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Shell’s Wild Coast exploration appeal dismissed, but rights renewal still feasible

Shell’s Wild Coast exploration appeal dismissed, but rights renewal still feasible
Protesters against Shell’s offshore exploration at North Beach, Durban on 11 December 2021. (Photo: Gallo Images / Darren Stewart)

Organisations opposing Shell’s oil and gas exploration off the Wild Coast were partly disappointed by a Supreme Court of Appeal ruling on Monday. It upheld the urgent interdict halting Shell’s operations, but a potential opportunity to continue exploration was still on the cards.

The Supreme Court of Appeal (SCA) on Monday dismissed Shell, Impact Africa and the Department of Mineral Resources and Energy’s appeal against a court interdict halting Shell’s oil and gas exploration off the Wild Coast.

In 2022, the High Court in Makhanda, Eastern Cape, found that Shell’s rights for oil and gas exploration off the Wild Coast had been granted unlawfully because of a lack of meaningful consultation with the communities affected by the activities.

The ruling, now upheld by the SCA, also highlighted the energy company’s lack of consideration for the communities’ rights to food and livelihoods, as well as their cultural and spiritual rights.

Monday’s judgment comes amid Shell’s plans to divest its downstream operations from South Africa because of a row with its BEE partner, Thebe Investment. 

Read more in Daily Maverick: Shell confirms intention to divest from South African downstream operations

Respondents in the SCA case were Sustaining the Wild Coast, the Dwesa-Cwebe Communal Property Association, residents Ntshindiso Nongcavu, Sazise Maxwell Pekayo and Cameron Thorpe, All Rise Attorneys for Climate and the Environment, Natural Justice and Greenpeace. They were represented by the environmental law firm Cullinan and Associates. 

When the case began in the SCA on 17 May, the respondents said Shell had not consulted the affected parties, adding that the energy giant’s consultation with traditional leaders was insufficient.

They further argued against Shell’s appeal by describing the exploration’s probable impact on livelihoods, ocean life, the climate and the interests of the entire community, including fishers. They also noted a lack of evidence that the exploration would provide jobs and increase government revenue. 

Court offers Shell a lifeline

The case of Shell’s third exploration right renewal, which the company was granted without having informed local and affected communities, was also before the SCA.

The high court had set aside the granting of the exploration rights and subsequent renewals.

One of the four applicants, Impact, to which the right was initially granted, had applied for the renewal of its 2014 exploration right, which was granted in December 2017. A second renewal was granted in July 2021. 

The third renewal application, which was accompanied by the right to carry out seismic exploration along the Wild Coast, was partly the catalyst for the eight respondents taking the case to the Makhanda High Court seeking interdictory relief.

The ruling further showed that Impact had invested R1.1-billion in exploration since 2012.  

Read more in Daily Maverick: Shell, Impact Africa and Mantashe fight order to halt Wild Coast oil and gas exploration

The SCA recognised the 2014 exploration right and the two renewals, effectively allowing Shell to resubmit its renewal application to address the lack of public participation.

The SCA judgment read: “We were informed, in response, that prior to the end of the second renewal period of the exploration right and, according to exercising their exclusive right to do so … Impact and [oil company BG International] timeously submitted an application to [the Petroleum Agency South Africa] on 21 July 2023, to enter into a third renewal period as permitted by s 81(4) of the MPRDA [Mineral and Petroleum Resources Development Act], an exploration right in respect of which an application for renewal has been lodged shall, notwithstanding its expiry date, remain in force until such time as the application has been granted or refused. 

“In the circumstances, so the contention goes, considerations of justice, equity and the principles of finality and certainty, dictate that the harshness of the exploration right being set aside, can and should be ameliorated.”

‘Tragic irony’

“Shell is refocusing its business on opening new oil and gas fields that will fuel catastrophic climate change and threaten the lives and human rights of millions of people, particularly in Africa,” Cormac Cullinan of Cullinan & Associates said in response to the SCA judgment.

“There is a tragic irony in the SCA using its constitutional powers to grant ‘a just and equitable remedy’ not to protect the human rights of current and future generations, but to preserve Shell’s application to renew its exploration right.”

Read more in Daily Maverick: Countrywide protests support Wild Coast community’s case against Shell in Supreme Court of Appeal

Human rights and environmental law organisation Natural Justice said the ruling on the rights renewal was disappointing for the affected communities and organisations that brought the case to the Makhanda High Court in December 2021.

Natural Justice said the SCA’s decision misrepresented the high court’s conclusion on the matter of the renewal of the rights in which the climate crisis was considered relevant to the consideration of the decision. It said it was considering appealing to the Constitutional Court.

Sinegugu Zukulu of Sustaining the Wild Coast said the judgment disregarded people’s constitutional rights to a safe and healthy environment. 

Zukulu, who recently won the Goldman Environmental Prize, said: “It disregards the rights of current and future generations to a climate-crisis-free life. It pushes the profiteering by the few over the majority. It overlooks the rights of marine life.

“Cutting down fossil fuel emissions is urgent for all countries. The poor are most vulnerable and are already suffering. Allowing multinational corporations to continue to endanger lives and disregard livelihoods of the indigenous communities has to stop now.”

Following the judgment, Shell was reportedly considering its next steps. DM

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