Toyota SA distances itself from R6. 5 billion lawsuit against KZN government
Toyota South Africa Motors (TSAM) has distanced itself from a looming legal battle involving its insurer and KwaZulu-Natal government stakeholders.
According to reports, TSAM's insurer has filed a R6.5 billion lawsuit in the Durban High Court, stemming from damages suffered at TSAM's Prospecton plant during the 2022 KZN floods.
Tasneem Lorgat of Toyota South Africa Motors (TSAM) explained that, while the car manufacturer is aware of the action undertaken by Tokio Marine & Nichido Fire Insurance Co. Ltd against the eThekwini Municipality, the Department of Transport and Transnet SOC Limited, TSAM is neither facilitating nor funding the litigation proceedings.
"Accordingly, TSAM will not benefit in any way from the subrogated recovery action against these entities. Upon learning of the impending recovery litigation, TSAM undertook, with the consent of Tokio Marine, to engage with each of the defendants to advise of the impending subrogated recovery action," Lorgat said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
18 hours ago
- Daily Maverick
Insurers take hard line on failure to maintain infrastructure aimed at preventing climate change damage
A R6.5bn lawsuit in the wake of the 2022 KZN floods reveals how insurers are no longer willing to act as underwriters of public incompetence, especially concerning damage related to climate change. Cast your mind back to April 2022 and the floods in KwaZulu-Natal. Infrastructure, homes and businesses buckled under severe floodwaters that caused billions of rands in damage and hundreds of deaths. Devastating flood damage at Toyota's manufacturing and assembly plant in Durban halted vehicle production there for four months. In the aftermath, Toyota South Africa Motors' (TSAM's) insurer, Tokio Marine & Nichido Fire Insurance, paid out — and then turned its attention to those it holds responsible. The Japanese insurer is now attempting to recoup a collective R6.5-billion from the eThekwini Municipality, the KZN Department of Transport and Transnet. It is claiming negligence, specifically the failure to maintain flood prevention infrastructure. 'It is important to note that the litigation proceedings are not being facilitated and/or funded by TSAM,' said Tasneem Lorgat, the general manager of marketing communications at TSAM. 'Accordingly, TSAM will not benefit in any way from the subrogated recovery action against these entities.' If successful, this case could change how insurers manage climate risk and who they hold accountable for damages related to climate change. Insurers vs incompetence As the climate warms and infrastructure decays, insurers like Tokio Marine seem no longer willing to act as underwriters of public incompetence. And who can blame them? According to Atang Matebesi, the CEO of Santam Client Solutions, the insurer's storm and flood claims in commercial lines have increased by 5% over the past year. 'Storm and flood damage is often exacerbated by inadequate infrastructure maintenance or poor town planning, resulting in higher-value claims regardless of no major catastrophe events occurred over the past year,' he said. Santam's latest Insurance Barometer shows that climate change has barged its way into the list of top 10 concerns for customers, with 78% of respondents worried about extreme weather. Nearly a quarter of respondents said they were proactively cleaning gutters or upgrading infrastructure to mitigate risks, said Matebesi. He added, however, that Santam's claims data tell another story: too little, too late. Climate change is a balance sheet issue Insurers aren't alone in their shift from passive observer to active risk manager. 'Climate volatility has accelerated the case for investing in renewable energy and water infrastructure to enhance economic and environmental resilience,' said Thabang Selota, Environmental, Social and Governance (ESG) and impact analyst at Sanlam Investments. The asset manager's investments, including in Oya Energy and Alien Fuel Group, are designed to lower exposure to fossil fuel volatility and boost long-term sustainability. Sanlam uses internal ESG scoring and aligns decisions with global standards like the Task Force on Climate-Related Financial Disclosure and the UN's Principles for Responsible Investment, said Selota. High-emission companies with no real decarbonisation plan are red-flagged. 'Climate-related risks have direct implications for investment values,' said Selota. 'These risks have increasingly influenced how we assess infrastructure resilience and asset viability.' Everyone's problem, nobody's job In sectors like agriculture and logistics, the cost of inaction will hit a lot harder. Selota points out that businesses with physical exposure to climate extremes — agriculture, logistics, infrastructure — are particularly vulnerable. Those without the capital to build adaptation buffers are the first to go under. '[Climate change] impacts substantially on livestock and crop health and production, while damage to infrastructure from extreme weather events disrupts agricultural and food supply chains,' said Stellenbosch Business School research fellow Roscoe van Wyk. There's still a yawning gap between risk perception and preparedness. Santam's data show that 64% of agribusinesses name climate change as a top concern. Yet only 16% of corporates overall rank it in their top three risks. Wear and tear on infrastructure and increased weather-related risks could influence the fine print of insurance policies, said Kirsten Wolmarans, a partner at Webber Wentzel. 'Insurers may soon require institutional policyholders to implement early warning systems as a condition for coverage,' she said, warning that infrastructure contracts should mandate such systems or risk facing litigation. DM
IOL News
24-06-2025
- IOL News
eThekwini Municipality invests R113 million in Prospecton Canal upgrade amid flooding lawsuits
