INSIGHTS INTO THE WULA PROCESS

The water-use licence application (WULA) process balances economic growth and environmental preservation. Nonhlanhla Mnengi, an associate at Webber Wentzel, provides some legal views and updates on regulatory shifts in water-use licensing.

Water-use licencing is a regulatory mechanism implemented by the Department of Water and Sanitation (DWS) to manage water resources and ensure that water use is undertaken in a responsible and sustainable manner. This involves an application process that is uploaded onto the DWS’s electronic water-use licence application and authorisation system (e-WULAAS).

The WULA process consists of strong BBBEE motivation, a public participation process, as well as specialist studies (e.g. geohydrological, flooding, hydrological, offset studies, and watercourse delineation) to define the sustainability of the suggested water use. Subject to the availability of free water in the catchment, a thorough report must be submitted to the DWS for approval. The applicant is liable for all costs incurred throughout the WULA process.

Legal representation

Mnengi believes that legal experts can assist in navigating the complex regulations and legal requirements around WULA. “There is often a general lack of understanding around the different types of water uses. While general authorisations and Schedule 1 water-use activities do not require a water-use licence, there are other water-use activities that are regulated under Section 21 of the National Water Act (No. 36 of 1998) and require a licence. To add to complications, there are also general existing water uses that had general authorisations before the National Water Act was promulgated in 1998. They do not have to apply for a water-use licence. Often, there is confusion around the difference between a registration certificate and a water-use authorisation, which can result in water being used illegally,” she explains.

Application process

To process any WULA, there are generally six steps to follow:

Step 1 – Pre-application process (Phase 1):

This phase begins as soon as one receives a licence application. Step 1 is used to determine information requirements to compile an application. Missing information must be filled in and initial feedback may be received before the application fee is paid. This assists with the decision to either continue or withdraw from the process.

The DW758 (company registration) form must be completed with business information as well as the water uses applied for, details of the property owner and where the water uses will take place (property details).

The DWS can reject an application on the basis that not all of the documents have not been provided. It is advisable to meet with the DWS in phase 1 for guidance to determine the exact requirements for an application, ensure that all possible aspects are addressed and avoid the application being deemed inadequate at a later stage.

Step 2 – Application initiation (Phase 2):

The DWS establishes the necessary information required to compile a technical report that supports the application. This is based either on the site inspection or the information in the form.

Here, it is advisable to appoint technical specialists to provide input into the report. A legal team can then evaluate the legislation that is triggered by a particular legislation and provide counsel accordingly.

Step 3 – Screening (Phase 3):

This is the screening of the technical report and the acceptance or rejection thereof.

Step 4 – Processing and finalising: The current step consists of the evaluation of the technical report where the information is assessed by specialist groups, together with the recommendation to the delegated authority at DWS for a decision.

Step 5 – Decision by the delegated authority: The DWS (and/or a delegated authority like a municipality) will either refuse or approve the application after the consideration of all relevant information.

Step 6 – Implementation: The regional office will begin implementing the licence together with issuing and highlighting the conditions attached to the water use licence. Depending on the difficulty of the application, the potential consequences and its benefits to the general public, it may take up to 300 days to process an application for a water-use licence. Applicants may be requested at any time to provide more information, to invite comments from interested parties and affected parties, or to advertise the proposed water use.

Public participation is requested by Sections 40 and 42 of the National Water Act, which provides for the responsible authority as well as assessing the likely effect of the proposed licence on the protection, preservation, use, management, development, and control of the water source.

“While the DWS has made great efforts in shortening the WULA process, it can still take hundreds of days, and it is important for an applicant to factor this into their planning process. It is also essential to have funds set aside for technical specialists. Once a water-use licence is granted, we also advise our clients to never let it expire, as they can incur fines and a substantial cost when applying for a new license and there may be new compliance conditions,” explains Mnengi.

Latest developments

Last year, the Constitutional Court ruled that water rights holders are entitled to temporary transfer of such rights in accordance with the provisions of the National Water Act. It confirmed that receiving financial compensation for transferred water-use entitlements is neither prohibited nor unlawful in South Africa. A part or full water-use entitlement can be transferred, provided the water comes from the same source, it is within the same vicinity, and it is for a same or similar purpose. Once the temporary transfer is complete, the new licence holder will be liable for all fees related to the maintenance of that licence. Owners of water-use entitlements have the potential to earn an income.

Another development was the draft revision of the regulations regarding the procedural requirements for WULA.

“The transformation requirements of the National Water Act have been interpreted to require certain sectors 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. According to statistics drawn from WULs issued since 1998, 75.93% of water has been allocated to historically advantaged individuals, leaving only 24.07% allocated to historically disadvantaged individuals,” adds Mnengi.

“This would only be applicable to applications for new water-use licences and are not applicable to renewal of existing water-use licences, nor to the water-use applications which will arise out of compulsory licensing. Compulsory licensing refers to the process of relicensing water-use allocations which were made prior to the National Water Act coming into effect,” she clarifies.

The DWS 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.

Another more contentious development in terms of the National Water Act is that it appears that company directors and municipal managers will be personally liable, in fine or imprisonment, for water law violations caused by their companies or municipalities.

In terms of Water Services Amendment Bill 2023, water service providers will be compelled to be licensed within 12 months of the regulations being published, with the Minister being given increased powers to enforce any failures by water service providers.

“There are a host of other amendments to the National Water Amendment Bill 2023 and Water Services Amendment Bill and I would encourage comments to be submitted to the DWS, as the submission date was due 16 January 2024 and has now been informally extended to 1 March 2024,” adds Mnengi.

“South Africa is a water-stressed country, with climate change exacerbating water supply and quality. As a custodian of South Africa’s water resources, the DWS has the difficult task of protecting water resources while still encouraging the growth of our economy by allowing businesses to use water responsibly. This is where the WULA process comes in – to assist in reducing negative impacts to finite water resources,” she concludes.

Nelson Mandela Bay Municiplaity (NMBM) not only improved upon i ts 2014 Blue Drop score but achieved the highest scoring results within the Eastern Cape province. Kirsten Kelly talks to Chandre Barnard, deputy director: Bulk Supply & Reservoirs from NMBM, about their success.