IN A major test for the future of empowerment charters, the energy minister will interrogate the heads of fuel groups operating in South Africa, after a government-sanctioned audit on their compliance with the liquid fuels charter found overall compliance at just 48%.
Speaking yesterday at the release of the audit - conducted by independent audit company Moloto Solutions and covering the period from 2000 to 2010 - Energy Minister Dipuo Peters said the findings were "extremely disappointing".
The charter, finalised in 2000, targeted 25% black ownership and control of all facets across the value chain. However, the audit said black ownership was 18,91%, with black women accounting for 6,72% of this figure.
This is not the first charter to come under scrutiny.
Two years ago, the mining industry also fell short of a charter target of 15% black ownership, and instead had transferred 9%. The mining industry must transfer 26% of ownership into black hands by 2014.
The information and communication technology charter, on the other hand, was gazetted only last month.
Ms Peters said the R217bn industry performed "dismally" on enterprise development, skills development, employment equity and preferential procurement.
In view of the findings, she would hold individual meetings with the heads of the various companies to set deadlines to meet the charter's requirements.
In its recommendations, Moloto said the firms should commit "to concrete plans to deal with the gaps, within a set time frame".
The Department of Energy could not say how much time the companies would be given to comply. However, director-general Nelisiwe Magubane said: "It is definitely not going to be 10 years. That is for sure."
The charter, part of the Petroleum Products Act, empowers the government to curtail the ability of the companies to import crude oil and to revoke their licences "in the worst-case scenario", Ms Magubane said.
The outcome of the audit will test the department's ability to force compliance in one of South Africa's key industries.
Asked whether curtailing crude imports would affect the availability of petroleum products, deputy director-general Tseliso Maqubela said the negative effect would be short-lived. "There will be people who will step in to deal with any shortages." South Africa relies heavily on imported crude oil.
In 2010, the petroleum industry, which is responsible for refining, distributing and marketing petroleum products, consisted of BP Southern Africa, Chevron, Engen Petroleum, PetroSA, Sasol Oil, Shell Marketing & Refining SA and Total SA.
Representatives of most of these companies, as well as smaller black-owned companies in the energy industry, were all present when Ms Peters presented the audit outcome at a function in Midrand.
Gosetseone Leketi of the Department of Energy said only Sasol Oil and Total had procured crude oil from previously disadvantaged transporters during the audit period.
Mr Maqubela said the department had set up a new unit specifically to deal with compliance.
Simphiwe Mehlomakulu, chairman of Reatile Group, a black-owned investment holding company with an energy subsidiary, bemoaned the oil industry's lack of commitment to the charter. Mr Mehlomakulu said the industry did not treat the charter as a priority and he urged the government to be tougher. "Compliance needs teeth," he said.
Mr Mehlomakulu said there was a need to review the quality of the black economic empowerment (BEE) transactions in the industry.
Ms Peters was also critical of "serial investors" who were not involved in key operations in the industry. "These are the people who do not want the oil industry to grease their hands but they want the money of the oil company to grease their hands. This type of investor beneficiary mentality is a drawback on this knowledge-intensive industry and adversely impacts BEE imperatives," she said.
Ms Peters said the continued reliance on oil majors for the supply of petroleum products was an indictment of black people. "We have failed ourselves and the country. We need to acknowledge that we are not there," she said.
South African Petroleum Industry Association (Sapia) executive director Avhapfani Tshifularo said the association "noted" the findings. "Once we have had a chance to thoroughly review it, we will engage with the department directly to address any issues.
"Sapia and its members will continue to collaborate closely with the Department of Energy on all matters related to the liquid fuels charter," Mr Tshifularo said.