legal opinion komati ash dam eskom-1
DESCRIPTION
ASH DAMSTRANSCRIPT
Date:
To:
DEPARTMENT OF ENVIRONMENTAL AFFAIRS REPUBLIC OF SOUTH AFRICA
Tel: +27 (012) 310-3788 Fax: +27 (012) 320-7561
24 JAUNARY 2012 File LS101358 nr:
DIRECTORATE: AUTHORIZATION AND From: DIRECTORATE: CORPORATE
WASTE DISPOSAL MANAGEMENT SUPPORT & LITIGATION
DIRECTORATE: ENFORCEMENT
DIRECTORATE: WASTE STREAM
MANAGEMENT
LEGAL
RE: OPINION :- COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS LIMITED -
ASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
1. PURPOSE
1.1 We have been requesled to furnish an opinion relating to the commencement of operation
of the Ash Dam Extension 3 ("the Ash Dam") at Komati Power Station, Mpumalanga by
Eskom Holdings Limited ("Eskom"). We have been specifically requested to consider the
opinion furnished by Eskom and to consider the view that Eskom is required to obtain
authorisation to commence with operation of the Ash Dam in terms of the National
Environmental Management: Waste Act (No. 59 of 2008) ("NEMWA").
1.2. We have been furnished with the following documentation :-
1.2.1. Environmental Impact Assessment and Environmental Management Plan,
Volume 1 dated 31 March 2008 ("EIA");
RE OPINION - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS LlMITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
1.2.2. Environmental Authorisation dated 18 August 2008;
1.2.3. Legal Opinion prepared by Eskom's Corporate Legal Department dated 5
October 2011 ; and
1.2.4. Letter from Eskom dated 19 October 2011.
2. BACKGROUND
2.1. The background facts have been gleaned from the EIA - Eskom is re-commissioning the
Komati Power Station, located between Middelburg and Bethel in Mpumalanga Province.
The first unit at Komati Power Station is expected to be re-commissioned in 2008 with the
last unit being re-commissioned in 2010. It is anticipated that the Komati Power Station will
have an operational life of 20 years from re-commissioning. The combustion of coal at a
power station produces ash that is disposed of at engineered ash disposal facilities. The
return to service of Komati Power Station was granted environmental authorisation by the
Mpumalanga Department of Agriculture and Land Administration. However, the
authorisation did not permit any capacity increase. Thus, an environmental authorisation
was required for the new Ash Dam, namely Ash Dam Extension 3.
2.2. Eskom submitted an application for authorisation in terms of the National Environmental
Management Act (No. 107 of 1998) (UNEMA") and the Environmental Impact Assessment
Regulations.
2.3. The Department of Environmental Affairs and Tourism on 18 August 2008 issued an
Environmental Authorisation, the most important provision of which provided as follows :-
"By virtue of the powers conferred on it by the National Environmental Management
Act, 1998 (Act No. 107 of 1998) and the Environmental Impact Assessment
Regulations, 2006 the Department hereby authorises Eskom Holdings Limited _. _._._
to undertake the following activity/activities (hereinafter referred to as "the
activities ");
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RE: OPINION - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS lIMITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
No.R.386 of 2006 1(1). The construction facilities or infrastructure, including
associated structures or infrastructure for the transmission or distribution of above
ground electricity with a capacity of more than 33 kV and less than 120 kV;
NO.R.387 of 2006 1 (a). The construction of facilities or infrastructure, including
associated structures or infrastructure for the generation of electricity where the
electricity output is 20 MW or more;
NO.R.387 of 2006 1(1). The construction of facilities or infrastructure, including
associated structures or infrastructure for the transmission and distribution of above
ground electricity with a capacity of 120 kV or more ;
On the Farm Komati Power Station ... .... The proposed Ash Dam 3 will be constructed on Site 7 as recommended by the Environmental Impact Assessment ("EIR') dated March 2008".
2.4. After the authorisation was granted, the Ash Dam was constructed by Eskom and Eskom
intends to put the Ash Dam into operation during January 2012.
2.5. Also, subsequent to authorisation being granted under NEMA, NEMWA was promulgated
and brought into law on the 1 July 2009. The question that has therefore arisen is whether,
in light of the subsequent promulgation of NEMWA, Eskom is obliged to obtain authorisation
to commence with the operation of the Ash Dam in terms of NEMWA Eskom has provided
an opinion in terms of which its view is that, based on a number of grounds, it is not required
to obtain authorisation under NEMWA before operation of the Ash Dam may commence.
3. DISUCISSION
3.1 WHAT WAS ESKOM ENTITLED TO DO IN TERMS OF THE AUTHORISATION UNDER
NEMA?
3.1.1 Eskom, in its opinion, is of the view that the authorisation granted by the Department of
Environmental Affairs on 13 August 2008 gave it the authority to construct as well as
commence operating the Ash Dam. We are in agreement with this view.
