Fourth Annual Report : February 2000

Ethics and good governance

INTRODUCTION

The oil industry in South Africa is more than a century old ­ as old as the first paraffin lamp in South Africa. Yet the South African Petroleum Industry Association (Sapia) is as new as our new democratic nation. Members of Sapia operate globally and are answerable to the strictest statutory codes of business ethics so far operating anywhere in the world. Experience of the legal rules, as practised in Washington, London, Berlin and elsewhere, is applied in South Africa as well.

These codes of ethics cover the sensitive matters of political donations and bribery and corruption in business.

The major oil companies thus operate with probity, and do so under close scrutiny of numerous lobbies and interest groups in the most sophisticated trading zones. The multinationals emphasise "a recognition of our moral obligations" and are proud of their reputations for ethical behaviour and industrial safety and environmental protection.

Good governance and ethical operations are essential to the very existence of modern international oil companies. After a wildcat, hectic scramble in the 19th century, oil companies consolidated to become world leaders in recognising their responsibilities to society. The South African petroleum industry, which circulates the lifeblood of the economy, long ago became one of those leaders.

In forming the South African Petroleum Industry Association, the local oil industry was deeply aware of the need to make South Africa a competitive nation, and the role that the availability and cost of high quality liquid fuel plays in achieving this target.

The Association, acting as the industry's national voice, was founded in 1994 to help usher in a new era. Sapia is an agent of change to transparency, free and fair competition and economic growth for all.

MISSION STATEMENT

Among Sapia's goals are the following:

• To ensure good governance and the highest standards of conduct in the industry
• To promote communications within the industry
• To create a forum for consultation between the industry, government and other organisations on issues of public interest
• To seek consensus with government and all other role players on how the industry should be re-shaped to best serve the national interest
• To promote understanding of the petroleum industry
• To represent the SA petroleum industry at international level

LONG TERM COMMITMENT

As stated earlier, while the South African Petroleum Industry Association (Sapia) is as new as the new democratic nation, its members have been here a long time and intend being here deep into the new millennium. The strategic nature of their business brought them considerable pressure in the past, but the industry consistently sought openness, fair competition and democracy. It prides itself on having established itself as an ethical industry based on high standards.

The petroleum industry is the essential foundation of any growing economy. It is the basis for much of the nation's productivity ­ from powering factories to providing cosmetics; from keeping national transport flowing, to producing heat for a family in a rural hut. The many corporate responsibilities which Sapia members assume have been listed in its previous annual reports. Some are referred to in the environmental and social responsibility reports as well as in other sections of this document.