
•
A moral stance is often revealed in the position people take when there is no
law that governs an issue, or no policy and procedure guidelines. Within any
business or organisation U1is may be supponed or undemtined by the culture
of the business or organisation.
•
Et/1ical codes, such as the King Code t ll, ill and IV Report and Supplements
on Corporate Governance or the ethical codes of professional organisations.
•
Personal codes of ethics.
19.5.2 Forms of African value systems - Ubuntu
An extract from a speech made in 2006 by then Deputy President, Ms Phumzile
Mlambo-Ngcuka, at a national imbizo on ubuntu and nation buildiug, best describes
the principles of ubuntu.
What is ubuntu? Ubuntu is what defines us as Africans, as distinct from
otl1er people. what we normally refer 10 as the spirit of African humanism;
it is the foundation upon which mosi African societies are founded. It
deanes what is best about us as Africans.
The values of ubuntu are based on principles of caring for humanity, love
for one's people. respect for people and their country. affording each other
nationhood. These are the very same values that our South African society
was founded upon when we adopted our new Constitution in 1996.
Besides the Constitution. our principles of ubuntu are deeply rooted in
an African culture, and the African saying among the Nguni and Sothospeaking people which say ·umuntu ngumuntu ngahantu' or 'Motho ke
motho kabalho: When directly translated into English it means that 'A
person is a p~on because of ocher people'. But. I believe this saying is
deeper and more profound than that; it defines the concept of uhuntu.
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Nineteen: Ethics of environmental management
This saying instructs us that our existence is dependent upon other people.
Our successes are due to r.he role that our communities have played in
nurturing and developing us.
lt spe-.tlts about the need for us lo have a sense of community spirit as a
people. It says community members must play a constructive role towards
the development of their communities. It also tells us about the need to
give back to our communities what they have given us; it tells us tl1at the
most imponant value of ubuntu lies in giving. Having an open hean and
giving to those who are needy and poor is not a sign of weakness, rather
a sign of strength. Making sacrifices for tbe common good is what keeps
our society together.
Flnnly embedded in thls saying is an injunction that, without the suppon
of other people, our existence is meaningless. It instructs us that we have
a central role to play in the empowerment of our communities, wbo are
mostly poor and destitute. Because of this spirit of ubuntu that permeated
our communities U1e weak, lhe young, U1e poor and the vulnerable were
not as exposed to the harshest condltions of our society and dangers in
our streets as it is the case today.
Ubuntu acted as a social security network or fabric that cushioned many
in our communities. It was the glue that held our society together. Several
articulations by President Mbeki on ubuntu reveal both the government's
attitude as well as the vital role ubuntu can potentially play in revitalizing
the African Renaissance. II therefore means that revival of ubunru will noi
be something strange and new for a majority as it has some resonance
born out of collective memory and experiences. Given the picture painted
above and the preponderance of ubuntu in our communities al one poini
in time, there is a serious decline in our values ofubuntu and tliis is tearing
our society apart and causing disintegration of our communities and
families. But our society while still facing challenges of crime, violence,
rape, murder, greed, and other social ills, is however a fundamemally
moral society, which is influenced lly the values of ubuntu.
We must ask ourselves how can we infuse (re-infuse) our society with a
spirit of ubuntu by making concrete policy interventions and suggestions
instead of sentimental utterances Lo make a positive impact on peopte·s
lives. As the leader of Moral Regeneration Movement collective, l will
be keenly interested in your advice on bow to re-energize our campaign
utilizing the values of ubuntu.
The wonderful Uling about ubuntu is tliat it embodies universal 1Jun1an
values that are essentially not in contradiction with values of our diverse
communities in the country. Ubuntu values are also found in O1ristian,
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Environmental Manageme_nt - A business management approach
Islam, Jewish religion, Hindu, Buddhism, Bahaj religions/belief systems.
It is for this reason thai ubuntu could provide a platform tltar every racial
and cuJ1ural group of Lhls country can relate to.
