DA requests SIU investigation into sale of Strategic Fuel Stocks

Issued by Gavin Davis MP – Shadow Minister of Energy
23 Feb 2018 in News

The DA has written to President Cyril Ramaphosa, requesting that he proclaim an urgent Special Investigation Unit (SIU) investigation into the illegal sale of South Africa’s strategic fuel stocks at below-market prices.

It is estimated that it would cost South Africa R5.6 billion, at the current exchange rate, to replace the 10.3 million oil barrels which have already been sold.

Minister of Energy, David Mahlobo, told the Energy Portfolio Committee this week that an investigation initiated by the Department into the sale had been halted due to what he called a “shoddy” report he had received on the matter.

We do not believe it is appropriate for a minister to institute an inquiry and then have the power to accept or reject the report that follows from it. For all we know, Minister Mahlobo has rejected the report because it implicates high-ranking politicians and political allies in wrongdoing.

Indeed, the law firm that conducted the inquiry on behalf of the Department of Energy – Allen & Overy – have stated publicly that they stand by their report.

We also know – through a leaked copy of the report published in the media last year – that it found the sale to be irregular as it was concluded without concurrence from Treasury, the Board of the Strategic Fuel Fund (SFF) and the Central Energy Fund (CEF).

Significantly, the report also found that SFF executives had liaised directly with former Energy Minister, Tina Joemat-Pettersson, instead of going through its own board.

It is therefore deeply suspicious that Joemat-Pettersson told Parliament in 2016 that the offloading of oil reserves was simply a rotation of stock and not a sale. She was later contradicted by her successor, Minister Mmamoloko Kubayi, who confirmed that the stocks were in fact sold.

There is something rotten at the heart of the sale of our strategic oil reserves. It would be a profound lapse in public accountability if we allow the investigation into it to live or die according to the whims of Minister Mahlobo.

Instead, we need an independent body to fully investigate the sale.  The SIU is well-placed to this in line with its mandate to investigate serious malpractice relating to state institutions, state assets and public money.

President Ramaphosa has made some big noises about fighting corruption, and we, therefore, call on him to initiate an independent SIU investigation without delay.