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The Citizen
2 days ago
- Business
- The Citizen
17% of SA's electricity consumed by a few giant consumers
Among them is South32, which owns the KZN Hillside aluminium smelter. It's 2025 discount could subsidise electricity costs of nearly 700 000 households. A recent investigation by Open Secrets laid bare the sweetheart deal that allows South32's Hillside aluminium smelter in KwaZulu-Natal to consume about 6% of Eskom's electricity output – while paying roughly half the normal tariff. That figure rises to nearly 9% when South32's Mozal smelter in Mozambique is added to the picture. The extent of the discount enjoyed by South32 is outlined in a negotiated pricing agreement (NPA) recently disclosed by Eskom to Open Secrets. 'The energy consumed by Hillside is equivalent to approximately six large ferrochrome smelters. The consumption is an equivalent of 1 300GWh (gigawatt hours),' according to the NPA with Eskom. A calculation by the Democratic Alliance spokesperson on electricity and energy, Kevin Mileham, shows 17.27% of Eskom's electricity is consumed through these NPAs or via international sales. 'What is shocking is that this 17.27% only generates 8.5% of Eskom's revenue from the sale of electricity,' he says. Based on this calculation, a few energy-intensive consumers are paying roughly half of what the rest of the country pays. While the National Energy Regulator of South Africa (Nersa) recently approved a 24.3% tariff hike over the next three years, South32's NPA guarantees it producer price inflation (running at about 1% this year) plus 1.25%. The agreement allows Eskom to shut off its power for a maximum of two hours at a time for up to 104 hours a year. ALSO READ: 30% electricity tariff increase is a reality, says Erasa Mileham welcomes the recent announcement by electricity and Energy Minister Kgosientsho Ramokgopa that a review of electricity pricing policy is now a priority. One customer knocking on the door for a better electricity pricing deal is ArcelorMittal SA (Amsa), which has been vocal about the 835% increase in its electricity tariff increase over the last decade. This hike has been a major contributor to its financial woes and the R5.1 billion headline loss reported for the 2024 financial year. The government is dangling all sorts of carrots to stop its threatened shut down of its long-steel plants, and a preferential electricity tariff is one of the carrots being considered. Regulated prices charged by government-owned entities such as Eskom and Transnet are running at an average inflation rate of 9.7% – well above the rest of the economy, which is at about 4.5%. The SA Reserve Bank wants to set an inflation target of 3%, but achieving this will require getting these regulated prices under some sort of control. ALSO READ: Nersa's municipal tariff process flawed, says Sapoa Good deal or not? Responding to Moneyweb's request for comment, South32 points to Hillside's significant contribution to SA's economy in employing 2 300 people directly and a further 27 400 indirectly. 'It has played a key role in South Africa's domestic aluminium industry as a supplier to local companies that manufacture products for sale domestically and abroad. 'Hillside plays an important role in keeping the South African electricity grid stable and helps to manage load shedding through the suspension of power to potlines at critical times. Despite limited loadshedding across South Africa during the past year, suspension of power to potlines at Hillside has continued during this period in order to support Eskom in managing South Africa's electricity grid,' says a spokesperson for South32 (see the full response below*). Hillside's initial preferential tariff was linked to the London Metal Exchange price for aluminium and the US dollar-rand exchange rate, and dates back to the 1990s, when Eskom had surplus power. Then, it was only too happy to sign up a large anchor consumer capable of absorbing some of this surplus power, but – despite warnings from Eskom and others of a looming power shortage – government sat on its hands until forced to green-light the grossly over-priced and seriously delayed Medupi and Kusile power stations in the late 2000s. A new agreement was signed with South32 in 2021, the details of which remained a secret until recently. Hillside was formerly owned by BHP and acquired by South32 in 2015 as part of BHP's divestment from SA. The current Hillside contract (2021) does not contain commodity price and exchange rate sharing. ALSO READ: Grim impact of soaring electricity prices on South Africans revealed According to Open Secrets, the initial (pre-2021) agreement sparked outrage when it was made public, as it showed former owner BHP was paying only 15% the tariff