African Climate Alliance and Others v Minister of Mineral Resources and Energy and Others (56901/2021) [2024] ZAGPPHC 1172 (4 December 2024)

African Climate Alliance and Others v Minister of Mineral Resources and Energy and Others (56901/2021) [2024] ZAGPPHC 1172 (4 December 2024) (56901/2021) [2024] ZAGPPHC 1172 (4 DECEMBER 2024)

Introduction

This note examines the African Climate Alliance and Others v Minister of Mineral Resources and Energy and Others judgment (“African Climate Alliance Judgment”), focusing on Justice van der Westhuizen’s determination of whether key energy-related decisions constitute administrative or executive action.

Background

The Integrated Resource Plan (“IRP”) is a living electricity infrastructure development plan based on least-cost electricity supply and demand balance, considering security of supply.

A review application was brought against three decisions:

  1. On 18 October 2019 the Minister of Mineral Resources and Energy (“the Minister”) published the IRP of 2019 which included an addition of 1 500 megawatts of coal-fired power (“Additional Coal Load”) to the grid between 2023 and 2027 (“the Minister’s IRP Decision”). The Minister’s IRP Decision is made in terms of section 35(4) of the Electricity Regulation Act 4 of 2006 (“ERA”).
  2. On 25 September 2020 the Minister published the Determination in terms of section 34(1) of the ERA which sought to give effect to the Minister’s IRP Decision (“the Minister’s Determination”). The Minister’s Determination is made in terms of section 34 of the ERA.
  3. The National Energy Regulator of South Africa (“NERSA”) concurred with the Minister’s Determination, which was made public on 10 September 2024 (“NERSA’s Concurrence”). NERSA’s Concurrence is made in terms of section 4 of the

(collectively “theDecisions”).

Legal issue

 The issue was whether the Decisions were subject to review in terms of the Protection of Administrative Justice Act 3 of 2000 (“PAJA”) and/or the principle of legality.

Are the Decisions administrative action or an exercise of public power?

The Minister must determine the policy relating to the supply of electricity to South Africa.1 This authorisation underscores the obligation of the Minister to determine the IRP to give effect to the policy. The IRP is to be developed by the Minister, in conjunction with NERSA.

According to the African Climate Alliance Judgment, “PAJA defines an administrative decision as any decision taken, or any failure to take a decision by an organ of state. It does not include a decision by a Cabinet Minister. In casu, the Minister is obliged to determine the policy for the supply of electricity to the Republic”.2 According to Justice van der Westhuizen, the decisions to determine the policy and develop the IRP are not administrative action as defined in terms of PAJA. Therefore, the Minister’s IRP Decision and the Minister’s Determination are not subject to review in terms of PAJA. Furthermore, should the Minister’s IRP Decision and the Minister’s Determination be reviewed and set aside, NERSA’s Concurrence will be of no effect.

Legality

The real issue is whether the Decisions are subject to review in terms of section 1(c),3 read with section 172,4 of the Constitution. The applicants contended that the issue was “whether, on the facts in this case, the Minister and NERSA reached decisions on new coal-fired power in a manner that was inconsistent with their constitutional and statutory obligations”. They further contended that a draft of the IRP published in 2018 differed materially from the IRP published in 2019 by omitting the reference to the Additional Coal Load. Justice van der Westhuizen highlights that no facts or assessments regarding the impact on the environment, health of the nation and children was contained in the Rule 53 record supplied by the Minister and NERSA. The Minister and NERSA failed to demonstrate that consideration was given to section 245 and 286 of the Constitution. Accordingly, the Minister and NERSA flouted in their constitutional obligations and the Decisions stand to be reviewed under the principle of legality.

The Minister and NERSA maintained that the limitation of rights was reasonable and justifiable to enable the stability of the grid and sustain its integrity. However, Justice van der Westhuizen asserted that the Minister and NERSA failed to discharge the onus of demonstrating that such limitation was reasonable and justifiable.

