Sakeliga opposes race-restrictive water licensing in the National Water Amendment Bill

Sakeliga has formally objected to the race-restrictive water-licensing regime proposed in the National Water Amendment Bill in written comments to Parliament's Portfolio Committee on Water and Sanitation.

The Amendment Bill aims to create a permanent, race-restrictive water licence system.

Sakeliga further objects to the proposed prohibition of private water rights trading and provisions allowing the state to arbitrarily curtail unused water allocations without compensation.

Abusing "redress" in order to discriminate

Currently, “redress of past racial and gender discrimination” is one of eleven factors to be weighed, alongside whether water will be used productively, what it will support, and what it will cost in resource terms. The current Amendment Bill intends to skew these criteria much further toward race-restriction.

The proposed Amendment Bill would elevate race preferencing (what it calls “redress”) to a mandatory, separate obligation in every licensing decision, regardless of an applicant's specific circumstances or the resource's technical requirements. It would further empower the responsible authorities, having regard to the "demographic composition of water users" in a water management area, to set aside specific volumes of water for black people.

The Amendment Bill provides no conditions for when the purported redress will be achieved, and no option for an applicant to review the outcomes.

This form of redress effectively functions as a mandate for arbitrary economic restriction, in which an applicant's race becomes both a reason to grant and a reason to refuse a licence. Officials are required to prioritise racial preference over the merits of an application. Applicants are subjected to criteria still undefined, with no clear mechanism for review.

This is unacceptable, since whether a proposed water use is efficient, beneficial, or environmentally sound is completely unrelated to an applicant's race.

Economically damaging consequences

Further provisions in the Amendment Bill pose severe economic risks.

Surplus entitlements cannot be sold and transferred to more productive users and must instead revert to the state for redistribution. Additionally, the state can curtail unused allocations based on unspecified criteria, stripping away statutory rights to compensation if enterprises collapse. This will destroy the water market and replace it with a bureaucratic exercise that exposes users to uncompensated losses, violating section 25 of the Constitution.

Sakeliga opposes these measures on several fundamental economic grounds, regardless of demographic ownership:

• Market mechanisms optimise resource utility: Voluntary transfers route water to higher-value uses that enable greater productivity without increasing total extraction. By prohibiting private water trading, the Amendment Bill effectively dismantles these efficient allocation mechanisms and replaces them with state-directed redistribution. This is a significant threat to responsible water management and conservation.
  
• Price discovery is beyond state capacity: Centralised authorities lack situational, subjective market information, and officials face no economic consequences for misallocation. 
  
• Non-transferability erodes asset value: Removing tradability of water rights and exposing rights holders to expropriation without compensation devalues and destroys bankable assets that back agricultural credit and insurance.
  
• Confiscation policies encourage waste of resources: The Amendment Bill penalises resource conservation by introducing a "use it or lose it" framework that forces maximum extraction to retain rights.
  
• Investment security requires long-term certainty: Long-term capital projects require secure, rationally permitted water access. Arbitrary ministerial curtailment without recourse fundamentally compromises the viability of orchards, mines, and processing plants.

The Amendment Bill in its current form poses tremendous harm, is constitutionally deficient, and is open to challenge on several grounds. Sakeliga reserves all rights to pursue legal and constitutional remedies should it proceed in this or any similar form.

Resources

• Read Sakeliga's full submission here.