Centre for Environmental Rights – Advancing Environmental Rights in South Africa

Today, as we submit our comments on the Proposed Technical Regulations for Petroleum Exploration and Exploitation published by the Minister of Mineral Resources in October 2013, we also publish a set of Minimum Requirements for the Regulation of the Environmental Impacts of Fracking. These Minimum Requirements follow on the CER’s Position statement on protection of environmental rights in decisions around fracking for shale gas issued in August 2012.

Below is an executive summary of the Minimum Requirements, which also summarises our response to the DMR’s Proposed Technical Regulations.

The inadequate regulation of mining, and negligible compliance monitoring and enforcement, has had and continues to have significant negative impacts on the environment in South Africa.  Many of these impacts cannot be remedied, and will continue to impose heavy financial, health and environmental costs on society for the foreseeable future. In light of the potentially severe and pervasive effects associated with the nascent shale gas industry, in particular the fracking technique, it is particularly important that fracking is regulated by an appropriate and comprehensive regulatory regime that is implemented, monitored and enforced.

Based on a 2012 U.S. study by Ecologix Environmental Systems

The regulation of the environmental impacts of fracking must comply with the existing legal framework. This includes:

1. fundamental rights in the Constitution, including the right to an environment not harmful to health and wellbeing, the right to sufficient food and water, the right to just administrative action and the right to access to information;
2. the National Environmental Management Act, 1998 (NEMA), particularly the environmental management principles, such as: the principle of sustainable development; decision-making in an open and transparent manner with access to information provided in accordance with the law; the precautionary principle; the polluter pays principle; the principle of cradle-to-grave responsibility; the public trust principle; and the prevention of unfair discrimination; and
3. the National Water Act, 1998 (NWA), the National Environmental Management: Waste Act, 2009 (NEMWA) and the National Environmental Management: Air Quality Act, 2004 (AQA).

The regulation of the environmental impacts of fracking in South Africa must comply with best international practice and best international regulatory requirements. Approaches that must be considered cannot only be the industry standards published by the American Petroleum Institute (a U.S. trade association working to ensure the viability of the U.S. oil and natural gas industry), but at least those produced in the past two years by other authorities such as the International Energy Agency, the European Commission, the United States’ Environmental Protection Agency and the United Kingdom’s Department of Energy and Climate Change.

The environmental impacts of fracking must be regulated under the appropriate legal framework, in an integrated and streamlined manner. The proposed technical regulations for the petroleum exploration and exploitation, which include proposed rules in respect of fracking (the “proposed fracking regulations”), attempt to regulate all environmental impacts of fracking through the Mineral and Petroleum Resources Development Act, 2002 (MPRDA), when there is a suite of water and environmental laws specifically designed to manage the environmental impacts of such an activity (see, for example, the section entitled “Management of Water”  that makes no reference to the NWA, and the section entitled “Management of Waste” that makes no reference to NEMWA). While it is valuable to aggregate all regulatory provisions into a single set of regulations, those regulations must be appropriately authorised by the relevant statutes.

The environmental impacts of fracking must be regulated by the appropriate competent authority or authorities in an integrated and cooperative manner, with appropriate resources. Even if the current proposals for amendment to the MPRDA are effected, the authorisation, compliance monitoring and enforcement of these activities will be undertaken primarily by the DMR and the DWA, both national departments with extremely limited resources (particularly absent is adequate numbers of staff with appropriate qualifications and experience) for compliance monitoring and enforcement.

Key recommendations in the CER Minimum Requirements include:

1. that regulations must be promulgated not only under the MPRDA, but also under NEMA, the NWA, NEMWA, the National Environmental Management: Air Quality Act, 2004 (NEMAQA), alternatively be delayed until the commencement of the environmental management of mining activity under NEMA in December 2014;
2. promulgating regulations under the appropriate legislation would also ameliorate the problem of inadequate penalties for violations in the MPRDA as it stands: penalties in environmental legislation are far harsher than those in the MPRDA;
3. that the environmental authorisation of fracking related activities and the compliance monitoring and enforcement of environmental provisions in relation to fracking are exercised by a specialised, inter-departmental unit under the Minister of Water and Environmental Affairs. The costs of recruiting, employing and training inspectors must be borne at least partly by licence holders;
4. that an independent expert panel be appointed by the Minister of Water and Environmental Affairs to review and advise competent authorities on all environmental impact assessments for fracking (including financial provision), to ensure the integrity of assessments and consistency of requirements across the country;
5. that comprehensive provision be made in the proposed regulations for:
   1. protection and promotion of disadvantaged and vulnerable communities, and for appropriate public consultation and engagement: engaging with local communities, residents and other stakeholders prior to each development phase, with sufficient opportunity for comment and appropriate responses (these are not currently requirements under the MPRDA or the MPRDA Regulations); and involving the local community (with the appropriate training and motivation) in compliance monitoring by, for example, being tasked with the raising of alerts after becoming aware of areas for concern;
   2. the completion of baseline measurements for key environmental indicators including: groundwater quality, supply and characteristics; surface water quality, supply and characteristics; seismic characteristics; air quality and emissions (including radioactivity and radio frequency levels); and noise quality;
   3. public access to all licences issued for fracking, and all compliance reports against those licences;
   4. adequate and reliable measurement, monitoring and disclosure of  information on water use, volumes and characteristics of waste water and air emissions, and fracking fluid additives and volume, which must be displayed on a public disclosure register (see the example of the US based FracFocus;
   5. requirements for site selection must account for geological structures, water availability and accessibility, waste disposal options, cumulative and regional impacts; and must avoid or minimise impacts on local community, heritage, existing land use, individual livelihoods and ecology. Environmentally sensitive and significant areas must be excluded, and local zoning schemes respected;
   6. approval of exploration and production rights in a phased and measured manner to allow for the cautious practical assessment of economic, technological and environmental indicators, and limitations on actual fracking during the exploration phase;
   7. obligations to reduce the use of freshwater for fracking, coupled with a prohibition on the use of potable water in fracking;
   8. responsible and lawful water use, storage, treatment and disposal, coupled with the use of “green completions” for the separation of flowback water from natural gas that would also eliminate venting and flaring of natural gas;
   9. minimisation of the use of chemical additives, and promote innovative less harmful alternatives;
   10. ensuring integrity of well design and construction that complies with best international practice and best international regulatory requirements;
   11. an early warning monitoring and response system for failures, blowouts, spills and contamination;
   12. appropriate and significant financial provision for rehabilitation, that – unlike the DMR’s current guidelines – actually take into account the effects of inflation on the calculation of such provision over time;
6. that strict enforcement and penalties are applied in the event of non-compliance. Over and above the usual remedies such as suspension or revocation of licences, licences should provide for significant administrative penalties in the case of violations of licence conditions and/or legislative provisions, up to a maximum of the higher of R20 million or 10% of turnover or 10% of gross asset value, whichever is the highest.

To the extent that the proposed fracking regulations do not comply with the minimum requirements set out in this document, we regard these as inadequate and flawed. In particular, they inter alia:

1. read as a guideline for norms and standards instead of regulatory requirements with binding obligations and, as such, make no provision for the creation of offences and penalties for violations of these guidelines;
2. instead of drawing on a wide range of best international practice and best international regulatory requirements, rely solely on industry standards published by the American Petroleum Institute (API), a U.S. trade association for the oil and natural gas industry. According to the API’s website, it is “the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.” API’s mission is “to influence public policy in support of a strong, viable U.S. oil and natural gas industry essential to meet the energy needs of consumers in an efficient, environmentally responsible manner”;
3. do not provide for the public participation of stakeholders, despite the potentially significant and pervasive detrimental effects associated with fracking, and despite the amorphous and inadequate provisions for public participation provided by the MPRDA and the MPRDA regulations;
4. do not provide for public access to environmental information, licences and compliance and performance data against acceptable standards, despite the necessity of public access to clear, comprehensive and accessible information from an unbiased source to enable meaningful public participation; and
5. purport to regulate all impacts of fracking, including the environmental impacts, under the MPRDA notwithstanding the fact that:
   1. the environmental management of mining activity under the MPRDA is soon to be transferred to NEMA;
   2. the MPRDA regime is ill-suited to the environmental management of fracking related activity and fails to provide for the effective mitigation of the high risks of cumulative impacts; and
   3. there is a whole suite of water and environmental legislation designed to regulate the environmental impacts of all activities that impact on the environment, including fracking.

Download our comments submitted to the DMR on the proposed technical regulations here. These comments are endorsed by partner NGOs WWF South Africa, groundWork, Earthlife Africa Cape Town, Environmental Monitoring Group and Institute for Zero Waste in Africa.

We thank all the local and international experts who have assisted us in the development of the Minimum Requirements and drafting comments on the proposed technical regulations.

Access these links to read more about the draft regulations, as well as the CER’s other work on Karoo fracking.

In case this is not clear from the above, the CER does not endorse the use of fracking. This position is set out in detail in Position statement on protection of environmental rights in decisions around fracking for shale gas issued in August 2012.