South Africa: Court strikes down Shell’s Wild Coast exploration right

By David Whitehouse
Posted on Monday, 5 September 2022 06:00

Residents demonstrate against Royal Dutch Shell's plans to start seismic surveys in Sigidi
Wild Coast residents join a demonstration against Royal Dutch Shell's plans to start seismic surveys to explore petroleum systems off the country's popular Wild Coast at Mzamba Beach, Sigidi, South Africa, December 5, 2021. REUTERS/Rogan Ward

A South African court has ruled that inadequate consultation of local communities invalidates an exploration right granted to Royal Dutch Shell to conduct oil and gas exploration off the county’s Wild Coast.

The ruling annuls the decision by the Department of Mineral Resources and Energy in 2014 allowing Shell and its partner Impact Africa to carry out seismic surveys. The case was brought by a coalition of environmental groups, who argued that the right should not have been granted because there was insufficient consultation with affected communities.

That argument was accepted by the high court in Makhanda in its decision on 1 September. Consulting solely with kings, monarchs and other traditional leaders “finds no space in a constitutional democracy” the court said in its decision. “There is no law, and none was pointed to, authorising traditional authorities to represent their communities in consultations . . . a chief does not denote a community.”

Meaningful consultations consist “not in the ticking of a checklist, but in engaging in a genuine, bona fide substantive two-way process aimed at achieving, as far as possible, consensus.”

It is “evident that the traditional leaders concerned urged the consultants to deal directly with members of the affected communities, to no avail,” the court said.  Newspaper notifications in English and Afrikaans were insufficient as many locals do not speak those languages, and radio broadcasts should have been used, it added. Decision-makers also failed to consider potential harm to fishing livelihoods, ocean life, the impact on cultural and spiritual rights and the contribution of oil and gas to climate change, the ruling found.

  • The government failed to take into account the Integrated Coastal Management Act (ICMA) that obliges the state to manage public coastal property in the interests of the whole community, the court found. This was “fatal” to the validity of the exploration right.

Job Creation?

Shell argued that the planned survey was in line with global industry standards and that no harm would result as it was to take place about 20km offshore, with steps being taken to protect sea mammals. None of the proposed steps addressed local religious and ancestral beliefs, the court found.

The company said in its court affidavit that South Africa is highly dependent on energy imports. Seismic surveys are the only possible way to establish whether hydrocarbons exist on the ocean floor, the company argued, stressing that its authorisation was simply to explore and not carry out extraction. Commercially viable offshore resources could contribute to energy security, economic development and employment, and oil and gas are less carbon-intensive than gas, it argued.

  • The court said there was “no detail” on how the project would support job creation or increase government revenues.
  • “As Wild Coast people, we live off the land and the ocean. Government tells us that oil and gas will bring job opportunities but we know very well that this will destroy our livelihoods,” Siyabonga Ndovela, a Wild Coast resident, said after the ruling.
  • The company now has the option to take the case to the Supreme Court of Appeal.
  • “We respect the court’s decision and are reviewing the judgment to determine our next steps regarding the Wild Coast block,” a spokesperson for Shell told The Africa Report. “At this stage we are unable to comment on whether we will appeal the judgment.  We remain committed to South Africa and our role in the just energy transition.”

Bottom line

There’s no legal way to cut corners on consulting local communities on development plans in South Africa – even if they don’t speak the corporate language.

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