18 March 2015
The South African Communist Party (SACP) in the Western Cape has learnt with complete disgust plans by Petrochemical Company of South Africa, trading as PetroSA, to retrench a shocking 40% of its 1,800 workers.
The planned mass-retrenchment is concerned with profit maximisation, called operational requirements, not with the well-being of the workers. Upon closer examination of PetroSA statements, it becomes abundantly apparent to the SACP that this Government parastatal is fast becoming a haven for overzealous tenderpreneurs that continue to mercilessly milk state entities. It is our firm view that these tenderprenuers collude with officials to collapse the system of controls and illicitly amass wealth and enrich their personal coffers from the resources of the company.
This is evident from the cases contained in the financial statements. The company lost up to R1.6 billion on tenders that were not in line with legislation and its own procurement policies. This lack of respect of legislative instruments further resulted in penalties of up to R2.3 million. These are the funds that could have been used to contribute positively in a country that is riddled by unemployment, poverty and social inequality. Institutional governance and management completely failed on the responsibility to detect and deal with risk, thus creating an opportunity for abuse of supply chain management processes as controls over financial resources and compliance with legislation were disregarded.
The SACP is extremely concerned by the inability of those assigned with governance and executive management positions to act in the interest of PetroSA for the sustainability of its operations, workers and communities. The planned retrenchment is therefore a direct assault on the communities in which PetroSA relies on for its sustainability.
It is also interesting that while PetroSA underperformed in terms of its targets, including financial targets, those in Executive positions continue to amass resources through hefty bonuses. It cannot be correct that while the State relies on its entities and companies to lead a progressive re-industrialisation agenda, the resources are rerouted to individual pockets through unsustainable and unjustified bonuses. It can never be correct in any measure of both logic and institutional governance that the Group Chief Executive Officer alone paid herself R1.2 million in performance bonuses while her executive management R5.1 million collectively, while the company underperforms in its targets and the workers are faced with a hopeless future.
It is therefore based on the SACP`s scrutiny of these maladministration practices that the Board, Executive and the entire leadership of PetroSA led by its CEO live on an island of unjustifiable privilege and benefit. It cannot be at this critical stage of our democracy and particularly during the embryonic stage of our radical phase of State led re-industrialisation that a public entity continues to operate with a private mindset. The central role for any public entity or company is to support public policy and programmes. This requires serious commitment in shutting down the pipelines of illicit leakages of resources.
It is therefore due to this understanding that we view the challenges facing PetroSA as failures of governance and institutional mismanagement. The imprudent management of resources is the culprit, not the workers; workers must never be used as scapegoats for failed corporate governance. Those who are responsible for institutional governance and management must take responsibility.
We call upon the Minister of Energy to reverse the plans to retrench workers and to institute an independent wide-scale investigation on the R1.6 billion that was lost as a result of the abuse of supply chain management processes.
In addition we call upon the portfolio committee on energy to exercise its oversight role in ensuring that the company runs efficiently and continues to contribute to the economic growth and sustainable work.
We are also aware of the serious challenges faced regarding implementation of strategic projects and we challenge the company to be more transparent on Projects such as iKhwezi where close to a billion was spent. It is in the interest of the country to know whether any benefits are realised from these investments.
Issued by SACP Western Cape
Enquiries:
Masonwabe Sokoyi - SACP Western Cape Provincial Spokesperson
Cell: 0815846138/ 0765243242
Office: 021 696 2522
Fax: 086 558 2481
Twitter: @SACPWC
Facebook: SACP Western Cape
Email: sacpwc.media@gmail.com