15 March 2023
The judgment of the Constitutional Court is available here.
Coram: Zondo CJ, Baqwa AJ, Kollapen J, Madlanga J, Majiedt J, Mathopo J, Mbatha AJ, Mhlantla J and Rogers J
Heard: 23 August 2022
Unanimous judgment by Madlanga J delivered: 15 March 2023
Outcome: Appeal from Supreme Court of Appeal dismissed with costs.
The central issue in this matter is whether a water use entitlement obtained in terms of the National Water Act may be transferred to a third party and, if so, whether a fee may be charged for the transfer. The Department of Water and Sanitation had up until 2018 consistently allowed such trading, but after it issued a circular providing that the Act does not allow trading, the Director-General declined such applications which led to this litigation.
The Constitutional Court interpreted the context and plain language meaning of the wording of section 25 of the National Water Act 36 of 1998 and found that it indeed allows for the transfer of water use entitlements and that parties may also charge fees for transferring the rights.
Section 25 of the National Water Act provides as follows:
“25. Transfer of water use authorisations.
(1) A water management institution may, at the request of a person authorised to use water for irrigation under this Act, allow that person on a temporary basis and on such conditions as the water management institution may determine, to use some or all of that water for a different purpose, or to allow the use of some or all of that water on another property in the same vicinity for the same or a similar purpose.
(2) A person holding an entitlement to use water from a water resource in respect of any land may surrender that entitlement or part of that entitlement—
(a) in order to facilitate a particular licence application under section 41 for the use of water from the same resource in respect of other land; and
(b) on condition that the surrender only becomes effective if and when such application is granted.
(3) The annual report of a water management institution or a responsible authority, as the case may be, must, in addition to any other information required under this Act, contain details in respect of every permission granted under subsection (1) or every application granted under subsection (2).”