Criminal charges in powership deal

The Green Scorpions have recommended that criminal charges be laid against Karpowership SA for intentionally misleading the Department of Forestry, Fisheries, and the Environment (DFFE) in its bid to secure a R225-billion deal to supply power to South Africa’s grid.

According to amaBhungane, the environmental protection unit referred a docket to the Director of Public Prosecutions (DPP) to prosecute the company for its attempt to circumvent environmental regulations.

This came after the Green Scorpions confirmed in early June it was investigating Karpowership and its environmental consultants Triplo4 Sustainable Solutions and Nselenduna Consulting for attempting to avoid the environmental impact assessments (EIAs) that would be required before it could anchor its gas-fired power ships in South Africa’s harbours and supply power to the grid.

Under the National Environmental Act (NEMA), there are permits for which companies can apply that would exempt them from EIAs if quick action would save lives and prevent more environmental damage.

Karpowership initially secured these exemptions in June 2020, claiming that it would help provide emergency power during the Covid-19 pandemic.

In August 2020, the environmental department withdrew the permits after finding there was no emergency situation.

With the case now referred to the police and the DPP, it appears that the Green Scorpions believe there is prima facie evidence of Karpowership’s wrongdoing in securing the exemption.

The punishment for anyone who “willfully, knowingly or negligently, provide incorrect or misleading information” to the department in an application for exemption is a fine of up to R10 million and/or 10 years imprisonment.

Karadeniz powership
Karadeniz powership

Because the exemption permits were withdrawn, Karpowership was required to carry out the EIAs.

However, by the time the energy department announced Karpowership as a preferred bidder to supply 1,220MW of electricity as part of the Risk Mitigation Independent Power Producer Procurement (RMIPPP) programme, Karpowership’s EIAs were still incomplete.

In late June, the DFFE confirmed it refused the company’s applications for environmental authorisation.

Karpowership has appealed the decision of the DFFE to reject the deal, claiming that the department has been misled by a “vicious adversarial and aggressive campaign” which is driven, in part, by the media.

Environmental minister Barbara Creecy has 70 days to rule on that appeal. It should be emphasised that this matter is separate from the potential criminal case.

Barbara Dallas Creecy South African Minister of Environment, Forestry and Fisheries
Barbara Creecy, Minister of Forestry, Fisheries, and the Environment for South Africa

The powership deal has been met with fierce resistance and scepticism out of many corners.

Environmental protection groups have claimed the ships will generate underwater noise that will disrupt sea life and fishing in the areas where they planned to moor.

An unsuccessful bidder for the programme, DNG Energy, has also launched a legal challenge against the decision claiming that it was irregular and corrupt.

In addition, law firm Bowmans has pointed out that there could be significant legal hurdles in establishing the port infrastructure required to connect the powerships.

Sources close to the situation have further claimed that Eskom does not want to buy electricity from Karpowership. The 20-year deal would put more pressure on its ailing finances and increase its reliance on fossil fuels.

The power utility has dedicated itself to cutting down on emissions and increasingly using renewable energy generation, the costs of which have decreased in recent years.

Lastly, energy experts have said the deal could also expose South Africa’s electricity tariffs to the variable costs of natural gas, which currently has to be imported.

Now read: South Africa’s emergency power plans in disarray

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Criminal charges in powership deal