Hoe lyk dit vir ons of BHP Billiton sy krag basies verniet kry

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Hoe lyk dit vir ons of BHP Billiton sy krag basies verniet kry

Pos  Admin on Thu Mar 18, 2010 5:59 pm

Eksklusief: Sake24 vat Eskom, BHP hof toe
2010/03/18 07:55:00 AM Jan de Lange
5


Johannesburg. - Sake24 vra ’n hofbevel wat Eskom verplig om die pryse bekend te maak waarteen elektrisiteit verskaf word aan BHP Billiton se twee aluminiumsmelters in Suider-Afrika.

Die hofstukke vir die aansoek is eergister by die Randse hooggeregshof in Johannesburg ingedien en sal in die loop van vandeesweek aan Eskom bestel word.

Die aansoek volg op ’n omvattende ondersoek die afgelope maande na dié twee hoogs geheime kontrakte wat Eskom in die vroeë 1990’s vir die verskaffing van elektrisiteit met die smelters Hillside in Richardsbaai en Mozal buite Maputo in Mosambiek, gesluit het.

Die omstandighede het sedertdien verander en die ondersoek het laat blyk dat Eskom enorme verliese ly uit die elektrisiteitsverskaffing aan dié twee smelters.

Die twee smelters alleen verbruik 5,68% van Eskom se basis-kragopwekkingsvermoë en kry volgens alle aanduidings krag teen minder as kosprys van Eskom. Hillside, die grootste van die twee, verbruik 1 200 MW, wat van hom alleen die derde grootste enkele elektrisiteitsverbruiker in die land maak ná Kaapstad en Durban. Die twee stede verbruik elk 1 300 MW.

Die land sou dus nie meer ’n elektrisiteitskrisis gehad het as hy nie krag aan die twee smelters gelewer het nie.

Die kontrak tussen BHP Billiton en Eskom raak elke Suid-Afrikaner omdat dit nie net Eskom se benarde finansiële posisie verder verswak nie, maar dit ook daarop neerkom dat gewone Suid-Afrikaners deur die betaling van hoër elektrisiteitstariewe BHP Billiton se aluminiumsmelter subsidieer.

Elektrisiteitspryse vir Hillside en Mozal word gedeeltelik of heeltemal bepaal deur die alumi?niumprys op die Londense metaalbeurs (LME) kragtens ’n hoogs geheime formule in ’n kontrak wat vroeg in die 1990’s gesluit is. Dié ooreenkoms geld vir etlike dekades.

Die aluminiumprys het in 2008 en verlede jaar skerp gedaal en het steeds nie herstel nie.

Die twee kontrakte is volgens Sake24 se inligting geheel en al verantwoordelik vir die verlies van R9,5 miljard wat Eskom in die jaar tot einde Maart 2009 gely het weens “afgeleide instrumente” – ’n rekenkundige term vir pryse wat bereken word op grond van eksterne faktore.

Die bedrag van R9,5 miljard is die negatiewe waarde wat die kontrakte vir Eskom inhou oor die oorblywende looptyd van die kontrakte. Dit is dus eintlik net ’n boekinskrywing.

Eskom het egter in die jaar ’n bedryfsverlies van R3,2 miljard gely. Sake24 wil weet watter gedeelte van dié verlies te wyte is aan die verskaffing van elektrisiteit aan Hillside en Mozal asook wat die moontlike jaarlikse verliese in die toekoms gaan wees.

Dis volgens Sake24 in die openbare belang dat dit bekend gemaak word.

Volgens ou jaarverslae van Eskom lyk dit boonop asof sy blootstelling aan aluminiumpryse ná 2013 skerp gaan styg. Volgens sy 2003-jaarverslag beloop sy blootstelling aan dié metaal van 2004 tot 2012 116 880 ton per jaar. Van 2013 tot 2020 neem dit toe tot 200 978 ton per jaar.

Verlede jaar se boekwaardeverlies van R9,5 miljard kan dus met 72% styg indien dieselfde markomstandighede ná 2013 heers.

Die verweerders is Eskom, Billiton, Hillside Aluminium, ’n filiaal van Billiton, Motraco, ’n vennootskap tussen Eskom, die Mosambiekse regering en die Swazilandse elektrisiteitsmaatskappy, asook die minister van justisie en staatkundige ontwikkeling.

http://www.sake24.com/articles/default/display_article.aspx?Channel=News_Home&ArticleId=6-1607_2576498&IsColumnistStory=False

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Hier is die hof aansoek

Pos  Admin on Thu Mar 18, 2010 6:09 pm

IN THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG
(REPUBLIC OF SOUTH AFRICA)
CASE NO: ___________

In the matter between:

JAN GEORGE DE LANGE First Applicant

MEDIA 24 LIMITED Second Applicant


and


ESKOM HOLDINGS LIMITED First Respondent

BHP BILLITON PLC INCORPORATED Second Respondent

HILLSIDE ALUMINIUM (PTY) LTD Third Respondent

MOTRACO-COMPANHIA DE TRANSMISSAO DE
MOCAMBIQUE SARL Fourth Respondent

THE MINISTER OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT Fifth Respondent


__________________________________________________________________

FOUNDING AFFIDAVIT
__________________________________________________________________


I, the undersigned,
JAN GEORGE DE LANGE
do hereby make oath and say :
1 I am an adult male specialist writer employed by the second applicant, Media 24 Limited (‘Media 24’). I am the first applicant in this matter. I am also duly authorised to depose to this affidavit on behalf of the second applicant, Media 24.
2 The facts deposed to in this affidavit are within my own personal knowledge except where the context indicates otherwise and are to the best of my belief true and correct.
3 Where I make legal submissions I do so on the advice of the applicants’ legal representatives. Full legal argument will be advanced on all legal issues at the hearing of this matter.

PARTIES
4 As already indicated, I am the first applicant in this matter. I reside within the jurisdiction of this honourable Court.
5 The second applicant is Media 24 Limited. Media 24 is a publishing group which operates from Heerengracht 40, Cape Town. It publishes a wide range of newspapers (including Beeld and City Press), a wide range of magazines (including FinWeek) and a wide range of online publications (including News24.com, Sake24.com and Fin24.com).
6 The present application arises out a request for information made by me and Media 24 in terms of the Promotion of Access to Information Act 2 of 2000 (‘PAIA’). The applicants approach this Court in their own interest and in the public interest.

