Media briefing by Minister of Water and Environmental Affairs, Ms Edna Molewa, on Water Policy and Fracking in the Karoo

Journalist: I noticed the intention to send out a notice of intention which would declare fracking a controlled activity in the Karoo. What exactly does this mean and can it be taken as a signal that the government is broadly supportive of hydraulic fracturing? What will controlled activity encompass, will it include guidelines on the use of chemicals in the Karoo, and will this be carried out by the new water authorities? Will they be the policing mechanism to ensure that the Karoo is not damaged?

Journalist:  How do you define indigent in terms of those who will be allocated water? What are the criteria for that? Secondly, 30 days is a short time for the public to comment on what seems like some quite fundamental policy changes which indicates that government wants to take serious control of water all the way through and it would make a great difference to some people. A 30-day period seems quite short.

Journalist: My question is about the water tribunal. As the Minister knows, the water tribunal has not been in working order for the last two years and the Minister was even taken to court over this. I would like to know what the Minister is going to put in place for the water tribunals.

Journalist: I want to find out about the application of the use it or lose it principle. How many kilolitres of water are being kept by the owners of reserves and how many kiloliters will be freed once this principle comes into play? How long does the provision give for someone to keep water?

Journalist: The ability for the Minister to take water from one user and allocate it to another - does this not give the Minster too much power in deciding the allocation of water? Can you give us criteria on the equity status of water use? Would this criteria state when you could take water from one user and give it to another?

Minister Molewa: The first question that I would like to respond to is what it means to plan hydraulic fracturing and unconventional means of gas exploration.

Chief Director Mochotlhi: I am responding to the first question which was what it means to declare fracturing a controlled activity. When that provision is passed we will be able to ask for additional information. We are declaring hydraulic fracturing for gas and oil a controlled activity for the reason that technology is advancing and sites have many differences between each other, so controlled activity would allow us to require certain information from applicants in order to proceed with activities, it also means that a water use license would be required. When you apply it does not mean you get the license, but it will be processed and then a decision will be reached.

The issue of existent lawful water use - let me just explain that, in terms of the National Water Act, is actually recognition of the previous entitlements. Now, there is a difference in the National Water Act between how we treat existent lawful water use and licenses. The Act provides that with licenses we can give you a condition that in a particular period you should have utilised that water, it changes from process to process. But with the existent lawful water use, the Act does not give us that provision. That results in people holding water and we are unable to reallocate that water for other uses. The Act says that water should be used beneficial for every citizen of the country and that makes it difficult for us to free the water under the current act. That is why we are proposing that if you do not use it you lose it, but the timeframes will still be determined once we are through with this process.

Minister Molewa: Let’s also keep in mind that the Cabinet decision talks to fracturing, it talks to precautionary principal being applied. In other words the issue called hydraulic fracturing is still to be worked on because right now we are still focusing on exploration. In other words, the use of water as a mechanism to develop is still to be finalised and this is why the regulations are being issued, so we get reports as and when exploration happens so that we can then be able to make informed decisions. Deborah emphasised on the timeframe - let me further explain why we are not talking about the timeframes directly right now. The situation currently in South Africa is that we have 98% of the water in the country being considered “fully allocated”, this means that my child and your child that is being born tomorrow has 2% of water for use going into the future. This 98% that is allocated is allocated to the existing lawful users, and some has been done through the current licensing mechanism, and we can always review this mechanism. But that which used to be called rights now fall under existing lawful user. Even if a very successful commercial farmer has an over allocation, we are not able to just take it away. However, we can do it through the application for licenses; all of us know that application for licenses had started in 2001. 

