Green capitalism is not the solution to South Africa’s energy crisis

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The advent of another Workers’ Day, which is annually celebrated worldwide on May 1 gives workers and their families an opportunity to pause and deeply analyse the progress, if any made in the numerous uphill battles that they face on a day-to-day basis, as they eke out a living in an increasingly hostile neo-liberal world that South Africa has steadily become over the past century.

The prognosis is bad.

The ANC, an erstwhile ally of workers has morphed into the worst acolytes of a discredited neo-liberal capitalist system, whose only response to high levels of poverty, chronic joblessness, and the highest level of inequality in the world is to implement austerity measures.

READ: Inside Labour | Mayday, Mayday, Mayday! – the distress signal workers are sending out today

Through its numerous failures, the ANC and its business friends (with whom, and on whose behalf, it governs), have extracted more than a pound of flesh from workers and their families. The deliberate devaluing and collapsing of viable state-owned enterprises (SOEs) leading to thousands of job losses is but a case in point. Eskom’s inability to provide reliable electricity which is therefore throttling an already anemic economy, is perhaps one of the ANC government’s greatest historic failures.

This incredulous own goal, which came after numerous warnings about building future capacity, some going as far back as former president Thabo Mbeki’s administration, as well as 10 years and counting of loadshedding, with no credible solution in sight, demonstrates astounding incompetence at the highest levels of the ruling party. Numsa does not hold any hope for any accountability because the factional politics of the ANC have made it well-nigh impossible to scrutinise certain ministers whose misrule has resulted in untold suffering for workers and their families.

READ: How Eskom’s board helped the Guptas buy a mining company

Here are just a few of the ways that workers have borne the brunt of the rolling blackouts that have become normalised in South Africa:

Job losses through company and plant closures

Numerous small and medium-sized businesses are closing down. According to Stats SA in the Quarterly Labour Force Survey, the unemployment rate has increased to 35.3% and the expanded definition which includes those who have given up looking for work is at a staggering 46.6%. The manufacturing sector was hardest hit, having shed 85 000 jobs, followed by the construction industry which lost 25 000 jobs followed by the utilities and transportation sectors which shed 14 000 and 13 000 respectively.

READ: Zuma’s critical role in Gupta’s plans to capture Eskom revealed

Numsa is experiencing first-hand the impact of these job losses because it is reflected in the large number of retrenchments notices it has received in the last two years. In many cases, companies cited persistent load-shedding and increasing energy costs as part of the rationale for downsizing operations or closing down. The situation has also been exacerbated by the hard lockdown caused by the covid-19 pandemic, and, the unrest we experienced in July last year. It is worthwhile to remind the reader that every South African worker looks after up to seven family members, on his or her meagre income. So, every job lost has a devastating impact, not just on the worker involved, but on society as a whole.

Safety and security

The areas where the majority of the working class reside particularly in townships and informal settlements are places which are usually rife with crime. This is made worse by regular blackouts because it allows criminals to perform their dirty deeds under the cover of darkness. This makes it particularly unsafe for women to walk to and from their places of work. Workers are easy prey for vicious criminals and the police have unfortunately proven to be quite weak in protecting our communities. The sharp increase in the crime rate is no coincidence.

The state seems unable to deal with this spike in crime that all South Africans are acutely feeling. As a result, vigilante attacks are on the increase.

This has also given rise to the unfortunate scapegoating of all foreign nationals as being responsible for criminality. This is because communities are frustrated by the slow pace of service delivery and by the prevalence of violent crime and the failure of the state to adequately address this.

Higher electricity tariffs

Eskom’s position is indefensible. The country is subjected to crippling rolling blackouts but South Africans are paying more for electricity. When Eskom was making an application for a tariff increase of 20.5% in January 2022 to the National Energy Regulator of South Africa, it justified the request on the basis that the cost of procuring energy from Independent Power Producers (IPP’s) and the carbon tax were driving the tariff increase. These two factors contributed 13.8% of the proposed increase. (As of April 1, a tariff increase of 9.5% went into effect).

