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Memorandum of Understanding Between the Department of Minerals and Energy (South Africa) and the South African Petroleum Industry Association

Category: Agreement
Binomial Name: Government of the Republic of South Africa
Date: 30 November 2004
Sub Category:Memorandum of Understanding
Location:Republic of South Africa
Subject Matter:Collaboration / Partnership | Oil and Gas | Petroleum
URL: http://www.dme.gov.za/pdfs/energy/liquidfuels/mou_dme_sapia.pdf
Summary Information:
The Memorandum of Understanding Between the South African Government Department of Minerals and Energy and the South African Petroleum Industry Association ('the MoU') is an agreement between the South African Department of Minerals and Energy (DME) and the South African Petroleum Industry Association (SAPIA) and its members. The MoU was signed on 30 November 2004.

The MoU aims establish a Supplier Development Agency (SDA) for the purpose of furthering the objectives of the Charter for the South African Petroleum and Liquid Fuels Industry. This Charter incorporates the principles of Black Economic Empowerment, which is one of the range of measures being used to counteract the economic effects of apartheid in South Africa.

Detailed Information:
Purpose

The aim of the MoU is to address the access difficulties faced by historically disadvantaged South African (HDSA) suppliers in the liquid fuels industry by establishing an SDA.

The mandate of the SDA is to 'accelerate progress in the empowerment of [HDSAs] in the petroleum industry, through increased access to industry procurement opportunities.' This will be achieved by, for example:

  • HDSA supplier accreditation;
  • the consolidation of existing HDSA supplier development efforts;
  • matching supplier capacity to industry needs; and
  • providing information to HDSA suppliers.

    The MoU includes provision for the sharing of information between the parties, including the creation of a common database, to be used by the SDA to provide information about procurement opportunities, as well as to facilitate contact between suppliers and the parties.

    Implementation

    The SDA's strategy will be implemented in the form of projects with defined time, cost and performance criteria, to be funded by the signatories to the MoU. Smaller financial contributions are to be derived from supplier membership fees. Signatories commit to fund the initial capital requirements of the SDA, amounting to R250 000 per party.

    The MoU will be administered by a Working Committee consisting members the parties, who will be responsible for overseeing the legal formation of the SDA, delegating responsibilities and ensuring each parties financial contributions are obtained.

  • Outcomes:
    The South African Supplier Development Agency (SASDA) was launched by the Deputy President, Ms Phumzile Mlambo-Ngcuka, on 12 September 2005. The Deputy President commended the SASDA as a platform for suppliers to diversify their customer base, thereby increasing their own sustainability. However, she also warned that the real proof of its success would be 'a measurable increase in the number of [HDSAs] who can attest to the fact that they are actively involved in supplying products and services that are core to the petroleum industry.' Accordingly, she urged industry leaders to actively support the SASDA.

    Related Entries

    Organisation
  • Department of Minerals and Energy (South Africa) - Signatory
  • South African Petroleum Industry Association - Signatory
  • South African Supplier Development Agency
  • Sasol Ltd
  • Policy/Strategy
  • Charter for the South African Petroleum and Liquid Fuels Industry

  • References

    Agreement
    Department of Minerals and Energy (South Africa)` (30 November 2004) Memorandum of Understanding Between the Department of Minerals and Energy (South Africa) and the South African Petroleum Industry Association
    Media Release
    The Presidency: Republic of South Africa (12 September 2005) Address by the Deputy President, Ms Phumzile Mlambo-Ngcuka at the Launch of the South African Suppliers Development Agency
    Resource
    South African Supplier Development Agency (2006) Welcome to SASDA

    Glossary

    Memorandum of Understanding

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