South Africa’s commercial agriculture representative body Agri SA has submitted comprehensive comments on the government’s proposed water use licence regulations, saying aspects of the draft regulations are unconstitutional and contradict existing law.
Earlier this year, the government’s Department of Water and Sanitation (DWS) called for public comment – by July 21 – on its proposed changes to the procedural requirements for water use licence applications and amendments.
Responding to emailed questions spokesman, Mavasa Wisane said the department had received 12 346 comments by July 19. She said further consultations would get under way with “key stakeholders” regarding the issues raised in these. “Thereafter the draft regulations will be revised where necessary before being published for implementation,” she said.
The initial draft regulations were published in the Government Gazette (48630) on May 19.
Before submitting their response, AgriSA had met the department’s Director-General, Dr Sean Phillips, and Water Allocation Director Sipho Skosana, among other officials, on June 15, to clarify some of the proposed amendments.
A media report released by the department on that same day explained that the changes applied only to applications for licences in relation to 1.5% of the water resources in the country not already allocated, and were not applicable for the renewal of existing water use licences or for applications which would arise out of compulsory licencing.
In other words, any water use licencing approved before the National Water Act 36 of 1998 was exempted from the proposed new regulations.
Department of Water and Sanitation Director General: Dr Sean Phillips.
Concerns
In its official submissions, AgriSA’s Legal and Policy Executive Janse Rabie highlighted major concerns in Chapter 5 (regulations 12-14) of the draft regulations.
This aspect requires preference be given to black people, and then women, when allocating future water use licences relating to 1.5% of the water resources available for allocation.
Additionally, all future applications must allocate shareholdings to black people proportionally as follows:
Percentage shares allocated to blacks:
| Up to 250 000m³ | Up to 100ha | Exempted |
| 250 000 to 500 000m³ | 100 to 500ha | 25% |
| 500 000 to 1 000 000m³ | 500 to 1 000ha | 50% |
| More than 1 000 000m³ | More than 1 000ha | 75% |
AgriSA contends that for Chapter 5 to have any hope of validity, it must be consistent with the relevant provisions of the National Water Act, specifically sections 26(1)(k) and 27(1), and with section 9(2) of the Constitution and sections 7,13 and 14 of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000.
If the proposed changes went ahead in their current form, Rabie said the matter would be subject to a court challenge.
Food security under threat
While AgriSA was well aware of and supported the “importance of creating a more inclusive agricultural sector”, Rabie said this could not be achieved at the expense of food security or production.
Further, the rigid regulation as stipulated in the above table, he said, did not allow for discretion, was impractical at an operational level, and was “substantially indistinguishable from a quota”.
Rabie said the regulations prescribed in the table would, in fact, restrict empowerment as follows:
- the narrow focus on the applicant companies’ percentages of black shareholding
- not properly designed to protect or advance the category of persons disadvantaged by unfair discrimination
- focusing solely on black ownership excludes granting consumptive water licences to those who have significant black representation in their management, a high percentage of other black employees and meaningful and progressive black employee skills development programmes, black enterprise-development programmes, black supplier-development programmes and socio-economic development programmes and
- by focusing solely on black ownership, the government precludes the granting of consumptive water use licences to applicants who have significant shareholders who are women, or a representation of women in management or a high number of employees who are women or are engaged in meaningful and progressive employee skills-development, supplier, socio-economic or enterprise development programmes for women.
In its submission AgriSA suggests Chapter 5 should read as: “Procedural Requirements for applications for licences to use water which has not been allocated before and for financial assistance for making such applications”.
And applicants should include their application relevant forms and supporting technical information such as:
- B-BBEE generic scorecard and status;
- the amended AgriBEE Scorecard and black economic empowerment status for the agri-sector codes of good practice;
- the particulars, numbers and percentages of black people who have ownership interests, are in management and among non-managerial staff;
- proof of compliance with the Employment Equity Act; and
- black and female skills development, enterprise-development, supplier development and socio-economic development programmes.
Added to that, applicants must submit an explanation not exceeding 2 000 words on why they believed granting them a licence would redress the results of past racial and gender discrimination.
Similarly, in the application for financial assistance, documentation should include particulars as defined in the Broad-Based Black Economic Empowerment Act, and the financial position of the applicant, to be substantiated by the most recent audited financial statements.