charged to ordinary consumers. South32 says it is unable to verify this, as Meridian Economics ran the numbers for Open Secrets comparing the Hillside tariffs with the standard 'Megaflex' tariff [for large industry and mines]. Meridian conservatively estimated the discount for the current financial year at about R10 billion, with South32 having already benefited from about R25 billion in lower electricity prices since the deal was struck. Over the full 10-year agreement, Meridian estimates the total discount will be about 50% – around R92 billion in forgone Eskom revenue. The R10 billion discount for 2025 is sufficient to subsidise the electricity costs of nearly 700 000 households, supporting 2.5 million South Africans. South32 responds that the cost to Eskom of supplying bulk power to a single major customer like Hillside is significantly lower than the cost of supplying to thousands of smaller or individual customers. Says Open Secrets: 'It is also worth reflecting on how much this could contribute to South Africa's energy transition. South32's discount for this year – R10 billion – is nearly three times the total grant funds disbursed to the Just Energy Transition Partnership over the past three years.' ALSO READ: ArcelorMittal long steel business closing for good due to policy inaction In motivating the NPA with Hillside, Eskom argued that the Hillside smelter would not be viable under the standard Megaflex tariff. 'In the absence of this proposed NPA, the Hillside smelter would close, with resultant negative consequences. The need for an incentivised energy pricing arrangement is the reality for aluminium smelters worldwide,' stated the utility. 'Without an appropriate NPA, there would be zero electricity sales and zero revenue to Eskom from the Hillside smelter. The proposed pricing arrangement should not be viewed as a discount, as it has been structured to result in a more cost reflective tariff and ensure that all applicable costs are recovered and a positive contribution is made to fixed costs.' Eskom goes on to argue that the proposed NPA would be advantageous to both Eskom and other customers 'as it is at a higher price than the existing NPAs'. 'The loss of the Hillside smelter sales and loss of the positive contribution to fixed costs would result in a higher tariff increase requirement, as other customers would have to make up this contribution.' ALSO READ: Electricity tariffs: Ramokgopa reveals how much Eskom customers pay for usage per month The NPA was supported by the government as well as Nersa, which had to be satisfied that the NPA tariff was above Eskom's cost of supply, allowed Eskom to make a reasonable return, and was not being subsidised by other electricity customers. Mileham says an appropriate question to ask is whether the Hillside NPA – and others like it – are in the best interests of the country and all its citizens. 'I would argue that we would see faster economic growth without having these preferential tariffs, and bear in mind that Hillside's profits don't stay in SA, they end up in Australia.' *South32's full response: 'Hillside Aluminium is a significant contributor to South Africa's national economy and a major employer. It employed over 2 300 employees and contractors in FY24 and supports a further estimated 27 400 indirect employment opportunities in the economy. 'It has played a key role in South Africa's domestic aluminium industry as a supplier to local companies that manufacture products for sale domestically and abroad. 'Hillside plays an important role in keeping the South African electricity grid stable and helps to manage load shedding through the suspension of power to potlines at critical times. Despite limited load shedding across South Africa during the past year, suspension of power to potlines at Hillside has continued during this period in order to support Eskom in managing South Africa's electricity grid. 'The pricing agreement for Hillside reflects the SA government's policy to support strategic industries that create value for the nation. It was approved by Nersa, following consideration of a range of factors. It helps the smelter to remain internationally competitive so it can continue to deliver these significant benefits to South Africa. 'Eskom outlined its rationale for the pricing agreement in a publicly available submission to Nersa in February 2021. In its submission, Eskom noted Hillside's role in supporting stability of the electricity grid. It also noted that the NPA would be advantageous to both Eskom and other customers. 'When it publicly outlined its rationale for supporting the agreement, Nersa stated there was a 'net benefit to the rest of the customer base in putting this agreement in place.' This article was republished from Moneyweb. Read the original here.