7 The first respondent is Eskom Holdings Ltd (‘Eskom’), a public company duly registered in terms of the law of South Africa. Its registered address is Megawatt Park, 2 Maxwell Drive, Sunninghill, within the jurisdiction of this honourable Court. Eskom is cited by virtue of the fact that the request for access to information by me and Media 24 was directed to Eskom and refused by it.
8 The second respondent is BHP Billiton PLC Incorporated (‘Billiton’), an external company with its local registered address at 6 Hollard Street, Johannesburg. The second respondent is cited for such interest as it may have in the relief sought by the applicants. No relief is sought directly against the second respondent, save for a costs order in the event of opposition.
9 The third respondent is Hillside Aluminium (Pty) Ltd (‘Hillside’), a public company duly registered in terms of the law of South Africa. Its registered address is 9 West Central, Arterial, Richards Bay. The third respondent is cited for such interest as it may have in the relief sought by the applicants. No relief is sought directly against the third respondent, save for a costs order in the event of opposition.
10 The fourth respondent is Motraco-Companhia de Transmissao de Mocambique SARL (‘Motraco’), an external company with its local registered address at Megawatt Park, Maxwell Drive, Sunninghill Ext 3. The fourth respondent is cited for such interest as it may have in the relief sought by the applicants. No relief is sought directly against the fourth respondent, save for a costs order in the event of opposition.
11 I point out that, in terms of the Rules of Procedure in terms of PAIA, the applicants need not have formally cited the second to fourth respondents and could have simply relied on Eskom informing them of this application. Nevertheless, the applicants have taken the view that it is most efficient and prudent to cite the second to fourth respondents in the manner set out above.
12 The fifth respondent is the national Minister of Justice and Constitutional Development (‘the Minister’), cited care of the State Attorney, Johannesburg.
12.1 The Minister is cited by virtue of the fact that he is the Minister responsible for the administration of PAIA.
12.2 As I make clear below, in this matter the applicants will advance certain contentions as to the proper interpretation of PAIA, particularly sections 37(1)(a) and 46 thereof. In the event that these contentions are upheld, no question of constitutional invalidity arises.
12.3 If, however, the interpretations contended for by the applicants are rejected, then the applicants contend that sections 37(1)(a) and 46 of PAIA are unconstitutional and ought to be declared as such by this Court. It is in this regard that the Minister’s interest in the present matter arises.

AN OVERVIEW OF THE ISSUES IN THIS APPLICATION
13 This application arises out of Eskom’s refusal of a request for access to information in terms of PAIA. The request was made by me, on behalf of Media24.
14 The request relates to matters of considerable public interest – the contracts that Eskom has with companies in the Billiton group for the supply of electricity to two Billiton smelters that produce aluminium. The two smelters are the Hillside smelter in Richards Bay and the Mozal smelter in Maputo, Mozambique.
15 As I explain below, these contracts have already been the subject of debates in Parliament and in the media. It appears that the contracts are responsible for at least part of Eskom’s R3.2 billion operating loss for the year ended 31 March 2009 and the whole of its projected loss on embedded derivates of R9.5 billion going forward.
16 As I also explain below, the contracts and their effects also have a significant impact on the reliability of the public’s supply of electricity by Eskom and the rates paid by the public in this regard. This is partly because the two smelters concerned, by themselves, consume 5.68% of Eskom’s total electricity supply capacity. Moreover, they do so at rates that, at present, cause substantial losses for Eskom and profits for Billiton.
17 In my PAIA request, I sought the following information in relation to the two contracts between Eskom and the Billiton group:
17.1 Documents or relevant extracts of documents evidencing the identities of the “signatories” to the agreements;
17.2 Documents or relevant extracts of documents evidencing the formula for and/or manner of the determination of the price for the supply of electricity by Eskom to the Hillside and Mozal aluminium smelters.
17.3 Documents or relevant extracts of documents evidencing the commencement date and termination date of the agreements concerning supply of electricity by Eskom to the Hillside and Mozal aluminium smelters.
18 By way of outline, Eskom’s response to the request for access to information was as follows:
18.1 In respect of the request for the “signatories” to the contracts, Eskom purported to grant access. However, what it disclosed in response was not the “signatories” (that is the individuals who signed the contract) but instead the parties to the contracts. Moreover, it did not disclose the documents or extracts thereof – it merely recorded the parties in a letter to me. Eskom has given no reason for its failure to disclose the individual signatories and its failure to disclose the documents or relevant extracts thereof.
18.2 In respects of the request for the portions of the contracts relating to the price of the electricity supplied and the commencement and termination dates, Eskom refused to disclose the information concerned. In doing so, it purported to rely on sections 36(1)(b) and (c) and 37(1)(a) of PAIA.
19 I deny that Eskom’s reasons justify its refusal to provide the information requested. As I demonstrate below, there is no basis for the conclusions it reached. This is particularly so in light of the fact that PAIA prevents a public body (Eskom) from simply relying on the say-so of the third party (Billiton). Rather, PAIA requires Eskom to assess Billiton’s contentions and then determine whether, for example, it could “reasonably be expected” that the disclosure would put Billiton at a disadvantage. It is plain from Eskom’s response that this is not the test or approach it applied.
20 Moreover, and in any event, even if Eskom correctly took the view that the requirements of sections 36(1)(b) and (c) or 37(1)(a) were met, this did not in and of itself justify the refusal of the request. Eskom ought properly then to have considered the overwhelming public interest in this matter and therefore granted the request in light of section 46 of PAIA. That section requires the disclosure of documents – despite the provisions of section 36(1)(b) and (c) and section 37(1)(a) – where this is in the public interest. Eskom appears to have had no regard, alternatively insufficient regard, to the public interest.
21 In the circumstances, I pray that this Court direct Eskom to provide all of the information sought in the request.
22 In what follows, I deal first with the relevant background facts before dealing in turn with the various grounds of refusal relied on by Eskom and the relevance of the public interest. Finally, I deal with the relevant constitutional issues and questions of remedy.

