Environmental Rights VS Economic stability
7 June 2018
In March of 2018, the Minister of Energy, Jeff Radebe, finally signed power purchase agreements with 27 Independent Power Providers (IPPs) on behalf of Eskom - the national electricity provider. These agreements should have been signed as far back as 2015, under the auspices of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). REIPPPP was launched in 2011 to encourage private investment and help in the development of the renewable energy sector in South Africa.
South Africa is particularly suited for renewable energy generation due to the abundance of wind for wind farms and sunshine for solar energy projects. In December 2017, the Department of Energy stated that since the commencement of REIPPPP in 2011, the country had attracted over R194 billion in investments. On 1 June 2018, Radebe announced a new round in REIPPPP, which could bring between R40 billion and R50 billion worth of investment to the sector. The delay in the signing of the agreements came from several avenues. Eskom resisted pressure from the State to execute the agreements, citing the high cost of procuring and producing renewable energy. Eskom also stated that it was operating at overcapacity, meaning that it was, and is, producing more electricity than demanded by consumers. This reasoning was used to suggest that there was, therefore, no need for alternative energy sources, much less more expensive ones.
In addition, a year ago, the Coal Transportation Forum (CTF) approached the High Court in Pretoria (High Court) to interdict the State from implementing REIPPP. Whilst the matter has not yet been set down, CTF argued in its submissions that the inclusion of IPPs in energy production would result in massive job losses in the sector, particularly for the working class, such as the coal truck drivers they represented. CTF further argued that REIPPPP would result in the abandonment of mining towns where closed coal stations are situated, creating ghost towns in places like Mpumalanga.
Shortly before the Minister signed the agreements, the National Union of Mineworkers of South Africa (NUMSA) and Transform RSA approached the High Court to block the conclusion of the agreements. They echoed CTF’s argument that the renewable energy producers would contribute to a rise in the price of electricity, (although the State opines that IPPs will influence competitive pricing) and that many jobs would be lost as collateral.
The High Court did not grant the interdict, neither did it deliberate on the merits of the case. This means that an application may still be brought on the ordinary Court Roll and should the applicants be successful, the agreements could be reversed.
This situation highlights the tension between much-needed jobs on the one hand, and the constitutionally-mandated progressive realisation of environmental rights on the other hand. South Africa is experiencing an unemployment crisis - currently at 26.6%. Further, 55.5% of the population lives below the national poverty line. The World Bank has classified South Africa as the world’s most unequal society, coming in at 149 of the 149 nations whose GINI indexes were measured. This speaks to the dire need for economic rejuvenation, to which job creation would contribute. Those against REIPPPP argue that the loss of jobs is counterintuitive in the present economic climate.
On the other hand, the Constitution provides for the right to have the environment protected, for the benefit of present and future generations. The measures used to give effect to this right must include ecologically-sustainable development and the use of natural resources, while promoting justifiable economic and social development. Whilst it is true that initially, the capital needed for renewable energy is high, in the long run however, renewables are a cheaper and more sustainable form of energy - which serves the poor of society, as well as reducing costs for businesses. In terms of job creation, the 27 agreements are expected to create more than 61 000 jobs over the next two to three years, which contributes positively to the economy.
To offer perspective on how this balance could be achieved, one can consider the International Labour Organisation (ILO) Guidelines for a just transition towards environmentally sustainable economies and societies for all (the Guidelines). The Guidelines present a set of conclusions and resolutions regarding sustainable development, decent work and green jobs, as well as creating a policy framework for just transition. The Guidelines highlight the importance of poverty eradication being executed hand-in-hand with environmental sustainability and state that to achieve this balance, consensus is needed on the routes taken. This can only be achieved via consultation with all relevant stakeholders. In South Africa’s case, it has been alleged that not all stakeholders were consulted prior to the introduction of REIPPPP.
The Guidelines acknowledgechallenges posed by green transitions, including economic restructuring, resulting in the displacement of workers. On the other hand, they mention the benefits, such as social inclusion through improved access to affordable, environmentally-sustainable energy and payments for environmental services. The Guidelines state that green transition policies must respect, promote and realise fundamental principles and rights at work. Comprehensive policies across the economic, environmental, social, education/training and labour sectors should create an enabling environment for stakeholders to welcome the transition.
The Guidelines echo the principle that human rights are interrelated, interdependent and indivisible. As such, none of these rights operate in a vacuum, and seeking to remedy the political or economic atmosphere without considering the Constitution, would be dangerous. Whilst the harsh realities of inequality and poverty must be considered when applying the Constitution, so must the impact of conduct on the environment.
Questions of misplaced priorities must be met with earnest efforts to show that attention is being paid to all the concerned areas. It is therefore imperative that the government crafts policies which reflect the delicate balance between ensuring protection of the environment and ensuring the preservation of livelihoods.
*Read more about the state of environmental rights and equality in South Africa in the Centre for Constitutional Rights’ annual publication - The Human Rights Report Card.
By Rebecca Sibanda: Legal Assistant, Centre for Constitutional Rights, 6 June 2018