South Africa

#CabinetReshuffle: David Mahlobo’s appointment comes days after DEA gives Eskom nuclear site authorisation

By Marianne Thamm 18 October 2017

An early warning that something was about to happen with regard to President Zuma and the government’s bid to ram through a cripplingly costly nuclear procurement programme became evident last week, when the Department of Environmental Affairs granted a nuclear site permit to Eskom to build a new nuclear plant in the Western Cape. The shuffling of former Minister of State Security, David Mahlobo – a frequent flier to Moscow – into the key post of Minister of Energy has confirmed fears that President Zuma and the shadow state is desperate to clinch the nuclear deal. The plans will meet massive resistance from across South African society. By MARIANNE THAMM.

When a notification arrived on Monday that the Department of Environmental Affairs had granted an environmental permit to Eskom providing the go-ahead for the construction of a 4,000 megawatt nuclear power plant at Duynefontein, close to the more than 30-year-old Koeberg nuclear plant on the West Coast, Liziwe McDaid knew something was afoot.

We got the notification on Monday, it was sent out on Thursday but was dated Wednesday 11 October. We have 20 days in which to respond,” McDaid, co-ordinator for the South African Faith Communities Environment Institute (SAFCEI), told Daily Maverick.

SAFCEI and Earthlife Africa were the two Davids to government and Eskom’s Goliaths, securing a High Court victory in April 2017 that government and Eskom’s signing of a nuclear agreement with Russia as well as a Section 34 determination to procure nuclear power had been illegal and unconstitutional.

Judge Lee Bozalek also ruled that steps taken since the 2013 and 2016 Section 34 determinations (that South Africa required 9.6GW of nuclear power) and that this be procured by Eskom rather than the Department of Energy, be set aside. The High Court also ruled that inter-governmental agreements signed with Russia, the United States and Korea are illegal.

Section 34 of the Electricity Regulation Act refers to new generation capacity and that decisions taken by the Minister of Energy in terms of this section must be concurred with by National Energy Regulator of South Africa (Nersa).

Construction of the planned Generation III pressurised water reactor type nuclear power station comprising of two or three nuclear reactor units will only go ahead once the National Nuclear Regulator has granted an installation site licence.

McDaid said SAFCEI’s legal team was considering a “host of options” but that the organsation would not “let it slide. If we ever needed mass support, this is the time,” she said.

Eskom last week welcomed the authorisation of the site in the Western Cape, saying that at the beginning of the project, five sites had been considered. But Eskom’s plans of using its preferred choice, Thyspunt near Cape St Francis had been scuppered by the Department of Environmental Affairs, after representations by anti-Thyspunt environmental and cultural activists.

The replacement at Energy of Mmamoloko Kubayi, only five months in the job, with the former Minister of State Security David Mahlobo during President Zuma’s surprise Cabinet reshuffle on Tuesday has been met with widespread condemnation across South African society.

Greenpeace Africa Climate and Energy Campaigner Penny-Jane Cooke said, “The announcement of the second Energy Minister in five months is very similar to Eskom’s recent announcement that they will be rotating their CEO position among their executives. The lack of leadership being shown by such instability in one of the most critical ministries is astounding and Greenpeace deeply questions the real reasons behind this decision.”

Cooke added that it was well known that Mahlobo enjoyed a close relationship with President Zuma and shared his nuclear ambitions, a matter that was “deeply concerning”.

The fact that this announcement comes only months before the much-awaited Integrated Resource Plan and Integrated Energy Plan are due to be finalised means that vested interests and the protection of the nuclear agenda are clearly playing a role in Cabinet appointments,” said Cooke.

EFF leader Julius Malema at a press conference on Tuesday said that Zuma had essentially reshuffled his Cabinet in order to ram through the nuclear deal.

They took the Russians’ money. Now they have to deliver on the nuclear deal‚” Malema told media gathered at the party’s headquarters in Braamfontein.

DA spokesperson on energy, Gordon Mackay, said South Africans should be “deeply concerned” that the state was securitising the energy department and the reshuffling was the “clearest indication that the state is dead set on pursuing nuclear”.

Business Unity South Africa (BUSA) said that the sudden changes at the Energy Department created a lack of stability in the crucial energy sector in South Africa.

BUSA has consistently requested the Department of Energy and the minister to ensure that the Integrated Energy Plan and Integrated Resource Plan take into full consideration business views that have been submitted. The change in minister may well take the country back another step in this regard, thereby delaying the finalisation of a sustainable and affordable energy solution for the country,” BUSA said in a statement issued on Tuesday.

Zuma’s reshuffling also comes in the slipstream of a comment by Minister of Finance Malusi Gigaba on Sunday after meetings in Washington with the International Monetary Fund that South Africa could not afford the nuclear deal.

The South African economy at the present moment is not in a position where it can be able to carry the burden of nuclear technology, therefore we cannot proceed with that programme at the present moment until the economy has grown sufficiently and there is vast demand,” said Gigaba.

