Stockpiles of ‘a potentially valuable economic resource’ continue to grow ‘at an alarming rate’ due to lack of processing capacity. Image: Shutterstock
The controversial Recycling and Economic Development Initiative of South Africa (Redisa) has applied to the High Court in Pretoria to review and set aside government’s Industry Waste Tyre Management Plan (IWTMP).
The IWTMP was approved in March 2024 by the previous Minister of Forestry, Fisheries and the Environment Barbara Creecy, who is now Minister of Transport.
Redisa, together with its management company, Kusaga Taka Consulting, was placed in final liquidation in September 2017, but the liquidation order was overturned on appeal.
At the time, Redisa was the only approved integrated waste tyre plan. It and Kusaga Taka’s assets were transferred to the department’s Waste Management Bureau.
Redisa lodged the application to review and set aside the plan on 16 September 2024. It is uncertain when it will be heard.
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Redisa CEO Herman Erdmann, who was also chief executive of Redisa when it was previously liquidated, said the IWTMP approved by Creecy is an unlawful, irrational, unreasonable and procedurally unfair administrative action.
The Department of Forestry, Fisheries and the Environment (DFFE) confirmed on Wednesday that it has received Redisa’s application but cannot comment because it is still studying the court papers and considering its merits.
Comment was also requested from the SA Tyre Manufacturing Conference, which represents local tyre manufacturers, and the Tyre, Equipment, Parts Association (Tepa), but a response has not yet been received.
Erdmann said that while a promising start was made in 2012 to deal with the scale and complexity of the problem posed by waste tyre management in South Africa, there has been “little progress made since 2017”.
“The belated approval of the IWTMP by the former Minister in March 2024 – more than four years after the DFFE first started to work on its preparation – should therefore have been a welcome development.
“Unfortunately, despite the availability of funds – approximately R5 billion has been raised by government in the form of a specific ‘waste tyre levy’ imposed on the sale of each and every new tyre sold in the country since 2017 and continues to be raised – the IWMP that has been approved is fundamentally flawed in its conception and incapable of meeting it required purpose,” he said.
Erdmann added that in the unlikely event the IWTMP is successfully implemented, it would give rise to “destructive socio-economic consequences, the implications of which have not been considered”.
He said there were a number of further irregularities with the IWTMP.
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Erdmann said Redisa’s application seeks to review and set aside Creecy’s approval of the IWTMP because it:
Erdmann said the approval and implementation of a rational and reasonable IWTMP, albeit not in the form that has been approved, is not merely permissible but a mandatory requirement of binding South African law, necessary for the effective management of environmentally harmful tyre waste in accordance with lawful prescripts.
“It applies to an industry that rapidly produces such waste, in circumstances where waste management measures have failed or deteriorated, especially in recent years,” he said.
“This is despite the fact that waste tyres, if properly managed, are a potentially valuable economic resource, ideally suited to the full application of the ‘polluter pays’ principle, the ‘waste management hierarchy’ and the promotion of a ‘circular economy’.”
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Erdmann said a baseline study conducted in 2011 by the predecessor of the DFFE estimated the annual “inflow” of waste tyres at the time was more than 246 631 tons but also concluded only 4% or 9 865 tons of those tyres that became waste in South Africa each year were being properly managed according to the legislatively mandated waste management hierarchy, with the remainder going to landfill or, even worse, being disposed of informally in the environment.
He said sadly the annual additional threat to South Africa’s environment and its citizens’ well-being has not abated over the past 13 years.
Erdmann said this is apparent from the information regarding the collection of the waste tyre levy placed before parliament by Minister of Finance Enoch Godongwana in his Budget Review in February 2024 that the annual inflow during the year to 31 March 2024 was expected to be 246 245 tons.
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However, Erdmann said the annual inflow is now dwarfed by the “stockpile” that currently stands in enormous depots, waiting as freely available feedstock for a waste tyre management processing industry that has “quite simply not materialised”.
“The gravity of the situation that South Africa currently finds itself in, and the urgency of the need to address it in a rational, reasonable and meaningful way is graphically illustrated by the stockpiles of waste tyres (depots) that line many of South Africa’s key arterial routes,” he said.
Erdmann added that the precise extent of South Africa’s stockpile is currently unknown but, according to the IWTMP itself, was estimated to be as high as 900 000 tons at the end of 2022.
However, Erdmann said the true number is more than double this, and it continues to grow at an alarming rate due to the country’s lack of processing capacity. At the same time, the collection of waste tyres has suffered due to many depots being full to capacity.
Erdmann said the IWTMP was drafted and approved on the basis that it would be implemented from the beginning of the government’s 1 April 2023 reporting year and that it would be possible to reach a “steady state” – where the stockpile has been entirely eliminated, and 100% of the annual inflow of waste tyres is processed in accordance with the waste management hierarchy – within 15 years.
He said the plan would further require an immediate 339% increase in South African waste tyre processing capacity from 35 355 tons to 123 372 tons per year.
Annual year-on-year increases of between 10% and 20% per year would be required in the following five years, and thereafter, the required annual capacity increases would continue to exceed any reasonable prediction for South African economic growth for the next 15 years.
“The plan is devised in such a way that at the end of the 15-year period when the stockpile is used up and the ‘steady state’ is reached, the thriving and growing processing industry that will have been created, with a capacity of over 476 000 tons per year [and] a 1 310% increase since the plan’s commencement, will immediately have to shed more than 40% of that capacity to a mere 303 183 tons a year, with concomitant economic chaos, including permanent loss of jobs.
“It is thus on the basis of the DFFE’s own reported statistics that … it is patently obvious to any person without any special expertise that the approved IWTMP is practically and economically irrational and unreasonable,” he said.
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Redisa was placed in final liquidation in 2017 following an urgent high court application by then environmental affairs minister Edna Molewa because of alleged widespread misappropriation and irregular use by Redisa of funds obtained from the environmental levy of R2.30 plus Vat per kilogram on tyres.
Judge Henney said there had been “an unlawful misappropriation of public funds” by the Redisa directors.
However, the Supreme Court of Appeal (SCA) overturned the liquidation with costs in January 2019.
SCA Judge Azhar Cachalia said Molewa had been granted the provisional winding-up orders wrongly because she had not justified her resort to seeking relief from the court without involving Redisa during the initial stages, she had not disclosed material information to the court and had also not established any right to pursue the liquidation of Redisa in the public interest in terms of the specific section of the Companies Act cited.
The Retail Motor Industry Organisation claimed in 2012 that Erdmann hijacked its waste-tyre plan when he was the national chair of the Tyre Dealers’ and Fitment Association, later renamed the Tyre, Equipment, Parts Association.
However, Erdmann said these allegations were “totally untrue”.
This article was republished from Moneyweb. Read the original here.
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