The eThekwini Municipality is anticipating to spend R113 million on the three-year Prospecton Canal project update situated in the south basin precinct. The Toyota South Africa Motors (TSAM) Prospecton plant and other businesses were severely impacted by floods. Image: Leon Lestrade / Independent Newspapers The eThekwini Municipality anticipates spending R113 million on the three-year Prospecton Canal project update situated in the south basin precinct. The project, which is in its second year, is spearheaded by the Coastal, Stormwater and Catchment Management (CSCM) department and was highlighted at the eThekwini Executive meeting (Exco) on Tuesday. Durban Mayor Cyril Xaba is expected to meet Toyota South Africa Motors Limited (TSAM) executives in the coming week after the municipality, Transnet, and the Department of Transport (DoT) were informed about a lawsuit instituted by insurance company Tokio Marine & Nichido Fire Insurance Co. In court papers, it is stated that the three organisations failed in their duty to maintain infrastructure and should have known that neglecting such responsibilities could lead to flooding. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading During the April 2022 floods, the structural integrity of the Umlaas Canal and the diversion berm was compromised, leading to stormwater flowing into the Prospecton Industrial Area, where the Toyota plant is situated, causing extensive flooding and damage, as read in the court papers. The insurance company stated that Transnet owns the Umlaas Canal and is responsible for its management and maintenance, as well as the associated flood risk. The concrete-lined canal is intended to channel and divert the uMlazi River around the Prospecton Industrial Area. Together with the diversion berm, it forms an integral part of the flood control and prevention mechanism for the Prospecton Industrial Area. It said the DoT was responsible for the management and maintenance of the diversion berm, while the municipality owned, managed, and was responsible for the maintenance and control of the stormwater management system for the Prospecton Industrial Area. On Tuesday, Xaba said the events of the past two weeks, which have seen the municipality lose some court cases and the potential lawsuit arising from flood damage suffered in 2022 by TSAM, may have created doubts in the minds of residents. Xaba said this was raising questions about whether management is steering the municipality in the right direction. 'These are historical matters, some of them will continue to be with us for some time. I am planning to meet the Toyota management soon to understand the rationale behind this move. I am concerned that this case might open a floodgate. The city cannot afford this,' Xaba said.
IOL News
21-06-2025
- IOL News
KwaZulu-Natal DOT assembles legal team for Tokio Marine lawsuit over flood damages
The MEC for Transport and Human Settlements, Siboniso Duma, met with Andrew Kirby, the president and CEO of Toyota South Africa Motors. Image: Supplied The KwaZulu-Natal Department of Transport (DOT) is assembling a strong team of legal minds to guide them on a lawsuit instituted by insurance company Tokio Marine & Nichido Fire Insurance Co. The Japan-based insurance company has sued the eThekwini Municipality, Transnet SOC Limited, and the DOT in respect of the April 2022 floods, which affected Toyota South Africa Motors (Pty) Ltd (TSAM), based in Prospecton. In court papers, it is stated that the three organisations had failed in their duty to maintain infrastructure and should have known that neglecting such responsibilities could lead to flooding. During the April floods, the structural integrity of the Umlaas Canal and the diversion berm was compromised, leading to stormwater flowing into the Prospecton Industrial Area, where the Toyota plant is situated, causing extensive flooding and damage, as read in the court papers. It stated that Transnet owned the Umlaas Canal and was responsible for its management and maintenance, as well as the flood risk associated with it. The concrete-lined canal is intended to channel and divert the uMlazi River around the Prospecton Industrial Area. Together with the diversion berm, it forms an integral part of the flood control and prevention mechanism for the Prospecton Industrial Area, it further stated. It said the DOT was responsible for the management and maintenance of the diversion berm, while the municipality owned, managed, and was responsible for the maintenance and control of the stormwater management system for the Prospecton Industrial Area. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Tasneem Lorgat, the general manager, Marketing Communications for Toyota, stated that TSAM submitted its insurance claim to Tokio Marine in respect of the floods. Lorgat stated that the flood affected TSAM's manufacturing operations. She said the litigation proceedings are not being facilitated and/or funded by TSAM. Accordingly, TSAM will not benefit in any way from the subrogated recovery action against these entities. She said upon learning of the impending recovery litigation, TSAM undertook, with the consent of Tokio Marine, to engage with each of the defendants to advise them of the impending subrogated recovery action. The MEC for Transport and Human Settlements, Siboniso Duma, said that he had spoken with Andrew Kirby, the president and CEO of TSAM, on Friday. Duma stated that the department is consulting with lawyers and could not get into the legal technicalities and details of the processes that will unfold. 'Kirby has emphasised his commitment to work with us to build this province. We have agreed to sustain our relationship that has evolved over the years. We have agreed that nothing should come between us and this enduring relationship,' Duma said. eThekwini Municipality spokesperson, Gugu Sisilana, said the municipality was aware of the court action and had filed a notice to defend. An eThekwini Municipality finance committee report, in April 2025, stated that the municipality is actively working on improving critical infrastructure and water supply systems, particularly in the Toyota and South African Breweries (SAB) precincts, south of Durban, to mitigate future disruptions and demonstrate accountability In a municipal report, a suggestion was made to explore the possibility of relocating TSAM from its current location, which is situated in a flood-prone area in Prospecton, and that the current weather conditions pose significant risks to the company's operations. According to the report, relocating to another area within the eThekwini municipal region should be considered to mitigate potential long-term impacts, including huge job losses. Refilwe Ramatlhodi Ndhlovu, manager of corporate communications at TSAM, indicated that TSAM has no plans to relocate its manufacturing operations and remains invested in the community and investments made at the plant. Andre Beetge, DA Ward 97 councillor and Executive Committee member (Exco), stated that TSAM plays an important role within the southern economy. He said TSAM also creates job opportunities, and one must take into account the ancillaries that find themselves directly reliant on the existence and location of this 'anchor' manufacturer.
