1. Introduction

The Legal Resources Centre hereby amplifies its submission to the Portfolio Committee in order to address the submission of the Associated Octel Company SA Pty (Ltd) ( the "Octel Submission"which is presented by Realsearch) regarding issues surrounding the phase out of lead

2. Legal issues
1. Impact assessment

The Octel opinion states that a decision on petrol specifications is an administrative act that "materially and adversely affects the rights of the public" and will require an environmental impact assessment.

Our law provides for environmental impact assessments in two circumstances.

1. For activities scheduled in terms of section 21(1) of the Environment Conservation Act No 73 of 1989; and
2. Activities under s24(1) of the National Environmental Management Act 107 of 1998 ie activities that require authorisation or permission and which may significantly affect the environment.

It is submitted that restrictions on what additives may be permitted into fuel do not fall into either of these categories and accordingly an environmental impact assessment is not required.

1. Constitutionality of the proposed Petroleum Products Amendment Bill

The Department of Mineral & Energy Affairs proposes to the amend the Petroleum Products Act 120 of 1977 by the addition of a provision (s 12C) which allows the Minister to make regulations to "prescribe the specifications and standards of petroleum products".

The Petroleum Products Amendment Bill accordingly delegates to the Minister the power to make laws to govern the specifications for vehicle fuels without specific guidelines in the Bill as to how to exercise his/her administrative discretion.

The Octel opinion states that certain constitutional rights may be affected in the passing of these regulations and that it is trite law that parliament must provide guidelines to officials on how to exercise an administrative discretion. It refers to a number of decided cases. These cases do not deal with the situation where the Minister exercises his or her discretion to in performing delegated legislative functions.

In the case of the proposed regulations the legislative grant of delegated authority to the Minister is not unconstitutional because it involves policy questions to be decided by the Minister involving technical matters and when the Minister makes his decisions he does not do so in the absence of guidelines as to how to exercise his discretion. S/he is at all times to be guided by the National Environmental Management Act 107 of 1998.

The drafting of regulations in terms of the proposed Bill may or may not constitute administrative action, but in any event such action does not affect the constitutional rights of secondary parties such as the Associated Octel Co Pty Ltd. If it is the case that their rights have been affected (and it is not conceded that they had such rights) the discussion of policy in regard to fuel specifications has been in the public domain over an extended period of time and they had ample opportunity to make representations at the time.

2. Rationality of the date of 2006 for lead phase out.

As regards the rationality of the date of phase out of lead the administrative law issue is not a question of the wisdom of the decision but a question of whether the action serves a legitimate government purpose and whether what was done is rationally connected to that purpose. The purpose is to phase out lead and the setting of the date is rationally connected to that purpose. Hence the rationality test is complied with. The Octel opinion provides no basis for its assertion that the date of 2010 is more rational than the date of 2006.

1. Issues surrounding the phase out of lead in South Africa

The submission by Octel does not state its own particular interest interest pertinently at the beginning of the submission. The submission instead concentrates on attempting to articulate the interests of the SA oil industry, disadvantaged groups, consumers and others. We understand that the Associated Octel Company Limited is internationally the last remaining major producer of tetraethyl lead, the octane booster used in leaded petrol, which is due to be phased out of use in 2006.

The concerns that it raises purportedly on behalf of other interest groups are not raised by those groups and hence should be disregarded.

The credibility of the assertions of the Octel submission are in doubt given the massively inaccurate statement it makes regarding the cost of lead phase out, giving this as R15 billion. This is in fact the cost of all fuel specification reforms including lead based on much higher rand/dollar exchange values than are currently the case.

What the submission fails to state is that the cost of these reforms as well as the implementation dates have been accepted by a broad range of interested and affected parties including the oil industry, motor industry, SABS, civil society groups and government which has taken place in terms of a broadly consultative process extending over many years. The difficulties such as they may exist in fuel reformulation and in particular lead phase out have been extensively traversed in this process and submissions made by the parties are there for all to see. Strangely Octel has waited till this late stage to make its submission suggesting that there has been inadequate consultation and that this decision is over hasty. Its submission is not supported by the facts of how these reforms have evolved.

