It may be facing a multibillion-rand bill for alleged incompetence in co-enabling the 2022 flooding and shutdown of Toyota SA Motors’ (TSAM) vehicle assembly plant in Durban, but the KwaZulu-Natal provincial government knows where its industrial investment responsibilities lie.
Friday’s statement by transport & human settlements MEC Siboniso Duma, exonerating TSAM from responsibility for the R6.5bn lawsuit and promising to continue the “enduring” working relationship with the company, is meant to show there are no grudges against TSAM and that it’s also business as usual for other investors in the province.
Duma’s department, alongside Transnet and the eThekwini Municipality, is being sued in the Durban high court by TSAM’s Japanese insurer, Tokio Marine & Nichido Fire Insurance. TSAM claimed the money from its insurer for plant rehabilitation and other costs and now Tokio Marine wants its cash back from those it holds responsible for the disaster.
The R6.5bn comprises almost R4.5bn in plant repairs and more than R2bn in lost business. The Prospecton assembly plant, part of the dockside Prospecton industrial estate, was inundated by floodwater and thousands of tonnes of mud and silt in April 2022 after the estate’s stormwater management system, for which the three defendants share responsibility, gave way.
Court papers blame the event on lack of maintenance. Craig Woolley, a partner at law firm Norton Rose Fulbright SA, which is acting for Tokio Marine, said other Prospecton tenants are also seeking compensation. The Toyota plant builds the Hilux bakkie, Fortuner SUV, Quest and Corolla Cross cars, HiAce minibuses and Hino trucks and buses. About half of production is exported, mainly to Europe and Africa.
The floods caused a four-months halt to production, which resumed in August 2022. Court papers do not specify how the R6.5bn claim should be split between the three defendants, deeming them “jointly and severally” responsible for compensation. All have indicated they will defend the case.
Duma said on Friday: “We are assembling a strong team of legal minds to guide us on the lawsuit by Tokio Marine. Therefore, we will not get into the legal technicalities and details of processes that will unfold.”
However, he was keen to say how highly he thought of TSAM, particularly after president Andrew Kirby made clear the local company was not an active participant in the case.
TSAM may be listed as an appellant but Duma said: “Andrew Kirby pointed out that the litigation proceedings are not being facilitated and/or funded by TSAM. He further stressed that TSAM will not benefit in any way from the recovery action against us. Mr Kirby has emphasised his commitment to work with us to build this province. We welcome the bold leadership displayed by him.”
In a separate statement, TSAM reiterated its inactive role in the claim. It may be listed as the appellant but its main role so far appears to have been “to engage with each of the defendants to advise of the impending subrogated recovery action”.
When the floods hit in 2022, Kirby initially feared losses would run into “tens of billions of rand”. Parent company Toyota Motor Corporation called the event “the most comprehensive damage to one of our global production facilities as a result of a natural disaster”. Now, it is clear that it considers it to have been an avoidable disaster.
Duma, though, is doing everything to keep the relationship positive. He said : “We pause to pay tribute to Toyota SA , a company that has gained an excellent reputation in the provision of good quality vehicles for years. We are very much honoured that Toyota has been the brand of choice for many years. [Kirby and I] have agreed to sustain our relationship that has evolved over the years. We will do that in the interest of the people of KwaZulu-Natal and the whole country.”
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