Until now there has not been a serious and significant breakthrough of this allocation, so we think that we should apply a different mechanism to this because indeed it is a fact that there are people who are not using their water. Since they are not gainfully or efficiently using that water, validation and verification exercises will be done in some instances to see whether there is an over allocation. So the multitude and amount of water we do know that it is there to be reallocated, but it requires a very scientific process and policies, which we are putting in place now to continue to move forward. We are not necessarily going to arrive and tell the operator that we are just going to take away “x” amount of water without going through the proper process and determining what the user intended to use with the water. Many users have been trading their unused water, by finding this out we have proof that this person has not been using their allocation. By finding this out we will be able to clarify who is properly using the water and where supply can be reallocated. 

Even though the Act says that the Minister is the sole custodian of water that implied power is not to the extent you are thinking. The regulations ensure that there are safeguards. We are here talking about instances where some of South Africa should be allocated water for better use so that we do not have people in the country who are unable to be allocated water due to over allocation elsewhere, because that is what happening now. There are new developments that are on hold that would provide the country with new jobs, they are not on hold deliberately, and rather it is on account of a lack of policy and clarification as to how we can reallocate water in order for our country to grow. We think that many mining houses and new industrial developments that are out there, and human settlement developments, are being told “sorry but we are unable to allocate you any water right now”. But now with new regulation we are able to reallocate water and determine if someone is able to trade in order to advance these projects.  There is quite a significant amount of water that can be used through reallocation processes, the time period for this will be linked to the historical use of the water in question as well as the operation in question. For example, if you have a large farm you may be over allocated and not need all the water you have, so you will be left with enough to do your work and maybe a little more. 

Somebody said this is a drastic policy change and asked why there is only a 30-day consultation period? I believe we should cross that river when we get there, we will see what kind of progress we have made in those 30 days and determine where to go from there. This is why we have press conferences such as this, we will be going out across the country and getting input from various stakeholders and after 30 days we will determine whether we are satisfied with the input we have received. Please note that we are not encouraging people to hold back because we would like to move forward with these inputs. We believe that this is not all that drastic of a policy, but it is a game changer. It will help us as South Africans to focus on growth in the true sense of the word, and to use water as a catalyst for it. 

What do we intend to do with the tribunal, which we have been taken to court for? We did say in the briefing notes that similar to what is in existence as an appeal mechanism in other laws. By the way this is not the only Department that has appeal processes, and appeal processes in other Departments are handled in a different manner. We think that there should be mechanism to do the appeals in a similar manner to other departments. Under the National Environment Management Act, NEMA, there are people charged with authorisations; issuing records of decisions much like we currently have in Water for those issuing water use licenses. Internal mechanisms would be effective for us to use in addressing these issues prior to bringing them to a bigger court. Of course we would consider utilisation of highly skilled people under the tribunal system, we have the ability to used hydrologists and lawyers as part of these processes. Currently we have complied with the courts and sent our requests to the Judicial Services Commission to advertise to appoint a judge for the tribunal while we are working on the policy.

We need to free up the 98%, we cannot just sit back and say that we will allocate the remaining 2% to the rest of South Africa forever. We do by the way currently have in the law a framework to determine who indigents are. The standard amount of water for every South African is 25 litres per day, we all get this, and it is averaged out depending on how many people are in a household. There are not exceptions to this amount. Equity applies through this. We must move away from saying no to people and towards equitable distribution.

Chief Director Mochotlhi: As the Minister said, the volume of water that is to be freed is quite large. What gives us this indication is that we have received a large number of applications from people who want to trade their water, so we are talking huge volumes. If you think of 98% of the countries water being allocated, especially if you look at the period in which these entitlements were issued you soon will agree with us that it is a huge amount of water. We also look at water conservation as well, to ensure efficient use. The application process ensures this and is quite comprehensive. I want to mention hydraulic fracturing and unconventional gas or oil testing is that we are looking at the entire lifecycle of the process to determine any potential impact on the water sources and that includes the chemicals that are used in the process. We will be looking at saving and protecting water for domestic use because if Cabinet does approve, because we are only in the exploration stage, we will consider alternative water uses.

Journalist: Minister, I wanted to know in terms of the licensing convention when it is distributed, there would be conditions in terms of why you need the license. What would these conditions be and why would someone be turned down?

