PetroSA, at the centre of the “Oilgate” scandal, got a gentle ride during public hearings of Parliament’s standing committee on public accounts (Scopa) this week.
The committee’s convenor, African National Congress MP Pierre Gerber, described the affair as a “political sideshow” in his closing remarks to PetroSA management. “They call this the silly season, because it is election season and you are the flavour of the month.
“We specifically allowed tough questions and, from my point of view, you did well,” he told representatives of PetroSA’s parent company, the Central Energy Fund.
But Scopa decided in advance of the meeting not to request crucial documentation relating to a R15-million advance payment PetroSA made to Imvume Management for a shipment of condensate late last year.
Imvume, which the Mail & Guardian has revealed was set up as a front for the ruling party, immediately transferred R11-million of the advance to the ANC, and failed to pay its supplier, Swiss-based Glencore Resources. PetroSA was then forced to pay the same amount directly to Glencore to gain access to the shipment, which was urgently needed at its Mossel Bay refinery.
Some opposition MPs had suggested ahead of the hearings that the committee request copies of correspondence between PetroSA and Imvume discussing the advance, and copies of a PetroSA internal-audit report on the transaction. But the committee declined to do so. When Independent Democrats MP Lance Greyling asked for the documents in open session he was slapped down by committee chairperson Francois Beukman, who said Scopa needed to reach consensus on what documents should be requested.
“These documents were directly relevant to the issue at hand but neither the standing committee on public accounts nor the minerals and energy committee made these documents available after repeated requests,” Greyling said after the meeting. “I hope my request today for these documents will finally be honoured so as to able me to pursue my oversight duties in an effective manner.”
Pressed by the Democratic Alliance’s Annchen Dreyer over whether the decision to make the advance payment into a newly nominated account, rather than Imvume’s usual bank account, did not raise red flags, PetroSA chairperson Popo Molefe conceded there had been monitoring lapses.
But he stressed that the company’s black economic empowerment (BEE) procurement policy allowed for advance payments as a form of bridging finance for smaller or developing suppliers.
According to PetroSA’s records, he told MPs, Imvume had needed funds to resolve cashflow problems. “My understanding is it was the end of the year, and at that time of year staff begin to demand their bonuses, and that sort of thing,” he explained.
The Inkatha Freedom Party’s Gavin Woods then asked whether Imvume had “misled” PetroSA about the reasons for the advance, given that the money ultimately went to the ANC, rather than staff bonuses. Molefe initially replied, “I don’t understand the question”, and went on to repeat his earlier insistence that the advance was a small part of the total cost of the shipment, and that executives had trusted Imvume’s track record.
Asked by Greyling about an earlier decision to alter tender conditions and channel the entire payment through Imvume, rather than paying Glencore direct, Molefe said this move had followed a fierce boardroom debate, which ultimately concluded that the BEE party needed to be given more leverage, and to secure funds for training and skills transfer.