Win for energy transparency in murky solar battle

In a significant victory for energy transparency, Gwede Mantashe’s department of mineral and petroleum resources (DMPR) has been ordered to release the full record of its decision to award multibillion-rand contracts for renewable power. 

That order, handed down by Pretoria’s high court on December 19, follows a court battle by one of only two South African solar-panel makers, Durban-based ARTsolar, which argued that local content requirements had been ignored when Mantashe’s department awarded the solar contracts to 18 companies over the past few years. 

ARTsolar claimed the government had contradicted its own industrial policy, which spoke of using the renewable energy independent power producer procurement programme to “stimulate manufacturing, build technical capabilities and support long-term economic transformation”. 

Instead, ARTsolar suspected that the winning renewables companies – including Scatec, Engie and Electricite de France Renewables – had simply ignored a requirement that they buy solar panels from South African companies, and instead imported panels from China.

“We were ready to supply the local market, but those projects went ahead using imports. That’s how localisation in South Africa collapsed,” ARTsolar chair Eshu Seevnarayan told investigative journalists at Oxpeckers in an interview. 

In court papers, ARTsolar said that even though a National Treasury instruction specified that 35% of renewable energy spending ought to be local, the renewables companies bought just 3.5% of their solar panels from South African suppliers. Seevnarayan said while the department of trade, industry and competition was meant to oversee compliance with localisation rules, it had failed to do this – with dire consequences for his company,

There is no little irony in this argument, however, given that ARTsolar itself faces accusations that it lied about producing the solar panels locally, and had also imported them from China. 

A victory for public oversight

Nonetheless, late in December, acting high court judge John Mullins ruled that a “complete index of all documents comprising the record of the decisions” around those tenders must be handed to ARTsolar by January 30.

Irrespective of the noise around ARTsolar’s credentials, the court ruling would appear to be a major victory for public oversight of the government’s energy spending.

But this is less comprehensive than it might seem. Since Mullins was sensitive to the argument that these contracts may contain “commercially-sensitive information”, he ruled that ARTsolar’s lawyers and its experts would have to sign a confidentiality agreement first.

“No documents forming part of the record shall be made available to the public at large,” he said. Nonetheless, should ARTsolar proceed in court using what it found in the government documents, the details might still find their way into the public eye.

At this point, Mullins said, it is unclear to what extent ARTsolar’s suspicions are correct. “We are indeed at this stage in [a] darkened room, waiting for the light to be switched on by the [DMPR’s] production of the records,” he said. 

Failed gag order

There is plenty at stake in this case when it comes to the enforcement of “localisation” rules and transparency over energy contracts – but ARTsolar hasn’t helped itself by its ham-fisted handling of the accusation that it had lied to the public about being a 100% local company.

In April, it went to court to get a gag order preventing two former staff members and a client from discussing this claim publicly, including with the state-owned Industrial Development Corporation (IDC), which had lent it R90m.

One of those former employees, Shalendra Hansraj, said in an affidavit for that gag order case that ARTsolar “was importing some 95% of [its] solar modules from China [which] was contrary to the marketing material [which claimed it] was a local manufacturer”.

Brett Latimer, who runs a company in Kwazulu-Natal called Oxford Freshmarket, which had signed up ARTsolar as a provider based on its claim of being the “first and only 100% locally-owned manufacturers of solar PV models”, echoed Hansraj’s claims.

Latimer said that “though the modules were apparently tested locally, they were in fact manufactured abroad in China” – something he claimed hadn’t been revealed either to the public or to the IDC. He provided a bill of lading, which appeared to show that 682 solar panels were shipped from Shanghai in 2023 by Chinese supplier Einnova to ARTsolar in Durban.

“I had innocently and in good faith aided and abetted a company to enjoy an unfair advantage over its competitors that import solar panels,” he said in an affidavit.

A step towards transparency

In response, ARTsolar said these allegations stemmed from “disgruntled” former employees, and said it had been obliged to go to court to get the interdict to prevent people from perpetuating “malicious, defamatory and distorted narratives”.

Though it initially won the interim interdict gagging these critics from speaking out, the order lifted in July.

Which is just as well because, as media organisation amaBhungane put it, the gagging order would have prevented “ordinary citizens from speaking out about something they believe is wrong and from talking to the media about their concerns”.

Mullins’ court order is a helpful step towards transparency when it comes to the state’s energy dealings, but this case goes far deeper than that, with wider implications for localisation, government oversight and business ethics. 

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_{Top image: Ihsaan Haffejee. Courtesy Oxpeckers.}