Thabametsi power station authorisation without climate change impact assessment; SAWS Quarter 3 performance, with Minister

Meeting report

Chairperson Introductory Remarks

The Chairperson noted apologies from the Deputy-Minister, who was at the doctor, DG of the Department of Environmental Affairs (DEA) and the Minister who indicated she would be late. On the agenda of the Committee was environmental authorisation of the Thabametsi coal-fired power station and a briefing from the SA Weather Service (SAWS) on its second and third quarter reports. The SAWS Board requested an extension of four days to respond to the Committee’s enquiries from a previous engagement – the Committee agreed. The meeting with the Board was scheduled for 4 July.

 

DEA Briefing on the Thabametsi Coal-Fired Power Station and Climate Change Impact Assessment

Mr Ziyaad Hassam, Director: Appeals and Legal Review, DEA, took the Committee through the presentation on the implications of the High Court Judgement in the matter between Earthlife Africa Johannesburg (ELA), the Minister of Environmental Affairs, Ms Edna Molewa and others, in respect of the proposed Thabametsi coal-fired power station. The case sought to review and set aside the decision by the Department to grant approval for the construction of a 1200MW coal-fired power station and the Minister’s decision to dismiss an appeal by Earthlife.

 

In the appeal decision dated 7 March 2016, the Minister recognised the climate change impacts of the proposed development were not comprehensively assessed and/or considered prior to the issuing of the environmental assessment (EA). The EA was amended by inserting an additional condition for the applicant to undertake a climate change impact assessment prior to construction. The climate change assessment was currently underway and the draft report was made available at the time of court proceedings. The final report will be submitted for consideration in June 2017.The court held, however, that the Minister should have instead adjourned the appeal and directed Thabametsi to undertake a climate change impact assessment for consideration in the appeal process and thereafter to have substituted the Department’s decision with her own.

 

Earthlife sought the setting aside of both the EA and the appeal decision in its entirety, and requested that the EA and appeal processes commence anew. The court held that the more proportional remedy was not to set aside the EA, but rather to set aside the Minister’s ruling only in respect of the ground of appeal which dealt with climate change and to remit the matter of climate change impacts for reconsideration on the basis of the new evidence in the climate change report.

 

The Department’s argument was that climate change was adequately, although not comprehensively, assessed during the Environmental Impact Assessment (EIA) process. It was also considered inappropriate to assess climate change implications on a project-specific level. These considerations were comprehensively assessed during the development of the Integrated Resource Plan for Electricity 2010-2030.

 

Subsequent steps taken and implications of judgement on future projects with significant climate change implications included

-The Department recently published National Greenhouse Gas Emission Reporting Regulations to introduce a single national reporting system for transparent reporting of greenhouse gas emissions (GHG’s). Companies that conduct certain activities must register and report GHG emissions.  The Declaration of Greenhouse Gasses as priority pollutants and the National Pollution Prevention Plans Regulations will also soon be published for implementation.

-All projects that may have significant climate change impacts will have to be subjected to a climate change impact assessment in future.

-A task team was established to develop a climate change protocol that will be used as yard stick to measure the adequacy of all climate change impact reports during the EA process.

-The protocol will be consulted on and adopted by all 11 competent authorities.

 

Discussion

The Chairperson asked for the climate change protocol to be explained. He read the very long court judgement. The intention of the requested briefing was to get a comprehensive overview of the issues that were a bone of contention. He expressed surprised with the brief presentation – was it assumed Members knew the case and the judgement?

 

Mr Sabelo Malaza, Chief Director: Integrated Environmental Authorisations, DEA, replied there were standard processes in place to assess applications relating to EIA’s and there were minimum requirements about specialist reports. DEA’s sense, flowing from the judgement, was that something similar was needed to check the adequacy of a climate change report. DEA started a process to draft a protocol which will be taken to the rest of the competent authorities for adoption. This would outline the minimum requirements for a climate change impact assessment. This will be used universally in all 11 competent authorities. Because DEA needed to comply with the judgement it needed to start with the protocol to speak specifically to the Thabametsi situation. As part of the draft report that had gone through for process of public participation, the minimum requirements had been scoped. For Thabametsi the scope of work was used as a standing protocol but it needed to be improved and embraced by all of the competent authorities.

