For the South African Petroleum and Liquid Fuels Industry on Empowering Historically Disadvantaged South Africans in the Petroleum and Liquid Fuels Industry.

Preamble

Mindful of:

And noting:

the signatories have developed this Charter to provide a framework for progressing the empowerment of historically disadvantaged South Africans in the liquid fuels industry.

Scope of Application

This Charter applies to the privately owned parts of the industry and to all parts of the value chain, inter alia:

Interpretation

For the purposes of interpreting the White Paper on Energy Policy, the following terms apply:

The 25% ownership and control of all facets of the industry that the parties to this Charter are seeking to bring about over a ten-year period means HDSAs owning in total, by the end of that period, not less than 25% of the aggregate value of the equity of the various entities that hold the operating assets of the South African oil industry. The parties to the Charter agree that the measurement of the extent of the achievement of this target of 25% of the aggregate value of the equity will be based on the asset values per the audited accounts of the entities concerned.

Supportive Culture

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. It is noted that the process that gave rise to this Charter has increased the understanding and cooperation between established industry players and HDSA companies.

Companies undertake to foster a supportive culture with regard to all aspects of this Charter when dealing with HDSAs. Companies subscribe to incorporating and driving a process of transformation and a change of culture in their statements of business principles.

Capacity Building

The South African labour market does not produce enough of the skills required by the petroleum industry, especially the HDSA oil companies. Organised industry and government work together in addressing this skills gap:

Employment Equity

Companies publish their employment equity targets and achievements and subscribe to the following:

It is noted that the Capacity Building efforts referred to above will assist in this process.

Private Sector Procurement

Participants in the industry subscribe to and adopt supportive procurement policies to facilitate and leverage the growth of HDSA companies. Such policies include criteria that favour HDSA companies, all else being equal.

Public Sector Procurement

Government will engage with State Tender authorities to draw their attention to the White Paper milestones with respect to economic empowerment of historically disadvantaged South Africans, with the aim of giving effect to supportive procurement policies within this sector.

Access and Ownership of Joint Facilities

Access to large infrastructure for the movement and storage of crude oil and petroleum products, such as SBMs, pipelines and depots and storage tanks, is acknowledged as a critical weakness in the supply chain of emerging companies. In this regard owners of such facilities provide third parties with non-discriminatory access to uncommitted capacity. HDSA companies are to be given fair opportunity to acquire ownership in such facilities.

Refining Capacity

Access to refining capacity also represents a key weakness in HDSA companies' supply chain. Oil refiners and synthetic fuel manufacturers seriously consider:

Retailing/Wholesaling

The parties agree to create fair opportunity for entry to the retail network and commercial sectors by HDSA companies.

State Assets

Government undertakes to deal with State assets in a manner that promotes the objectives of the White Paper on Energy Policy and this Charter.

Upstream

The activity of oil and gas exploration and production is acknowledged as a high-risk activity that provides limited opportunities for new entrants. Government continues to make licences subject to the following conditions:

Financing

Finance is a serious constraint for HDSA companies.

Terms of Credit to HDSA Companies

Industry participants acknowledge that terms of credit are important to HDSA companies and agree to take this into account in bilateral activities.

Regulatory Framework and Industry Agreements

Governments regulatory framework and industry agreements strive to facilitate the objectives of this Charter.

Synfuels Supply

Parties to the Synfuels Supply agreements will strive to accommodate HDSA companies, which lack the facilities to comply fully with such agreements in the fairest way possible.

Consultation, Monitoring, Evaluation and Reporting

It is recognised that the achievement of the objectives set out herein entails an ongoing process. The Department of Minerals and Energy (DME) conducts an annual survey of the industry to evaluate progress in achieving the objectives of the White Paper. Companies submit such data as is required at the end of each year, including employment equity data, procurement targets, etc. The aggregated information is published and forms the basis of the annual forum.

Oil companies have taken major initiatives in this regard and have participated in a first survey earlier this year.

Parties hereto participate in an annual forum for the following purposes:

Signed by the under list of Companies that have participated in the BEE process and dated in November 2000.

South African Petroleum Industry Association (SAPIA)

BP Southern Africa (Pty) Limited

Caltex Oil (SA) (Pty) Limited

Engen Petroleum Limited

Sasol Limited

Shell South Africa (Pty) Limited

Tepco Petroleum Company (Pty) Limited

Total South Africa (Pty) Limited

African Minerals and Energy Forum (AMEF)

Afric Oil (Pty) Limited

Exel Petroleum (Pty) Limited

Worldwide African Investment Holdings (Pty) Limited

Department of Minerals and Energy

Ministry of Minerals and Energy

Central Energy Fund

African Minerals Petroleum

African Minerals and Energy Corporation

Calulo Investment Holdings (Pty) Limited

Mandlakazi