Economic Times
31-07-2025
- Business
- Economic Times
Karoline Leavitt's 2022 campaign still owes $323,000 — and there's no cash left to pay it back
Synopsis Karoline Leavitt, Trump's White House press secretary, faces scrutiny over her 2022 campaign's $326,370 debt. The campaign, Karoline for Congress, owes money to numerous creditors due to unreturned illegal donations. With no recent fundraising and an ongoing FEC audit, the debt remains unpaid, highlighting challenges in campaign finance regulations and enforcement. Getty Images White House Press Secretary Karoline Leavitt's 2022 campaign still owes over $326,000 to donors and vendors, according to FEC filings, with no funds raised in recent months to pay off the massive debt. Karoline Leavitt, now Trump's White House press secretary, still has a big money problem from her 2022 failed congressional campaign. Her campaign, Karoline for Congress, owes $326,370.50 to over 100 creditors — and hasn't paid off any of it. From April to June 2025, her campaign raised zero dollars, meaning no new funds came in to clear the debt. Most of this debt comes from illegal or too-large donations her campaign took years ago but never returned, as per the report by Open Secrets. As of June 30, the campaign has no cash left. It already spent the extra money it wasn't supposed to accept. Dozens of people are owed refunds, including big names like Former NH Gov. Craig Benson and Former NH Senate Leader Robert Clegg companies are also owed large amounts, Axiom Strategies — $46,747, Remington Research Group — $41,000, Fundraising Inc. — $12,815. In January 2025, the campaign changed 17 finance reports to show previously hidden contributions that broke federal limits. ALSO READ: Legendary lion Blondie lured from reserve and killed by trophy hunter in £35K shocking hunt - public furious In April, Leavitt's campaign refunded a few donors, including her parents, who got $2,900 each. Rob Phillips of AxCapital, the campaign's treasurer, did not reply to any media questions. A source close to Leavitt told OpenSecrets that Leavitt herself doesn't personally owe the money. The campaign is under an FEC audit, and that's why the debt is still there. In November 2022, the group End Citizens United filed a complaint with the FEC, saying the campaign broke finance laws. But the FEC can't take action now — because since May 2025, it has only three commissioners, not enough for decisions, as per the report by OpenSecrets. Trump hasn't nominated new FEC commissioners, even though names were recommended. Until then, the FEC can't approve investigations or fines. End Citizens United president Tiffany Muller said this shows people can break campaign laws and still get away with it. Leavitt was just 23 years old when she started running for Congress in New Hampshire's 1st District. She won the Republican primary but lost the general election to Democrat Chris Pappas by 8 percentage points. If she had won, she would've been the youngest woman ever elected to the U.S. House, as per the report by OpenSecrets. Leavitt began her political career in Trump's White House mailroom, then became an assistant press secretary. She was Trump's press secretary for the 2024 campaign and after he won, she was named White House press secretary at age 27 — the youngest ever. Trump praised her as 'smart,' 'tough,' and a 'highly effective communicator', as per the report by Daily Beast. Candidates don't personally owe the money — the campaign does. But when a campaign loses and runs out of money, paying back debt is tough. The campaign can try to raise money from new donors. The candidate can personally pay, but that's Clinton paid back $22.5 million from her 2008 campaign by selling merchandise, offering time with Bill Clinton, and renting out supporter data. She cleared her debt by Harris' campaign had over $1 million in debt from her 2020 run but paid it off after joining the Biden-Harris ticket. Biden's campaign helped pay it. Newt Gingrich, the former Speaker of the House, still owes $4.63 million from his 2012 campaign — the most by any candidate. Al Sharpton (2004) — still owes nearly $926,000 as of Dec. 2024 Rick Santorum (2012 & 2016) — owes big money Mike Pence (2024) — also has leftover campaign debt Sharpton's campaign even stopped sending reports to the FEC, which sent them a warning. Q1. Why does Karoline Leavitt's 2022 campaign still have unpaid debt? Karoline Leavitt's campaign owes over $326,000 due to illegal and excessive donations it accepted and never returned. Q2. Is Karoline Leavitt personally responsible for the campaign debt? No, Karoline Leavitt is not personally liable; the debt belongs to her 2022 congressional campaign committee.