 

2. Challenges to some of Octels Assertions

In 1999 a study of maternal and foetal blood lead levels was done which assessed blood lead levels during pregnancy in 2 hospitals serving disadvantaged communities. The average maternal blood level was 7.3 ug/dl but 18.7% of the samples had values greater than 10 ug/dl (the US Centres for Disease Control public health intervention level for raised blood lead level in children and pregnant women). The average umbilical cord blood level was 6..3 ug/dl and 12% had values greater than 10 ug/dl. The conclusion drawn was that there is a significant risk associated with maternal and foetal lead exposure in Durban and that public health measures to reduce exposure are needed.

In a study of lead poisoning of children in South Central Durban in 1998 twenty primary schools in 3 areas of South Central Durban were studied to determine if dust lead loading high enough to constitute a risk to children. 25% of primary schools were found to have mean outside dust lead loading above 1000 micrograms/m2. Exposure to dust lead in classrooms and in the school yard is considered to be an important contributor to blood lead levels and hence potential health hazard to children in many urban areas of the city.

In 1997 a study into lead poisoning of children in Africa found that in the Durban metropolitan area 5% of children showed blood lead levels of greater than 25 micrograms /dl . The figure for rural children was 2% of the blood lead levels were greater than 10 micrograms/dl. The study concluded that many children in Kwa Zulu-Natal are at risk of being lead poisoned. Average blood lead levels in Besters, an informal settlement , were 10 micrograms /dl. The USA Centre for Disease Controls benchmark for intervention is 10 micrograms per dl. A further study into childhood lead poisoning in Africa in March 1996 concluded that over 90% of the children in urban and rural communities of the Cape Province, South Africa, have blood lead levels of overall equal to 10 micrograms/dl. The introduction of unleaded petrol in 1996 has not caused a significant reduction of lead emissions as annual leaded petrol sales have remained more or less constant (see figure 1). Annual leaded petrol sales in fact increased from 1996 to 1998 and has subsequently decreased marginally. One can therefore expect that these studies will still be pertinent today. South Africa moreover in 1996/7 was the second largest user of leaded gasoline in the world.

High lead blood levels follow socio demographic patterns. Research has shown in South Africa and internationally that the poor and vulnerable e.g. children, show higher relative blood lead levels. High blood lead levels correlate with living in dense urban settlements, inner city areas and near to roads. In 1991 for example a survey of South African children showed that 13% of black children had blood lead levels elevated more than double the US action level whereas no white children had blood lead levels as high as this. A subsequent study in 1997 showed that even after a significant decrease in the lead content of our fuel 5% of children in an informal settlement in Kwa Zulu-Natal had blood lead levels greater than 25 micrograms/dl.

The National Environmental Management Act, Principle 2(4)(c) states that: "Environmental justice must be pursued so that adverse environmental impacts shall not be distributed in such a manner as to unfairly discriminate against any person particularly vulnerable and disadvantaged persons".

The continued use of leaded petrol results in a distribution of the neurotoxin lead in a manner which, as research has demonstrated, impacts to a far greater extent on vulnerable and disadvantaged communities and persons, such as black children in South Africa. A duty therefore rests on the state to take measures to eliminate this adverse health impact.

In this light, it is imperative that we critically examine for its truth the recent submission to the National Assembly of the Republic of South Africa by REALSEARCH (on behalf of Octel Company Ltd.) requesting an additional 4-year delay in the phase-out of leaded petrol in South Africa. What follows, then, is an examination of the most egregious of the errors in the submission.

3. Specific Issues

1. Octel through REALSEARCH has asserted: "6. In the USA and the European Union, there was a legal requirement to continue to supply leaded petrol for the existing, non-catalyst cars."

