Page 80 - Q&A
P. 80

Can you sell your water use entitlement
            to a neighbour?


            July 2020
            “With all attention being on Covid-19, people have forgotten that large parts of
            our country are still suffering from a prolonged drought. The drought and our
            suffering economy have made me look into selling my water use to a neighbour
            who urgently needs it and is willing to buy such from me and which money I
            could really use. However, I’m not sure whether I can in fact sell my water use to
            him. Is this possible?”
            Water  use  in  South Africa  is  mainly  regulated  in  terms  of  the  National Water
            Act, 36 of 1998 (“Water Act”). The Water Act clearly states that water is a scarce
            and unevenly distributed resource and that Government has a responsibility
            to manage water use and distribution in a sustainable way to the benefit of
            all users. Water is a natural resource that belongs to all people and to achieve
            sustainability and equality, and to protect our water resources, Government
      Property  must manage the use and distribution thereof.
            Chapter 4 of the Water Act deals with water use. Water use is broadly defined
            to include the taking and storing of water, activities which reduce stream flow,
            waste  discharges  and  disposals,  controlled  activities,  altering  a  watercourse,
            removing water found underground for certain purposes, and recreation.
            In general, water use must be licensed unless it is listed in Schedule 1, which
            mainly deals with use for domestic and not commercial purposes.
            The North Gauteng High Court recently had occasion to consider whether
            licensed water use can be transferred and/or sold in terms of the Water Act.
            In reviewing the position, the court held that trading in water is not permissible
            as it would allow the holders of water use entitlements to choose who the
            recipients of such water would be. The Water Act also does not provide any
            basis for allowing the holder of water use rights to sell such to a third party, as it
            is ultimately the relevant Minister’s responsibility to ensure that water is allocated
            equitably and used beneficially in the public interest.
            Accordingly, the sale of water use entitlements by holders in private agreements
            would discriminate against those who cannot afford the price determined
            unilaterally by the holder thereof. Such a practice would therefore establish
            a  monopoly  of  access to water  resources  by established  farmers  with the
            financial resources to purchase water use and would frustrate equal access
            to water and keep historically disadvantaged persons out of the agricultural
            industry. As such the court found that water use entitlements cannot be sold to
            a neighbour or any other person.

            Should this case be appealed, one will have to monitor whether the position
            changes, but for the moment water use entitlements cannot be sold to a
            neighbour or any other person.



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