Journalist: I want to clarify the Minister’s statement that they had already gazetted the notice that people can go about exploration of fracking in the Karoo and that there is 60 days from the gazetting for comment. When exactly was this gazetted?

Journalist: Just as a point of clarity in regards to hydraulic fracturing; is there any specific timeframe that you have given companies to frack in the Karoo in terms of how they can apply for their water license and could you give us some more detail about the criteria that you are looking at in terms of the volumes of water that will be used in the exploration process itself?  Lastly, looking at the coal mining sector, what is the process regarding verifying outstanding water use licenses, especially in Mpumalanga?

Journalist: Minister could you talk to the impact of the 98% allocations and the SIPS infrastructure projects; is this number holding back specific projects? Is the 98% from pre-1994 or has it crept up in the past 20 years?

Journalist: My question is a matter of clarity; page 4, first paragraph, last sentence, it uses the term “prevented managed” could you explain that term as I am not sure what it means. In terms of the water use licenses, the use it or lose it principle could encourage people just to use up their allocation quickly and not efficiently, are you looking at some sort of incentive to encourage companies to use water efficiently?

Chief Director Mochotlhi: The first question of under what conditions would we give licenses, the first problem is that many apply and the source they seek is already being stretched too far. The second is that when you look at Section 27(1) of the National Water Act it gives you a suit of considerations that are made during the processing of the application; one of which is beneficial use of water. In other words, when we look at two applications from one area and we can already foresee that there is a shortage of water in the area, we determine which one of the two applications meets the requirements of the National Water Act and has more beneficial uses of water.

The exact date of fracturing is not yet determined as it is still in public comment, which began on 23 August. It is government notice 863. What is it that we’re going to do to incentivise water efficiency? In the current Act there are some benchmarks as to what volumes of water were required for certain processes. I also need to emphasise that one of the provisions is that you use water efficiently and effectively, and therefore you are bound by the Act to be efficient. A further incentive for efficient use is the price you have to pay in order to extract and use the actual water.

Verification for licenses of mining, when we do verification processes we do not single out a particular industry, we do the entire scope. So at the time we do validation and verification in Mpumalanga the mines will be addressed.

Minister Molewa: I want to clarify; we said in a statement that the policy review that we are talking about has been gazetted on 30 August. The 60-day period that began on 23 August is a separate issue related to regulations and fracking - we are dealing with two issues. One is a policy review and one is regulations for fracking. 

I want to speak on the impact of the 98% of the allocation on existing and proposed developments.  Ladies and gentlemen I’d like to be just a little bit dramatic in demonstrating the kind of impact this has on development; in Limpopo, many SIP 3 projects are in waiting and housing developments and mining operations are waiting for allocations. 62% of national water allocation is going to agriculture, this allocation needs to be verified, and we will go to this area and determine this because we cannot stifle development due to over allocation. Due to the lack of allocation capacity there are two housing projects and two applications for two mines waiting, these mines are then going out and seeking to buy water elsewhere. This means that somebody has an unused allocation. Municipalities must be told by me that they must buy from somebody else to construct human settlements, this is not an effective system and it happens all over the country. Reallocation has to happen and you’ll notice that even in our National Water Resource Management Strategy we have reworked the hierarchy of reallocation of water. We now need scientific proof and validation for allocation. We need to support all sectors of economic development in an equal manner and this policy will help us do that. I want to emphasise that this is not a policy designed to take away water from a particular race group and give to another race group, it is to rightfully reallocate to those who need water most.

Where does it start? The previous law carried with it water rights, new law carried entitlements.  Existing lawful users were then entitlement holders; these are the same things. The previous percentage of someone’s allocation will remain when the new policies passes. 

Chief Director Mochotlhi: What this sentenced means; the impact of exploration and production of shale gas resources are prevented managed or mitigated is that we will be looking at the entire lifecycle of all the activities involved with fracturing or unconventional extraction methods. We will look at those to determine the potential impacts they may have and how they will be mitigated. We first deal with prevention, then minimise impact, and you control impact. 