IOL News
30-07-2025
- Business
- IOL News
Open Secrets demands action from Hawks and NPA on Prasa corruption
The Gauteng High Court, Pretoria, is set to hear the case brought by non-profit organisation Open Secrets to force action on corruption at the Passenger Rail Agency of SA. Image: File Non-profit organisation Open Secrets wants to force the Hawks and the National Prosecuting Authority (NPA) to probe and prosecute corruption at the Passenger Rail Agency of SA (Prasa). In papers filed at the Gauteng High Court, Pretoria, Open Secrets wants to declare invalid, review, and set aside, under the promotion of Administrative Justice Act or the principle of legality, the failure of the Hawks to complete their investigations, within a reasonable time, into the unlawful contracts concluded between Prasa and two companies, Siyangena and Swifambo. The organisation also wants to declare invalid, review, and set aside the corresponding failure of the NPA, which has assumed a guiding role in the Hawks' investigations, to ensure completion of the investigations and to decide whether to prosecute. In addition, Open Secrets wants to be granted just and equitable relief, directing the Hawks and NPA to finalise the investigations promptly, to decide on prosecution and to file such reports as the court may order. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading It also raises constitutional issues as to whether the prolonged failure by the Hawks and NPA to complete investigations into serious corruption at Prasa infringes on some constitutional provisions such as the duty of the police service to prevent, combat, and investigate crime, the NPA's duty to exercise its functions without fear, favour, or prejudice, and to perform constitutional obligations to be performed diligently and without delay. "Whether the failure of the Hawks constitutes unlawful administrative action or an unlawful exercise of public power, and whether the failure of the NPA constitutes an unlawful exercise of public power," Open Secrets stated. The organisation also wants the court to determine whether the Hawks and NPA have breached their respective statutory duties, under the subordinate legislation to the constitutional provisions interpreted in the light of the Constitution. Additionally, the high court must determine whether the SA Police Services Act and the NPA Act and related legislation, such as the Prevention of Combating of Corrupt Activities Act, were contravened. The court will be asked to decide if the findings and recommendations of the Commission of Inquiry into State Capture, led by retired Chief Justice Raymond Zondo, concerning the Siyangena and Swifambo contracts heighten the Hawks' and NPA's duties to act, and whether their continuing inaction is irrational and unreasonable.
The Intercept
10-07-2025
- Business
- The Intercept
The Private Prison Industry Looks Forward to Soaring Profits Thanks to Trump's Budget
The private prison industry saw its influence wane under Joe Biden, but it remains dominant in the business of immigration detention. So when President Donald Trump signed the so-called 'Big, Beautiful Bill' on July 4, dedicating $45 billion to immigration detention with a goal to double or triple the population behind bars, it was a huge payoff. The victory was in the works for years. A private prison company handed consulting and lobbying gigs to Trump's allies, its political action committee was the first to max out its donation to Trump, and industry executives had already made plans to reopen shuttered prisons — laying the groundwork for what they promised investors would be an incarceration bonanza. In the 2024 election cycle, employees and PACs affiliated with the publicly traded industry behemoths GEO Group and CoreCivic contributed overwhelmingly to Republicans and Trump. Republicans received 92 percent of $3.7 million in contributions affiliated with GEO Group and 96 percent of the $785,000 in contributions affiliated with CoreCivic, according to OpenSecrets, a nonpartisan, nonprofit research group that tracks official disclosures. When Trump won, the two companies gave $500,000 each to his inaugural committee. 'The private prison corporations were keenly aware of the implications of the then-Trump campaign's platform for mass deportations.' Even though the industry kept profiting from the Biden administration — despite a supposed ban on private prisons — one advocate said it was clear to her why companies went all-in on Trump. 'The private prison corporations were keenly aware of the implications of the then-Trump campaign's platform for mass deportations,' said Eunice Hyunhye Cho, a senior staff attorney at the American Civil Liberties Union's National Prison Project. 'There is no doubt that these private prison companies were keenly aware of the potential profits to be made under such a scheme.' Before the federal budget bill passed, private prison executives on earnings calls with investors were exultant about their upcoming business opportunities under the law — and held regular meetings with the Trump administration to pitch new plans on how to lock people up. Now, the White House hopes to get the bill's funding out the door quickly, in order to expand the middle part of a deportation pipeline that stretches from arrests at Home Depots to flights abroad. In a statement, the White House rejected the idea that the budget bill or any of Trump's immigration policies were shaped by industry. 