LOOKING AHEAD

It augurs well Committee on Minerals and Energy that Sapia’s 2001 report focuses mainly on the future rather than on the past or the present. This coincides with the Government’s approach, for the way forward is clear. It is only by overcoming poverty that we can begin to win the war against HIV/AIDS and the high level of crime that threatens the fabric of our society.

ANSWERING THE CHALLENGE

In my foreword to your previous report I said that those South Africans who today enjoy relative wealth and who benefited from a sound education, should realise that an island of wealth will not survive in an ocean of poverty.

I added that this realisation should prompt ideas on how to defeat poverty. One of these ways is economic growth, which will lead to job reation and sustainable empowerment.

Energy is a critical element in the development of our country and the current high international prices of petroleum products have added significantly to the burden of the poor in South Africa. Therefore, it is important to examine the progress that has been made during the past year by Sapia and its member companies.

A BRIGHTER FUTURE THROUGH EMPOWERMENT

The key achievement has been the development and signing of the “Charter for the South African Petroleum and Liquid Fuels Industry on Empowering Historically Disadvantaged South Africans in the Petroleum and Liquid Fuels Industry ” (the Charter). In this document the industry committed itself to supporting Black Economic Empowerment (BEE)in the fullest sense of that term.

There was commitment to the:

• Ownership of more industrial assets and operations.
• Procurement of goods and services.
• Development of human resources.
• Creation of a supportive ulture.

SPIRIT OF THE CHARTER

Our Charter states:

• “The signatories have developed the Charter to provide a framework for progressing the empowerment of historically disadvantaged South Africans in the liquid fuels industry.
• The success of this programme depends on the disposition of those who have responsibility for managing the process.
• Member companies and Government therefore undertake to appoint to such positions managers who will understand the spirit and background under which these policies were conceived in order to create a supportive and enabling environment for business success.”

I said in my introduction to the Charter that having committed people who believe in the democratic South Africa and wish to make it a success are key, not only for the success of our mutual aims in the liquid fuels industry, but also in South Africa as a whole. Those in key positions must be prepared to build “supportive cultures ” and to commit to the upliftment and development of our people. Our future depends on it. This is not a political or ideological message – it is an economic one. For business to thrive and succeed it needs to operate in a growing, shared economy. It will fail if mass poverty is not overcome.

The leadership and commitment from Sapia and its members to the Charter is a promising start.

OTHER PROGRESS

An Integrated Energy Plan is being prepared to evaluate how best to match the nation’s energy needs to its resources – with a special emphasis on rural energy needs. Our fortunate diversity of primary energy sources - coal, gas, oil, nuclear and renewables need to be harnessed so that we can move forward together.

A decision has been made to engage in a process of managed liberalisation of the oil industry. This process will seek to bring about a free-market industry in which the social objectives of Black Economic Empowerment and rural development are secured. The first steps will be the putting in place of enabling legislation to pave the way for managed liberalisation. This legislation will enable me to promulgate appropriate regulations to replace the informal regulation of the industry in the past.

Our energy policy will be paying more attention to the requirements of environmental protection. At the same time, the petroleum industry is engaged in a process of improving product quality – a process that will involve them in considerable investments.

IMMEDIATE KEY ISSUES

In the ensuing year,the following issues will be given attention:

• Efficiency in the use of energy needs to be encouraged. This is important to the macro-economy as crude oil is the largest consumer of our limited foreign exchange reserves.
• The impact of high oil prices on our economy needs to be considered. My Department is already working with the industry and other role players on this issue. In particular, the prices of paraffin and LPG are important in our fight against poverty.
• A review of the regulatory pricing structure is being undertaken.
• Following the Procurement Workshop held in March, we are planning a Human Resource Development Workshop to further the aims of the Charter.
• Other aspects of the Charter – ownership and encouragement of small business – need to be advanced. Gender issues must not be overlooked.

WORKING TOGETHER

I wish Sapia and its member companies well as they face the challenges of our mutual future. I call on them to continue to strive to be an example to organised business in demonstrating the value that can be added to South Africa when Government and business act as partners. Too often today this relationship – so important to us all – is fragile. Sapia’s wider membership, which now includes the synfuel producers and a new entrant company, is pleasing. So too are the working relationships that are developing with the African Minerals and Energy Forum (AMEF).

Salani kahle, Sapia – we have important issues to tackle. We need to display true leadership and be guided by a sound, shared, long-term vision of South Africa’s future.

I close with a quote from Deputy President Jacob Zuma’s Message to your Millennium Report: “The emphasis has to be on delivery – especially on defeating poverty and promoting growth and development ”.