We co uld bt>gio this work so that even visitors who come 10 our country
and those who will come for 2010 FIFA Soccer World Cup can begin to
experience the legendary spirit or ubuntu.
Archbishop Desmond Tutu explains the concept of ubuntu as follows:
A person with ubuotu is open and available to others, affirming of others,
does not feel threatened that others are able and good, for he or she has
a proper self-assurance tha1 comes From knowing that he or she belongs
in a greacer whole and is diminished when others are humiliated or
diminished, when others are tortured or oppressed.
One of the sayings in our country is ubuntu - the essence of being human.
Ubuntu speaks particularly about the fact that you can·1 exist as a hun1ao
being in isolation. It speaks about our interconnectedness. You can"t be
human all by yourself, and when you have this quality - ubuntu - you
are known for your generosity. We th.ink of ourselves far too frequently as
just individuals, separated from one another, whereas you are connected
and what you do affectS the whole World. When you do welJ, it spreads
out; it is for the whole or humanity.
Nelson Mandela explained ubuntu as follows:
A travelJer through a country would stop at a village and be didn't have
to ask for food or for water. Once he stops. the people give him food,
en1erlain him. That is one aspect of ubuntu, but it will have various
aspects. Ubuntu does not mean that people should not enrich themselves.
The question therefore is: Are you going to do so in order to enable the
community around you 10 be able lo improve?
According to Michael Onyebuchl Eze, the core of ubuntu can best be summarised as:
A pe_rson is a person through other people strikes an affirmation of one's
humanity through recognition of an 'other" in hls or her unjqueness and
difference. It is a demand for a creative intersubjective formation in which
the 'oti1er· becomes a mirror [but only a mlrror) for my subjectivity. TI!is
idealism suggests to us that humanity is not embedded in my person
solely as an ind ividual; my humanity is co-substantively bestowed upo n
the other and me. Humanity is a quality we owe to each other. We crl'ate
each other and need to sustain this otherness creation. And iF we belong
lo each other, we participate lo our creations: we are because you are,
and since you are, definitely I am. Tite ·1 am· is not a rigid subject, but a
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dynamic self-constitution dependent on this otherness creation of relation
and disrance.
19.5.3 Applying ethics in everyday life
Fraud is a manifestation of unethical behaviour. Accordiug lo Rossouw and Van
Vuuren, Deloitte and Touche conducted a survey in 1999 on fraud in 17 African
countries. In every country, with the exception of Botswana, fraud was on the
increase. ·Toe kinds or fraud that were idemified included forging bank documents,
Lax evasion,
false insurance claims, and electronic funds-transfer fraud. Other
forms of uneU1lcal behaviour that are well documented Include unfair dismissal of
people with AIDS; race and gender discrimination; intimidation of employees 10
perform work they find morally repugnant; and neglect of the safety of employees
in the pursuH of profit'.
One needs 10 look no further than at tl1e recent past 10 find that hig international
corporations such as Enron, WorldCom. City Group, JP Morgan, ICN Pharmaceuticals
and AT8T, to name but a few, have been involved in gross scandals relating to
unethical bel1aviour.
19.5.3.1 Enron bankruptcy
TI1e saga of Enron's bankruptcy in 2001 is an example of what can happen when
employees, management, boards of directors and shareholders do not ask questions
about a company's pe1:formance and ethical values. In an online interview, Kirk
Hanson, Executive Director of the MarJckula Centre for Applled Ethics, suggested
that the two most important reasons for what happened to Enron bad been the lack
of trutlifulness by management and the culture of Enron.