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RE: OPINION· COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS L1MITED ASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
3.1 .2. In terms of the Authorisation, the activities which Eskom was authorised to undertake are
set out in Notice No. R386 of 2006, Regulation 1 (I) Notice No. 387 of 2006 Regulations 1 (a)
and Regulation 1 (I);
3.1 .3. In these Regulations an important definition is "construction" which is defined as follows :.
"Means the building, erection or expansion of the facility, structure or infrastructure
that is necessary for the undertaking of an activity. but excludes any modification,
alteration or upgrading of such facility, structure or infrastructure that does not result
. in a change to the nature of the activity being undertaken or increase in the
production storage or transportation capacity of that facility, structure or
infrastructure". (Our emphasis).
3.1.4. This above quoted definition indicates to us that the activity for which authorisation is
required is not the construction itself. However, authorisation must be obtained to carry out
the activity before construction of facilities for that activity may take place. Thus, when
authorisation is given under these Regulations, the authorisation is given for building the
·infrastructure and for conducting the activity.
3.1.5. The Authorisation itself also clearly envisages construction of facilities as well as operation
of the facilities . The most obvious example is that there is a heading in the authorisation
"Construction and Operation of the activity" and under that heading under paragraph
1.16.10 there is a requirement that a "groundwater monitoring programme must be
maintained in all monitoring boreholes during the operation of the Ash dams".
3.1 .6. Our conclusion is that, but for the promulgation of NEMWA. Eskom would be entitled to
carry out the operation of the Ash Dams in terms of the Environmental Authorisation under
NEMA.
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RE: OPINION: - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS LlMITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
3.2. WHAT IS THE EFFECT OF THE SUBSEQUENT PROMULGATION OF NEMWA?
3.2.1 . Eskom has now built the Ash Dam but has not actually commenced operating it. NEMWA,
or at least the majority of the provisions of NEMWA, came into operation on 1 July 2009.
NEMWA governs waste management activities which are defined as follows :-
"waste management activity" means any activity listed in Schedule 1 or published by
notice in the Gazette under section 19, and includes :-
(a) the importation and exportation of waste;
(b) the generation of waste, including the undertaking of any activity or process
that is likely to result in the generation of waste;
(c) the accumulation and storage of waste;
(d) the collection and handling of waste;
(e) the reduction, re-use, recycling and recovery of waste;
(f) the trading in waste;
(g) the transportation of waste;
(h) the transfer of waste;
(i) the treatment of waste; and
Ol the disposal of waste".
3.2.2. The way in which NEMWA governs waste management activities is succinctly set out in
Section 20 which provides as follows :-
"No person may commence, undertake or conduct a waste management activity,
except in accordance with-
(a) the requirements or standards determined in terms of section 19 (3) for that
activity; or
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RE: OPINION: - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS L1MITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
(b) a waste management licence issued in respect of that activity, if a licence is
required"
3.2.3 Section 19 of NEMWA makes provision for the Minister to publish a list of waste
management activities which may require licensing . Schedule 1 of NEMWA, in terms of
Section 19(4), served as the list of waste management activities which may require
licencing when NEMWA was promulgated.
3.2.4 We cannot identify an activity listed in Schedule 1 of NEMWA under which the construction
and/or operation of the Ash Dam would fall. Schedule 1 of NEMWA was only in force and
effect for two days where after the Minister, in terms of Section 19(1) of NEMWA published
a list of waste management activities which replaced schedule 1, in Government Notice
718, Government Gazette No. 32368 of 3 July 2009 ("the NEMWA lisf') . In our view, the
NEMWA list does cover the activities of construction or operation of an Ash Dam. This
specifically we believe falls under Regulation 3(3), being the storage including the
temporary storage of general waste in lagoons. The question therefore is what effect does
this have on the current circumstances, given that authorisation was granted to Eskom to
construct the facilities under NEMA, but based on the above provisions would now also
require authorisation under NEMWA.
3.2.5 The first argument raised by Eskom that the activities in question do not require
authorisation under NEMWA is what we generally, and very loosely, term the argument
against retrospectivity. Accord ing to this argument, since authorisation was obtained by
Eskom under NEMA to commence construction and operation of the Ash Dam facilities, the
new NEMWA Act and the NEMWA list promulgated there under cannot retrospectively
preclude Eskom from continuing with exercising its entitlement, by virtue. of the
authorisation under NEMA, to operate the Ash Dam facility.
3.2.6 We are of the view that this argument against retrospectivity is not sound. It must be borne
in mind the nature of presumptions such as that a statute should be considered as being
applicable to future matters only and more especially that it should if possible be interpreted
as not to take away rights actually vested at the time of the promulgation. As was stated in
Adam Pol (Ptv) Limited vs Administrator, Transvaal 1989(3) SA 800 (A) at page 805
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RE: OPINION - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS LlMITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
"this rule is a presumption only - and it may be overcome either by express words in the
statute showing that the provision is intended to be retrospective, or by necessary and
distinct implication demonstrating such intention".
