Nuclear sector governance in South Africa heads for the courts – again

The top brass of the Nuclear Energy Corporation of South Africa (Necsa) has launched court action against Energy Minister Jeff Radebe as a result of the minister’s attempts to remove the Necsa board, chairman and CEO.

This was confirmed this week by Necsa chairman Kelvin Kemm, who is initiating legal action alongside Necsa CEO Phumzile Tshelane.

Since the financial crisis at Eskom, Necsa has become the de facto custodian of nuclear technology and the nuclear sector in South Africa.

Necsa is a state-owned enterprise undertaking research and development and commercial activities in the field of nuclear energy and radiation sciences, and the production of medical nuclear radioisotopes and associated services through its subsidiary NTP Radioisotopes (NTP). NTP had revenues of about R1,3-billion a year before its production facility was shut down by the National Nuclear Regulator (NNR) in November 2017.

Necsa is also responsible for processing source material, including uranium enrichment, and co-operating with other institutions, locally and abroad, on nuclear and related matters.

Apart from its main activities at Pelindaba, near Pretoria, which include operation and utilisation of the SAFARI-1 research reactor, Necsa also manages and operates the Vaalputs National Radioactive Waste Disposal Facility in the Northern Cape on behalf of the National Radioactive Waste Disposal Institute (NRWDI).

Over the last few years, Necsa has been embroiled in a number of debilitating operational, financial and governance challenges, culminating in the latest legal and court challenge against the authority of the South African Department of Energy and its minister, Hon. Jeff Radebe.

The timeline below details the events leading up to the latest legal action:

22 November 2017: Necsa board suspends NTP managing director Tina Eboka and three NTP executives following a breach of safety regulations and shut-down of the NTP medical nuclear radioisotope production facility by the National Nuclear Regulator (NNR) in November 2017.

9 July 2018: NTP MD Tina Eboka and executives reinstated following the conclusion of an inquiry into the breach of safety regulations at the NTP medical nuclear radioisotope production facility.

19 July 2018: Letter from energy minister Jeff Radebe informing the Necsa board that the NTP board will henceforth report directly to the Department of Energy through Deputy Minister of Energy Thembisile Majola, and not to the Necsa board.

31 October 2018: Letter from the Necsa board to the NTP board informing them that Necsa CEO Phumzile Tshelane has been appointed to the board of directors of NTP.

1 November 2018: Letter from the chairman of the NTP board to the chairman of the Necsa board, advising that ratification by Deputy Minister Majola will be sought for the appointment of Necsa CEO Phumzile Tshelane to the NTP board.

Date unknown: Necsa CEO Phumzile Tshelane commences proceedings to terminate the employment of the NECSA CFO amid a dispute as to whether such powers to fire the CFO lie within the authority of the CEO or the Necsa board.

1 November 2018: Letter from law firm ENS Africa to the chief legal advisor of Necsa giving the opinion that authority to “hire and fire” the CFO (who is not a board member) rests with the CEO, but that such authority must be exercised subject to directions (if any) issued by the Necsa board.

5 November 2018: Letter from the Necsa board to the NTP board informing them that Enoch Godongwana has been appointed non-executive director and deputy chairman of the NTP board.

8 November 2018: Letter from the chairman of the NTP board to the chairman of the Necsa board, advising that ratification of the deputy minister of energy will be sought for the appointment of Enoch Godongwana to the NTP board.

13 November 2018: Letter from the chief legal advisor of Necsa to the NTP board advising them that the instruction by Minister of Energy Jeff Radebe for the NTP board to report directly to the Department of Energy through the deputy minister of energy is unlawful and amounts to the department usurping the powers, rights and obligations of the Necsa board.

16 November 2018: Letter from the chief legal advisor of Necsa to the NTP board advising them of alleged violations by the Department of Energy and the Minister of Energy of the Nuclear Energy Act, the Companies Act, and the Necsa and NTP memoranda of incorporation.

22 November 2018: Letter from Minister of Energy Jeff Radebe to Necsa CEO Phumzile Tshelane placing him on precautionary suspension, and to the Necsa board, chairman and CEO requiring them to give reasons why they should not be removed from office. The minister provides five calendar days for Necsa board members to respond, and seven calendar days for the Necsa CEO to respond.

24 November 2018: Letter to the minister of energy from ENS Africa – acting on behalf of Necsa chairman Dr Kelvin Kemm, CEO Phumzile Tshelane and board member Pamela Bosman (see here and here) – advising the minister that they intend to hold on to their positions as directors of Necsa, that the precautionary suspension of the Necsa CEO is invalid and unlawful, and that the Necsa CEO therefore intends to continue as CEO of Necsa.

26 November 2018: Letter from ENS Africa to the minister of energy requesting and extension of the date for the Necsa board and CEO to provide reasons why they should not be removed, to Monday 3 December 2018.

3 December 2018: Article by EE Publishers MD and investigative editor Chris Yelland, entitled Necsa board, chairman and CEO on the ropes, published by EE Publishers, Daily Maverick, Moneyweb and BizNews.

3 December 2018: Necsa chairman Dr Kelvin Kemm advises EE Publishers that that he and Necsa CEO Phumzile Tshelane have instituted legal and court action challenging Energy Minister Jeff Radebe’s efforts to remove the Necsa board, chairman and CEO. DM

Chris Yelland is investigative editor, EE Publishers