Greasing the skids: Karpowership clinches last-minute ‘special directive’ from SA government

Screenshot of an extract from Adam Gunn’s letter to Barbara Creecy.

By Tony Carnie

14 May 2023

The government appears to have rammed through a ‘special directive’ ordering Transnet to find harbour space for three Turkish gas-to-power ships in the Coega harbour for the next 20 years.

The directive seems to have been shoved through despite strong opposition from the national harbour authority. Until recently, the Transnet National Ports Authority (TNPA) made it clear it opposed any long-term plans to moor powerships in Coega because it had already earmarked limited harbour space for its own port expansion plans. Therefore, there was no room to accommodate three large ships indefinitely.

This was one of the main reasons Karpowership’s bid for environmental approval was rejected two months ago.

But now it has come to light that Karpowership lawyer Adam Gunn has written to Environment Minister Barbara Creecy, stating that the national Transport Minister has issued a directive in terms of Section 79 of the National Ports Act. Such a directive would compel Transnet to make way for the powerships. It also short-circuits other sections of the act that require a separate public consultation process when harbour space is leased to third parties.

Section 79 confers the Minister of Transport with special power to issue these directives to protect “national security” or to “promote the national, strategic or economic interests” of the country, even where this is not in the commercial interests of Transnet or could result in financial losses.

karpowership directive Section 79 of the National Ports Act. (Image: Supplied)

But it remains unclear whether the directive was signed by newly appointed Transport Minister Sindiswe Chikunga or her predecessor Fikile Mbalula. Gunn has not disclosed the date on which it was signed.

Transnet has not responded to Daily Maverick’s repeated requests for comment since Thursday 11 May, while Chikunga’s department has also not responded to requests for clarity and confirmation sent on Friday afternoon, 12 May.

Karpowership insists it was “instructed” by Creecy’s department to not release a copy of its appeal document and annexures to the public and media, while Creecy’s department has also refused to release the appeal documents which were submitted to her office more than a month ago.

karpowership coega An aerial view of Coega harbour showing the proposed position of the three Karpowership vessels in yellow. (Image: EIA report)

A spokesperson for the Department of Forestry, Fisheries and Environment suggested it would be “premature” to release the documents at this stage because Karpowership’s appeal application was submitted after the stipulated deadline and was therefore being held in abeyance until a decision was made on whether to accept or reject the company’s condonation request for extra time.

Last week – in a further signal that the government is determined to approve the controversial “emergency power” plan come what may – President Cyril Ramaphosa indicated his personal support during parliamentary question time by stating, “...what South Africa needs right now is emergency energy… Other countries have done so... They have brought in ships that are able to generate energy and immediately solved their energy problems and challenges.”

Considering Gunn’s written assurance to Creecy that he had only recently “officially received the Section 79 Directive from the Minister of Transport”, this suggests that Chikunga signed the Section 79 directive at the last minute – possibly after Creecy’s department refused to authorise the Coega gas ship plan on 7 March.

karpowership gunn A screenshot of an extract from Adam Gunn’s letter to Barbara Creecy.

Alternatively, former transport minister Mbalula may have signed the directive before the Cabinet reshuffle on 6 March, as Gunn indicates in his letter that, at some point after 7 March, Karpowership had “further continued with its communications with TNPA to ascertain how conflicting information had been provided to different parties”.

Either way, the belated use of a Section 79 directive opens the way for further legal challenges against the Karpowership approval process.

Invoking these special powers has been on the cards since at least May 2021, when Durban maritime law expert Andrew Pike warned against such a move in a legal opinion he prepared for Business Unity South Africa.

At the time, the Transport Department told Daily Maverick that Mbalula had not issued a directive yet, and it could not be issued before he had consulted Transnet and Public Enterprises Minister Pravin Gordhan. Thereafter, a Cabinet memorandum would be needed before a directive was issued.

Pike, a senior member of law firm Bowmans, suggested that, before issuing such a directive, the Minister of Transport would be required to follow a more onerous public consultation process. He cautioned that the legal authorisation strategies under discussion at that time were likely to be ruled unlawful unless the National Ports Act was amended.

Commenting, University of KwaZulu-Natal law expert Professor Michael Kidd said the legal wording of Section 79 requires the minister to show that his/her instructions to Transnet are strictly necessary to “promote the national, strategic or economic interests” of the country.

A ‘high bar’

“That is quite a high bar. This is obviously a higher legal standard than expedience or convenience and if it can be demonstrated that electricity/power issues can be resolved – or at least alleviated by alternative (less potentially harmful) ways – then the necessity of the directive will not be objectively demonstrable.”

Further concerns have been raised by Dr Gary Koekemoer, chairperson of the Algoa Bay branch of the Wildlife and Environment Society of South Africa (Wessa). He said the Wessa branch was considering its legal options after Creecy’s department refused to provide him with a copy of Karpowership’s appeal documents and a copy of the Section 79 directive.

Wessa lodged a Promotion of Administrative Justice Act application to Creecy’s department “to understand what communication was engaged in” between Karpowership and the department on the issue of Coega’s harbour expansion plans, as well as any other relevant communication between Karpowership, its environmental consultants (Triplo4), the Environment Department and TNPA on the same issue.

This was because Triplo4 had given assurances at a public meeting last year that Transnet was not opposed to the Karpowership plan in Coega.

“Without sight of the appeal itself, we are unable to assess whether the Section 79 directive is submitted simply to override the clear conflict with the port expansion plans, or whether (Karpowership) makes the case that the project will not conflict with port expansion plans,” Koekemoer said.

“Either way, the Coega port expansion is critical to the Nelson Mandela Bay metro’s economy, the Coega Development Corporation and the adjacent Economic Development Zone, and specific to several local pending issues such as the relocation of the tank farm from the Port Elizabeth port, the building of new manganese terminals, the capacity expansion of the port and more.

“The public have not been given the opportunity to comment on the impact of the project on the expansion plans. As we understand it, the three Karpowerships cannot be relocated within the current port, and the berthing plan as per the application will render the northern expansion of the port impossible. The effect of that on the project and the port is material and of great public interest and should have formed part of the original application.

“Without sight of the Section 79 directive, we do not know when such a directive was issued, whether it is a generic directive or specific to the Port of Ngqura, or if it had any conditions attached? Again, it appears material to the appeal and in the public interest to be able to comment on such... Why was such a directive not submitted as part of the original application? (Karpowership) in its request for condonation does not explain why the directive held up the appeal submission.”

Koekemoer said Wessa and other parties were now being placed at a legal disadvantage because they were being denied access to new information presented by Karpowership after the environmental impact assessment process had been concluded.

In response to Koekemoer’s submission, a senior official wrote back suggesting that no parties would be deprived of their rights to comment on Karpowership’s legal appeal documents at a later stage, if the department agreed to condone its late submission.

“The appeal itself will remain in abeyance until such time as the condonation decision has been either granted or refused.” DM

Transnet responds

[Gqeberha, 16 May 2023] Transnet National Ports Authority (TNPA) can confirm that it is in receipt of a directive issued by the Department of Transport in terms of Section 79 of the National Ports Act 12 of 2005. This directive is subject to certain conditions on which TNPA and Karpowership are engaging.

TNPA is not at liberty to provide a copy of the section 79 directive and at this stage it would be premature for the Ports Authority to express a view hereon.

The port development plan aimed at accommodating additional and much-needed liquid bulk handling facilities at the Port of Ngqura’s A100 location will continue as planned, in support of the regional industrial sector.

TNPA will continue to work with port stakeholders to ensure fairness and transparency in finding workable solutions.

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