 

The Chairperson asked about the absence of emission thresholds and said that he understood there to be minimum emission standards that had been agreed to and promulgated. What emission thresholds were being referred to in the presentation?

 

Ms Judy Beaumont, DDG: Climate Change and Air Quality, DEA, replied there were a couple of issues within the Department it was trying to balance. One of the issues to consider carefully in developing a Climate Change Response legal framework was increasing regulatory burden. Existing and new legal instruments will be used. DEA was in the process of transitioning from not having a specific legal instrument, except using existing legislation, to starting the use of specific legal instruments. The minimum emission standards, for particulate matter, sulphur dioxide and nitrogen oxide, were under the National Air Quality Act. In respect of the issue at hand, GHG’s, the first phase of the carbon budgeting framework for industries which were high emitters, was in place. There was no legal frame for that yet but DEA was moving towards that. The level on which this kind of EIA was done was either at policy level or specific project level. Already on policy level, the Integrated Resource Plan (IRP), negotiations and discussions took place on building GHG emissions constraints. This already took place on IRP2010 level and it will continue for the new IRP discussion document. From a GHG emissions perspective, the merit of doing an EIA at the project level became an additional level of Environmental Assessment and from DEA’s perspective, which had been done at policy level. From an infrastructure perspective, one of the key issues was vulnerability of infrastructure in a changing climate, for example, when an area was prone to flooding. In that context discussions were held to formalise and finalise the protocol.

The Chairperson welcomed the Minister and said her apology was received. He opened the floor for questions from the members.

Mr R Purdon (DA) asked if water availability had been adequately addressed as tension could be created within communities and with farmers. What lessons did the Department learn from the lawsuit? What had it cost? Was the authorisation, as it stood, been suspended? The Minister conceded the material impact was not assessed - was this admission contrary to the National Environmental Management Act (NEMA)?

Mr S Makhubele (ANC) linked with Mr Purdon in asking whether construction will commence while the comprehensive assessment was done - he wanted the question answered in clear terms. What were the full implications of assessing afterwards and what were the challenges? This situation obviously set a precedent that now climate change impacts should be considered. He suspected that the next challenge will be on air quality considerations - was the Department pro-active in this regard? To avoid unnecessary costs, the Department should come up with measures long before they were challenged in court.

The Chairperson welcomed Mr P Mabilo (ANC) back. Knowing that the merits and demerits of the case were not to be discussed, he asked about the plain reading of section 240 (1) of NEMA and what it was attributed to. Was it a matter of misunderstanding the team that did the EIA, misinterpreting Section 240.1 or was it a lapse of memory or a gap? What did DEA attribute that aspect of the court finding to? In the future, those who were approving and doing EIA’s should be rigorous and systematic.

The Chairperson said stakeholders and commentators in this space hailed this as the first climate change ruling in the SA courts since making commitments to reduce emissions. He knew that this was one of three coal powered independent power producers government intended to approve. What was the accumulative impact in terms of GHG emissions that these power stations were going to have considering SA’s obligations to the Paris Agreement and the strategy developed of national contributions in peak, plateau and decline phases? Considering the area where Thabametsi was supposed to be, Medupi and Matimba were already there. As part of the EIA, had the contribution this station will have on air quality, in terms of the minimum emission standards, been assessed? Will additional emissions not lead to a situation where the standards will be exceeded? Mention was made of the climate change response policy framework - climate change legislation had been consistently argued. A situation where industry was obligated to reduce emissions was needed.

Comment from the Minister

The Minister said she had just arrived from Johannesburg where, as usual, there were late Monday night meetings. She wanted to outline where SA was and where the country was going with matters where EIA’s were concerned, linking up with climate change response policies and the IRP. The matter being discussed was a judgement, an outcome of court that could not be reversed at the Committee’s level or her level until it was appealed. The judgement came as a result of an appeal that was responded to in the granting of a “go ahead” on a decision on an appeal. In this case a decision on an appeal was made by the Minister of Environmental Affairs. Thus the matter was outside the hands of officials and the Department – it was at ministerial level. This was why she was present to answer as broadly, eloquently and informatively as she could.

 

Minister Molewa reiterated that the decision was in her hands even though there was a legal team to advise. She made a decision and believed this was the one to make under the circumstances. This was an executive decision made after analysing everything before the Department and Committee. She emphasised that all information and every instrument was assessed before making the decision.