BACKGROUND FACTS
23 As indicated above, I am a specialist writer employed by Media 24. My areas of specialisation are primarily mining and labour. I have been writing on the mining industry for approximately 10 years.
24 I have written on a wide range of issues relevant to the mining sector. Amongst the issues that I have a particular interest in are the contracts that the Billiton group has with Eskom for the supply of electricity to its Hillside aluminium smelter in Richards Bay and its Mozal aluminium smelter in Maputo, Mozambique. By way of example, I refer to three articles written by me:
24.1 The first appeared in Sake24 on 18 February 2008, during the period that South Africa was afflicted by severe blackouts or “load-shedding”. In response to a suggestion that the media had not been sufficiently vigilant on this score, I drew attention in my article to a series of pieces previously written by me in this regard – including some predicting the forthcoming blackout problems. A copy of the article, together with my translation into English, is attached marked Annexure JD1
24.2 The second appeared in Sake24 on 11 September 2009 and made clear that the then CEO of Eskom, Jacob Maroga, had been warned in advance of the impending blackout problems. A copy of the article, together with the published translation, is attached marked Annexure JD2.
24.3 The third appeared in Sake24 on 31 August 2009 and dealt with the severe negative effects on Eskom of the contracts between Eskom and the Billiton group that are at issue in this application. A copy of the article, together the published translation, is attached marked Annexure JD3.
25 On 30 June 2009, I submitted a request for access to information in terms of PAIA to Eskom. I refer to this as the ‘initial request’. I stress that this initial request is not the subject of the present application and I mention it simply by way of background. A copy of the initial request is attached marked Annexure JD4. In that request I sought the following documents:
25.1 The bulk purchase agreement for the supply of electricity by Eskom to the Hillside Aluminium Smelter in Richards Bay;
25.2 The bulk purchase agreement for the supply of electricity by Eskom to the Mozal Aluminium Smelter in Maputo;
25.3 The total and final invoices containing the amounts due by Billiton to Eskom in respect of the electricity for the smelters for a period of three years.
26 On 29 July 2009, Eskom refused this initial request. A copy of its letter refusing the request is attached marked Annexure JD5. It relied on a variety of grounds for its refusal.
27 Notwithstanding the fact that I and the second applicant considered Eskom’s refusal to be unlawful and incorrect, we ultimately took the view that it would be more appropriate and prudent for a narrower and more specific request for information to be filed. Accordingly, we did not pursue any review in respect of Eskom’s decision in relation to the initial request.
28 Instead, on 18 September 2009, I completed the necessary form in terms of PAIA to submit a further request to Eskom. This is the request that forms the subject of this application.
29 A copy of the form I completed and submitted to Eskom in this regard is attached marked Annexure JD6. In addendum 1 to the form, I indicated that the records I sought in terms of PAIA were the following:
“1. All and any documents, or relevant extracts of documents, evidencing the formula for and/or manner of the determination of the price for the supply of electricity by Eskom Holdings Limited or its affiliates to :
a. BHP Billiton plc or any of its affiliates or Hillside Aluminium Limited for the operation of the Hillside Aluminium Smelter in Richards Bay, South Africa;
and
b. BHP Billiton plc or any of its affiliates or Mozambique Transmission Company SARL or Mozal SARL for the operation of the Mozal Aluminium Smelter in Maputo, Mozambique.
2. All and any documents or relevant extracts of documents, evidencing the identities of all signatories to all written agreements between Eskom Holdings Limited or its affiliates and any other party, for the supply of electricity to:
a. BHP Billiton plc or any of its affiliates or Hillside Aluminium Limited for the operation of the Hillside Aluminium Smelter in Richards Bay, South Africa;
and
b. BHP Billiton plc or any of its affiliates or Mozambique Transmission Company SARL or Mozal SARL for the operation of the Mozal Aluminium Smelter in Maputo, Mozambique.
3. All and any documents or relevant extracts of documents, evidencing the date of commencement and termination of all written agreements between Eskom Holdings Limited or its affiliates and any other party, for the supply of electricity to:
a. BHP Billiton plc or any of its affiliates or Hillside Aluminium Limited for the operation of the Hillside Aluminium Smelter in Richards Bay, South Africa;
and
b. BHP Billiton plc or any of its affiliates or Mozambique Transmission Company SARL or Mozal SARL for the operation of the Mozal Aluminium Smelter in Maputo, Mozambique.”
30 On 20 October 2009, I received a notice from Eskom indicating that it had decided to extend the period in which it had to reply to the request for access to information. A copy of this notice is attached marked Annexure JD7.
31 On 13 November 2009, I received a letter from Eskom containing a decision on my request for access to information. A copy of this letter is attached marked Annexure JD8. The letter stated as follows:
“SECTION A: GRANTING ACCESS
Upon consideration of your request for access to information on behalf of Media24 (trading as Sake24), we have decided to grant access to the following record(s):
1. Identities of all signatories
1.1 The signatories to the electricity supply agreement for Hillside are Eskom Holdings Limited and Hillside Aluminium Limited.
1.2 The signatories to the electricity supply agreement for Mozal are Eskom Holdings Limited, Mozambique Transmission Company (Motraco), Electricidade de Mocambique E.P and Swaziland Electricity Company.

SECTION B: REFUSAL
Upon consideration of your request for access to information, on behalf of Media24 (trading as Sake24), we believe that access to the following records should be refused on the ground set out below:
1. The formula for and/or manner of the determination of the price for the supply of electricity
1.1 Having applied our mind, upon consideration of your request, and after been (sic) declined on consent to release the information, Eskom will not disclose:
1.1.1 any documents or relevant extracts of the documents relating to the formula and/or manner of the price determination for the supply of electricity for the operation of Hillside on the grounds set out in sections 36(1)(b) and (c) and 37(1)(a) of the Promotion of Access to Information Act No 2 of 2000 (the Act); and
1.1.2 any documents or relevant extracts of the documents relating to the formula and/or manner of the price determination for the supply of electricity for the operation of Mozal on the grounds set out in sections 36(1)(b) and (c) and 37(1)(a) of the Promotion of Access to Information Act No 2 of 2000 (the Act).
1.2 The requested documents or the relevant extracts thereof contain both general and specific commercial, financial and technical information of a highly confidential nature belonging to the BHP Billiton Group, the disclosure of which will cause significant harm to the commercial and financial interest of the BHP Billiton Group. The BHP Billiton Group believes that the disclosure of such confidential information will put the BHP Billiton Group at a disadvantage in its contractual negotiations both in South Africa and Mozambique and prejudice it in commercial competition.
1.3 Should Eskom disclose the documents or relevant extracts of the documents relating to the formula and/or manner of the price determination, Eskom will be in breach of a duty of confidence owed to either Hillside Aluminium Limited or Motraco.
2. The date of commencement and date of termination of all written agreements
2.1 Having applied our mind, upon consideration of your request, and after been (sic) declined consent to release the information, Eskom will not disclose:
2.1.1 any documents or relevant extracts of the documents evidencing the commencement and termination dates of written agreements for the supply of electricity for the operation of Hillside on the grounds set out in sections 36(1)(b) and (c) and 37(1)(a) of the Promotion of Access to Information Act No 2 of 2000 (the Act)
2.1.2 any documents or relevant extracts of the documents evidencing the commencement and termination dates of written agreements for the supply of electricity for the operation of Mozal on the grounds set out in sections 36(1)(b) and (c) and 37(1)(a) of the Promotion of Access to Information Act No 2 of 2000 (the Act)
2.2 The requested documents or the relevant extracts thereof contain both general and specific commercial, financial and technical information of a highly confidential nature belonging to the BHP Billiton Group, the disclosure of which will cause significant harm to the commercial and financial interest of the BHP Billiton Group. The BHP Billiton Group believes that the disclosure of such confidential information will put the BHP Billiton Group at a disadvantage in its contractual negotiations and prejudice it in commercial competition
2.3 Should Eskom disclose the requested information, Eskom will be in breach of a duty of confidence owed to Hillside Aluminium Limited or Motraco.”
32 In what follows, I deal with each of the relevant aspects of this letter.
33 Before doing so, however, I point out that in its letter, Eskom indicated that it had set up an internal appeal mechanism for PAIA requests, but that this mechanism was not one required or contemplated by PAIA. This is because Eskom (correctly) recognises that it falls within paragraph (b) of the definition of “public body” in PAIA and therefore that sections 74 and 78(1) of PAIA do not apply to it. Eskom therefore indicated that I had the option to pursue the internal appeal if I wished but that I could also choose to proceed straight to this Court under PAIA if I preferred. I took the view that the latter course was preferable.

DOCUMENTS EVIDENCING THE IDENTITIES OF ALL “SIGNATORIES” TO THE AGREEMENTS
34 In the request, I sought access to “All and any documents or relevant extracts of documents, evidencing the identities of all signatories to all written agreements” concerning the supply of electricity to the two smelters.
35 In respect of this request, Eskom purported to grant access. However, the access that it granted was flawed and unlawful in two respects.
36 First, what it disclosed in response were not the “signatories” but instead the parties to the contracts. What I sought and continue to seek is the identity actual “signatories” to the contracts – that is the names of the individuals who signed the contracts on behalf of the parties.
37 Second, Eskom did not provide the documents or extracts thereof as I had requested. It merely recorded the names of the parties in its letter. Again, I continue to seek the documents or extracts thereof.
38 Eskom has given no reason for its failure to disclose the individual signatories and its failure to provide the documents or relevant extracts thereof.

