Holding Corporations Accountable: Are environmental penalties sufficient to the damage done?

Introduction

There is an increased rise in the pollution and degradation of the environment. The environment is the core of which existence of life has become anchored (Kolbert dtl.2017). A home for humans, flora and fauna providing each living species with their essential needs: water, air and food. All living things are therefore completely dependent on the good state of the environment for their health and well-being. Any negative impact towards the environment would result on the very well-being and health of the environment affected.

Section 24 of the Constitution of the Republic of South Africa,1996 (Constitution) comprises of one’s constitutional right to having an environment that is not harmful to their health and well-being; an environment that is protected and from pollution and ecological degradation. Therefore, section 24 makes provisions for environmental rights that incorporate and impose the duty to care for the environment (Gaveni.2021).[1] However, South Africa law has been criticised for not effectively addressing environmental liability in its environmental laws and policies. The effectiveness to holding perpetrators (natural and juristic persons) for environmental crimes accountable needs to be reassessed.

This article aims to critically analyse the effectiveness of the penalties and policies in environmental law that hold perpetrators liable for their environmental crimes and damages.  It further will question whether the penalties and damage control is sufficient to the harm caused to the environment and those affected. A look into South African case law and international cases will help give a comparative analysis into recognising the lacuna in environmental law that is supposed to effectively prevent further environmental damage and instil a strong environmental consciousness into perpetrators when taking reasonable measures to not cause damage to the environment.

Legal Framework

“The dependency of human life on a good state of the environment creates not only a moral obligation, but also a legal obligation.” This is called an environmental duty of care. The Constitution and National Environmental Management Act 1998 (NEMA), South Africa’s landmark Act in environmental law, is an enactment of section 24 of the Constitution that recognise the importance of the duty of care towards the environment.

For a penalty to be imposed on a perpetrator in environmental law; it is trite to understand terms such as environmental liability and environmental duty.

The term ‘duty of care’ is found in Common law under the law of delict. Contextually to environmental law, the duty of care for the environment entails an obligation upon everyone to ensure that they do not engage in any activities that may cause pollution or degradation without taking reasonable measures to prevent such environmental harm from occurring. [2]

Environmental liability on the other hand entails ensuring that perpetrators comply with their duty of care towards the environment. This comes in the form of having sanctions imposed if in breach of the duty of care. [3] These sanctions include imprisonment, fines and directives imposing perpetrators to remedy their actions or rehabilitate the damages done by paying to the State or affected third parties.

South Africa:

Despite there being various sanctions that address environmental crimes and damages, South Africa environmental law is still criticised because of the lack of effectiveness in addressing environmental liability. In a recent matter, Topigs Norsvin SA (Pty) Ltd v Eskom and Others [4]  reflects how large companies such as Eskom fail to place preventative measures in ensuring the construction and operations of their business are not polluting or harming the environment and communities in the process. The applicant in this case requested an order for an interdict to prevent the Eskom’s Kusile’s Power Station from further or likely polluting the water resource and environment the applicant relies on. The irony in the matter was that respondents such as the Minister of Water and Sanitation, Minister of Forestry, Fisheries and Environment, Minister of Mineral Resources and Energy showed bias regarding Eskom and the duties Eskom needed to perform to place reasonable measures in avoiding polluting the water resources. Duties such as providing adequate data and reports on a regular basis to relevant stakeholders. However, they would delay or not comply, and proposed plans to address any pertinent issues were not addressed. [5]

Cases such as these accentuate the need to hold perpetrators accountable for environmental crimes and damages. South Africa environmental law is criticised for its lack of effectiveness because in cases such as these where those who are entrusted with ensuring all natural and juristic persons fulfil and promote the purpose, purport of the Constitution, specifically in this scenario section 24, are laxed in enforcing compliance with the water licenses. Which will inevitably become a breeding ground for corruption and infringement of rights.[6]

When it comes to sentencing corporations for environmental damage, the issue becomes that firstly, corporations cannot be imprisoned which leaves the other alternative penalty of fines. However, for most large corporations a fine becomes a payment that could constitute as forming a part of normal business operations. [7]

United States [8] :

One of the infamous examples of environmental damage corporations have done in Northern America would be the BP oil spill off the coast of the Gulf of Mexico. An oil leak that lasted 86 days resulted in the ecological and economical loss of many stakeholders. It even resulted in the deaths of 11 workers. Aquatic life lost and those who relied on the aquatic life (nearby communities and fishers) were gravely impacted by the disastrous incident. This spill was a testament of the importance of holding companies liable for the damages they cause to the environment and how the damages can affect present and future generations, which in this case it has as children are born with birth defects even after the clean -up. This spill did not only shed light on BP’s poor governance that led to disaster, but also the lack of transparency and accountability within the company. Especially the inability to take accountability of the spill by those involved. The issue of accountability has been an ongoing issue in the company as BP has historic incidents of misconduct.

