/ 6 July 2009

Spy war at PetroSA

Papers filed in a court case shed light on a bizarre spy war at PetroSA that involved a bug sweep by the National Intelligence Agency (NIA).

At the same time, worker protests have erupted at the parastatal over the suspension of a trade union member, allegedly for leaking information to the Mail & Guardian after his emails were searched by management.

Workers allege a general witch-hunt against critics and dissenters at PetroSA. They link it to management’s fears that criticism could derail a huge expansion programme planned at the parastatal.

The ”spy versus spy” allegations are contained in papers filed last month in the Cape Town Labour Court by former senior PetroSA investigator Lerato Lesole, who is suing the parastatal for unfair dismissal and demanding immediate reinstatement.

Lesole was investigating PetroSA’s chief executive, Sipho Mkhize, and the chief financial officer, Nkosemntu Nika, before he got the chop.

His probe was sparked by a claim by an internal whistle-blower in 2007 that Nika might be involved in fraudulent activities and that Mkhize was involved in tender irregularities relating to the desludging of PetroSA’s Milnerton oil tanks.

Lesole became suspicious that he was being bugged because people outside his office knew about the progress of his investigation. In the court papers he reveals that he contacted the NIA to sweep his office.

He says that it was his ”job to see to it that all the risks and possible risks to the company are protected against” and that the NIA had a similar responsibility to safeguard PetroSA’s security.

PetroSA maintains in an answering affidavit that Lesole was not authorised to order the sweep.

In April 2008 senior management ordered Lesole to halt all investigations and appointed law firm Edward Nathan Sonnenberg to take them over and to probe him.

The firm cleared Nika and Mkhize, whereas the outcome of the inquiry into Lesole’s actions was used to draw up the disciplinary charges that led to his dismissal.

In a letter to Mkhize after he was ordered to stop the investigations, which forms part of his court papers, Lesole paints a picture of interference in his work as PetroSA’s chief risk and compliance officer, particularly by Nika.

”Nika did [interfere] by stooping so low to go and instruct the forensic auditor to stop investigating him,” he says.

”Nika and yourself [Mkhize] directly and indirectly have been trying to make my life in PetroSA miserable and this investigation of my department is but one example …”

Lesole said Nika ”interfered [with] and intimidated” him and his departmental staff.

He said he was offered a settlement package, but when he played hard ball, disciplinary charges were brought against him.

In another development the chairperson of the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (Ceppwawu), Enzich Briesies, was suspended this week after PetroSA management scrutinised his email.

Briesies has been a vocal critic of wasteful practices at PetroSA.

PetroSA spokesperson Thabo Mabaso denied that the suspension related to the leaking of information to the M&G, which recently reported on alleged wasteful expenditure at the parastatal, including a questionable executive bonus scheme. Mabaso said Briesies was suspended because he had brought the organisation’s name into disrepute.

Trade unions at PetroSA have reacted angrily to management surveillance of staff emails.

Between 60 and 100 workers barricaded PetroSA’s administration centre in Mossel Bay on Tuesday to prevent the disciplinary hearing of Briesies from taking place. The hearing was postponed until Monday.

”We respect that management can monitor the system for unwanted material; we cannot accept what has happened here,” Ceppwawu’s Mossel Bay branch said, adding that union processes had been compromised.

”To intercept emails addressed to the general secretary of the union is absolutely atrocious and horrific,” it said.

Mabaso said ”only a dozen or so” workers had barricaded PetroSA’s Mossel Bay offices. The hearing was postponed for technical reasons and not because of the worker demonstration, he said.

Fuelling Mthombo
PetroSA is set for a multibillion-rand expansion in the next decade and trade union observers and company executives believe horse-trading over procurement is fuelling the infighting at the energy parastatal.

The backbone of the parastatal’s growth will be Project Mthombo, which is the proposed crude oil refinery at Coega in the Eastern Cape. It is billed as one of the biggest post-2010 investments in the country and the plant will cost about R100-billion. It is expected to refine 400 000 barrels of oil a day and will come on stream in 2014-15.

At a petroleum conference two weeks ago the parastatal announced its upstream projects, in which Project Mthombo will increase the supply of liquid fuels to the domestic market from the current 5% to 25% by 2020.

PetroSA is finalising feasibility studies on its Coega projects and has hired multinational financial adviser HSBC to engage global investors. Contrary to media reports, the national treasury has not been approached for funding yet, PetroSA spokesperson Thabo Mabaso said. ”The only process under way regarding funding is that we are engaging global investors, through the services of HSBC,” he said.