Empowerment Evaluation Committee

1
Empowerment Evaluation Committee

• Progress Report to the
• Parliamentary Portfolio Committee
• 3 September 2003

2
Recap on the EECs Mandate

• To advise the Minister in matters concerning the
  implementation of the Charter including
• Business transactions
• Transformation of the industry
• Role
• Advisory
• Independent
• Non interventionist
• Informed, fair evaluation of progress
• Informed, fair evaluation of transactions
• Alert to unintended consequences

3
Committee Members

• Almorie Maule (chair)
• Tami Bonga
• Anton Eberhard
• Busi Mabuza
• Brian Marsh
• Raisibe Morathi
• Deyar Natha

• Deyar Natha
• Ayanda Nkuhlu
• Faizel Randera
• Manny Singh
• Mntuwabantu Nduvane / Laurel Shipalana
  (Secretariat)

4
Highlights

• Issues from the PPC
• Empowerment Evaluation Framework
• Empowerment Evaluation Matrix
• Governance
• Other Issues
• Work Programme

5
Key issues from PPC

• Lack of transparency of oil companies impact on
  evaluation
• Importance of skills transfer access to
  resources for HDSAs
• Importance of broad based empowerment
• Integrity and avoidance of conflicts of interests
  would be critical for EEC
• EEC must be cost effective avoid consultants

6
Framework for Evaluation

• Each sector is described under
• Nature key characteristics
• Local features SA market characteristics
• Opportunities Risks for HDSA entrants
• Means facilities/processes needed to enter
• Measures quantifies criteria to assess HDSA
  success
• Each value chain sector details Opportunities
  Risks associated with
• Ownership Control
• Procurement Support
• Human Resources

7
Framework for Evaluation

• Value Chain Sectors covered
• Exploration Production
• Crude, Intermediates Product Trading
• Pipelines SBMs
• Bulk Storage
• Shipping
• Refining (Crude synfuels)
• Lubricants Blending re-refinin
• Supply Distribution
• Marketing
• Other Value Adding Sectors

8
Framework for Evaluation

• Some key points from the sectoral analysis
• Procurement support are accessible entry points
  for EP and refining
• Achieving targets in crude procurement will be
  challenging
• Need emphasis on critical skills development
• Access to financing for HDSAs is critical

9
Evaluation Matrix

• Two evaluation matrices
• Matrix 1 for evaluating transactions
• Matrix 2 for evaluating companies / industry
• Criteria for evaluation are the same
• Matrix 1 addresses ownership control
• Matrix 2 addresses the 4 major Charter
  Objectives
• Ownership control
• Employment Equity
• Procurement
• External Business Capacity Development

10
Evaluation Matrix

• Each objective
• Has specific measures
• Progress is compared with the Charter Target for
  2010
• Progress is compared with Intermediate Targets
  for 2003 2005
• Lists a description of initiatives /
  interventions to achieve targets
• Lists elements required to ensure sustainability
  and the major risks associated with achieving
  targets

11
Evaluation Matrix

• The objectives listed in the Charter are defined
  as the Definition of Success
• 5 measures
• Exceeds Charter Commitments
• Meets Charter Commitments
• Charter Commitments not met, but substantial
  progress and reporting against measurable targets
• Charter Commitments not met, reasonable progress
  but no measurable targets
• Substantial non-delivery of Charter Commitments

12
Procedure - Evaluating Transactions

• Minister refers transaction to EEC for evaluation
  
• EEC evaluation communicated to the Minister-
  verbal written
• Minister considers evaluation other information
  to reach decision
• Minister communicates decision to the Company
• Companies may modify the transaction refer it
  back to the Minister
• Minister may comment without further reference to
  EEC
• EEC will give Evaluation reports to the Minister
  only unless otherwise instructed

13
Procedure - Evaluating Companies

• Annual evaluation using results of DME survey
• Questionnaire to be constructed to provide
  information required by EEC
• EEC will evaluate using the Evaluation Matrix
• Chairperson of EEC may request company CEO for
  additional information for assessment
• Each company will be assessed overall and by each
  segment of the Value Chain

14
Procedure - Evaluating the Industry

• Annual evaluation using results of DME survey
• Results will be aggregated for all companies in
  the sector and will be outlined by value chain
  segment
• A comprehensive report will be produced detailing
  the progress of each company, and the industry by
  value chain segment
• Key opportunities and common obstacles to
  progress will be highlighted

15
Governance Communications

• With the Minister
• Primary relationship will consult at all
  times
• All work done on direct request of the Minister
• With the DME
• DME provides Secretariat
• Close co-ordination communication important
• Annual Industry evaluations
• Regulatory legislative changes impacting on
  Charter
• Formal communication via the Minister
• With Established Oil Companies HDSA Companies
• Via the Minister
• With the Parliamentary Portfolio Committee
• Regular contact inform Minister