Over the last month, JA! has been confronting South African energy company Sasol in several ways, interrogating them on what they’re really getting up to in Mozambique.
Most recently, last week JA! attended the Sasol 2019 Annual General Meeting (AGM) in Johannesburg, along with four other civil society organisations, to question the board and inform shareholders about what the company is currently doing, and planning to do, in Mozambique.
Leading up to the AGM, JA! sent the company questions to understand the technicalities of their present and future projects, followed by a meeting with five vice presidents at their headquarters in Johannesburg, with the support of a fellow activist from partner organisation groundWork.
JA! raised two issues at the AGM:
The first was about the Pande and Temane gas fields in Inhambane that Sasol has been operating since 2006 after removing many community members from their homes and creating only 300 permanent jobs. Sasol has been accused of transfer pricing in this operation – Sasol Petroleum International (now Sasol Africa) is the sole purchaser of the gas extracted here by its wholly-owned subsidiary Sasol Petroleum Temane, which it buys at a tiny percentage of the market value.
The second question was about Sasol’s planned shallow-water drilling off the coast of Vilankulos, also in Inhambane. The drilling will destructively affect fishing communities, endangered species of animals and plants, and the tourism industry, a huge income generator for the province. Accompanying JA! Was a member of the Protect Bazaruto Campaign, which is working to stop the project.
Here are the questions asked by JA!:
“1. The first subject is the Pande and Temane project in Inhambane.
To give context, Sasol has regularly insisted that the fields have brought benefits to the surrounding communities since operations began in 2006. However, setting aside schools and soccer fields, the rate of literacy and employment has increased only in line with the rest of the country, including those provinces without extractive industries. Furthermore, 12 years later, according to the World Bank, only 25% of the population of Inhambane has access to electricity, which is less than the country as a whole, at 27%.
When communities were relocated from their homes in 2006, they were given once- off compensation of R 12 000. I emphasise, R 12 000. However, Sasol signed a Power Purchase Agreement (PPA) with the government which promises annual benefits to the people. Note that this amount is a mere 2.75% of the 6% production tax that the company pays to the government.
JA! questions are:
Why has Sasol not paid the annual benefits to the communities as per the PPA for the last four years?
Does Sasol recognise that the amount it offers as benefits is too little to maintain the livelihood of a family?
And will Sasol renegotiate the terms of the PPA to increase the amount of the benefit, by using total revenue as a basis as opposed to production tax, now that it has the option to do so?
2. The second subject regards Sasol’s planned seismic testing and drilling for gas in the shallow waters off the coast of Vilankulos
Sasol plans to do seismic testing and drilling in ocean shallow water ocean blocks 16 and 19 in Bazaruto, a national park and IUCN Important marine mammal area. Block 16 is home to the only viable dugong species in the Western Indian Ocean as well as two important reefs for commercial and subsistence fishing for many communities.
The best case scenario for this drilling is impacting critically endangered species such as dugong; Fish stocks and livelihoods of fishing communities; sustainable tourism which is central to the economy and can outlast oil and gas.
While Sasol maintains that it is taking all necessary actions to avoid environmental damage, it has been well documented that mitigation of the impacts of gas drilling and seismic testing is impossible. Communities, too, have shown strong resistance to the project.
JA! question is:
As it is scientifically certain that seismic testing and drilling will diminish the last viable population of dugong in the Western Indian Ocean, why does Sasol believe it has the right to contribute to the extinction of an iconic species, violate national laws protecting national parks, and detrimentally affecting the livelihood of fishing communities?”
At the end of the round of questions, we received a verbal response from Jon Harris, Executive Vice President: Upstream, who JA! has engaged with on previous occasions.
His response was vague, a public relations exercise and in it he repeated the same story of the great benefits that the company had allegedly brought, and that we need to look at smaller sections of the population of Inhambane, those in the immediate vicinity of the plant, and not the province as a whole. He said he was not aware of whether people had been receiving benefits or not, and did not answer whether they would renegotiate their PPA with the government, which would enable the people to receive more benefits.
Regarding Vilankulos, he said that seismic drilling has no impact on the environment, and that they are putting the utmost care into avoiding any impact on animals.
There are several aims of JA! Attending an AGM like this – to confront the board, to inform shareholders, to ask questions, to receive information and to alert the media. There is always the risk that the responses will not be helpful, or even relevant, but our presence there was imperative – were it not for JA!’s presence few people would have known about Sasol’s crimes in Mozambique.
Outside protesters, against Sasol, and same are about to hand over the memorandum to Sasol Vice President Marcel Mitchelson