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Declaring a State of Disaster for energy crisis contentious, BLSA CEO writes

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Declaring a State of Disaster for energy crisis contentious, BLSA CEO writes

6th February 2023

By: Tasneem Bulbulia
Senior Contributing Editor Online

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The call by the African National Congress (ANC) for a State of Disaster to be declared over the energy crisis has come as a surprise to organised business, given that only a few months ago President Cyril Ramaphosa said this had been considered but that legal advice was that it could not be implemented, business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter.

“A State of Disaster triggers emergency powers that can limit Constitutional rights. The relevant legislation provides reasons to declare a State of Disaster, particularly to assist and protect the public, provide relief, protect property and prevent and combat corruption. Under a State of Disaster, the executive can issue regulations that limit rights but only if, in doing so, they achieve the objectives of the State of Disaster,” she outlines.

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Mavuso says the State of Disaster declared at the onset of the Covid-19 crisis led to scenes of soldiers and police personnel violating the rights of individuals on the streets of communities.

“We also remember the arbitrary banning of the sale of cigarettes and alcohol, an act which has left a highly destructive legacy in a burgeoned illicit economy. These are the direct consequences of suspending individuals’ and businesses’ freedoms. It showed that without the normal limitations on the discretion exercised by public office bearers, it is easy to make draconian and counterproductive decisions. This is not something we should lightly repeat,” posits Mavuso.

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“Our electricity crisis is, however, certainly a crisis. It demands an extraordinary response. But I wonder whether a State of Disaster is necessary to deliver that extraordinary response. And moreover, whether a State of Disaster will create new problems that may cost more than any benefits,” Mavuso writes.

She says that, currently, there is a robust process underway in the National Energy Crisis Committee.

“The challenges facing the committee are largely about getting the rest of government to deliver on the policy changes and implementation steps that are needed to deal with the crisis. I do not see how a State of Disaster will help,” she notes.

Mavuso emphasises that business depends on predictable and fair application of the laws of the country, with investment decisions made with a view to many years in the future.

If business loses confidence that the environment is predictable, the risks to any investment are much greater and fewer investments will be made, she elaborates.

“A State of Disaster is a clear example of removing certainty over the rule of law and equipping the executive with a great deal of discretion. Now, a State of Disaster may well be optimal if the consequences of the disaster it is addressing really will be reduced by it. From a business perspective, this does reduce the risks that flow from the disasters themselves. But it is critical that there genuinely be such a reduction in consequences,” she outlines.

Mavuso says that, with the call for a State of Disaster made by the ANC, government must independently determine this to be appropriate.

She emphasises that if this decision is taken, it is important that there is an explanation for why this is necessary.

“Then it must set out very clearly what regulations will be made and how these will deliver on the objectives of ending the crisis. It must show how risks will be managed, particularly the risks of corruption that arise when greater discretion is given to public office bearers and how the rights of people and businesses will be protected throughout.

“Irrespective of what happens on a state of disaster, it is critical that all stakeholders are fully engaged with the NECOM process and driving it to solve our electricity crisis. Let us not be distracted,” Mavuso avers. 

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