DOCUMENTS EVIDENCING THE FORMULA AND/OR MANNER OF PRICE FOR THE SUPPLY OF ELECTRICITY AND THE COMMENCEMENT AND TERMINATION DATES OF THE AGREEMENTS
39 In the request, I also sought access to all and any documents or relevant extracts of documents evidencing the formula for and/or manner of the determination of the price for the supply of electricity to the two Billiton smelters, as well as the documents evidencing the date of commencement and termination of the agreements.
40 Eskom refused these requests. It offered three justifications in this regard:
40.1 It stated that the documents contained both general and specific commercial, financial and technical information of a highly confidential nature belonging to the Billiton Group, the disclosure of which would cause significant harm to the commercial and financial interest of the Billiton Group. This justification appears to rely on section 36(1)(b) of PAIA.
40.2 It stated also that the “Billiton Group believes” that the disclosure of such confidential information would put the Billiton group at a disadvantage in its contractual negotiations both in South Africa and Mozambique and prejudice it in commercial competition. This justification appears to rely on section 36(1)(c) of PAIA.
40.3 It stated that disclosure would mean that Eskom would be in breach of a duty of confidence owed to either Hillside or Motraco. This justification appears to rely on section 37(1)(a) of PAIA.
41 I deal with each of these issues in turn, before turning to the question of the public interest.

PURPORTED HARM TO COMMERCIAL INTERESTS, FINANCIAL INTERESTS AND CONTRACTUAL NEGOTIATIONS
42 It is notable that Eskom provides no details at all of the purported harm that Billiton will allegedly suffer in terms of sections 36(1)(b) and (c) of PAIA.
43 It instead relies on a bare and extremely vague assertion of this purported harm and in doing so merely repeats the wording of PAIA. I point out that section 25(3)(a) of PAIA required Eskom to provide ”adequate reasons for the refusal”. I deny that the reasons provided by Eskom meet this standard. My ability to deal fully with this assertion of harm is obviously undermined by the vague and unparticularised manner in which Eskom has set out the alleged harm.
44 Nevertheless, it appears that the assertion of harm is unfounded. In order to demonstrate this, it is necessary to understand the aluminium market.
44.1 Aluminium is sold internationally via the London Metals Exchange (“LME”). The LME reflects a constantly changing price for aluminium (and indeed other metals). This price will change minute by minute as trades take place – in much the same manner as stock prices on the stock market.
44.2 Billiton is in this regard what is referred to as a “price-taker” – that is it will inevitably have to accept the price for aluminium on the LME.
44.3 This is because Billiton is a reasonably small player in the global aluminium market.
44.3.1 Billiton has an annual production capacity of 1.3 million metric tons.
44.3.2 The official total world production of primary aluminium in 2008 was 27 million metric tons. The unofficial and true figure is likely to be far higher because several countries do not report their production to the International Aluminium Institute. The true figure is likely to be in the region of 38 million metric tons.
44.3.3 Thus, Billiton controls only between 3% and 5% of the world market for aluminium – significantly less than some its competitors, such as Rusal, Alcoa and Rio Tinto.
45 Of the aluminium produced by Billiton at its Mozal smelter, 100% is exported for sale on the international market. Similarly, more than 90% of the aluminium produced by Billiton at its Hillside smelter is exported for sale on the international market.
46 All of these international sales will take place at the LME prices. In the circumstances, there is no realistic possibility of Billiton being harmed commercially by public disclosure of the price it is paying for electricity. It is simply too small a player on the international market for such disclosure to have any effect on the general LME price for aluminium and, as indicated, it sells more than 90% of its aluminium via the LME at LME prices.
47 Billiton’s South African sales are, as I have just indicated, only a small proportion of the aluminium it produces. The South African sales may not take place strictly at the LME price due to differing considerations such as transport and logistics. However, the South African price will certainly be based on some variation of the LME price that accounts for these differing considerations. Again, therefore, there is no realistic possibility of Billiton being harmed commercially by public disclosure of the price it is paying for electricity.
48 The concern around contractual negotiations is similarly misplaced. I simply cannot see how the disclosure of this information would disadvantage Billiton at a disadvantage in its commercial negotiations.
49 I note that in respect of this issue, Eskom appears to have simply accepted Billiton’s say-so on this score – as is made clear by the language of its refusal: “The BHP Billiton Group believes that the disclosure of such confidential information will put [it] at a disadvantage…”. I submit that this is impermissible.
50 Section 49(1)(a) of PAIA provides that the information officer of a public body must, “decide, after giving due regard to any representations made by a third party in terms of section 48, whether to grant the request for access”. This section makes clear that it was not for Eskom simply to accept Billiton’s assertion of harm. It had to give “due regard” to it – that is it had to assess whether the assertion of harm was well-founded and make a decision in this regard. This, it appears, Eskom failed to do in respect of all of the grounds of refusal relied on.
51 This applies with particular force to section 36(1)(c) of PAIA. That section provides that it can only be asserted as a ground for refusal where it could “reasonably be expected” that the disclosure would put Billiton at a disadvantage. It is plain from Eskom’s response that this is not the test or approach it applied. The same applies to section 36(1)(b) of PAIA.
52 Moreover, I note that Billiton has been prepared to publicly comment on and defend its contracts with Eskom.
52.1 This is demonstrated by an article in Martin Creamer’s Mining Weekly of 28 August 2009, a copy of which is attached marked Annexure JD9. In that article, the Billiton spokesperson is quoted as saying that the price Billiton pays for electricity for the smelters is “internationally competitive” and that these are “multidecade” contracts.
52.2 Yet Billiton appears to have subsequently refused to allow Eskom to divulge to me the information sought in the PAIA request on the price and duration of the contracts.
52.3 Thus Billiton appears to regard the price and duration provisions of the contracts as being relevant to the public and worthy of public discussion – but only provided the public cannot see the actual details and underlying provisions of the contracts in this regard. I submit that this is impermissible as a matter of law.
53 I therefore submit that Eskom’s refusal of the request on the basis of section 36(1)(b) and (c) of PAIA was flawed and unlawful in a series of respects. It did not meet the procedural requirements of PAIA. Moreover there is no objective basis for a finding that granting the request would cause the harm complained of.

THE PURPORTED BREACH OF A DUTY OF CONFIDENCE
54 Eskom’s letter of refusal states that if it disclosed the documents or relevant extracts of documents this would amount to breach of a duty of confidence owed to Hillside or Motraco. However, again, Eskom provides no details as to:
54.1 the nature of this duty of confidence;
54.2 whether it arises from the agreements themselves or some other basis;
54.3 what aspects of the agreements the duty of confidence covers; and
54.4 whether the duty of confidence contains any exceptions, for example, in relation to disclosures required by law or pursuant to a court order.
55 In the circumstances, it is impossible for me to respond meaningfully to this ground of refusal. However, in light of the paucity of the information provided thus far, I deny that Eskom has established a basis to refuse the request in terms of section 37(1)(a) of PAIA.
56 In addition, I again I point out that Eskom’s refusal in this regard does not comply with the requirement in section 25(3)(a) of PAIA that Eskom provide ”adequate reasons for the refusal” or section 49(1)(a) of PAIA that Eskom give only “due regard” to the representations of Billiton.
THE PUBLIC INTEREST
57 Even if Eskom correctly took the view that the requirements of sections 36(1)(b) and (c) or 37(1)(a) of PAIA were met, this did not justify the refusal of the request. Eskom ought properly to have considered the overwhelming public interest in this matter and therefore granted the request in light of section 46 of PAIA.
58 That section requires the disclosure of documents – despite the provisions of section 36(1)(b) and (c) and section 37(1)(a) – where this is in the public interest. Eskom appears to have had no regard, alternatively insufficient regard, to the public interest.
59 In what follows, I set out the public interest in the contracts that form the subject of the request and, in particular, the electricity price in these contracts and their duration.


