Constitutional Court to hear vital water rights case for agricultural sector sustainability
11 April 2022
The Constitutional Court has granted the Department of Water and Sanitation’s (DWS) application for leave to appeal against a decision by the Supreme Court of Appeal (SCA) on the transferability and trading of water rights. The outcome of this judgment will have significant consequences for the agricultural sector, both in terms of investor confidence and access to capital.
The case came about as the result of a circular issued by the DWS in January 2018 in which the department sought to remove the right of water use entitlement holders to transfer the entitlements. The case was brought to the SCA after the Pretoria High Court dismissed applications for a declaratory order on the legality of the circular.
On 8 November 2021, the SCA ruled that water rights’ holders are entitled to transfer such rights in accordance with the provisions of the National Water Act, and that trading in such rights is neither prohibited nor unlawful. The department has chosen to appeal this decision, and the Chief Justice has directed that the appeal against will be heard by the Constitutional Court on 25 August 2022.
Stewardship of water involves not only the efficient use of scarce water resources, but also the legal protection of water use entitlements, which are not only essential for access to water, but are also a valuable asset for South Africa’s farmers. The ability to lawfully transfer water use entitlements in accordance with the provisions of section 25 of the NWA is vital, particularly for the irrigation agricultural sector. The transferability of water use entitlements in terms of the NWA was envisaged from the outset, and this was actively endorsed and supported by the DWS.