South African environmental law has become an essential element of commercial and industrial investments and decision making. It is a necessary component of new business areas such as those in environmental commodities, including carbon, water and biodiversity offsets.
As a result, the business of environmental law has witnessed a rapid evolution in recent years, leading to an increasing number of environmental law practitioners being employed at larger 'full-service' firms and a move away from boutique (niche) environmental law practices.
The immediate reason for the rise of environmental legal departments at larger firms is that such departments are experiencing an increase in demand for their services and require experienced practitioners to respond to this need. Given the previous eminence of boutique firms in the environmental legal sector, an obvious source of such experience has been the staff complements of the smaller firms.
Among the advantages of the larger firms is their attractiveness as employers, from a perspective of both salary and benefits. Furthermore, larger law firms tend to attract large volumes of multidisciplinary work by virtue of their full-service offering, giving practitioners exposure to a wide range of issues.
Corporates tend to take advantage of the varied expertise of full-service law firms, as contracts and legal issues become increasingly intertwined and cross-disciplinary.
The advantage of the full-service law firm in these circumstances is well illustrated by the fact that virtually all the legal work required to prepare project bids for government’s Renewable Energy Independent Power Producer Programme (REIPPP) was undertaken by large law firms.
In essence, the REIPPP puts on par the suite of legal considerations required for projects to achieve 'preferred bidder status'. Thus environmental qualification criteria are given equal standing with technical, financial and black economic empowerment criteria.
The following is a non-exhaustive set of examples of factors contributing to the increase in demand for the services of the larger law firms’ environmental departments:
Increased compliance and enforcement: South African environmental law was long regarded as being comprehensive and well-articulated, but lacking enforcement 'clout'.
This perception is rapidly evaporating as a result of the work of the Department of Environmental Affairs Compliance and Enforcement Directorate (The Green Scorpions), which releases an annual report to record progress in enforcement – including by way of litigation, the imposition of fines and associated sanctions with financial impact (such as issuing remediation orders).
In addition, criminal convictions are set to become a feature of environmental compliance. A recent example is the case of York Timbers (Mpumalanga), which received a fine of R650 000 for contravention of the regulations for environmental impact assessment.
The largest criminal penalty, to date, for an environmental offence is the R4-million fine imposed upon Golfview Mining (Pty) Ltd, for various contraventions of the National Environmental Management Act and the National Water Act.
The application of the Equator Principles by some banks to projects valued over R100 million means that certain infrastructural investments are now being scrutinised through an environmental lens. Seventy-two South African companies recently committed to the United Nations Global Compact – am initiative in which businesses align their strategies and operations with 10 universally accepted principles in the areas of human rights, labour, environmental protection and anticorruption.
Further changes in the environmental legal business model are reflected in the renaming of practices to include concepts such as 'sustainability', 'environmental markets' and 'natural resource management' – making the old query "what’s in a name?” especially apposite.
The new nomenclature reflects emerging awareness that the natural environment does not exist, and cannot be dealt with, in isolation from the need for human development. Modern sustainable development law seeks practically to achieve this 'connectedness' and these linkages are reflected in the evolving business of environmental law.
