Shell saga on the Wild Coast a litmus test
As the legal tussle over Shell’s halted Wild Coast exploration project heads to the Supreme Court of Appeal, the stakes could not be higher for SA. The case is a striking example of the global struggle to balance energy needs with environmental stewardship, and its outcome will send ripples through the country’s investment landscape. It is a classic tale of man versus nature, where the pursuit of the almighty dollar, or should we say the rand, clashes with the ideals of conservation and community rights.
Shell and Impact Oil & Gas’s R1bn gamble on SA’s oil potential is a bold move, selling it to politicians as holding SA’s hand in taking a leap into a future in which SA would bask in the glow of energy independence and economic prosperity.
But, the high court’s 2022 ruling put their ambitions on ice. It cited a lack of adequate consultation with affected communities and concerns over the environmental impact, including potential harm to the fishing industry and broader implications for climate change. Environmental groups emphasised the cultural and spiritual rights of the communities, which are often overlooked in the hunt for economic gains.
The mineral resources & energy department, Shell and Impact staunchly rebuff the notion of skimping on consultations. Yet the cadre of environmental custodians — Natural Justice, Sustaining the Wild Coast, Greenpeace Africa and others — contend that the procrastination in filing the review application is squarely on the shoulders of the department and the corporate duo. They argue that the process was shrouded in secrecy, only to be unveiled at the last possible moment, casting doubt over the transparency of the proceedings.
The environmentalists’ victory may seem like a win for the planet, but it is not that simple. SA’s energy woes are well documented and the allure of energy independence is the story. Our unhealthy addiction to coal is a ticking time bomb for the environment and the economy, making the search for alternatives ever more urgent.
The Supreme Court of Appeal’s decision will have far-reaching consequences. A ruling in favour of Shell could reignite the Wild Coast project, potentially unlocking new energy reserves and reducing SA’s carbon footprint. However, it could also raise questions about the government’s commitment to environmental protection and community rights.
Conversely, if the Supreme Court of Appeal upholds the high court’s decision, it could deter future investments and slow down the country’s transition to cleaner energy sources. The message to the global energy industry would be clear: SA’s environmental and community standards are not up for negotiation.
About a year ago, Johnny Copelyn, head of one of the biggest investors in oil and gas exploration in SA and Namibia, told the group’s shareholders that President Cyril Ramaphosa had not shown his hand on whether his administration supported oil and gas exploration in the country. Hosken Consolidated Investments, of which he is the CEO, has an interest in Impact Oil & Gas.
“There is substantial litigation opposing such exploration work. The president ... has been particularly evasive as to whether he supports such work or not and it is unclear whether this will completely inhibit SA developing its own oil resources despite the obvious prospectivity of the blocks concerned,” Copelyn wrote in a letter to shareholders.
For investors and business leaders such as Copelyn, the case is a litmus test for SA’s regulatory environment. Will the country uphold its legal commitments to environmental and social governance, or will it bend to the promise of economic gains? The clarity the Supreme Court of Appeal’s judgment will bring is crucial for future investment decisions.
For the communities, the true star of the show watching from the wings waiting to see how their interest will be served, will the economic benefits of exploration triumph, or will environmental risks take centre stage?
The Shell Wild Coast case is more than a legal battle; it is a narrative about SA’s energy future, a story that sums up the tension between progress and preservation. As we wait for the judgment with bated breath, one thing is clear: the outcome will be a defining moment for all stakeholders involved. It will clarify the murky waters of environmental law and corporate responsibility.
SUPREME COURT OF APPEAL’S DECISION WILL HAVE FAR-REACHING CONSEQUENCES