United Nations Development Programme

12 July 2022

Mr. Robert Krause

SUBJECT: RESPONSE TO AN OPEN LETTER CONCERNING THE UNDP AND MMSEZ

MEMORANDUM OF UNDERSTANDING

I acknowledge receipt of the Open Letter dated 04 July 2022. I commend the collective
and unwavering commitment of the undersigned organisations toward promoting sustainable
development in the context of the inter-dependence between people and nature.

At the outset, it must be emphasized that development is at the heart of UNDP’s work in
South Africa and around the world. We view development as a multidimensional undertaking to
achieve a higher quality of life for all people. As such, economic development, social development
and environmental protection are interdependent and mutually reinforcing components of
sustainable development. UNDP's work in the country is aligned with supporting the Government
of South Africa to overcome the triple development challenges of poverty, unemployment, and
inequality. This is operationalized through UNDP South Africa’s three focus areas; “Enhancing
Inclusive growth and decent work”, “Climate Change and Greening South Africa’s Economy”, and
“Strengthening Democratic Governance.” The establishment of special economic zones in South
Africa, such as the Musina-Makhado Special Economic Zone (MMSEZ), forms part of the South
African Government’s strategic economic reforms and growth plans. UNDP aims to guide and
support these developments while promoting the Sustainable Development Goals (SDGs) and
Agenda 2063.

Development work is collaborative in nature - partnerships strengthen institutional

capabilities and are key to achieving transformational impact. UNDP applies the United Nations
Sustainable Development Group guiding principles when entering into partnerships. These
principles form the foundation for our programming, with the "leave no one behind" approach as
the overarching and unifying principle. When considering a collaboration with any entity, UNDP
considers the entity’s mandate and strategic intent and its alignment to advance the SDGs and the
National Development Plan (NDP), and their commitment to doing so in accordance with the
principles of protecting people and the planet, and leaving no one behind. All UNDP partner
activities are designed to achieve common objectives in line with UN development goals.

We have precisely applied these principles when determining a cooperation agreement with
the MMSEZ. UNDP’s interest in engaging with the MMSEZ is part of its efforts to promote socio-
economic development that is environmentally and socially sustainable in order to contribute
towards overcoming South Africa’s triple development challenge. In addition to advancing
development in Limpopo, the MMSEZ project offers the opportunity to advance the African

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Continental Free Trade Area Agreement (AfCFTA), an initiative supported by UNDP Africa, by
introducing trade corridors and gateways between South Africa and neighbouring countries.

UNDP is not new to the geographical area and has been working in the Vhembe District in
Limpopo Province since 2016. Through the Global Environmental Facility (GEF) Small Grants
Programme, UNDP has been supporting communities through more than 20 environment and
climate change related projects. This support has been made possible through partnerships
established with the Vhembe Biosphere Reserve (VBR), the Limpopo Department of Economic
Development, Environment and Tourism (LEDET), the University of Venda’s Institute for Rural
Development, as well as Civil Society Organisations (CSOs) in Vhembe. Our projects vary in scope
from the protection of natural sacred sites, rehabilitation of wetlands and fountains, addressing
deforestation and overharvesting of indigenous plant species, and reducing energy costs and
indoor pollution through the introduction of biogas digesters and eco-briquettes to aquaponics and
climate smart-agriculture projects.

Having broadly outlined our mandate and programming principles, I move to address areas
highlighted in your Open Letter.

With reference to the first issue raised in the Open Letter, “contravention of environmental
and human rights standards and UNDP principles”, UNDP cannot form partnerships with
organizations inconsistent with the UN Charter or beyond UNDP's mandate. As such, UNDP
partnerships must comply with the norms and standards expressed in the General Assembly and
the Economic and Social Council. Furthermore, UNDP is committed to ensuring that our
programming and operations are socially and environmentally sustainable. We recognize that social
and environmental sustainability is fundamental to the achievement of sustainable development
outcomes. As such, the agency has in place policies, procedures and accountability mechanisms
to underpin our support to the UN Member States. The UNDP and MMSEZ Memorandum of
Understanding (MoU) further outlines how the two entities will cooperate to promote
environmental sustainability, address climate change, and empower the local community to
participate in socio-economic activities. It must be emphasised that MMSEZ jettisoned plans to
include a coal-fired power plant in favour of a renewable energy project. This move led to the
signing of an MoU with investors on the Photovoltaic Solar Plant and Hydrogen Energy Plant. The
key areas of focus will include energy generation (renewable/clean energy technologies while
ensuring a just transition), improved water resource management, and reducing deforestation.

