Energy14.02.2023

These laws make an energy state of disaster useless in South Africa

The South African government’s decision to declare a state of disaster over the country’s 15-year-long energy crisis faces significant legal hurdles.

That is according to a recent collaborative piece by Weber Wentzel firm partner Mzukisi Kota, senior associate Lubumba Kamukwamba, and candidate attorney Lize-Mari Doubell.

The trio argued that legal challenges against the state of disaster — such as those launched by the Democratic Alliance and Solidarity — could proceed, as it did not meet the requirements of the Disaster Management Act (DMA).

“The declaration of a national state of disaster (and the installation of a new Minister of Electricity) appears to be little more than an attempt to ‘side-step’ addressing the root causes of the energy crisis,” they said.

“These include the lack of coordination, cooperation, planning and political agreement between the existing ministries and the national utility, Eskom.”

In addition, they argued that the government failed to implement the existing regulatory framework and policies to eradicate load-shedding, infrastructural challenges, and rampant vandalism and looting at power plants.

“The biggest elephant in the room remains what is happening on the transmission infrastructure required to unlock various projects which have been orphaned from the renewable energy independent power producers programme due to their inability to connect to the national grid,” the trio said.

“This issue will not be resolved by the declaration of a national state of disaster.”

Ramaphosa’s energy plans don’t support declaration

According to the legal experts, the plans outlined by President Cyril Ramaphosa during his state of the nation address (SONA) were “always achievable” under existing legislation, with adequate mechanisms for extraordinary and swift action.

Among Ramaphosa’s justifications for the declaration of a state of disaster in his speech were:

  • Enabling an effective response co-ordinated from the centre of government
  • Supporting businesses in the food production, storage, and retail supply chains through the roll-out of generators and solar panels
  • Exempting critical infrastructure — such as hospitals and water treatment plants — from load-shedding
  • Accelerating energy projects and limiting regulatory requirements while maintaining rigorous environmental protections, procurement principles and technical standards

The Weber Wentzel team explained that section 27(1) of the DMA provides that a national disaster may only be declared if existing legislation and contingency arrangements do not adequately provide for the national executive to deal with the disaster effectively.

Alternatively, there may also be other “special circumstances” that warrant the declaration.

“While it seems that the definition of a disaster would be satisfied by the energy crisis, it is highly debatable whether the requirements for the declaration of a national disaster, as set out in section 27(1), have in fact been satisfied,” they said.

“It seems to us that a strong argument exists that adequate provision has been made in existing legislation to address the energy crisis in general, and to enable the measures articulated by the president, in particular.”

President Cyril Ramaphosa. Credit: GCIS

The specific legislation empowering Ramaphosa’s executive includes section 34 of the Electricity Regulation Act (ERA).

It lets the mineral resources and energy minister procure new generation capacity to ensure the uninterrupted supply of electricity.

The trio said removing the 100MW licencing threshold for embedded generation illustrated the radical measures that can be undertaken under ERA.

The minister is also able to “issue any guarantee, indemnity or security or enter into any other transaction that binds the state to any future financial commitment that is necessary or expedient for the development, construction, commissioning or effective operation of a public or privately owned electricity generation business”.

In addition, the government may expropriate land to achieve the objectives of the ERA.

“In our view, the ERA already contains special legislative mechanisms designed to ensure the uninterrupted supply of electricity, and these could be deployed to address aspects of the energy crisis,” the Weber Wentzel team stated.

Secondly, the Public Finance Management Act (PFMA) also contains special mechanisms for crises.

One example is section 16 of the PFMA, which gives the finance minister the power to “authorise the use of funds from the National Revenue Fund to defray expenditure of an exceptional nature which is currently not provided for, and which cannot, without serious prejudice to the public interest, be postponed to a future parliamentary appropriation of funds.”

“This is an extraordinary power that bypasses the ordinary appropriation of funds through parliament and enables the Minister of Finance to respond efficiently to situations of urgent or emergency need,” the legal experts said.

Furthermore, National Treasury is also allowed to deviate from ordinary competitive tender procedures in an “emergency situation” or “urgent case”.

“An emergency situation means a serious and unexpected situation that poses an immediate risk to health, life, property or the environment, which calls for urgent action and if there is insufficient time to follow a competitive bidding process,” the legal experts explained.

“An ‘urgent case’ is a case where early delivery is critical and the invitation of competitive bids is either impossible or impractical and crucially, not due to improper planning.”

Coordination should not require a state of disaster

It is only addressing the issue of government-wide coordination that is not supported by an immediately-identifiable existing legal mechanism.

However, the trio said this could arguably be facilitated through mechanisms like those in the Infrastructure Development Act, at least in relation to infrastructure coordination.

“It is, in any event, most surprising that government requires the adoption of a national state of disaster and legislation to achieve coordination in implementing actions intended to address the energy crisis,” they said.

“The declaration, therefore, does not satisfy section 27(1) of the DMA because it has been declared despite the existence of legislation and contingency arrangements to adequately address the crisis.”

Finally, there was also a marked absence of “other special circumstances” to warrant the declaration.

The trio concluded that any regulations and directions published under the declaration might be reviewed and set aside in terms of the Promotion of Administrative Justice Act, 2000 or the principle of legality.

“Similar challenges were launched during the Covid-19 state of disaster, such as in the case of Minister of Cooperative Governance and Traditional Affairs v British American Tobacco South Africa (Batsa) and Others,” they said.

In that instance, Weber Wentzel acted on behalf of Batsa and the other respondents and successfully challenged the now-infamous tobacco ban.


Now read: Two basic things Ramaphosa can do to improve South Africa

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