If a licence is granted, the applicant should be registered on the government’s central supplier database before any payment of any funding.
AgriSA’s Legal and Policy Executive Janse Rabie.
Complex procedures
AgriSA said the proposals were so complex in their processes and procedures that applicants would have to appoint specialists at “substantial additional cost” to administer the submissions.
In many instances such a cost could not be justified, particularly in the case of applicants who were irrigation farmers. “This will increase the cost of food production and discourage new investments in agriculture,” Rabie said.
AgriSA urged the government to streamline its processes, particularly in irrigation-related applications, and for those applying for relatively minor water uses.
Alarmingly, the proposed amendments require applicants to have “lawful access to property”.
This means if an applicant wishes to take water from a water resource on a property owned by someone else, to lead water across that property and other properties owned by third parties, they would be prevented by this regulation from applying for those water uses.
Rabie says this is inconsistent with the National Water Act, which separates water use rights from riparian land ownership.
Regarding groundwater, section 24 of the National Water Act provides that a licence may be granted to use “water found underground on land not owned by the applicant if the owner of the land consents, or if there is good reason to do so”.
Further, an approved water use licence shall lapse if the holder fails to act on the approved authorised activities within three years of the issue of the licence.
Again, AgriSA contends this is not workable, as according to the National Water Act, the termination of a licence is considered at the time of issue and in consideration of the possible existence of mitigating factors. “The lapsing of a licence should be determined on a case-by-case basis and take into consideration the scale of a project to which the water use relates,” Rabie said.
Environmental compliance
It goes without saying that a large percentage of future water use licence applications would also require alignment and approval via the Mineral and Petroleum Resources Development Act (MPRDA) or the National Environmental Management Act (NEMA), or both. And while the regulation amendments stress that such authorisations “must be submitted and processed in an integrated manner”, Rabie said if such integration were to be effective it should be done in accordance with a set-down process agreed to by all three ministers.
“The draft of such an agreement should be published for comment – with drafts of all applicable regulations to be made by the ministers – because implementation will have a material bearing on applications that require authorisation under any environmental law. Then the integrated process will appear from the draft regulations and the draft process agreement,” he said.
AgriSA disagrees with the proposal in the amendments that public participation across all three ministries be carried out jointly. “The minister cannot unilaterally bind the other two ministers responsible for the administration of the MPRDA and NEMA by asking that the public participation processes under those Acts are carried out jointly with the process of the National Water Act. Without coordinated draft regulations by all of the ministers and an agreed process, regulations cannot validly be made,” Rabie said.
Further detailed amendments include the alignment of jurisdictions during the processing, and that if a water use licence spans two water management areas, it should not be necessary to apply for separate licences in each jurisdiction.
And, if a licence is required for more than one water use for the same undertaking or project within one catchment area, then AgriSA suggests a single application would suffice, rather than two separate applications.
An important provision in the amended regulation pertains to financial provision in mining-related applications.
AgriSA contends there are two difficulties relating to this aspect: one of the cited corresponding regulations is not in the public domain and cannot be attached as an annexure as required, while others are either incomplete or inapplicable.
Temporary transfer
Related to the transfer of a water use licence transfer from one user to another, AgriSA believes a two-year restriction previously imposed on such cases was “never complied with or enforced”.
This, it said, was because the transfer of a water use licence may well incur significant expense, for example, to store water in a dam or divert the flow of water from a water course or to install irrigation systems.
“This capital outlay could never be justified for only two years when you consider a water licence may span 40 years,” Rabie said, adding that provision of a temporary transfer period should be determined on a case-by-case basis and the definition of ‘temporary transfer’ deleted from the proposed regulations altogether.
In the event of the proposed amendments linked to notice of applications for water use licences on properties under land claims, AgriSA said this should only apply to individuals or parcels of land where claims have been gazetted. Any comments by the regional land claims commissioner or representative of a gazetted land claim should be submitted by the specified date and must indicate whether they object to the granting of a licence, and why.
AgriSA called for clarity on the required submission of technical reports, saying a blanket approach was unworkable. It proposed the delineation of what technical report would be required for each specific area of application, for example, a new wastewater treatment plant technical requirement versus an irrigation installation would differ significantly.
Rabie said interaction and discussions between the department and AgriSA on the amendments were to be welcomed and that as the process moved ahead, he believed further discussions and meetings would be held accordingly.