The second issue relates to the “signing of the MoU creating momentum and confidence
in a fundamentally flawed project”. The MoU signed on 17 March 2022 with MMSEZ formalizes a
non-binding partnership which stipulates intent and commitment between our two entities. It
articulates the legislative background, general principles and focuses on potential cooperation in
pursuit of common goals. The MoU in question has identified a series of activities subject to UNDP’s
respective mandates, regulations, rules, policies, and procedures. These activities include:
i. Technical support in areas of project management, financial planning, conceptualization
of innovative solutions towards advancing the SDGs, leveraging international
expertise/knowledge, etc.;
ii. Capacity building through training of local communities, businesses and government
towards creating an employment pool for jobs of the future and to support the vision of
the development of smart cities;
 iii. Research and innovation in the field of agro-processing, value-adding/ beneficiation of
raw materials, energy, water and mining, etc.;
iv. Environmental sustainability and climate change through promoting the
identification and adoption of climate-friendly solutions in various sectors, including energy
generation and water management (such as renewable energy, clean energy technologies
and improved natural resource management, while ensuring a just transition);
v. Forging and facilitating partnerships to grow foreign direct investment in the MMSEZ;
and
vi. Transforming existing skills and assets within rural villages/towns towards the
creation of smart cities and the adoption of the 4th industrial revolution.

For UNDP to formally influence a developmental project, system, or operation and steer it
in a direction of environmental and social sustainability, a formal instrument of engagement is
required. This instrument allows UNDP to directly engage with the affected stakeholders and those
responsible for driving the developmental trajectory. The MoU entered into with the MMSEZ serves
as such an instrument. It will enable UNDP to influence the areas of cooperation outlined in the
MoU and support the MMSEZ to mainstream human and environmental rights.

UNDP has also noted additional areas of concern, particularly environmental sustainability,
water insecurity, pollution, and lack of community consultation. UNDP has been given assurances,
including in the form of a public statement, that all coal-fired power generation plants have been
replaced by solar and hydrogen energy facilities which reduce greenhouse gas emissions. This is
aligned with the outcomes of COP26 and the country’s commitment to a low-carbon economy.

Regarding water insecurity, our discussions with MMSEZ management indicate that there
are bilaterals to collaborate on water provision and investment promotion. Further, MMSEZ plans
to invest in upgrading the water infrastructure in the Musina municipality to optimize the supply of
water. Water from Zimbabwe will be sourced in the short to medium term. The long-term solution
is the establishment of the Musina Dam at the confluence of Sands River and Limpopo River for
domestic use and irrigation. This dam will also assist in containing the floods that have proven to
cause devasting destructions of lives and livelihoods along the Limpopo River right through to
Mozambique. Preliminary studies already indicate that the Musina Dam project is viable.

On the issue of community consultations, the MMSEZ have indicated they met the required
standard. Nonetheless, we are ready to work with you and other stakeholders to ensure
communities’ views and needs are fully integrated into the project implementation.

A review of the MMSEZ shows the project offers a significant potential boost in local job
creation through the establishment of planned agro-processing facilities, energy and metallurgy
industries, as well as general manufacturing and logistics services. Various technical studies have
been conducted to gauge the potential success of these sectors within the province. Our
involvement is to ensure that people and the planet are foremost as the MMSEZ begins to create
sustainable employment where poverty and unemployment are rampant. Throughout this
partnership and process, UNDP will ensure monitoring and evaluation is a continuous management
function which will assess the progress made to achieve the expected results while adhering to
and upholding national and international laws. We welcome CSOs in working with us to ensure this
is achieved.
 While South Africa’s development challenges are vast, the government’s NDP is both
ambitious and achievable with strong commitment from stakeholders. A bold and innovative
approach is required to ensure that projects like the MMSEZ are given adequate support to
overcome poverty and unemployment in the province, and ultimately open an array of new growth
opportunities for her people.

There will be continued multi-stakeholder consultations and I invite the undersigned CSOs
to join UNDP on this journey. As a matter of priority, we remain ready to work with the collective
to address any emerging concerns on the project. We all have a collective responsibility to
support the people of Limpopo, protect the environment and jointly shape the MMSEZ
development.

I would like to take this opportunity to reiterate the assurances of promoting human
rights and protecting environmental sustainability in the country.

Yours Sincerely

Ayodele Odusola, PhD

Resident Representative
UNDP South Africa

Mr. Robert Krause,

Representative of the undersigned CSOs

cc.
MMSEZ SOC
Living Limpopo
Centre for Applied Legal Studies
Centre for Environmental Rights
Natural Justice
The Vhembe Biosphere Reserve, a UNESCO Biosphere Reserve
All Rise Attorneys for Climate and Environmental Justice
EarthLife Africa
groundWork
Fossil Free South Africa
BirdLife South Africa
The Wildlife and Environment Society of South Africa - WESSA NAR & NACSSA
The Mining and Environmental Justice Community Network of South Africa (MEJCON)
350Africa.org
Dr. Victor Munnik
Prof. Lisa Thompson
Prof. Patrick Bond