Brief Summary

Administrative Law — Review — Nuclear power procurement — Applicants challenged the Minister of Energy's determinations under section 34 of the Electricity Regulation Act and the constitutionality of intergovernmental agreements tabled before Parliament — Applicants argued that the Minister's decisions lacked procedural fairness and public participation, and that the tabling of agreements was non-compliant with constitutional requirements — Court held that the Minister's determinations and the tabling of the agreements were lawful, as the applicants failed to establish a basis for review or demonstrate standing to challenge the agreements.

Comprehensive Summary

Summary of Judgment

1. Introduction

This was a High Court review application in which two civil society organisations challenged a series of governmental steps taken between 2013 and 2016 in furtherance of South Africa’s nuclear new generation capacity procurement programme. The proceedings combined administrative-law review and constitutional review, with the applicants seeking declaratory and setting-aside relief directed at both electricity procurement “determinations” and the tabling of certain international agreements in Parliament.

The applicants were Earthlife Africa – Johannesburg and the Southern African Faith Communities’ Environment Institute. The principal respondents opposing the relief were the Minister of Energy and the President of the Republic of South Africa. The National Energy Regulator of South Africa (NERSA) was cited because it concurred in the impugned ministerial determinations. The Speaker of the National Assembly and the Chairperson of the National Council of Provinces were cited due to their institutional interest in the tabling of international agreements. Eskom Holdings (SOC) Limited was joined during the proceedings but, together with the parliamentary office-bearers, abided the decision.

Procedurally, the litigation evolved as the record became available and as further steps were taken by the executive. The application was launched in October 2015. During the course of the proceedings, the respondents produced a previously undisclosed 2013 section 34 determination (gazetted only in December 2015), and the Minister later issued a further 2016 section 34 determination (gazetted in December 2016) which precipitated a postponement and later supplementary affidavits. The matter was heard on 13 December 2016 and 22–24 February 2017, with judgment delivered on 26 April 2017 by Bozalek J (Baartman J concurring).

The general subject-matter concerned, first, whether the Minister and NERSA lawfully and fairly made determinations under section 34 of the Electricity Regulation Act 4 of 2006 (relating to the need for and procurement of 9 600 MW of nuclear capacity), and second, whether the Minister lawfully tabled certain intergovernmental agreements (IGAs) under section 231 of the Constitution, including the 2014 Russian Federation nuclear cooperation agreement and the 1995 United States and 2010 Republic of Korea nuclear cooperation agreements.

2. Material Facts

In March 2011, the Minister gazetted the Integrated Resource Plan for Electricity 2010–2030 (IRP2010). The Department of Energy had indicated that this plan should be revised every two years, but at the time of the hearing it had not been revised as originally contemplated.

On 11 November 2013, the Minister signed a proposed determination under section 34(1) of the Electricity Regulation Act 4 of 2006 stating that 9 600 MW of electricity should be procured from nuclear energy, with procurement to occur through tendering procedures that are fair, equitable, transparent, competitive, and cost-effective. NERSA concurred in the proposed determination on 17 December 2013. Notwithstanding this, the determination was not made public at that time and was only gazetted on 21 December 2015, after the litigation had been launched and in circumstances indicating that its publication was treated as urgent for purposes of the respondents’ defence.

Separately, an intergovernmental agreement between South Africa and the Russian Federation on strategic partnership and cooperation in nuclear power and industry was approved for signature at executive level in September 2014, with the President authorising signature and the Minister signing on behalf of South Africa. Press statements issued immediately thereafter (by the Department of Energy and the Russian atomic energy agency, Rosatom) characterised the agreement as laying a foundation for South Africa’s large-scale nuclear power plant procurement and development programme, based on construction of nuclear power plants using Russian VVER technology up to 9.6 GW, alongside additional cooperation measures.

On 10 June 2015, the Minister tabled five IGAs in Parliament under section 231(3) of the Constitution, including three that were central to the present dispute. These were the nuclear cooperation agreement with the United States of America signed on 25 August 1995, the agreement with the Republic of Korea signed on 8 October 2010, and the 2014 Russian Federation agreement signed on 21 September 2014. The tabling thus occurred more than two decades after signature for the US IGA and nearly five years after signature for the Korean IGA.

