/ 26 May 2017

The hurdles nuclear must now clear

Come clean: Activists in Durban protest against the use of nuclear power. With the court ruling
Come clean: Activists in Durban protest against the use of nuclear power. With the court ruling

Early this week, the new minister of energy, Mmamoloko Kubayi, said she did not want to go to jail over nuclear procurement.

Her three-month-old son Sandile needed her, she told The Times.

The question of nuclear procurement has been so politically fraught that her concerns are no surprise.

But the recent Western Cape High Court judgment gives her a “clean slate” to start again, as Judge Lee Bozalek said in his judgment.

Adrian Pole, the attorney who represented Earthlife Africa Johannesburg and the Southern African Faith Communities Environment Institute in the case, explained some of the potential implications the judgment has for future processes.

The court ruled on three key things: the three international agreements in place with Russia, the United States and South Korea regarding nuclear energy; two determinations made under section 34 of the Electricity Regulation Act (ERA); and any requests for information and requests for proposals by nuclear vendors based on these determinations.

Agreements unlawful

The court ruled the three intergovernmental agreements were unlawful and unconstitutional because they did not comply with key requirements, specifically section 231, of the Constitution.

It outlines two ways in which international agreements become binding, said Pole. Section 231(3) allows routine agreements of a technical or administrative nature to be become binding on being tabled in Parliament, without the approval of the National Assembly or National Council of Provinces, provided this is done within a reasonable time.

Section 231(2) deals with all other agreements, and requires that they go through all the parliamentary approval processes, which include public participation, and they must be ratified by both houses.

The 2014 Russian agreement, which the state tabled under section 231(3), was found to be more than simply a technical agreement, Pole said, and the court held that it would have had to go through the processes outlined in section 231(2).

The agreement, unlike those with the other countries, went so far as to indemnify the Russian government and its entities from liability in the event of a nuclear incident and to provide them with tax concessions.

The judgment said the agreement could not be considered “routine” as the “detail and ramifications are such that it clearly required to be scrutinised and debated by the legislature”.

The other two agreements, according to Pole, were more technical in nature and more typical of co-operative intergovernmental agreements. They had been set aside because, although they were tabled correctly under section 231(3), this was not done within a reasonable time. The US agreement was tabled 20 years after it was signed and the South Korean agreement almost five years after it was signed.

If the government chooses to renegotiate all the agreements, they need to be put through the appropriate tabling mechanism, said Pole. “Ideally they should go through section 232(2) so that they can be debated in Parliament and enable public participation,” he said.

The minister said in her budget vote speech last week, following the judgment, her department would sign new intergovernmental agreements with the five countries and submit these to “Parliament within reasonable time”.

New determination

Pole said the state will have to issue a new section 34 determination to do that.

This is the legislative framework under which any decision to acquire new electricity generation capacity must be made. As it stands, with both determinations having been struck down, “there is no lawful decision by the DoE [department of energy] and Nersa [National Energy Regulator of South Africa] that new nuclear power is required and should be procured”, he said.

The court found that two determinations — one in 2013 and one in 2016 — were unlawful and unconstitutional. Although section 34 allows the minister to make determinations on additional generation capacity, it must be done with the concurrence of Nersa. In turn, the regulator is required, under section 10 of the National Energy Regulator Act, to make independent decisions “within a procedurally fair process in which affected persons have the opportunity to submit their views and present relevant facts and evidence”.

Importantly, the court found that in both instances Nersa failed to give the public a chance to comment.

Pole says that, before issuing a section 34 determination, the minister has to carry out extensive public participation.

“But a significant part of procedural fairness is having access to the information on which a decision is going to be based,” he said. Transparency in the nuclear procurement process, including access to cost estimates and feasibility studies, has been at the heart of this case, and “public participation without that kind of information being made available would render it, in itself, unfair”, he said. “It can’t be a box-ticking exercise. It requires meaningful public participation.”

Although the minister will not appeal the judgment, she said her department will review all other section 34 determinations made to ensure their compliance. The departmental review will cover the many renewable energy projects the country has already embarked on.

The minister’s decision may be “conceptually correct”, said Pole but it is unlikely to succeed. According to legal precedent, administrative action remains lawful unless it is set aside by a court review. In other words, to challenge all other section 34 determinations would require a person to take them to court.

Assuming that the other section 34 determinations suffered the same procedural flaws as the nuclear one, there are potentially two problems with this, said Pole. The first is the length of time that has passed since the determinations were made. Second, the court would consider a wide range of other issues, including what has happened since the decision was made and what prejudice would be suffered if it was set aside. In the case of many determinations, procurements have been made, agreements signed and power plants built.

The judge also set aside any requests for information or proposals that were based on the previous section 34 determinations. This put paid to the requests for information that Eskom released in December last year, and which it terminated after the court decision, as well as the request for proposals, which was expected later this year.

Bigger picture

There are other ramifications, Pole said. For energy planning purposes, an integrated energy plan (IEP) and an integrated resource plan (IRP) should be in place.

The IEP is an overarching road map of the energy choices the country will make in the future, but the plan has not yet been finalised.

The IRP deals specifically with future electricity needs and is conceived to be updated every two years. A version was gazetted in 2010 but, despite various updated drafts, including one published last year, the government has yet to formally adopt an updated IRP.

The energy needs of the country have shifted significantly since the IRP 2010 was published, and any new section 34 determinations based on it would probably render them irrational or unreasonable, and subject to review, said Pole.