ConCourt to consider Shell Wild Coast exploration ‘renewal’ case in 2025 as communities vow to defeat oil giant

Environmental protesters outside the Western Cape High Court on 7 February 2022 in Cape Town, South Africa. (Photo: Gallo Images / Die Burger / Jaco Marais)

By Kristin Engel

2 Sep 2024

‘We are not free until this case has been resolved,’ said activist Nonhle Mbuthuma after the Constitutional Court found Shell’s right to conduct seismic exploration off the Wild Coast was granted unlawfully. The next battle is over a Supreme Court of Appeal ruling that could allow the oil giant to continue anyway.

The prolonged legal battle for Wild Coast communities and environmental justice organisations to stop Shell and Impact Africa’s seismic exploration off the Wild Coast has almost come to an end, with the Constitutional Court set to hear the last of this matter in early 2025.

Last week, the ConCourt dismissed Shell and Impact Africa’s cross-appeals, confirming that their right to conduct seismic surveys off the Wild Coast had been granted unlawfully.

Now, Wild Coast communities, Sustaining the Wild Coast, All Rise Attorneys, Natural Justice and Greenpeace Africa have filed applications to the court to appeal a Supreme Court of Appeal (SCA) order, which found it would be “just and equitable” to allow the Minister of Mineral Resources and Energy to still decide on Shell’s third application to renew its exploration permit.

In their appeal, the communities and environmental organisations will argue that what is required in the renewal process is completely different from the application process.

The applicants are confident that they will be able to successfully put this drawn-out litigation behind them when the case is heard again in the first term of 2025.

Read more: ConCourt says no to Shell appeal bid over Wild Coast seismic survey permit

Thamsanqa Malusi, a senior associate at Richard Spoor Inc Attorneys, representing the affected communities, explained that in the application process, you have to show that you’ve consulted with directly affected communities and that you’ve taken their concerns into account. There are no such requirements in the renewal process, which simply renews the right without having to look into much detail.

Malusi said they were encouraged that the matter was going all the way to the ConCourt as it could set a precedent to hold corporates accountable when it comes to environmental and community rights.

Shell protests People protest outside the Eastern Cape High Court on 30 May 2022 in Gqeberha, South Africa. (Photo: Gallo Images / Die Burger / Lulama Zenzile)

Shell protest Protesters gather on 30 May 2022 in Gqeberha, South Africa. (Photo: Gallo Images / Die Burger/ Lulama Zenzile)

The court directed the communities and environmental justice organisations to file their heads of argument by 25 October 2024, while Shell, Impact Africa, and the Minerals Minister must file their heads of argument by 8 November this year.

“We have a really strong case and I am fairly confident that our prospects of success are good,” Malusi said.

The lead attorney at Cullinan & Associates, Ricky Stone, representing Natural Justice and Greenpeace Africa, set out the arguments against the SCA’s order:

It’s not “just and equitable” as is required by the Constitution. The SCA’s order is an attempt to give Shell and Impact Africa the chance to make up for their failed consultation process when it applied for the right over a decade ago. Stone said they will argue that the law does not allow such a late redemption.

It’s constitutionally impermissible and legally incompetent and should be set aside by the Constitutional Court.

It does not effectively protect the rights of the communities and other parties to fair administrative action, nor the communities’ constitutionally protected rights to their livelihoods and their cultural and spiritual rights.

It fails to provide any clarity on what Shell, Impact Africa, and the Minerals Minister must do to remedy the defects of the earlier processes, which Stone said means that, inevitably, more litigation will follow. He said, “To be just and equitable, an order must at least be clear.”

If the appeal is successful, the exploration right will be invalid, and Shell and Impact will have no right to explore for oil and gas in that area. There is a moratorium on new offshore rights, so, for the moment, they will also not be able to apply for a new right to those resources.

In response to questions sent by Daily Maverick, Pam Ntaka, spokesperson of Shell Downstream South Africa, said: “We have noted the Constitutional Court’s decision to grant leave to appeal in relation to the Wild Coast matter and will respond as directed by the Court.

“South Africa is currently reliant on  energy  imports for many of its energy needs. Should viable resources  be found offshore, this could significantly contribute to  South Africa’s energy security and the government’s economic development programmes.”

Legal ramifications and setting a precedent

The High Court judgment, upheld by the SCA, set a groundbreaking precedent for consultation and the considerations relevant to decision-making.

They vindicated the communities’ rights to have their livelihoods, culture and environmental concerns heard as people who stand to be directly affected by the project.

Shell protest A protester with a mask depicting the Minister of Mineral and Petroleum Resources, Gwede Mantashe, outside the Western Cape High Court on 7 February 2022 in Cape Town, South Africa. (Photo: Gallo Images / Die Burger / Jaco Marais)

Environmental protesters outside the Western Cape High Court on 7 February 2022 in Cape Town, South Africa. (Photo: Gallo Images / Die Burger / Jaco Marais)

By dismissing the Impact and Shell application for leave to appeal, these findings have effectively been confirmed by the Constitutional Court, and corporations and environmental assessment practitioners can no longer evade these considerations on the basis that they have not been finally decided by the court.

