Staff Writer | 6 June 2023
Draft regulations that will determine access to water based on skin colour will have a catastrophic impact on food security and employment in the agricultural sector in South Africa.
This is the warning from Agri SA in response to the proposed water licensing regulations gazetted by the Department of Water and Sanitation (DWS) in May 2023.
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 for such water use licenses to be granted.
According to the department, this consideration is to achieve equity and redress past racial discrimination.
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.
The shareholding requirements are given in the table below, as outlined by the department.
The proposed regulations also exempt mining companies, the state and state-owned entities, and 100% black-owned entities.
According to the draft, “the responsible authority may, subject to the availability of water resources, support black people with water licences before a final decision is reached on their applications.”
The proposed regulations are seen as the DWS’ most radical and sweeping effort to date toward changing the demographics concerning water use in South Africa, said Agri SA.
It noted that the agricultural and forestry sectors appear to be the primary target of the proposed regulations, accounting for approximately 60% of South Africa’s total water use.
According to the organisation, the consequences for food security and the sustainability of the agricultural sector should these regulations be passed in the current form cannot be understated.
“They would have a devastating impact on the sector and its ability to provide the country with a secure food supply.
“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,” it added.
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.
Regarding section 27 of the National Water Act, the DWS must consider all relevant factors when issuing a water use license. This already includes the need to redress the results of past racial and gender discrimination, noted the organisation.
Legal and policy executive at Agri SA, Janse Rabie, explained that Section 27 of the National Water Act contains at least ten other considerations that the DWS (the responsible authority for granting water use licenses) must consider before granting any application for a water use license.
“What the proposed regulations seek to achieve is to make BBBEE the sole consideration for granting licenses, essentially forcing the transfer of ownership of the ability to use water lawfully,” he said.
Furthermore, he noted that these regulations are also unlikely to achieve the goal of further transformation in the sector and would threaten the employment of 800,000 South Africans.
“Achieving transformation will require creating an environment conducive to growth and investment in the sector, providing meaningful support for new entrants. This will encourage the opposite,” he said.
Rabie stressed that this effort by the government could not have come at a worse time for the sector and the economy, which is already reeling from the impact of load shedding, rural crime and deteriorating public infrastructure.
These considerations remain important and are especially so when considering the sector’s foundational role in food security and employment, as well as the very significant headwinds farmers are currently facing.
“Water is the most vital input for the sector, and if farmers lose the lawful use of this input, the impact will be catastrophic,” said Rabie.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.