Department of Water and Sanitation on the “polluter pays” principle & Nandoni Dam Resettlement Report

Meeting report

Resettlement of 32 villages: Nandoni Dam social facilitation project
Ms Zandile Mathe, Deputy Director General: Infrastructure, Department of Water and Sanitation (DWS), said the Nandoni Dam case had been reopened due to complaints laid by the communities, Following consultation with the Minister and the Committee, the DWS had taken the recommendations and come up with a progress report. The problem was that the DWS had not fully implement the recommendations of the Office of the Public Protector, and this had resulted in complaints from 14 villages affected by the construction of the Nandoni Dam.

The Nandoni Dam had been built in 1998 and completed in 2005 and was a major component in the Luvuvhu River Government Water Scheme (LRGWS). It was built with the objective of creating economic empowerment opportunities in the nearby communities, like Vhembe District Municipality, Venda and Limpopo Province. The communities involved had lodged a complaint through the Office of the Public Protector (OPP), stating that certain issues had not been resolved in the relocation action plan. After public hearings which led to an investigation of the complaints, the OPP had produced a report stating that there were only 14 villages affected by the relocation action plan, and not 32. In November 2014, the Committee had recommended to the DWS that the relocation action plan should be reviewed, and it was then presented to the Portfolio Committee.

The Department had then had engagement sessions on 24 and 26 February 2015, which were attended by the DWS, Vhembe District, councillors, local chiefs and representatives of the affected villages. The DWS had worked closely with Vhembe District municipality, because that was the most affected area and not Mopane. The resolutions adopted in this engagement were the resuscitation of the task team, the establishment of a project technical committee, integration of the social facilitation and a commitment that the water reticulation was to be completed in 18 months. The proposed intervention had been presented to the Minister on 4 March 2015 and was accepted by her. She also advised that a social facilitator must be appointed and a Memorandum of Understanding (MOU) signed.

The progress thus far was that the MOU and the reference for the appointment of a social facilitator had been developed. The task team had been resuscitated and the project technical committee had been established. The project had begun in March 2015 and would end in August 2016, making it the full 18 months. In 2015 alone, 465 structures had to be inspected and quantified to fix roof leaks, extend roofs with rafters and fix walls.

The Chairperson said that the issues were that the building of the dam had caused a loss of economic opportunity because the people were farmers. Issues of compensation and housing had then come about as time went on. The communities needed to get closure from these issues, and the best way was through figuring out solutions to the problem. The Department should take this as a case study for other incidents that might occur in the future.

Discussion
Ms Pam Tshwete, Deputy Minister, DWS, asked which communities would benefit from the Dam?

Ms Mathe replied that not only the 14 villages would benefit, but Mopane would benefit also. People from Kwa Malumelele in the pipeline would be assisted with water. The Nandoni Dam would benefit Vhembe most, but as time went on and new pipelines were built, Mopane and Kwa Malumelele would also have a line that went that way, so it could reach many more villages. The project was already at design stage, sending water from Nandoni to Mopane.

The Chairperson mentioned that Vhembe had also been invited today, but could not make it due to a water summit they had had to attend.

Ms J Maluleke (ANC) asked what the relationship between the DWS and the province was in addressing the issues that were occurring.

Ms T Baker (DA) wanted clarity on whether the issues that the DWS was having in the Nandoni Dam project should not have been anticipated prior to the start of the project. The Department was supposed to create economic empowerment opportunities but had taken farming away from the people. Now it would cost the Department, after the project, to assist the community economically. The issues that were happening now should have been evaluated before the start of the project, so she wanted clarity on this matter.

Mr M Shelembe (NFP) asked what was meant by the 465 structures that needed to be inspected by 2015. It was now 2015, and clarity on the developments thus far was needed.

Mr T Makondo (ANC) said that in the establishment of the project technical committee, there had been two representatives for each of the 14 villages affected, and asked what had happened about the other 18, since there were 32 villages affected in total. In terms of the issues being addressed, had there been any debriefing, since there had been a number of committees and this had created confusion?

