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Considering environmental risk

25 May 2016

Before construction commences and during the construction process, there is a plethora of environmental and heritage laws, regulations and processes in South Africa that must be complied with. The question of who bears the risk for compliance with environmental regulations and processes is often dictated by the type of contract utilised.

In FIDIC contracts, for example, it is the employer’s responsibility to ensure that all planning, zoning or similar permissions for the works are in place prior to commencement unless otherwise specified. The contractor is obliged to comply with all laws and regulations.

The GCC2010 has a similar risk allocation: the employer is responsible for planning approvals in respect of the permanent works, but the contractor is responsible for all consents, permits or approvals arising from any legislation, ordinance, Regulation or By-Law.

In the JBCC, the allocation is not borne out of the standard form, which means that the parties must allocate the risk. The only requirement that is required by the standard form is that both parties comply with all laws, regulations and bylaws of local and other authorities.

The unique complexities of each project will dictate how the specific risks are allocated. Using an example of a biogas production plant construction contract, the contractor is probably best placed to ensure that all emission regulations are complied with, while the employer would likely make application for any zoning or planning approvals as owner of the new plant and land on which it is situated.

Aside from the obvious requirement to comply with regulations, both contractors and employers have a moral and ethical duty to protect our environment and heritage. Pay careful attention to which party between the contracting parties is responsible for ensuring compliance with both environmental and heritage laws.

Author: Taryn van Deventer, Senior Associate