The fate of gas seismic surveys off the Wild Coast and oil exploration rights granted to Shell and Impact Africa in 2014 will be argued in the Constitutional Court on Tuesday.
Seismic surveying, which involves controversial airgun blasting towards the seabed, was halted through court action by Wild Coast communities and environmental organisations.
At issue in the apex court will be a ruling by the Supreme Court of Appeal (SCA), which agreed with a high court ruling that the granting of the right was unlawful, but suspended this finding to allow Shell to apply to renew the right for a third time.
Wild Coast communities and environmental organisations believe this order cannot stand. It would in effect perpetuate an illegality because the exploration right has been set aside, they argue.
They say the defects in the department of mineral resources & energy’s process of granting the right cannot be cured in a “narrow” renewal process.
They argue that the SCA order violates the constitution and does not give effect to communities’ cultural and spiritual rights. The order does not provide any clarity on what Shell and the minister must do to remedy the defects of the earlier processes, they argue.
High Court ruling
In 2022, the Makhanda High Court ruled that the exploration right had been granted unlawfully because affected communities had not been properly notified and consulted.
- 2014: Shell and Impact Africa granted oil exploration rights off the Wild Coast.
- 2022: Makhanda High Court rules rights were unlawfully granted; communities not properly consulted. Exploration right set aside.
- 2023: Shell lodges third renewal application following Supreme Court of Appeal (SCA) order suspending invalidity.
- 16 September 2025: Constitutional Court to hear arguments on the legality of the exploration right and SCA’s suspension order.
The court found that the communities’ right to food and livelihoods from the ocean and their spiritual and cultural rights, as well as the climate change impacts, had been ignored.
The court also found that the minister had failed to consider and comply with the requirements of the Integrated Coastal Management Act. It set aside the exploration right entirely.
The SCA, in hearing what became a failed appeal bid by Shell and the minister, agreed with these findings.
But the court said it would be “too harsh” to set aside the exploration right immediately. Instead, it suspended the order of invalidity pending the outcome of a third renewal application by Shell, which the company lodged in 2023.
Shell and minister oppose challenge
Impact Africa, Shell and the minister are opposing the application to have this “suspension” set aside. They argue that leave to appeal should not be granted.
In written submissions, lawyers for the minister say the SCA had exercised “true discretion” and “the minister will be guided by the court’s judgment and its order in deciding whether to approve the third renewal application, having regard to the historical failures at the participation level”.
Seismic surveys use powerful sound waves to map the seabed and locate oil or gas reserves. Sensors capture the echoes to reveal underground rock formations. While essential for exploration, the blasts can disturb marine life and ecosystems.
Until such time as a decision is made, it is unknown whether there will be further failures in the public participation process. At this point, therefore, there was no “live controversy”.
Financial prejudice and investment concerns
Shell’s lawyers, in their written submissions, said financial prejudice to Shell and Impact, which had spent more than R1bn in pursuit of the exploration right, should be avoided if this could be done legally and appropriately.
This was because they were not to blame “in any material sense” for the lack of community consultation, and once the exploration right was granted, they had been entitled to assume that “all was in order”.
Going forward, it was in Shell’s interest to ensure that the process was fair because it may face future litigation if it is not.
Referring to the “chilling effect on investment”, Shell said while it accepted that all people who could be affected by commercial development should be consulted before approval, this should not morph into a veto on commercial development.
The high court, by simply setting aside the exploration right, had the potential to discourage investment “by sending the message that even a good faith error results in an immediate loss of investment”.
“If a more nuanced approach, which preserves the interests on all sides of the debate, may be adopted, then that is clearly preferable.”
GroundUp
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.