While dismissing an appeal of a High Court judgment setting aside a right granted to Shell to explore for oil and gas off South Africa’s Wild Coast, the Supreme Court of Appeal (SCA) has suspended the same court’s decision to set aside a renewal of the right until a third and final renewal application is finalised.

Delivered electronically on June 3, the SCA judgment sets aside an appeal lodged by the Minster of Mineral Resources and Energy, Shell, Impact Africa and BG International to a judgment handed down in the Makhanda High Court on September 1, 2022.

That earlier judgment reviewed and set aside the decision to twice renew the exploration right for oil and gas in the Transkei and Algoa exploration areas, finding that the right was granted unlawfully because of the failure to notify and consult affected communities.

The SCA ruling echoed the sentiments of the High Court, finding that the consultation process was inadequate, with the process having been advertised in English and Afrikaans language newspapers only, despite the fact that the affected communities speak isiXhosa or isiMpondo and receive news and information mostly by means of radio broadcasts.

“In the circumstances, the choice of print media was plainly ill-advised. This was exacerbated by the choice of English and Afrikaans language newspapers. The process, which was more illusory than real, was thus manifestly inadequate,” the SCA judgment reads.

However, the SCA described the High Court’s finding that “authorising new oil and gas exploration, with its goal of finding exploitable oil and/or gas reserves and consequently leading to production, is not consistent with South Africa complying with its international climate change commitments” as having a “sterilising effect” that “cannot be endorsed”.

Noting that Impact and BG had timeously submitted an application to Petroleum Agency South Africa on July 21, 2023 to enter into a third renewal period as permitted under Section 81(4) of the Mineral and Petroleum Resources Development Act, the SCA said the right remained in force until such time as the application was adjudicated.

“Thus, despite the current expiration date of 26 August 2023, the exploration right remains in force until the third renewal application has been granted or refused.”

However, the SCA directed that “as part and parcel of a proper consideration of the third renewal application, a further public participation process be conducted to cure the identified defects in the process already undertaken”.

Respondents, who included Wild Coast communities and small-scale fishers, alongside various environmental justice groupings and lawyers, described the outcome as disappointing and indicated that they were considering an appeal to the Constitutional Court.