Black Economic Empowerment
At Engen, black economic empowerment (BEE) is embraced as a value creating strategy,
designed to create realistic, meaningful and enduring and sustainable partnerships
with those previously denied them.
Engen's BEE is thus a value creation driven strategy as this is the strongest
possible motivation in a value-based company and we believe the only truly sustainable
reason for implementing a BEE strategy. We welcome the move away from the narrow
based BEE assessment model based on black ownership only to the more comprehensive
and inclusive Broad Based BEE model espoused in the "Codes of Good Practice"
for BEE. Our BEE strategy remains focused on; capacity building, job creation and
economic growth. There are five main focus areas:
- Shareholding and equity participation - with focus on seeking value added partnerships
and making the shareholder base representative
- Employees - with focus on employment equity, capacity building, training and skills
development
- Dealers - with focus on training, entrepreneurship and broadening the dealer mix
- Business Partners - with focus on value creating opportunities for our suppliers
and other business partners
- The wider community - with focus on nation building.
The first major achievement in the area of shareholding and equity participation
was the purchase in late-1999 of 20% of Engen by Worldwide
African Investment Holdings (Pty) Ltd.
Employees enjoy an integrated yet rigorous programme of capacity building with long-term
sustainability. Policies and procedures have been documented, approved and implemented
to ensure this. Engen's ultimate goal is that the company's employee profile
will match the economically active national demographic profile.
Retail dealerships represent ownership in the company's core business. A strategy
with a focus on transforming the demographic profile, entrepreneurship and training
has been implemented and we have set ourselves ambitious targets. Engen dealerships
owned by Black people was standing at 33% in 2003, this had grown to 35%. This represents
well over 400 sites across our entire portfolio of dealerships, owned and operated
by black people. The target for 2008 is 40% and soon after that, over half of Engen's
dealerships will be HDSA-owned.
In keeping with its partnership philosophy, Engen's strategy has been to supply
Black Oil Companies on a competitive economic transaction basis. Companies serviced
since 1998 include Zenex, Tepco and Afric Oil.
In selecting business partners and suppliers, Engen gives preference to those who
who comply with the criterion as set out in the Broad Based BEE "Codes of Good
Practice", but in line with the Liquid Fuels Charter, we further give preference
to those who have 50% plus one share HDSA ownership. Ideally, shareholders will
be taking an active part in the running of the business and ensuring that there
is a transfer of skills to black employees. Where possible, preference is given
to companies that satisfy the above criteria and are also Small, Medium and Micro
Enterprises (SMEs).
Engen's BEE Procurement Programme was initiated in August 1997 and since then,
the company has shown growth in the value of business done with BEE companies every
year. In the last financial year we have reached a significant milestone in that
we now purchase more from BEEs ( more than 50% ) than we do from traditional white
owned businesses.
Engen is a signatory to the "Charter for the South African Petroleum and Liquid
Fuels Industry On Empowering Historically Disadvantaged South Africans in the Petroleum
and Liquid Fuels Industry" which was signed by all the petroleum companies and
the Department of Minerals and Energy in November 2000.
Engen's commitment to the Charter underpins all its activities and ensures that
the company continues to lead the industry in delivering sustainable value-creating
opportunities for HDSAs. Engen has already put the necessary steps in place to ensure
that it meets the 25% target stated in the Oil Industry Charter signed with government.