 

She replied to Mr Purdon that water had been assessed at the level where the EIA gets done and not on the appeal stage. The assessment carried everything except the impact on climate change.

 

When SA, as part of 139 developing countries, was negotiating the climate change agreement that was agreed to in Paris, SA and all developing countries said they would agree to acting on climate change and ensure they were responsible in a world where it was not responsible for bringing the world into the state it was in. Developed countries, which polluted, must lead climate change actions. All developing countries, including SA, continued to emphasise this.

 

In the pre-industrialisation period, developed countries, such as Germany, had opportunity to grow its economies and take all sorts of action in their industrialisation processes without being told to stop because climate change was coming. Now, when SA and developing countries were in its developments spaces, nations of the world were talking about climate change. SA could not be told by developed countries to go slow in its development because they themselves had ample time to develop. “We need our development space” was the spirit the Minister wanted to plant in the Portfolio Committee today.

 

Minister Molewa said it was never said that SA will not have a Thabametsi - Thabametsi was already in the Nationally Determined Contributions (NDCs) when it was assessed and submitted. Pollution of Malawi and Botswana was not the same as pollution in SA. For example, Greenhouse Gas emissions can move from Germany and impact SA and Malawi - what one country produced can impact another. Therefore, it was not a given to count the stations in a particular area and then say there were too many. The stations were counted as part of the country’s complete NDC’s. Thabametsi was assessed.

 

In developmental projection, SA argued for space. In the response policy, the country made it clear that it would continue to develop its industries and continue to use coal and other sources of energy within its development space. There were industries that will be targeted to gradually and not haphazardly. The language used should be of a developing country and not a developed country.

 

The Minister said there was dialogue between DEA and the Energy, Transport, Trade and Industry and Agriculture sectors, for example. Modes and mechanisms shall be put in place. There was no certain time given for when SA will be done with that. The trajectory was continuing. Where job losses took place, people will be reskilled on new technology and innovations over time.

 

This was a summary of the bigger picture in the climate change response policy. Together with above mentioned sectors, SA’s Intended Nationally Determined Contributions (INDC) was submitted. Now the “I” had fallen off. The Minister was surprised to hear from certain industries, such as Eskom, that it did not know where the IRP came from because they were in the meetings. Thabametsi was part of the program of dialogue that was held at home, in SA, and was still in the NDCs.

 

All involved have to move together at the same time. DEA’s objective in the IRP was for there to be a peak, plateau and decline. The peaking part was still happening therefore within the developmental space, the country, as a responsible citizen of the world, argued it needed its industries to take SA where the developed countries were. The country could not afford job losses and so forth. There was an emission space of between 398 and 614 megatons that SA was still allowed to meet. It was not fair to expect there to be no Thabametsi. Industries were being held responsible to pollution standards, which were carbon budgets. Industry members will be allocated a budget. They will have to find their feet without DEA fighting with them. The industries should just ensure that by the time DEA wanted them to be at the pace of plateauing, they must be at that pace. Sometimes it sounded as if it was being said that SA should not even be using coal. In the IRP there was an amount of 42% renewables being built in until 2030, along with coal, gas and nuclear, to make up 100%.

 

Minister Molewa said impact assessments were now being done. The impact assessment, as per the court outcome, had been accepted. The Minister needed allocated space to deal with the judgement and to respond to it in a meticulous manner. Indirectly, DEA was hearing it was not supposed to have the coal-powered station. The interest of the Department was that of mature people who must lead the country and, in so doing, there should be no quibbling over small things. This was not rounds in a tournament but governing. This governing needed to contain a sub-law of a law that did not yet exist. Compliance was another story. There should not be space to continuously run away from carbon emission reduction - industry should be on the radar for DEA to understand what was developing and what was not developing. The Department did not want to quibble with the court about pieces of legislation especially pieces which were not even there.

It was also important to remember that NDC’s will only be implemented post-2020. SA, and all other countries, was currently in the space of voluntary contributions. SA was aiming to build legislation. Because this was a new green field matter without framework, DEA had to learn from INDCs, previous lessons and consultations such as the one with the Committee today.

