On 26 April 2017, Judge Bozalek (with Judge Baartman concurring) handed down a judgment in Earthlife’s challenge to the Nuclear Deal. The court invalidated South Africa’s nuclear agreements with Russia, South Korea, and the USA. The court also invalidated the two energy determinations which allowed for the procurement of nuclear energy. The court also ordered the Minister of Energy to pay the costs of the application.
The judgment was a huge victory for Earthlife but, importantly, the order was largely based on procedural challenges and shortcomings rather than on the substantive aspects of the nuclear deal. This meant that the court could not be seen to be interfering in policy decisions but also means that the government could retake the decision, just in a procedurally fair manner.
The case, and what it was about has been something of a moving target and a comprehensive explanation is available here.
In short, Earthlife’s initial challenge sought to have the intergovernmental agreements (IGAs) that South Africa entered into with the USA, the Republic of Korea and Russia set aside. The Russian IGA was challenged on the grounds that it was tabled under the wrong section and should have been debated in parliament. The USA and Korean IGAs were challenged on the grounds that the delay in tabling the agreements in Parliament was unconstitutional.
Earthlife also challenged the constitutionality of an energy determination from 2013 which ‘authorised’ the Minister of Energy to begin procuring nuclear energy. The challenge to the energy determination took an unexpected turn when, in the middle of court hearings, the Minister of Energy presented a new determination from 2016. The new determination addressed some of the flaws in the previous determination and Earthlife had to file additional papers to challenge the new determination.
The lynch pin of the challenge to the determination was Earthlife’s contention that making the determination was ‘administrative action’ which is a special kind of government decision that must meet a number of requirements. Categorising the determination as administrative action meant that Earthlife could challenge the fact that there was no public participation decision-making process and also argue that the determination was irrational and unreasonable.
In the end, the court was left to decide the following issues:
- whether the either the 2013 or 2016 determinations were unconstitutional;
- whether the Russian IGA was tabled in an unconstitutional manner?
- whether it was unconstitutional to delay tabling the USA and South Korean IGAs
The court held that the determinations were administrative action because the determinations had far-reaching consequences for the public and were legally binding on NERSA. In addition, other energy providers would be materially affected by the determination. All of these factors, the court said, indicated that the determination was administrative action. In addition, section 10 of the National Energy Regulator Act, 40 of 2004, NERSA had to take a take the decision ‘within a procedurally fair process in which affected persons have the opportunity to submit their views and present relevant facts and evidence to the Energy Regulator’. As a result, NERSA’s decision to concur with the determination was administrative action.
The court then held that because NERSA’s role in making the determination was a ‘vital link’, the entire determination would be fatally flawed if NERSA acted unconstitutionally. This meant that the court would not need to consider the constitutionality of the Minister’s decision.
The court held that due to the far-reaching consequences of the determination; a rational and fair decision-making process would have included public participation from affected persons. The court stressed that, even if NERSA’s decision was not administrative action, at least some public participation would have been needed. Since there was no public participation at any point in the decision-making process, the court found that both the 2013 and 2016 determinations were made in a procedurally unfair manner and were declared invalid.
The court also found that the Minister’s delay of two years, in gazetting the 2013 determination meant that the determination was irrational and unlawful. The delay also ‘violated the requirements of open, transparent and accountable government’. As a result, the court found that the 2013 determination was declared invalid.
In addition, the court held that the fact that the 2016 determination was inconsistent with the 2013 but had not attempted to amend or withdraw the 2013 determination rendered the 2016 determination was irrational and it was set aside. The court also found that NERSA failed to act independently in concurring with the determination, another ground upon which the determination was set aside.
It is important to note that the court provided a number of reasons for setting aside the two determinations. Some of these reasons were based on the standards applied to administrative action while others used the lower standard of legality. This means that even if a higher court finds the determinations were not administrative action, the determinations will still be invalid on a number of other grounds. The plethora of reasons provided by the court on various different grounds also means that it will be difficult for the government to find a ground for appeal.
This part of the challenge was a technical and procedural point but, in brief, section 231 of the Constitution outlines two procedures, which can be used to bind South Africa to an international agreement. One requires that Parliament approve the agreement by resolution before it is binding on South Africa. The other, reserved for technical, administrative, executive or self-executing international agreements provides that agreements will be binding upon signature. The Minister tabled the Russian IGA under the second procedure which meant that the agreement was not subject to parliamentary debate.
The court held that the Russian IGA should have been subject to Parliamentary debate due to the detailed terms of the IGA and its potential impact. As a result, the Ministers decision to table the agreement in a manner that bypassed this debate was found to be irrational.
The court also found that the delay in tabling the South Korean and USA IGA was unconstitutional and, as a result, the IGAs were invalidated and set aside.
What does this mean?
Earthlife’s application challenged all of the legal components of the nuclear deal, from the Minister’s decision to procure nuclear energy to the intergovernmental agreements that would allow South Africa to cooperate with other countries to develop nuclear power plants. Each one of these challenges was successful and on a wide range of procedural grounds. This will make it difficult for the government to successfully appeal the decision.
What remains to be seen is whether the government will now attempt to appeal, attempt to make new agreements and determinations or simply abandon the nuclear deal altogether.