The truth is – On November 15, 1990, the U.S. Congress, in enacting the U.S. Clean Air Act Amendments of 1990, merely allowed the continued sale of leaded petrol with low levels of lead for five more years, until December 31, 1995. Under this provision of law, U.S. retailers were free to discontinue the sale of leaded petrol. Many retailers did, in fact, discontinue the sale of leaded petrol far earlier than this date. The relevant provision of U.S. law is as follows: "Prohibition on Leaded Gasoline for Highway Use.- After December 31, 1995, it shall be unlawful for any person to sell, offer for sale, supply, offer for supply, dispense, transport, or introduce into commerce, for use as fuel in any motor vehicle [as defined in section 216(2)] any gasoline which contains lead or lead additives." U.S. Clean Air Act, section 211(n); 42 U.S.C. section 7545(n).

To confirm that no regulations or laws required the sale of leaded gasoline for older cars, we conferred with James W. Caldwell, Senior Engineer, Transportation and Regional Programs Division, Office of Transportation and Air Quality, United States Environmental Protection Agency (U.S. EPA).  Mr. Caldwell has almost thirty years of experience working on gasoline regulation at the U.S. EPA.  Mr. Caldwell informed us that there has never been a U.S. law requiring the continuing sale of leaded gasoline.

Mr. Caldwell supplied a short history of unleaded fuel in the U.S. According to Mr. Caldwell, by 1982, lead in gasoline was capped at a maximum of 1.1 grams/gallon. At that time, about 50% of gasoline sold in the U.S. was leaded gas, and about 50% was unleaded. In 1985, as a result of new information about the deleterious human health effects of lead, the maximum allowable concentration of lead was reduced to 0.1 grams/gallon of gas.  There was some concern from farmers and antique car owner interest groups about removing lead entirely from gasoline, since these groups were worried that engines in agricultural equipment and antique cars, respectively, might be damaged. The continuing presence of up to 0.1 grams/gallon of lead was allowed in part to alleviate these concerns and protect older engines, but there was no requirement that leaded gasoline continue to be sold.  Mr. Caldwell added that the fears of damage to these older engines in fact never materialized.

According to Mr. Caldwell, by 1990, when the Clean Air Act Amendments mandated the elimination of all lead in gasoline by Jan. 1 1996, leaded gasoline comprised only about 10% of the U.S. market.  Although leaded gasoline was available until Jan. 1, 1996, there was no requirement that it be supplied in the U.S.

2. Octel has asserted: "11. Whilst petrol lead contributes around 90% to lead in air, a UK study clearly showed that its contribution to lead in blood was 10-15%, making it a minor contributor to body burdens (1). 12. This conclusion was supported in a report issued by the authoritative International Lead Zinc Research Organisation (ILZRO) (2). … The trend of decreasing blood lead levels in the USA when petrol lead usage fell was attributed to the attention paid to reduce significantly all the other contributors to lead in the body, eg industrial emissions, paint, food, beverages and drinking water. 13. Eliminating lead from petrol will not, therefore, bring about a marked lowering in blood lead levels in the RSA. Where blood levels are unacceptably high, attempts should be put in place to identify the principal sources. Unusually high levels of lead in the local environment are most often caused by specific point sources of emissions (3)."

The truth is – In every country that has severely restricted or eliminated the sale of leaded petrol, human blood levels of lead have declined dramatically. According to a United Nations technical report:

3. Octel has asserted: "14. Apart from one or two exceptions, international studies have established that there is no correlation between low levels of environmental lead and hypertension and impairment of neuropsychological development in children. However, studies have been conducted on children exposed to unacceptably high levels of lead exposure, e.g. living close to lead smelter plants. Adverse health effects were observed in children with blood lead levels in excess of 25µg per dl (4)."

