Court sets aside nuclear deals with Russia, other countries

Cape Town – It’s back to the drawing board for government, which has received a bloody nose in the Western Cape High Court where its nuclear procurement processes to date have been declared unlawful and set aside.

Judge Lee Bozalek on Wednesday ruled in favour of the case brought by Earthlife Africa Johannesburg and the Southern African Faith Communities’ Environment Institute (Safcei) against government.

In his ruling, he declared government’s attempts to secure 9.6 GW of nuclear energy were unlawful, including the initial determination to procure nuclear energy in 2013, the cooperation agreements signed with Russia, the US and South Korea, as well as former energy minister Tina Joemat-Pettersson’s decision to hand over the procurement of nuclear energy to Eskom late last year.

The court case was first launched in October 2015, with Earthlife Africa and Safcei challenging the government’s decision to buy 9.6 GW of nuclear power without debating it first in Parliament, thus flouting democratic processes.

READ: FULL JUDGMENT: Nuclear process declared unlawful

The two organisations said in a joint statement issued on Tuesday that if the court bid is successful, it will put "serious roadblocks" in the way of the government and Eskom's nuclear procurement process. 

Fin24 earlier reported that the applicants argued in court papers that the government cannot afford the mooted R1trn nuclear price tag, and that it acted in secret when it signed an agreement with Russia as part of the procurement plans for a nuclear build programme. 

READ: Why discuss the nuclear deal in secret?

The court declared that the minister's decision on or about June 10 2015 to table the Russian intergovernmental agreement (IGA) before parliament in terms of the Constitution is unconstitutional and unlawful, and it is reviewed and set aside.

The judge also declared the minister's decisions at about the same time to table certain other agreements before Parliament in terms of the Constitution unlawful and unconstitutional.

These include the agreement for cooperation between SA and the US regarding peaceful uses of nuclear energy, and an agreement between SA and the Republic of Korea regarding cooperation between the two countries in the peaceful use of nuclear energy.

READ: Energy minister to cough up for nuclear court costs

Earthlife and Safcei further argued that the Department of Energy acted unlawfully when it decided in December 2016 to move the procurement of nuclear energy to Eskom, as former energy minister Tina Joemat-Pettersson had not followed any public participation or consultative process before making the decision. 

Joemat-Pettersson in a responding affidavit said she was not aware of any rule or court order that would prevent her from handing over the procurement process to Eskom. 

Government’s lawyer Marius Oosthuizen SC said in counter arguments that the deal signed with Russia was not tantamount to a commercial agreement, but was only an agreement to work together. 

He pointed out that an international agreement between two countries is not required to be debated in Parliament, as this is not a constitutional requirement. 

READ: We don't need public approval for Russian nuclear deal - govt

Oosthuizen also argued that the government is within its rights to come up with policies such as nuclear energy as part of South Africa’s energy mix, and that it should not be preceded by a debate in Parliament. 

He further questioned why “everybody” is “picking” on government’s agreement with Russia to when similar agreements had been signed with France and China. 

The procurement of nuclear energy is the subject of fierce debate in the country. A number of energy experts argue that it is superfluous, as energy demand is lower than previously projected and nuclear energy would be too expensive. 

The government, on the other hand, including power utility Eskom, maintains that South Africa needs nuclear energy as a form of base load power as coal-fired power stations are being phased out. 

Finance Minister Malusi Gigaba repeated President Jacob Zuma’s earlier statement that nuclear energy would only be procured at a pace and scale the government can afford. 

The affordability issue however was also raised by Fitch, which became the second rating agency to downgrade South Africa’s sovereign credit rating. 

READ: Nuclear uncertainty cited as one of the reasons for Fitch downgrade - economist

In its statement issued on April 7, explaining the decision to cut South Africa’s rating to junk status, Fitch said under new Minister of Energy Nkhensani Kubayi the programme is likely to move “relatively quickly”. 

It further noted that under the finance ministry of Nhlanhla Nene, who was removed on December 9 2015, National Treasury said Eskom could not absorb the nuclear programme with its approved guarantees at the time. A nuclear build programme would increase contingent liabilities, Fitch said, which are already “sizeable”.

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