This scandal demonstrates the need for significan1 reforms in accounting
and corporate governance in the United States, as well as for a dose look
al !he ethical quality of the culture of business generally and of business
rnrporations in the United Stales. There are many causes of the Enron
collapse. Among them are the conflict of interest between me two roles
played by Arthur Andersen, as auditor but also as consultant 10 Enron; the
lack of attention shown by members of the Enron board of directors to the
off-books financial entitles with wWch Enron did business; and the lack
of truthfulness by management about the health of the company and its
business operations. 1n some ways, the cullure of Enron was the primary
cause of the collapse. The senior e.xecutlves belleved Enron had 10 be the
best at everything it did and that U1ey had to protect their reputations and
their compensation as the most successful executives in the U.S. When
some of their business and trading ventures began Lo perform poorly, tl1ey
lried 10 cover up their own failures.
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Environmental Manageme_nt - A business management approach
Silverstein, in an onllne article, wrote:
Altogether, 16 former Enron executives including Skilling bad been
sentenced to prison. A lot of people have suffered, not tbe least or whom
are the shareholders and pensioners who lost it all Lt was a sad 'ending'
to what liad appeared to be a promising beginning 10 the New Economy
i.n which the internet age would spread wealth and create jobs throughout
the social spectrum. Wliile Enron may be the crown jewel or corporate
prosecutions, it was preceded by guilty verdicts for lop executives at
Adelphia Communications, Tyco International and WorldCom.
Some lessons that can be learnt [rom this ordeal are:
•
One needs adequate liquidjty in a company.
•
Disproportionate leverage is u~"l.lally a Wgh-rlsk approach.
•
Fraudulent behaviour never pays.
•
•
Employees need to continually update their skUJs and knowledge.
If investors cannot understand a company·s financials, then they should not
invest in the company.
•
The same company cannot be the auditors and the consultants. as thls creates
a conflict or interest.
•
The board or di.rectors, investors and shareholders should ask more questions
about a company"s activities, especially those off-book.
•
One's own failures should not be cove.red up.
The film Enro11: 1111.- Smartest Guys i11 the Room is a good lesson in ethks and
corporate governance. If Enron did indeed have value statements in place, it is
an illustration that the me.re existence of value statements and ethical codes or
conduct does uot ensure e[bjcaJ corporate behaviour.
EtJ1kal behaviour, like any other type or behaviour, does not manifest because
or the me.re existence or a set of rules. In the case or Enron and many other
companies, rules may have been in place., but these were wilfully and perhaps even
skilfully circumvented. The result is that investors, as well as internal and external
stakeholders, are losing trust in companies wWch are managed on unetbical
principles.
19.5.3.2 Steinhoff - a South African example
South Africa also have their fai.r share of corporate companies whose caretakers
have behaved uneillically. To mention a few examples, that you could do your
own research on, like Steinhoff, where the CEO allegedly persuaded a trust to
swap its shares in the PSG group for Steinhoff shares in June 2015. This led to Lhe
share price of the company plunging afie.r the CEO resigned in December 2017.
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Nineteen: Ethics of environmental management
The company·s market capitalisation plunged with more than 200 billion Rand
leading !O huge losses for investors. This once leading retailer, now has a market
capitalisation of just over R5 billion after losing over 90<\b or its share value.
Although they still continue as a business !here reputation as one of the leading
retailers in the world tarnished and new investors are reluctant lo lnvest.
19.5.3.3 Whistle-blowing
Ethics and its application in everyday life cannot be discussed without mentioning
whistle-blowing. One can ask questions such as: Why did the Enron executive not
blow tl1e whistle on tl1e CEO and CFO earlier? Why did the board not ask questions
or let the authorities know about their book entities that were created? By the Lime
Watkins and Cooper blew the whistle on the Enron situation, a lol of damage had
already been done. The same question could be asked about the Steinhoff saga.
This leaves us with tl1e question, what is whistle-blowing? A whistle-blower is
a person who exposes dishonesty, misconduct, malpractices, and tile endangerment
of otlters' safety or illegal activities in an organisation. tn other words, it is someone
who publicly exposes an organisaLion·s wrongdoing.
