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Director liability: Court sends strong message via sentence

Director liability: Court sends strong message via sentence

Mar 31, 2015

In a landmark case in 2014, the Naphuno Regional Court in Limpopo sentenced Matome Maponya, managing director of the Tzaneen-based clay mining company Blue Platinum Ventures, to five years in prison. This sentence was suspended for five years, on condition that the damage done by the mining operation – estimated by the court to total some R6.8-million – be rehabilitated within three months.

Importantly, directors of mining companies should note that the ruling makes Maponya the first director in South Africa to be held personally liable for a mining-related environmental offence.

Director liability is a key issue for all businesses, and this case shows that the National Prosecuting Authority (NPA) intends to enforce South Africa’s environmental laws not only against the companies responsible for damage to the environment, but their office bearers and directors as well.

News reports quoted Tracey Davies, attorney for the Centre for Environmental Rights, as saying: “The fact that the company was found guilty of negligence is not unusual. What makes this case special is that this is the first time in South Africa that the prosecutor was not content with merely holding the company responsible.”

This case heralds a change in accountability by both companies and directors with regard to environmental issues and rehabilitation. The judgement handed down by Naphuno Regional Court may find application outside of the mining sector and is potentially applicable to directors of companies in all industries and sectors that have the potential to damage the environment.

Director liability also means that individuals who were directors of a company when the incidents occurred may be held responsible, even if they are no longer directors of that company.

Should you require any information regarding the Companies Act, director liability and environmental law, please contact Ramsay Webber Attorneys on info@ramweb.co.za

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