Real Estate Investor Magazine South Africa September 2013 | Page 52

LEGAL MOVES
3) to recognise the risk and implement monitoring
and management measures to manage the risk,
and lastly,
4) make a f inding that the land is not
to
contaminated.
If remediation is required the Minister or MEC
can then make what NEMWA refers to as a
remediation order which, to the extent that it
is applicable, must identify the person to whom
the remediation order relates, the land, the
measures that have to be taken to remediate the
land and the period with which the remediation
must take place.
What is evident from the above is that the
discretion in terms of who receives the notice
identifying an investigation area, and who is
then directed to remediate the contaminated
land, lies wholly with the Minister or the
MEC. This discretion when exercised could
have enormous cost implications for the party
who the Minister or MEC has in his sights as
the one to remediate the land in question.
The purpose of these provisions, which is to
provide for the remediation of contaminated
land, means that the Minister or MEC will be

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September 2013 SA Real Estate Investor

looking to a person, and this includes juristic
persons, who will be in a position to undertake
a site assessment or appoint the necessary
professionals to conduct it and to be in a position
to effect the necessary remediation should same
be required. It goes without saying that the
remediation of land, depending on the scale
thereof, could be a costly and time-consuming
endeavour and as such the Minister or MEC
will be looking to the person, whether that be
the owner, the tenant, or the party undertaking
the activity causing the contamination, who
would be in financial position to do so.

“Consider environmental
indemnifications more closely and
ensure they minimise the risks”
Given the above, will the environmental
indemnif ication clause contained in the
lease, the purchase and sale agreement or the
mortgage bond serve to assist the party seeking
indemnification? Given the discretion is with
the Minster or MEC to choose the person to
whom the site assessment and remediation plan
will apply, the indemnification, depending on
its particular wording, may be of no assistance

whatsoever. Section 38 (4) specifically states
that a remediation order “must be complied
with at the cost of the person against whom
the order or directive is issued”. There can be
no confusion in terms of the interpretation of
section 38 (4) or what the legislature intended.
The person/s set out in the remediation order
must at their own cost give effect to the order.
Yes, you may be in a position, once the
remediation has been effected, to institute
action to recover the loss sustained, and this
action may be based on an indemnification
clause, but this further action will of course
incur further costs and time, whilst in the
meantime the costs incurred due to the
remediation will have to be borne by you.
With this in mind, it may be time to consider
those environmental indemnifications a little
more closely and ensure that they minimise
the risks to the greatest extent possible. The
Minister or MEC may, however, be the one
having the last laugh.

RESOURCES
Garlicke & Bousfield

www.reimag.co.za