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60 According to its financial statements for the year ended 31 March 2009, Eskom made an operating loss of R3,197 billion. In addition, in the same financial statement, Eskom reflected a further loss on “embedded derivatives” of R9,514 billion. A copy of the relevant parts of Eskom’s financial statements is attached marked Annexure JD10.
61 It is important to distinguish between these two types of losses:
61.1 The operating loss of R3.2 billion is an actual loss made by Eskom in the financial year concerned.
61.2 The loss of R9.5 billion on embedded derivatives represents the assessment by Eskom of the likely losses that it will incur due to its exposure to embedded derivatives over future years. As I demonstrate shortly, these embedded derivative arise entirely out of the contracts between Eskom and the Billiton group that formed the subject of my PAIA requests.
61.3 However, what is notable is that the financial statements of Eskom do not disclose what proportion of the actual operating loss of R3.2 billion is attributable to the same embedded derivatives that are responsible for the future loss of R9.5 billion and that arise from contracts between Eskom and the Billiton group. Nor has Eskom ever made such disclosure.
61.4 What appears clear is that the embedded derivatives dealt with by the contracts between Eskom and the Billiton group that formed the subject of my PAIA request are at least partially responsible for this actual operating loss of R3.2 billion.
61.5 If Eskom had granted my request for access to information, I would have been able to ascertain accurately to what extent these contracts caused the R3.2 billion loss concerned. Indeed, that was one of the reasons for the request.
62 In respect of the reference to “embedded derivatives”, the financial statements do not specify what these “embedded derivatives” are.
62.1 I was present at the press conference held on 27 August 2009 when these results were released. I asked several questions regarding what caused this derivative loss and, in particular, asked whether it was related to the contracts which Eskom has for the supply of electricity to the two Billiton aluminium smelters. Despite my repeatedly asking this question, Mr Maroga refused to answer the question directly.
62.2 Subsequent to the conclusion of the press conference, however, a highly placed source in Eskom came to me and informed me that the loss was indeed entirely attributable to the contracts which Eskom has with Billiton for the supply of electricity to the smelters. I am not at liberty to disclose my source in this regard.
62.3 Moreover, I note that on 27 August 2009 Creamer Media’s Engineering News reported that Eskom had “said that the valuation of aluminium contracts with embedded derivatives had resulted in accounting losses of R9,5-billion and were clearly not sustainable”. A copy of the relevant article is attached as Annexure JD11. I am unaware of any attempt by Eskom to correct this report.
62.4 It is therefore clear that it is the contracts that are the subject of this application that caused Eskom’s derivative loss of R9.5 billion.
62.5 This is because the price that Eskom charges Billiton for electricity at its smelters is based, to some substantial extent, on the prevailing aluminium price on the LME. In other words, what Billiton pays for electricity is related to the prevailing aluminium price. Though Eskom has never formally confirmed this it has become common knowledge in the industry.
62.6 Moreover, it is virtually confirmed beyond doubt by Eskom’s financial statements for the year ended 31 December 2003, wherein the following is stated:
“8. CUSTOMISED PRICING ARRANGEMENTS
Eskom has entered into a number of agreements to supply electricity to electricity intensive industries where the price is influenced by commodity prices, foreign exchange rates and production price indices. Due to the long-term nature of the contracts, relevant and reliable forward pricing data is unavailable for many of the inputs needed in determining the value. Estimates of value, given various simulations of forward prices, yield a range of values that is so variable and the possibilities of the various outcomes are so numerous that the usefulness of estimates of value is negated. Disclosure has been provided to reflect the economic characteristics and inputs that are necessary in determining a range of values. The following disclosure has been provided according to the type of commodity to which the pricing agreement is linked.
62.7 Three examples are then given, one of which is the following:
Commodity Pricing Components Mechanism Period Annual commodity tonnages % of electricity revenue
Aluminium 3-month forward aluminium price US dollar/R The monthly consumption on these contracts is converted at the ruling three month LME (London Metals Exchange) aluminium price converted to rand at the then ruling spot US dollar rate 200220032004-20122013-20202021-2025 113 632106 500116 880200 97884 098 5,74,8

62.8 A copy of the relevant extract of the 2003 financial statement is attached marked Annexure JD12. Curiously, the financial reports subsequent to 2003 contain no equivalent section on customised pricing arrangements.
62.9 It is therefore clear that the loss on embedded derivatives of R9.5 billion is attributable to the contracts that formed the subject of my PAIA request.
63 Importantly, when Eskom announced its R3.2 billion operating loss, it contended, in essence, that the loss was justified as being in the interests of the public.
63.1 Thus Eskom contended that this was a loss made in the interests of keeping South Africa’s lights on. I refer in this regard to two Business Day articles of 27 August 2009 and 28 August 2009 in this regard. Copies of the articles are attached marked Annexure JD13 and Annexure JD14.
63.2 Similarly, in Eskom’s application for the latest tariff increases from the National Electricity Regulator of South Africa it stressed that amongst the key pillars of the application was “resolving the funding model for the build” and “the cost of keeping the lights on”. A copy of an application presentation is attached marked Annexure JD15.
63.3 It is therefore clear that Eskom has tried to justify both its losses and tariff increases as being in the public interest.
63.4 Of course, depending on the extent of the loss attributable to the smelter contracts, this may not be accurate. It may well be that Eskom is quite capable of “keeping the lights on” without massive operating losses and without tariff hikes, if it were charging Billiton ordinary rates for electricity supply instead of the approach of linking the price of its electricity supply to the price of aluminium.
63.5 However, without sight of the price mechanism of the contracts and the provisions governing their duration, it is impossible to say for sure whether and to what extent this is the case and for how long this state of affairs could continue. This alone demonstrates the considerable public interest served by my PAIA request.
64 The appropriateness and viability of the contracts between Eskom and the Billiton group has already received the attention of Parliament.
64.1 At the meeting of Parliament’s Portfolio Committee on Public Enterprises held on 6 October 2009, the issue of tariffs in general and in relation to the aluminium smelters repeatedly came up. A copy of the minutes of this meeting, prepared by the Parliamentary Monitoring Group, is attached marked Annexure JD16.
64.2 According to the minutes, Mr Maroga testified as follows:
“In terms of differences in tariffs for different consumers, there were two kinds of customers. There were consumers who were subject to standard tariffs, which increased every year. The second types of consumers were subject to special pricing agreements. There was a small section in the industrial sector subject to special agreements such as the aluminium industry. On average, industrial customers subsidised the rest of the customer base when one looked at costs to suppliers.”
(emphasis added)

64.3 It is therefore clear that the contracts presently at issue are unlike anything else dealt with by Eskom. They involve an exception even to the general approach to industrial customers.
64.4 The position of the aluminium smelters was specifically debated during the hearing as follows:
“Mr C Gololo (ANC) said that the aluminum smelters were electricity “guzzlers” and that they were exempt from tariff increments because the price of aluminum in the market fluctuated. This was an international trend. He asked if Eskom found that they lost a lot of money because of this. He wanted to know the percentage for reserve margins regarding electricity security.
Mr Moroga answered that the aluminum contracts represented, in terms of capacity, about 5% of the system. It was important that Eskom learn from this and focus more closely on long-term contracts and how they reflected the reality of what was happening in the country presently. Eskom wanted to do this in a way that did not leave an impression that they could not fulfill their commitments. He said that aluminium smelters were not exempt from tariff increases. Eskom had a special agreement with them based on the aluminium produced.
Mr Moroga said that the reserve margin improved largely because demand for electricity decreased due to the global meltdown. However, it was still not where it should be and the new power stations were needed to ensure electricity supply security. Currently, the reserve margin was at 10%, but Eskom needed to be at 15% minimum.”