It should not be said that DEA was just sitting around in its offices – the Department was working hard on synchronising matters. It was important to have an internal argument about the kind of legislation needed before going out to stakeholders in the industry. Another question was whether it should be separate legislation or hinged on existing legislation –the latter would be easier and faster.

The Minister replied to Mr Makhubele by repeating that most of the projects were found in the NDC’s. An example of the work the Department was doing was found in the Northern Cape in the area of the Square Kilometre Array (SKA) telescope. Energy development there may tamper with the satellites although the extent to which they may tamper was not known. The EIA’s on alternative energy in that area were presently being done and the Department was being pro-active in using scientific methods to determine how many windmills or solar panels, for example, there may be.

Energy corridors had been assessed. Broad impact assessments were done in many areas. Pro-active strategic environmental assessments were done. Another example of DEA being pro-active was in the area of shale gas, where assessments have been underway for two years now, as well as in Limpopo and Rustenburg where developments were expected.

The Minister said when one works one sometimes gets taken to court where cases were judged against you or against those taking you to court. A budget gets allocated for legal costs and DEA was not using it deliberately. The budget gets used again when people take the Department to court when they did not even understand why. Decisions that were taken genuinely and with the use of valuable information will get defended in the future as well. The cost will be shared as part of the budget.

To summarise, DEA was working on legislation and linking it with the existing NEMA will fast-track the process as public private participation, which was embodied in the Constitution, must also be done.

Mr Mabilo said his question about dealing with assessments in hindsight was not answered.

The Minister replied that she had answered it by saying that what was needed was to focus on where SA was going and not where it came from.

The Chairperson remarked that he got the sense from the answers there was some level of irritation by the questions the Committee was asking. It seemed as if the Committee was asking questions that it was not supposed to and therefore the Minister gets irritated. There was better language to use to engage the Committee. He sensed emotion in sentences like “we are governing the country, “we are not sitting in our offices doing nothing” - this was not the way to engage with a Committee of Parliament. There must be a much more mature way of engaging. The Committee will ask questions on matters it wanted to understand and it was expected the Department answered such questions without wanting to second guess why the questions were asked. It was the responsibility of the Committee to ask questions and the Executive had the responsibility to answer the questions. A judgement, said to be “ground-breaking on climate change” had been issued. The Committee asked to be briefed on the judgement and it was not necessary to be emotional as the matters were not personal.

The Chairperson pleaded that the Minister should not be irritated by the Committee’s questions. The Department should not suggest it did not respect what the court had pronounced on but rather comprehensively embrace it. The Chairperson took it that the climate change protocol was a proper response which seeks to respond to what the court was saying. He repeated that it was the responsibility of the Committee to ask questions and there should not be irritation in the engagement.

Mr Purdon wanted to know, in clear concise language, if authorisation had been suspended pending actions DEA will take. Have operations been put on hold? Were there specific costs for this court case available or not?

The Minister answered that she was going to ask Mr Hassam to answer the question from a legal point of view but she knew the judgement had not suspended the decision.

Mr Hassam added the judgement suspended one condition of the Minister’s decision - this condition was the Climate Change Impact Assessment to be conducted post authorisation. By implication the project cannot proceed until the Climate Change Impact Assessment had been submitted to the Minister. That will be done within the next month. After looking at the assessment the Minister will remake her decision. Up until the Minister remade her decision the authorisation was suspended.

The Chairperson asked if there was intention to appeal this judgement.

The Minister remarked that this was why she was a bit nervous by the Chairperson saying DEA accepted the judgement. The Department was actually looking at all other possibilities including when the submission had been made about the suspension. As much as the case was hailed as ground-breaking by others it may have implications on many matters which will still be considered from a legal point of view based on what DEA’s decisions were on all analytical work to be done. There was a possibility of a domino effect on many other decisions. DEA was at the point where all these factors were to be considered

The Chairperson asked if there was a final tally on the legal costs.

The Minister consulted with her Department and found that it was not yet costed. DEA will come with the cost as well as the cost of other cases of that nature.

The Chairperson explained to the Committee that usually, after a case, statements were sent out by advocates and attorneys and a cost was calculated. If the Department wanted to submit overall costs it may although the request was only for this specific case.

