The Human Rights Commission Is Now Asking Who Approved South Africa's Data Centres
A constitutional body has opened an inquiry into the country's digital infrastructure boom, and the questions it is asking belong on every board agenda.
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South Africa has spent several years courting data centre investment with considerable success. The country now hosts most of the continent’s digital infrastructure, and the capital continues to arrive. What has changed is that a Chapter Nine institution has begun asking how those facilities were approved, on what terms, and with whose consent. That question is not directed only at operators. It reaches the boards that commission, finance and occupy this infrastructure.
CONTEXT AND BACKGROUND
The South African Human Rights Commission has invited written submissions from communities, industry actors, regulators, academics and organs of state on the human rights implications of the rapid expansion of data centres and digital infrastructure in South Africa. The themes it set out are notably broad, covering electricity demand and increased tariffs, water use and cooling, environmental impact, e-waste, land use, community participation, data protection, transparency and accountability, business and human rights responsibilities, and the adequacy of existing regulatory frameworks.
The timing reflects how quickly the sector has grown. South Africa hosts roughly seventy per cent of the continent’s data centres, and the local market is expected to more than double to five billion dollars by 2031. President Cyril Ramaphosa has described their growth as essential to the country’s security and its businesses while calling for the protection of human rights and the environment. Operators have responded publicly, citing renewable procurement and closed-loop cooling as evidence that expansion is proceeding responsibly.
INSIGHT AND ANALYSIS
The instinct in many boardrooms will be to treat this as a matter for operators. That reading is mistaken. Business and human rights due diligence, which the Commission named explicitly, attaches along a value chain rather than to a single company, reaching the enterprises contracting for capacity, the lenders financing construction and the investors holding the equity.
It is also difficult to reconcile with the governance code now in force. King V has applied since the beginning of this year to financial years starting in January or later, reducing King IV’s seventeen principles to thirteen. Its tenth principle holds the governing body accountable for the acquisition and use of technology, and expressly requires effective management of the risks attaching to outsourced technologies and services, including minimum assurance requirements from the service provider. A board leasing capacity in a facility whose resource arrangements it has never examined is not meeting that standard.
The Commission’s list of themes reveals what is under examination. Most items are not technical thresholds. Community participation, transparency and the adequacy of oversight are questions about how decisions were reached rather than what was decided. An operator can hold excellent efficiency metrics and still fail that test.
I have previously written about this in an article on the hidden environmental cost of South Africa’s data centre expansion, which noted that Eskom and several municipalities declined to release consumption figures for local facilities. That refusal is now part of what the Commission is examining.
Elsewhere, the same questions have been settled less gently. In the United States, at least eighteen incumbent officeholders lost elections over a twelve-month period after documented action on data centre projects, though the publication that compiled the review cautions that the cases differ in evidentiary strength. Seventy-one per cent of Americans oppose construction of a data centre in their local area.
IMPLICATIONS
For directors, the work implied here is unglamorous. It means knowing what the facilities you use, finance or occupy actually consume, being able to demonstrate how affected communities were consulted, and recognising that confidentiality provisions unable to survive publication are a liability rather than a protection.
For policymakers, international experience offers a template rather than a warning. Twenty-three American states have approved large load tariffs requiring data centres to carry the incremental costs of serving them, with Virginia mandating fourteen-year minimum contracts and collateral of one and a half million dollars per megawatt. When Ohio approved a comparable measure, the relevant utility’s large-load forecast halved, suggesting a considerable share of projected demand had been speculative.
For the sector itself, the inquiry is an opportunity. An industry that answers thoroughly, publishes its consumption figures and consults before rather than after approval will operate in a more predictable regulatory environment. Serious capital values predictability more highly than permissive silence.
CLOSING TAKEAWAY
South Africa’s digital infrastructure ambition is legitimate, and the economic argument for hosting it is real. The Commission has not challenged that ambition. It has asked how the decisions were made, and that is a question every board should be able to answer without discomfort.
Investment secured through opacity is held on borrowed time. Wherever communities have discovered that decisions affecting their electricity, their water and their land were taken without them, the reaction has been broadly similar regardless of jurisdiction. South Africa has the uncommon advantage of facing that question through a constitutional process, early, and before the heaviest phase of construction arrives. Directors who treat the inquiry as an administrative inconvenience will have squandered it.
Author Bio: Johan Steyn is a prominent AI thought leader, speaker, and author with a deep understanding of artificial intelligence’s impact on business and society. He is passionate about ethical AI development and its role in shaping a better future. Find out more about Johan’s work at https://www.aiforbusiness.net
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