One of the most famous whistle-blowers was Erin Brockovicb, about whom a
film was made. We find tllal many companies will have a whistle-blowing policy
or a helpline or a company that will handle Utis on their behalf. Another film worth
watching is Silkwood.
Whistle-blowing is not easy. It has major implications for the company, as well
as for the whistle-blower. Whistle-blowers can experience alienation from their
colleagues; they may even lose tlleir jobs or their families may be persecull'd. Titis
may result in financial difficulty for the people involved; it may also hamper their
cliances of getting a new job or starting their own business. Whistle-blowing can
also have extreme consequences. An example includes whistle-blowers from the
KwaZulu-Na tal Education Department who were murdered because they aposed
the fraudulent practices of cenain school principals in the province.
Organisations may have internal whistle-blowing processes; these days'
businesses often use external companies lo encourage employees to inform on
suspicious events. 11 is imponant for companles which are serious about ethics
and values 10 have a way for employees lo confidentially repon illegal activities.
Some companies also offer a reward for employees who repnn such activities.
Thls is sometimes very tough, since these whistle blowers might have aired their
disagreements and uneasiness. The rest will know who ii was. Make sure that if you
are in such a situation, that you use the anonymous helplines available.
19.5.4 The Compromise Trap
Elisabeth Doty (2009), wrote a book called Tire Compromise Trap - How co rlrrive or
work wit/ro11/ sel/i11g your soul. She discusses healtl1y and unhealtl1y compromises
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Environmental Manageme_nt - A business management approach
and pressures. She indicates and discusses the following misconceptions about
workplace compromises:
I.
Compromise is always healthy.
2.
Good companies don·1 create unhealthy pressure.
J.
Unhealthy pressure is the leader"s fauJL
4.
You have to go along to survive.
5.
You'll always know if you're crossing a line.
6.
The company sets the terms.
7.
You should just say no.
8.
Refusing 10 compromise means fighting back.
9.
You thrive wben you get to !be 1op.
10. Individual integrity add up to organisational integrity.
She explains how ii takes a small compromise, then ii leads to larger once, and
before you know it you have been suck in to this compromise trap. Then you would
struggle to get ouL To compromise and not to compromise, both have a price to
pay. And as we have seen with our examples of Enron and Steinhoff it takes a
Lall order, not only on the individuals involved but also to the secondary victims
affected by this unethlcal behaviour.
Many times ethica l behaviour is equated to integrity. Doty (2009) defines
integrity as "being true, whole, undivided and sound, wWch includes consistency
between words and actions, being open to seeing the world as iL is, sustaining
relationships, and fulfilling a wonhwhile purpose. Pul most simply, integrity
involves seeing, caring, and action·.
Doty (2009) discusses various areas of compromise is our Lives, for example
honesty. your values or principles, laws or regulations, your professional standards,
your objectivity and your health, your character, promises and commitments, your
desire to do good work, and your relationships and your purpose.
Dity (2009) funl1er explains the compromise trap as "the gradual erosion of
vitality, passion, and confidence that occurs when you deal with unhealthy pressure
by playing along with the game and compromising in unhealthy ways·.
19.5.5 The costs of unethical behaviour
Most people do not realise how the costs of unethlcal behaviour can escalate.
Below is a list of costs that can be incurred as a result of unethical behaviour:
•
Much of the costly work carried out by attorneys and advocates is due io
unethlcal behaviour. We have many examples currently serving in our couns
and testimonies before various commissions on a variety of topics.
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Nineteen: Ethics of environmental management
•
•
•
The cost of law enforcement and security personnel adds up. Security guards
would noi be necessary if it was no1 for people·s unethical behaviour, such as
stealing.
Costs are incurred for the physical protection of people and property, such as
alarm systems, electric fences. vaults, elc.
Wasted or misused investors' funds by unscrupulous investment companies
incur costs; money must be spent on regulators and examiners because of
ihe unethical behaviour of a few who bend Lhe rules and do not act in the
best interests of their clients.
•
Recovering and collecting undeclared taxes from companies and individuals
incurs costs.
