PetroSA’s R14.5 Billion Impairment: meeting postponed

Energy

18 October 2016
Chairperson: Mr F Majola (ANC)
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Meeting Summary

During the deliberations the Committee understood that;

-it was evident that the Department of Energy (DoE) was not yet ready with the outcome of PetroSA’s Impairment report and expressed displeasure over the lateness of the forensic report.
-The forensic report needed to ascertain whether the intervention through the turnaround strategies put up by the Board on the matter had been successful or not.
-The Committee discovered that the document submitted by the Department on PetroSA did not capture all the details requested therefore, the Department could not present the document as a brief on the Outcomes of the Report on PetroSA’s R14.5 Billion Impairment to the Committee.
-The Committee expressed deep concern over the loss of R14.5 billion as reported in PetroSA’s Impairment report and wanted to know whether the officers concerned took responsibility for their actions.
-The first draft of the Portfolio Committee on Energy (PCE) Budgetary Review Recommendation Report (BRRR) was tabled to the Committee in a closed door meeting.

The Committee resolved that;

-The Department should submit a comprehensive forensic report on the Outcome of the Report on PetroSA’s R14.5 Billion Impairment to the Committee.
-A loss of R14.5 billion as reported by PetroSA’s R14.5 Billion Impairment could not be overlooked therefore the comprehensive report on the outcome must include a detailed valuation of how the figure of R14.5 Billion stated in the Impairment report was generated.
-The comprehensive report should indicate whether the officials responsible took responsibility for their actions.
-The report should be presented by the Minister in the presence of the Board and relevant officers on 1 November, 2016.
- The Committee was committed to assisting PetroSA to be a strong and viable entity.

                                                                                                   

Meeting report

The Chairperson said the Minister of Energy, Ms Tina Joemat-Petterson, and Deputy Minister, Ms Thembisile Majola of Energy had tendered apologies as they were attending a project implementation committee meeting.

The Chairperson then gave opportunity to the Committee members to present their observations.

Mr M Mackay (DA) said the Committee had requested that the Department of Energy (DoE) should send a forensic report to the Committee as one of the decisions reached at the last meeting, and no report had been sent yet. He further asked the DoE to explain why the forensic report was not available.

The Chairperson asked the DoE to respond to the request and further stated that a decision would be reached on what to do with the document that was presented. However, he urged the Committee to wait until he advised the Committee on the issue. The decision taken at the last meeting demanded that the Minister should present the report to the Committee during this meeting. Consequently, this report should address the issues on the ground and assist PetroSA in moving forward as several reports had been submitted yet the issue had not been addressed. He advised the Committee to allow PetroSA to go ahead with the briefing and later deliberate on how the matter will be dealt with.

Mr Thabane Zulu, Director-General, DoE, responded that although the Committee requested a forensic report the report had been submitted to the Minister and was still awaiting his recommendations. A comprehensive presentation on the forensic report would not be available until the Minister gave his recommendation. Consequently, today’s brief could only make a reflection based on some parts of the report.

The Chairperson stated that the Department should have made it clear to the Committee that PetroSA was still waiting for the Minister’s recommendations so that this briefing would have consisted of only a short summary.

Mr Mackay reminded those present that the Committee had legal backing to ask for a forensic report from any entity as part of its oversight functions. The Committee did not ask for an interpretation of historical information as contained in the document submitted but a report. The document that PetroSA wanted to present would be insufficient as it would not address all the issues contained in PetroSA’s R14.5 Billion Impairment. He suggested that the Chairperson entertain only questions from Committee Members and not allow PetroSA to make any presentation.

Mr P Van Dalen (DA) expressed displeasure that the DoE was still reporting that PetroSA’s Impairment report, which was supposed to have been completed three weeks ago, was yet to be completed. A distinction should be made between disclosing information to the Committee, which was empowered by law to receive such information, and the public which might not have such access. The DoE was creating a perception that the Committee could not receive the outcome of PetroSA Impairment yet. He suggested the Committee condemn the DoE’s action of not submitting PetroSA Impairment outcome though it was three weeks behind schedule.

Mr M Matlala (ANC) joined Mr Van Dalen in expressing his displeasure on the DoE’s lateness in submitting the report on the outcome of PetroSA’s Impairment. He suggested that the Committee stop the DoE’s presentation and wait for the report from the Minister as the deliberation would be fruitless. He suggested that the Committee should come up with a time within the next two weeks within which the Minister must present PetroSA’s Impairment outcome to the Committee.

Ms T Mahambehlala (ANC) observed that the matter at hand was to deliberate on the outcomes of the Report on PetroSA’s R14.5 Billion Impairment. The forensic report needed to ascertain whether the intervention through the turnaround strategies put up by the Board on the matter had been successful or not. She suggested that the DoE and the Board needed to be present and answer questions when the Minster presented a detailed forensic report to the Committee. The document presented in this meeting was incomplete and did not show any improvement in PetroSA despite the interventions presented by the Board.

Mr M Plouamma (AGANG) observed that when the DG spoke it was evident that the DoE was not yet ready with the outcome of PetroSA’s Impairment report and agreed with other Members that the Committee should not allow the DoE to present the document handed out during this meeting. He further agreed with Mr Matlala that the Committee should give a time frame within which the Minister must come and present the outcome of PetroSA’s Impairment report with the relevant officers of the DoE and the Board in attendance.

Mr A Hlumgwani, Board member and acting CEO, said he would convey the decisions to the Board.

The Chairperson observed that the issue had been on-going and agreed with the suggestion that the Board and relevant officers needed to be present when the Minister presented the comprehensive report. The presentation would be scheduled for 1 November, 2016 if the DoE confirmed that the outcome of PetroSA’s Impairment report would be ready.

Mr Van Dalen reminded the DoE that the Committee expected that the forensic report should include a detailed explanation of how PetroSA came about with an accumulated figure of R14.5 Billion stated in the Impairment report. He emphasised that this detailed explanation was a key part of the forensic report.

Mr Mackay observed that the documents given by the DoE so far contained edited versions that had treated only six of the issues reported in PetroSA’s impairment. He suggested that the DoE be mandated to give a comprehensive forensic report that included a valuation of how the figure of R14.5 Billion stated in the Impairment report was generated as well as give an outcome to address all issues stated in PetroSA’s Impairment report.

The Chairperson said according to legislation backing up Parliament all entities should give all information that is requested according to the Constitution. He however stated that, adequate precautions would be taken if there were concerns on the sensitivity of the report to the public. He also expressed deep concern over the loss of R14.5 Billion stated in the Impairment report by PetroSA and wanted to know whether the officers concerned took responsibility for their actions.

The Committee resolved that;

  • The DoE should submit a Comprehensive forensic report on the Outcome of the Report on PetroSA’s R14.5 Billion Impairment to the Committee.
  • A loss of R14.5 Billion as reported by PetroSA’s R14.5 Billion Impairment could not be overlooked therefore the comprehensive report on the outcome must include a detailed valuation of how the figure of R14.5 Billion stated in the Impairment report was generated.
  • The comprehensive report should indicate whether the officials responsible took responsibility for their action.
  • The report should be presented by the Minister in the presence of the Board and relevant officers of DoE on 1 November, 2016
  • It was committed to assisting PetroSA to be a strong and viable entity.

Committee Budgetary Review Recommendation Report (BRRR)
The Chairperson tabled the 1st draft of the Portfolio Committee on Energy Budgetary Review Recommendation Report. The meeting was closed due to the sensitivity of the PCE Budgetary Review Report.

The meeting was adjourned. 

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