Zuptas left in a bind? Court sets aside nuclear deal with Russia, other countries

By Liesl Peyper, Fin24

Cape Town – It’s back to the drawing board for government, which has received a bloody nose in the Western Cape High Court where its nuclear procurement processes to date have been declared unlawful and set aside.

Nuclear power station

Judge Lee Bozalek on Wednesday ruled in favour of the case brought by Earthlife Africa Johannesburg and the Southern African Faith Communities’ Environment Institute (Safcei) against government.

In his ruling, he declared government’s attempts to secure 9.6 GW of nuclear energy were unlawful, including the initial determination to procure nuclear energy in 2013, the cooperation agreements signed with Russia, the US and South Korea, as well as former energy minister Tina Joemat-Pettersson’s decision to hand over the procurement of nuclear energy to Eskom late last year.

The court case was first launched in October 2015, with Earthlife Africa and Safcei challenging the government’s decision to buy 9.6 GW of nuclear power without debating it first in Parliament, thus flouting democratic processes.

The two organisations said in a joint statement issued on Tuesday that if the court bid is successful, it will put “serious roadblocks” in the way of the government and Eskom’s nuclear procurement process.

Fin24 earlier reported that the applicants argued in court papers that the government cannot afford the mooted R1trn nuclear price tag, and that it acted in secret when it signed an agreement with Russia as part of the procurement plans for a nuclear build programme.

The court declared that the minister’s decision on or about June 10 2015 to table the Russian IGA before parliament in terms of the Constitution is unconstitutional and unlawful, and it is reviewed and set aside.

The judge also declared that the minister’s decisions at about the same time to table certain other agreements before Parliament in terms of the Constitution unlawful and unconstitutional.

Former Minister of Energy Tina Joemat-Pettersson

These include the agreement for cooperation between SA and the US regarding peaceful uses of nuclear energy, and an agreement between SA and the Republic of Korea regarding cooperation between the two countries in the peaceful use of nuclear energy.

Earthlife and Safcei further argue that the Department of Energy acted unlawfully when it decided in December 2016 to move the procurement of nuclear energy to Eskom, as former energy minister Tina Joemat-Pettersson had not followed any public participation or consultative process before making the decision.

Joemat-Pettersson in a responding affidavit said she was not aware of any rule or court order that would prevent her from handing over the procurement process to Eskom.

Government’s lawyer Marius Oosthuizen SC said in counter arguments that the deal signed with Russia is not tantamount to a commercial agreement, but was only an agreement to work together.

He pointed out that an international agreement between two countries is not required to be debated in Parliament, as it is not a constitutional requirement.

Oosthuizen also argued that the government is within its rights to come up with policies such as nuclear energy as part of South Africa’s energy mix, and that it should not be preceded by a debate in Parliament.

He further questioned why “everybody” is “picking” on government’s agreement with Russia to when similar agreements had been signed with France and China.

The procurement of nuclear energy is the subject of fierce debate in the country. A number of energy experts argue that it is superfluous, as energy demand is lower than previously projected and nuclear energy would be too expensive.

The government, on the other hand, including power utility Eskom, maintains that South Africa needs nuclear energy as a form of base load power as coal-fired power stations are being phased out.

Finance Minister Malusi Gigaba repeated President Jacob Zuma’s earlier statement that nuclear energy would only be procured at a pace and scale the government can afford.

The affordability issue however was also raised by Fitch, which became the second rating agency to downgrade South Africa’s sovereign credit rating.

More of Zapiro’s magic available at his website www.zapiro.com.

In its statement issued on April 7, explaining the decision to cut South Africa’s rating to junk status, Fitch said under new Minister of Energy Mmamoloko Kubayi the programme is likely to move “relatively quickly”.

It further noted that under the finance ministry of Nhlanhla Nene, who was removed on December 9 2015, National Treasury said Eskom could not absorb the nuclear programme with its approved guarantees at the time. A nuclear build programme would increase contingent liabilities, Fitch said, which are already “sizeable”.

Source: http://www.fin24.com/Economy/breaking-court-sets-aside-nuclear-deals-with-russia-other-countries-20170426

SAFCEI media statement:

“Victory for justice and the rule of law and the people of South Africa”, is how Makoma Lekalakala of Earthlife Africa Johannesburg (ELA-JHB) summed up the court judgement.