'The only people who influence the President's decision-making are the American people. But leave it to the Fake News Intercept to pathetically and desperately try to attack agenda that the American people voted for – deportations of criminal illegal aliens,' Abigail Jackson, an administration spokesperson, wrote in an email. Days after his inauguration in 2021, Biden made a splash by announcing that the federal Bureau of Prisons, or BOP, would no longer house incarcerated people in private prisons. The supposed ban only affected a few thousand of the BOP's roughly 150,000-person population, and the private prison companies soon managed to find workarounds. More importantly, Biden's order did not touch the much larger number of people held in immigration detention, which is reserved mostly for people accused of committing civil violations such as illegal presence in the U.S. Three years into Biden's administration, about 90 percent of people in immigration detention were housed in private facilities. There were about 40,000 people in immigration detention by the end of his term. Many were detained in facilities owned or operated by CoreCivic and GEO Group. Both companies also have subsidiaries profiting off other parts of the immigration system, ranging from an electronic monitoring company GEO Group bought in 2010 to a transportation company owned by CoreCivic. Although they continued doing business with the Biden administration, private prison companies bristled at his at his attitude toward the industry. In addition to the millions in campaign cash the private prison industry funneled to Trump and Republicans, there were jobs for major figures in Trump's orbit. Tom Homan, the former acting director of U.S. Immigration and Customs Enforcement, had a consulting gig with GEO Group that was only made public this year. Pam Bondi, the former Florida attorney general, picked up work as a lobbyist for the company in 2019, shortly before she joined Trump's defense team at his first impeachment. Trump in his second term tapped Homan to serve as 'border czar' and Bondi as U.S. attorney general. While many industries with government work try to cozy up to former officials, Lauren-Brooke Eisen, the senior director of the Brennan Center's Justice Program and author of a book on the industry, said private prisons cultivated unusually close relationships. 'There's sort of always a revolving door between the private sector and the government, but what we're seeing here is, we're also seeing people with super close ties,' she said. In a statement, GEO Group did not directly address questions about the donations to the Trump campaign or its ties to high-ranking administration officials. 'We are proud of the role our company has played for 40 years to support the law enforcement mission of U.S. Immigration and Customs Enforcement,' a company spokesperson wrote. 'Over the last four decades, our innovative support service solutions have helped the federal government implement the policies of seven different Presidential Administrations.' CoreCivic, meanwhile, said that it welcomed 'the opportunity to support any political leaders who are open to the solutions our company provides to serious national challenges, including providing safe, humane care for people going through the civil immigration process and helping those in our criminal justice system prepare to return to our communities with the skills they need to be successful.' The donation to the inaugural committee, CoreCivic spokesperson Ryan Gustin said, 'is consistent with our past practice of civic participation in and support for the inauguration process, including contributions to inauguration activities for both Democrats and Republicans.' The White House rejected out of hand the idea that campaign contributions, or the work that top officials conducted for the industry while out of office, had anything to do with crafting the specifics of the budget bill. 'The One, Big, Beautiful bill provides the funding necessary to fulfill the President's promise to carry out the largest mass deportation operation in history. CoreCivic and GEO Group have received contracts under both Democrat and Republican administrations,' Jackson wrote. After Trump's first term, Homan hung up a shingle for a consulting firm that told prospective clients it had a 'track record of opening doors,' resulting in big state and federal contracts. As border czar, Homan has said he will not be involved in making decisions about individual contracts. Bondi has promised to consult ethics officials if any conflicts of interest come up, and a Justice Department spokesperson said she 'played no role in the provisions for additional funding for immigration detention.' Such denials do not sway Cho, the ACLU lawyer whose work includes representing people in immigration detention. 