3.2.7. Our view is that NEMWA, as well as NEMA, do expressly deal with retrospective application
and NEMWA can, by necessary and distinct implication, be applied retrospectively.
3.2.8. NEMWA expressly deals with situations in which activities are currently being conducted.
Section 19(3)(c} provides that a notice (the NEMWA list) may contain transitional and other
special arrangements in respect of waste management activities that are carried out at the
time of their listing. In addition, Section 24L of NEMA and Section 44 of NEMWA specifically
indicates that an authorisation for a certain activity may be required simultaneously under
NEMA and NEMWA
3.2.9 To summarise the problem is not that Eskom had authorisation in terms of NEMA and that
this authorisation somehow has an effect on the operation of NEMWA, because
authorisation under both NEMA as well as NEMWA is expressly potentially a requirement,
the problem is whether in the circumstances Eskom is required to obtain authorisation
under NEMWA.
3.2.10 Section 20 of NEMWA is broad and fairly clear cut in that it states that no person may
commence, undertake or conduct a waste management activity. Based on this section in
isolation it would be unavoidably clear that Eskom would require authorisation. However,
one needs to consider how transitional arrangements have been regulated because, as
indicated, NEMWA expressly authorises regulation of transitional matters. The NEMWA list,
as envisaged in Section 19(3}(c} does deal with transitional arrangements and provides that
"Persons who lawfully conduct waste management activities listed in the schedule on the
date of the coming into effect of the notice may continue with those activities until such time
that the Minister by notice in the gazette calls upon those persons to apply for waste
management licences".
3.2.11 It would appear that the Minister has not by notice in the gazette called upon Eskom to
apply for waste management licence in respect of the Ash Dam. The crisp question to be
answered therefore is whether Eskom was lawfully conducting a waste management
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RE: OPINION - COMMENCEr~ENT OF OPERATION OF FACILITY - ESKOM HOLDINGS L1MITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
activity on the date of the coming into effect of the NEMWA list. If this is the case, then we
submit that Eskom does not need to obtain authorisation in terms of NEMWA, until such
time as the Minister calls upon Eskom to do so by way of notice in the Government Gazette.
3.3 WAS ESKOM ALREADY LAWFULLY CONDUCTING A WASTEMANAGEMENT
ACTIVITY?
3.3.1 We must point out at the outset that the relevant provisions dealing with this question are
not completely clear cut and are open to interpretation. We are, however, of the view that,
on balance, Eskom was not conducting a waste management activity at the time of
promulgation of the NEMWA list. The facts bear repeating - Eskom had commenced with
construction of the Ash Dam facility at the time of promulgation of the NEMWA list.
However, Eskom had not commenced with operating the Ash Dam facility at the time of the
promulgation of the NEMWA list. NEMWA defines waste management activity, which is
reproduced above, and as can be seen from this definition there is no reference to
construction of facilities. This definition of waste management activity also refers to the
NEMWA list, meaning that the activities described in the NEMWA list would constitute
waste management activities. Regulation 3(18) as well as Regulation 4(11) lists the
following activity :-
"The construction of facilities for activities listed in category A (or category B) of this
schedule (not in isolation to associated activity).
3.3.2 The NEMWA list defines construction as "the building, erection, establishment,
alteration or expansion of a facility, structure or infrastructure that is necessary for
the undertaking of a listed activity" . Note our emphasis on the undertaking of a listed
activity as definition. Our interpretation of these provisions in the list are as follows :-
A waste management activity is the actual managing of waste (to speak generally) such as
in this instance the operation of the Ash Dam facility. Construction of facilities is not an
actual waste management activity (according to the definition of construction in the NEMWA
list). The construction of facilities is listed but the purpose of this is simply to ensure that
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RE : OPINION: - COMMENCEMENT OF OPERATION OF FACILITY - ESKOM HOLDINGS LlMITEDASH DAM EXTENSION 3 AT KOMATI POWER STATION, MPUMALANGA
authorisation for conducting waste management activity is obtained before construction of
facilities for such waste management activity may take place. This becomes apparent when
one has regard to Regulation 3(18) which provides that construction of facilities are "not in
isolation to associated activity". This portion of regulation inserted we submit to convey that
authorisation for activity must be obtained before construction commences but that
separate authorisation for the construction of the facility and for the operation of the facility
is not required.
3.3.3 There is in our view a sound rationale for the requirement that the actual managing of waste
must already have commenced. There may be numerous facilities possessed by persons
who have never received authorisation to conduct waste management activities. It would be
extremely problematic to find that, because such persons have constructed such facilities
they do not require authorisation under NEMWA and can commence operating that facility.
4. CONCLUSION
Consequently, our view is that by constructing a facility as at the date of promulgation of the
NEMWA list, Eskom had not yet commenced, undertaken or conducted a waste
management activity and, as a result, authorisation in terms of NEMWA will be required.
~ -=--~ MRS V BENDEMAN
DIRECTOR: CORPORATE LEGAL SUPPORT & LITIGATION
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