Dit is dus nodig om die omvang en toepaslikheid van die beginsel te verbreed om dié in te sluit wat dit normaalweg nie sou dek nie. Een van die beginsels wat PPP uitbrei, is die beginsel van uitlenerverantwoordelikheid (beginsel van uitlenerverantwoordelikheid).
Introduction
The environmental impacts of lending
However, it can be generally assumed that all pollution caused by companies financed by banks is the responsibility of the lenders. It would then be easy to calculate the environmental impact in this sense, as this would equate to almost the total pollution of the entire economy in many countries.6 On the other hand, there is the de facto reality that banks are not pollute, and it is their customers who do this, and these customers must take responsibility for the pollution they cause.
Problem statement
It is therefore argued that the fate of the lenders must be linked to that of their debtors. It will critically analyze the development and codification of the doctrine in the US and its adoption and application in Brazil before intending to apply it to South Africa.
Lender Liability
Introduction
Who is a lender?
Lender liability - a principle, doctrine or a body of law?
In countries such as Brazil and South Africa, lender liability is not recognized as a principle either in legislation or in jurisprudence. Lender liability therefore refers to the body of law compiled from a number of liability theories based on contract, tort and statute.33 It exists where the borrower's environmental liability is potentially in making or granting a loan.
Grounds under which the lender can be held liable
The collective element that unites these theories is that they are asserted against borrowers.36 Causes under these theories may arise when actions taken or not taken by a borrower with respect to a loan directly or indirectly result in to a loss for a borrower or a third party.37 For the purposes of this study, the loss under consideration is environmental.
Environmental risks
- Liability risk or direct risk
- Foreclosure and due diligence
- Due Diligence
- Credit or indirect risk
54 Lender Underwriting date unknown http://www.rd.usda.gov/files/3565-1chapter03.pdf.” The process involves a simultaneous analysis of the borrower's creditworthiness and the property's economic value as an income-producing investment.
Sustainable development and green banking or financing
- The Equator Principles
- ISO 14001:2015
- Transferability of environmental liability
63 European Community Policy and Action Program regarding the Environment and Sustainable Development Role of Financial Institutions in Achieving Sustainable Development 1. However, some NGOs have had doubts about the environmental and social impact of the project in the region.
Relevant environmental law principles
- Polluter pays principle
- Precautionary principle
According to the principle, inanimate objects and the environment do not impose costs, people do. The intended payment (regardless of whether there are real victims or not) naturally goes to the government as a tax.
Relevant theories of environmental harm
- The instrumentality or control theory
- Good faith
- Duty of care
- Negligence
- Wrongfulness
Clearly, the failure to warn the borrower of potential risks is in itself an unfair fulfillment of the lender's obligations. It is generally accepted that the bank has a duty of care, especially when it comes to the client's affairs. There is no doubt that the concept of tort is not only an essential but also an entirely separate element of liability, rooted in the legal beliefs of society.
Illegal conduct falls under the latter category and is rooted in the legal beliefs of the community.
Practical implications of the decision to lend
The cumulative effect of the authorities referred to in the overview above suggests that this investigation should identify the following elements of wrongfulness. First, whether the community's legal convictions have been established as a criterion for wrongdoing in all cases of wrongdoing.117 This requires a consideration of whether the behavior of banks that irresponsibly lend money for activities that harm the environment is wrongful in the eyes of society. For the purposes of this study, the applicable laws and voluntary standards that are adhered to will therefore be considered the moral conscience of society, and that of banks in particular, as they are under no legal obligation to adhere to these standards. The position of the environmentalists, that one cannot use one's own resources at the expense of the environment, is a crucial philosophical worldview because it poses a direct threat to the lender.
Lenders have "deep pockets" and if a cleanup is needed they can finance it,121 why should they be allowed to walk free when they have contributed to the harmful use of the environment, a resource held in trust for humanity.
Conclusion
The sole purpose of a bank is to make money, but it is inexcusable that it should have this profit regardless of the cost. If by its provision of funds it enables the pollution to continue, then it follows that it should not profit from its own mistakes and should be held responsible for the pollution.