This incident involved BP in both criminal and civil court proceedings.[9]  The criminal charges were for the deaths of the workers on the rig, and civil for the damage caused to the affected stakeholders (fishermen, tourists, nearby communities). BP was sentenced to pay a $4 billion fine and penalties and sentences five years’ probation (the maximum term for negligence by law at the time).  Their overall bill for the disaster and clean up would be $42. 4 billion.

$42.4 billion is a steep amount to pay, however, the question remains whether it is enough for the damages done. Which according to International Tanker Owners Pollution Federation Limited, isn’t a simple determination because oil spill incidents vary and are dependent on factors such as the location and attributes of the disturbed area.[10]

When sentencing corporations liable for environmental damage, ‘traditional’ methods of holding accountable isn’t necessarily effective for the following reasons[11]:

Firstly, corporations or corporate offenders have no conviction. Being found guilty may cause a corporation to feel the possibility of scrutiny and scare other businesses from working with the corporation (the deterrent effect). However, especially if it’s not publicised, will not be enough to force the company to change its ways.

Secondly, the imposition of fines highlights two issues: the first being the ‘deterrence trap’ which refers to fines being too small to deter a company because of their financial capacity. The second is the retribution trap; this refers to excessively harsh fines that would result in the bankruptcy of a company. Furthermore, innocent shareholders may be implicated to pay off the fines. The fining sanction therefore becomes imperfect as it fails to find a balance between deterrence and retribution.

South Africa and the USA address holding corporations accountable in different ways. USA has a more aggressive approach in punishing their wrongdoers, especially those that are intentional. The release of the South African Law Commission’s, Report on a New Sentencing Framework (Report) provides for guidelines for sentencing options for particular or sub-category. This report offers sentencing options, guidelines when applying the sentencing principles, and these principles assess the severity of the matter.[12] South Africa’s approach, although less harsh than those of the USA builds its approach off the values of the Constitution. Until the fruition of the Report, the sentencing of environmental criminals appropriately is yet to be implemented.

 Conclusion

South Africa takes a vastly different approach to sentencing crimes compared to the USA. The USA implements a more aggressive approach whereas South Africa, despite not having a fully implemented guideline to appropriately sentence perpetrators, aims to appropriately punish wrongdoers. The question whether the penalties are sufficient given the damage in South Africa rests on various factors. It is therefore sufficient to say that in South Africa the logistics in South Africa regarding punishment are fair, their effectiveness is yet to be strengthened as there are state officials responsible for implementing the punishments but are unnecessarily lenient to corporations, such as Eskom.

Reference(S):

Case law

Topigs Norsvin SA (Pty) Ltd v Eskom and Others [2024] ZAGPPHC 561.

Legislation

National Environmental Management Act 107 of 1998.

Secondary Sources

Brennan, K “A Stakeholder Analysis of the BP Oil Spill and the Compensation Mechanisms Used to Minimize Damage “( Honors Thesis, University of South Florida 2013)  .

D W Gaveni, O.K Odeku ‘ Accentuating the need to hold perpetrators liable for breach of the duty of care to the environment in South Africa ‘(2021) 13 (3) African Journal of Public Affairs.

Micheal Kidd, “Sentencing Environmental crimes”  (2004) 11 SAJELP < *Sentencing environmental crimes: articles> accessed 30 March 2026.

South African Law Commission’s, Report Project 82: Sentencing (A  New Sentencing Framework,2000) paras 28,66.

[1] D W Gaveni, O.K Odeku ‘Accentuating the need to hold perpetrators liable for breach of the duty of care to the environment in South Africa ‘(2021) 13 (3) African Journal of Public Affairs.

[2]Ibid, 26.

[3] Ibid ,23.

[4] [2024] ZAGPPHC 561.

[5] [2024] ZAGPPHC 561, [45].

[6] [2024] ZAGPPHC 561, [63]

[7] Micheal Kidd,  “Sentencing Environmental crimes”  (2004) 11 SAJELP < *Sentencing environmental crimes: articles> accessed 30 March 2026.

[8]  Katelyn Brennan, “A Stakeholder Analysis of the BP Oil Spill and the Compensation Mechanisms Used to Minimize Damage “(Honors Thesis, University of South Florida 2013)  .

[9] Ibid, 23.

[10] Brennan, 21.

[11] Kidd, 69-71. 

[12] Kidd, 66.