Engen’s transformation agenda is influenced by business, ethical and legislative imperatives. We are also keenly aware that this is a journey that will require time and patience. Our Black Economic Empowerment Policy states that “We will promote and develop an enabling environment in which Engen will deliver on its transformation strategy”. This policy extends to Engen’s employees, dealers, suppliers, business partners and the wider community. In South Africa, our transformation programme is also governed by the Broad-Based Black Economic Empowerment (B-BBEE) Act (Act 53 of 2003) and other relevant legislation, as well as the Liquid Fuels Charter and the Mining Charter.
We would like our employees to see value proposition in our fair and equitable employment policies. Business BEE enterprise development and socio-economic initiatives have enhanced Engen’s position as a company of choice.
Effective and meaningful transformation requires immense and focused cultural shift, and Engen’s transformation strategy forms part of an integrated business plan. Since transformation objectives have been incorporated in the Engen Balanced Scorecard they have been expressed and cascaded down and throughout the business, which leads to more effective planning and execution of each B-BBEE element by the organisation.
Transformation is taking place at retail site ownership level, where continued efforts to change the demographic outlook are yielding results.
Our B-BBEE Performance
Since 2012, Engen has improved its B-BBEE Level status from a Level 4 B-BBEE Contributor to a Level 3 B-BBEE Contibutor, achieving a score of 81.50% from 73.24%. This has been achieved by our deliberate indepth analysis and verification of different elements of the codes. The review of the business strategic objectives, as expressed in the revised Engen strategy, has yielded improvements for our transformation journey especially in areas like Ownership and Enterprise Development.
In order to take a more long-term view, our performance regarding the B-BBEE scorecard is discussed over the period 2012-2014.
Engen’s improved score on the Ownership element is derived out of Pembani and the application of the exclusion principle as per the verification manual (recalculation in 2014). Our score for Management Control is steadily increasing.
The employment of people from designated groups in junior and senior management has continued to show improvements, while we continue to face challenges with regards to the representation of people with disabilities. A disability awareness campaign, together with the commitment of employing people with disabilities by the different divisions, shows the business is serious about diversity of its workforce. Divisions, together with the Employment Equity Committee, are paying special attention to this area in order to boost our performance.
The Skills Development score has increased steadily over the past two years. An area of improvement is skills development expenditure on people with disabilities, which achieved the least points within the Skills Development element. This is consistent with the challenge identified under the employment equity element when it comes to the employment of people with disabilities and the training opportunities thereof. Improvements in the recording of skills development spend that is within divisional control has seen Engen being able to recognise more training spend that was not included in the previous reporting period.
Our Preferential Procurement score has seen a drop since 2012. Procurement from suppliers that are Black owned, especially small and micro enterprises as per the codes, have been a challenge for Engen. Steps have been put in place to increase procurement from Black-owned and Black-woman owned suppliers with the view to ensuring that Engen complies. The integration of the use of information systems, and providing supportive guidance by procurement on suitable Black and Black-woman owned suppliers is starting to bear results for the preferential procurement element, as seen in the increased score for 2014.
It is worth noting that some Black-owned and Black-woman owned entities that were brought into the supply chain as part of Engen’s transformation are amongst the top 5 vendors for crude and refined products.
For the first time, Engen scored full points in the Enterprise Development element. A number of successful enterprise development initiatives have been maintained and, where necessary, enhanced to ensure that there is value both to Engen and the recipients.
Key initiatives include:
Based in the Raizcorp Business Incubator in Durban are 39 small businesses that are undergoing intensive business support under the guidance of Raizcorp. In 2014, a review of the incubator programme was done to ensure that companies that are in the programme can become suppliers to the Refinery. This review means that at least 80% of recipients should have the technical ability to undertake contracts.
Integrated Energy Centre – Bushbuckridge
Work is on-going in the building of the Engen Integrated Energy Centre (IEC), which is a One-Stop energy shop owned and operated by the Bushbuckridge community in Mpumalanga. Not only is this programme aimed at creating a viable enterprise development model for rural areas, it also plays a critical role in addressing social challenges facing the rural poor.
Over the past few years, Engen has consistently achieved a full score for Socio-Economic Development.
Engen Pitch and Polish
This successful programme continues to unearth talented young entrepreneurs and 2014 was no exception. Below is the table of the top 4 businesses that made it to the finals from different provinces.
New B-BBEE Codes of Good Practice
The amendments to the B-BBEE Codes of Good Practice as published in the Government Gazette on 11 October 2013 have raised the bar when it comes to implementing B-BBEE in line with government’s National Development Plan priorities. While these codes come into effect in 2015, we continue preparing the business for their implementation and where necessary, steps are being put in place to align policies and procedures with the spirits of the codes. To this effect, a project was launched to improve monitoring and reporting systems in line with the new codes. The increased emphasis on preferential procurement and enterprise and supplier development is being considered in the review of our procurement processes.
Efforts to transform the demographic composition of retail site ownership continued and eleven more BEE-owned sites were added. Approximately 45% of our retail sites are owned or managed by previously disadvantaged individuals.
In addition to the DRC, Gabon, Burundi, Botswana and Zimbabwe which have indigenized shareholding requirements, there was an increased focus on regulating transformation in Ghana and Namibia. Various models and options are being explored to unlock indigenized shareholding and continue to improve the diversity of the business. We have also embarked on a Strategic Sourcing project to empower local suppliers as part of our construction project in all our affiliates. These will include the development of retail and commercial sites where local suppliers are given preference over foreign contractors.