State of disaster: The rules that mean there are no rules

Karpowerships and even new nuclear build loom as new energy generation procurement rules may be thrown out of the window

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28/02/2023 15:05:41

.Image: Flickr/GovZA / compilation OUTA

State of disaster: The rules that mean there are no rules

The new state of disaster regulations appear to be intended to allow a quick contract with Karpowerships by fast-tracking or by-passing environmental authorisations, procurement rules, public participation and even legal challenges.

The regulations confirm OUTA’s concerns that the state of disaster will be used to remove regulatory provisions and oversight to enable the fast-tracking of unaffordable generation contracts.

OUTA is determined to continue our legal challenge to review the declaration of a national state of disaster and our challenge to the issuing of the Karpowerships’ generation licences by the National Energy Regulator (NERSA). Both these matters are before court.


The regulations: removing controls

A key aspect of the regulations is to enable the connection of unspecified new generation power.

OUTA is concerned that the Karpowerships contract, strongly promoted by Minister of Mineral Resources and Energy Gwede Mantashe in the face of civil society opposition, will now be fast-tracked through the system without the legally required due process. We are concerned at the possibility that the regulations might be used to fast-track new nuclear power, also without the safeguards of existing law. These are the projects that ran into strong public opposition and should be subjected to careful, public scrutiny and meaningful public consultation, not enabled through late-night regulations under the guise of a “national disaster” that has been 15 years in the making.

These regulations are of particular concern: 

  • Regulation 5(1)(d) which enables “implementing measures to remove impediments to the development or construction of new generation capacity”;

  • Regulation 5(1)(e) which enables “streamlining and expediting application and decision-making procedures for regulatory processes related to energy generation projects, including designating a single department or institution to receive and coordinate the processing of applications or stipulating maximum timeframes for decision-making”;

  • Regulation 5(1)(i) which enables “excluding upgrades, refurbishments, adjustments and repairs of existing energy infrastructure and existing generation, transmission and distribution facilities” from all environmental law; and

  • Regulation 5(1)(t)(3) which permanently legalises all actions taken in terms of the regulations even after the state of disaster is lifted.

The regulations effectively remove proper oversight, regulatory processes and public participation in decisions of enormous public importance and cost. This is the sign of a desperate government which seeks unfettered powers to pursue an agenda which is not in the public interest.

We have the examples of Medupi and Kusile, where state capture, greed and mismanagement resulted in overspending on badly designed power stations, which have yet to deliver as promised but which bankrupted Eskom and resulted in last week’s R254 billion bailout by taxpayers. Lowering the standards of good governance is a sure way to foster increased corruption.

The regulations give wide powers to all the ministers to “issue directions, as required, within his or her mandate”. It is not clear why all ministers would be granted these powers without a legal obligation to properly consult industry experts and Eskom itself, which are not mentioned in these regulations.

They call on “all institutions within national, provincial and local spheres of government” to ensure “continuous operation” of health facilities, water infrastructure and other specified infrastructure and services “including by installing alternative energy sources or other measures”. This is a wide authority for bankrupt and mismanaged organs of government to spend with profligacy by circumventing good governance processes.

OUTA believes that much of what Cabinet says the regulations are intended to achieve could have been done under existing law. There was nothing to prevent municipalities and provinces from arranging generators or back-ups for hospitals and water and sanitation infrastructure. Eskom has for years bought electricity from neighbouring states.

It is odd that the notion that different government departments (and spheres of government) must suddenly cooperate in terms of a state of disaster, while cooperative government is a principle already enshrined in our Constitution.

“We would like Government to make use of all the existing laws and emergency procurement regulations that are already at their disposal, including the introduction of specialists and professionals to fulfil positions of leadership within Eskom, to address this growing crisis,” says Advocate Stefanie Fick, OUTA’s Executive Director. “In addition, we would like to see less political meddling or board interference in executive operational matters. The use of a state of disaster and these regulations is the last resort of a failed state.”


OUTA’s challenge to the national state of disaster

OUTA’s legal challenge to the state of disaster, filed on 16 February 2023, is now due to be heard in the Pretoria High Court on an expedited basis. This arises from an agreement between the parties which was made an order of court on Tuesday 28 February.

In terms of the agreement, Part A of OUTA’s application – OUTA’s request to interdict the state of disaster pending the hearing of the main application – was removed from the roll. Part B – OUTA’s application for the court to review the decisions implementing the state of disaster – will be set down on the urgent roll as soon as possible.

In terms of the order, the head of the National Disaster Management Centre and the Minister of Cooperative Governance and Traditional Affairs must by 2pm on Friday 3 March provide OUTA with the record of all documents relating to their decisions and reasons for those decisions to classify the electricity crisis as a national disaster and declare the national state of disaster.

OUTA’s case cites eight respondents:

1.      The President, who announced the national state of disaster;

2.      The head of the National Disaster Management Centre, who classified the electricity crisis as a disaster;

3.      The Minister for Cooperative Governance and Traditional Affairs, who declared the national state of disaster;

4.      The Minister of Mineral Resources and Energy;

5.      The Minister of Public Enterprises;

6.      The Speaker of the National Assembly;

7.      The Chairperson of the National Council of Provinces; and

8.      Eskom Holdings.

The first five are opposing the application. The last three are cited only as interested parties and no relief is sought against them unless they oppose the application.


OUTA’s challenge to the Karpowerships

On 26 April 2022, OUTA filed an application for the review and setting aside of the decisions by the National Energy Regulator of South Africa (NERSA) to grant the three Karpowership independent power producer (IPP) generation licences. OUTA is asking the high court to review and set aside NERSA’s decisions to award generation licences to the three Karpowership IPPs, and order NERSA to reconsider these decisions.

On 23 January 2023, OUTA brought an application to compel NERSA to produce the full and unredacted record of its decision. Both this and the main application continue; although both NERSA and Karpowership are opposing both applications, only NERSA has filed answering papers so far.


More information

A soundclip with comment by Advocate Stefanie Fick, OUTA Executive Director, is here.

More information about OUTA’s case against the state of disaster is here.

More information about OUTA’s case against the Karpowership generation licences is here.

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