South Africa is the world’s seventh-largest producer and consumer of coal.Eskom— the State-owned electricity utility — has 15 coal-fired power stations, which produce over 80% of the country’s electricity; however, they regularly break down due to faulty flues and generally purchase less efficient wet coal. One contributing factor to Eskom’s inefficiency — leading to years of frustrating “loadshedding” or rolling blackouts — is the Gupta-Zuma State capture scandal, which included coal companies owned by the Gupta family supplying inferior coal to Eskom thanks to sweetheart procurement contracts themselves the product of capture.

According to Devi Pillay ofPublic Affairs Research Institute(PARI), “Regarding State capture and corruption, the Gupta family had relationships with executives, people in government, and third-party companies. They colluded. They had these relationships in order to obtain high-value contracts, including with the mines that they owned. They also had contracts with consulting firms like McKinsey. It was a lot of money and there was actually no work done. Sometimes they didn’t need to hire a consultant. Thanks to Gupta Leaks there’s evidence of this. Those were the two main drivers: the coal contracts and services with other companies. The Guptas even bought Glencore’s Optimum mine and used their cronies in government to purchase it at a very low price.”

The majority of the academic, CSO, and journalist coverage of the Gupta-Zuma scandal and ensuing investigation focused on the object of capture — the State — and not nearly enough on the economic service providers and other business interests who participated.And far less has been studied about the practical repercussions of State capture on the country’s hopes for a just energy transition. 

According to a representative of theCentre for Applied Legal Studies(CALS, South Africa), while some middle- or upper-class analyses of the Gupta-Zuma scandal have linked it to the energy crisis, the political discussion has centered on dysfunction within the energy system — South Africa’s extreme dependency on coal to produce electricity and the working-class and popular attention rightly focused on loadshedding.

InfluenceMap(UK), a think tank that provides data and analysis on the impact of business and finance on climate change, and operates a trusted platform analyzing corporate climate policy lobbying, released a report stating that “South Africa has faced challenges in the development of climate policy. The [Intergovernmental Panel on Climate Change] IPCC has identified ‘opposition from status quo interests’ and incumbent fossil fuel interests ‘exerting political influence’ over the policymaking process as a key reason for the lack of progress on global climate policy. (…) Steps from the South African Government to improve transparency and governance of climate policymaking processes, including holding private entities to account for either knowingly blocking science-based policy or for greenwashing, could also have systemic and positive impacts on the development of climate policy in the region. InfluenceMap’s global analysis has often found a strong correlation between a failure by governments to act on climate, and a powerful fossil fuel lobby alongside limited transparency around the policy process, resulting in ‘policy capture.’”

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