'Whatever those responses are doesn't belie the fact that these companies clearly are purchasing influence in order to benefit politically and financially,' she said. Citing reporting from The Intercept, Sen. Dick Durbin, D-Ill., in May called on Bondi to recuse herself from 'any and all' activities tied to immigration detention that could directly or indirectly benefit GEO Group. The administration has brushed off such critiques as it pushes ahead with its mass deportation plans. The Department of Homeland Security, which oversees ICE, says the budget law will allow it to secure 80,000 new detention beds and bring its total population over 100,000. GEO Group said in November that Trump's plans could help it fill 18,000 empty beds, translating into $400 million in additional annual revenue. CoreCivic said in February that it had pitched the federal government on plans for housing an extra 28,000 people. The companies will face competition from states like Florida, which is relying on federal reimbursements to build tent camps at places such as the so-called 'Alligator Alcatraz' facility in the Everglades intended to house 3,000 people. 'The $45 billion represents such an unprecedented broadening for federal prison funding for immigration.' Cho said she does not think such state facilities pose a business threat to the private prison companies, in large part because there is so much money to go around. 'Even state detention systems often depend on private prison companies for operation,' she said. 'The $45 billion represents such an unprecedented broadening for federal prison funding for immigration.' In recent weeks, the major private prison companies have continued to make announcements about their growing capacity – for detention and profit. CoreCivic announced last month that it had spent $67 million on a detention center in Virginia that it expects to produce an extra $40 million in annual revenue. If Homan has his way, many of the new detention centers springing up to fill the administration's demand will be under looser state regulations instead of more stringent federal standards. 'It is really scary that we are seeing a reduction of oversight, along with this idea that we should loosen the standards, with this huge increase in funding.' Stories of suffering behind bars are already proliferating as the detention population grows. Eisen noted that one of the Trump administration's first actions at the DHS was to decimate an oversight office meant to investigate allegations of wrongdoing. 'It is really scary that we are seeing a reduction of oversight, along with this idea that we should loosen the standards, with this huge increase in funding,' she said.
Mail & Guardian
03-07-2025
- Business
- Mail & Guardian
Consulting companies are profiting off the climate crisis — report
Major consulting companies and some of the big accounting firms in South Africa are cashing in on the climate crisis, a new report has revealed. Major consulting companies and some of the big accounting firms in South Africa are cashing in on the climate crisis, despite conflicts of interest, and a lack of expertise and ambition, undermining South Africa's The investigation highlighted that management consultants and institutions linked to donor countries are receiving the lion's share of the grant funding meant for South Africa's just energy transition projects. The international financial pledge towards South Africa's shift from coal to cleaner sources of energy — while ensuring that coal-dependent communities and workers are not left behind — is $12.8 billion and $2.8 billion of pledged funds has actually been committed to projects, according to Open Secrets. A total of $100 billion is said to be needed for the country's just transition. 'Much of the grant funds are caught in a circular process that sees little money arriving on the ground in South Africa,' the report states. 'Instead, it 'passes through' South Africa only to again make its way into the hands of international platers. Where it is paid to South African entities, many of them are private consultants working for international firms.' The findings show that 65% of the committed grant funds have gone to private corporations and organisations as implementing entities and less than 25% of the grant monies have gone to local implementing entities, including non-governmental organisations, public sector institutions and universities, lead investigator Zen Mathe said. 'We have also found that often there is a direct link where the money comes from — so the donor country — and where the money goes, so the implementing entity and, as a result, consulting firms, are playing a fundamental role in shaping South Africa's response to the climate and energy crisis,' Mathe told a forum on the report. 'It's concerning that private consultants have been given this opportunity to corner the market for advice on the climate crisis and a just transition, with little to no scrutiny.' The report shows that most management consultancies have made fortunes by servicing the interests of fossil fuel companies and some of the world's largest polluters. These companies' climate advice also 'routinely lacks the ambition required to push for the systemic change that the climate crisis demands'. The report questions whether these firms have the necessary skills and expertise to do the work they are contracted to do. The use of consultancy firms to guide policies on the just transition undermines the expertise and capacity within the state and is a risk to democracy, it claims. 