Trillion-Rand South African Nuclear Procurement Halted By South African High Court
The South African government’s nuclear procurement programme, already mired in controversy in the media amidst allegations of corruption, suffered a major set-back on 26 April 2017 when the High Court set aside various steps taken to implement the programme. The court decision effectively puts on hold the plans to build nuclear power stations to generate 9.6GW of new electricity at an estimated cost of one trillion Rand (just under £60 billion).
Although there were several grounds of review, the main reasons underlying the decision – with echoes of the UK Supreme Court’s recent decision in Miller on whether the UK Government could unilaterally start the process of leaving the EU – were a lack of public participation and Parliamentary approval. The High Court set aside three sets of actions by the executive relating to domestic policy-making, the tabling of international agreements and initial public procurement steps. The reasons for setting aside each step differed in the detail, but at their core reflect a process that was rushed through by the executive without allowing public comment and treating parliament as a rubber stamp.
First, the High Court set aside the Minister’s determination under the Electricity Regulation Act in which the Minister had determined that South Africa needs to buy new power capacity by building nuclear power stations. The regulator, NERSA, had concurred in the Minister’s determination. The court held that the process was unlawful because it failed to allow any opportunity for the public to comment, as is required both under general administrative law and the specific legislation governing electricity regulation.
The second category of conduct to be set aside was the decisions by the Minister of Energy to table before Parliament three international agreements – treaties between South Africa and Russia, the United States and the Republic of Korea. The South African Constitution requires a different process for two types of international agreement. An agreement of “a technical, administrative or executive nature” or an agreement that does not require ratification or accession must merely be tabled before both houses of Parliament “within a reasonable time” in terms of s 231(3) of the Constitution. No parliamentary approval is required. However, any other international agreement must actually be approved by resolution in the National Assembly and the National Council of Provinces (s 231(2)). The executive treated all three agreements as s 231(3) agreements requiring only tabling in Parliament. The High Court found that the Russian agreement was not of a merely “technical, administrative or executive nature”. The court found that it “stands well outside the category of a broad nuclear cooperation agreement and, at the very least, sets the parties well on their way to a binding, exclusive agreement in relation to the procurement of new reactor plants from that particular country.”
The court found that the other two treaties, with the United States and the Republic of Korea, which are in quite different terms, were merely of a “a technical, administrative or executive nature”. No parliamentary approval was required. However, the executive had failed to table these agreements in parliament “within a reasonable time” as is expressly required under the Constitution. The two agreements were signed in 1995 and 2010 but only tabled in 2015. This, the court held, did not meet the requirement that they be tabled within a reasonable time.
Finally, the High Court set aside the steps taken by government to initiate the public procurement process. This finding flowed from the decision that the policy determination that South Africa needs new nuclear generation capacity was unlawful because of the lack of public participation. It followed that the government could not begin the public procurement process to acquire nuclear infrastructure.
The High Court’s decision will undoubtedly be appealed and is unlikely to be the final word on the matter. Shortly after the decision, Energy Minister Mmamoloko Kubayi said that the government accepted the need for public participation and was considering how to proceed, including whether it is necessary to conclude new international agreements or whether it will be sufficient to table the original agreements in Parliament. For now, though, the decision puts the brakes on one of the largest and most controversial proposed infrastructure programmes in democratic South Africa.