Promulgated in terms of section 26(1)(k) of the National Water Act 36 of 1998 (National Water Act), the draft Regulations provoked a significant amount of negative reaction and media attention insofar as they contain various proposed transformation requirements relating to water use licence applications.

These transformation requirements have been interpreted to require certain sectors (the mining sector is exempted) to, when applying for water use licences to take or store water, allocate shares of up to 75% to Black South Africans for such water use licences to be granted. Considering many companies within the agricultural and other sectors, including the forestry sector, are lawfully operating under the auspices of historical rights to use water that were issued before the National Water Act came into effect, there was an immediate concern that any future obligation that may be placed on such companies to apply for water use licences would result in the need to allocate shares in such companies of up to 75% to Black South Africans.

On 15 June 2023, the Department issued a media statement to clarify the extent of the transformation requirements in the draft Regulations which confirmed that:

“… the transformation requirements categories as envisaged in the current review of Regulations are only applicable to applications for new water use licenses and are not applicable to renewal of existing water use licenses, nor to the water use applications which will arise out of compulsory licensing (compulsory licensing refers to the process of re-licensing water use allocations which were made prior to the National Water Act coming into effect).”

The Department further confirmed that 98,5% of the available water resources in South Africa are currently allocated and that the transformation requirements would only apply in the context of new water use licence applications relating to the remaining 1,5% of water resources. To the extent that the wording of the draft Regulations remains a concern, the Department has encouraged the public to submit comments on these and other provisions in the draft Regulations and how such provisions can be amended and/or worded better.

The public has 60 days from the date of publication (19 May 2023) of the draft Regulations to submit comments.