'The undermining of state capacity and capture of the policy space by corporate interests closely tied to fossil fuel interests are risks to the democratic process. Where the voices and interests of the public are sidelined, the risk is heightened.' It added that a lot of these discussions were happening behind closed doors, with little transparency. The Boston Consulting Group (BCG) has been named as one of the major firms benefiting from the climate crisis, alongside McKinsey & Company and Bain, which were also implicated during an investigation into state capture in South Africa. 'BCG has positioned itself as a leader on climate-related consulting around the world and cemented itself as a key partner in South Africa's energy space,' the Open Secrets report states. This is despite having ties with petrostate Saudi Arabia and companies known to be major polluters, including Saudi Aramco, Shell and ExxonMobil, as well as being a consultant for Sasol — one of the world's worst polluters. 'Despite BCG's clear conflicts of interest, it has continued to play a key part in global climate negotiations,' the report states. The consultancy was a partner at the 26th UN climate change conference (COP26) and also played a role at COP27, before it was chosen as the 'principal strategy and action partner' for COP28 in 2023, which was held in the United Arab Emirates. According to the report, a record number of fossil fuel lobbyists — 2 456 — were present at the conference that year. 'BCG's partnerships and choice in clients, who are amongst some of the top polluters in the world, has called into question its role as a strategic partner for the last three global climate conferences,' Open Secrets said. 'If the aim is really to pursue the transition to a low-carbon economy, it should surely be of concern that a firm that applauds fossil fuel companies for supposed 'innovation' — all while those companies double down on models incompatible with addressing climate change — should play any lead role in the most important global negotiations to tackle climate change.' The report said from 2019 to 2021, BCG took on over 750 climate-related projects for over 300 clients and it made around $1.1 billion from climate consulting in 2021, which could account for almost a third of its sales by 2027. In response to questions from Open Secrets about its work on South Africa's just energy transition, BCG said: 'As is already a matter of public record, our various efforts with multi-stakeholder coalitions (e.g. NBI [National Business Initiative], Busa [Business Unity South Africa], The Energy Council of South Africa) have involved many contributors from many different organisations as part of transparent consultation processes, with BCG providing analytical and technical modelling support. 'We are proud of our contribution to South Africa's JET,' it added. Sasol confirmed that it takes consultation from BCG and various other firms on its projects, adding: 'We do not publicly disclose the specifics of all our consulting engagements or their ongoing status.' McKinsey & Company told Open Secrets that it has been open about its work with fossil fuel clients and 'hard-to-abate sectors and see no contradiction with our commitment to the energy transition … 'We are proud to work with clients in all of these sectors — including in oil and gas.' The big four accounting firms, EY, Deloitte, KPMG and PwC, have punted climate-related and environmental social and governance projects, but only two, Deloitte and PwC, are currently working on just transition-related projects and benefiting from the grants portion of just energy transition project funds, according to the report. These two firms have also been In July 2024, 'just transition' was officially defined under the Climate Change Act as 'a shift towards a low-carbon, climate resilient economy and society and ecologically sustainable economies and societies which contribute towards the creation of decent work for all, social inclusion and the eradication of poverty.' The implementation and interpretation of the Act requires decision-making that considers the needs of the most vulnerable, head of legal at Open Secrets Ariella Scher said. 'It's from that perspective that this report demonstrates that that doesn't seem to be what's happening. What is happening is that the most powerful, and those who have always been in charge of our economies, are just continuing to benefit,' Scher said. The authors recommended that money for the just energy transition be funnelled to the South African state, not only to private sector institutions, and should be in compliance with the Public Finance Management Act (PFMA). Additionally, the funds must be monitored and recorded in a publicly accessible repository and 'spent in a manner that is determined by the South African state itself', said Mathe. 'This allows for financial oversight, but also really importantly, democratic oversight because it subjects the spending of state monies to financial audits parliamentary oversight and so we have greater accountability, if we're following what the PFMA says,' Scher added. Open Secrets is also calling for more regulation. 'There must be public debate about how we hold these unelected private technocrats to account. We must critically consider the impact on South Africa's pursuit of an energy transition that is just and benefits the most vulnerable in our society and those that are most immediately affected in our society,' said Mathe
