Mineworkers Investment Company Limited
Women’s Development Bank (Investment Holdings)
BP Southern Africa

The South African Government seeks greater inclusion of historically disadvantaged South Africans in the management and ownership of industry. In November 2000, members of the energy industry signed the Oil Industry Charter - calling for 25% ownership by formerly disadvantaged groups within ten years (2010).

BPSA aspired to go beyond this goal and to create a means of sustainable capacity building for participating in the formal economy – a prerequisite for tackling critical issues of sustainable development.

This partnership focuses on the social and economic pillars of sustainability and a key issue of how to extend participation in the formal economy to historically disadvantaged South Africans, and women in particular.

Tackling these issues requires access to capital and the transfer of know-how and experience to those who often lack the necessary technical and managerial skills base. Such barriers can restrict empowerment initiatives to an elite few. The BPSA model seeks to address these barriers by taking a holistic approach to economic empowerment and by specifically targeting greater inclusion of women.

In August 2001, the Mineworkers’ Investment Company (MIC) and WDB Investment Holdings (WDBIH) took an equity stake in BP’s South African operations, giving them an immediate three seats on the board of BP Southern Africa (Pty) Limited and 25% shareholder voting rights. The deal was structured to make it possible for MIC and WDBIH to self-finance the transaction and accomplish it entirely without external financiers. As part of the transaction, MIC and the WDBIH also secured an initial 25% shareholding in a new BP marketing joint venture, exclusively servicing BP’s existing and future commercial and industrial clients.

A series of cross-postings involves MIC and WDBIH staff working for the joint venture and inside BP. The joint venture will eventually be majority owned and operated by empowerment partners. The equity stake gives BP’s new partners strategic influence and provides a vehicle through which skills transfer, capacity development and, ultimately, operational control can be accomplished in a responsible and sustainable manner.

The partnership adresses environmental concerns in the sense that it brings greater influence and resources to bear on issues such as rural development and skills upgrade mainly, but not entirely, via the close links with the Womens Development Bank and the Mineworkers Investment Company whose subsidiaries are active at grassroots level promoting sustainable development and environmental protection for example, in the case of the WDB, promotion of appropriate technology that is ecofriendly and encourages organic farming methods, use of appropriate technology and so on. ( See video).

The joint venture, which carries the BP brand, is a significant milestone along the road to achieving significant and sustainable levels of empowerment.

In a relatively short history, MIC and WDBIH demonstrate a proven track record of consistently repatriating funds for the benefit of programmes that support social development at grassroots levels, indirectly empowering thousands of previously disadvantaged South Africans.

BPSA has a clear and acknowledged responsibility to ensure that secondees are trained effectively so as to maximise the benefit of the appointments. Secondees are involved heavily in the sales process, the business planning process, the marketing process, etc. Training is comprehensive and long-term.

WDB and MIC have three seats on the BPSA board, 25% voting rights and leadership of various board subcommittees relating to training, diversity and equity within the company.

The measurement of social performance is one of the core challenges many companies are addressing. Social issues are dynamic and change over time. Through ownership, commitment and by direct influence on a transformational journey and ‘learning by doing’ – fresh perspectives will bring benefits to each of the partners for understanding what it takes to delivering on critical socio-economic objectives. Sucess will be measured ultimately by the profits that will accrue to MIC and WDB and through them to grassroots levels of society.

MIC and WDBIH share the same commitments as BP - being a force for good in the communities in which they operate. It is unique in that no external financiers were used; it benefits the many rather than the few; and it involves genuine sharing of business risk and reward and entailed financial investment by all parties. It also envisages a future joint venture in which the BEE parters will have a majority shareholding and provides means of including further partners beyond MIC and WDM in future. It is a beginning not an end.

The partnership focuses on sustainable enterprise development and capacity building. It took a year of discovery to identify prospective partners who shared BP vision and values, concepts of corporate citizenship and ethics and who would achieve the maximum impact on South African society particularly those previously disadvantaged by apartheid. Consultants, Business Map, were used to identify prospective partners. Once all parties were convinced that there were common values the actual partnership agreement was constructed. A key requirement was that no external finance was used. The partners bought into the agreement with their own funds, thus it is a true investment. Secondly all parties insisted that no one would have to exit the arrangement to realise value -- indeed there are penalties to early exit by either BPSA, MIC or WDB.