Fourth Annual Report : February 2000
Foreword from the Minister of Minerals and Energy
As we stride confidently into the 21st century we take pride that, of the many economic and social changes that occurred in the past century, the miracle of South Africa's liberation is among the most noteworthy. It has brought us acclaim from every corner of the globe. There is, however, still much to do. The fight against the pervasive poverty of the people of South Africa is, unfortunately, a battle on a vast scale. The past five years mark only the beginning of this task. Although significant changes have occurred in the energy sector since 1996  the year when my predecessor became the first democratically elected Minister to assume this portfolio  there is still much to do in respect of transforming the energy industry. From 1996 the Ministry consulted a wide range of stakeholders and heeded their concerns and contributions. From this consultation process emerged a new approach to energy policy that broke with the secrecy and self-sufficiency policies of the past. This new approach is reflected in the White Paper and will act as our point of departure during my term of office. The Ministerial foreword to the White Paper states: "As government pursues its macro-economic policy on growth, employment and redistribution, as well as its policy of reconstruction and development, changes take place within the energy sector that continue to present us with interesting challenges." I am sure that we, working together, can meet these challenges and establish a stable and internationally competitive liquid fuels industry. South Africa over the last five years has become increasingly integrated into the world market. This means that we will have to adapt ever quicker to the changing world economic circumstances. This also makes a move to a less regulated market essential. It will be a challenging process; a delicate one in which all participants should conform to agreed rules and not seek individual gain at the risk of damaging the process. It will require real leadership from all concerned to take us through this transition. In terms of efficiency all activities will have to be internationally competitive. During the transition to deregulation the industry will continue to be regulated, ultimately under my direction. Government remains committed, as stated in the White Paper, to providing a climate conducive to reasonable profits and sustained investment. In November 1997 industry was granted a 2c/l interim wholesale margin increase and in January and November 1999 a further 1c/l and 0,5c/l were granted. Government is also committed to developing rural areas and to this end continues to regulate in such a way as to make this possible without cross-subsidies. Government's future role in the oil industry's commercial operations will be determined after the restructuring of the existing commercial state assets, held in the CEF, into one company. The White Paper spells out seven milestones that will have to be reached before moving into the next phase of deregulation. I trust that Sapia members are working towards realising these milestones, including achieving the sustainable presence of historically disadvantaged people in the industry. Making available to emerging companies all new allocations of retail sites granted in terms of the 1998/99 Service Station Rationalisation Plan is but one example of our joint efforts. Over the past three years government and Sapia have developed a good working relationship. Sapia's commitment, clearly expressed in this and previous reports, to work in partnership with government in developing and implementing energy policies is welcomed. We require many more such co-operative efforts between government and business. Government, in partnership with stakeholders, has sought ways of redressing the backlogs of the past. We need to pay particular attention to the small business sector, gender issues and jobs that may be impacted as we move to deregulation. This brings me back to the fight against poverty. 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. This realisation alone should prompt ideas on how to defeat poverty. One of the ways to tackle poverty is economic growth, which will lead to job creation and sustainable employment. Government, business, labour, urban societies and rural communities have different aims and interests, yet we all face the same nation-wide challenges. How we manage to co-operate in successfully meeting those challenges will determine our prospects for the next century. Such cooperation in spheres outside of politics is a skill South Africans still need to acquire. I also wish to mention that in these days when corruption is so prevalent, particularly white collar crime, it is vital that Sapia members continue to strive towards the highest ethical standards. The 21st century will be a technological one and your contribution to South Africa in this field is also noted. My dream and vision and your imperative is that South Africa will become a leader in the liquid fuels industry in Africa. As the new Minister I want us to achieve that dream. None of us can afford to fail. I end with a quote from our first democratically elected President, Nelson Mandela, a man, who when things appeared darkest, picked himself and South Africa up and worked tirelessly to recreate a new South Africa. He said that: "The foundation has been laid - the building is in progress. With a new generation of leaders and a people who roll up their sleeves in partnership for change, we can and shall build the country of our dreams." I wish Sapia, and its member companies, good fortune in meeting the challenges which face them at the start of the new millennium. I know that, given the commitment of our Government, we, together with the social partners, will find resourceful ways of achieving our mutual objectives. The emphasis has to be on delivery  especially on defeating poverty and promoting growth and development. Africa must work at becoming the champion of the 21st century. We must bring about the rebirth of Africa. Our evolution must keep pace with progress and not remain lost in the mists of time. Access to energy is one of the keys to achieving this. The current tragedy is that whilst Africa is richly endowed with energy resources - be it oil, coal, hydro, nuclear or solar, its people do not have access to these resources. The Ministerial foreword to the Government's White Paper on Energy Policy states: "Government is committed to the promotion of access to affordable and sustainable energy services for small businesses, disadvantaged households, small farms, schools, clinics, in our rural areas and a wide range of other community establishments." It further states: "Energy should therefore be available to all citizens at an affordable cost." I call on Sapia and its members to play a meaningful role in contributing to the African Renaissance and the transformation of South Africa by helping to improve access to affordable energy. Our President in his State of the Nation address said: "We are on course". Let us, for the sake of the generations to come, ensure that we stay on course. The Community, Labour, Business and Government must all work together to bring this about. I wish you well as we join hands and get to work at building a better life for all. You know the role you can and indeed have to play.