The floods caused Toyota to pause production for four months, resulting in a R6.5 billion loss.
The KwaZulu-Natal department of transport is assembling a legal team to navigate the R6.5 billion lawsuit filed by Toyota insurer Tokio Marine & Nichido Fire Insurance in the Durban High Court over the 2022 floods.
The floods caused significant damage at the Toyota South Africa Motors (TSAM) vehicle assembly plant in Prospecton, Durban.
Tokio Marine & Nichido Fire Insurance is claiming that the damage caused by the floods was due to negligence of the infrastructure. For this, the insurer is suing KZN transport, eThekwini municipality and Transnet SOC Limited.
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Toyota floods
The floods damaged the plant, forcing Toyota to pause production for four months, which allegedly resulted in the company incurring R6.5 billion in costs – R4.5 billion for repairs and R2 billion for business interruption.
MEC for transport and human settlements Siboniso Duma told journalists at a media briefing on Friday that he had engaged with Andrew Kirby, president and CEO of Toyota South Africa Motors, regarding the lawsuit and was assured that the lawsuit was not brought by Toyota, but by the insurer.
“For the record, in our engagement with Andrew Kirby, he pointed out that the litigation proceedings against the department of transport, eThekwini municipality and Transnet SOC Limited are not being facilitated and/or funded by Toyota South Africa Motors.”
Toyota not to benefit
Duma said he was told that Toyota will not benefit in any way from the subrogated recovery action against the three parties being sued.
“At this stage, we wish to announce that we are assembling a strong team of legal minds to guide us on this lawsuit instituted by Tokio Marine & Nichido Fire Insurance. Therefore, we will not get into the legal technicalities and details of processes that will unfold.”
At the time of the damage, the parent company of Toyota SA called the incident “the most comprehensive damage to one of our global production facilities as a result of a natural disaster”.
More lawsuits on the way
Craig Woolley, from Norton Rose Fulbright SA, representing the insurance company, said that more companies in the Prospecton area are taking legal action for damage caused by the floods.
The lawsuit states that by failing to maintain waterways and drainage systems that carried the floodwater, the defendants are responsible.
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How the parties bear responsibility
The lawsuit details how the three parties are to be blamed for the floods.
“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.
“Transnet owned the Umlaas canal and was responsible for its management, maintenance and 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.
“The Department of Transport 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.”
Toyota shares its point of view
The Prospecton plant builds the Hilux bakkie, Fortuner SUV, Quest and Corolla Cross cars, as well as HiAce minibuses and Hino trucks and buses. About half of the production is exported, mainly to Europe.
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