South Africa: The Evolution Of The Business Of South African Environmental Law

The business of environmental law has witnessed a rapid evolution in recent years. This article considers the reasons for and implications of this change for the future trajectory of environmental legal practice.

While environmental legislation certainly existed before the democratic era, the incorporation of the “environmental right” into the 1996 Constitution (which exhorts government to legislate for environmental protection and sustainable development) led to the (then) Department of Environmental Affairs and Tourism implementing a law reform process which, ultimately, produced in the current suite of environmental legislation largely falling under the aegis of the National Environmental Management Act No. 107 of 1998. These statutes are the environmental lawyer's toolbox and the context for their application has recently seen a marked shift. The nature of the contextual shift can be seen as inter alia arising from:

• increasingly complexity of environmental legal matters and awareness of the linkages between these and other legal considerations;
• a significant increase in the importance of environmental / sustainability issues in commerce and industry and a concomitant elevation in the actual and perceived financial value of these issues; and,
• heightened compliance and enforcement actions by the Department of Environmental Affairs (DEA).

Among the indicators of the contextual shift is the increasing number of environmental law practitioners employed at larger “full service” firms offering a number of specialist practice areas. This is a move away from the previous character of the market in which environmental boutique (niche) law practices dominated based on a view of environmental law as ancillary to more mainstream commercial legal disciplines.

The immediate reason for the rise of environmental legal departments at larger firms is that such departments are experiencing an increase in demand for their services and require experienced practitioners to respond to this need. Given the previous eminence of boutique firms in the environmental legal sector, an obvious source of such experience has been the staff complements of the smaller firms. Among the advantages of the larger firms is their attractiveness as employers from, both, a salary and benefits perspective. The flip-side of the “large law firm as employer” dynamic is the heightened set of production demands placed on the individual practitioner and the need to access the work required to satisfy these production demands. To some degree the nature of large law firms ameliorates this dynamic in that such firms tend to attract large volumes of multi-disciplinary work by virtue of their full-service offering. Effectively, this means that a large corporate instructing the commercial department of a large law firm is also likely to use that firm's other expertise, including environmental, when the need arises. This is often a function of the convenience provided by the large law firm as a “one-stop-shop” for legal services but is also due to the approach adopted by such firms to securing and building client relationships through a system of cross-referrals between departments / disciplines.

The following is a non-exhaustive set of examples of factors contributing to the increase in demand for the services of the larger law firms' environmental departments:

• South African environmental law was long regarded as being comprehensive and well-articulated but lacking enforcement “clout”. This perception is rapidly evaporating as a result of the DEA established the Compliance and Enforcement Directorate (The Green Scorpions) which releases an annual report to record progress in enforcement - including by way of litigation, the imposition of fines and associated sanctions with financial impact (such as issuing remediation orders). In addition, criminal convictions are set to become a feature of environmental compliance. A recent example is the case of York Timbers (Mpumalanga) which received a fines of R 650 000 for contravention of the regulations for environmental impact assessment. The largest criminal penalty imposed, to date, for an environmental offence is the R 4 million fine imposed upon Golfview Mining (Pty) Ltd, for various contraventions of the National Environmental Management Act (NEMA) and the National Water Act. The Golfview conviction follows the conviction and sentencing of Anker Coal and Mineral Holdings (Pty) Ltd (Anker Coal) and its director for infringements of environmental and mining legislation.
• Experience has shown that in many circumstances, environmental legal issues are usually intertwined with other areas of law such as property law, mining law, tax law and project finance law. The advantage of the full service law firms in these circumstances is well illustrated by the fact that virtually all of the legal work required to prepare project bids for government's Renewable Energy Independent Power Producer Programme (REIPPP) was undertaken by large law firms. In essence, the REIPPP treat equally the suite of legal considerations required for projects to achieve “preferred bidder status”. Thus environmental qualification criteria are given equal standing with technical, financial and Black Economic Empowerment criteria.
• Application of the Equator Principles by some banks to projects valued over R 100 million means that certain infrastructural investments are now being scrutinised through an environmental lens; and 72 South African companies recently committed to the United Nations Global Compact – am initiative in which businesses align their strategies and operations with ten universally accepted principles in the areas of human rights, labour, environmental protection and anticorruption.

South African environmental law has matured and taken its place as an essential element of commercial and industrial investments and decision-making and is a driver of certain new business areas such as the set of burgeoning markets for environmental commodities, including carbon, water and biodiversity offsets. Changes in the environmental legal business model are reflected in the renaming of practices to include concepts such as “sustainability”, “environmental markets” and “natural resource management” – making the old query “what's in a name?” especially apposite. The new nomenclature reflects emerging awareness that the natural environment does not exist, and cannot be dealt with, in isolation from the need for human development. Modern sustainable development law seeks practically to achieve this “connectedness” and these linkages are reflected in the evolving business of environmental law.