Rhino Oil and Gas Exploration South Africa (Pty) Ltd v Normandien Farms (Pty) Ltd and Another
Jurisdiction | South Africa |
Judge | Ponnan JA, Mbha JA, Mathopo JA, Van der Merwe JA and Plasket AJA |
Judgment Date | 31 May 2019 |
Citation | 2019 (6) SA 400 (SCA) |
Docket Number | 100/2018 [2019] ZASCA 88 |
Hearing Date | 31 May 2019 |
Counsel | A Rafik Bhana SC (with I Goodman) for the appellant. MG Roberts SC (with E Roberts) for the first respondent. |
Court | Supreme Court of Appeal |
Plasket AJA (Ponnan JA, Mbha JA, Mathopo JA and Van der Merwe JA concurring):
[1] The appellant, Rhino Oil and Gas Exploration South Africa (Pty) Ltd (Rhino), B lodged an application with the second respondent, the South African Agency for Promotion of Petroleum Exploration and Exploitation SOC — also known as the Petroleum Association of South Africa (PASA) [1] — in terms of s 79(1) of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA) for a petroleum C exploration right. The application was in respect of nearly 5500 farms in KwaZulu-Natal covering an area of just under two million hectares. Some of these farms were owned by the first respondent, Normandien Farms (Pty) Ltd (Normandien). [2]
[2] Normandien brought an application in the Western Cape High Court, D Cape Town for orders: (a) setting aside PASA's acceptance of Rhino's application; (b) setting aside the notices published by PASA in terms of ss 10(1)(a) and (b) of the MPRDA, that the application had been accepted and inviting interested and affected persons to submit comments on the application; (c) setting aside PASA's acceptance of a scoping report submitted to it by Rhino; and (d) interdicting Rhino from E submitting an environmental impact assessment and environmental management programme to PASA.
[3] In the court below, Dlodlo J granted these orders with costs. Rhino appeals against those orders with Dlodlo J's leave. F
[4] In this judgment, I shall first set out the process that an applicant for an exploration right is required to follow, from lodgement to decision. I shall then consider the salient facts of this case. Finally, I shall turn to the application of the law to those facts.
The process G
[5] The long title of the MPRDA states that it makes provision for 'equitable access to and sustainable development of the nation's mineral and petroleum resources' and 'matters incidental therewith'. It does so, inter alia, by placing the mineral and petroleum resources of the country H
Plasket AJA (Ponnan JA, Mbha JA, Mathopo JA and Van der Merwe JA concurring)
under A the custodianship of the state for the benefit of all South Africans. [3] The consequences of this for the exploitation of mineral and petroleum resources are spelt out in s 3(2):
'As the custodian of the nation's mineral and petroleum resources, the State, acting through the Minister, may —
B grant, issue, refuse, control, administer and manage any reconnaissance permission, prospecting right, permission to remove, mining right, mining permit, retention permit, technical co-operation permit, reconnaissance permit, exploration right and production right; and
in consultation with the Minister of Finance, prescribe and levy, C any fee payable in terms of this Act.'
[6] C Chapter 6 of the MPRDA deals with petroleum exploration and production. It is to the provisions of this chapter that I now turn.
[7] Section 69, the first section of ch 6, states that the chapter 'provides for the granting of exploration rights and production rights and the D issuing of technical co-operation permits and reconnaissance permits'. For this purpose, s 69(2)(a) provides that various sections in ch 4, 5 and 7, as well as in sch II, apply to the application of ch 6, with the necessary changes.
[8] Section 69(2)(b) provides specifically that in applying the provisions E of those other chapters:
'Any reference in the provisions referred to in paragraph (a) to —
minerals, must be construed as a reference to petroleum;
mining, must be construed as a reference to production;
mining area, must be construed as a reference to production area;
mining rights, must be construed as a reference to production F rights;
prospecting, must be construed as a reference to exploration;
prospecting area, must be construed as a reference to exploration area;
prospecting rights, must be construed as a reference to exploration rights; and
G reconnaissance permission, must be construed as a reference to reconnaissance permit.'
[9] It is not in dispute that PASA was appointed by the Minister as a designated agency for the performance of functions in terms of ch 6. Section 71 sets out its functions. These functions cover a wide span and H include: promoting both onshore and offshore exploration and production of petroleum; [4] receiving applications for, inter alia, exploration rights; [5] and evaluating applications lodged with it and making recommendations to the Minister. [6]
[10] Section 79 regulates applications for exploration rights. Section 79(1) I is concerned with the lodging of applications. It provides:
Plasket AJA (Ponnan JA, Mbha JA, Mathopo JA and Van der Merwe JA concurring)
'(1) Any person who wishes to apply to the Minister for an exploration A right must lodge the application —
at the office of the designated agency;
in the prescribed manner; and
together with the prescribed non-refundable application fee.'
[11] Once an application has been lodged, s 79(2) requires that PASA B 'must', within 14 days of receipt, accept the application if —
the requirements contemplated in subsection (1) are met;
no other person holds a technical co-operation permit, exploration right or production right for petroleum over the same land and area applied for; and
no prior application for a technical co-operation permit, exploration C right or production right over the same mineral, land and area applied for has been accepted'.
[12] At this point s 10 comes into play with the necessary changes. Section 10(1) provides that within 14 days of the acceptance of an application, PASA must, in the prescribed form, make known that the D application has been accepted 'in respect of the land in question' and 'call upon interested and affected persons to submit their comments regarding the application within 30 days from the date of the notice'.
[13] In terms of s 79(3), if an application does not comply with the requirements of s 79, PASA 'must notify the applicant in writing within E 14 days of the receipt of the application and provide reasons'.
[14] Section 79(4) deals with the acceptance of applications. It provides:
'If the designated agency accepts the application, the designated agency must, within 14 days of the receipt of the application, notify the applicant in writing to — F
consult in the prescribed manner with the landowner, lawful occupier and any interested and affected party and include the result of the consultation in the relevant environmental report as required in terms of Chapter 5 of the National Environmental Management Act, 1998; and
submit the relevant environmental reports required in...
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