Mr D Mnguni (ANC) asked whether there was a programme that could monitor the progress of the project to fix roofs and leaks that must be completed in six months’ time, so that the Committee knew what was going on, rather than getting a report at the completion of the project. Had the DWS given the community representatives the necessary information for when it engages with the project technical committee, because when a DWS committee fails it creates another one? He wondered whether the community was aware of this, and if the committee members had been briefed on what they were supposed to do. In the budget for compensation, was there enough money to compensate the people after the project was completed, because the Members did not want the DWS to come back here after six months and complain that it did not have enough budget to complete the project.

The Chairperson noted that the two main issues here were compensation and the houses with defects, and said that the issue had begun way before the Portfolio Committee’s time, in 1998. He had advised the MEC that the matter needed to be laid to rest, as it had been going on for a number of years. Closure was needed and it could happen in two levels. A valuer would deal with the compensation of the farmers regarding the opportunity cost that they had lost. The second was the reticulation programme and houses with defects. This could be done if the DWS and the Committee focused on identifying a problem and creating a solution, rather than being all over the issue.

The Deputy Minister said that the OPP had done an investigation and reported that it was not 32 villages affected, but 14, and this accounted for in the number of representatives for the villages. In regard to the budget for compensation, the DWS had dealt with the budget and it knew whether there would be enough money to compensate the people. She added that the task team was representative of all the 14 villages, and that progress reports would be produced to brief the Committee on the progress, as the completion of the whole project was in August 2015.

Ms Mathe said that in terms of working with the province, the DWS did not have a provincial department, so it fitted in with the structures that were held by the Office of the Premier, where the DWS reports all projects it carries out in the Limpopo province. The DWS had a vibrant head of Water and Sanitation in the province who sits in the structures that report to the Premier, and in some cases she herself also gets called to do presentations. The relationship was good, even though there were some areas that needed to be focused on with the structures of the Premier.  The Director General had started a process where the DWS was engaging with the Department of Cooperative Governance and Traditional Affairs (COGTA) and the National Treasury to make it easy for the grant process of infrastructure. This meant the DWS could deploy infrastructure to the people of Mopane knowing that it had worked with all spheres of government and that they had all put money in the same basket.

In terms of providing economic empowerment, the DWS had realized that infrastructure was just being deployed without looking at soft issues, and the community now knew their rights and had been proactive in what happened in the communities. Socio-economic issues were considered in the structures of the Department, and even in the development of the township the DWS had created for the people, the community had been happy about the houses that had been built. If the Committee Members could visit, they would see the good work the Department has done. Although some houses that had been built by the Department had cracks and the people had complained, these were issues the DWS was dealing with at the moment.

Another issue the Department was dealing with was the issue of economic compensation, because the farmers who had been compensated did not feel that the money they had received matched what they had lost. There had been a construction issue that the DWS had had to deal with, and that was why it would use internal resources to fix the houses with defects, so there was no need for a tender in that regard. What the DWS needed a tender for was for a valuer to determine the economic compensation for the farmers.

Ms Tshwete said that there was a budget to address the issues of the past, but it had not yet been quantified as to how much would go to a certain dam. It was not only Nandoni Dam that would be addressed, but Woodstock and others as well. On whether the communities were being briefed, she said that was why the Department had a social facilitator in the new structure so that the facilitator could communicate to the community what a project was about. She would address the challenges once the Department had finalised the project charter, which would look at the risks, challenges and critical success factors, and that would all be in the report to the Portfolio Committee. As for now, the project was still in its beginning phases and if problems arose due the course, they would be highlighted as they occurred.

