Environmental Due Diligence

September 8, 2021 admin 0 Comments

environmental due diligence

Environmental due diligence is an investigation or assessment that is usually conducted by a business or person before they invest in immovable property or are about to acquire an existing business operation.


As far as immovable property (land) is concerned, these investigations could identify possible risks in the form of existing contamination and other forms of environmental damage. And with the strict liability imposed in terms of our environmental laws, the new owner becomes liable for remediation of the damage or contamination. This liability also extends to situations where an existing business operation is acquired. The new owner becomes liable for any previous or existing pollution or environmental damage.


Another form of risk associated with property (land) transactions is when a parcel of land is purchased with the intent to develop, only to realise that there are significant environmental impediments which substantially reduce the development potential of the land. These impediments include having to conduct a variety of studies, or even being prevented from developing, due to sensitive environmental features on the property, such as wetlands or other sensitive habitats which require protection.


Conducting environmental due diligence investigations can reduce a company’s risk substantially. At best, it clarifies both the environmental and financial risk a company could face if it proceeds with a transaction or agreement. And considering the strict environmental liability provisions and the serious civil and criminal penalties for environmental non-compliance, failing to conduct an environmental due diligence assessment might eventually expose your company to serious reputational risk.


Adv K Samie

Trust Account Advocate Specialising in Environmental Law