AGRI SA has submitted its comments on the proposed Water Use Licence Applications, Amendment and Appeals Regulations that were published on 19 May 2023. The draft regulations proposed that certain enterprises applying for water use licences to take or store water would in the future have to allocate shares of up to 75% to black South Africans in order for such water use licences to be granted. Given the legal and food security implications of the regulations, it is essential that they are reviewed and substantially amended.
Subsequent to the publication of the draft regulations, on 15 June 2023, Agri SA had a productive meeting with the Department of Water and Sanitation where officials clarified that the new transformation requirements would only apply with respect to the 1.5% of water resources in South Africa which have not already been allocated. The regulations are also not intended to apply to applications for the renewal of existing water use licences, or to the water use licence applications which will arise out of compulsory licensing.
Agri SA welcomes this clarification and has included these parameters in our suggested reformulation of the regulations. Notwithstanding this important clarification, Agri SA remains concerned that the draft regulations, as published, are not consistent with the relevant provisions of the National Water Act, the Equality Act, and the Constitution.
No provision in the National Water Act empowers the Minister to make regulations prescribing substantive requirements for licence applications or for the determination of licence applications. Even if such a power is inferred, the Act provides that, in issuing a licence, the responsible authority must take into account all relevant factors. This includes a list of 11 factors including efficient and beneficial use of water in the public interest, the socio-economic impact of water use, and investments already made by a water user. The need to redress past racial and gender discrimination is one of these 11 factors. By law, when determining an application for a water licence, the responsible authority must strike a reasonable balance between all the factors.
Furthermore, the arbitrary and thus legally impermissible nature of racial quotas has already been established by court judgments. As the draft regulations do not allow for any element of discretion, they are so rigid as to be indistinguishable from a quota, and therefore invalid.
A further concern is that the draft regulations reduce transformation to black ownership. Codes of practice issued under the B-BBEE Act utilise a scorecard which consists of five key elements, with ownership being only one. The other four are management control, skills development, enterprise and supplier development, and socio-economic development. These elements should be taken into account by the Department.
The inclusion of women as a previously disadvantaged group should also be taken into account. Currently, only racial transformation goals are included in the draft regulations.
Agri SA is all too aware of the historical imbalances that prevail in the farming sector today, but the sector must achieve equality within the rule of law. Agri SA has therefore submitted a proposed reformulation of the draft regulations that take the above-mentioned considerations into account.
It is essential that the effort to build an inclusive agricultural sector does not undermine the country’s food production. South Africa is a food-secure country and must remain one. Agri SA’s submission makes clear that were the draft regulations passed as published, they would have a potentially catastrophic impact on agriculture and the country’s food security.
Agri SA welcomes the engagement of the Department of Water and Sanitation with the sector, and we will work with them to establish a water licencing regulatory framework that respects the Constitution and protects food security in order to avert the lengthy litigation which would result if the regulations were enacted in their current form.