Ms Makomo Makurupetje, MEC: Cooperative Governance, Human Settlements and Traditional Affairs (CoGHSTA), Limpopo, said that the relationship between the Department and the Limpopo province was through the Intergovernmental Relations Framework Act, which told the Department how to do its work. As a province, they do not know what was happening in the province with regard to the Department and were not sure if the local municipality had been taken on board with what was happening in their communities. The Deputy Minister had been in Vhembe a few weeks ago and the MEC of the province had not been invited or been aware of the visit. The DWS did not have a relationship with the community, and two people had died in protests over water in a community. She and the executive mayor were helpless, because the people working there should be reporting to the DWS. She advised the Department to go back to basics and not show up when challenges occurred, and should look at the Intergovernmental Relations Framework to see how it should be doing things.

Mr Mnguni asked that the DWS should alert the Committee when it was going anywhere for its projects, so that Committee Members could go and see what was happening. He stressed that there could not be good relations with a province if the MEC did not know about developments that occurred in her own province. The work of the Committee was useless if the DWS lied to them about what was going on in the province, or there was a water summit in Limpopo and the Committee was not notified or invited. A programme was needed to check when and what was being done.

Ms Maluleke advised the DWS to work closely with the MEC of CoGHSTA because most issues relate to CoGHSTA, and starting from now the Department should work hand in hand with the Province.

The Deputy Minister raised an issue, asking what the DWS was discussing in the Office of the Premier if the MEC did not know anything about the projects in the province. The province should assist the Department, because how could people be dying and the province did not know anything. She said she was not defending the DWS, but councillors and other structures in the province should assist the Department because the DWS could not always report to the MEC. She stressed that the MEC should know that the Department was dealing with more than one project, and the mayor should work with the Department to let it know what was happening in the province

The Chairperson said the DWS should wrap up the compensation and housing defects issues, and advised that there had to be a time frame to address them once and for all. There should also be a time frame to discuss future relations between the DWS and the Limpopo Province.

Ms N Bilankulu (ANC) asked whether there were any plans by the DWS to intervene in the case of the two people who had died in the water protests in Tzaneen.

Ms Makurupetje replied that the there would be a meeting between the Premier and the Minister in the next two weeks which would discuss and address the challenges that had occurred to ensure that they did not happen again. The province was taking charge of the responsibility relating to water issues, and the summit which the Vhembe municipality had gone to was to address and see which areas the DWS was providing with water, and which areas still needed to be focused on.

The Chairperson asked when the DWS would come before the Committee to give a progress report on the issues at hand.

The Deputy Minister replied that the Department would come with a report at the end of August covering the Nandoni Dam relocation, compensation and the housing issue.

The Chairperson mentioned that a housing challenge that the Committee had come across was that the people in the communities did not maintain their houses, and had found that having to paint houses for people that were occupying the homes was like babysitting them.

The Deputy Minister requested that the Committee should come to see the project before the report came out, because three months was a long time. The MEC and the Committee would be invited for a visit to see the progress of the houses.

Presentation on the Polluter Pays Principle
The Chairperson said that many lives had been lost and there had not been any cases of convictions other than fines for the polluters, which were not high enough when set against the life of a person that had been lost. The fines for polluters such as the mines could be budgeted for easily, and it was not enough that they just got fined.

Mr Anil Singh, DDG: Water Regulation, DWS said that the presentation would deal with how the Department applied the polluter pays principle, the legislative framework, contraventions, case laws, water use charges and pricing strategy, waste discharge charge system and lastly, the acid mine drainage and mitigation strategy.

The “polluter pays” principle (PPP) was a way of requiring the producers of pollution to pay for the costs of avoiding pollution and cleaning up or remedying its effects. It was an important cornerstone of environmental law and was generally accepted as an economic principle aimed at consumer protection. Any pollution created by a process must be paid within the cost structures of production of that company and the PPP could also be applied to impose sanctions for wrongful doing or misconduct so that corrective measures were taken to restore a given environmental asset to its pre-damage condition. It also served to direct the conduct of potential polluters.
 
