Working towards lasting transformation in South Africa
Sasol considers transformation to be a business, social and moral imperative. As a responsible corporate citizen, it is our ethical duty to take decisive action to contribute meaningfully towards redressing the injustices of our country's past. Broad-Based Black Economic Empowerment (B-BBEE) aims to bring about a more equal and inclusive society in South Africa. Over the past 24 years, many transformation milestones have been reached across the country and across our organisation, but we acknowledge that much more still needs to be done.
The Department of Trade and Industry's B-BBEE Codes of Good Practice provide a framework to measure progress across all sectors. Under the original codes, released in 2007, Sasol achieved a level 4 contributor status. However, with the introduction of revised codes in 2015, our contributor status re-rated to a level 8. We launched a number of initiatives to improve this, aiming to achieve at least level 4 by 2020. By September 2017, we had moved up to level 6.
Our target is to become at least a level 4 contributor by 2020.
In 2018 our B-BBEE score is a level 6 contributor.
In 2016 Sasol was a level 8 contributor due to the revised “codes of good practice“ which were implemented.
Sasol's transformation is closely aligned to the objectives of the B-BBEE Codes and we take an integrated approach to accelerate transformation across all five pillars, with a particular focus in 2018 on ownership.
One important step to bring about a more inclusive economy is through opportunities that enable previously disadvantaged Groups to own shares in companies. Over the years Sasol has implemented various schemes to achieve this.
- In 2006, we concluded a R1,45 billion transaction through which Tshwarisano acquired 25% of Sasol’s liquid fuels business housed in Sasol Oil. This transaction benefits hundreds of historically disadvantaged South Africans directly and indirectly around three million other South Africans including the youth, the disabled and rural communities. Sasol facilitated and guaranteed the R1,1 billion funding which was settled through dividends from Sasol Oil in 2016, making the investment fully unencumbered.
- In 2008, Ixia Coal a venture with Women Investment Portfolio Holdings (WIPHOLD) and Mining Women Investments (MWI) which promotes woman in mining acquired an effective 10,2% shareholding in Sasol Mining for R1,9 billion. MWI comprises of thousands of rural black women in the Free State, Mpumalanga and Limpopo provinces, where Sasol Mining has operations and coal reserves.
- In 2008, we implemented our 10-year R28 billion Sasol Inzalo
BEE transaction for a 10% interest in Sasol Limited. This objective
was not met because the Sasol share price did not deliver some
significant benefit through the Sasol Inzalo Foundation and the
Sasol Inzalo Employee Share Ownership Plans (ESOP).
- The Sasol Inzalo Foundation received more than R1 billion in dividends from its shares in Sasol, R630 million was used in the promotion of excellence in science, technology, engineering and mathematics (STEM) education.
- Beneficiaries of the Sasol Inzalo ESOP collectively received more than R1,5 billion in dividends and also benefited from the Tier 1 of the new Sasol Khanyisa ESOP.
- On 1 June 2018, we implemented Sasol Khanyisa, through
which we intend to create meaningful financial benefit for
approximately 230 000 black shareholders, Sasol Khanyisa
contains a number of elements structured at both a Sasol
Limited and at a subsidiary level, Sasol South Africa Limited
(SSA) which was previously a wholly-owned subsidiary of Sasol
Limited and houses the majority of the group’s South African
operations. Sasol Khanyisa will deliver benefits to participants in
the following ways:
- Sasol BEE ordinary (SOLBE1) shareholders who elected to retain their shares in 2018 received one new SOLBE1 share for every four they owned during the election period under the previous scheme and became eligible to be part of Sasol Khanyisa. SOLBE1 shares trade on the Empowerment Segment of the JSE, they are identical to Sasol Limited (SOL) shares and receive the same dividends as SOL shares.
- On 1 June 2018, eligible shareholders in SOLBE1, Sasol Inzalo Public Limited ordinary (SIPBEE) and Sasol Inzalo Groups Limited (RF) (Inzalo shares) who did not opt-out of Khanyisa received one new SOLBE1 share for every 10 Inzalo shares they owned. In addition, they received one Sasol Khanyisa Limited (RF) share for every Inzalo share owned. Sasol Khanyisa owns approximately 18,4% of SSA.
- Employees that were Sasol Inzalo participants, in Sasol’s service on 18 May 2018 and did not opt-out, each received rights to a bonus share allocation of SOL or SOLBE1 shares to the value of R100 000 on 1 June 2018. These shares will vest after three years, employees will receive dividends on the shares during the three-year vesting period.
- Qualifying black Sasol employees each received 1 240 rights to SSA shares owned by the Sasol Khanyisa ESOP Trust on 1 June 2018.
Sasol Khanyisa shareholders will exchange their SSA shareholding for SOLBE1 shares on a fair value-for-value basis at the end of the empowerment period.
- Refer to note 35 of the Annual Financial Statements for further detail.
Our commitment to transformation is further supported by the effective integration with our talent management processes. At Sasol, we utilise a number of opportunities that are covered under our Diversity ten point plan. Based on our plan we focus on having diverse succession pools, promote career advancement, mobility and development, increase awareness on persons with disabilities and drive our “Women in Operations” initiative.
We have improved the diversity of our succession pools as well as increased our targets for females and persons with disabilities. Through various awareness sessions, we have encouraged employees to voluntarily declare their disabilities which has yielded a 100% increase compared to the previous year.
We will continue to work to achieve the B-BBEE stretch targets, supported by the elevation of ‘diversity and inclusion’ as one of Sasol’s values in our journey to transformation.
We invest in a range of skills development programmes focused on employees from previously disadvantaged groups. These include full- and part-time sponsored study; functional/technical and safety and compliance programmes; leadership development and career succession programmes.
In 2018, 715 African, Indian and Coloured employees attended the LEAD programme, and we continued with our senior leadership mentorship programmes, particularly in our operations. By providing study aid, we supported employees studying part time for professional qualifications. In 2018, 1 515 women and 1 945 men were enrolled. In addition, we had 1 501 employees in apprenticeship and learnership programmes.
We had 386 youth in our graduate programme, most of whom in engineering and 63 of whom are now employed full time.
As in previous years, in 2018 our spending on socio-economic development exceeded 1% of net profit after tax. This expanded the reach of our STEM education support to 6 million learners and teachers and that of our early childhood development support to over 25 000 children. By collaborating with local government, we increased access to healthcare to over 380 000 people and improved the delivery of municipal services to over 600 000 people by upgrading local infrastructure.
In 2018, Sasol made good progress in preferential procurement: expenditure with black-owned suppliers increased to R12,7 billion from R7,5 billion in 2017. We strive to drive partnership between local and multinationals in order to improve the long-term economic growth with suppliers in the regions in which we operate. We have implemented a fence-line community supplier strategy to accelerate the achievement of our preferential procurement targets towards exempted micro-enterprises (EMEs) and qualifying small enterprises (QSEs).We provide support to SMME, including loan funding through the Sasol Siyakha Enterprise and Supplier Development Fund and business development and incubation support through the Sasol Business Incubator in Sasolburg.