South Africa will need specialised courts with the right technical expertise to efficiently adjudicate legal challenges to oil and gas exploration activities, says Ross Compton, senior director of global policy at EnerGeo Alliance.
He told Business Times this week that South Africa was well-positioned to grow its economy, create jobs, and insulate itself from geopolitical tensions if it attracted investment in exploration and related activities. Establishing specialised courts, with experts adjudicating technical aspects of exploration and development, would ease bottlenecks in the process.
“One of the key things that has been raised several times now… is the potential need for specialised courts that have more direct expertise to deal with the specific issues of the oil and gas industry and the different activities that are being applied for,“ said Compton, whose organisation is a Houston-based global trade alliance for the energy geoscience and exploration industry.
“They are complex topics and the courts don’t necessarily have the correct level of expertise to be able to deal with them, so the idea of specialised courts is something that the minister [Gwede Mantashe] has raised that’s been echoed by elements of industry as well.”
He said South Africa was attracting investment, but delays in environmental authorisations, coupled with legal challenges from environmental NGOs, were hampering the companies involved.
“The timelines for environmental authorisations and some of the further challenges around litigation being brought by environmental NGOs are slowing down the process. After companies have met the obligations of the environmental authorisation process and been granted authorisations, they are then subject to lengthy appeals and judicial reviews. Often, the timelines for those are unknown and subject to the vagaries of court capacity, and that can be very challenging in a dynamic market.”
South Africa’s courts are not struggling because they lack technical expertise. They are being drawn into increasingly complex disputes because of governance failures at the decision-making stage
— Shahil Singh, legal adviser for The Green Connection
Compton said the new minister of forestry, fisheries and the environment, Willie Aucamp, was committed to clearing the backlog of appeals.
“The potential opportunity for South Africa… comes against the backdrop of a declining manufacturing base and industrial base and problems with low GDP growth. Beyond that, there are issues of high unemployment, particularly among young adults, where that is a startlingly high figure of around 45%.”
He said South Africa had significant domestic oil and gas production opportunities, particularly blocks 11B and 12B off Mossel Bay, which could bring in R23bn annually and create up to 50,000 jobs.
“Oil and gas can support industrial growth, support growth in GDP, and support the growth of jobs over the longer term as part of the energy system of South Africa,” Compton said.
“While load-shedding, for the time being, has gone away, there are issues with supply in the long term for South Africa for residential use and for industrial use, and the pending gas cliff for the supply that is coming from Mozambique. There is a need to diversify where supplies are coming from.”
The Orange Basin off the West Coast has potential for oil and gas development, but its potential must still be established, he said.
This week, the Western Cape High Court will hear a challenge to the environmental authorisation granted to TotalEnergies for oil and gas exploration off the West Coast.
The Aukotowa Fisheries Co-operative, which represents small-scale fishers, along with NGOs The Green Connection and Natural Justice, are set to argue that the approval process was fatally flawed, irrational, and inconsistent with the constitution, relevant legislation and South Africa’s climate and energy commitments.
Speaking at the Southern Africa Oil & Gas Conference in Cape Town on Monday, Mantashe warned that the war against Iran will have an unavoidable impact on fuel supply and fuel prices.
“Since the onset of the conflict in the Middle East, fuel supply chains have experienced disruptions, while the under-recovery on fuel prices has continued to fluctuate. While questions remain about potential fuel supply disruptions, the reality is that substantial fuel price increases are increasingly unavoidable.
“To maintain product availability in our country ... the department remains in constant engagement with industry players to explore all possible supply sources. These engagements are aimed at ensuring uninterrupted fuel availability in the domestic market, without immediately utilising the country’s strategic reserves.”
Francesca de Gasparis, executive director of the Southern African Faith Communities’ Environment Institute, dismissed the idea of specialist courts for oil and gas exploration challenges.
“South African courts are receiving legal challenges due to legitimate issues. Legal structures are in place to address legitimate concerns and challenges; there is no need to create a separate body, and the suggestion seems to be a costly and unnecessary distraction from our serious energy challenges in South Africa.”
As the cost of Eskom electricity continued to rise faster than inflation, the need to speed up development of wind and solar sources was urgent, De Gasparis said.
Shahil Singh, legal adviser for The Green Connection, said the problem did not lie in the courts; the real issue was failures during the exploration application stage.
“South Africa’s courts are not struggling because they lack technical expertise. They are being drawn into increasingly complex disputes because of governance failures at the decision-making stage.”
He said the country’s judiciary has a well-established ability to deal with highly technical matters, supported by expert evidence and robust legal processes.
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