The last issue about incentives - currently we do not have a particular incentive for efficient water use, but the incentive for every responsible citizen of the country should be that “If I use water efficiently, it will free up water for someone who needs it”. You would be freeing water for further economic development, for me that should be incentive enough. But I have indicated that as one of the conditions in authorisation of water is that when you get your authorisation you agree to use water effectively and efficiently.

Minister Molewa: May I also indicate however that we do have in South Africa many companies that are really trying their best to actually ensure that they use their water efficiently and effectively. We cannot name those companies in this room, but there are many of them. We work with them through the boarding calls, the South African partnership which works. Big companies and small companies are trying to help South Africa to get efficient use of water in their sectors, these companies know the seriousness of the threat of the potential lack of water to their business. This has led to them to coming on board and working with the Department very well on various measures in ensuring that we reuse water and we do other projects with it.  There is no financial incentive; it is those reasons that provide the incentive.

Journalist: I would like to ask you whether you think you have any control over the mines in Mpumalanga. Because if you don’t have control I cannot see you being able to control the companies that want to come and frack the Karoo for gas. Because I go there regularly and I see how they destroy our water.

Journalist: The 62% of water allocated to agriculture; what percentage of that is legal use versus illegal use? What percentage of water does the department see as being needed for agriculture and won’t that suppress agriculture in the future? The irrigation board; can you clarify the issue of whether you are going to stop the irrigation boards and what are they doing to stop transformation, what problem do they pose in water allocation?

Journalist: You said that one of the major decisions that was being taken was the National Water Act and the Water Services Act would be brought together into one, isn’t that quite a big proposal? Does that mean that those two Acts will be scraped or merged? It could take quite a long time, what can we expect when you speak about bringing those two together?
 
Journalist: Regarding fracking, I’m sure that you are aware with the problems that shale gas fracking has caused in parts of the United States. Also the old explorations holes that were created in the 60s have led to radioactive pollution and salts coming up, one of the reasons according to academics is because the underground water in the Karoo flows upwards. It just seems that even with the best intentions in the world this just seems like one of those things might be impossible to prevent given that toxic cocktail of chemicals. How would you stop that sort of thing, how do guidelines prevent water pollution from fracking?

Journalist: Minister, just to follow up on how all these companies that are interested in exploration for natural gas in the Karoo; what do they do now in terms of getting the water licenses? Is there an application procedure and to whom, is it the new regional water authorities who are going to deal with this or is it the Department? Do you personally, as Minister of Water Affairs, support fracking?

Chief Director Mochotlhi: The percentage of water that is legal and lawful - that is exactly the purpose of our programmes because in these we are ensuring this and checking practices. The percentage needed by agriculture is 62%, this is a huge number and you would probably agree with me in saying that this is an industry that needs to be monitored for efficiency. I’ve already communicated that there is a methodology in which we determine the amount of water needed for an activity by an applicant.

With regards to the impact of hydraulic fracturing in the Karoo and the historical record in the USA; I would like to say that various sites are different in various ways, so maybe the USA having those radioactive pollutants might be different from the Karoo. Also remember that technology has improved, I’m not saying that we are going forward with fracking because that is a political decision that has to be made. I’m just saying that if we go that route we will do everything within our power to prevent, manage and mitigate impacts and ensure that the companies involved do so too.

About water that has been flowing upwards in the Karoo and thus unable to be managed, that will be addressed in the studies currently being conducted. All those determinants will be taken into consideration should we move forward. We do currently have applications for water use licenses, but we are waiting for the regulator studies to unfold.

Minister Molewa: In terms of Mpumalanga; there are a number of mining companies that are operating there without water licenses. We do not have that figure readily available. There have been new companies that have applied for new licenses, which we have awarded. After the last count which we did there have been new applications. What is really going to help us in having full control in that area of mines, especially in Mpumalanga, is for us to have a fully functional inspectorate. Our inspectorate body and branch of the department is necessary because we have seen firsthand what needs to be addressed in these areas.