In so far as NERSA’s Concurrence constituted administrative action in terms of PAJA, it would be subject to review under PAJA. However, NERSA’s Concurrence similarly failed to comply with its obligations in terms of the Constitution in respect of children’s rights since the public consultations were inadequate and a “mere lip service” was applied to the Minister’s IRP Decision and the Minister’s Determination.

Order

The constitutional challenge to the Decisions is upheld and the Decisions are declared to be inconsistent with the Constitution, unlawful and invalid. The Decisions are set aside to the extent that they make provision for the Additional Coal Load.

Analysis

Justice van der Westhuizen asserts that the Minister’s IRP Decision and the Minister’s Determination are exercises of public power since the IRP is a fluid policy document. In Permanent Secretary of the Department of Education of the Government of the Eastern CapeProvinceandAnothervEd-U-College(PE)(Section21) (CCT26/00) [2000] ZACC 23 (“Ed-U-College”), the locus classicus judgment on differentiating between administrative and executive action, the Constitutional Court held that:

“Policy may be formulated by the Executive outside of a legislative framework. For example, the Executive may determine a policy on road and rail transportation or on tertiary education.The formulation of such policy involves a political decision and will generally not constitute administrative action. However, policy may also be formulated in a narrower sense where a member of the Executive is implementing legislation. The formulation of policy in the exercise of such powers may often constitution administrative action” (our emphasis).7

The African Climate Alliance Judgment leaves the reader wanting for a more robust justification on precisely why the Minister’s IRP Decision and the Minister’s Determination are executive action. Justice van der Westhuizen reasons that the Minister’s IRP Decision and the Minister’s Determination are not administrative action for three reasons:

  1. “The IRP, viz, the Integrated Resource Plan, is in essence a document designed todetermine a new generation capacity that is required to ensure the continueduninterrupted supply of electricity, and to determine the types of energy sources from which electricity must be generated and the percentages thereof to be generated from such sources”;8
  2. “The IRP would encompass the policy determination in respect of supply of electricity for the Republic”;9 and
  3. “PAJA defines an administrative decision as any decision taken, or any failure to takeadecisionbyanorganofstate. ItdoesnotincludeadecisionbyaCabinetMinister”,10

(“The Reasoning”).

The IRP is a policy determination

In MineralsCouncilofSouthAfricavMinisterofMineralResourcesandEnergyandOthers (20341/19) [2021] ZAGPPHC 623 (“MineralsCouncil”) the issue was whether the 2018 Mining Charter is a formal policy document or administrative action. Justice Kathree-Setiloane asserted that:

“[t]he charter has elements of both section 85(2)(a) of the Constitution (the implementation of legislation by the executive) and 85(2)(b) of the Constitution (the development of policy by the executive). In Ed-U-College the Constitutional Court held that policy formulated by the executive outside of the legislative framework involves a political decision and will generally not constitute administrative action, however, policy formulated by the executive in the exercise of implementing legislation may often constitute administrative action. The charter, in my view, falls in the latter category as it is intended to facilitate theimplementation oft heMPRDA, as contemplated in section 85(2)(a) of the Constitution” (our emphasis added).11

In terms of section 35(4) of the ERA, the Minister may make regulations regarding, inter alia:

  1. new generation capacity;
  1. types of energy sources from which electricity must be generated;
  1. the percentages of electricity that must be generated from different energy sources;
  1. any other matter that may or must be prescribed in terms of the ERA; and
  1. any other ancillary or administrative matter that is necessary to prescribe for the proper implementation or administration of the

In terms of section 34 of the ERA, the Minister may, in consultation with the NERSA determine, inter alia:

  1. that new generation capacity is needed to ensure the continued uninterrupted supply of electricity; and
  2. the types of energy sources from which electricity must be generated, and the percentages of electricity that must be generated from such sources.