The truth is – There is irrefutable and robust scientific evidence proving that exposure to low levels of lead causes irreversible mental retardation of children (IQ deficits) at blood lead levels below 10 µg per dl. According to a scientific paper by a researcher at Harvard University School of Public Health:

If this were not enough, exposure to lead also is a cause of increased rates of violent crime and unwed pregnancies. According to a recent scientific paper:

4. Octel has asserted: "15. ENVIRON, an internationally renowned US firm of consultants, reviewed the lead and health studies …"

The truth is - ENVIRON is an environmental consulting firm for corporations. According to its promotional materials, ENVIRON "strives to provide strategic solutions that are aligned with the business goals of our clients."

5. Octel has asserted that: "16. In particular … a causal association between low level lead exposure and IQ has not been firmly established and that the cardiovascular risks associated with lead exposure in adults are scientifically unsupportable (5). 17. The World Health Organisation’s International Programme on Chemical Safety issued a publication, in 1995, entitled ‘Inorganic Lead. Environmental Health Criteria 165’ … the following points were also made ‘…observational epidemiology cannot provide definitive evidence of causality (ie between blood leads and IQ effects) when the key statistical association is weak, the temporal relationship is unclear and major confounders are present’ … ‘Despite intensive efforts to define the relationship between body burden of lead and blood pressure or other effects on the cardiovascular system, no causal relationship has been demonstrated in humans and the mechanisms remain obscure.’

The truth is – There is strong scientific evidence showing that exposure to low levels of lead causes increased blood pressure in adults, leading to increased rates of heart attacks and strokes. According to a scientific paper by a researcher at Harvard University School of Public Health:

According to a scientific paper by a researcher at University of Michigan School of Medicine:

6. Octel has asserted that: "19. Solely focusing on the contribution of petrol lead in air to lead in blood in developing countries carries with it the danger of overlooking the major contribution of lead from other sources. For example, potentially highly significant sources of atmospheric lead are: fossil fuel burning in industry and in homes; lead-product manufacture (eg lead smelting); poorly-glazed cooking and eating ware; from lead-soldered food cans; lead in drinking water and beverages; in old flaking paint work; and illicit car battery meltdown to recover and sell the lead. 20. From the above, the assertion can be made that, unless there is compelling evidence of elevated blood levels that can be directly attributed to petrol lead, there is no justification on health grounds for a rapid phase-out of petrol lead by 1^st January 2006."

The truth is - In urban areas of developing countries, exposure to airborne lead from motor vehicles using leaded petrol is the primary source of lead toxicity. According to a World Bank technical publication:

7. Octel has asserted that "26. Adverse environmental consequences can arise due to the change in petrol composition made necessary by lead’s reduction and elimination. As already mentioned above, traditionally, lead’s octane numbers are replaced by using increased amounts of aromatics, such as benzene, toluene and xylene. Olefins and oxygenates, such as methyl tertiary butyl ether (MTBE) and ethanol, are other popular octane blending components. 27. Higher exhaust emission levels of benzene result from increased usage of aromatics as a blending component. This is not just due to benzene itself – the other aromatics undergo de-alkylation reactions during the combustion process to form benzene (12, 13)."

The truth is – Increased environmental exposure to benzene is by no means a necessary consequence of phasing out leaded petrol. Even where use of unleaded petrol does lead to increased environmental exposure to benzene, the benefits of reduced exposure to lead far outweigh the costs of increased exposure to benzene. According to a World Bank technical report:

8. Octel has asserted that: "30. It is widely accepted that increasing the aromatic content of petrol produces more oxides of nitrogen (NOx) at the tailpipe (18). This is due to the resultant elevated combustion chamber temperatures caused by the higher calorific value of the aromatics. NOX contributes to ozone formation and adversely affects pulmonary function."

