Sack the Necsa board before it wrecks the company – union

Written by Ciaran Ryan. Posted in Journalism

A once model state-owned company is being ruined by design, say union members. From Moneyweb.

Suspended Necsa executives are taking legal action against former energy minister Jeff Radebe, with claims that he overstepped his ministerial authority and interfered in management appointments. Picture: Moneyweb

Suspended Necsa executives are taking legal action against former energy minister Jeff Radebe, with claims that he overstepped his ministerial authority and interfered in management appointments. Picture: Moneyweb

Former energy minister Jeff Radebe left a trail of destruction across the energy portfolio, not least of which was his irrational disregard for nuclear or clean coal in the energy mix.

That was the view of Nehawu (National Education, Health and Allied Workers’ Union) members picketing outside Gate 3 of the secretive Pelindaba headquarters of the SA Nuclear Energy Company of (Necsa) this week.

“There is a suspicion among workers that the company is being run into the ground – on purpose,” said Zolani Masoleng, Nehawu branch chairperson at Necsa, speaking to Moneyweb this week. “The Department of Energy has been presented with a turnaround strategy, which proposes the retrenchment of 400 staff members and possible sale of public assets without the knowledge and consultation of organised labour. This is being done without consulting labour as required in terms of Section 189 of the Labour Relations Act.”

The suspicion is that the nuclear company is being wrecked so that its licence can be handed over to a foreign buyer – widely believed to be US diagnostic imaging company Lantheus Medical Imaging (LMI) – a Necsa customer.

Read: Axed Necsa board blames resistance of ‘privatisation by stealth’ for dismissal

Nehawu is demanding that the current Necsa board be sacked, along with NTP’s board and its MD, Tina Eboka. NTP is a Necsa subsidiary that produces medical isotopes and other products. Last year Radebe sacked the previous Necsa board and suspended chairman Dr Kelvin Kemm, CEO Phumzile Tshelane and director Pamela Bosman on grounds of “defiance and ineptitude”.

The suspended executives are fighting the former minister’s decision in the Pretoria High Court, and argue in their papers that he interfered in management appointments and over-stepped his ministerial powers, by blocking a non-binding agreement with Russian nuclear company Rosatom.

The Safari-1 nuclear reactor at Pelindaba has been shut down three times in the last 18 months, over safety lapses that were essentially lapses in paperwork (though one worker was airlifted to hospital in the last week after being exposed to a toxic fluorine gas after a cylinder rupture – which some in the company believe was sabotaged). The reactor is used for the production of life-saving medical isotopes, used in the treatment of cancer and exported to more than 60 countries. The shutdown resulted in a daily loss of about R3.5 million, reducing a once model state-owned company into a financial mess, that is now pleading for a R500 million bail-out from government.

Read: Fight between energy minister and nuclear company board gets nasty

In a statement issued this week, Nehawu said newly-appointed Necsa chairman Rob Adams, is anti-working class and ignoring labour laws. Adams was formerly CEO of Necsa. “We feel validated to hold this attitude because he left Necsa in financial tatters in 2012 with 250 employees served with retrenchments notices. He left Necsa to join Aveng Nuclear Manufacturing division, which also collapsed and retrenched its employees,” says the statement.

“To prove that his management style was a disaster to workers at Necsa, within a space of one year in 2013, through the intervention of Nehawu and the reduction of inefficiencies originating from his time as CEO, Necsa was able to achieve a turnaround of R100 million from a deficit of R75 million at the start of 2012/13 financial year to a surplus of R29 million at the end of the period. As a consequence of this, the board at the time was able to clean his mess and took a decision to lift section 189 notices.”

Necsa’s financial troubles started after the appointment of Jeff Radebe as energy minister and are a recent and entirely avoidable creation, says Masoleng. “It is false to claim Necsa’s financial problems will be solved by cutting the wage bill. The problems are much broader than that.”

Nehawu says it has learned that Necsa plans to close or sell several Necsa subsidiary companies, including Pelchem, Pelindaba Enterprises and the vast Necsa property at Pelindaba. Also rumoured for sale are several NTP subsidiaries: NTP Logistics, Gamma-tek and AEC-Amersham.

“As a matter of principle we stand in opposition to the surrender of public resources to private individuals. Public resources are for public benefit,” says Nehawu’s statement.

It says Necsa’s turnaround strategy cannot be complete without replacing the Safari-1 as a matter of urgency and expanding nuclear energy in SA.

Responding to the Nehawu statement, Necsa says “the board inherited a dire financial situation when it assumed office in December 2018, with cash flow shortfalls of hundreds of millions of rand and empty order books across divisions. Much of this can be attributed to policy uncertainty around the new nuclear build and urgent decisions needed to be made. The Necsa Board quite properly entered into discussions with the shareholder in the first instance.

“The board will engage with all stakeholders and role players in accordance with the provisions of the law.”

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.