JOHANNESBURG — In a case that pitted rural South African communities against the energy giant Shell Global, a judicial panel ordered a halt this week to the company’s plans to explore a pristine coastline for oil and gas, saying the residents were not properly consulted on the project.
In revoking Shell’s rights to explore the seabed of South Africa’s Wild Coast, a panel of three judges sided with rural communities, fishermen, traditional healers and environmental activists against the company and South Africa’s government.
The ruling, delivered on Thursday in a court in South Africa’s Eastern Cape Province, sets aside the exploration rights that South Africa’s Department of Mineral Resources and Energy granted to Shell and a local partner, Impact Africa, in 2014, as well as the government’s decision to renew those rights over the objections of people living on the coastline.
While the court ruling can be appealed, it is uncertain whether Shell or the government will be enthusiastic about a fight. Shell has said it is reviewing the court decision, but in the past it has retreated from projects when public opposition and regulatory hurdles made financial and political costs prohibitively high.
However, even if Shell should walk away, analysts say, the court ruling does not preclude another company from gaining the prospecting rights.
Nevertheless, the ruling represented a rare victory for environmental interests in a country that imports most of its oil and has long favored development over the environment.
South Africa’s Wild Coast is an unspoiled string of beaches, where forests roll down into the crystalline waters of the Indian Ocean. While fishing and farming villages dot the coastline, the area is also a popular tourist destination, a place where cows are known to share the beaches with sunbathers and swimmers.
Local residents were alarmed last year when Shell announced plans to conduct a seismic survey, using sound waves to search for the deposits of oil and gas its geologists suspected lay hidden beneath the Indian Ocean seabed. They got together and, with the aid of environmental lawyers and activists, filed suit, saying the government had not properly taken into account the concerns of the community before granting the exploration rights.
The judicial panel concurred, saying the process also failed to properly notify the people living along the coast. Communities said they first heard of Shell’s plans 30 days before the seismic activity was set to begin. A notice in English and Afrikaans language newspapers did not reach remote villages, where in any case isiXhosa is the main language.
“The heart of the case was about whether they have a right to be consulted or not,” said Johan Lorenzen, one of the attorneys who represented the community. “It’s not inherently an anti-oil and gas judgment.”
Since the ruling applies only to the process followed by Shell, Mr. Lorenzen said, another energy company could purchase the exploration rights and begin prospecting, if it were to follow the correct procedures in consulting the community.
Yet, by positioning the communities as custodians of the environment, the ruling could set a precedent for objections to the nearly 150 oil and gas surveys around Africa’s coastline, said Thandile Chinyavanhu, an activist with Greenpeace Africa.
Nontsindiso Nongcavu, a fisherman who joined the case as a plaintiff, agreed that the judgment gives communities a needed weapon to fight for their land. “Our government leaves us nowhere,” said the 42-year-old, who supports a multigenerational family trapping rock lobster.
In December, Greenpeace was among several groups that tried to stop the seismic survey on the basis that it was a threat to marine and coastal life, but a judge ruled that Shell’s mitigation measures would be enough to minimize the harm.
South Africa is the largest consumer of oil and petroleum products in Africa, but has limited oil reserves and is highly dependent on oil imports, particularly from the Middle East. Nearly all of its proven reserves are offshore.
In the grip of an energy crisis, South Africa’s government has embraced fossil fuel development as a solution, despite its stated commitment to green energy. The minister of mineral resources and energy, Gwede Mantashe, a powerful voice in the governing African National Congress, has vociferously defended South Africa’s exploration for fossil fuels. Last year, Mr. Mantashe described environmental groups as “apartheid and colonialism of a special kind, masquerading as a great interest for environmental protection.”
South Africa’s Ministry of Forestry, Fisheries and the Environment has historically played a much more muted role, including a slow response to sanctioning the national power supplier, Eskom, for its polluting coal-fired power stations.
A spokesman for the Ministry of Mineral Resources and Energy, Natie Shabangu, said the government would study the judgment and explore possible recourse.
The court decision comes at a time Shell is beginning a retreat from oil, as it attempts to pivot to cleaner energy. It has set a goal of net-zero emissions by 2050, and set a target of reducing oil output by 2 percent a year by 2030 through divestments and lower investments in exploration and production. When Shell originally received exploration rights to start seismic operations in 2014, it came at a time when the company was looking to expand production.
Since then, a decision by a Dutch court in May 2021 ordered the company to cut greenhouse gas emissions by 45 percent by 2030 compared to 2019 levels, and the company has filed an appeal.
Even if Shell drops its seismic plans, whether voluntarily or by force, that may not stop other oil companies from exploring offshore.
“Shell and others have to optimize their portfolios for assets that are both low carbon and low risk,” said David Goldwyn, who was a top State Department energy official during the Obama administration. “If South Africa is no longer low risk, Shell would be inclined to move elsewhere.”
Lynsey Chutel reported from Johannesburg, and Clifford Krauss from Houston.