But the SCA held that, despite the exploration right clearly being granted unlawfully to Shell and Impact in the first place, it is too harsh an outcome to expect them to apply for a permit afresh.

Rather, it said, because there will be a renewal of the exploration right by Shell that’s coming up soon, the defects in the initial granting of that right can be cured through the renewal process.

This is what the applicants are appealing against, arguing that what is required in the renewal process is completely different from the application process.

“The Court made it clear that this order was motivated by its concern for encouraging investment and continued fossil fuel extraction,” Jean-Andre Deenik from the Legal Resource Centre told Daily Maverick.

Deenik described this as a dangerous precedent, saying it harked back to an era when financial considerations outweighed environmental concerns and the rights of the poor.

“It is important that we don’t condone unlawful actions when it is ‘convenient’ to do so. Should we be successful, Shell will indeed be required to commence the application process afresh.”

Deenik said that, after this case, it would no longer be good enough to speak to a traditional leader and publish newspaper adverts as a means of reaching those whose lives may be directly impacted by a development. Instead, the developer must ensure that they understand what is at stake for the local communities.

Stone said the potential legal ramifications would be unique to exploration rights in a sense, because there is currently a moratorium in place on these types of applications (but not on others such as applications for production rights), so if the Constitutional Court ultimately overturns the SCA’s lifeline order, then it will mean that Shell and Impact Africa would not be able to submit a fresh application for exploration rights until a time when the moratorium has been lifted, if the Minerals Minister ever lifts the moratorium.

“There will however be potential legal ramifications for all types of developments and the decisions of judges in judicial review proceedings when the decision maker’s decision is challenged,” Stone said.

This is specifically because this case will lead to further precedent on a “just and equitable” remedy in circumstances where a court finds that the original decision was unlawful, but then elects to make an order that breathes life into a process or decision that was declared unlawful.

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

This case has already fundamentally altered the way public participation is undertaken in South Africa. For example, Stone said the country is now seeing applications advertised in African languages and the environmental consultants taking greater care to identify the affected communities during the initial scoping stage of project development.

“It has served to sharply shine a light on the inadequacies of public participation processes for projects that impact vulnerable and already impoverished coastal communities. Bright lights have also been cast on how decision makers ignore relevant considerations – such as communities’ rights to livelihood and food; to practise their customs and culture; to deeply held ancestral beliefs and the interconnectedness of all species – when approving such oil and gas developments,” Stone said.

The Constitutional Court’s ultimate judgment in this case will, whichever way it goes, provide legal certainty on what the highest court in the land considers to be a “just and equitable” remedy in circumstances where the original decision has been declared by lower courts to be unlawful.

Stone said that while corporations learn from their mistakes that trip them up in legal proceedings, all cases must be tried and adjudicated on their merits, which will differ from case to case and within affected communities.

Lawyers of the applicants told Daily Maverick the impacts on livelihoods, cultural and spiritual practices and customary rights to resources must be clearly understood and weighed as constitutional rights to be impacted.

The struggle of Wild Coast communities

“We are not free until this case has been resolved,” Nonhle Mbuthuma, founder of the Amadiba Crisis Committee, told Daily Maverick.

The case against Shell and Impact Africa was brought in 2021. Almost three years later, with the end of the prolonged legal fight on the horizon, the social, spiritual and economic frustrations are taking their toll.

From being criticised as being anti-development, to facing intimidation and threats, Mbuthuma said that until this case has been concluded, they will continue to face social, physical and spiritual frustration.

“Those are the frustrations that we are facing as communities. It’s not just the development side, but also physically and spiritually. We’ve seen that there are also people who are trying to intimidate some communities. That is why we wish for this case to be finished…

“There are intimidations that are around; also, there is money involved, trying to bribe some of the communities. Those are things that are worrying us a lot because we know that it delays (the case) and the more it delays, the more it frustrates the community and the more threats we are facing,” she said.

While often criticised as anti-development, Mbuthuma said she has seen a big shift where inland and coastal communities were speaking in one voice against oil and gas exploration.

“Most of the time we’ve been accused by people that we don’t want South Africa to be developed like in other countries. And we have been accused that South Africa loses a lot of investors because we are a stumbling block to development, which is not the truth. Development must include people… Not like what was happening with Shell where they were just deciding about us without us,” Mbuthuma said.

Deenik from the LRC added that their clients – the communities – have faced pressures, in particular from government representatives, to change their stance, but they have refused to do so.

Deenik said the fact that they were able to stop a large corporation from entering their oceans has strengthened their resolve to protect their livelihoods and their ocean, but the relentless endeavours by the government and companies to extract fossil fuels from the sea – in the face of a climate crisis – continues to impact their livelihoods.

And as rewarding as court victories have been to the communities and others, the legal process has been an emotionally taxing one that places enormous pressure on all those involved.

“All litigation involves risk and when the issues are of national importance, as they are in this case, the legal issues are ultimately only finally adjudicated in the Constitutional Court, which is a process that takes many years,” Stone told Daily Maverick. DM

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Legal ramifications and setting a precedent

The struggle of Wild Coast communities