The South African photovoltaic (PV) manufacturer that exposed an alleged great solar rip-off has won a major first step in its legal battle to enforce mandatory localisation requirements in multibillion-rand renewable energy contracts.
The sole solar panel manufacturer in Sub-Saharan Africa, Durban-based ARTsolar, asserts that 18 foreign companies, or their associated joint ventures, have failed to meet the critical localisation requirements on which their contracts were based.
ARTsolar’s main review application, in which it ultimately seeks an order declaring non-compliance with the requirements, was launched in 2024.
The company alleged that successful independent power producers (IPPs) were systematically side-stepping their contractual obligations to procure locally made solar photovoltaic panels.
Now the court has ordered the government to produce the full record of decisions, including alleged failures to act, related to the mandatory local content requirements for the tenders.
Acting judge John Mullins, sitting in the Pretoria high court, has compelled the department of mineral resources and energy (DMRE) to hand over critical documentation sought by the Durban-based company as part of its review application. This was against opposition from some of the 27 respondents cited in the application, who argued that the information might be considered competition sensitive.
“It isn’t disputed that production of the record by the DMRE might entail the disclosure of commercially sensitive information that was disclosed by the bidders (successful and unsuccessful) in their bid documents in the belief that the disclosure was confidential and that the commercially sensitive information would not be shared with competitors,” he said.
It isn’t disputed that production of the record by the DMRE might entail the disclosure of commercially sensitive information that was disclosed by the bidders (successful and unsuccessful) in their bid documents in the belief that the disclosure was confidential and that the commercially sensitive information would not be shared with competitors.
“That is, on the one hand, a very weighty consideration. But on the other hand, there is Artsolar’s right of access to the documentation in order to vindicate its review right. See section 34 the constitution, which provides as follows: ... Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court...”
The ruling forces the minister of mineral resources and energy to now disclose all decisions related to the mandatory local content requirements for the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), as well as bid windows five and six of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
While the decision might look administrative, it could prove crucial in unlocking ARTsolar’s main case in the matter and expose widespread non-compliance within the multibillion rand programme.
ARTsolar says the IPPs have allegedly opted to import cheaper, foreign-manufactured alternatives, directly undermining the localisation requirements. It also accused the DMRE and the department of trade, industry and competition (DTIC) of failing to enforce this localisation policy, which was designed explicitly to stimulate domestic manufacturing, safeguard local jobs, and build industrial capacity.
While the DTIC had provided a record, the DMRE had opposed the application on the grounds that no case had been made for a reviewable decision being taken and also that ARTsolar’s contention that it failed to determine whether the IPPs complied meant there was no record. Mullins rejected this, saying: “Omissions can conceivably be accompanied by documentary record.”
ARTsolar had cited 27 respondents in the matter, including the ministers of electricity and finance, the board chair of the energy regulator, Eskom and its transmission company, plus 18 IPPs that were awarded the solar component of the tenders.
Several of these successful bidders, including Scatec Solar SA, Oya Energy, Engie Southern Africa, EDF Renewables and Enel Green Power Africa, had argued against the full release of tender documents, citing commercial confidentiality.
Mullins weighed this confidentiality against the principle of rule 53 of the uniform rules of the court, which requires an administrative organ to provide the court and the applicant with a full record of a decision-making process in order to have a fair hearing. He ultimately ordered that the record be divided into confidential and non-confidential sections, with the latter being made available to all legal teams.
The confidential records will be restricted to Artsolar’s legal representatives, and an independent technical expert will be granted access. This will only be after signing a “comprehensive confidentiality undertaking”.
“Having regard to the confidentiality regime applicable to the procurement processes implicated in the review application, no documents forming part of the record shall be made available to the public at large,” Mullins said. He added that any dispute over whether a document should be considered confidential or not would be resolved by a retired judge who would be appointed within 24 hours of non-resolution of the dispute.
Mullins gave the department until January 30 to deliver the record, with costs being reserved for determination during the main application.
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