After department visits to sites there has been an emergence of applications from those people who were operating without licenses. In many cases when companies apply they are missing documents, in these instances we’ve gone back several times to remind them. If they don’t respond after being reminded we strike their application. We have taken companies to court, it is a tedious process, but it does happen. We want to have full control; we are doing all in our powers to ensure that there is compliance with our laws in order to protect this scarce resource, especially in vulnerable areas such as Mpumalanga.

The 62% of allocation to agriculture what is legal and what is not? To give an example, let’s pretend we have a full dam of water, which is the 62% allocated, it didn’t come from counting individual farmers or industrialists. It came as a result of previous lawful use allocations, even if a tsunami came and filled the dam up more; it would just increase the overall volume but the percentage remains 62. We had processes, which require that existing and lawful users to go through a registration process prior to the promulgation of the National Water Act, what was not done was the actual amount of water used. So, this number had to be determined through validation and verification exercises. The percentage of allocation is not directly linked to legal versus illegal use; it is linked to the amount of available water there is. Legality comes from how you use water; illegality is when you use unallocated water. We have given out compliance notices to stop this type of use and issue directives to the users.

The National Water Act and the Services Act are being brought together and is a big project, we have someone here who is in the room who is doing the actual drafting, and he is already halfway done. I will ask him to deal with this question.

The question on whether I believe in fracking is quite difficult. Let me just say that the experiences of the USA versus the South African situation - what the South African government said was that we as a team are led by the Department of Minerals, Science and Technology is involved as well, Water Affairs is part of the larger assembly working in this area. These departments have been brought together all our interests and functionality to develop this project. We are sharing knowledge, information, and research so that we are looking at all routes, everyone is present in one room as we discuss and make decisions. All the departments, as well as me as a person, would like to be as objective as possible and ensure that our water is protected in the space that we have been given a mandate, but also interacting with others to find the best mechanism that we can apply to take us forward as a country in a responsible and efficient way. Another question to be asked is what happens to the waste, because we must remember that these processes create waste. We are all here to take care of these issues and come up with the best possible practices for South Africa. I will not say that I want this or want that, I will say that I want what is best for our country, including the water sector and the protection of our environment. I think we must note that we will be monitoring more seriously, even in the exploration we are operating with the principle of precaution. We will research and analyse and use our discoveries to make our decisions and move forward. 

As you know water resource responsibility lies with the Department of Water Affairs, municipal responsibility is with the Municipal Water Services Authorities, they are responsible for ensuring that those who need water get it and that it is clean. But, overall, authority is in the Department of Water Affairs, we are the monitoring mechanism.

Chief Director of Legal Services, Mr Singh: Yes it is indeed so that the move towards having one single National Water Act is a big proposal and normally legislation does take time.  However, we have done a significant amount of work towards the process since 2012 when I started with the Department. We have a National Water Act Amendment Bill, which is quite expansive and all encompassing; the purpose of these policy updates is to pave the way for the legislation to come. We will put the policy framework in place and then work towards the legislation. The wisdom in having one Act is that the Water Services Act was, by my understanding, created with the intent of it being a short to medium term solution. Local government legislation has overtaken this Act and you will find that a significant percentage of the relevant provisions in the Water Services Act will be carried over into the National Water Act Amendment Bill; this amendment bill will be moving in a way that will provide cohesive and concrete water legislation. There will be no fragmentations in the legislation and it will realise our aspirations to date. The Bill has already been drafted and we are consulting on it internally and we will be in a position to consult on it externally soon. The timeline is that there is a provision for us to request the Deputy President to give us the permission to table this Bill within the current year before Cabinet rises. We are aspiring towards that, in short we have done a great deal of work and this Bill has been ready for some time and now just requires more consultation.  The Bill will legislate the policy positions that we have announcing today.

The media briefing was closed.