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The 1998
White Paper on Energy Policy set the sustainable presence,
ownership or control by historically disadvantaged South Africans
of a quarter of all facets of the liquid fuels industry or plans
to achieve this as a milestone to trigger the substantive re-regulation
of the petroleum and liquid fuels industry in South Africa.
The government has linked the re-regulation of the industry
to the meaningful participation in the industry by South Africans
who were excluded in the past through the general racial political
dispensation, social inequalities and provisions governing the
industry specifically. In pursuit of this objective, the government
has taken various steps together with industry leaders and associations,
such as the South African Petroleum Industry Association
(SAPIA)
and the African Minerals and Energy Forum (AMEF).
At several
meetings between Pumzile Mlambo Ngcuka, the then Minister, and
industry associations in 1999 and 2000, the idea of a task team
as well as an industry summit were mooted as mechanisms to take
forward the imperative posed in the White Paper. In her Parliamentary
budget vote address on 11 May 2000, Ms Mlambo Ngcuka announced
that the appointment of a ministerial task team.
While transformation
and de-regulation need to take place with a minimum of disruption
and unintended negative consequences, the meaningful participation
by historically disadvantaged South Africans in the economy
is an urgent and overriding national economic and political
imperative.
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After initial consultations, the task team embarked on a series
of workshops examining the entire liquid fuels petroleum industry
in South Africa:
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Oil
and gas exploration and production; |
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Crude
oil refining; |
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Synfuels
manufacturing; |
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Marketing
of petroleum products; and |
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Transportation
of petroleum products. |
Industry associations were tasked to ensure that
any unorganised industry players are brought into the process.
Efforts were made to this end, and some of these companies did
participate in part of the deliberations.
The task team met
on several occasions, and finally agreed on six strategic issue
areas to focus on (see below). These strategic focus areas were
discussed at a series of three full-day workshops. While the
workshops were a process of engagement often fraught with tension,
they brought the participants closer to a common understanding
of the issues that faced the transformation agenda.
The Liquid
Fuels Empowerment Charter emerged as an attempt to capture
the frustrations of the new participants in the industry and
the ways in which transformation could best be facilitated.
In some ways, the process leading to the signing of the charter
was as important as the document itself. The final document,
signed by key industry players in November 2000, is a statement
of the commitment of the signatories to transformation of the
industry as a principle, as well as details of the key measures
and expectations.
Since then, it has become the organising force
in the transformation of the liquid fuels sector."
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The areas focused on by the task team were:
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Employment
equity |
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The
key concern here was the participation of historically
disadvantaged South Africans in the mainstream of the
industry, especially at managerial and operational levels.
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Capacity
building |
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The
industry requires certain high level skills that are in
general inadequately provided for in the South African
labour market. Emerging companies are especially under-skilled.
A key driver in their success will thus be the extent
to which their capacity can be accelerated. |
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Ownership
and control |
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The
industry is highly capital intensive, with major infrastructure.
This has historically been in the hands of the multinational
companies. The focus here was on the acquisition of such
ownership by historically disadvantaged South Africans,
and what such ownership would entail. |
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Financing |
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The
key obstacle for new and small entrants into the industry
is its high capital intensity and relatively low or slow
return rate. Financing mechanisms will need to be devised
if this objective is to be achieved. |
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Procurement |
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In
the past, positive or affirmative procurement policies
have been used to accelerate the growth of new entrants.
This avenue was examined as a key driver in the nurturing
of emerging companies from all sectors. The focus here
was on both private sector and public sector procurement. |
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Legislation
and regulation |
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Within
which the White Paper milestone is to be achieved was
examined to determine the extent to which it may assist
or hamper progress, and to arrive at interventions at
this level. Industry agreements were also examined as
part of this focus. |
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