Proposed water licensing regulations requiring up to 75% black South African shareholding create more risk for food security

The Department of Water and Sanitation (DWS) recently published draft revised Regulations regarding the Procedural Requirements for Water Use Licence Applications and Amendments for comment.

According to the draft regulations, certain enterprises applying for water use licenses to take or store water, will in the future have to allocate shares of up to 75% to black South Africans in order for such water use licenses to be granted. The consequences for food security and the sustainability of the agricultural sector should these regulations be passed in the current form cannot be overstated – they would have a devastating impact on the sector and its ability to provide the country with a secure supply of food. This is because focussing solely on ownership, to the exclusion of all other relevant factors, will mean the loss (or partial loss) of water resources for numerous currently viable commercial farming enterprises.

Similar requirements are also prescribed in the draft with respect to so-called “stream flow reduction activities” (essentially commercial forestry plantations). The regulations also make provision for hydraulic fracturing (which is a further risk and threat to food security).

The prescribed minimum black South African shareholding requirements of 25%, 50%, or 75%, required for a water use license to succeed depends on the volume of water abstracted or stored, or the area covered (in the case of commercial forest plantations). 

The proposed regulations are seen as the DWS’s most radical and sweeping effort to date toward changing the demographics with respect to water use in South Africa. The agricultural and forestry sectors appear to be the primary target of the proposed regulations. The agricultural sector accounts for approximately 60% of South Africa’s total water use. It is worth noting that the proposed regulations exempt mining companies, the state and state-owned entities, as well as 100% black-owned entities. 

“Agri SA is of the view that the proposed regulations will have a devastating effect on South Africa’s commercial agricultural sector if adopted in their current form,” says Janse Rabie, legal and policy executive at Agri SA. “It is well known that the DWS envisages compulsory licensing of existing lawful water uses in the near future (a fact which is emphasised by regulation 13 of the proposed regulations). By far the greatest number of agricultural water uses are exercised in terms of historic existing lawful water uses.” 

Concerningly, the draft regulations would seem to be attempting to replace the current suite of considerations which apply to granting water licenses with ownership demographics. In terms of section 27 of the National Water Act, the DWS must take all relevant factors into account when issuing a water use license. This already includes the need to redress the results of past racial and gender discrimination.

For more information:
Janse Rabie
Agri SA
Tel.: +27 076 451 9601

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