READ: Mmusi Maimane | Why we are gatvol

When Numsa went to the high court to prevent the signing on of 27 Renewable Energy Independent Power Producer projects in 2018, we were severely criticised. But we had a duty to defend the principle of a Just Transition and currently, the manner that this government has embarked on this process does not match up at all to what was envisioned by the International Labour Organization as a just transition from fossil fuels to renewable energy.

The ILO calls for a ‘human-centred approach’, one where the livelihoods of workers and communities are not negatively affected. Where every job lost in the coal industry is replaced, or, workers are upskilled. The best way to achieve that is, Numsa argued, is if these companies are owned and controlled by workers and communities.

We demanded ownership, but instead, what we got was loans to the tune of R131 billion to ‘fund the transition’.

The CSIR predicted that over 90 000 jobs would be lost because of the transition and yet there is still no social labour plan from the government to mitigate against this looming disaster.

READ: Forget Eskom, go renewable

Furthermore, the union warned that these privately owned renewable energy projects were a vehicle to privatise energy generation at Eskom, and as a result, the cost of energy would increase. It was revealed in court papers that the REIPP project would cost the fiscus R1.4 trillion, an amount significantly larger than the nuclear deal.

Green capital seeks to profit too

Capital, even green capital, does not have a vested interest in mitigating against climate change. It seeks to profit and as long as that is the primary motive, this can never be a sustainable solution to reducing carbon emissions. Numsa demands that a considered approach be taken before coal power stations which are the lifeblood of the economy of the Mpumalanga province, are arbitrarily shut down. Our critics have unfairly attacked the general secretary Irvin Jim of having “sold out” to the coal industry, when the union is simply demanding that the Just Transition which we signed up for, should be done at a rate the country can afford, and, in a way that does not cost the country any more suffering for the working class.

READ: Irvin Jim’s birthday party paid for by embattled life insurer

In May 2021 Numsa identified the following issues that needed urgent intervention if we were to find long term solutions to Eskom’s spiraling debt crisis:

1. Government must intervene in the ever-escalating costs of primary energy, which have been rising at a minimum of 17% per annum. This includes the cost of IPP’s, coal and diesel. These contracts must be investigated and, in some cases, set aside because the cost escalations are not justifiable. There is a directive from government on this but no action has been taken to date.

2. In contrast, employee benefit costs decreased by 6% between 2019 and 2020. Since 2017 until the end of the financial year for 2020, this cost has remained flat. The false narrative that the wage bill is to blame for Eskom’s financial problems, is just that. A lie. And it is being used to unfairly target workers and justify job cuts.

3. The government’s disastrous decision to allow big business to ‘self-generate’ by up to 100 MW. This is scandalous because the ANC government, which is also the erstwhile shareholder, is enabling the private sector to compete against Eskom, thereby fast-tracking the collapse of the entity. We recommended that this decision must be reversed immediately because government should not drive an agenda that results in Eskom losing much-needed revenue.

4. At least R250 billion of Eskom debt must go onto the government books. This must include the R38 billion owed by municipalities which cannot be paid as a result of the reduction in allocation by the National Treasury. Those municipalities do not have any revenue as a result of the depressed socio-economic conditions and poor governance and expecting them to pay the owed amount is beyond incredulous.

5. Eskom must establish its own renewable energy company which must execute 70% of the renewables in the IRP and it must be allocated nuclear in light of the government having taken a decision to include nuclear in the energy mix. Such a demand is in line with the 1998 Government White Paper and it is in the best interest of job security for workers at Eskom. It also ensures the long-term sustainability of the power utility.

If no action is taken, the consequences will be dire. The food riots witnessed in July are just the tip of the iceberg of what is to come. There are those who claim that the financial cost of saving Eskom is too high, but surely the cost of violent unrest and political instability is far higher.

Hlubi-Majola is a former journalist and currently the Numsa National Spokesperson


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