BLSA CEO letter – 6 February 2023

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The call by the ANC for a state of disaster to be declared over the energy crisis has alarmed many across society. Organised business was also surprised by the announcement, given that only a few months ago the president said a state of disaster had been considered but that legal advice was that it could not be implemented. What has changed, I wonder?

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.

We all remember that 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 our communities, including the beating to death of Collins Khosa. 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.

Our electricity crisis is, however, certainly a crisis. It demands an extraordinary response. But I ponder 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.

As it stands, we have a robust process in the National Energy Crisis Committee (NECOM). 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.

Business depends on predictable and fair application of the laws of the country. Investment decisions are 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. 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.

I am reminded of the comment by high court Judge Hans Fabricius in his judgment finding against the ministers of defence and police regarding the death of Collins Khosa: “The populace must be able to trust the government to abide by the rule of law and to make rational regulations to promote their stated purpose. These should intrude upon the rights of people (and businesses) either not at all or if they do, or justifiably must, the least restrictive measures must be sought, applied and communicated to the public.”

The call for a state of disaster has been made by the ANC. Government must independently determine whether it is appropriate and may well disagree. But if it is to make such a decision it is very important that it explain why a state of disaster is necessary in the first place. 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.

Conspiracy theories have long been a characteristic of SA’s political landscape, but they seem to be increasing in both frequency and absurdity the closer we get to next year’s elections. Desperate politicians and even some senior Cabinet Ministers latch onto any excuse to shift accountability as the problems mount, I write in News24 Business. With so much at stake in terms of resolving our energy crisis and maintaining social cohesion, it is critically important for leaders to make calm decisions based on the facts. Anything else is irresponsible.

In his state-of-the-nation address on 9 February, President Ramaphosa needs to weave anti-corruption policies into each priority action he announces for the year ahead and show leadership when addressing the energy crisis and Transnet’s challenges, I write in Business Day. In the imminent cabinet reshuffle, our president needs to choose leaders who are able to fulfil their portfolio’s mandates and help to transform SA’s economy. Business believes that SA needs a cabinet that will drive urgent implementation across a broad range of areas and recognise the importance of a real partnership with business to improve investor sentiment and to get things done.

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BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. In 2017, BLSA signed a contract with South Africa, committing business to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.

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