The Minister said all members of the Department have strict instructions to adhere to the Committee and she did the same. When the Department and the Committee spoke to each other respect must be both ways. When one heard statements such “if you do not want to do this legislation we will do it” it had meaning – these words came from the Committee. This was why the Minister said the Department was not just sitting in its offices – those words have come from the Committee. The Minister was thus respectfully reacting from the words coming from the Committee. The Minister had been told by Members that “we have a hot chair and she will handle her.”

The Chairperson asked who this statement came from.

The Minister answered that it came from the other side. The Minister she was being “handled” now and they knew it. The Minister could not be expected not to respond to this.

The Chairperson said that was a very serious statement.

The Minister agreed and this was why she asked for a meeting with the Chairperson.

The Chairperson repeated that it was a very serious allegation and he did not know if the Minister wanted it to be put on record.

The Minister replied that it was on record – she did not say things she could not vouch for.

The Chairperson said the last submission was unfortunate - when allegations were made, it must be said who were making them. There was no intention from the side of the Committee to do what it was not supposed to. What the Committee did was consistent with its responsibility of conducting oversight. A statement such as that wrongly bedevils the environment. He repeated that the Committee’s work was to carry out oversight and no amount of threats will derail it from doing so – Members would not be intimidated. The Minister cannot behave as she was before the Committee.

The Minister said the Chairperson continued to raise issues she wanted to discuss privately. She said the meeting was public and did not want to be insulted in public.

Mr Mabilo called for order.

The Chairperson asked the Minister who was insulting her - the Minister kept making comments and that was not how she was expected to behave in Committee. The Minister had been a Member of Parliament for many years and she was supposed to be exemplary. The matter will be left at that and not further discussion on it would be allowed. The Department will look at the court case and decide whether to appeal or not to appeal – if it did not appeal, the Department would have to comply with the court’s judgement.

SA Weather Service Performance Objectives Quarter 3 of 2016/17

The Minister introduced Mr Jerry Lengoasa, who was the new CEO of SAWS. As he only started a few days ago he was not present at the meeting. Mr Lengoasa was a scientist by profession and led SAWS in the time of former Minister Marthinus van Schalkwyk. The Minister hailed Mr Lengoasa as a good manager. He worked previously in Geneva, Switzerland as Deputy Executive Secretary of the World Meteorology Organisation - he was now back home, eager and willing to work.

The Chairperson said it was good that Mr Lengoasa had been the former CEO of SAWS.

Ms Mmpula Kgari, General Manager: Commercial, SAWS, outlined that she would only present performance for quarter three and not quarter two as it was already presented in the previous meeting. There were five strategic goals set, namely:

- Provision of products and services

- Capability and capacity development

- Engaged Stakeholders

- Research and knowledge/intelligence creation

- Growth and sustainability

 

Under these goals, objectives not achieved included:

- To conduct a community weather-smart needs survey

- To have radar availability at 80% - it was only at 76%. An aggressive maintenance program was underway

- To conduce analysis of current employee capability and employee leadership capability

- To conduct a stakeholder satisfaction survey

- Because of no funds being allocated for SEB study, the study was not conducted

 

Mr Lulama Gumenge, Acting CFO, SAWS, presented the financial performance. Total expenditure (excluding depreciation and amortisation) amounted to 3.98% below the year-to-year budget.

Administrative expenditure, employee costs and operating expenditure were all below budget. Some bad debt was also paid back.

 

Discussion

Ms H Kekana (ANC) asked what SAWS’ coverage in the rural parts was. What percentage of people where reached in the North West province and how?

 

Mr Mnikeli Ndabambi, General Manager: Operations, SAWS, replied that coverage was inclusive of all rural areas. Whether people there received warnings was another question – if the people received them, did they understand them and if they understood them, were they able to take appropriate actions? That was where the challenge lied. A needs analysis was conducted and there was a program, together with the Central University of Technology, around small scale farmers. An end-to-end dissemination system, to see who received warnings and what they were doing about it, was being looked at. The National Disaster Management Centre agreed to come on board. It was thus not possible to tell how many people had been reached in the North West with severe weather warnings.

Ms J Edwards (DA) wanted to know if there were any targets that SAWS had to catch up with that it did not catch up with yet. She pointed out two slides in the presentation that did not correlate and asked why that was.