It is believed President Zuma’s decision to replace Kubayi with the loyal and pliant Mahlobo was because Kubayi might have proved a little too independent for his liking.

Last month Kubayi confirmed that she was investigating several senior officials in her department with regard to irregular nuclear tenders worth around R80-million. Kubayi’s office had confirmed that it was investigating a possible violation of National Treasury regulations in the awarding of the tender to nuclear transactional adviser Mahlaka-A-Phalala (M-A-P).

In May, Kubayi confirmed that strategic fuel stocks had been sold and not “rotated” as her predecessor Tina Joemat-Pettersson had claimed. Kubayi, in her budget vote speech, highlighted problems in PetroSA and the Central Energy Fund. She stated at the time that the CEF would be restructured to ensure accountability and efficiency.

Kubayi also appeared to be willing, after the April High Court SAFCEI and Earthlife Africa victory, to be more transparent with regard to the nuclear programme.

In June Kubayi led a delegation to an international forum in Russia. There she met with her Russian counterpart as well as executives from Rosatom, the state-owned energy company, to discuss issues around South Africa’s nuclear build programme.

But what are the implications now of the April High Court ruling?

Adrian Pole, legal representative for SAFCEI and Earthlife in the matter, said the court had ruled on three matters: the international agreements with Russia, the US and Korea; the two Section 34 determinations, and any requests for information or proposals by nuclear vendors based on these Section 34 determinations.

Pole said there were two ways in which international agreements became binding, through Section 231 (3) of the Constitution which 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) dealt with all other agreements and required that these undergo parliamentary approval processes, including public participation, and be ratified by both houses. The High Court in April found that the 2014 agreement with Russia (tabled by the state under section 231 (3) had been found to be more than a technical agreement and that it would have to undergo processes outlined in Section 231 (2) of the Constitution.

The agreement with Russia in particular indemnified the Russian government and its entities from liability in the event of a nuclear incident and also provides it with tax concessions.

Judge Bozalek found that this agreement could not be viewed as “routine” as the detail and ramifications are such that it clearly required being scrutinised and debated in Parliament.

Pole said the two other agreements – with Korea and the US – were more technical and more typical of co-operative international agreements and while these agreements had been tabled correctly, this had not been done within a reasonable time frame (20 years in the case of the US and five years with regard to Korea).

Kubayi, before she was axed, had intimated that her department would be signing new agreements with five countries and submit these to Parliament within a reasonable time. The state, said Pole, would also have to issue a new Section 34 determination in order to accomplish this.

Both the 2013 and 2016 determinations have been ruled as unconstitutional and as such, said Pole, “there is no lawful decision by the DoE and Nersa that new nuclear power is required and should be procured”.

Although section 34 allows the minister to make determinations on additional generation capacity, this must be done with the concurrence of Nersa which must, in turn, under Section 10 of the National Energy Regulator Act, 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”.

The court found that Nersa had failed to provide an opportunity for public comment in 2013 and 2016 and that before Mahlobo can issue a new Section 34 determination, extensive public participation must take place.

A significant part of procedural fairness is having access to the information on which a decision is going to be based,” said Pole.

So while President Zuma might hope to ram through the deal, Minister Mahlobo is going to find himself having to be transparent, a characteristic inimical to the securocrat.

Pole said that the April High Court ruling also had ramifications with regards to energy planning which requires an energy plan, an IEP, and an integrated resource plan, IRP, to be in place.

The current IEP of the energy choices the country will make in future has not been finalised and is meant to be updated every two years. In 2010 a version of the IEP was gazetted and later updated as late as 2016 but government has not adopted the updated IRP.

Pole said that South Africa’s energy needs had changed significantly since 2010 and any new Section 34 determination based on this outdated plan would be rendered “irrational” or “unreasonable”.

Mahlobo has no experience to warrant his heading one of the most important ministries in the country. The nuclear deal, he can rest assured, will be watched and followed keenly by energy experts, politicians, NGOs and ordinary South Africans.

In June, Kubayi, barely a month in the job, travelled with a delegation to attend a conference in Russia. There she met with her Russian counterpart, Alexander Novak, as well as the state-owned Rosatom head Alexei Likhachev.

At a media conference at the time Kubayi said that South Africa would “do the nuclear project at a scale and pace that we can afford. So, we will look at that completely, if we need to review the scale we have obviously to go back.”

Kubayi told the Russian media that it was too early to provide an exact date for when the nuclear procurement programme would resume.

In a few weeks we should be able to give an indication (of the procurement restart date), once the internal Cabinet processes have been concluded.”

That indication appears to have occurred now, four months later, with the appointment on Tuesday by President Zuma of David Mahlobo as the new Minister of Energy, who will be expected to deliver. But can he? Tick-tock. DM

Photo: Minister David Mahlobo chairing the Justice, Crime Prevention and Security (JCPS) cluster about the implementation of the cluster programme of action for the year, following the 2017 State of the Nation Address at a briefing held at Tshedimosetso House in Pretoria. 05/03/2017. Ntswe Mokoena (GCIS).

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