A tale of illegal IPPs, ignored or stage-delayed ConCourt orders on Section 89 and plausible grounds of impeachment of SA caretaker president.
The eighteenth-century cleric and writer, Charles C. Colton long ago told us, “Much may be done in those little shreds and patches of time which every day produces, and which most men throw away.”
This musing in a sense makes up some of the interesting moments of an epoch, spanning time that is often forgotten when we want to make sense of what confronts us in the present-day sense. This musing is by no means an exhaustive blow-for-blow account of a history of events understood in moments of alternate energy and its ultimate manifested jolts of obscured realities.
On Friday, 9 March 2018, the Department of Energy (DOE) under the stewardship of Minister Jeff Radebe announced that Eskom was to enter into Power Purchase Agreements (PPA) with 27 Independent Power Producers (IPPs) on Tuesday 13 March 2018, in what is known as REIPPPP Bid-windows 3.5 and 4. It is interestingly curious that by Friday when the DOE apprised the SA public of this decision, the preceding Thursday 8 March, the Competition Commission announced its decision to recommend to the Competition Tribunal to approve without conditions, the merger whereby Thebe Renewable Energy Holdings Ltd acquired Phembani Solar Energy 1 (Pty) Ltd, Phembani Renewables (Pty) Ltd and Shanduka Black Umbrellas Energy (Pty) Ltd as well as Pulida Energy (RF) (Pty) Ltd. It is reasonable that the application to the Competition Commission for this merger/acquisition would have been made at a time when former Minister of Finance Nhlanhla Nene was Resident Advisor at Thebe Investment Corporation. It is alleged that Nene’s job at Thebe is what led to him not being appointed Chairman of the Board of Eskom in January this year as it would have created a definitive conflict of interest with Thebe having PPA(s) with Eskom.
Astonishingly, the current Chairman of Eskom Jabu Mabuza, on the other hand, seems to have had no qualms in accepting this plum job despite the apparent conflict of interest brought about by his 10% ownership of Sphere Holdings which in turn owns 30% shares in Babcock, the latter is on a multibillion-rand a year “evergreen” contract for services to Eskom.
An even more glaring conflict of interest can be said to be that of one of President Cyril Ramaphosa’s companies, Aggreko-Shanduka having signed a 20-year PPA for 92.5 megawatts at R2.70 per kilowatt hour with Eskom, allegedly on Ramaphosa’s instruction whilst he was chair of the patently unlawfully established Eskom War Room in 2015.
On the Monday prior to the Tuesday of contemplated signing with the 27 IPPs, NUMSA and TransformRSA instituted an urgent High Court action to interdict the said signing of PPAs between Eskom and the 27 IPPs pending hearing and ruling on the application launched in July 2017 by Coal Transporters Forum (CTF) to set aside the signing of PPAs by Eskom with IPPs. The CTF application is now set for hearing in March 2019.
The litigants NUMSA & TransformRSA have a claim in this regard, that the presiding Judge Fourie’s ruling on 29 March 2018 was legally misdirected as the case before him was that of an interdict on the signing of the 27 IPPs pending hearing and ruling on the CTF application. Judge Fourie instead ruled on urgency, which was moot as Honourable Madam Judge Pretorius had already ruled on 12 March 2018 that the NUMSA-TransformRSA urgent application was indeed urgent. To understand the actions and mind of Judge Fourie a good analogy used by the legal advisers of the litigants hold that, what Fourie suggested with his ruling is tantamount to a person seeking protection from a court of law for being threatened with beating and assault that is sure to cause grievous bodily harm by another, and bizarrely the court (Judge Fourie in this instance) arguing that when you are assaulted you can visit this or that surgeon to fix your injuries. It is the mind of the litigants that the intention was never to fall prey to grievously bodily harm injuries in the first place. Fourie’s ruling when looked at from the reality of South African electricity consumers suggests that they can be financially assaulted with exorbitant electricity tariffs on a weird reasoning they could visit a surgeon (the courts) for surgery afterwards without guarantee of full restoration.