64.5 This passage alone demonstrates the significant public interest in the contracts concerned.
64.6 Moreover, it is difficult to understand how Mr Moroga’s statement that “aluminium smelters were not exempt from tariff increases” can be correct. It is clear that there are special contracts in place between Eskom and the Billiton group – the contracts at issue in these proceedings – and that these contracts tie the electricity price to a number of external factors, such as the price of aluminium. It therefore does not seem possible that the smelters will be subject to the tariff increases as Mr Maroga told Parliament. I invite the respondents to explain this apparently incorrect testimony.
64.7 Subsequent to the meeting, The Times reported that the chairperson of the Committee had expressed real concerns about the aluminium contracts:
“Mentoor cautioned Eskom and “any other” state entity from entering into contracts with big business that they could not simply renege from in the event that “things go out of hand — such as the economic meltdown we are all suffering from — that we cannot escape out of those contracts”.
“So we want you to go and take a fine comb and go through that contract and see whether we cannot escape out of it or whether we cannot renegotiate it,” she said.”

64.8 Similarly, on 7 October 2009, Business Day reported as follows on this issue:
“Maroga told the committee that Eskom was engaged in talks to renegotiate long-term aluminium contracts with the aim of delinking them from the aluminium price, which has fallen sharply during the global financial crisis.
These commodity-linked contracts have been blamed for the utility's record annual loss. BHP Billiton, however, has insisted that its commodity-linked contracts were internationally competitive.
"Going forward we are engaging with them to start saying: we want to remove this linkage of commodity to the price so that they can now also pay standard tariffs," Maroga said.”

64.9 Copies of the two articles are attached marked Annexure JD17 and Annexure JD18.
65 Moreover, it has already been made publicly clear that the Eskom contracts with the Billiton group are inequitable, unsustainable and highly damaging for Eskom.
65.1 For example, in the 27 August 2009 article in Creamer Media’s Engineering News to which I made reference earlier:
65.1.1 Eskom is recorded as saying that “the discounting of electricity prices to aluminium producers was unsustainable and needed to be limited or removed”;
65.1.2 the then Eskom Chairperson Mr Bobby Godsell is quoted as saying in respect of the commodity-linked contracts, which must refer to the contracts at issue in this matter:
”Eskom would be engaging its commodity-linked customers with a view to achieving more equitable pricing”
“These contracts were concluded a long time ago, under very different circumstances. These customers have long-term as well as short-term interests, and we will simply sit with down with them and explain why these contracts are problematic, not only in price, but also because of the accounting uncertainty that they impose, that makes proper strategic management of resources very difficult.”
“We will look at both the form and the content of the contracts and I would hope that we could come to a good long-term basis of doing business.”

65.1.3 Mr Maroga is quoted as saying that “correcting embedded derivatives is a big issue” and that:
“Going forward, we want to limit or remove this exposure to commodity-linked prices. Both the accounting treatment and just the exposure to commodity prices in terms of revenue and the differential between the commodity-linked electricity price and the standard electricity price is becoming an issue.”

65.1.4 Mr Godsell is quoted as saying, in respect of the R9.7 billion loss that:
“The scale of Eskom’s financial losses incurred is clearly unsustainable.”

65.2 It also appears that the failure to have promptly renegotiated these contracts with Billiton was one of the issues in dispute between Mr Godsell and Mr Maroga in October-November 2009. This appears from the notes prepared by Mr Godsell for a meeting of 23 October 2009, which notes were previously published on the Mail and Guardian website. A copy is attached marked Annexure JD19.
65.3 That dispute led to the highly public resignation by both Mr Godsell and Mr Maroga.
66 It is important to appreciate that the contracts concerned relate to a substantial portion of the electricity supplied by Eskom.
66.1 Eskom’s total net baseload generation capacity is 34 294 megawatts.
66.2 It needs a 15% reserve margin to operate on a secure basis without a threat of shortages. It currently has a reserve margin of less than 10%. It was problems with the reserve margin, amongst others, that led to the massive blackouts or “load-shedding” that occurred throughout the country in 2008.
66.3 However, the Hillside smelter consumes 1 100 megawatts and the Mozal smelter consumes 845 megawatts. The two Billiton smelters, alone, thus consume 5,68% of Eskom’s total baseload capacity. Therefore if Eskom had not been supplying electricity to the smelters in terms of these two contracts in 2008, the public would have faced either no blackouts or certainly far fewer blackouts.
66.4 The terms of the contracts, and particularly, their duration are thus highly relevant to the stability of the public’s electricity supply in the future.
66.5 In this regard, it appears that the smelter contracts have a substantial period still to run. Mr Maroga has been quoted as saying that “some metal-price-linked contracts have 15 to 20 years left to run”. I attach in this regard a copy of a Business Day article of 27 August 2009 marked Annexure JD20.
66.6 Similarly, the passage from Eskom’s 2003 annual financial statements to which I made reference earlier suggest that the contracts will continue to exist until at least 2025. Indeed, that passage suggests that Eskom’s exposure in respect of these aluminium contracts will increase in the future – from 116 880 tons per annum at present to 200 978 tons per annum for the period 2013 to 2020.
66.7 This is partially confirmed by a passage in Billiton’s latest annual report which indicates, in respect of the Mozal smelter, that
“Mozal sources power generated by Eskom via Motraco, a transmission joint venture between Eskom and the national electricity utilities of Mozambique and Swaziland. Tariffs are fixed through to 2012 and will be linked to the LME aluminium price thereafter.”
66.8 A copy of the relevant part of the Annual Report is attached marked Annexure JD21.
66.9 Yet Eskom has recently announced that 2013 is the very stage at which South Africa’s electricity supply is going to again be “extremely tight” and “under pressure”. Eskom indicated also that power saving would be essential to prevent blackouts and power interruptions in this period. I attach in this regard a copy of a Reuters report dated 2 March 2010 as Annexure JD22.
66.10 I do not know whether this is due to the expansion of Eskom’s exposure in respect of Billiton or whether this is merely an extraordinarily unfortunate and damaging coincidence. I invite the respondents to indicate what the position is in this regard. In any event, what this makes clear is that Eskom’s supply of electricity to the Billiton smelters in terms of the contracts at issue will, in the future, continue to affect the extent to which the public can rely in the future on an uninterrupted electricity supply.
67 The effects of the two Billiton group contracts are also closely related to the recent electricity tariff increases sought by Eskom and granted by NERSA.
67.1 On 24 February 2010, NERSA announced that:
67.1.1 electricity tariffs will increase by 24.8% for 2010/11;
67.1.2 electricity tariffs will increase by a further 25.8% for 2011/12; and
67.1.3 electricity tariffs will increase by yet a further 25.9% for 2012/2013.
67.2 These tariff increases are partly to deal with Eskom’s existing operating losses and partly to fund Eskom’s programme of building further generation capacity. In both respects, the need for the increases is affected by the contracts that Eskom has with the Billiton group for the supply of electricity to the smelters. This is demonstrated by the following considerations:
67.2.1 First, as already indicated, it appears that the supply of electricity under these contracts caused a significant operating loss for Eskom. I cannot say how significant the contribution of these contracts to Eskom’s losses is because Eskom have refused or failed to disclose them. If the PAIA request had been granted, I would have been able to say how significant the contribution of these contracts to Eskom’s losses is.
67.2.2 Second, and in any event, as I have already indicated, the electricity supplied by Eskom in terms of these contracts consumes approximately 5.68% of Eskom’s total baseload generation capacity. If this were not the case, there would be significantly less need for Eskom to embark on its programme of building new generation capacity.
67.2.3 Third, and again in any event, a substantial part of Eskom's programme of building new capacity will be paid for with money borrowed by Eskom. But the R9.5 billion worth of losses suffered by Eskom pursuant to the contracts has the effect of destablising its balance sheet and affecting its credit ratings. This has made it more expensive for Eskom to obtain the finance it needs.
67.3 The tariff increases granted by NERSA will have a significant impact on countless members of the public on a daily basis. In the circumstances and on this basis alone, there is a public interest in the contracts between Eskom and Billiton.
68 The public also has an interest in these contracts because it appears that ordinary members of the public are, via their domestic electricity tariffs, subsidising the electricity used by the Billiton group at its smelters.
68.1 This was a concern for the members of the Parliamentary Portfolio Committee as the minutes referred to earlier make clear:
“The Chairperson said that the tariff increases were quite worrying. The Committee had pointed out that tariff increases for big users and small users were very different. It seemed that small users were being charged higher tariffs than big users. This was a very serious matter. The Committee would come back to NERSA to discuss this issue in depth.
Mr Van Dyk said that there was a big difference in tariffs being paid by small users and big users. Small users were paying more because electricity was being distributed through municipalities, which added profit onto the costs before distributing the electricity to the consumers. Eskom's distribution of 40% of the power to big consumers was only subject to normal tariff increases.”