The truth is – use of unleaded petrol results in reduced emissions of hydrocarbons (HC) and carbon monoxide (CO) that outweigh increased emissions of nitrogen oxides (NOx). According to a World Bank technical publication:

9. Octel has asserted that: "44. Lead traps (ie exhaust gas lead filters) offer a cost-effective and environmentally-beneficial alternative to the rapid elimination of lead from petrol in South Africa. … 45. Lead traps are a well-proven technology providing an economic and environmental solution to reduce lead emissions from existing non-catalyst cars. Historically, governments have allowed non-cat cars to continue to use leaded fuel whilst encouraging as many as possible of them to switch to unleaded. This was the original preferred approach to the gradual reduction in vehicular lead emissions."

The truth is – lead traps are an unproven technology for controlling tailpipe emissions of lead. There is not a single country in the world where more than a handful of vehicles use lead traps for controlling tailpipe emissions of lead. The way to eliminate tailpipe emissions of lead is to prohibit the addition of lead to petrol.

10. Octel asserts that: "47. In almost every case when a country moves to unleaded petrol the oil industry has been asked by government to develop energy penalty and cost implications. There is an energy penalty because making more aromatics and olefins consumes more crude oil in the refinery. Without exception, refineries have been required to find the capital investment costs to upgrade their octane-enhancing component units. Governments accepted the oil industry’s energy penalties and costs to produce unleaded fuel knowing that the latter would have to be passed on to the motorist. 48. Additional reforming to produce more aromatics has been the traditional and most cost effective route to up-grade. Cracking to make more transport fuels from a barrel of crude also contributes high octane petrol blending components to the refinery pool. Expensive alternatives to refinery up-grading do exist in the form of importing high octane components. However, this has detrimental effects on a nation’s balance of payments and the viability of its local industry."

The truth is – The costs of eliminating leaded petrol are minimal. In a free market system, these costs can be passed on to the consumer. Since the economic benefits of unleaded petrol outweigh the economic costs by more than 10-fold, consumers can easily bear the costs of eliminating leaded petrol. According to a World Bank technical report:

11. Octel asserts that: "55. A high proportion of cars in South Africa have engines that were designed and manufactured to run on high-octane leaded fuel. This is a consequence of the fact that the average age of the RSA car-pool is approximately 13 years. In most cases these engines need the higher octane of leaded fuel and have ‘soft’ valve seats that need lead’s protection. Converting all of them to run without catastrophic engine failure on lower octane unleaded petrol is not a practical proposition, neither is it economically feasible."

The truth is – The vast majority of older vehicles with soft valve seats experience no problems using unleaded gasoline. This is because valve seat recession in these vehicles is strictly limited to vehicles that travel consistently at very high loads and speeds. According to a World Bank publication:

Thus, the problem of valve seat recession in older vehicles with soft valve seats using unleaded petrol would be virtually absent in South African cities. This is because drivers in urban areas, where the majority of older vehicles with soft valve seats are concentrated, simply do not travel consistently at very high loads and speeds.

12. Octel asserts that: "61. Petrol pricing policies impact on the poorer members of society who run older cars. Fiscal strategies might involve applying a lower excise duty to unleaded fuel to off-set its higher manufacturing cost, thereby making it cheaper than leaded at the pump. However, this would unfairly penalise the socially disadvantaged motorist. … 63. In South Africa the majority of drivers of the ‘old’ cars that need leaded petrol for safe operation are Historically Disadvantaged South Africans (HDSAs). Therefore, requiring HDSAs to convert their cars to run on unleaded or run them on more expensive leaded fuel is unfairly discriminatory. This would be particularly penal for motorists who need their car to help them earn a wage, for example commuting to work and using it to transport goods in a small private business."

The truth is – Delaying by four years the phase-out of unleaded petrol will disproportionately burden Historically Disadvantaged South Africans (HDSAs).

First, the health effects of lead emissions from motor vehicles using leaded petrol are suffered most by persons living in congested urban areas. According to a World Bank technical report:

Second, the use of unleaded petrol will result in a substantial net savings for motorists because of the damage leaded petrol causes to vehicle components. According to a United Nations technical report:

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A ANDREWS