Constitutional Court Blocks Shell Oil Exploration Off South Africa's Wild Coast
Court ruling permanently blocks offshore oil exploration on environmentally sensitive South African coastline.
South Africa’s Constitutional Court permanently revoked an offshore oil and gas exploration right covering a 250-kilometre stretch of the Wild Coast in the Eastern Cape on 14 August, finding that the original grant and its renewals contained unfixable legal defects that no further consultation or renewal application could remedy.
The majority decision reinstated an earlier High Court order that had set aside the exploration right entirely. The court rejected the intermediate approach taken by the Supreme Court of Appeal, which had suspended the cancellation while a third renewal was considered, on the basis that a fresh public participation process during renewal could cure the original defects. The Constitutional Court found that reasoning flawed.
Impact Africa originally applied for the exploration right in 2013 to conduct seismic surveys searching for offshore oil and gas deposits. The right was granted in April 2014 and subsequently renewed twice before Shell acquired a 50% stake in 2021. When Shell announced plans to begin a 3D seismic survey, environmental organisations, coastal communities and fishermen challenged the right in court.
The High Court sided with the challengers, setting aside the exploration right and renewals on grounds that consultation had been inadequate and that decision-makers had failed to consider potential harm to marine and bird life, cultural rights, and climate change impacts. The Supreme Court of Appeal agreed the original decisions were unlawful but proposed a different remedy: suspending the cancellation to allow a third renewal application with a fresh public participation process designed to address the identified defects.
Environmental groups and Wild Coast communities appealed that approach to the Constitutional Court, arguing that a renewal process could not retroactively cure fundamental flaws in the original grant decision.
Writing for the majority, Justice Kollapen acknowledged that the Supreme Court of Appeal had been entitled to reconsider the remedy but held that it had misunderstood the nature of the original defects. The deficiencies went far beyond inadequate consultation. The original decisions failed to consider climate change impacts, breached requirements under the Integrated Coastal Management Act, and neglected to apply the precautionary principle. These were independent legal defects. Adding a consultation exercise to a renewal application could not fix them.
The majority judgment drew on emerging international climate law, citing recent advisory opinions from the International Court of Justice, the International Tribunal for the Law of the Sea, and the Inter-American Court of Human Rights. The court noted that climate change had moved “from the margins of environmental diplomacy to the centre of legal accountability,” signalling that climate considerations must inform resource extraction decisions at the highest level.
Shell and Impact had argued that the Supreme Court of Appeal’s remedy was practical and necessary. They contended that the minister could consider new information during renewal and that outright cancellation would cause severe prejudice to their investment, particularly given a government moratorium on new exploration rights that would prevent them from reapplying. The companies had spent approximately 1.1 billion rand (roughly 50 million pounds) on the project.
The Constitutional Court majority rejected the weight given to that investment. While acknowledging that the expenditure was relevant to remedy considerations, the court held that financial interests should not be given undue weight, especially where the beneficiaries of an unlawful decision had themselves contributed to the circumstances that produced it.
By contrast, Justice Rogers dissented, concluding that fresh consultation and reconsideration during the renewal process could have preserved the possibility of a final three-year exploration period while adequately protecting the rights of affected communities.
The majority allowed the appeals and restored the High Court’s order, leaving the exploration right and all its renewals permanently set aside. The Wild Coast, an environmentally sensitive area where coastal communities depend on fishing and maintain longstanding cultural and spiritual practices, remains closed to offshore oil and gas exploration.
Whether the government moratorium on new exploration rights will hold, and what that means for any future offshore energy ambitions along this coastline, remains an open question.
Q&A
What legal defects did the Constitutional Court identify in the original exploration right grant?
The court found the original decisions failed to consider climate change impacts, breached requirements under the Integrated Coastal Management Act, and neglected to apply the precautionary principle. These were independent legal defects that went far beyond inadequate consultation.
Why did the Constitutional Court reject the Supreme Court of Appeal's proposed remedy?
The Constitutional Court held that the Supreme Court of Appeal had misunderstood the nature of the original defects. The court found that a fresh public participation process during renewal could not retroactively cure fundamental flaws in the original grant decision, as the deficiencies were independent legal issues.
How much had Shell and Impact Africa invested in the exploration project?
The companies had spent approximately 1.1 billion rand, roughly 50 million pounds, on the project. The Constitutional Court acknowledged this expenditure was relevant to remedy considerations but held that financial interests should not be given undue weight.
What is the current status of the Wild Coast regarding offshore oil and gas exploration?
The Wild Coast remains permanently closed to offshore oil and gas exploration. The exploration right and all its renewals have been permanently set aside, and a government moratorium on new exploration rights prevents the companies from reapplying.