This giant must be forced to comply

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IOL news jul12 SS sasol

Independent Newspapers

Highly profitable: The Secunda plant. Sasol claims the costs to clean up its plants are prohibitive.

By: Tristen Taylor, Project o-ordinator at Earthlife Africa Jhb.

On May 21, Sasol launched legal action against the Department of Environmental Affairs (DEA) in the High Court in Pretoria to set aside key parts of air quality legislation. In other words, Sasol is aiming to pollute our air at levels higher than what the DEA thinks is acceptable in terms of human health, socio-economic conditions and the environment.

If we strip Sasol’s legal documents (1) to their absolute core, Sasol is trying to avoid spending money to ensure that its Synfuels plant (Secunda), its Infrachem plant (Sasolburg), and the Natref refinery (Sasolburg, co-owned with Total) meet emissions standards.

Sasol is asking the court to erase emissions standards for a cocktail of toxic and carcinogenic chemicals. These chemicals are: particulate matter, carbon monoxide, sulphur dioxide, oxides of nitrogen, hydrogen chloride, hydrogen fluoride, hydrogen sulphide, sum of lead, arsenic, antimony, chromium, cobalt, copper, manganese, nickel, vanadium, mercury, cadmium, thallium, total volatile organic compounds, sulphuric acid mist, sulphur trioxide, ammonia, dioxins and furans.

The DEA has due cause to regulate the amount of these substances that industrial concerns like Sasol, Total, Engen and Eskom can put into our air and water: these substances are terrible, if not fatal, for human health and must be controlled.

Sasol’s court action may end up in the Constitutional Court, as what is at stake is section 24 of the constitution which states that, “(e)veryone has the right to an environment which is not harmful to their health or well-being; and to have the environment protected for the benefit of present and future generations through reasonable legislative and other measures that: prevent pollution and ecological degradation, promote conservation, secure ecologically sustainable development and use of natural resources, while promoting justifiable economic and social development”.

A large part of Sasol’s argument rests on the basic idea that the costs of reducing its pollution to the levels that the DEA has set are not “reasonable” measures that promote justifiable economic and social development.

Putting aside the Orwellian nature of Sasol’s use of a clause in the constitution designed to prevent pollution as the basis for a licence to spew out carcinogens, Sasol’s claim that the costs to clean up its plants are prohibitive needs to be interrogated.

We can reasonably ask, what is Sasol’s cost to install pollution abatement measures? One would think it would provide a figure, in big bold type, in its court papers to prove that, even as much as it would like to reduce its pollution, the cost of not polluting the air at dangerous levels is, sadly, simply too high. This, Sasol did not do. Quite the opposite, in fact. Key cost calculations are redacted in the papers.

Despite Sasol blacking out many costs, indicative costs do come through in the supporting annexures to its founding affidavit.

These supporting documents are from Sasol Synfuels, Natref, and the Chemical and Allied Industries’ Association, of which Sasol is a member.

If all the costs are added up, the total cost comes to R37.88 billion. This covers compliance to clean fuel standards, removal of hydrogen sulphide and preventing the release of volatile organic compounds into the air.

When examining this figure of R37.88bn, we should keep in mind that some of the costs may be overlapping – Sasol would incur many of them anyway – and that they all come from documents arguing why Sasol should not be made to comply with the DEA’s air emissions standards. The costs are probably inflated.

Nearly R39bn sounds like and is a lot of money. It also happens to be very close to Sasol’s annual, pre-tax profit last year of R40bn. After-tax profit for 2013 was R27.1bn (R74 million a day) and Sasol’s turnover for last year was R181bn. Over the last decade, Sasol made R176.6bn in after-tax profit.

Sasol’s chief executive, David Constable, took home R53.6m last year, just over R1m a week.

The nearly R4bn in South African and European fines for price-fixing imposed upon Sasol are small change for the company.

Sasol is neither a poor nor a marginal company. In fact, it is a highly profitable company that the state privatised in 1979, and for which its plants in Sasolburg and Secunda were underwritten with public money.

The apartheid state created and funded Sasol’s coal-to-liquids technology – until recently, Nazi Germany was the only other state to develop this technology – as part of its drive towards economic independence.

In these circumstances, the costs of cleaning up Sasol’s plants are reasonable, especially as those investments will be spread across many years, written off against tax, and won’t cause Sasol to close down or lay off workers. In fact, it is reasonable to suppose that increased investment in its South African plants will create jobs.

Our air will be cleaner, and people living near the Synfuels, Infrachem and Natref plants will see their right to a clean and healthy environment realised. The worst that will happen is that the major owners of Sasol shares – Allan Gray, Coronation Fund Managers, Investec, Sanlam and Old Mutual – may see their dividends decline temporarily.

The danger of this application to the high court is not only that Sasol gets a free pass on complying with air quality legislation, but that the court’s ruling will apply similarly to Eskom and other major emitters of these toxic chemicals.

If that happens, Sasol will have taken our air quality legislation back to the days of the National Party, whose attitude towards the environment and people’s health was abusive.

By opposing air emission standards on dangerous toxic chemicals, Sasol is seeking to implement its private desire or will on the public. Our constitution is the expression of the general will of the South African public, and our government and judiciary have the mandate to implement and defend it.

And, this means not allowing Sasol, Natref and their cheerleaders at the Chemical and Allied Industries’ Association to plead poverty when, in reality, they are making money hand over fist while poisoning us all.

(1) For copies of Sasol’s court papers, go to: http://cer.org.za/programmes/ pollution-climate-change/legal-proceedings.

Saturday Star


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