Legal challenges against state of disaster can be successful

The electricity crisis is a disaster and it is leaving SA in a state, but government’s declaration of a national state of disaster is seen by many as unnecessary.

At least two entities, the Democratic Alliance (DA) and Solidarity, have said they will approach the court to reverse the decision.

Read: Ramaphosa jeered as he declares national state of disaster

Critics raise three arguments against the state of disaster:

1. Neither Eskom nor government departments have proper plans to solve the power utility’s problems and a state of disaster will not magically create credible plans;
2. The electricity crisis can be addressed under existing legislation and procedures; and
3. Declaring a state of disaster and bypassing certain procedures will create even more opportunities for fraud and corruption.

Law firm Webber Wentzel adds another – important – reason to the list.

Partner Mzukisi Kota refers to the Disaster Management Act (DMA) in an opinion drafted with senior associate Lubumba Kamukwamba and candidate attorney Lize-Mari Doubell.

“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,” he says.

“A ‘disaster’ is defined in the [act] as: ‘a progressive or sudden, widespread or localised, natural or human-caused occurrence which (a) causes or threatens to cause (i) death, injury or disease; (ii) damage to property, infrastructure or the environment; or (iii) significant disruption of the life of a community; and (b) is of a magnitude that exceeds the ability of those affected by the disaster to cope with its effects using only their own resources’.

“Importantly, 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 effectively deal with the disaster,” he adds.

“The declaration of SA’s energy crisis as a National State of Disaster may be open to court challenge, as there is already sufficient legislation in place to deal with it,” says Kota.

“The immediate concern that arises from the measures articulated by the president is why their implementation requires the declaration of a National State of Disaster. 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.”

15-year-long crisis

Webber Wentzel also notes that there is growing scepticism about the government’s ability to address the energy crisis in the wake of a record-breaking streak of rolling blackouts and concerns that the state of disaster, which ousts parliamentary supervision over lawmaking, is the appropriate solution to a 15-year-long crisis.

“There are also worries about the potential for fraud and corruption of the kind experienced in the emergency procurement of personal protective equipment during the height of the Covid-19 pandemic when South Africa also operated under a State of Disaster,” says Kota.

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In his State of the Nation Address (Sona), President Cyril Ramaphosa justified the declaration of a state of disaster, saying that it would enable an effective response to the electricity crisis to be coordinated from the centre of government. It includes plans to support businesses in the food production, storage and retail supply chains through the roll out of generators and solar panels.

Government plans to exempt critical infrastructure, such as hospitals and water treatment plants, from load shedding, accelerate energy projects, and limit regulatory requirements.

However, Webber Wentzel maintains that legislation already exists to fix the problems.

Electricity Regulation Act

Section 34 of the Electricity Regulation Act (ERA) already empowers the minister of mineral resources and energy to procure new generation capacity to ensure the uninterrupted supply of electricity.

Various ministerial determinations are issued from time to time in terms of Section 34(1)(b) of the ERA to provide for, among other things, the types of energy sources from which electricity must be generated and the proportion split across the relevant sources.

Section 34(2)(e) also empowers the minister 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”.

The state is even empowered to expropriate land, or any right in, over, or in respect of land, to facilitate the achievement of the objectives in the ERA.

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Recent amendments to the ERA schedules to remove the 100 megawatt (MW) licensing threshold for embedded generation further illustrate the radical measures that can be and have been taken under the ERA to address the need for additional generation capacity in the country and to reduce the amount of red tape.

“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. There is nothing in what is being sought by declaring the National State of Disaster that enables swifter action than is already possible under ERA,” says Kota.

Public Finance Management Act

The Public Finance Management Act (PFMA), and the instruction notes issued under it in terms of Section 76, also contain special mechanisms for a crisis. For example, Section 16 of the PFMA empowers the minister of finance 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.

Moreover, National Treasury Instruction 3 of 2021/22 provides for a deviation 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, calls for urgent action, and, if there is insufficient time, will follow a competitive bidding process. An “urgent case” is a situation where early delivery is critical and the invitation of competitive bids is either impossible or impractical.

Kota implies in his analysis that improper planning should not be made a crisis or urgent case.

Unnecessary

“Arguably, the plans outlined at Sona were always achievable under existing legislation, which has adequate mechanisms to enable extraordinary and swift action,” says Kota.

“The only aspect which is not clearly envisaged is that of the co-ordination pointed to by the president (though this could arguably also be facilitated through mechanisms such as those set out in the Infrastructure Development Act – at least in relation to infrastructure co-ordination).

“There has also been a failure to implement the existing regulatory framework and policies to eradicate load shedding, infrastructural challenges and rampant vandalism and looting at power plants.

“It is in any event most surprising that government requires the adoption of a National State of Disaster and legislation to achieve co-ordination in implementing actions intended to address the energy crisis,” says Kota.

“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 the root causes of the energy crisis. These include the lack of co-ordination, co-operation, planning and political agreement between the existing ministries and Eskom.”

The lawyers say that regulations and directions that will be published under the state of disaster could be tested in court, adding that similar challenges were launched during the Covid-19 state of disaster, as in the case of the minister of cooperative governance and traditional affairs versus British American Tobacco South Africa (Batsa).

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Webber Wentzel notes that it successfully acted for Batsa and other parties who initially challenged the Covid-19 tobacco ban in the Western Cape High Court, before the minister’s unsuccessful appeal at the Supreme Court of Appeal.

At the time, the victory had little effect as the state of disaster had by then been lifted and tobacco products were freely available. However, it created a legal precedent that might be referred to when organisations go to court now.

Irrelevant

People immediately recalled some of the irrelevant regulations that were passed under the previous state of disaster.

“A state of disaster is irrational and unnecessary and leaves Solidarity with no option but to litigate,” says Dirk Hermann, chief executive of the trade union that often responds to issues affecting the general public.

“We dare not allow a repeat of the government’s abuse of power that occurred during the Covid-19 state of disaster. The decision-making that led to a ban on warm chicken meals and flip-flops now wants to take the decisions about the energy crisis without proper oversight.

“A state of disaster will not end the energy crisis any faster, but it opens the door to major abuse once again.

“No amount of legislation will be able to rectify uselessness and incompetence. A state of disaster is equal to giving an incompetent builder a bigger hammer – it will not lead to better construction, but rather to more damage,” says Hermann.

He adds that Solidarity has already started to prepare urgent court documents to be submitted within days.

The DA also announced that it will challenge the legality of the state of disaster. DA leader John Steenhuisen responded within hours of the president’s announcement, saying the party had already briefed its lawyers.

“A National State of Disaster under the guise of dealing with the load shedding crisis it created, will similarly empower the ANC to abuse procurement processes and issue nonsensical regulations that have nothing to do with the electricity crisis,” says Steenhuisen.

“We reiterate our call to urgently loosen the regulatory noose around the electricity system’s neck by incentivising private sector investment in generation and removing impediments like localisation requirements and BEE to enable Eskom to recruit the skilled people it so desperately needs to speed up maintenance and unbundling.”