While the review was pending, the Minister issued a further section 34 determination on 8 December 2016, published on 14 December 2016, again providing for the procurement of 9 600 MW of nuclear energy. The principal change was that it identified Eskom Holdings (SOC) Limited or its subsidiaries as the procurer rather than the Department of Energy. NERSA concurred in the 2016 determination by a round robin resolution, and the record reflected that NERSA’s concurrence occurred within days of the Minister’s request.

The court treated as central and effectively undisputed (on the papers and record) that no public participation process preceded NERSA’s concurrence in either the 2013 or 2016 determinations. The court also treated as material that the 2016 determination did not expressly withdraw, amend, or refer to the gazetted 2013 determination, creating an anomalous situation of two gazetted determinations with inconsistent provisions, including on the identity of the procurement agency.

Regarding the international agreements, the respondents’ preliminary contentions included that foreign states were necessary parties, that IGAs were not justiciable by domestic courts, and that the applicants lacked standing. The court resolved these points as matters of domestic constitutional and administrative law, based on the relief actually sought and the constitutional scrutiny of the executive’s domestic conduct.

3. Legal Issues

The court identified three main issues for determination.

The first issue was whether the Minister and NERSA breached statutory and constitutional prescripts in making the 2013 and 2016 section 34 determinations, including whether those determinations (and NERSA’s concurrence) constituted administrative action reviewable under the Promotion of Administrative Justice Act 3 of 2000 (PAJA), and whether the decisions were lawful, reasonable, and procedurally fair. This issue involved questions of law (classification as administrative action; statutory interpretation of NERA and PAJA), application of law to fact (whether the process complied with procedural fairness requirements), and legality/rationality review (whether the process and decisions were rational).

The second issue was whether the President and the Minister breached the Constitution in relation to the 2014 Russian IGA, specifically whether it was constitutionally permissible to table it under section 231(3) (technical/administrative/executive agreements not requiring parliamentary approval) rather than section 231(2) (agreements binding only after approval by both Houses). This issue was principally one of constitutional interpretation and classification of the agreement by reference to its terms.

The third issue was whether the Minister breached the Constitution by tabling the US and South Korean nuclear cooperation agreements under section 231(3) only after substantial delays, and whether tabling “within a reasonable time” was merely directive or a jurisdictional requirement for the section 231(3) procedure. This issue concerned law and application of law to fact, particularly the meaning and effect of the “reasonable time” requirement.

Ancillary issues included whether foreign states were necessary parties (non-joinder), whether the dispute was justiciable, whether the applicants had standing, and what constituted just and equitable relief under section 172 of the Constitution.

4. Court’s Reasoning

On the section 34 determinations, the court analysed whether the conduct constituted administrative action under section 33 of the Constitution and PAJA, or whether it was excluded as high-level executive policy. Applying the Constitutional Court’s approach to distinguishing administrative from executive action, the court emphasised the source of the power (section 34 of the Electricity Regulation Act), the nature and subject-matter of the power, and the direct external legal effect of the determination, at least in binding or authorising NERSA’s licensing stance and affecting market participants. The court accepted that NERSA’s role was decisive because section 34 determinations were inchoate until NERSA concurred, and considered it conceptually difficult to treat NERSA’s concurrence as administrative action while treating the overall section 34 determination as something else.

The court then focused on NERSA’s statutory duties under the National Energy Regulator Act 40 of 2004 (NERA). It highlighted that section 10 of NERA requires that every decision of NERSA must be in writing, consistent with the Constitution and applicable laws, taken in the public interest, and critically, taken within a procedurally fair process where affected persons have the opportunity to submit views and relevant facts and evidence. The court reasoned that NERSA’s concurrence in an expansive nuclear procurement determination was not a routine internal matter but an unusually significant regulatory decision, and there was nothing indicating it fell outside section 10’s scope.

When assessing procedural fairness, the court referred to PAJA’s provisions on procedurally fair administrative action, including the provisions dealing with administrative action affecting the public, which require an administrator to decide whether to use mechanisms such as a public inquiry or notice-and-comment procedure, or another appropriate procedure that gives effect to procedural fairness. On the record, the court found no indication that NERSA afforded any opportunity for affected persons or the public to participate, and the brief timeframes between request and concurrence made meaningful procedural fairness improbable. Given the far-reaching consequences of procuring 9.6 GW of nuclear capacity (including substantial public expenditure and environmental implications), the court considered that a fair and rational process required a mechanism for public input before NERSA concurred.

