AmaBhungane and Open Secrets challenge PetroSA’s diesel contracts secrecy

For the past two years, PetroSA — South Africa’s national oil and gas company — has reaped enormous profits from the load shedding crisis by buying diesel from unknown suppliers and selling it to Eskom at a profit.

But aside from PetroSA, who benefits when the lights go out?

This is what we have been trying to find out. For months we have submitted requests to PetroSA under the Promotion of Access to Information Act (Paia), asking it to name the companies that received roughly R20-billion in contracts to supply it with diesel.

And for months, PetroSA has resolutely refused to even respond to our requests.

PetroSA is not only refusing to disclose this information to us, however: the National Treasury is also in the dark about PetroSA’s apparent deviations from standard procurement procedures.

In its recent annual report, PetroSA proudly proclaimed — in bold white letters on a midnight blue background — that “The spirit of Batho Pele, which means ‘People First’, underpins the PetroSA values.”

The question is: which people is PetroSA putting first?

AmaBhungane’s recent investigations have also uncovered how Russia’s state-owned Gazprombank appeared to be cherry-picked for a tender to refurbish the Mossel Bay gas-to-liquids refinery; how a controversial businessman received massive contracts to build offshore gas infrastructure, seemingly without having the financial resources to carry this out; and how those contracts were scuppered by an unpaid soccer player who successfully placed the company in liquidation.

These controversial contracts could cost PetroSA many billions more. But when we submitted Paia requests asking it to disclose records of how these contracts were awarded, we received the same stoney silence.

It’s a constitutional right 

As a state-owned enterprise created to play a strategic role in the oil and gas industry, PetroSA’s success or failure has repercussions for South Africa’s economic development. Yet despite its professed people-centred approach, PetroSA treats information requests from civil society as an annoyance that can be ignored.

Our courts have recognised that the constitutionally enshrined right of access to information is fundamental to the public’s ability to enforce other constitutionally protected rights and to the facilitation of transparency and accountability. The courts have also emphasised that civil society and the media should not have unnecessary obstacles placed in their way when performing this role. A civil society that is lively and engaged must act based on accurate information and so relies on requests for information under Paia.

State entities are obliged to respond to Paia requests and to provide the information sought unless clear grounds exist to refuse the request. All requests are also covered by a “public-interest override” as the Act states that even where there are grounds to refuse a request — to protect commercial confidentiality, for example — if there is a significant public interest in the information and there is evidence of a “substantial contravention of the law” or an “imminent and serious public safety or environmental risk”, the information must be disclosed.

By the very nature of its focus on the oil and gas industries, PetroSA’s procurement contracts have an impact on communities and the environment, cost a substantial amount of money, are long-term and are meant to ensure competitive operations in a sustainable commercial manner.

• Open Secrets recently released an in-depth report on the shadowy influence of the oil and gas sector titled The Oil & Gas Majors

Timeously accessing the relevant contractual documents would allow the public to assess the extent to which PetroSA, as a subsidiary of the Central Energy Fund, which in turn reports to Gwede Mantashe’s Department of Mineral Resources and Petroleum, is performing its responsibilities effectively and efficiently.

Despite this crucial public role, however, PetroSA seems to believe that the government’s obligations to act transparently do not apply to it.

At Africa Oil Week 2023, Mantashe said, “If you want to expose the business of PetrolSA, you’re basically killing it.”

The truth is quite the opposite: increased transparency leads to a more competitive environment and therefore lower prices. Procurement contracts secured in secret, and thus without meaningful oversight, risk costly and damaging outcomes such as corruption, unnecessary debt and, of particular concern to the energy sector, severe capacity constraints and grid instability.

Information Regulator

PetroSA’s apparent zeal to cultivate an environment in which secrecy thrives indicates that its professed “people first” ethos is not in fact what it practises. The constitutional requirements of fairness, equity, transparency, competitiveness and cost-effectiveness are plainly eroded by the stifling of public participation in this manner.

Last week, amaBhungane and Open Secrets decided to approach the newly established Information Regulator, who is tasked with adjudicating Paia as well as Popia (Protection of Personal Information Act) requests.

Together we have filed a detailed affidavit setting out how PetroSA has systematically ignored our official requests and why, in our view, PetroSA’s obsessive secrecy cannot be allowed to stand.

While we, as civil society, will continue to push against this unsustainable approach, we hope that the PetroSA leadership will internally reflect and revert to the Batho Pele value they profess to hold. DM