It is an evidently established fact that South Africa has been financially assaulted with exorbitant electricity prices emanating largely from the illegally signed IPPs which currently cost just over R93-million per day with inflation-linked escalations. It is argued that Judge Fourie effectively failed to protect the electricity consumers from a further financial assault of exorbitant electricity prices whereby current prices/tariffs range from R1.58 per kilowatt hour to as high as R4.00 per kilowatt hour for prepaid electricity consumers. It is also an established fact from Eskom’s audited financial statements that its average cost of electricity production, excluding transmission and distribution, is R0.42 per kilowatt hour. Shockingly, IPPs currently cost an average R2.26 per kilowatt hour. This average cost of Eskom’s electricity production of R0.42 per kilowatt hour effectively dispels the false claims about cost overruns and delays in completion of the Kusile and Medupi power stations, for they are included in this average cost of R0.42 per kilowatt hour.
It can thus be argued that energy poverty increased due to the ruling of Judge Fourie by not acting in accordance with conscripts of the law. In a strange twist of events, the NUMSA-TransformRSA case file went missing on the eve of the hearing of the application and subsequently the record transcript of the matter before the court has also gone missing. This begs the question how did the case file or docket go missing? In addition, how did the transcript vanish and who was responsible for the missing docket and subsequently vanished transcript.
Perhaps we may be helped by the commentary and statements of Judge President Dunston Mlambo that he made at an Africa Prosecutors Association three-day session held in Pretoria on September 30, 2016. Mlambo is on record to have said while he can’t say there is no corruption in the judiciary, he is promising to fight tooth and nail to makes sure courts do not ignore graft. Mlambo went further to say, “there are colleagues who are doing (corruption) this, when you look at the evidence I’ve presented to you, I see these things and say I can’t keep quiet”. “I have warned my judges that one of you will be caught up in an investigation that could become disastrous for your careers and your lives”.
On another score, the National Assembly that represents the legislative component of a three-tier South African State, hitherto is in breach if not defiance of the highest court, the Constitutional Court (ConCourt), who during 2017 in the EFF matter ruled and ordered that the National Assembly must draft and promulgate constitutionally compliant rules on Section 89 by May 2018. Failure and or defiance by the National Assembly to duly comply with the ConCourt Order has put South Africa in a precarious state of a constitutional crisis.
The litigants NUMSA and TransformRSA have since filed a leave for appeal of the legally bizarre Fourie judgement of 29 March 2018, in regards, the costs order it exacted. The premise for such an appeal resonates in this: that the ConCourt previously ruled that entities that act in the public interest are exempted from having cost orders exacted against them. In order to find against public entities such as the litigants who are no different to a Section 27, FUL or Helen Suzman Foundation, questionable bona fides and or any malicious intent would have needed to be established. Fourie’s judgment therefore on this score may in reasonable consideration translates to a flagrant and common threat of intimidation into silence thus intending to dissuade public interest entities from seeking appropriate judicial relief as provided for and guaranteed within the explicit ambit of the constitution of the republic.
The citizenry is, therefore, more inclined to rightfully ask whether a lower court can willfully disregard the constitution given the undeniable presence of case law established by the ConCourt. This situation presents a double-barrelled challenge. Firstly, what then do we make of this prevailing impasse and secondly what constitutes due recourse for ordinary South Africans when lower courts can willfully and consciously defy, ignore of not blatantly disregard the rulings of the final arbiter if justice understood in SA as the ConCourt? If this does not indicate a context of constitutional crisis, what does?
Logic would dictate that in order to justify the contracts of IPPs and Eskom as initiated by the DOE, there needed to be given due consideration to the two cardinal pieces of legislation, that being the Electricity Regulation Act number 4 of 2006 and also the National Energy Regulator Act number 40 of 2004, particularly Section 10 and Section 34 respectively. This is macro-graphed when cognisance is taken of, the ruling of the Cape High Court in the Earth-Life matter on nuclear. In such instance, it ruled that Section 34 determination was unlawful and therefore set aside. This was attained predicated on the confirmed findings that the prescripts were not followed. The established indisputable fact therefore is; every single IPP including the earlier mentioned, respectively known as bid windows 1, 2,3 which costs the South African public on exceeding, onerous terms, on a daily basis to an inflation-bound astronomical amount of R93-million, for what can be rightfully argued is electricity supply which Eskom simply does not need, constitutes as illegally signed as entered into.