68.2 In this regard, I know that some analysts estimate that domestic users pay approximately 66 cents per kilowatt hour whereas industrial and mining companies pay approximately 21 cents per kilowatt hour. These estimates include the prices for energy, wires and support and do not take into account the latest tariff increases.
68.3 The same point was made recently by a member of NERSA, Thembani Bukula, in an interview with the Sunday Times that gave rise to an article published on 7 March 2010. A copy of the article is attached marked Annexure JD23. In that article, the following passage appears in respect of Mr Bukula’s views:
“Bukula said SA electricity tariffs were low on average, but this was largely because industry, which consumes about 80% of the country's power, paid some of the lowest tariffs in the world.
‘Domestic tariffs on the other hand are a bit on the high side. They compare with those paid in Austria and UK. One of the things we want to do over the coming years is to reduce the gap between domestic and industrial tariffs.
‘Currently, the gap is way over 100%. If you look at countries with a similar profile to ours ... the difference is between 60% and 80%.’
‘The reason for the difference is that big industrials take power at high voltage and don't need to have distribution infrastructure.’”

68.4 This tendency is, of course, not unique to the Billiton contracts. There are also other industries which might be described as intensive electricity users and which are, in effect, subsidised by domestic users.
68.5 However, to the best of my knowledge, each of these industries publicly discloses what tariff they pay Eskom for electricity.
68.5.1 Thus, for example, ARM Ferrous Metals operates ferrochrome- and ferromanganese smelters for export markets at Machadodorp in Mpumalanga and Cato Ridge in Kwazulu-Natal.
68.5.2 Its contract with Eskom is one of the so-called Megaflex-contracts in Eskom terms. Megaflex is a standard contract for this category of users and is renewed every three years. The latest renewal in the case of ARM Ferrous was in November 2009.
68.5.3 The contract is negotiated in terms of the network-requirements (i.e. distribution costs to transmit electricity to a required site), the amount of electricity that will be consumed (165 000 KVA in this case) and some administration costs involved. The price of electricity is however fixed as standard in Megaflex-contracts – presently 30,7 cents per kilowatt-hour.
68.6 It thus appears that the Billiton aluminium smelters are either the only industry or one of the few industries which refuses to disclose what rate it pays for the electricity that it uses and the duration of the contracts.
68.7 Indeed, Eskom has recently stated publicly that it only has special pricing agreements with two customers – not any other industrial customers. I attach in this regard a copy of an article published in Business Day on 11 March 2010, a copy of which is Annexure JD23(a). It appears virtually certain that the two contracts at issue in this case are the two contracts referred to in the article and thus the only “special pricing arrangements” that Eskom has with its customers. If this is incorrect, I invite the respondents to say so in their answering affidavit and to set out the correct position.
69 It is clear that Billiton has profited substantially at the expense of Eskom and other electricity consumers by virtue of these contracts.
69.1 In Billiton’s group results for the year ended June 2009, it indicated that losses due to lower prices for aluminium had been “partially offset by a US$131 million [R980 million] positive impact of price-linked costs”. It indicated further that “favourable embedded derivative revaluation increased Underlying EBIT [earnings before interest and tax] by US$170 million [R1.275 billion].” A copy of the relevant pages of the annual report is attached marked Annexure JD24.
69.2 In Billiton’s interim results dated 10 February 2010 there is an item reflecting a benefit for Billiton of US$19 million (almost R150 million) due to “price linked costs” in the aluminium business unit. A copy of the interim results is attached marked Annexure JD25.
69.3 In a recent teleconference to announce the interim results, I asked Billiton’s South African CEO, Marius Kloppers, if this figure related to the embedded derivate contracts that Billiton had with Eskom – that is the contracts at issue in this application.
69.4 The answer from Billiton via a subsequent e-mail on 10 February 2010 was that the figure was “for the Aluminium division as a whole, globally, and therefore isn't exclusively related to Eskom”. A copy of the e-mail is attached marked Annexure JD26.
69.5 I point out that BHP Billion’s answer is misleading. The group’s global production of aluminium comprises 1,2 million tons of aluminium from Eskom-power and only 160 000 tons in Brazil. It must therefore be the case that, at the very least, the vast bulk of this US$19 million benefit is due to the contracts with Eskom.
70 Finally, it appears that the agreements between Eskom and the Billiton group may be in contravention of the Electricity Regulation Act 4 of 2006. Section 15(2) of that Act provide as follows:
“A licensee may not charge a customer any other tariff and make use of provisions in agreements other than that determined or approved by the Regulator as part of its licensing conditions.”
70.1 As I understand the position, Eskom is indeed subject to the provisions of this Act. I am not aware of NERSA formally granting approval of the tariffs for the supply of electricity contained in the agreements between Eskom and the Billiton Group.
70.2 If such approval was granted, I invite the respondents to indicate when this occurred and to place such approval before this Court as part of their answering affidavits.
71 I submit that the facts set out above are more than sufficient to require disclosure in the public interest. The disclosure of the information I sought and seek is in the public interest and the public interest in disclosure outweighs any harm contemplated by sections 36(1)(b) and (c) and 37(1)(a) of PAIA in the present context.
72 I deal below, in the section on constitutional issues, with the applicants’ contentions on the proper interpretation of the public interest override in section 46 of PAIA.
73 Without prejudice to those submissions, however, I emphasise the following points in relation to the facts set out above.
73.1 Those facts demonstrate that to the extent that there is any harm arising out the disclosure of the records in relation to sections 36(1)(b), 36(1)(c) and/or section 37(1)(a) of PAIA (which is denied) the public interest in the disclosure “clearly” outweighs such harm.
73.2 Moreover they demonstrate that the disclosure of the records I sought would reveal evidence of:
73.2.1 a substantial contravention of, or failure to comply with, the law; and
73.2.2 an imminent and serious public safety or environmental risk.
73.3 In respect of this last point, I emphasis that “public safety or environmental risk” is defined by section 1 of PAIA as including “harm or risk … the public … associated with … a product or service which is available to the public”. I submit that the electricity supply plainly falls into this category.
74 Thus, in all the circumstances, even if Eskom correctly took the view that the requirements of sections 36(1)(b) and (c) or 37(1)(a) of PAIA were met (which is denied), the public interest by itself meant that the request ought to have been granted. On this basis alone the request ought to have been granted by Eskom and ought to be upheld by this Court.
