Department of Environmental Affairs not to blame for Evraz Highveld Steel closure
21 February 2016
The Department of Environmental Affairs refutes claims that it had in any way scuppered the possible sale of Evraz Highveld Steel, thus forcing the company’s closure.
While no direct blame has been laid at the door of the Department, business-rescue practitioners have indicated that legacy environmental issues were likely to have soured the deal as the seller had not fulfilled the conditions-of-sale agreement.
The Department places on record that it has been extremely reasonable over the years in relation to working with Highveld Steel to come into compliance with environmental legislation and permits.
Since 2007, inspections have been conducted at the facility in Mpumalanga and it has issued various notices to compel Highveld to take action to address the ongoing contraventions that impacted both the environment and human health. To date, none of these notices instructed the closure of the facility, as it has always been important to balance the environmental, social and economic issues.
In actual fact, the closure of this facility is not in the interests of the environment within the current context, the reason being that as an operating facility (one that is making money) it would better be able to address the environmental issues and thereby invest in measures/infrastructure to enable the facility to meet the relevant standards and other environmental requirements.
The DEA has therefore been in constant communication with the Business Rescue Practitioners (BRP), discussing various options to enable the company to continue operating while ensuring that the environmental issues are taken care of. The Department has also been in constant contact with the management of Highveld, the Department of Economic Development and the Industrial Development Corporation, as well as the provincial environmental department and Emalahleni municipality.
We have and continue to remain open to suggestions from the BRP or any potential investor in relation to operating the facility while ensuring a mechanism to provide for environmental issues to be addressed over a period of time.
The DEA was as surprised as everyone else when the International Resources transaction failed as we were eagerly awaiting their proposal for review in relation to how the environmental issues would be addressed while the facility continued to operate.
It should furthermore be noted that fines have not been issued against the company. Although the criminal investigation has been finalised, the criminal prosecution for offences related to the environment has not yet commenced.
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