The court held that the absence of even limited public participation rendered NERSA’s concurrence in the 2013 determination procedurally unfair, in breach of section 10(1)(d) of NERA read with PAJA. It further reasoned that even if the decisions were not administrative action, the principle of legality required rationality in both the process and the decision, and that in certain circumstances rationality demands hearing interested persons. Applying Constitutional Court authority on rationality review, the court held that NERSA’s process failed rationality requirements because NERSA did not explain how it acted in the public interest without ascertaining views of the public or affected parties, despite statutory duties of independence, transparency, and procedural fairness.

The court also upheld a distinct procedural challenge based on the two-year delay in gazetting the 2013 determination. Although the Electricity Regulation Act did not expressly require gazetting, the court treated publication as a recognised mechanism for public notification and considered that the delay undermined transparency and accountability. It relied on authority indicating that certain official acts take legal effect when translated into an overt act through public notification (often by gazetting), and reasoned that delay raised questions about whether the determination had legal effect before publication. The court also held that, because the determination was effectively only made public in December 2015, NERSA’s concurrence from 2013 could not simply be assumed to remain valid; developments in the intervening period might have warranted reconsideration, and concurrence was not sought anew. The delay therefore contributed to unlawfulness, including as a breach of legality and the requirements of open government.

For the 2016 determination, the court similarly held that there was no public participation process before NERSA concurred, notwithstanding the passage of time since 2013 and the significant change to designate Eskom as procurer. The court then addressed the further challenge that the 2016 determination failed to withdraw or amend the 2013 determination and created two inconsistent gazetted determinations. The respondents argued that the 2016 determination was intended as an amendment or implied repeal. The court rejected the sufficiency of this response, emphasising that if the 2013 determination was invalid ab initio it could not be amended, and in any event the 2016 determination did not purport to amend, repeal, or even refer to the earlier determination, leaving the legal position uncertain in a manner inimical to the rule of law. The court held that this inconsistency and uncertainty rendered the 2016 determination irrational as an independent ground of review.

The court also considered a specific substantive attack on NERSA’s concurrence in 2016, based on NERSA’s own recorded reasons suggesting it would be viewed as mala fide to delay or refuse concurrence because it had concurred previously. The court accepted that, absent any further explanation from NERSA (which did not oppose the proceedings), these recorded reasons had to be taken seriously. It held that NERSA’s approach reflected a material error of law or fact and/or a failure to act independently as required by NERA, because concurrence involved an independent discretionary judgment and NERSA was not bound by its prior concurrence.

Turning to the IGAs, the court first rejected the respondents’ non-joinder argument. It reasoned that the applicants were not seeking orders against foreign states, nor was the court asked to decide the validity of the agreements on the international plane; the focus was the constitutionality of the Minister’s and President’s domestic conduct under section 231. It also rejected the contention that the applicants lacked standing, holding that the applicants had standing in their own right and in the public interest, and that citizens have a legitimate interest in whether IGAs are properly tabled in Parliament given Parliament’s constitutional role in representing the people.

On justiciability, the court distinguished authority concerning disputes that would require a domestic court to determine the “true agreement” between sovereigns in a way that would intrude into foreign sovereign conduct. The court held that determining whether the Russian IGA should have been tabled under section 231(2) or 231(3) necessarily required the court to have regard to the agreement’s content, and that constitutional scrutiny of the executive’s exercise of public power in foreign affairs is not excluded merely because an international agreement is involved.

On the classification of the Russian IGA, the court undertook a close reading of the agreement’s terms and emphasised its specificity, peremptory language, and the scope of commitments, including references to a “strategic partnership,” detailed provisions connected to VVER reactor technology, envisaged projects and further agreements, favourable tax treatment, and liability/indemnification provisions. The court compared the 2014 Russian IGA with other nuclear cooperation agreements and with an earlier 2004 Russia-South Africa cooperation agreement, finding the 2014 agreement materially more far-reaching. Against this, and also noting that a senior State Law Advisor had concluded that the agreement fell within section 231(2), the court held that the Russian IGA could not be treated as a routine technical/administrative/executive agreement for section 231(3) purposes. It concluded that the agreement required parliamentary scrutiny and approval under section 231(2), and that the Minister’s decision to table it under section 231(3) was at least irrational, and thus unlawful and unconstitutional.

However, the court declined to decide, at that stage, whether the President’s authorisation and the Minister’s signature of the Russian IGA were unconstitutional on the basis of section 217 procurement requirements. The court reasoned that once the tabling decision under section 231(3) was set aside, the agreement would have no binding effect in domestic law, and if the executive chose to pursue section 231(2) approval thereafter, Parliament could debate and decide the agreement’s fate. The court considered that determining at this stage whether provisions of the agreement violated section 217 could improperly intrude into matters that could become the subject of parliamentary scrutiny, and it therefore exercised restraint.

