Farmers' water rights and the law

Water is an economic enabler, and ensuring that it is used where it will have the most benefit is key to the agriculture sector and maintaining food security. However, a recent decision by the South African High Court, which confirmed that the sale and transfer of water is unlawful, has created much uncertainty about farmers’ rights in this regard, writes James Brand, senior associate of ENSafrica’s Natural Resources and Environment department.

- James Brand

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South Africa is a water-scarce country and climate change is set to make water in even shorter supply in large parts of our country. One critical tool for drought mitigation is the ability to temporarily transfer water between users so as to maximise and ensure the efficient use of this resource. A recent South African High Court decision has confirmed that the sale and transfer of water is unlawful, and if recent policy is implemented, we can anticipate express statutory restrictions on the transfer of water-use entitlements in future.

THE HISTORIC POSITION

Water transfers are a heavily regulated and evolving area of the law and are subject to ongoing debate in our courts. Two key aspects are firstly, whether a water-use entitlement can be transferred to a third party and secondly, whether it is permissible to sell a water-use entitlement as part of this transfer.

The National Water Act of 1998 (NWA) regulates the temporary and permanent transfer of water-use entitlements. In this regard, water management institutions have historically allowed transfers of water-use entitlements held for irrigation to third parties for temporary use on another property for the same or similar purpose. Historically, the Department of Human Settlements, Water and Sanitation (DWS) has allowed a person holding an entitlement to permanently surrender that entitlement to allow a third person to apply for a new water-use entitlement based on the surrendered water. This historic position was informed by policy adopted by the DWS that permitted such transfers.

A CHANGE IN POLICY