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The nuclear deal is dead (at least for now)

On Wednesday, the Cape Town high court 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, as well as 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 order was largely based on procedural challenges and shortcomings rather than on the substantive aspects of the nuclear deal. This meant that the court would not be seen to be interfering in policy decisions and the government could retake the decision, albeit in a procedurally fair manner.

The application

A comprehensive explanation of the court case is available here.

Earthlife’s initial challenge sought to have the intergovernmental agreements (IGAs) between South Africa and the USA, South 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. In the middle of court hearings, the minister presented a new determination from 2016, which addressed some of the flaws in the previous determination and Earthlife had to file additional papers to challenge the new determination.

The foundation of Earthlife’s challenge to the determination was their contention that it constituted ‘administrative action’ – 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 lack of public participation in the decision-making process and argue that the determination was irrational and unreasonable.

The court decision

The court was left to decide the following issues:

  • whether either of the 2013 and 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 2013 and 2016 determinations

The court held that the determinations were administrative action because they had far-reaching consequences for the public and were legally binding on the National Energy Regulator of South Africa (NERSA). Other energy providers would also be materially affected by the determination. According to section 10 of the National Energy Regulator Act, 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 declared them 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’. The court thus declared the 2013 determination invalid.

In addition, because the 2016 determination was inconsistent with the 2013 determination, but no attempt had been made to amend or withdraw the latter, it was rendered irrational and set aside. The court also set aside the determination because it found that NERSA failed to act independently in concurring with the determination.

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 other grounds. The plethora of reasons provided by the court on various grounds also means that it will be difficult for the government to find a ground for appeal.

The intergovernmental agreements

This part of the challenge was a technical and procedural point but, put briefly: 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 minister’s 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 the decision, attempt to make new agreements and determinations or simply abandon the nuclear deal altogether.

This article originally appeared on Safura Abdool Karim’s blog, Reasonableness Review, and is republished with permission.

Featured image via Twitter.

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