CONSTITUTIONAL ISSUES
75 Section 37(1)(a) of PAIA provides:
“… the information officer of a public body … must refuse a request for access to a record of the body if the disclosure of the record would constitute an action for breach of a duty of confidence owed to a third party in terms of an agreement”.
76 It will be contended on behalf of the applicants that, properly interpreted (including in the light of section 39(2) of the Constitution) the section does not mean that as soon as an agreement with a public body contains a confidentiality clause, the requirements of section 37(1)(a) are then met and the public body is precluded from disclosing the agreement.
77 Such an interpretation would undermine the purpose and effectiveness of PAIA. This is because, inter alia, many persons contracting with government – even for the expenditure of public funds – would simply include such a clause in their agreements protecting confidentiality and thus make it extremely difficult for the public to discover how much was being spent, by which government department and for what purpose. In the circumstances, a proper interpretation of section 37(1)(a) must set the bar for a duty of confidence far higher.
78 In the event that the applicants are incorrect in this contention and the effect of the section, properly construed, is indeed that as soon as an agreement with a public body contains a confidentiality clause, the requirements of section 37(1)(a) are then met and the public body is precluded from disclosing the agreement, then the applicants contend that section 37(1)(a) is unconstitutional on the following grounds:
78.1 it violates the right of access to information held by the state, enshrined by section 32(1)(a) of the Constitution;
78.2 it violates the right to freedom of expression, enshrined by section 16(1) of the Constitution, including the freedom of the press and other media in section 16(1)(a) and the freedom to receive or impart information or ideas in section 16(1)(b);
78.3 it violates the founding values of accountability, responsiveness and openness enshrined by section 1(d) of the Constitution; and
78.4 it violates the values governing the public administration enshrined by section 195 of the Constitution, including that public administration must be accountable (section 195(1)(f)) and transparency must be fostered by providing the public with timely, accessible and accurate information (section 195(1)(g)).
79 I point out that the onus for justifying the limitations of section 32(1)(a) and 16(1) just set out rests on the respondents. I will deal with this issue, to the extent necessary, in the replying affidavit.
80 Section 46 of PAIA provides:
“Despite any other provision of this Chapter, the information officer of a public body must grant a request for access to a record of the body contemplated in section 34 (1), 36 (1), 37 (1) (a) or (b), 38 (a) or (b), 39 (1) (a) or (b), 40, 41 (1) (a) or (b), 42 (1) or (3), 43 (1) or (2), 44 (1) or (2) or 45, if-
(a) the disclosure of the record would reveal evidence of-
(i) a substantial contravention of, or failure to comply with, the law; or
(ii) an imminent and serious public safety or environmental risk; and
(b) the public interest in the disclosure of the record clearly outweighs the harm contemplated in the provision in question.”
81 It will be contended on behalf of the applicants that on a proper constitution (including in the light of section 39(2) of the Constitution), section 46 requires a simple analysis: is the disclosure of the record in the public interest and does the public interest in the disclosure outweigh the harm contemplated in the relevant sections in the relevant context?
82 If the applicants’ contentions in this regard are not upheld and section 46(a) of PAIA is interpreted to mean that questions of public interest sufficient to justify disclosure only arise if disclosure of the record would reveal evidence of:
82.1 a substantial contravention of, or failure to comply with, the law; or
82.2 an imminent and serious public safety or environmental risk,
then the applicants contend that section 46 of PAIA is unconstitutional in the respects set out below.
83 Similarly and in any event, if the use of the word “clearly” in section 46(b) of PAIA is interpreted to mean that even where the public interest in disclosure of the record appears to outweigh the harm contemplated in the relevant sections, this is not necessarily sufficient to require disclosure, then the applicants contend that section 46 of PAIA is unconstitutional in the respects set out below.
84 On either interpretation, section 46 would undermine the purpose and effectiveness of PAIA.
84.1 In respect of the first issue, one can conceive of numerous examples of documents that ought to be disclosed to the public and yet do not reveal evidence of contraventions of the law or an imminent and serious public safety or environmental risk. There is no proper basis for preventing the public interest exception from ensuring that such documents can be disclosed.
84.2 In respect of the second issue, there is no proper basis for making the default position non-disclosure even where public interest has been established, or putting a “thumb on the scale” against public interest disclosure. In the present case, as already indicated, it is the applicants’ position that the public interest does indeed “clearly” outweigh any harm. Yet such an approach of requiring such “clear” outweighing remains inappropriate and unconstitutional.
85 On either of these interpretations, section 46 is unconstitutional on the following grounds:
85.1 it violates the right of access to information held by the state, enshrined by section 32(1)(a) of the Constitution;
85.2 it violates the right to freedom of expression, enshrined by section 16(1) of the Constitution, including the freedom of the press and other media in section 16(1)(a) and the freedom to receive or impart information or ideas in section 16(1)(b);
85.3 it violates the founding values of accountability, responsiveness and openness enshrined by section 1(d) of the Constitution; and
85.4 it violates the values governing the public administration enshrined by section 195 of the Constitution, including that public administration must be accountable (section 195(1)(f)) and transparency must be fostered by providing the public with timely, accessible and accurate information (section 195(1)(g)).
86 I again point out that the onus for justifying the limitations of section 32(1)(a) and 16(1) just set out rests on the respondents. I will deal with this issue, to the extent necessary, in the replying affidavit.
87 In the circumstances, and to the extent necessary, the applicants seek orders declaring sections 37(1)(a) and 46 unconstitutional.

CONCLUSION
88 In all the circumstances, Eskom’s decision in relation to the PAIA request of 18 September 2009 should be reviewed and set aside and Eskom should be directed to provide all of the information and records sought in that request.
89 On behalf of the applicants, I therefore pray for an order in terms of the Notice of Motion.

_______________________
JAN GEORGE DE LANGE

I hereby certify that the deponent knows and understands the contents of this affidavit and that it is to the best of his knowledge both true and correct. This affidavit was signed and sworn to before me at ______________________ on this the ____day of ______________ 2010, and that the Regulations contained in Government Notice R.1258 of 21 July 1972, as amended, have been complied with.



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