Energy governance and corruption in South Africa

| 27th August 2019
(c) President of Russia
(c) President of Russia
Major energy procurement projects need independent oversight at all stages, argues multi-faith climate justice group in South Africa.

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The Southern African Faith Communities Environmental Institute (SAFCEI) has closely monitored government planning and decision-making on energy procurement, following a 2017 court case that halted the Zuma government’s controversial plan to purchase a fleet of nuclear reactors. 

SAFCEI specifically outlines the need for accountability in nuclear energy planning and procurement in its submission to the Zondo Commission on State Capture, arguing that major energy procurement projects need independent oversight at all stages – pre-procurement, procurement and post-procurement – to prevent further corruption and state capture. 

SAFCEI's submission contended: “A number of steps and events surrounding the then proposed nuclear new build programme planning and procurement process bear the features of state capture, and need to be investigated.”

Unlawful and unconstitutional

The role played by state actors and individuals warrant further scrutiny and investigation. According to the multi-faith NGO, the secret and highly problematic intergovernmental agreement (IGA) with Russia, entered into in 2014 – and made binding without the necessary parliamentary approval – is one crucial example.

The determinations made by the Minister of Energy in 2013 and 2016 that new nuclear energy was required and should be procured, but which were found to have been unlawful and unconstitutional, are further examples.

The 33-page submission further highlights two procurement contracts that were awarded by the Department of Energy (DoE) without following competitive tender processes. These included a R171 million contract for a nuclear build programme management system, and a 3-month contract for advisory services (that quickly escalated from about R21 million to in the region of R100 million).

The submission also makes a number of recommendations, such as the need for a legislative provision requiring affordability and economic viability in energy planning and procurement to be activated.

Transparent, cost-effective and independent systems for energy infrastructure developments are currently lacking. Such systems are critical to protect the public and taxpayers from future large-scale over-expenditure on risky, outdated and expensive technologies such as nuclear, and to limit opportunities for rent-seeking and corruption.

Energy governance

An example of good energy governance is the mechanism created to oversee the Renewable Energy Independent Power Producers procurement process, which has attracted over R200 billion investment and created over 35,000 jobs. This approach should be extended across energy procurement.

According to SAFCEI, the budget presented by Minister of Mineral Resources and Energy, Gwede Mantashe in July of this year, suggests that the government has not yet dealt with many of the concerns related to energy governance, with nuclear, coal and fracking firmly back on the table. This is despite their cost, both in real monetary terms and to the environment and communities.

Francesca de Gasparis, SAFCEI’s Executive Director, said: “Nuclear energy is the wrong policy decision for South Africa. It fails dismally as a just energy choice, particularly since it is unable to reach the two million rural households who have no access to the centralised grid.

"The government’s National Development Plan (NDP) to electrify rural households cannot be realised through a nuclear energy future. Rather, this goal will only be achievable and affordable by providing decentralised renewable energy for rural homesteads.”

This Author

Natasha Adonis is a communications consultant working predominantly with various NGO’s and civic organisations. She was part of the team who brought much-needed publicity on the SA Government’s secret nuclear deal – through the Southern African Faith Communities’ Environment Institute (SAFCEI), Earthlife-Africa JHB and the Heinrich Boell Foundation. Natasha is now also working with the Campaign for a Just Energy Future.

Image: Vladimir Putin with Jacob Zuma, President of the South African Republic from 2009-2018. Source: President of Russia

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