On 19 May 2023, the Minister of Water and Sanitation published draft regulations for public comment on the procedural requirements for the application and amendments of water use licences in South Africa.
The Draft Regulations have introduced the most radical and far-reaching effort by the government to date, to effect demographic change concerning water use in the country by prescribing requirements for achieving equity and redressing past racial and gender imbalances.
Most notably, the Draft Regulations seek to impose racial quotas for the granting of water use licences. This means that licence applications for the extraction of ground or surface water, the storage of water in a dam and the performance of stream flow reduction activities (such as forestry), will now only be considered by the government if the company applying for it meets certain racial quotas. The required percentage of Black shareholding will apparently be determined by the annual volume of water that will be extracted or stored by the user or the land area that will be used for forestry.
The Draft Regulations stipulate the following minimum Black shareholding requirements:
The mining sector is exempt from these racial quotas. It seems that the government is making a targeted effort to make the agricultural and forestry sectors' water use subject to these racial quotas. These changes may have significant implications for the commercial farming and agricultural sector as a whole. This narrow focus on Black ownership excludes other essential factors such as agricultural skill and resources, meaning the possible loss, or partial loss, of water resources for many currently viable commercial farming enterprises.
There has been vehement opposition to the Draft Regulations, claiming that if implemented, these racial quotas would threaten the agricultural sector and food security in the country. It is also questionable whether such racial quotas would be detrimental to the creation of an environment that is conducive to growth and investment, which ought to be the primary objective of transformation in the sector.
It is not clear whether these racial quotas will remain in the final regulations.
The Draft Regulation is open for public comment until 18 July 2023.
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