Ms Kgari replied that there were aggressive recovery plans put in place for previous unmet targets and, although she did not have the figures, SAWS ended the year quite well. Only three targets were still missed which included radar coverage. The discrepancy between the slides was due to a numerical error in the pie chart - she apologised for that.

Mr Purdon asked if the contracts in Mpumalanga were negotiated on an annual basis.

Ms Kgari replied that usually municipalities went on commercial tender particularly around air quality maintenance for its infrastructure. In response to the tenders in Mpumalanga and Tshwane, three year contracts were set up. It was good value for money, around R5 million annually.

Ms H Nyambi (ANC) questioned coloured and Indian representation in top management.

The Chairperson joked that he thought the Member would congratulate SAWS on having a majority women in top management.

Ms Kgari said the structure of top management was very small. The last four posts were filled with three African ladies and one white female. SAWS now had vacancies and it will try to be inclusive of other races.

Mr Makhubele noted that funds were not allocated for the SEB project – did that mean there were no funds for the SEB project throughout the year? Did SAWS foresee any future financial problems? He asked if outstanding issues with suppliers had been resolved.

Ms Kgari answered that the SEB study was not scheduled for the current year but at the Board’s strategic work shop in July last year, it was felt that management should bring the study ahead because it was of strategic importance. Management was tasked to go and find funds through existing savings and such to accommodate the study. Such funds were not found because it was, at that time, early in the year. Only at the end of Quarter Three were such funds found. The study was then initiated at the beginning of January. In the current year funds were allocated. The initiation of phase one was the issue.

Mr Gumenge added Telkom was still charging SAWS for data at stations which were already closed. SAWS hoped that to be resolved by the end of the financial year.

Mr Mabilo asked about the actual ratio of personnel to non-personnel in the employee costs. Vacancies were still to be filled before the end of the year – what was the turnaround time for filling vacancies? He requested a disaggregate of critical vacancies. Were there other cost drivers over and above the three that were mentioned in the presentation? If the total revenue above budget was recapitalised, what was done with that surplus? Lastly, in terms of the responsibility of forewarning South Africans of severe weather, were there other ventures, such as apps, pursued? Did foreign weather apps have an impact on the work of SAWS?

Mr Ndabambi replied that because of the danger of miscommunication, SAWS was moving carefully into the space of social media. Miscommunication could lead to more disaster. Feedback was important.

The Chairperson said he follows SAWS on Twitter. He encouraged Members to also follow Twitter as social media was not to be frowned upon. On a light note, he said Mr Mabilo should be on Twitter.

Mr Gumenge replied to the question about the ratio of non-employees and employees by saying SAWS was sitting at 66% when the target was 60%. The reason for this was under-spending in other areas. Major cost drivers were infrastructure costs, to which repairs and maintenance was linked, as well as software licenses. Should there be a surplus at the end of the financial year, SAWS will, in terms of the Public Finance Management Act (PFMA), apply to retain the surplus. That will then be used for repairs and maintenance and capital for infrastructure. SAWS was in a healthy financial position – it had a surplus and expenses were under control. Legal costs were a challenge but that was catered for.

Mr Makhubele asked to be updated on the debtors, such as airlines no longer flying, who were taken to court.

Mr Gumenge replied that approval needed to be sought from the SAWS Board and the CEO to write that debt off. As far as accounting statements went, provision was made for bad debts. Some insurance companies did not want to pay by claiming there were no order numbers. The same process of writing off the debt was being followed.

The Chairperson asked about the Blue Crane.

Mr Gumenge said it was the same process - executive management needed to write that off.

Mr Mabilo asked again if foreign weather apps had any impact.

Ms Kgari said there was aggressive competition in the app space as there were more than hundreds of apps. Through strategic partners there were currently two apps, WeatherSmart and AfricaWeather, which were powered by SAWS. These apps used radar instead of satellite data. AfricaWeather was generating good income with 1.5 million users. SAWS was also busy revamping its website as it was the first point of interaction with the Service,

The Chairperson noted that when the SAWS Annual Performance Plan was discussed, there was an issue which emerged and this issue was scheduled to be discussed with the SAWS Board on 7 June. There would then be elaboration on the response to Mr Purdon’s questions. The Committee could applaud the sustained performance of SAWS. The full picture of the entity, however, would emerge when its Annual report was discussed in October.

The meeting was adjourned.