Exploration for petroleum by fracking cannot go ahead, SCA rules

The Supreme Court of Appeal (SCA) ruled on Thursday that the minister of mineral resources did not have the power to make regulations for petroleum exploration and production.

These regulations governed the exploration and production of petroleum, including shale gas through the use of hydraulic fracturing (fracking).

The judgment has stalled plans to explore for petroleum by hydraulic fracturing for now because the SCA also set aside the petroleum regulations in their entirety. 

The SCA passed its judgment in two cases on appeal which were consolidated for hearing before the court.

In one case brought by Karoo farmers, the high court in Grahamstown had held that the minister of mineral resources was not empowered to make the petroleum regulations which were promulgated in 2015.

However, the high court in Pretoria – in a case brought by Treasure the Karoo Action Group and AfriForum – had ruled in favour of the minister on the same issue.

The matter has its genesis between 2008 and 2010, when three entities applied for rights to explore for shale gas in the Karoo through the use of fracking.

The fracking process would likely have a variety of adverse impacts on the environment, most notably the emissions of pollutants and the contamination of both surface water and groundwater.

As a result of this, the minister of mineral resources established an interdepartmental task team to evaluate the potential risks posed by fracking.

The result was that the environment minister, the mineral resources minister and the minister responsible for water affairs entered into an agreement in respect of the management of environmental impacts of activities under the Mineral and Petroleum Resources Management Act (MPRDA).

The agreement, known as the One Environmental System, was that all environmental aspects would be repealed from the MPRDA and that these would fall under the control of the environment minister under the National Environmental Management Act (Nema).

Despite this agreement, the minister of mineral resources promulgated the petroleum regulations in 2015.

These regulations were then challenged in the two high court cases, one in Grahamstown and the other in Pretoria.

In its judgment on Thursday, the SCA held that the implementation of the One Environmental System divested the minister of mineral resources of the power to make regulations.

“As I have shown, the One Environmental System envisaged that all environmental aspects relating to prospecting, exploration, mining or production in terms of the MPRDA would be regulated through Nema and its subordinate legislation.

“It is plain that this includes making regulations regarding the management of the environmental impacts of these activities,” judge of appeal Christiaan van der Merwe said in a unanimous judgment of the full bench.

Van der Merwe said as a result, the only regulation-making powers regarding the environmental impacts of these activities, were those vested in the environment minister in terms of Nema.

He said a large number of provisions of the petroleum regulations plainly sought to manage the potential impacts of petroleum exploration and production on the environment.

Van der Merwe said exploration for petroleum by hydraulic fracturing should not take place at all before it was lawfully regulated.