The outlook on the extractives upstream investment in South Africa: the environmental governance issue

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Though endowed with natural resources, South Africa's upstream investment continues to deteriorate. This is partly due to the depleting reserves and the country's policy perception, which ranks South Africa as a high-risk upstream investment destination. This study focused on the country's policy perception zooming in on the environmental governance of the extractives sector. Environmental governance in South Africa was fragmented. The fragmentation occurred in policies, institutions and, ultimately, governance. The consequences of this fragmentation were regulatory duplication and inconsistencies between the regulatory institutions, which manifested in delays and uncertainty, negatively impacting South Africa's competitiveness in investment. The industry's One Environmental System (OES) was effected to eradicate this fragmentation. However, this study demonstrates through case studies that the OES implementation was haphazard, creating uncertainty, amplifying the lack of cooperative governance and introducing compromised environmental management compliance through the competent authority for the industry environmental authorisations. This study finds that policy design, implementation strategies, and environmental regulatory coordination are vital to a country's competitiveness. It argues that these elements will promote competitiveness and stimulate innovation to develop new pollution-saving technologies that offset compliance costs and improve environmental and economic performance leading to sustainable development. The study concludes with the solutions to South Africa's OES system by referring to the Organisation for Economic Co-operation and Development's (OECD) integrated environmental permitting guidelines.