Statutory interventions and limitations in other jurisdictions
Introduction
- Judicial activism
Brazil is used to demonstrate the impact of the judiciary in holding the borrower liable for environmental damage in a jurisdiction where there is no statutory provision for borrower liability. Judges have always played a fundamental role in the development and application of effective laws for the protection of the environment. A common example is that of the Indian Supreme Court, which since 1985 has used the guarantee of the right to life under Article 21 of their Constitution as the basis for developing a powerful set of principles for the protection of the environment.132 In the op. the same way the principle of borrower's liability developed in the USA and in Brazil.
A good example is that of the Constitutional Court of India, which ordered that all buses in the city should be converted from diesel fuel to compressed natural gas in 3 years.134 Such an order is an assertion by the judiciary independent of consultation with the public and has financial and socio-economic impacts.
United States of America
- Background and historical setting
- Liability under CERCLA
- Foreclosure
- Exemptions to CERCLA
It is risky for a lender to foreclose on potentially contaminated property151 especially if the lender takes ownership of the property since the lender may lose its protection under CERCLA's creditor exemption.152 To qualify for this exemption, a lender must show that it has a security interest in the property and does not participate in the administration of the property.179. Even lenders that are within the prerequisites for CERCLA provided the exclusion of creditors and that foreclose with the intention of profiting from the vault.
Since contamination is an ongoing phenomenon, omissions or negligence on the part of the lender can be fatal.
Brazil
- The Constitution
- Judicial activism
- Project financing and environmental due diligence
- Foreclosure
The Latin risk theory ubi emolumentum ibi onus186 has influenced the development of Brazilian environmental liability. In its purest sense, it is an extension of the polluter pays principle by the judiciary to establish causation and hold the lender liable. It is in line with the factors present that have led to the development of lender liability in the US.
Brazil's constitution assigns the federal government, states, districts and municipalities the responsibility for the protection and conservation of the country's flora and fauna.
Conclusion
An analysis of the performance of lenders, particularly in America, suggests that American society had reached a stage, mentally, in appreciating the importance of preserving the environment for its own sake. This point was clearly highlighted by the example of Brazil, where the coverage of the right has allowed for a deliberate interpretation capable of holding lenders accountable. Where the squeeze is anthropocentric, it becomes extremely problematic to develop laws that protect the environment for the sake of the environment, when there is no human harm caused by environmental damage.
Although it is appreciated that these sentiments are largely academic and unrealistic expectations of marriage, they are ideal.
South African statutory framework
- Introduction
- The Constitution
- National Environmental Management Act (NEMA)
- Polluter pays principle
- Section 28 (1) of NEMA
- Other legislation
- Wrongfulness
- Banking law
- Due diligence
- Voluntary standards
- Sustainability reports
- Conclusion
236 It is the content of the right that changes depending on what it emphasizes, some give. This would entail compliance in the negative sense - doing nothing to undermine environmental protection. 253 In the US, lenders were forced to do a full environmental due diligence due to the 1996 lender liability rule.
As a member of the community, the lender must do its part in protecting the environment. This realization led to the promulgation of the Lender's Liability Rule in America. The deductions in this chapter are realistic given the Brazilian experience.
Conclusion and Recommendation
Chapter synopsis
Final conclusions
It is purely speculative that the current legal regime is capable of holding lenders accountable. Therefore, the lender's obligation should be seen as much more than just an extension of the PPP. It is more like the band-and-brackets approach, where the actual polluter is subject to strict environmental conditions by the lender, forcing it to limit its pollution, and if the lender fails to enforce these environmental conditions on the lender, then it, as "deep pocket", can take the fall.
It is the "how to incorporate" principle in the South African body of law that is perhaps a little unclear.
Recommendations
- Statutory amendments
- Judicial activism
- Voluntary measures
338 2004 version of the Code (applicable from 1 October 2004), contained in the introductory provision (cl. 1), available at http://www.banking.org.za/consumer-information/legislation/code-of- banking practice. Cordato RE A Proper Guide for Environmental Policy date unknown https://www.heartland.org/sites/all/modules/custom/heartland_migration/files/p dfs/8241.pdf. John A Hannah et al Lenders and Environmental Liability date unknown http://www.irmi.com/expert/articles/2000/hannah09.aspx accessed 29 July 2015.
Guilder A and Rumble O and Dhladhla B et al Environment - South Africa 2012 https://www.ensafrica.com/news/Environment-South-.
