Johannesburg - Energy Minister Dipuo Peters has described the findings of the Liquid Fuels Charter Audit as disappointing.
Peters shared some of the outcomes with the media and industry role players on Thursday.
In November 2010, the minister announced the commissioning of the audit of the Liquid Fuels Charter of 2000. The purpose of the audit was to achieve a comprehensive and representative assessment, as well as verify the status of compliance by charter signatories; identify bottlenecks in the implementation of the charter inventions; develop standardised assessment criteria; and monitor transformation throughout the value chain.
The audit also ascertained the extent of transformation in the petroleum and liquid fuels sector over the 2000-2010 period.
"Overall the findings of the audit are extremely disappointing given the timelines since the signing of the charter in 2000," Peters noted.
The target set by the charter was for the industry to reach 25% of sustainable presence, ownership and control of all facets across the value chain. This was to be achieved over a period of 10 years.
"We are therefore disappointed that this compliance audit reveals that over these 10 years under scrutiny, overall compliance stands at a mere 48%. On ownership, the finding concludes that the average effective narrow-based black shareholding is 18.91%."
Of this 18.91%, representation for black women stood at a "meagre" 6.72%, while only one oil company had fully complied with the obligation for ownership by black shareholders.
"The poor representation of women in all strategic focus areas of the charter is of even greater concern when juxtaposed against 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.
These were the very areas that had been identified as having potential to place women on a faster trajectory of economic development and empowerment due to their ripple effects, the minister pointed out.
"In terms of the transformation across the greater petroleum and liquid fuels sector, government is also concerned at the dismal performance of the industry in the areas of 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," Peters noted.
The report also indicated that were was some achievement in the partial ownership of assets by serial investors who were not actively involved in key operations within the sector as envisaged by the black economic empowerment imperatives.
This type of investor beneficiary mentality was a drawback to this knowledge intensive industry and adversely impacted BEE imperatives, she said.
"Further the audit shows that over the 10-year period under review, out of the six oil companies operating in the country, only two oil companies procured crude oil from previously disadvantaged entrepreneurs," Peter added.
The lack of technical skills transfer had proven to be the biggest lost opportunity during the period under review.
The audit findings have been presented to Cabinet and Cabinet's recommendations would be incorporated in the department's way forward with the charter.
One of the recommendations to emerge from the report was that the minister meets one-on-one with representatives from the oil companies to discuss compliance. The minister and department's director-general had also approved the creation of a unit that would specifically deal with compliance.
Peters said government would not be held to emotional or political blackmail by any company and that those who failed to comply would the law would face consequences.
"Whilst we are disappointed we believe that there is room for improvement if we work together," she added.
