Race-based water permits defended

• Water allocation still heavily skewed towards the previously advantaged

The government has defended its plans to introduce black shareholding requirements for new water use licences, saying it is doing so to correct the racial imbalance created by SA’s apartheid past.

The government has defended its plans to introduce black shareholding requirements for new water use licences, saying it is doing so to correct the racial imbalance created by SA’s apartheid past.

Water & sanitation minister Senzo Mchunu rattled the commercial agriculture sector with proposed regulations to be added to the Water Act that will require farmers to have a black shareholding of 25%-75% to obtain water licences, depending on how much water they extract or store.

Most of SA’s water resources are still held via water use entitlements that predate 1998, while a smaller fraction is set aside through water use licences granted since then.

The department of water & sanitation said in a statement on Monday that both sorts of water allocation are heavily skewed towards historically advantaged individuals. The aim with the draft regulations is to tackle this disparity.

The draft regulations were published for comment in the Government Gazette on May 19, and interested parties have until July 18 to provide input.

Analysis of the 5.83-billion cubic metres of water set aside under existing lawful water use allocations shows that 98.5% (5.74-billion cubic metres) of this total is in the hands of previously advantaged individuals, and only 1.46% (90-million cubic metres) is held by historically disadvantaged individuals, said the department.

About 75.93% (313-million cubic metres) of the 412-million cubic metres allocated via water use licences have been granted to previously advantaged individuals, and only 24.07% (99million cubic metres) to previously disadvantaged individuals, the department said.

SA’s largest agricultural federation, Agri SA, said the proposed regulations will have a devastating effect on agriculture and food production, as they will compel the transfer of ownership of the ability to lawfully use water.

The government indicated previously that farmers with existing lawful water use entitlements would at some stage be required to apply for water use licences instead, but it was not clear when this would be, said Agri SA legal and policy executive officer Janse Rabie. Irrigation farmers would be affected directly as they are large water users.

The proposed regulations “places a sword over their heads” and creates such a climate of uncertainty that it threatens property transactions and plans for future investment, Rabie said.

Farmers who wish to invest in new water storage facilities such as dams are already required to apply for water use licences, and will face a similar challenge if the draft regulations were to be implemented in their current form.

Agri SA supports transformation, but it needs to be done in a manner that maintains a stable and investment-friendly environment, he said.

If the regulations are enacted in their current form they will have a chilling effect on property transactions.

“A property changes hands with the water licence [or water use entitlement]. The ability to lawfully use water is vitally important, and the buyer is always going to ask [about this]. If there is uncertainty, it is certainly going to affect property values,” he said.

THEY WILL HAVE A DEVASTATING EFFECT ON AGRICULTURE, AS THEY WILL COMPEL THE TRANSFER OF OWNERSHIP OF THE [WATER USE ABILITY]