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Empowerment Evaluation Committee

Empowerment Evaluation Committee. Progress Report to the Parliamentary Portfolio Committee 3 September 2003. Recap on the EEC’s Mandate. To advise the Minister in matters concerning the implementation of the Charter including: Business transactions Transformation of the industry Role

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Empowerment Evaluation Committee

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  1. Empowerment Evaluation Committee Progress Report to the Parliamentary Portfolio Committee 3 September 2003

  2. Recap on the EEC’s 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. 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) Committee Members

  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 HDSA’s • 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 & SBM’s • 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 E&P and refining • Achieving targets in crude procurement will be challenging • Need emphasis on critical skills development • Access to financing for HDSA’s 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

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