As 2021 ended, the South African High Court granted local communities’ request for an urgent interim injunction prohibiting Shell Exploration and Production South Africa BV, Impact Africa Limited and BG International Limited (Shell) from conducting any seismic exploration activities off the coast of South Africa’s Eastern Cape province.
In support of its decision, the court found that there was a reasonable likelihood that the proposed exploration activities would violate the applicants’ (and the communities whom they represent) rights to an environment which is not harmful to a their health and well-being, to participate in and enjoy the cultural life of their choice, as well as to just administrative action.
In response to the order, Shell terminated the contract with the company responsible for conducting the seismic survey. The Amazon Warrior, the vessel in question, has since left South Africa’s coastal waters.
This judgment forms part of a series of significant South African and international decisions (including the Baleni, Malendu, and Okpabi) which confirms that companies – particularly those in the extractives sector – must take the rights of communities seriously or risk the chance of suffering significant financial loss.
Read: Uganda: Mining (Amendment) Bill – 2021
Guidance on the approach which extractive companies ought to follow
The decision should, however, not be seen as an assault on the private sector, but rather as guidance on the approach which extractive companies ought to follow when intending to undertake any exploration and production activities. According to the decision, it is critical for companies to consult meaningfully with communities as part of the licence application process. In doing so, companies should apprise communities of the nature and extent of their proposed activities in a form which is easy for the communities understand.
While consultation does not mean negotiation, companies should show that they properly considered the response which the communities provided during the consultation process. Where necessary, companies must also provide an adequate response to this. This may include adapting the proposed activities in response to these concerns.
History is littered with examples of operations which fail when extractive companies lose their social or societal licence to operate. Owing to the critical role which the extractives sector will play in the transition away from fossil fuels, the world cannot afford any further unnecessary delays. It is therefore important that governments, communities, and the private sector work together to ensure a just transition to a sustainable economy.
