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Sisulu and her adviser implicated in R4bn Cape Town development with Amazon as tenant

A Cape Town civic organisation says former minister of water and sanitation Lindiwe Sisulu has “usurped” the powers of the water tribunal by uplifting the suspension of a water use licence issued to the developers of the multibillion-rand redevelopment of the River Club in Observatory, Cape Town.

US multinational technology company Amazon is the anchor tenant in the R4.6-billion mixed-use development, which will house its new African headquarters, and include residential units, office and retail space, a hotel, gyms, restaurants, conferencing, schools and event space.

A Mail & Guardian investigation has found that Sisulu overturned the appeal process giving the Liesbeek Leisure Properties Trust (LLPT), which runs the multibillion-rand redevelopment of the River Club, a water licence. The investigation also revealed that Sisulu’s special adviser, Jurgen Kögl, met with the LLTP on the matter. In 2012, Kögl was named by Amabhungane as one of the benefactors of former president Jacob Zuma.

Asked about this “special treatment” the department’s spokesperson Sputnik Ratau said the minister has the powers to direct otherwise. “The minister exercised her powers in terms of section 148(2)(b), based on all factors considered in the initial decision-making process, to allow the developer to continue exercising the water use licence. As a responsible government that has the ultimate duty to ensure that our nation’s water resources are being protected and conserved, the government also has a responsibility to ensure our nation’s water resources are being developed and used in a sustainable and equitable manner.”

Ratau said Sisulu’s upliftment of the suspension of the water use licence is “not necessarily common” but it does occur.“The opposite also happens where the minister might uphold an appeal and decline the issuing of a licence.”

When asked about Kögl’s meeting with the developers, Ratau said the department “embraces” Batho Pele principles. “One … is openness to the people served by the department. The minister’s advisers meet with people to understand the matters that are being considered so that they provide well-informed advice to the minister. The recommendation the minister considers is generated by the administrative component of the department.”

But Kögl never met with the Observatory Civic Association (OCA) — which since 2016  has been fighting against the development — as he did with the developers. 

The OCA has previously written to the head of Amazon, Jeff Bezos, urging the company to withdraw from the project, or Amazon’s investment would be “forever associated with environmental destruction, greed over protection of heritage and the environment and a complete abdication of any commitment to addressing climate change”.

The OCA describes how the significant infilling of the floodplain to raise it above the 1:100-year flood line would “materially and permanently change this well-loved, iconic, historically and spiritually important open space area”. 

Negative impacts, it said, would include the displacement of biodiversity habitat, steep gradients that will not provide opportunities for wetlands while “the current aquifer recharge function of the existing natural Liesbeek River will be lost”.

The department’s approach was flawed from the outset when it considered the site as degraded and “therefore developable” and that “rehabilitation of the water resources is only possible if the proposed development is authorised”, it said in its appeal, citing among its reasons is that the department failed to apply its mind independently or to have the reports submitted in respect of the water use licence application independently reviewed.

In his appeal submitted to the tribunal, Tauriq Jenkins, of the Goringhaicona Khoi Khoin Indigenous Traditional Council (GKKITC), said the approval of the licence is an “egregious offence” against indigenous people with whom the GKKITC is partnered with in opposing the development on the River Club site, where the first wars of colonial resistance were fought.

The Liesbeek and Black rivers are culturally and spiritually significant, Jenkins said, holding the “memory of when our ancestors defeated the Portuguese in 1510, and prevented our country from being a Portuguese slave route … We do not accept nor have we consented to the infill of the river. We do not artificially redirect sacred rivers … We do not consent to their destruction.”

On 21 June, the OCA lodged an appeal with the tribunal, an independent statutory body, which hears appeals in terms of the National Water Act, against the “flawed” licence issued to the LLPT on 6 June. When an appeal is lodged with the tribunal against a water use licence, the appeal by law, suspends the award of a licence.

However, on 28 June the LLPT, through its attorneys, Nicholas Smith Attorneys, a specialist environmental law firm, wrote to Sisulu asking her to invoke her statutory powers under the Act to uplift or reverse the suspension, describing how the appeal was without merit. 

In documents seen by the M&G, LLPT states that any form of delay or suspension of the project while an appeal process is underway “will expose the developer to severe financial prejudice” and that the appeal was a strategy to delay the project and to “scupper” it. 

The environmental, social and economic benefits of the development have been “unequivocally” established, comprehensively assessed and “found to be positive and beneficial”, the lawyers told Sisulu. “These benefits and the inherent sustainability of the development, were established … in the rigorous, exhaustive and lengthy environmental assessment and land use planning processes that preceded the grant of the water use licence … and led to the latter’s approval.”

Leslie London, the chairperson of the OCA, said his requests for a copy of the licence from departmental officials was refused and he was told he should request a copy through an access to information application. “Eventually, our lawyers took over and got the water use licence and reasons without a PAIA application and used that to lodge an appeal with the water tribunal.” 

London questioned why Kögl met with the LLTP in the matter. “He arranges to meet the developers in a matter where they have tried to secure the minister’s decision which will allow them to proceed with the development. If people with strings and influence and money can get access to the minister to get a favourable decision for a billion-rand development, then we are not surprised.”

A view of the land where the new River Club development is located. (David Harrison/M&G)

Kögl told the M&G that Sisulu’s decision was prepared by the regional office and the national office of regulations of the department, and referred questions to the department.

In their letter to Sisulu on 14 July, the OCA’s attorneys termed the LLPT’s request to lift the automatic suspension of its licence pending the appeal and to “continue at pace” with construction as an “improper and impermissible attempt” to undermine the constitutional rights of registered interested and affected parties in decision making. 