On the US and South Korean IGAs, the court accepted that such agreements would ordinarily fall under section 231(3), but held that the requirement that they be tabled “within a reasonable time” is a mandatory prerequisite for the lawful invocation of section 231(3). The court rejected the respondents’ contention that unreasonable delay merely meant the delay was unconstitutional while the tabling remained effective. It reasoned that section 231’s structure reflects separation of powers and accountability, and allowing the executive to bind the state while withholding tabling for years would undermine openness and the constitutional scheme. On the magnitude of delay (decades and nearly five years), the court held that such delays could not be reasonable and would render the time requirement meaningless. The tabling decisions were therefore unlawful, unconstitutional, and fell to be reviewed and set aside.

Finally, on relief, the court applied section 172 of the Constitution, noting the default position that consequences of invalidity should be corrected or reversed where possible. It granted setting-aside relief for the tabling decisions and the determinations, declined to issue further declaratory relief prescribing future procedures beyond what was necessary, and crafted costs orders reflecting both the applicants’ substantial success and the court’s disapproval of the late disclosure of the 2013 determination.

5. Outcome and Relief

The court declared unconstitutional and unlawful, and reviewed and set aside, the Minister’s decision (around 10 June 2015) to table the Russian Federation intergovernmental agreement in Parliament under section 231(3) of the Constitution.

The court also declared unlawful and unconstitutional, and reviewed and set aside, the Minister’s decisions (around 10 June 2015) to table in Parliament under section 231(3) the nuclear cooperation agreements with the United States of America (signed 25 August 1995) and the Republic of Korea (signed 8 October 2010), based on the failure to table them within a reasonable time as required by section 231(3).

The court declared unlawful and unconstitutional, and reviewed and set aside, both the 2013 section 34 determination (gazetted 21 December 2015) and the 2016 section 34 determination (gazetted 14 December 2016) relating to the requirement for and procurement of nuclear new generation capacity.

Consequentially, the court set aside any Request for Proposals or Request for Information issued pursuant to the impugned section 34 determinations.

On costs, the court ordered the Minister to pay the costs of the application, including costs justified by the matter’s complexity. It further ordered the Minister to pay, on an attorney-and-client scale, those costs incurred by the applicants due to the late disclosure of the 2013 section 34 determination.

Cases Cited

President of the Republic of South Africa and Others v South African Rugby Football Union and Others 2000 (1) SA 1 (CC).

Permanent Secretary, Department of Education and Welfare, Eastern Cape, and Another v Ed-U-College (PE) (Section 21) Inc 2001 (2) SA 1 (CC).

Grey’s Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others 2005 (6) SA 313 (SCA).

Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC).

Albutt v Centre for the Study of Violence and Reconciliation, and Others 2010 (3) SA 293 (CC).

Democratic Alliance v President of the Republic of South Africa and Others 2013 (1) SA 248 (CC).

Kruger v President of the Republic of South Africa [2008] ZACC 17; 2009 (1) SA 417 (CC).

Durban Add-Ventures Ltd v Premier, KwaZulu-Natal, and Others (No 2) 2001 (1) SA 389 (N).

Burger v Rand Water Board and Another 2007 (1) SA 30 (SCA).

Tlouamma and Others v Speaker of the National Assembly and Others 2016 (1) SA 534 (WCC).

President of the Republic of South Africa and Others v Quagliani 2009 (2) SA 466 (CC).

Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa and Others 1999 (2) SA 279 (T).

Mohamed and Another v President of the Republic of South Africa and Others (Society for the Abolition of the Death Penalty in South Africa and Another Intervening) [2001] ZACC 18; 2001 (3) SA 893 (CC).

Kaunda and Others v President of the Republic of South Africa and Others 2005 (4) SA 235 (CC).

Geuking v President of the Republic of South Africa and Others 2003 (3) SA 34 (CC).

National Commissioner of Police v Southern African Human Rights Litigation Centre and Another 2015 (1) SA 315 (CC).

Krok and Another v Commissioner, South African Revenue Service 2015 (6) SA 317 (SCA).

Minister of Justice and Constitutional Development and Others v Southern African Litigation Centre and Others 2016 (3) SA 317 (SCA).

