Shell still has one more shot at seismic exploration authorisation
- The Supreme Court of Appeal has dismissed an appeal by Shell, Impact Africa and the Department of Mineral Resources and Energy, to overturn a High Court ruling that halted an seismic survey off the Wild Coast.
- Dismissing the application with costs, the court said community participation had been "illusory".
- However, the court has left the door open for Impact Africa and Shell to proceed with their third and final attempt for a renewal of the 2014 exploration rights.
- But proper and meaningful consultation must be done with local communities who say the seismic survey will impact their livelihoods.
The Supreme Court of Appeal (SCA) has dismissed, with costs, an appeal by Shell, Impact Africa, and the Department of Mineral Resources and Energy (DMRE), which sought to overturn a High Court ruling that had halted an oceanic seismic survey off the Wild Coast.
The ruling entrenches the legal rights of communities to proper consultation under various laws in South Africa.
However, the court suspended the orders of the Makhanda High Court which had set aside Shell's exploration right of 2014, and DMRE's decision to renew the right in 2017 and 2021, pending the outcome of a further application by Shell submitted in July 2023.
This now leaves the door open again for Shell to seek permission to proceed with its exploration. But in light of the findings by the Makhanda High Court and the SCA, it will have to be done with proper consultation with the affected communities, taking into account community rights and environmental harm.
The Amadiba, Cwebe, Hobeni, Port St Johns and Kei Mouth communities, as well as Sustaining the Wild Coast, Natural Justice and Greenpeace Africa, secured a victory in the Makhanda High Court in September 2022 when three judges of that court ruled that the authorisation of the exploration right was unlawful.
The DMRE and Shell appealed against that decision in the SCA, arguing that the the public participation process and the Environmental Management Programme, both concluded before the 2014 right was granted, were sufficient for the Minister to make a decision on the subsequent renewals.
They also argued that certain factors such as climate change and heritage rights need not have been considered in making this decision.
A cross-appeal was brought by environmental activists, who argued that Shell must get environmental authorisation and undertake an Environmental Impact Assessment before being granted a renewal, as the law had changed.
Read the SCA judgment here
In Monday's unanimous ruling, Judge Nathan Ponnan said the right to procedurally fair administrative action was entrenched in the Bill of Rights.
"When administrative action materially adversely affects the rights of any person, their right to procedural fairness is triggered. It can hardly be in dispute that Impact was required to meaningfully consult with the communities and individuals that would be affected by the seismic blasting."
He said the Promotion of Administration of Justice Act set out the requirement for procedural fairness. This included that affected persons must be given adequate notice of the action and must be given a reasonable opportunity to make representations.
The Mineral and Petroleum Resources Development Act also imposed obligations to consult with any affected party.
The general principles under that act were that interested and affected persons had to be informed in sufficient detail of the proposed mining activities in order for them to make an informed decision over what representation to make.
There also had to be meaningful consultation.
The judge said the adequacy of the consultation process had been subjected to wide-ranging criticism: that the language used was technical and inaccessible and that geographical location was vague and overbroad.
"However, by far the most trenchant criticism - one from which there appears to be no escape for the appellants (the ministry and Shell/Impact) is that the notices that were published in four newspapers were inaccessible to many members of the communities," said Judge Ponnan.
"Three of the newspapers were in English and one in Afrikaans. Few people in the respondent communities read English and virtually no-one speaks Afrikaans. The majority speak isiXhosa or isiMpondo.
"If Impact wanted to meaningfully engage with them, it should have prepared notices in their language," he said, noting however, that most of the communities did not read newspapers and relied on radio for news.
"The process, which was more illusory than real, was thus manifestly inadequate," Judge Ponnnan said.
The upshot of this was that when the exploration application was considered by the department, a number of relevant factors were not considered.
These included the detrimental impact the survey might have on spiritual and cultural practices, the livelihoods of communities, in so much as the sea is a primary and in many cases only source of nutrition and income for them, and the requirements of the National Environmental Management Integrated Coastal Management Act, which created specific measures for the protection of the coastal zone.
Judge Ponnan said the decision was reviewable but the unlawfulness had to be dealt with in line with the Constitution.
The High Court had "gone so far as to hold that authorising new oil and gas exploration ... was not consistent with South Africa complying with its international climate change commitments".
"On any reckoning, such a far-reaching finding, which has a sterilising effect and for which there can be no warrant, cannot be endorsed."
He said courts had to be pragmatic in crafting just and equitable remedies.
The High Court had erred by not weighing up relevant factors.
These included that there had been an almost eight-year delay between the granting of the exploration right and the review application, and that there had been significant financial expenditure in the region of R1.1-billion.
Two renewals had been granted and there was only one more opportunity to renew the right, which had been submitted in July 2023. The right remained in force until the third renewal application had been granted or refused.
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"It would thus be entirely within the power of this court to direct that as part and parcel of a proper consideration of the third renewal application, a further public participation process be conducted to cure the identified defects in the process already undertaken," Judge Ponnan said.
He said the issues and the parties involved were now well established in the court proceedings.
He dismissed the appeal, with costs, but suspended the High Court's previous orders that set aside the granting of the right and the renewal applications, pending the outcome of the third renewal application.
"Shell respects the court's decision to dismiss the appeal," said its spokesperson Pam Ntaka. "However, we welcome the court's direction that the exploration right remains valid, subject to further public consultation and the renewal application."
"We are examining the ruling in detail and considering our next steps".
The Legal Resources Centre's Wilmien Wicomb said the judgment had reaffirmed the importance of recognising and respecting the rights of local and directly affected communities. However, it was disappointing that the court had given Shell a further chance to renew the exploration right.
"It is not clear how the renewal of a permit, ten years after it was first (unlawfully) granted, can possibly cure the original sin," she said.
Sinegugu Zukulu, of Sustaining the Wild Coast, said the ruling disregarded the rights of current and future generations to a climate crisis-free life.
