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Renewable energy projects need to prioritise stakeholder management to avoid pitfalls later | 09 May 2022
BY Ntsiki Adonisi-Kgame AND Mihlali Sitefane

Renewable energy projects need to prioritise stakeholder management to avoid pitfalls later

The management of key stakeholders is often placed low priority, compared to the urgency and the need to operationalise renewable energy projects. However, this approach is often short-sighted. Failure to place stakeholder management at the forefront in the development of renewable energy projects may result in these projects being stalled and could introduce challenges which may have a bearing on the success and longevity of these projects.

Foreseeing these challenges and meaningfully addressing them is important if South Africa is to realise the vision in the National Development Plan, 2030 to have an energy sector that promotes “economic growth and development through adequate investment in energy infrastructure and the provision of quality energy services that are competitively priced, reliable and efficient”.

In the context of renewable energy projects, stakeholders include: landowners, local communities, lawful occupiers, developers, neighbouring operations, municipalities, farmers and any person or group of persons who may affect or be affected by the development and operationalisation of the project. Stakeholders are different and so it is crucial to ensure that stakeholders are not only identified, but are classified and prioritised appropriately.

For example, stakeholders who have rights to land are key and must be clearly identified. This is important for concluding certain agreements, such as sale of land agreements, servitudes or leases and in establishing what their terms of engagement are. Depending on the location of the land, and current use of the land, stakeholders who have rights to land may include: individual owners, communities, farmers, associations and, in some instances, municipalities and mining companies. Failure to properly engage these stakeholders will stall the project because the surface/land rights, for purposes of constructing the plant or other necessary infrastructure, would not have been secured.

Where the land is owned by a community (as defined in the Interim Protection of Informal Land Rights Act, 1996), the community would need to consent to the alienation of any of its rights in the land. Furthermore, and as was found in Maledu & Others v Itereleng Bakgatla Mineral Resources (Pty) Limited and Another, it is not sufficient to merely engage and conclude surface related agreements with the Tribal Authority without consulting and engaging the lawful occupiers or owners of the land concerned. This task may seem simple, but practically, it may involve extensive consultation with many people, and reaching a consensus may be arduous.

Similarly, the land identified may already be ring-fenced for another purpose, such as mining activities, rehabilitation efforts in line with existing environmental approvals, township establishments and other commercial purposes. Timeous and effective engagement with these stakeholders increases the chances of ensuring that mutually beneficial commercial terms are agreed upon by all parties.

From an environmental law perspective, it is imperative to determine whether any interested and affected parties in the area are likely to oppose or appeal the requisite environmental authorisations, which may lead to the suspension of these authorisations pending the outcome of the appeal. This determination requires a proactive approach, as opposed to a reactive approach where the project is delayed because of ineffective stakeholder engagement.

The approach to stakeholder management must not be ‘box-ticking’ exercise for the sole purpose of obtaining the requisite licences and authorisations, and securing land rights. Rather, stakeholders must be seen as fundamental to the success of the renewable energy project. Developers must proactively plan for the management and engagement of stakeholders at inception, with a long term view of maintaining relationships, and enjoying long term operational success that has the full buy-in of the relevant stakeholders.

Reviewed by Ntsiki Adonisi-Kgame, head of ENSafrica’s Natural Resources and Environment department.

Mihlali Sitefane

Natural Resources and Environment | Senior Associate

msitefane@ENSafrica.com