The Minister’s IRP Decision was made in terms of section 35(4) and the Minister’s Determination was made in terms of section 34 of the ERA. While the nature is a policy determination for the supply and generation of electricity to South Africa, it is nevertheless a policy formulated by the Minister in the exercise of implementing legislation which, according to the Minerals Council, may often constitute administrative action.

The Reasoning concludes that “the impugned decisions by the Minister are not subject to a review under PAJA”.12 While originating from the Minister’s inherent constitutional mandate, the Minister’s IRP Decision and the Minister’s Determination was made in terms of empowering legislation.

As Nugent JA observed in Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others (347/2004) [2005] ZASCA 43 (“Greys Marine)” “[t]here will be few administrative acts that are devoid of underlying policy – indeed, administrative action is most often the implementation of policy that has been given legal effect”.13

Furthermore, and most notably, in South African Reserve Bank and Another v Shuttleworth and Another (CCT194/14, CCT199/14) [2015] ZACC 17 (“Shuttleworth”) the Constitutional Court held that the decision of the Minister of Finance to impose a 10% charge on export of amounts of more than R750 000 amounted to a “narrow policy formulation directed at implementing legislation and was, unlike a broad or political policy formulation, subject to administrative review”.14

While Minerals Council does not state that all policy formulated by the executive in the exercise of implementing legislation constitutes administrative action, the Reasoning leaves us wanting for a detailed rationalisation on why the Minister’s IRP Decision and the Minister’s Determination are executive action.

Administrative action does not include a decision by a Cabinet Minister

The Reasoning that administrative action does not include a Cabinet Minister’s decision is, at best, unclear and, at worst, flawed. In terms of section 239 of the Constitution, “organ of state” means:

  1. any department of state or administration in the national, provincial or local sphere of government; or
  2. any other functionary or institution –
  1. exercising a power or performing a function in terms of the Constitution or a provincial constitution; or
  2. exercising a public power or performing a public function in terms of anylegislation, but does not include a court or a judicial officer (our emphasis).

A Cabinet Minister is a functionary exercising a public power and/or performing a public function in terms of legislation and therefore falls squarely within the definition of an organ of state. Accordingly, a Cabinet Minister can in fact make an administrative decision and there is case law to this effect (Shuttleworth, Greys Marine and Minerals Council).

Conclusion

The African Climate Alliance Judgment underscores the complex interplay between policy decisions and administrative action. While Justice van der Westhuizen concludes that the Minister’s IRP Decision and the Minister’s Determination constitute executive action and therefore not subject to PAJA, the Reasoning leaves gaps. Specifically, it does not adequately address why these decisions – taken under the ERA – do not align with case law, such as Greys Marine, Minerals Council and Shuttleworth, which suggest that policy formulated in the implementation of legislation may often constitute administrative action.

References

  1. Section 1 of the ERA.
  2. African Climate Alliance Judgment para 17.
  3. The Republic of South Africa is one, sovereign, democratic state founded on, inter alia, the supremacy of the Constitution and the rule of law.
  4. When deciding a constitutional matter, a court must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency.
    1. to an environment that is not harmful to their health or wellbeing; and
    2. to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that –
      1. prevent pollution and ecological degradation;
      2. promote conservation; and
      3. secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.Everyone has the right –
  6. A child’s best interests are of paramount importance in every matter concerning the child.
  7. Permanent Secretary of the Department of Education of the Government of the Eastern Cape Province and Another v Ed-U-College(PE)(Section21) (CCT26/00) [2000] ZACC 23 para 18.
  8. African Climate Alliance Judgment para 12.
  9. Ibid para 16.
  10. Ibid para 17.
  11. 11 Minerals Council of South Africa v Minister of Mineral Resources and Energy and Others (20341/19) [2021] ZAGPPHC 623 para 32.
  12. Supra note 3 African Climate Alliance para 17.
  13. Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others (347/2004) [2005] ZASCA 43 para 27.
  14. South African Reserve Bank and Another v Shuttleworth and Another (CCT194/14, CCT199/14) [2015] ZACC 17 para 35.