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The legislative process is an important process but loses a sense of legitimacy if bills are pushed through Parliament in a rush. When three bills affecting the energy sector are pushed through at the same time, it looks like Parliament is rushing to clear its desk before the 2024 elections.

These are three bills affecting the energy sector out for comment: the National Nuclear Regulator Amendment Bill and the Electricity Regulation Amendment Bill, both with comment by 13 October to the Portfolio Committee on Mineral Resources and Energy; and the National State Enterprises Bill, with comment by 14 October to the Portfolio Committee on Public Enterprises. OUTA submitted comment on the National Nuclear Regulator Amendment Bill and the National State Enterprises Bill.

At least two of these bills have been long awaited: OUTA’s parliamentary oversight report for 2023, Parliament: The fairytale that became a nightmare, noted the delay in the Electricity Regulation Amendment Bill and the National State Enterprises Bill, and the confusion over whether there is still a plan for a Shareholder Management Bill (see here).

Parliament seems to be struggling to keep up with the public consultation process, as its webpage listing bills out for comment omits the state enterprises bill and lists only four bills. The Parliamentary Monitoring Group lists nine bills and eight other documents currently out for comment. 

NNR AMENDMENT BILL

Although various additions to the current legal framework are welcome, we feel that Parliament has missed a golden opportunity to address the independence of the National Nuclear Regulator (NNR).

South Africa is a member state of the International Atomic Energy Agency (IAEA). South Africa also ratified the 1996 Convention on Nuclear Safety. In 2013, the IAEA visited South Africa with the aim to share lessons from the Fukushima disaster. A report was subsequently released and brought under the attention of the South African government.

Amongst other things, the IAEA found that: “The Minister of Energy and the National Nuclear Regulator (NNR) are identified in the two Acts as having regulatory functions over nuclear activities. Considering that the Minister of Energy is also in charge of the promotion of nuclear energy and given that the Minister appoints the NNR Board and CEO, approves NNR’s budget and promulgates regulations, the INIR team is of the view that the separation between the regulatory functions and the promotional activities is not adequate, thus calling into question the effective independence of the NNR.” (OUTA’s emphasis.)

This finding speaks for itself and implies that there needs to be proper separation between the Minister and the NNR. We believe this can be achieved though amending the NNR Act by transferring the powers conferred upon the Minister of Mineral Resources and Energy to another ministry which is not biased towards a particular technology, such as the Ministry of Forestry, Fisheries and the Environment.

It is imperative that the legislative framework and governance structures around nuclear energy are able to withstand political interference and uphold the independence of all regulatory bodies, including the NNR.

We are aware that the majority of our public institutions are set up in such a way that cabinet members are able to apply unfettered control, such as having the sole discretion to hire and fire boards of SOEs. We need not elaborate on this point any further but need only to read our daily news feed.

“The bill in its current form is a move in the right direction but does little to ensure, enforce and promote independence of the NNR,” says OUTA’s submission.

Reform will certainly not happen overnight, but that does not mean that civil society should stand back and wait for reform to come.

A copy of OUTA’s submission on the NNR Amendment Bill is here.

NATIONAL STATE ENTERPRISES BILL

Although a noble idea, this bill falls short of being anything to write home about. It envisions doing away with the Department of Public Enterprises – a department at the centre of state capture – and replacing it with a holding company under which our state-owned entities will be controlled. The entities are not specified, as this bill sets up the holding company only. 

In theory such an arrangement would naturally promote good governance based on established corporate principles and best practice. However, centralisation of power is a massive feature in this proposed holding company and is somewhat counterintuitive if South Africa wishes to move on from a dysfunctional public service.

The bill proposes the State as the only shareholder of the holding company – and it is only the President, as the shareholder representative, who could “hire and fire” the board. Of course, the President may transfer any powers or functions in terms of the bill to any cabinet member. It is not farfetched to believe that the holding company could maintain a culture of cadre deployment if professionalisation of the private sector is not incentivised or properly implemented.

“We believe that much-needed independence will not be achieved through the bill in its current form,” says OUTA’s submission.

As the bill stands now, a lot of homework still needs to be done – but homework with sound input from the private sector. It is therefore imperative that big business and the private sector in general participate in any subsequent public consultation processes.

The need for reform of the public service cannot be overemphasised, which is why thought leaders and heavyweights across the business landscape need to step up to the plate.

A copy of OUTA’s submission on the National State Enterprises Bill is here. 

More information

A voicenote with comment by OUTA Legal Project Manager Brendan Slade is here.