The National Environmental Management Act (Act 107 of 1998) states clearly that the costs of remedying pollution, environmental degradation and consequent adverse health effects must be paid for by those responsible for harming the environment. The polluters pay principle had also been accepted in the international environmental policy, principle 16 of the United Nations conference on Environment and Development (Rio Declaration), which states that national authorities should endeavour to promote the internalisation of environmental costs. This was the principle that the DWS was applying, and it applied to both the government and private sector, so the onus was on the polluter to make amends and minimize pollution as much as possible. There had been a case where Earthlife Africa had gone to court with the Department of Environmental Affairs and Tourism, and the court had held that the polluter pays principle applied to both the private sector and the state. If the State failed to address the issue of reducing potential environmental harm, it would be the one that would be liable for the pollution cost.
One of the many cases that had gone to court was the Harmony Gold case, involving five mining companies that conducted gold mining operations in North West. A directive had been issued to these companies under section 19(3) of the National Water Act (NWA) that required the companies to take anti-pollution measures and a joint proposal towards the long term sustainable management of water arising from mining activities in the North West area. Harmony Gold conducted its business in property owned by ARMGold which sold its business to Pamodzi in 2008, assuming Harmony’s obligations both in terms of mining operations and the directive. The Pamodzi company was liquidated in 2009, and no longer had the finances to comply with the directive. This left the DWS and the other four companies to argue that Harmony should comply with the directive. Harmony had argued that the directive under section 19(3) of the NWA was valid only for as long as the person to whom it was issued owned, controled, occupied or used the land in question. Thus, so the argument went, the directive became unenforceable against Harmony from the date upon which Pamodzi took ownership of the land and control of the mining operations conducted thereon. Harmony had applied to the North Gauteng High Court in terms of which it sought the review and setting aside of the directive, or of the refusal to withdraw it and a declaration that it became invalid when Pamodzi took ownership of the land and control of the gold mining operations. The High Court had dismissed the application, giving rise to the present appeal.
The largest criminal penalty imposed for environmental offences in South Africa to date was recently handed down by a South African Court. Golfview's offences included illegally mining in a wetland, the diversion of water resources, inadequate pollution control, and the unauthorized transformation of three hectares of indigenous vegetation. The conviction and sentence was imposed as part of a plea agreement in terms of which Golfview was required to pay R1 million each to the Mpumalanga Department of Economic Development, the Department of Environmental Affairs and Tourism, the Mpumalanga Tourism and Parks Agency and the Water Research Council. An additional R1 million penalty was conditionally suspended for five years. The court also imposed an order that forced Golfview to rehabilitate the wetland according to an approved rehabilitation report. The potential cost of the rehabilitation has been estimated at between R50 and R100 million.
The conviction followed the conviction and sentencing of Anker Coal and Mineral Holdings (Pty) Ltd (Anker Coal) and its Director in April this year for similar infringements of environmental legislation and the Mineral and Petroleum Development Resources Act, No. 28 of 2002. The conviction of Anker Coal was the first time that a mining company had been held criminally liable for the contravention of environmental legislation. It was also the first time that provisions of environmental legislation had been invoked to hold a director of a mining company criminally liable.
The Golfview conviction was significant not only because of the large fine imposed by the court, but also because it demonstrated that non-governmental authorities and other private persons were prepared to institute criminal proceedings where the environmental authorities were slow or reluctant to do so, and that the prosecuting authority was pursuing prosecutions of companies and directors.
In the National Water Act (NWA) section 19 the remedy effects of pollution state that the owner of land must take all reasonable actions to remedy the effects of pollution and should the owner fail to comply with this law the DWS was permitted to take necessary action to recover the costs associated with the pollution. In section 20 of the NWA it also states in terms of emergency incidents that if a person was responsible for an accident and owns the substance that made the pollution it was that person’s responsibility to remedy the effects of the incident or the DWS could  and would take necessary measures to recover the costs. In section 53 of the NWA with regards to rectifications of contraventions it states that DWS may direct a person or an owner of the property in relation to a contravention of an authorization to take any specific steps needed to rectify the contravention. This also includes the recovering of the costs associated with the contravention or application to a competent court for appropriate relief. Mr Singh adds that in the general application of the PPP it plans to identify polluters that have sufficient economic resources to pay for their pollutions and also advocate them to pay for the costs of avoiding pollution or cleaning up its effects. The polluters should prove that measures were taken to prevent pollution.

