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SCA ruling puts brakes on fracking

Publish date: 09 July 2019
Issue Number: 613
Diary: Legalbrief Environmental
Category: Litigation

The SCA ruled last week that the Minister of Mineral Resources did not have the power to make regulations for petroleum exploration and production, effectively halting the exploration of shale gas through the use of hydraulic fracturing (fracking). TimesLIVE notes the SCA also set aside the petroleum regulations in their entirety. The SCA ruled on two cases consolidated for the hearing. In one case brought by Karoo farmers, the Eastern Cape High Court (Makhanda) had held that the Minister was not empowered to make the petroleum regulations which were promulgated in 2015. However, the Gauteng High Court (Pretoria) – in a case brought by Treasure the Karoo Action Group (TKAG) and AfriForum – had ruled in favour of the Minister on the same issue. The matter has its genesis between 2008 and 2010, when three entities applied for rights to explore for shale gas in the Karoo through fracking. The Minister of Mineral Resources established an interdepartmental task team to evaluate the potential risks posed by fracking. The result was that the Environment Minister, the Mineral Resources Minister and the Minister of Water Affairs entered into an agreement in respect of the management of environmental impacts of activities under the Mineral and Petroleum Resources Management Act (MPRDA). The agreement, known as the One Environmental System, was that all environmental aspects would be repealed from the MPRDA and that these would fall under the control of the Environment Minister under the National Environmental Management Act (Nema). Despite this agreement, the Minister of Mineral Resources promulgated the petroleum regulations in 2015. These regulations were then challenged in the two cases.

The SCA held last week that the implementation of the One Environmental System divested the Minister of Mineral Resources of the power to make regulations. ‘As I have shown, the One Environmental System envisaged that all environmental aspects relating to prospecting, exploration, mining or production in terms of the MPRDA would be regulated through Nema and its subordinate legislation. It is plain that this includes making regulations regarding the management of the environmental impacts of these activities,’ Judge Christiaan van der Merwe said in a unanimous judgment of the full Bench. According to TimesLIVE, Van der Merwe said as a result, the only regulation-making powers regarding the environmental impacts of these activities, were those vested in the Environment Minister in terms of Nema. Van der Merwe added exploration for petroleum by hydraulic fracturing should not take place at all before it was lawfully regulated.

Minister of Mineral Resources v Stern & Others (1369/2017); and Treasure the Karoo Action Group & another v Department of Mineral Resources & Others

Full TimesLIVE report

Agriculture body Agri SA has welcomed the ruling. A report in The Mercury quotes AgriSA natural resources head Janse Rabie as saying the judgment was a ‘welcome reprieve’. ‘This judgment has enormous significance and we’re delighted by it. No applications for shale gas rights can proceed until such time as the necessary technical regulations are promulgated by the Minister of Environmental Affairs,’ Rabie said. Hans-Jurie Moolman, an attorney representing KZN and Free State farmers in an appeal to the Minister against an application for exploration by Rhino, said while the judgment did not affect the appeal, it would prevent the approval of any pending applications because without environmental approval no exploration could take place. Jonathan Deal, CE of TKAG, said the ruling justified the reservations AfriForum and TKAG had about the regulations and fracking technology. ‘SA does not have enough resources to handle this industry … water is a resource one simply cannot waste,’ Deal said.

Full report in The Mercury (subscription needed)