Unions calls for the disbanding of PetroSA board

The PetroSA Board should be dissolved immediately. This is the call made by Solidarity, the National Union of Metalworkers (Numsa) and the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (CEPPWAWU).

Last week the three unions held a meeting for unionised and non-unionised PetroSA employees, where it was resolved that the national oil company’s board should be dissolved immediately.
The Mail & Guardian has seen a letter addressed to union members, dated June 6, where the unions set out the alleged maladministration at the entity and how they want to rope in the Public Protector to investigate.

Solidarity spokesperson Connie Mulder said they would not comment as they are currently in discussions. Numsa spokesperson Phakamile Hlubi did not respond to questions.

But the letter states that the PetroSA board has failed to exercise skill, care and diligence in discharging their roles. “Furthermore, the PetroSA board should not set foot on any PetroSA premises. The current PetroSA executive committee has been complicit to the dismal poor performance, that trust between the executive committee with PetroSA is irreparable and that therefore the committee to be dissolved together with the Board.”

PetroSA has for the past three years been involved in scandal after financial scandal. It made a R1.4-billion loss for the 2016/17 financial year. Then its Project Ikhwezi — for the drilling of gas for the Mossel Bay refinery — collapsed with R14.5 billion in losses (the single biggest loss of any state owned enterprise).

It has since been unable to come up with an acceptable turnaround strategy, and, according to the unions, there have been numerous irregular appointments.

The feedback letter states that the Central Energy Fund (CEF), the parent company to PetroSA, has been at the centre of the chaos and it has failed to establish leadership, or to provide oversight.

PetroSA spokesperson Tumoetsile Mogamisi said he is aware of the letter, and the entity is engaging with the unions to address a number of the concerns raised in the letter. “The unions raised several issues with PetroSA over the past 12 months. The PetroSA board has dealt with a number of the issues raised by the unions. The issues that remain have taken longer to resolve due to their complexity, however they are currently being expedited.”

Furthermore, the unions stated that:

  • Gross incompetence of the PetroSA interim board in that they have dismally failed to present a strategy and a funding model for the company.
  • Its corporate plan was rejected three times by the Ministry of the Department of Energy.
  • PetroSA has recorded more than 103 meetings in less than two years, raking more than R10 million in board fees but has nothing to show.

But Mogamisi denies that more than R10-million has been paid for board meetings and instead the cost of the meetings is R1.29-million.

“The current challenges facing PetroSA are complex. They require both technical and commercial solutions. As a result, they require a business unusual approach, as board and management engage to find a combination of long-lasting solutions.

“In trying to address the myriad challenges, the board has had to meet much more often than usual and as such have been able to guide some of the following outputs with the support of CEF.”

He added that CEF, as PetroSA’s Shareholder, has also been requested to support PetroSA to thoroughly investigate a number of these issues.

But the unions have resolved to go into an industrial action process. Mogamisi added that it was only Ceppwawu that had been given an award to strike on discretionary salary increases. “Notice to strike has not been issued since the unions first need to ballot their membership. Management continues to engage in dispute resolution meetings to try and avert the strike.”

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