Unions and banks keep South Africa’s dirtiest utility running

The utility generates most of its electricity from 15 aging coal-fired power plants, for which it has long won waivers on emission limits for soot, nitrogen oxides and sulfur dioxide ( N/A2) When coal reacts with oxygen, it forms small acidic particles – sulfur dioxide – which can enter the human lungs. Eskom now releases 1,600 kilotonnes of sulfur dioxide per year, making it the world’s largest producer of the pollutant, according to an October 2021 study by the Center for Research on Energy and Clean Air (CREA), a think tank in non-profit.

The study found that Eskom’s SO2 emissions in 2019 exceeded those of the electricity sectors of each of the world’s three largest economies – China, the United States and the EU.

The consequences of this level of air pollution are severe, particularly on rural towns in South Africa and poor communities near Eskom’s coal-fired power stations, where residents are paying the price. SO2, in particular, can impact our lungs and make it difficult to breathe. High concentrations of SO2 could burn trees and other plants, stunt their growth and contribute to acid rain, which harms ecosystems. Many residents living around Eskom’s factories suffer from asthma, bronchitis, tuberculosis and heart disease.

In a 2017 report titled “Health Impacts of Coal-Fired Power Plants in South Africa,” Dr. Mike Holland summarizes “the health impacts and associated economic costs of current air pollutant emissions from coal-fired power plants in South Africa.” South Africa “. He continues: “The results demonstrate that air pollution has a wide range of health effects, including mortality and cardiovascular and respiratory disease. . . . “To ignore morbidity would be to ignore the important impacts and costs for the [South African] health system and labor productivity.

Pollution from Eskom’s coal-fired power plants is estimated to cause an average of 2,000 deaths in South Africa every year.

To understand how Eskom easily became the world’s dirtiest company, it is important to center the role of South Africa’s so-called “socialist” unions in this debacle. “There is an alliance of unions, business and government around coal in South Africa. Eskom is the beneficiary of all this,” says Mupara.

In 2019, when Eskom attempted to split into smaller, more manageable entities to accelerate the clean energy transition, the unions went down the warpath, threatening physical confrontation until the plans to privatize Eskom be abandoned. Union representatives have a great influence on how Eskom deploys its company finances. The unions regularly agitate to dismiss members of the Eskom board of directors who do not respect their line.

“It’s simple,” says Mupara, “coal unions are at the heart of government in South Africa.

Coal sector unions are key allies of the African National Congress (ANC) party that has governed South Africa since 1994. These unions rally workers and their families to vote for the ANC, says Mupara. In return, the ANC gives ex-syndicalists lavish ministerial jobs. Additionally, the ANC government is protecting the interests of the coal sector by delaying the approval of renewable energy projects in South Africa.

South Africa’s president is a former trade unionist turned billionaire; the Minister of Mines is a former coal trade unionist and the Minister of Finance comes from the trade unions. Thus, any attempt to eliminate sulphur-producing coal is seen as a threat to the watering hole of the ruling class.

Supplying coal to Eskom’s power plants is a much-coveted commercial gateway that is attracting interest from ruling politicians and big business.

For example, the ANC party is cited in a University of Cape Town study as quietly owning a private investment vehicle that supplies coal to Eskom power stations, earning billions in the process. In fact, in 2010, when the World Bank approved a US$3.75 billion loan to expand Eskom’s power generation capacity, opposition parties wrote to the World Bank, opposing to the loan on the grounds that the $3.75 billion would enrich coal supply contracts linked to Eskom which is owned by the ANC. In South Africa’s infamous 2021 ‘state capture’ inquest, which found $30 billion in public money was stolen, questionable coal supplies worth $1 billion dollars to Eskom by the ruling class and their families figured prominently in the findings of the investigation.

“You don’t have to be a rocket scientist to understand why Eskom has been allowed to become the world’s biggest sulfur polluter,” says O’bren Nhachi, a researcher at the Center for Natural Resource Governance, who studies damage left behind. in communities living next to coal mines across southern Africa.

“The equation is simple: Eskom’s coal supply contracts bring billions to South Africa’s ruling ANC party. This coal burns in sulfur and pollution continues to swirl.

South African national banks are another key player in this game.

Ahead of the Glasgow climate talks, COP26, last year, the US, UK and EU were expecting $8.5 billion to help end the huge dependence on coal-fired South Africa. South Africa’s national banks have openly opposed this, insisting that they will not turn off the coal finance taps soon, as this will bring uncontrollable political and financial ruin to South Africa.

“We depend on Eskom. So we can’t stop funding Eskom because we’re going to shut down our whole economy,” an executive at one of South Africa’s biggest banks admitted to Reuters.

Gwede Mantashe, Minister of the Department of Mineral Resources and Energy and a former coal trade unionist, also said that giving up coal would be tantamount to economic suicide for his country.

Exxaro, the largest coal miner and supplier to Eskom’s power plants, is also a major recipient of bank loans.

“So easily the big banks in South Africa are giving Exxaro coal loans. Exxaro transports the coal to Eskom’s power plants. Eskom burns coal and spits sulfur dioxide. This is the polluting chain,” explains Mupara.

“These big companies [banks] behave as if they run South Africa,” says Desmond D’Sa, coordinator of the South Durban Community Environmental Alliance, a coalition monitoring toxic discharges from refineries in the country.

So far, Eskom has made little effort to comply with South Africa’s minimum emissions standards. The national government, which introduced the standards in 2010, had given power companies until 2020 to limit their sulfur dioxide, nitrogen oxide and particulate emissions. But the utility has asked for five-year deadline extensions in 2018 and 2020 and advocated for lower emissions limits.

South African environmental groups GroundWork and Earthlife Africa oppose the company’s “minimal” effort to reduce its huge pollution footprint. They asked the country’s Minister for Forests, Fisheries and the Environment, Barbara Creecy, to invalidate the deadline extensions granted to Eksom.

If Eskom continues business as usual, it could potentially derail South Africa’s transition to a climate-sustainable future.

“Given the current climate crisis by the fossil industry, we don’t have much time as we are experiencing excessive heat in South Africa. There are droughts, rampant fires and huge floods. weather conditions have changed drastically and our water and food [are] threatens. If we delay, we’re compromised,” D’Sa says.

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