Mon Oct 24 14:31:31 SAST 2016

Disappointment at level of black ownership of oil companies

Sapa | 05 July, 2012 12:43
A tanker makes a delivery to a Shell petrol station. File photo.
Image by: Reuben Goldberg

The findings of the audit into the Liquid Fuels Charter are extremely disappointing given the timelines, Energy Minister Dipuo Peters said on Thursday.

"We are disappointed that this compliance audit reveals that over these 10 years under scrutiny, overall compliance stands at a mere 48 percent," Peters told reporters in Midrand.

"On ownership, the finding concludes that the average effective narrow-based black shareholding is 18.91 percent, instead of the 25 percent.

"Out of this 18.91 percent, representation for black women stands at a meagre 6.72 percent, while only one oil company, Total South Africa, has fully complied with the obligation for ownership by black shareholders."

In 2010, the energy department called for amendments to the liquid fuels charter and the Petroleum Products Act to give black players in the retail fuel industry access to the fuel infrastructure.

The charter was drawn up in 2000 and called for 25 percent black ownership across the value chain within 10 years. The audit was done from 2000 to 2010.

Peters said the poor representation of women in all strategic areas of the charter was of greater concern when compared to the expectations of equity norms.

"The paucity of representation of women is apparent in particular areas such as management control, employment equity, crude oil procurement, and skills development," she said.

"Yet, these are areas that have been identified as having the potential to put women on a faster trajectory of economic development and empowerment due to their ripple effects."

She said government was concerned about the industry's performance in enterprise development, skills development, employment equity, and preferential procurement.

"The figures in the report show that the status in this instance is worse than it was in 2006 with respect to both the Liquid Fuels Charter and black economic empowerment frameworks."

In the main, the report showed some achievement in the partial ownership of assets by investors not actively involved in key operations within the sector, said Peters.

"These are the people who don't want the oil industry to grease their hands but they want the money of the oil company to grease their hands."

She said this kind of "investor beneficiary mentality" was adversely affecting BEE imperatives.

In the 10-years under review, only two oil companies procured crude oil from previously disadvantaged entrepreneurs.

The audit findings were also presented to Cabinet. Peters said the overall reaction to the report was positive, with a recommendation that it be referred to the economic cluster for further review in terms of policy development.


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