Biodiversity Law Centre lodges appeal against Richards Bay Karpowership project – updated

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On Wednesday, 22 November 2023, the Biodiversity Law Centre submitted an appeal to the Minister of Forestry, Fisheries and the Environment against the environmental authorisation (EA) issued for the Karpowership project in Richards Bay. The appeal automatically suspends the EA until the appeal is finalised, delaying an already protracted process that has encountered many hurdles over the past 3 years.

At the core of the Biodiversity Law Centre’s concerns is the controversial agreement concluded between Karpowership and Ezemvelo KZN Wildlife (Ezemvelo) in terms of which the company allegedly purchased Madaka game farm for Ezemvelo in order to ‘offset’ the biodiversity loss that the project will cause to sensitive estuarine environment. Madaka game farm is located approximately 100km inland from Richards Bay.

In essence the EA envisages a “like-for-like” estuarine offset, and an “out-of-kind” offset in the form of Madaka to compensate for the delay in selecting and securing an appropriate estuarine offset site. This is problematic for a number of reasons, so argues the appeal. Firstly, both the “out-of-kind” and “like-for-like” offsets are included in the EA without satisfactory explanation as to the specific residual impacts the offsets seek to remedy, and in the absence of a comprehensive offset report. This important information should have been before the competent authority when considering the EA. Secondly, there is inherent uncertainty regarding whether the offsets are in fact possible, and the EA caters to this uncertainty by requiring an offset design as part of the offset implementation process. Thirdly, it is unclear how purchasing Madaka, with biodiversity targets relating to elephants and black and white rhino populations, will compensate for impacts to estuarine environment.

Most concerningly, the offset mechanism contemplated creates a problematic precedent for how to hold developers accountable for biodiversity impacts arising from delays in offsets becoming functional. There is further doubt as to whether the offset arrangement is lawful, existing entirely outside the statutory and policy provisions governing offsets.

The appeal also raised several other grounds. These include: inadequate public participation regarding the proposed offsets; the failure to take a risk averse and cautious approach with due regard to Richards Bay being a sensitive, vulnerable, highly dynamic or stressed ecosystem; and the competent authority issuing what is in effect a conditional EA, when it is not empowered to do so.

Should the appeal be dismissed, the appellants would be able to approach the High Court in a review application.

On 28 November 2023, and subsequent to lodging its appeal, the Biodiversity Law Centre was notified of an application by Karpowership in terms of section 43(9) of the National Environmental Management Act (NEMA), 1998, to suspend the suspension of the EA. In essence, Karpowership argued that its project would be jeopardised should it not have a valid EA in place by 31 December 2023, the deadline for reaching Commercial Close. Further, no party would be prejudiced if its section 43(9) application were successful, and the environment would not be harmed. In the circumstances, so argued Karpowership, good cause had been shown that the EA should not be suspended by the appeals.

In its response submitted on 8 January 2024, the Biodiversity Law Centre disputed that Karpowership had shown “good cause” that the EA not be suspended, as required by the relevant provisions of NEMA. It also argued that the legal test put forward by Karpowership for determining “good cause” (based on considerations of relative prejudice to the parties, and potentially irreparable harm) is not the correct test to be applied. Rather, the onus is on Karpowership to provide a reason which is of sufficient clarity, reasonableness and persuasion to justify the Minister directing that the EA will not be suspended pending her decision on the appeal, which Karpowership had not done.