The PPP water use charges were used to fund the costs of water resource management and also to ensure compliance with prescribed standards according to the user pays and polluter pays principles. Other ways the charges were used was as a means of encouraging reduction in waste, while non-payment of water use charges would attract penalties, including the restriction or suspension of water supply from a water works, or of an authorization to use water.
The key principles of pricing strategy were full recovery of costs that had to do with management, use, conservation and development of water resources and associated administrative and institutional costs. The application of the polluter pays and user pays principle meant that polluters and users must pay for the costs of their water use and take into account the need for targeted subsidies where users or polluters were not able to afford costs resulting from full application of principles. Lastly, allowing differential charges and capping of water use charges for designated water use sectors supported the achievement of key national objectives such as food security, racial and gender equity, and job creation and economic level.
Section 56 (5) of the NWA states that the pricing strategy may provide for a differential rate for waste discharge, taking into account the kind of waste discharged. This provided an economic instrument to assist other regulatory tools in maintaining the desired state of surface water resources, represented by Resource Quality Objectives (RQOs). Also it would be implemented at a catchment level where RQOs were either exceeded or being threatened. The Water Discharge Charge System (WDCS) used economic measures to improve water quality, achieve water quality objectives and reduce waste load reduction. Its mandate, developed by the DWS, was based on the PPP and established under the DWS pricing strategy. The WDCS was a legal mandate which was in the constitution, under the NWA section 56(5), which spoke about waste discharge, and 56(6) which talked about incentives. The first phase was in 2001, were a framework document had been drawn up, and the second was in 2002, when a Waste Discharge Charge draft strategy had been formulated. The third phase was the final strategy and in 2014, the final phase of charge rates was implemented.
Mr Singh said that in terms of the technical elements, there were two types of charges. The Incentive Charge/Waste Discharge Levy was implemented in all catchments in which the WDCS was implemented and was intended to reduce pollution load at source. The Mitigation Charge was an adjunct to the incentive charge and was applied in some catchments in which WDCS was implemented. It was an instrument for recovering costs of mitigation in the resource.
The Acid Mine Drainage (AMD) was when water was mixed with mining geological strata and produced acid water which contaminated the ground and surface water resources and created other undesirable environmental impacts. The issue on PPP and AMD was that there was no definitive policy on AMD. Section 19/20 of the NWA permits invoking of PPP when addressing AMD, but it usually occurred after mines had closed so there was no liability apportioned to polluters. In 2009 the DWS did try to apportion liability and apply PPP for AMD generating mines in the West Rand, but it was unsuccessful and the section 19/20 directives had been rescinded. On the Witswatersrand goldfields, the DWS has a mitigation strategy for AMD, implementing remedial interventions across the affected areas. The cost of this was being borne from loans attached to the fiscus, and the proposed environmental levy on the mining sector for AMD mitigation has the potential to serve as a superfund for AMD mitigation after mines have closed down. The DWS was assisting National Treasury on proposing a levy for application in the mining sector, where funding would be ring-fenced for mitigating mining-impacted waters. The DWS was aware that AMD was a huge problem that it had to deal with, and the team and the Department were sitting and addressing the issue of why the taxpayers had to pay for the sins and pollution of the mining bosses of the past.

Discussion
Mr L Basson (DA) with regards to Modimolle, asked the DWS to investigate whether the truck that had carried acid and been involved in an accident and had spilled acid into a river, had the necessary approval to transport it, because the Committee did not want a problem made by one Department to be put on to the DWS. He asked Mr Singh to forward the documentation of the issues of water to the Committee so that the Committee could give inputs rather than waiting for when the report was finalised.