Glenister v President of the Republic of South Africa and Others 2011 (3) SA 347 (CC).

Economic Freedom Fighters v Speaker, National Assembly and Others 2016 (3) SA 580 (CC).

International Trade Administration Commission v SCAW South Africa (Pty) Ltd 2012 (4) SA 618 (CC).

Metal and Allied Workers Union and Another v State President of the Republic of South Africa and Others 1986 (4) SA 358 (D).

Matatiele Municipality and Others v President of the Republic of South Africa and Others (No 2) [2006] ZACC 12; 2007 (6) SA 477 (CC).

Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (4) SA 179 (CC).

Legislation Cited

Constitution of the Republic of South Africa, 1996 (sections 1, 33, 38, 41, 42, 85, 92, 172, 217, 231).

Electricity Regulation Act 4 of 2006 (section 34).

National Energy Regulator Act 40 of 2004 (sections 9 and 10).

Promotion of Administrative Justice Act 3 of 2000 (sections 3, 4 and section 1 definition of “administrative action”).

Promotion of Access to Information Act 2 of 2000.

Public Safety Act 3 of 1953.

Rules of Court Cited

Uniform Rules of Court, Rule 53.

Held

The court held that NERSA’s concurrence in the 2013 and 2016 section 34 nuclear determinations was required to comply with statutory procedural fairness requirements, including section 10(1)(d) of the National Energy Regulator Act 40 of 2004, and that the absence of public participation rendered the decisions procedurally unfair and unlawful. The court further held that the two-year delay in publishing the 2013 determination and the failure to secure NERSA’s concurrence anew for publication contributed to unlawfulness, and that the 2016 determination was independently irrational because it co-existed with a contradictory gazetted 2013 determination without express amendment, withdrawal, or repeal.

The court held that the Minister’s tabling of the Russian Federation nuclear agreement under section 231(3) was unconstitutional and unlawful because, on the agreement’s terms and implications, it was not a routine technical/administrative/executive agreement suitable for section 231(3) tabling; it required parliamentary approval under section 231(2). The court declined, on separation of powers and remedial grounds, to determine at that stage the additional challenge directed at the President’s and Minister’s decisions to authorise and sign the Russian agreement by reference to section 217 procurement requirements.

The court held that the tabling of the US and South Korean nuclear cooperation agreements under section 231(3) was unconstitutional and unlawful because section 231(3) requires tabling within a reasonable time as a mandatory prerequisite, and delays of decades and nearly five years could not satisfy that requirement.

LEGAL PRINCIPLES

The judgment applied the principle that the classification of conduct as administrative action depends on factors including the source, nature, subject-matter, and effect of the power, and that implementation of legislation is typically administrative action, while formulation of policy in the narrow sense may still constitute administrative action when undertaken pursuant to statutory powers.

The court applied and emphasised that statutory requirements in section 10 of the National Energy Regulator Act 40 of 2004 impose enforceable obligations on NERSA that its decisions be taken within a procedurally fair process allowing affected persons an opportunity to make representations, and that significant regulatory decisions with broad public impact cannot lawfully be made without procedures giving effect to such fairness.

The judgment applied the legality principle that rationality review extends to both the decision and the process by which the decision is taken, and that where the circumstances so require, rational decision-making may necessitate hearing interested or affected persons.

In relation to international agreements, the court applied the constitutional principle that the executive’s conduct under section 231 is justiciable as an exercise of public power, and that a domestic court may have regard to an agreement’s content to determine whether it was properly processed under section 231(2) or section 231(3).

The court applied the principle that section 231(3)’s requirement that agreements be tabled “within a reasonable time” is a mandatory condition for lawful reliance on the section 231(3) procedure, in a manner consistent with separation of powers, openness, and accountability.

The court applied rule-of-law principles concerning clarity and certainty in official determinations affecting rights and public administration, holding that the coexistence of contradictory gazetted determinations without clear amendment, withdrawal, or repeal is inimical to legality and may render the later determination irrational.

The court applied constitutional remedial principles under section 172 that invalid conduct must be declared invalid, and that relief should be just and equitable, with costs and scale reflecting both success and the court’s disapproval of litigation conduct such as late disclosure of material decisions.

Earthlife Africa Johannesburg and Another v Minister of Energy and Others (19529/2015) [2017] ZAWCHC 50; [2017] 3 All SA 187 (WCC); 2017 (5) SA 227 (WCC) (26 April 2017)