State’s disregard for the law as alarming as the nuke deal itself

Over the past few weeks, the rule of law in South Africa has experienced a rollercoaster ride. The offices of the chief justice and those in Parliament have been broken into, in both cases with a measure of sophistication and without any meaningful responses to date from the police. By contrast, the courts have remained steadfast, as a recent decision of the high court in Cape Town has illustrated.

The case turned on the legality of the government’s nuclear power procurement programme. The legal challenge was based on a series of significant procedural irregularities, in particular the legality of the minister of energy and the National Energy Regulator of South Africa (Nersa) making two determinations, and the actions of the president and minister signing an agreement with the Russian government in relation to nuclear procurement.

On November 11 2013, the minister signed a determination under section 34(1) of the Electricity Regulation Act (ERA) in relation to the procurement of 9.6GW of electricity from nuclear energy. This was done with the concurrence of Nersa. On September 20 2014, President Jacob Zuma signed a minute approving an agreement with the Russian government in relation to a strategic nuclear partnership, which authorised the minister to sign the agreement. It appears that, after entering into the agreement with Russia, the government concluded agreements with China and France in late 2014, over and above earlier agreements with the United States of America in 1995 and South Korea in 2010.

Two applicants, Earthlife Africa and the Southern African Faith Communities Environmental Institute, argued that the so-called section 34 determinations had not been implemented in a lawful, reasonable and procedurally fair manner. As Judge Lee Bozalek noted, there was no serious dispute between the parties that the decision to procure 9.6GW of nuclear generation capacity would have far-reaching consequences for the South African public. The applicants contended that the costs, ultimately to be met by the taxpayer, could amount to R1-trillion, an estimate that was not disputed by government.

For this reason, the court held that a rational and fair decision-making process that would give rise to a section 34 determination had to make provision for public input, to allow interested and potentially affected parties to submit their views, present relevant facts and evidence to Nersa, before it took a decision on whether to concur with the minister’s proposed determination.

On the evidence, no open, public process was initiated. Nersa played an extraordinarily passive role, simply rubber-stamping the minister’s actions. As Bozalek noted, it failed to explain how it acted in the public interest without taking any steps to ascertain the views of the public or any interested or affected party.

Even more disturbing is that the section 34 determination made in 2013 probably would never have been communicated to the public had an application to the court not been launched and the record obtained. It was only in December 2015 that the minister gazetted the determination, two years after her decision. As the court noted, this significant delay not only rendered the decision irrational and unlawful but also violated the requirements of open, transparent and accountable government.

In December 2016, a further determination was made by the minister and published in the Government Gazette (December 14). This was probably done because of the lapse before the 2013 determination and the gazetting in 2015. The problem, yet again, was that this conduct breached all the procedural demands imposed by law.

A further important argument related to the legal status of the agreement with Russia. The applicants argued that the agreement had to be ratified by Parliament in terms of section 231 (2) of the Constitution in order to have legal effect. The government had entered into an agreement with Russia that contained binding commitments in relation to nuclear procurement, including providing the Russian Federation with an indemnity in respect of any liability that might arise out of any incident occurring in relation to any nuclear power plant to be constructed in terms of the agreement. Furthermore, the South African government made a commitment to Russia to afford a favourable tax regime in relation to the construction of the new nuclear plants.

The government argued that this was a technical agreement of a routine nature, which should be tabled in Parliament without more information, as envisaged in terms of section 231(3) of the Constitution. In other words, no ratification by Parliament was needed. But, from its breathtaking terms, it is clear that this agreement required scrutiny and thus debate by the legislature, as mandated in terms of section 231(2) of the Constitution. Accordingly, it can have no binding effect on South Africa until Parliament had performed its ratification role.

Wisely, the court eschewed any decision on the substantive issues as to whether South Africa needs nuclear power. The egregious disregard of public participation and the role of Parliament constituted more than sufficient grounds for the court to set aside both the 2013 and 2016 determinations under section 34(1) of the ERA, as well the agreement entered into with the Russian Federation and those with the US and Korea.

It is surely not disrespectful to the sustained logic and care of this judgment to ask who could possibly have advised government that it had a case to resist this application. So egregious is the lack of concern for the law exhibited by the executive that the answer may be that the law was treated as an unnecessary inconvenience standing in the way of a nuclear imperative. And that is as about as frightening a conclusion as are the contents of the actual agreement entered into with Russia. 

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