After over a year and a half of court preparation for justice, ELA-JHB and the Southern African Faith Communities’ Environment Institute (SAFCEI) were finally able to block the unlawful and unconstitutional actions of the South African government in its nuclear deal.

The Western Cape High Court delivered its judgement this morning in the nuclear deal court case brought by ELA-JHB and SAFCEI against the South African government on the eve of Freedom Day and on the anniversary of the Chernobyl nuclear disaster. The timing of the judgement, before this important day in South Africa’s history and on the day of the nuclear disaster in Russia, adds to the sense of justice being done.

“Along the road to the courts, we experienced delays and dirty tricks, but we persevered and now we have been vindicated.  The court has found in our favour”, said Liz McDaid, SAFCEI spokesperson.

The judges ruled that the secret tabling of the Intergovernmental Agreements (IGA) with Russia, USA and Korean are unconstitutional and unlawful and that they be set aside. They also ruled that the decisions made (section 34 determinations) to procure nuclear are unlawful and unconstitutional and that they be set aside. The government and Eskom’s proposed procurement of nuclear energy was ruled unlawful and unconstitutional and was set aside, and any existing requests for proposals from nuclear energy providers have also been set aside, meaning they are made null and void.

The government has to pay the costs of the court case as well as the other legal costs incurred by SAFCEI and ELA JHB. And the judges declared that the government’s decision (section 34 determination) must have public participation as a part of its procurement process, and that Eskom as the procurer has been set aside, which means Eskom cannot go ahead with the nuclear procurement. In future the Minister and/or the National Energy Regulator (NERSA) would be required to conduct public participation before making any new decisions.

According to SAFCEI’s Liz McDaid: “SAFCEI and ELA-JHB based their case on the South African Constitution, which states that when it comes to far-reaching decisions, such as the nuclear deal, which would alter the future of our country, government is legally required to debate in Parliament and do a thorough, transparent and meaningful public consultation.”

Vainola Makan of Western Cape Right to Know (R2K) campaign says, “This contravention of the Constitution is the main reason that ELA-JHB and SAFCEI have taken the government to court. R2K supported this legal action as we need our democratically elected government to be transparent in their dealings and accountable to citizens for their choices.”

A lot has happened in the two months since the final arguments were heard in the nuclear court case in February 2017. The President’s late-night cabinet reshuffle at the end of March has spurred countrywide marches and a vote of no confidence is looming. Many more discrepancies have since been reported, with the nuclear deal being in the spotlight in the latest crises in political leadership.

SAFCEI founder and Patron, the Green Bishop, Geoff Davies says, “We are very pleased with the result. However, it may only provide a short-lived reprieve. It is sad to hear fresh corruption allegations almost daily, and as custodians for the Earth, we pray that our country’s leaders will be convicted by their conscience to do the right thing, for all SA’s citizens.”

SAFCEI youth ambassador, Siphokazi Pangalele says, “We are so glad for the result, but it is clear that we still have a lot of work ahead of us. In the past few weeks citizens have demonstrated their willingness to mobilise against corruption and the capture of our State. The nuclear deal is at the centre of it all.”

According to Adrian Pole, legal representative for ELA-JHB and SAFCEI: “The judgement means that there is no decision in terms of the relevant empowering statute that new nuclear generation capacity is needed and should be procured. The Russian agreement has been declared unlawful and unconstitutional for its tabling. Before any nuclear procurement can proceed, the Minister of Energy (in concurrence with NERSA) will be required to make a new determination in accordance with a lawful process that is transparent and includes public participation. This will necessarily require disclosure of relevant information that to date has been kept from the public, including critical information on costs and affordability.”

In November 2016, a coalition campaign to stop the nuclear deal was initiated by Kumi Naidoo, ELA-JHB and SAFCEI, who have been joined by many other organisations and citizens across a broad spectrum of interests.  From social grants, to large corporates, from jobs, to environmental health and our collective energy future – this issue affects us all.

“The organisations and citizens who are motivated by a demand for a just energy transition to sustainable energy are planning to launch an even bigger campaign soon to ensure this judgement is only the start of people holding the government to account on its energy deals,” added Makoma Lekalakala of ELA-JHB.

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