The Green Connection recently submitted written comments to Parliament calling for the South African National Petroleum Company (SANPC) Bill to be withdrawn. The eco-justice organisation warns that the proposed legislation could deepen South Africa’s dependence on oil and gas, while simultaneously weakening public oversight and exposing taxpayers to major environmental clean-up costs. The Bill would establish a single state-owned oil and gas company – consolidating iGas, PetroSA and the Strategic Fuel Fund (SFF) – responsible for oil and gas exploration, production, storage, transport and sales, including through new liquefied natural gas infrastructure in South Africa and abroad.

“The Bill would place an exceptionally broad range of oil and gas functions in the hands of a single state-owned entity – making strong oversight, transparency and public accountability essential,” says Lisa Makaula, Advocacy Lead at The Green Connection.

“That level of power is especially concerning because the Bill is climate-blind at precisely the moment when South Africa’s laws and international commitments require climate accountability.”

“It is not only shocking but very concerning that the Bill does not refer to climate change, not once, despite South Africa having recently enacted a Climate Change Act. Section 7 of the Act – which came into operation in March 2025 – requires government departments to review and if necessary revise, coordinate and harmonise their laws and policies to ensure that the risks of climate change are taken into consideration, and to give effect to the principles and objects of the Act (including climate change mitigation and adaptation). Ignoring climate change in a Bill of this magnitude is not merely an oversight because, fundamentally, it undermines the whole-of-government approach that South Africa has committed to,” she says.

Makaula continues, “By failing to acknowledge the climate crisis, the Bill risks locking the country into long-term fossil fuel infrastructure when public policy should be accelerating a fair shift away from oil and gas.”

Makaula also highlights a separate but equally important concern relating to PetroSA’s substantial legacy decommissioning and rehabilitation liabilities. She says, “These obligations are estimated to cost around R10 billion, yet only about R3 billion has reportedly been set aside. And since the Bill is contradictory on whether these liabilities will transfer to the new SANPC, along with PetroSA’s valuable rights and assets, or if it will be left behind in an underfunded PetroSA severed from its revenue streams, taxpayers could eventually end up footing these very expensive bills.”

Notably, in an April 2024 media statement the then-Department of Mineral Resources and Energy (now the Department of Mineral and Petroleum Resources) indicated that to kickstart the operations of the new entity, a ‘lease and assign model’ was being proposed to ‘strategically select what is leased and assigned to the SANPC by ring-fencing or isolating PetroSA’s legacy assets such as decommissioning liability and current operating challenges of the Gas to Liquid Refinery’.

The Green Connection further cautions that future oil and gas revenues could bypass the national budget. The State is entitled to a 20% carried interest in future oil and gas projects – a direct stake in production, separate from taxes and royalties. Under the Bill, revenue from this stake would flow directly to the new company to fund its operations, instead of being paid into the National Revenue Fund where Parliament normally determines how public money is spent. The organisation recommends that any such revenues be paid into the National Revenue Fund, or into a transparent, ring-fenced statutory fund dedicated to the just transition, decommissioning and rehabilitation.

“There are several strong reasons that Parliament should withdraw the SANPC Bill. However, if it should proceed, the Bill must be fundamentally amended to protect the public interest, strengthen oversight and ensure that any oil and gas revenues support the just transition – not further fossil fuel expansion,” adds Makaula.

Compared with an earlier 2023 version of the Bill, several oversight safeguards appear to have been removed. These include requirements for government approval of subsidiaries, foreign transactions and new funding sources, as well as stronger checks on the appointment and removal of senior executives. The Green Connection says these changes are concerning in light of South Africa’s recent experience of state capture and corruption at state-owned entities.

The submission also raises additional governance and process concerns, including the absence of dedicated board representation for affected communities or civil society, weak rules for disqualifying unsuitable board members, unclear whistle-blower protections and reduced checks on senior appointments. The Green Connection has asked Parliament to confirm whether the Bill should have been referred to the provinces because of its potential environmental and community impacts, and whether it should first have been considered by NEDLAC, given its significance for economic policy, labour, business and communities.

“Coastal communities and small-scale fishers are already living with the consequences of risky ocean and energy decisions,” says Neville van Rooy, The Green Connection’s Outreach Ambassador. “Any new state-owned energy company must be accountable to the people most affected by its decisions. Communities should not be left out of governance, consultation or the benefits of public resources.”

The Green Connection has requested the opportunity to make an oral submission when public hearings are held.