“The proposed development will be about 12 months into the estimated 30-month construction period by the time the appeals are heard,” rendering the appeal and those of persons yet to appeal, of no effect. It was for the tribunal to assess the impact of the proposed development on the environment and “not for the minister to usurp its power and attempt to do so”.

However, Ratau argues that London was informed of the legal channels to appeal the department’s decision and those to acquire access to any information he might require. “Officials, unless directed otherwise, will not disclose information to any other party other than the person it relates to.”

Sisulu, in a letter to the OCA’s attorneys, Cullinan & Associates, said she had taken account of a number of factors, “including but not limited” to the local economic development of Cape Town. “Therefore, rejecting the application to uplift the water use licence of LLPT will not be in the best interests of the people of Cape Town and the economy of the country.” 

The LLPT said it had engaged with a number of stakeholders in the department. “The LLPT has adhered to the state’s legislative and regulatory framework throughout our redevelopment planning and remains committed to continue doing so. To insinuate otherwise is unfounded and libelous.”

A key component of the licence application, according to the LLPT, is for physical works within watercourses, “essentially the rehabilitation of a canal, the transformation of a degraded watercourse into a swale and the creation of ecological corridors – aspects assessed by qualified specialists to be ecological benefits”.

It said a core feature of its development proposal is to naturalise and rewild the canalised course of the Liesbeek river, including the removal of the concrete base structure. This, it said, would turn this “hydraulically connected, but sterile, canalised aquatic environment into a 40m+ wide naturalised river and riparian area with significantly more ecological function than the hydraulically disconnected and transformed western course, and an ecological benefit of high significance”.  

The rehabilitated watercourse will include active floodplain wetlands, missing from both the western channel and the canal in their present condition.  Another key component is to establish a terrestrial and aquatic transition area in the hydraulically disconnected, western course comprising a mosaic of wetland pools, wetland swales and high quality terrestrial habitat for the Western Leopard toad. “This is not simply infilling as claimed by the OCA,” it said.

The department had “good reason” to grant the licence because of the project’s biophysical improvements and significant socio-economic and public amenity benefits, it said.

“It’s clear the OCA is wilfully ignoring the redevelopment application and final project plan, which sets out the vast cleaning and rehabilitation projects that will be undertaken at the developer’s cost to restore this important natural resource, which is currently severely degraded and under-utilised, into a beautiful, environmentally-sensitive and safe space for all Capetonians to enjoy.”

Ratau said the record of recommendation indicates that due process was followed. “The comprehensive technical reports provided by the applicant, in support of the water uses applied for, were assessed by the department’s specialists and conditions were carefully crafted to ensure the mandate of the department was given effect to.”

The OCA’s appeal notes how the environmental management department of the City of Cape Town lodged an appeal against the environmental authorisation of the project. The department said the environmental authorisation “does not give sufficient weight to the

environmental impacts that would result from the scale of development and infilling of the river corridor and floodplain associated with the development proposal, most of which is below the 1:10 year floodline. 

“These significant impacts will result in future risks and costs, particularly in the context of climate change and the reduced role of the site as green infrastructure which supports a resilient future. The development proposal is also in conflict with historical planning for the area as predominantly open space and part of the coast to coast greenway,” the department said.

In his appeal, Jenkins wrote of the “failure” of the applicant to acknowledge to the department that the site is of “enormous heritage importance” slated for national heritage status and for inclusion in the National Khoi and San Liberation Route, a presidential legacy project. “It is therefore wholly incorrect for the department to characterise the water sources as having no strategic significance in the record of recommendation. Such a statement is offensive to the Khoi groups who believe the site is of sacred importance.”

The matters at hand, Jenkins said, “cross the boundaries of mere construction of a building site on a floodplain but speak directly to South Africa’s ability to meet its international cultural obligations and the responsibilities of governments for custodianship of heritage resources for the nation”.

The LLPT said the “majority of First Nations leaders in the peninsula have voiced their support” for the project “during professionally facilitated engagement. “In contradiction to the GKKITC’s allegation, the HIA (heritage impact assessment) confirms that the cultural significance of the area is derived from ‘the history of and concentration of historic elements in this landscape as well as the symbolic values of the Liesbeek’.

“…No specific act of resistance, battle or encounter, whether tangibly manifested or intangibly articulated, have been attributed specifically to the River Club site … The Liesbeek river is an important heritage resource in the broader landscape, and its rehabilitation/naturalisation is supported by the First Nations Collective/would be a cultural benefit; and the First Nations narrative should be acknowledged, embraced and celebrated in design and planning for the River Club,” it said.

Heritage Western Cape, which has the statutory responsibility for regulating development that has the potential to affect heritage, did not accept the HIA for the project.

Earlier this month, the OCA and the GKKITC announced that they were heading to court against the LLPT and the government departments that approved the project “to prevent the wanton and baseless destruction of the intangible heritage of the Liesbeek Riverine Valley and the environmental harms inherent in this development”. 

Their petition has garnered over 56 000 signatures, while more than 60 organisations are backing Heritage Grading for the Two Rivers Urban Park, within which the River Club site falls, with support from “multiple professionals who are equally scandalised that the development could have been approved contrary to all planning, environmental and heritage considerations”.

On Wednesday, the Western Cape First Nations collective said that thousands of Khoi and San descendants arrived at the River Club to register on its database to benefit from employment and economic development opportunities in the redevelopment project.

“The Western Cape First Nations Collective has been a strong proponent of the development which will secure a significant heritage precinct for the First Nations descendants,” it said in a statement. 

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Sheree Bega
Sheree Bega is an environment reporter at the Mail & Guardian.

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