- Constitutional Court restored the order setting aside Shell and Impact Africa’s Wild Coast exploration right and its renewals.
- Court held that meaningful consultation with affected coastal communities is a constitutional and statutory requirement.
- Judges ruled that the Supreme Court of Appeal’s suspended remedy could not cure the unlawful decision-making process.
The Constitutional Court has effectively blocked Shell from proceeding with offshore seismic exploration along South Africa’s Wild Coast, restoring the High Court order that set aside the company’s exploration right and its subsequent renewals.
In a majority judgment written by Justice Jody Kollapen, the apex court upheld appeals by Sustaining the Wild Coast NPC, affected coastal communities, fishers, traditional healers, and environmental organisations, and overturned the Supreme Court of Appeal’s decision to suspend the setting aside of the exploration right pending a third renewal application.
The court granted leave to appeal, upheld the appeals, restored the High Court order, and ordered the Minister, Shell, Impact Africa and related respondents to pay the applicants’ costs. Seven judges formed the majority, while Justice Owen Rogers wrote a minority judgment.
The dispute concerned an exploration right granted to Impact Africa in 2014 for offshore seismic surveys to search for oil and gas deposits along the Wild Coast, as well as renewals granted in 2017 and 2021. Shell later acquired a 50% participating interest in the right.
After Shell announced plans in 2021 to begin a 3D seismic survey, coastal communities and environmental groups approached the High Court in Makhanda, which interdicted the survey and later reviewed and set aside the exploration right and its renewals.
Court says unlawful right cannot be kept alive
The Constitutional Court held that the Supreme Court of Appeal had erred in suspending the setting aside of the exploration right pending a further renewal application.
Justice Kollapen said the central question was whether the suspended remedy was “just and equitable” under Section 172(1)(b) of the Constitution. The majority found that the defects identified by the High Court were not limited to a procedural irregularity that could be fixed later.
The High Court had found three independent grounds of unlawfulness. These are the absence of meaningful consultation, the failure to consider environmental and cultural impacts, and non-compliance with statutory objectives relating to historically disadvantaged communities.
The Constitutional Court held that the renewal process under Section 81 of the Mineral and Petroleum Resources Development Act is narrow and largely administrative, and therefore could not cure those defects.
Meaningful consultation required genuine engagement
The court strongly endorsed the High Court’s finding that the consultation process was “more illusory than real”. Justice Kollapen repeated that meaningful consultation requires a genuine, bona fide, substantive two-way process aimed, as far as possible, at achieving consensus.
The court accepted that affected communities were denied a reasonable opportunity to understand the proposed seismic survey and make informed representations about its environmental, cultural and livelihood impacts.
Environmental and climate concerns mattered
The judgment also held that the Minister failed to consider several relevant factors, including potential harm to marine and bird life, the impact on cultural and spiritual practices, livelihood effects, climate change, and the requirements of the Integrated Coastal Management Act.
Justice Kollapen emphasised that the Wild Coast enjoys special legal protection as coastal public property held in trust for present and future generations.
Economic arguments rejected
The Supreme Court of Appeal had relied on the alleged R1.1 billion expenditure by the respondents, the delay in bringing the review, the possibility that the right could not be obtained again because of a moratorium, and the potential economic benefits of offshore exploration.
The Constitutional Court was not persuaded that these considerations justified preserving an unlawful exploration right. It noted that the delay argument was weakened by the inadequate public disclosure of the original grant and that the claimed economic benefits had not been properly substantiated before the High Court.
Shell can no longer proceed under the impugned rights
The court restored the High Court order setting aside the exploration right and both renewals and ordered the Minister and the company respondents to pay the applicants’ costs.
The practical effect is that Shell and Impact Africa no longer have a valid exploration right to conduct seismic surveys under the impugned authorisations. The court did not decide the separate NEMA issue because it had not been determined by the lower courts.
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