In November, South African oil and gas company, SASOL, held its annual general meeting (AGM) at the Sandton Convention Centre in Johannesburg. JA, along with a few other organisations, attended the AGM to raise issues about SASOL’s operations. This was the first time ever that civil society was present at a SASOL AGM, and was made up of the Centre for Environmental Rights – a legal organisation based in Cape Town, the South Durban Community Environmental Alliance (SDCEA) and Women in Mining (WoMin).
JA was the only organisation raising an issue outside of South Africa, and in particular the Temane gas fields operations, SASOL Petroleum Temane’s Central Processing Facility, in Inhambane province, in the south of Mozambique.
The questions raised referred specifically to a 2017 report written by Mozambican organisation the Centre for Public Integrity (CIP), entitled SASOL Continues to Milk Mozambique.
The substance of the report centered on two issues:
- SASOL purchases gas from its own entity, SASOL Petroleum Temane, which extracts the gas, at very low prices, which it has set itself.
- It then sells it in South Africa, at a much higher price, making massive profits.
This is straightforward transfer pricing.
The project is managed by SASOL Petroleum Temane Limitada (SPT), by the Companhia Moçambicana de Hidrocabonetos (Mozambican Hydrocarbons Company or CMH) and by the International Finance Corporation (IFC).
SASOL responded to the report on their website, and JA opted to raise two questions in particular: One on employment of locals, and one on tax.
SASOL has not made any of their annual tax statements and details public, instead it has only provided an overall statement, and we had planned to demand access to the annual statements. However, we were refused the opportunity to ask the question about tax, and could only focus on jobs, as they insisted that we were only allowed one question each.
One of the issues raised in the report was that SASOL has not provided many jobs to local communities. SASOL’s response to the allegation on its website says:
“To date, over 300 permanent jobs have been sustained since inception across our various businesses in Mozambique, the majority being in Inhambane Province. SASOL and its partners established a Community Liaison Forum (CLF), in Maimelane in Inhassoro district, Inhambane Province, which helps with jobs opportunities for the 22 surrounding areas of the Central Processing Facility (CPF). Approximately 600 jobs have been allocated to members of these communities to date.”
We asked what the difference was between ‘permanent’ and ‘allocated’ jobs, and how it was possible that in 16 years of operating the project, they have only created this tiny number of jobs across the country.
Their initial response was to ‘put in context’ for the attendees the work that SASOL is doing in Mozambique, where they explained that they are the largest taxpayer, that they have built clinics and schools and brought Mozambicans into management positions.
It was only after JA’s member stood up and shouted in order to be heard, – insisting that the board provided a proper response to the questions – that they finally answered with the explanation that the 300 permanent jobs were employees who worked directly at the plant, and whose salaries were paid by SASOL. However, the 600 allocated jobs were people who worked at the clinics and schools that SASOL had built for the communities, but they were not on SASOL’s payroll, but rather were paid by the Mozambican government.
They then said that the reason only 300 jobs had been created at the plant was because ‘the plant only needs 300 workers at a time’.
SASOL created a major obstacle for us – while we had legitimately arranged for proxies to be given to members of SDCEA and WoMin, the company did not recognise them as shareholders, claiming that we required a letter from SASOL, which we were not told beforehand, and were therefore not given an opportunity to ask a question.
SDCEA is leading the fight against SASOL in the coastal province of Kwazulu Natal. SASOL is responsible for 2 massive oil spills here, and along with Italian company Eni, is now again exploring for oil offshore. SDCEA previusly tried to engage directly with SASOL but was met with hostility. They have totally undermined community input, have created extremely toxic air pollution, and the oil spills have led to massive distruction of the ecosystem and coastal flora and fauna.
WoMin has been fighting SASOL’s operations in Secunda and Sasolburg for many years, with the company being the greatest polluter in the country, and those regions bearing the largest brunt.
Overall, the AGM was successful for a few reasons – we had taken the executive board by surprise as this was the first time they had been directly confronted by civil society at a shareholder meeting. They were forced to answer questions on the spot, and even though their answers were vague, and even somewhat patronising, it was clear that they were unsure and on the back foot. They were certainly not expecting to be faced with a question about Mozambique, and were clearly confused as to how to answer. It was only when they forced into answering that they answered with technical information which still did not explain how, as the largest taxpayer, the country remained one of the poorest in the world and they had barely made a slight dent in the problem of unemployment, even in the communities where they operate.
The lesson learnt, however, was that it is important to have community members present to ask questions from personal experience. While civil society’s input was imperative, personal experience will be invaluable.