Rhino Oil and Gas Exploration South Africa (Pty) Limited v Normandien Farms (Pty) Limited and Another

Rhino Oil and Gas Exploration South Africa (Pty) Ltd (Rhino) lodged an application with the Petroleum Association of South Africa (PASA) for a petroleum exploration right in terms of section 79(1) of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). The application covered nearly 5,500 farms in KwaZulu-Natal, spanning just under two million hectares, some of which were owned by Normandien Farms (Pty) Ltd (Normandien). In February 2015, before lodging the application in April 2016, Rhino began a notice and consultation process through its environmental consultant, including letters to landowners and public meetings. The proposed activities were limited to non-invasive early-phase exploration using remote techniques such as aerial surveying, desktop studies, and flights over properties, with no hydraulic fracturing (fracking) proposed. PASA accepted the application on 15 April 2016 and gave notice in early May 2016. A further notice was published in the KwaZulu-Natal Provincial Gazette on 21 December 2016 calling for objections. Rhino submitted a scoping report which was accepted by PASA on 31 August 2016. Normandien's attorney attended public meetings for the first time in November-December 2016. On 13 December 2016, Normandien launched an urgent application in the Western Cape High Court to set aside PASA's acceptance of Rhino's application, the section 10 notices, the scoping report acceptance, and to interdict Rhino from submitting an environmental impact assessment and environmental management program. The High Court granted the relief sought. Rhino appealed with leave.

• Whether a party can challenge preliminary procedural steps in an application for a petroleum exploration right on review before any final decision has been taken and before suffering any prejudice
• Whether the acceptance of an application, giving of notice under section 10 of the MPRDA, and acceptance of a scoping report constitute administrative actions or clerical functions
• Whether the doctrine of ripeness precludes review where no final decision has been made and no prejudice has been suffered
• Whether the absence of prejudice to an applicant seeking review is fatal to the application
• The application of the principle of legality and common law review to preliminary administrative processes under the MPRDA

1. The appeal is upheld with costs, including the costs of two counsel. 2. The order of the court below is set aside and replaced with the following order: 'The application is dismissed with costs, including the costs of two counsel.'

An applicant for judicial review, even if establishing an irregularity in administrative or quasi-administrative processes, is not entitled to have the offending action set aside unless he or she has been prejudiced by it. A challenge to the validity of an exercise of public power that is not final in effect is premature - the application will not be ripe for adjudication and cannot succeed on that account. The appropriate criterion by which the ripeness of an action is measured is whether prejudice has already resulted or is inevitable, irrespective of whether the action is complete or not. Where preliminary procedural steps in an application for a petroleum exploration right under the MPRDA have been challenged on review, but no final decision has been taken and the challenger admits no prejudice has been suffered at that stage, the matter is not ripe for adjudication and the review application must fail.

The court noted, without deciding, the debate about whether the acceptance of an application for mineral or petroleum rights involves a 'decision' constituting administrative action under PAJA or is merely a clerical function. The court referenced the query by Cameron J in Aquila Steel (S Africa) (Pty) Ltd v Minister of Mineral Resources about whether the acceptance of an application involved some degree of evaluation, questioning the correctness of aspects of the earlier Mawetse decision, but stated it was not necessary to decide this issue in the present matter. The court also described the purpose of the consultation and notice requirements in the MPRDA as set out in Bengwenyama Minerals, emphasizing that the granting and execution of a prospecting (or exploration) right represents 'a grave and considerable invasion of the use and enjoyment of the land' and that the consultation process and its result are 'an integral part of the fairness process'. The court noted approvingly that Normandien may have been best advised to 'husband its powder' in anticipation of the battle that may or may not lie ahead, suggesting parties should be strategic about when they challenge administrative processes.

This case establishes important principles regarding the timing and prerequisites for challenging administrative processes in mineral and petroleum rights applications. It confirms that in South African law: (1) The absence of prejudice is fatal to a review application, even where procedural irregularities are alleged; (2) The doctrine of ripeness prevents courts from adjudicating challenges to preliminary administrative steps before a final decision has been taken; (3) Courts will not engage with 'academic situations' where no rights have been adversely affected and no prejudice has resulted; (4) Parties seeking to challenge administrative processes under the MPRDA and related environmental legislation must wait until they have suffered actual or inevitable prejudice before approaching a court; and (5) Pre-emptive challenges to ongoing administrative processes, before completion and before adverse effect, are premature. The judgment reinforces the principle that courts should not waste time with half-formed decisions whose shape may yet change. It provides important guidance on when review applications are ripe for adjudication in the context of complex, multi-stage administrative processes involving mineral and petroleum rights and environmental authorisations.