It remains the conviction and belief of the litigants that these agreements entered into are unlawful as already determined. In perpetuity and the clear case of defiance of the judiciary by the Executive, 27 IPPs bid-window 3.5 and 4 were signed in April 2018. It also remains the submission of the litigants that this constituted a steamrolled action notwithstanding the CTF application pending in the high court and the ruling of the Cape High Court in the Earthlife matter. It has also been established from the court papers in the CTF matter that DOE, NERSA & Eskom and the IPPs have equally failed to produce a legally compliant Section 34 Determination under the National Energy Regulator Act and legally fit Record-of-Decision under Section 10 of the Electricity Regulation Act.
The implications for Eskom are increasingly depicting a gloomy picture. The most recent Eskom financial statements include a subject of technical and non-technical losses. It can be extrapolated from the Eskom financial statement that as we pen this article there is corroborating evidence already of big industrial users practising ‘bridging’, the act of unlawfully connecting oneself to the grid to enjoy unlimited and unaccounted supply. This act of electricity theft as it appears in the Eskom Financial Statement is reported to the tune of R18 billion and shelved in what is accounted for technical and non-technical losses.
It goes without saying that if the DOE and Eskom had followed the prescripts in Sections 34 and 10 respectively, there would never have been a single IPP in this country. In the absence of claiming ignorance which really cannot be claimed, one is left to surmise nothing but unadulterated avarice and a non-gratifying greed tangible in gigantic thieving may be the bedrock for these patently unlawful actions of illegal contract signing.
On another score, the ongoing Eskom alternate energy saga before the courts extends itself to point to a troublesome potential claim of the subject of plausible impeachment for the current caretaker SA president. The current acting president of South Africa, as it is claimed by various legal scholars, is in violation of section 96 of the constitution of the republic. Ramaphosa has as we were told locked all his assets into a contrived animal called a “blind trust”. Those of the legal and business fraternities remonstrate the South African law does not entertain or explain the construct of a “blind trust”. The construct of blind trust is also not legally defined or framed in our South African lexicon.
According to Investopedia, “Blind trusts are often used when a wealthy individual is elected to a political office, where his investment holdings could potentially put him in a conflict of interest with a regulatory issue or other sensitive exercises of political power. Investopedia delineates some challenges with the use of a blind trust when it raises two cardinal aspects, 1, “some obvious issues with blind trusts in that the beneficiary setting up the blind trust is at least aware of the investment mix going in and cannot realistically forget that information when weighing future decisions. 2. The trustors may also set the rules under which the investments are managed and, of course, pick trustees that they are confident will act in a certain way in potential situations.”
On the premise of the aforementioned, Investopedia argues, “the efficacy of the blind trust in truly eliminating a conflict of interest is far from proven”. It concludes that “politicians with a large amount of wealth or in high office use blind trusts to show that at least the effort is being taken to establish impartiality.” We must from this summation assume that Cyril M. Ramaphosa with his November 2014 blind trust initiative at best attempted to try to be perceived as acting towards impartiality, yet he did not with the adoption of the blind trust negate the claim of conflict of interest or the cited reasons.
While the natural temptation exists to celebrate the efforts to be impartial it cannot come at the expense of demonstrable claim of the partiality and if partiality can be established a claim can be exacted that there exists no real elimination of a conflict of interest which by itself extends to the grounds for a claim of benefit while holding office as a breach of the outlined Section 96 provisions.
Yet, we know blind trusts have to find meaning and expression within the ambit of South African law, otherwise, it can be argued it is nothing but a contrived initiative.
It is legally permissible that a trust deed may not specifically name the beneficiaries and the beneficiaries may themselves not know the assets of the trust and their monetary value thereof. To cite an example in the instance of the Rhodes trust or even the Mandela Rhodes Foundation, the beneficiaries are not named and neither do they know what the assets entail. In the case of Ramaphosa, it is not legally sufficient without full disclosures of who the trustees are, and who the beneficiaries constitute. Had Ramaphosa determined to have donated he would have been subjected to tax provisions in this regard.
Considering that a trust may also be used to hold and protect personal or business assets and may, therefore, be used to hold shares in businesses and to ensure the continuity of ownership of assets, it would appear in absence of evidence to the contrary, that Ramaphosa’s intended purpose was continued beneficial ownership of all the business interests purportedly now under this so-called blind trust. With this consideration, Ramaphosa appears to still be exposed and therefore in harm’s way with regards to Section 96.
