Cosatu welcomes draft petroleum bill

The bill mandates the SOE to explore and stimulate South Africa’s economic activities in the petroleum, oil, gas, energy and related industries. Photo: Supplied

The bill mandates the SOE to explore and stimulate South Africa’s economic activities in the petroleum, oil, gas, energy and related industries. Photo: Supplied

Published Nov 22, 2023


By Solly Phetoe

Cosatu welcomes the draft South African National Petroleum Company Bill.

While we support its conception, further engagements need to take place at Nedlac and Parliament on its objectives and modalities, how will we ensure that it does not repeat the mistakes of other state-owned enterprises (SOEs) and, most importantly, how it will contribute to growing the economy, creating jobs, reducing poverty and embracing the principles of sustainable development.

Some critics have lamented that the bill is seeking to establish another SOE and that this will simply add future headaches for the state. The bill does the opposite. It provides for the consolidation of three SOEs, namely the Petroleum Oil and Gas Corproration of South Africa, the Strategic Fuel Fund and the South African Gas Development Company into a single SOE.

In other words, this is a consolidation of three existing SOEs that have struggled, for various reasons, into a single SOE. This will help avoid duplicate mandates and management structures, and provide for a greater synergy and co-ordination by the state of its role in this strategic sector. This is a positive move away from the fragmentation of the state which has been one of the reasons the government has struggled to co-ordinate various public entities.

Cosatu is pleased the bill embraces three progressive principles that Organised Labour had long championed and that are important to workers at the entities and in the broader economy.

First is the impact upon the workers at the entities. The bill provides for their inclusion in the new SOE and that their conditions of service cannot be negatively impacted upon. This is important for the workers and their families who have often seen their rights abused and lived with the guillotines of retrenchments and the non-payment of salaries hanging over their heads. We hope no worker will be retrenched in the process of integrating the three SOEs into one.

Second ,it mandates the SOE to explore and stimulate South Africa’s economic activities in the petroleum, oil, gas, energy and related industries. This is key as energy is the bloodline of any industrial economy. If we are to move beyond 1% economic growth rates and slash unemployment, then we need to harness and unleash the job-rich and investment-intensive sectors.

Namibia and other countries along the Atlantic coast of Africa have been able to tap into significant gas and petroleum discoveries. These provided massive boosts to their economies. Mozambique has experienced significant gas finds. South Africa has not reached the level of offshore discoveries hoped for, but indications are that significant resources may be found.

While we remain an oil importing economy, we need to do more to develop our refinery capacity.

Much debate has taken place with regard to gas exploration offshore and inland. The explorations need to be handled with care, given the risks to the environment and other key economic sectors, in particular agriculture and fishing. Enabling an SOE to lead in this regard can help ensure the right balance is found between economic and sustainable development and the needs of other economic sectors are taken into account.

Third, the bill embraces the important principles of sustainable development. No longer is it simply reduced to a feel good slogan but it is being elevated into various laws, including the Climate Change Bill currently before Parliament.

The South African National Petroleum Company Bill mandates the SOE to undertake its activities in a manner that supports sustainable development. This is key if we are to set the economy, our jobs and society on a path that not only ensures prosperity for today but also those of tomorrow and future generations.

The energy industries have taken a heavy toll on the planet. We are witnessing the effects including through rising temperatures which threatens food security, on droughts risking humanity’s access to water, and on floods destroying roads and homes.

When the bill is passed into law by the 7th Parliament, society will be able to hold the government and the SOE accountable for any practices they undertake that undermines sustainable development in the sectors.

This is an important paradigm shift. Yes, we must unleash economic growth and attract investment but we must also do so in a way that ensures decent jobs are created, that the planet ecosystem is secured and healed, that workers are not exposed to dangerous working conditions and that communities are not subjected to devastating pollution.

The bill will not be a magic wand that will resolve our energy needs, but it lays a positive foundation for the development of South Africa’s energy sectors and in a manner that is forward looking and balances lives, jobs and the environment with profits.

Cosatu general secretary Solly Phetoe. File

Cosatu general secretary Solly Phetoe.