SA planned binding nuclear deal with Russia

By Carol Paton

This article was published in BDLive

BDLive 31 MarchNEW proof has emerged that SA intended to sign a binding deal with Russia to buy a fleet of nuclear reactors, bypassing public finance management rules along the way.

This is contained in court papers lodged on Wednesday by the Southern African Faith Communities Environmental Initiative and Earthlife Africa in the High Court in Cape Town.

The lobby groups, which are asking the court to declare the inter-governmental agreements on nuclear energy signed in 2014 unlawful, secured the new information through court processes that compelled the government to provide the record of decisions on the deal.

Among the records provided is an explanatory memorandum drafted by the state law adviser in November 2013 on the draft Russian deal, which makes clear — they say — that the deal was “intended” and was “understood as creating a firm commitment that Russia would construct the required nuclear plants in SA”.

The state law adviser’s memo has been long sought by the media and opponents of the forthcoming nuclear procurement as it was widely rumoured at the time that the office had given a strong warning that the proposed agreement was binding in nature, had budgetary implications and had to be debated publicly before it could be adopted.

Asked at the time to comment, chief state law adviser Enver Daniels refused, citing client confidentiality.

Supplementary papers lodged in court on Wednesday argue that the state law adviser’s opinion “confirms the plain meaning of the obligation created by the Russian inter-governmental agreement … and the binding nature and specificity of the agreement reached”.

It was this opinion that is believed to have caused both then finance minister Pravin Gordhan and the then energy minister Ben Martins to oppose the signing of the agreement. Both were subsequently moved out of their positions by President Jacob Zuma in May 2014. Then director-general of energy Nelisiwe Magubane was a third casualty of the drama and quit after coming under pressure to support the agreement.

Opposition from Mr Martins, Mr Gordhan, and senior government officials to the agreement had the effect of postponing the signing for almost a year. In September 2014, with new Energy Minister Tina Joemat-Pettersson in place, SA and Russian-owned energy firm Rosatom signed a new version of the deal in Brussels.

After the signing, the Department of Energy and Rosatom issued a statement implying that a procurement deal had been reached. It quoted Ms Joemat-Pettersson saying that co-operation with Russia “will allow us to implement our ambitious plans for the creation by 2030 of 9,600MW of new nuclear capacities based on modern and safe technologies”.

This was later withdrawn by the Department of Energy, which said there was no procurement deal but only “a country-to-country framework agreement”.

While inter-governmental agreements are normally generic in nature, the agreement stated unequivocally that the parties would jointly implement “projects of two new nuclear power plants with VVR (Russian) reactors with a total capacity of up to 2.4GW at the site selected by the SA party … and other nuclear power plants of a capacity of up to 7.2GW at other identified sites in SA”.

In the memo, the state law adviser pointed out that as, in its view, the proposed deal with Russia was binding and had budgetary implications it must be tabled in Parliament under section 231.2 of the Constitution. This would allow for public participation, debate and parliamentary approval.

Instead, when the agreement, and those made with other prospective vendors, were finally tabled in Parliament in June last year, Ms Joemat-Pettersson did so in terms of section 231.3, side-stepping the need for public participation. The Department of Energy did not comment on Wednesday.

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