A clear explanation of who the beneficiaries are has to be articulated. When ownership of shares in a business moves from an individual or another business entity to a trust that it is transferred into, at what value of those assets and who becomes the beneficiary and who is the trustee(s) must be articulated. Is there a deed of trust that under normal circumstances is registered Deed of Trust Acts, 1988 law?
Meaning the current caretaker president of SA for the better part of his tenure as deputy president and leader of government business effectively since May 2014 has benefited from his shareholdings and earned income beyond the scope of the designated and explained diaphragm of a government salary. Ramaphosa’s significant shareholdings in companies (some of which are accused in the Panama & Paradise Papers) such as Lonmin, Aggreko-Shanduka, Standard Bank, Glencore, Bidvest and Tshivhase Share Dealing, from which he benefited and arguably continues to benefit at a monetary level, puts him in direct line of fire for apparent breach of Section 96.
It is the submission of the litigants that it was incumbent on Ramaphosa to protect and uphold the constitution of the Republic of South African and he was therefore duty-bound to protect the public from an expense that translates to an incremental inflation-linked current daily R93-million in fruitless expenditure. It is furthermore argued that the violation of Section 96 starts with Ramaphosa’s tenure as deputy president but continues with his new acting role of president. It is further argued that Ramaphosa, when the blind trust claim is put aside, effectively earns income from all the companies he owns directly or indirectly.
Those who argue that the current president must be held accountable and ultimately impeached do so on the prescribed Conduct of Cabinet members that dictates, in following section delineation: Section 96: 1) Members of the Cabinet must act in accordance with a code of conduct of ethics prescribed by national legislation. 2. Members of the Cabinet and Deputy Ministers may not – a. undertakes on other paid work, b) act in any way that is inconsistent with their office, or expose themselves to any situation involving the risk of a conflict between their official responsibilities and private interests, or c) use their position or any information entrusted to them, to enrich themselves or improperly benefit any other person.
When #Ramaphosa contrived a so-called #BlindTrust, could it be that he too had found himself in a similar predicament as rich young ruler written about in Luke 18:22-23???
It reads:- “So when Jesus heard these things, He said to him, “You still lack one thing. Sell all that you have and distribute to the poor, and you will have treasure in heaven; and come, follow Me.” But when he heard this, he became very sorrowful, for he was very rich.”
However, he too by now must have found out:- “For everyone to whom much is given, from him much will be required; and to whom much has been committed, of him, they will ask the more.”
It then must lead that when the National Assembly finally comes around to rightfully comply in respect of the Constitutional Court ruling and order to finalise and promulgate Constitutionally compliant rules to give effect to Section 89 of the constitution, it will present the occasion and opportunity for anyone in the public to charge Ramaphosa as having violated Section 96 as outlined. The claim that Ramaphosa earned other income contrary to stipulations of Section 96 that members of the cabinet and deputy ministers cannot earn income outside the parameters of the stipulated income for the designations as defined in the constitution is, therefore, one to engage. He was therefore as leader of government business in good conscience obligated and duty-bound to have led the charge to stop the process of the IPPs. These conflicts coupled with the dereliction of duty constitutes prolific soil for a claim of the removal of the current acting president.
Having attempted to show the illegal signing of what constitutes REIPP’s predicated on the flawed and misappropriation of sections 10 and 34 as earlier alluded to came also heavily aided by an unfortunate Judge Fourie ruling. It was further aided by an intransigent national assembly who appeared stunted in its non-compliance if not defiance with ConCourt, for rulings to give true and proper effect to Section 89, concomitantly leads to the caretaker president not rightly be held accountable to explain himself as to the developing case of him having flaunted the rules on cabinet ministers as also alluded to earlier. The ConCourt is equally duty bound to write and inquire from the National Assembly as to when it intends to engage its clarion instructions.
Cynicism will lead that there is an unholy alliance of those who will demonstrate they are in pursuit of fixing SA from the media-driven alleged Gupta state capture crime that has become the railroad to allow the real issues of capture and defiance of the ConCourt escape us all.
It cannot be that SA is fooled into the daily dosages of Gupta obsession when the REIPPS and Eskom may constitute nothing less than the flagrant hijacking of a national power utility with definite intent of squeezing it into the orchestrated and long, foreign-driven intent of unbundling, where the usual vultures again intend preying on SA’s assets for personal enrichment.
Clyde Ramalaine and Tshepo Kgadima