South Africa Gas Bill adds internal appeal process for NERSA disputes
South Africa Gas Bill adds internal appeal process for NERSA disputes
Government amends bill in response to stakeholder concerns
Larry Claasen
IN one of its most significant decisions on the Gas Bill, the Department of Electricity and Energy (DEE) has announced the introduction of a new internal appeal mechanism to resolve disputes with parties unhappy with decisions made by the energy regulator, NERSA.
During a presentation on submissions made to Parliament by industry participants, the DEE said the new mechanism would provide a dedicated, streamlined avenue for anyone dissatisfied with a NERSA ruling to challenge it. The aim is to avoid costly and time-consuming appeals to the High Court; instead, an aggrieved party would first have the option to seek redress through a specialised internal process.
Department introduces internal tribunal to resolve NERSA disputes
Under the proposed system, aggrieved parties will submit an appeal to NERSA, which must then establish an independent body to hear the case. This newly formed tribunal will review the matter.
“We are proposing the insertion of a new section 39, to the effect that should anyone be aggrieved by a decision of the regulator, they must appeal to the regulator,” said Robert Phupheli, DEE director for gas.
The change is one of several proposed amendments to the bill made by the DEE in response to stakeholder submissions. The proposed legislation will replace the Gas Act of 2001. Acting DG Thabo Kekana said the current legislation was “no longer fit for purpose”, as it is very narrow, contains no provisions for offences or penalties, lacks environmental protection and rehabilitation measures, and restricts the regulator’s enforcement and oversight powers.
Although broadly welcomed by organised business, stakeholders raised several issues in their submissions to Parliament’s Portfolio Committee on Electricity and Energy that they wanted changed. The South African Oil and Gas Alliance (SAOGA), for example, called for the bill to enhance regulatory certainty and institutional roles, strengthen environmental and climate governance, and include a dedicated internal appeal mechanism. It also sought increased institutional coordination, proportionality in enforcement, and alignment and planning certainty.
Stakeholder pushback prompts flexibility on licensing and environmental rules
On these issues, the DEE showed some flexibility. While it did not directly address the separation of policy versus regulatory functions, it proposed amendments to strengthen the regulator’s role in considering transformation objectives. In response to SAOGA’s call for independent licensing decisions, the DEE proposed a new subsection requiring the regulator to consider government transformation objectives — effectively tying licensing criteria to policy directives rather than purely objective commercial benchmarks.
SAOGA also sought greater clarity on the scope and limits of ministerial intervention. On this point, the DEE proposed that the minister must consult with the regulator and the public before issuing “imperatives” for licensing decisions.
The department also demonstrated flexibility regarding requests to clarify environmental authorisation requirements, supporting the integration of environmental compliance throughout the life cycle of a facility, rather than only at decommissioning.
The DEE further supported expanding the consultation list for the Gas Master Plan to include provinces, municipalities, traditional leaders, communities, and private landowners for municipal works.
Flexibility was also shown on licensing. Whereas the Gas Act of 2001 fixes the licence validity period to a minimum of 25 years, industry wanted the option of a shorter period. “The bill seeks to provide an alternative scenario intended to enable the regulator to issue a licence period that is justified by prevailing supporting information and the applicant’s request, where shorter periods are sought,” Phupheli said.
Ministerial veto retained for private gas projects despite industry objections
However, the DEE showed no flexibility on certain issues. SAOGA, for instance, wanted the private sector to be able to invest in gas infrastructure, including storage and trading facilities, without requiring additional ministerial approval. The DEE rejected this proposal, insisting that even private projects (storage and trading) must obtain a ministerial determination, arguing that this signals government support and thereby unlocks investment in the sector.