•
The need for forensic audliors and accoun1ants 10 trace moneys defrauded or
stolen incurs costs.
•
Consumer protection agencies, eihical business agencies and consultation
companies all incur expenses.
Revenue is lost by credltors when companies and individuals declare
themselves bankrupt
The low lnvestmenl that results from external investors and tourisls not
visiting a country, or clients not doing business with a company.
Costs are incurred by committees investigating governmental fraud and
unethical behaviour and wrongdoing.
•
•
•
•
Welfare costs are incurred for those without a means of income when parties
10 unethical behaviour are imprisoned.
TI1ere are also costs to business; these can be seen from the Enron example:
•
the costs of declaring the company bankrupt:
•
•
the higher cost of the debt incurred;
the costs incurred through the involvement of regulators in a company;
•
•
the loss of business assets;
increased security costs;
•
•
the loss of customers as part of ihe aftermath of the unethical behaviour;
ihe loss of employees who would rather work elsewhere; Ibis includes the
costs invested in their training and development:
the cost of legal expenses, which cannot always be claimed as a tax
deduction in South Africa:
the loss of investor confidence, reflected through lower share prices, and
difficulty in getting finance or fundlng;
•
•
•
the ultimate loss of the company's reputation; this is the biggest loss of all
for any company ;
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Environmental Manageme_nt - A business management approach
•
the loss of 1.he company's reputation; and
•
the loss of life, due to the impact and aftermatlt of the shame, guilt and
elimination of witnesses.
19.6
Conclusion
Businesses have much lo gain if they have a reputation of corporate governance
based on ethical behaviour. A company's reputation is the most important aspect
for the success of any entity. This reputational risk is also the highest risk that any
company faces. Reputation takes years to build, brands are differentiated fonn
competitors because of tltcir reputation. This can be lost in a matter of seconds,
referring to our rwo examples, and can takes years to rebuild.
Unethical behaviour may enable a company to gain ground and have an
advantage over iLS competitors, but that is temporary. In the long run, individuals,
companies and society will pay a price for the uneUlical behaviour of employees
and managcmenL How many families are now struggling due Lo misbehaviour of
people who were supposed 10 govern tJ1cir companies in the best interest of all the
stakeholders. Ii stands ro reason that any organisation that has a reputation for
corporate governance and eUlics is able Lo:
•
attract new investors;
•
attract ethically discerning customers; and
•
be a preferred employer for people who perceive themselves as having the
capacity to thrive in an environment that fosters ethical behaviour.
Our environment is important for the future of everyone in Ulis world. We as
management and future managen1eni have the responsibility to look after it. We
cannot take responsibility for the ha.no that previous generations caused to the
environment, but we can change the future through eUlical behaviour on the part
of individuals and companies.
South Africa has a Constitution that ascribes many rights 10 people. Many
people claim these dghLS and stand by their rights. We need to be aware that
standing by one's rights is fme and well, but every right that is claimed brings
with it a responsibility. We should not allow rights and the responsibilities to be
separated from one another.
Ultimately it is in1portant to remember 10 do unto 0U1ers as you want them
to do unto you. This can be achieved by doing what is right Respect others, take
responsibility for your action or inactions and you will achieve positive re.7.tlLS.
Check before you do anything. .Know your values that are uncompromisable.
David Cottrell said: 'The 10ughes1 issues any of us face are U1ose involving
'right versus dghi'. The problem: there are no obvious •wrongs· 10 avoid.'
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Nineteen: Ethics of environmental management
Review quest ions
I.
In your experience:
a)
Is the environment getting clearLer?
b)
Are environmental problems more or less of an issue than when you
firsl became aware ofth=?
c)
Are some problems getting better QT worse? Which?
d)
Do you have any thoughts about why some are improving and
otheJs are not?
2.
What criteria do you use to es1ablish moral standing? Where do you
draw the line between objects that count and those that do not?
J.
Should