Three senior directors of UPL South Africa have appeared in court to face three criminal charges in the aftermath of the burning pesticide and chemical pollution disaster during the July 2021 riots in KwaZulu-Natal.
The National Prosecuting Authority (NPA) confirmed to Daily Maverick that the three directors appeared in the Durban Regional Court on 2 March and again on 30 April and the case has been adjourned for a pre-trial conference at the end of September.
The three directors are UPL regional head Marcel Dreyer (60), former chief executive/commercial director Jan Jonathan Botha (70) and financial director Paul de Gryse (50).
The scheduling of a pre-trial conference raises the possibility of plea bargain negotiations between the State and UPL – or alternatively, setting a final date for trial.
Although the fire was the result of an arson attack by rioting mobs, the company and directors nevertheless face two charges of contravening the National Environmental Management Act (Nema) and a third charge under the eThekwini Municipality Bylaw of 2020.
The Nema charges relate to the alleged illegal storing, handling or bulk blending of hazardous substances including pesticides, herbicides or fungicides and “unlawfully and intentionally or negligently” committing any act or omission which causes significant pollution or degradation of the environment
The third eThekwini Bylaw charge also relates to illegal storage and handling of dangerous, specified products without written permission at the UPL leased warehouse on Umganu Road in Cornubia, Durban.
Nema provides for maximum fines of up to R10-million or 10-year jail terms, while the maximum bylaw penalties are R100-000 or two years jail.
The State acknowledges on the charge sheet that the warehouse was set on fire in an arson attack, but alleges that the company and its senior officials were either negligent or failed to take reasonable measures to prevent air pollution and water pollution that led to one million litres of water mixed with hazardous chemicals flowing in the Ohlanga River, killing fish and natural vegetation and causing sediment and possible groundwater contamination.
It was an offence under Nema to “unlawfully and intentionally or negligently commit any act or omission which causes significant pollution or degradation of the environment” and also an offence to conduct listed business operations without conducting an environmental impact assessment or securing prior authorisation.
It appeared that UPL had also failed to implement “adequate secondary containment for contaminated water (such as bunding, isolation drains, retention ponds), sufficient firewater retention capacity or foam suppression for chemical fires.
In short, the ensuing harm to the environment “was not caused solely by arson, it was also caused by the accused’s failure to implement reasonable measures” in the handling and storage of hazardous and harmful substances.
Notably, the charge sheet also refers to legal provisions that allow the Regional Court magistrate to order additional damages, compensation or fines for environmental clean-up costs; the costs incurred by the NPA, Green Scorpions and other organs of state while investigating and prosecuting the alleged crimes – and the possibility of further punishing UPL based on the “monetary value of any advantage gained or likely to be gained by such person in consequence of that offence”.
This provision aims to deter prospective developers from taking any environmental or regulatory shortcuts.
The legislation also makes provision for the prosecution and sentencing of any “manager, agent, employee or director” in addition to a company convicted of environmental crimes.
Separate case
In a separate civil case in the High Court in Pietermaritzburg, Capital Propfund and Lussindale Investments (Pty) Ltd are suing UPL for damage to their property and loss of value or rental income due to chemical contamination.
During the initial hearing in October last year, the two property owners alleged that the chemical contamination of soil below the old UPL warehouse had rendered their property “permanently unfit for human occupation and commercial use” and that the poisoned Cornubia site could no longer generate an income for a period projected to 12 July 2031.
They allege that UPL “could and should have refrained from bringing chemicals containing toxins into the warehouse, alternatively, it should have taken steps to prevent the chemicals from entering the soil”.
Capital and Lussindale computed their damages on the basis that the market value of the property before the fire was R100-million. After the contamination the market value was R1-million, with the result that the plaintiffs suffered R99-million in damages.
Alternatively, the loss of reasonable monthly rental which the plaintiffs could have earned was R81-million, being the reasonable rental of R750,000 per month multiplied by 108 months (from 12 July 2022 to 12 July 2031).
The claim is rooted in the alleged breach of duty imposed by the law of delict – to not cause physical damage to another’s property through negligent conduct or omission.
Invited to comment on both court cases, UPL South Africa confirmed that it had received a summons on charges related to the arson attack on its leased Cornubia warehouse. The company would defend itself against the charges, but would not comment further on ongoing legal matters.
In its arguments before Judge Thina Siwendu in the civil case, UPL raised a legal exception, submitting that it was impermissible for the property companies to subvert their contractual dealings by advancing a delictual claim.
However, in a written ruling on 26 January, Siwendu found the UPL complaints to be “overly technical” by requiring them to prove each detail across multiple links in the chain of causation.
“This is inconsistent with established pleading standards, which recognise that plaintiffs are not required to anticipate every technical objection or to provide exhaustive proof of causation at the pleading stage. That is for the trial court to evaluate,” she said.
Shortly after the July 2021 fire at Cornubia, government regulators suggested that UPL “bypassed” mandatory environmental and safety assessments that could have identified avoidable risks when storing dangerous chemicals in close proximity to people and sensitive environments.
In a joint compliance report by eight government departments shortly after the fire, the regulators said that failures to obtain licences, permits and other authorisations were criminal offences. They contended that an Environmental Authorisation (EA) would have been required prior to any UPL storage operations commencing.
Significantly, the Cornubia property was a general purpose warehouse rented by two tenants: with one half used to store clothing by a retail company and the other half used by UPL to store thousands of tonnes of toxic pesticides and a variety of herbicides and other farm fertiliser products.
The chemical warehouse was located directly across the road from the Reddam House private college (early pupils to matric), as well as the residential suburbs of Prestondale and Izinga and the Blackburn informal settlement.
The latest litigation comes at a time when UPL has pledged to invest nearly R17-billion in a proposed bioethanol refinery and processing facility somewhere near Durban – a promise that has been welcomed by President Cyril Ramaphosa; Public Works and Infrastructure Minister Dean Macpherson and the eThekwini Municipality. DM