Ms Baker said that the local governments themselves had water sewerage pollution problems, and they could not all be arrested because there would be no one to run the municipalities. How was the DWS going to address the problem of waste formulated by the local governments themselves? She advised that there was no need of further legislation and the laws that the country had were enough to deal with the AMD and other issues.

Mr Makondo asked whether fines were the only way to deal with people who polluted the environment, because even for those who faced criminal charges, it amounted to only a year in jail and then they were out. On the issue of the environmental levy, he asked how much the government had spent in terms of mitigation in that particular area, because the money the government had spent was nowhere near the levy amount that the people were being charged.

Mr Basson added that in the written questions that the Committee had given to the Minister, the Committee had indicated the problems with sewerage and in the answers that had come back he had noticed that the DWS was following the law in giving out directives, but did not follow up whether necessary measures were taken, and that was an issue that the DWS needed to address. He said that if a municipality could not run a water treatment plant, they should lose their licence and it should be given to a water board council. When the DWS amended its Act, it should consider putting in a clause where municipalities had to prove that they could run a water treatment plant and if not, their license should be revoked.

Mr Mnguni said that when there was a blame that had to do with water matters, the DWS took the fall and not COGTA, but in the municipality, when there were strikes and protests that had to do with the water system, COGTA was involved. He asked if there was any rule to separate COGTA from anything to do with water regulations.

The Deputy Minister agreed with Mr Mnguni that the DWS was struggling and when the grant came from the Treasury there became a war between the Department and COGTA because it wanted the money to come to them, rather than the DWS. There were meetings with COGTA in order to plan together with them. Regarding the truck incident, she noticed that enforcement in the DWS was done once in several months, so she would look at ensuring that it occurred on a daily base. She added that the people in the communities needed to be taught how not to pollute and to maintain dams. With regard to the fines, she agreed that polluters got away with light fines and did the same thing again, and advised that the enforcement unit needed to be strengthened.

Mr Shelembe asked whether the local municipalities in the Limpopo Province had authority over water and if they followed the necessary processes to qualify to be the local authority. How many municipalities and districts were in authority over water so that it could be monitored whether it was the districts or the municipalities that were doing well, and also what role COGTA played to help those municipalities and districts. Since there were two different authorities in the local municipality and the district, did both comply with what the DWS wanted them to do?

The MEC replied that there were six municipalities and four districts which were water authorities. The places where the six municipalities had water service authority were the best in terms of water provision, and there were minimal protests in the area. In the districts, once there was a challenge it affected all the other five municipalities. For instance, Mopane’s problems had affected all the other local municipalities. However, if a local municipality had a problem it affected only that one municipality and could be dealt with at that time. So the Province was trying to deal with the issues of districts like Mopane, Vhembe and so forth, but in terms of local municipalities in the Waterberg area, all was well.

The Chairperson said that collaboration with other law enforcement departments was crucial in making sure that the polluters were punished sufficiently. The legislation the DWS had needed to be tightened in order for polluters to pay, because R1 million to a mining company was nothing. These were the kind of things that need to be addressed, and a follow-up briefing in the future was needed, and other relevant departments like Police and the Judiciary should be invited to come and address the issues more holistically.

Mr Singh agreed that the laws the DWS had were enough, and there was no need for any more -- the DWS just had to implement the current law. The Department was in the process of reviewing the old legislation that had been passed in 1998 so that it could make refinements for harsher fines to be imposed, but that had to go through the Department of Justice. The laws should be enforced more, and he and the DWS would take all the recommendations and advice given by the Committee. With regard to the National Environmental Management Act that dealt only with fines and not necessarily jail sentences, the DWS would have to deal with that -- they could not leave the situation as was. The issue of the levy was still up for discussion, and the DWS must discuss the question relating to the trucks with the Department of Transport, and once it had been finalised it would give a written report with all the answers.

The meeting was adjourned.