Warning over national state of disaster in South Africa

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Business leaders have warned that, aside from opening the doors for corruption, declaring a national state of disaster over load shedding in South Africa risks disrupting the country’s business environment – putting off investors and stalling development.

The ANC has proposed declaring a national state of disaster over the ongoing energy crisis in the country. Following an ANC meeting last week, the party resolved that the best way forward for the crisis was to declare a disaster to address it with urgency.

The call has been met with a mixed response: some, like the Democratic Alliance, support a ring-fenced state of disaster that will unlock support and capabilities within the state to decisively deal with blockages in the process of resolving the crisis.

However, others, like business leaders, economists and analysts, fear that the state of disaster would once again open up the country to abuse by those in power – as was seen during the Covid-19 pandemic, where billions of rands were instantly looted by unscrupulous politicians and opportunistic companies.

According to Business Leadership South Africa CEO, Busi Mavuso, aside from the risks posed by a repeat of the Covid disaster, a new state of disaster so soon after the last one ended creates an unstable and unpredictable economic environment – which most investors shy away from.

“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,” she said.

“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.”

Mavuso said 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 – as well as 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,” she said.

Mavuso said that business depends on the predictable and fair application of the laws of the country, something which is at risk under a state of disaster.

“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,” she said.

“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.”

However, the debate over a state of disaster does not remove the immediate risk and threat that load shedding and the energy crisis poses, Mavuso said.

“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 said.

If a state of disaster is declared, she said that the government will have to explain why, in great detail. It will also have to clearly lay out which regulations will be made to end the crisis, and how the various risks – like looting and corruption – will be managed, and how citizens’ rights will be protected.

Ultimately, the BLSA CEO said that a state of disaster over load shedding likely won’t do much to help the situation, as the country already has 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,” she said.

“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.”

Source : BusinessTech