South Africa – ESG Dispute Update

​​Climate change considerations and environmental impacts relied on as grounds to refuse licences for development projects

In a judgment handed down by the Water Tribunal on 26 April 2023, the following sustainability considerations were important to the Water Tribunal's decision to dismiss Thungela Operations (Pty) Ltd's water use licence (WUL) application under the National Water Act, 1998:

  • the socio-economic impacts against granting the WUL outweighed the socio-economic impacts in favour of granting the WUL;
  • the failure to consider climate change in the mitigation measures in the environmental impact assessment process or under the WUL application process and non-alignment with national policies on climate change; and
  • the proposed projects cumulative impacts on wetlands in a region already extensively affected by mining activities.

In another mining and water-related judgment, on 30 May 2023, the Supreme Court of Appeal (SCA) dismissed an appeal against the judgment of the High Court of South Africa, which declared that a mine operator, Ezulwini Mining Company (Pty) Ltd, was obliged to continue pumping and treating extraneous water from its underground mining works until proper closure of the mine. The SCA reasoned that pumping was an essential and integral component of the underground mining operation, and that the cession of pumping will have a significant impact on the immediate physical environment of the underground mining area, and the adjacent underground environment.

Turning to the controversial gas-to-power plant at the Richards Bay Port, after being denied leave to appeal by the High Court against the decision to dismiss the review application against the environmental authorization granted for the project, on 16 May 2023, the South Durban Community Environmental Alliance (SDCEA) and Trustees of Groundwork Trust was granted leave to appeal by the Supreme Court of Appeal. The final decision will have significant implications for how South Africa responds to the twin challenges of climate change and long-term energy generation in order to deal with energy poverty in South Africa.

High court finds that “loadshedding” adversely impacts the constitutional rights to health, security, and education

On 5 May 2023, following an application by United Democratic Movement and other civic organisations, the High Court ordered the government to ensure uninterrupted electricity supply to various public institutions, such as schools, hospitals, clinics and police stations. The application arises from loadshedding which has been ongoing in South Africa on a consistent basis since the beginning of the year, and which can leave South Africans without electricity for up to 12 hours a day.

Given the critical nature of the public functions served by these institutions, the applicants based their application on the gross violation of human rights that occurred as a result of the failure to supply power to the institutions, which do not have alternative energy sources available to them, resulting in prejudicial, damaging effects. Specifically, the South African citizens' rights to access to healthcare, security and education have been infringed upon.

The High Court granted the government 60 days to ensure uninterrupted electricity supply to these institutions. However, the Minister of Public Enterprises, who is responsible Eskom, South Africa's national power utility, has applied for leave to appeal the judgment of the High Court.

Important cases relating to the "S" in ESG

On 21 April 2023, the SCA declared that any gratuitous public displays of the old South African Flag (ie the flag of South Africa during apartheid) constitutes hate speech, unfair discrimination on the basis of race and harassment in terms of the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000. The prohibition is subject to an exclusion in the Equality Act and does not apply to public displays of the Old Flag that serve a genuine journalistic, academic or artistic purpose.

On 12 June 2023, the Constitutional Court handed down judgment in relation to the rights of refugees in South Africa. The applicant, an Ethiopian national, was arrested for unlawfully entering and residing in South Africa in contravention of the Immigration Act, 2002. On his arrest, the applicant indicated that he had been unsuccessfully seeking asylum for a long time due to fear of persecution in Ethiopia. The applicant attempted to lodge an urgent application in the High Court in which he sought an order interdicting the respondents (being amongst others the Minister of Home Affairs and the Director General of the Department of Home Affairs) from deporting him until his status under the Refugees Act, 1998 or he Refugees Amendment Act, 2017 was lawfully and finally determined.

The Constitutional Court found that an illegal foreigner is entitled to be interviewed by an immigration officer to determine any valid reasons why he/she lacks an asylum transit visa. Further, that prior to being permitted to apply for asylum, an illegal foreigner must show good cause for the illegal entry and reason to stay in the country. Once such good cause is shown and an application for asylum is lodged, the entitlements and protections provided in the Refugees Act will be available to them. An illegal foreigner will thus be issued with an asylum-seeking permit and is shielded from proceedings against their unlawful entry. The practical effect for the applicant was that pursuant to the judgment, once he had an asylum seeker visa, he would be entitled to remain in South Africa temporarily and his detention under the Immigration Act would become unlawful.

The judgment is significant for several asylum seekers seeking clarity on the question of release from detention for illegal entry into South Africa when they have shown an intention to apply for asylum.

Finally, in relation to a case that intersects with the "G" element of ESG, on 30 May 2023, the Constitutional Court strengthened the right of access to information when it held that absolute bars on access to certain categories of information will generally not survive constitutional scrutiny in the case of Arena Holdings (Pty) Ltd t/a Financial Mail and Others v South African Revenue Services and Others [2023] ZACC 13. The request for information related to the individual tax returns for the 2010 to 2018 tax years for Jacob Zuma, South Africa's former president, infamous for facing allegations of corruption, fraud and state capture in the public sector of South Africa. The South African Revenue Service refused the request. The applicants challenged the decision all the way to the highest court and the majority judgment confirmed the constitutional invalidity of the relevant sections of Africa's Promotion of Access to Information Act, 2000 and the Tax Administration Act, 2011 as ordered by the High Court.


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