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'My decision was correct' - energy mnister defends fuel fund appointment

Oct 10 2017 13:37
Liesl Peyper

Cape Town – Energy Minister Mmamoloko Kubayi was taken to task by Parliament on Tuesday for seconding former director general Thabane Zulu to the Strategic Fuel Fund (SFF) to serve as the entity’s acting CEO. 

During her maiden budget speech in May this year, Kubayi had announced that she requested Zulu to be at the helm of the SFF to - among other things - ensure that the investigation into the sale of South Africa’s strategic fuel reserves in 2015 was “clean and transparent and not contaminated”.

The controversial sale of 10.3 million barrels of the country’s strategic oil reserves by the SFF, a subsidiary of the The Central Energy Fund (CEF)-  took place in December 2015, at a time when oil prices were at a historical low point.

READWait on for veil to lift on SA secret fuel sale

Kubayi and a delegation from her department, including acting director general Tseliso Maqubela, on Tuesday briefed the portfolio committee on energy on the department’s annual report for the 2016/17 financial year. 

Marshall Dlamini of the EFF and DA spokesperson on energy Gordon Mackay took issue with Kubayi’s decision to second Zulu, asking her if she had prior approval from the CEF board. 

Mackay said that, as Kubayi was not a shareholder of an entity of the Department of Energy, she couldn't appoint people without board approval. Such an action would be illegal, he said. 

Kubayi defended her decision, saying she had every right to take decisions, as Parliament holds her to account for the performance of the department.

In her May budget speech, Kubayi announced that she had "requested the Director General of the department Mr (Thabane) Zulu to go and act as the CEO of SFF on a secondment basis. This is to ensure that we are able to implement the recommendations in light of the report on the selling of strategic fuel reserves for the country."

Nothing wrong

On Tuesday Kubayi did not say outright if the board had approved the secondment prior to her announcement. 

“People want to make me out as if I don't have any authority in this department,” she said. “Were my actions malicious? Or are we seeing results? From where I’m sitting my decision was correct.

She said she did nothing wrong. "I won't seek a legal opinion, as I’m confident I did nothing illegal. I won’t waste the government’s money on getting a legal opinion if it’s not necessary,” she said.  

Mackay hit back, saying that the mandate of the SFF has changed significantly since Zulu’s arrival at the SFF.  “Instead of focusing on storage (of strategic fuel stocks) the fund is now exploring for oil in West Africa. He has changed the entire operational model of the SFF. Therefore there are serious questions about the legality of his appointment,” he said.  

Fikile Majola, chairperson of the portfolio committee on energy, asked Kubayi to respond in writing whether she had prior approval from the board or not.  

In a statement issued later, Mackay said his party contests the legality of this secondment on the basis that Kubayi, in her role as minister, cannot interfere with the SFF's operations and the appointments of board members or management.

"Kubayi has flouted the requirement that the CEF make a recommendation to the Minister for the appointment of a CEO of one of its subsidiaries. The minister’s meddling in the affairs of the SFF is simply unacceptable." 

Mackay said he'd request Majola to obtain a legal opinion on Kubayi's actions. 

Heading to court 

Last week Wednesday Zulu told journalists that a court would need to determine if South Africa could buy back the fuel stocks it sold off in late 2015.

READ: Court to determine if SA still has access to its strategic fuel stocks

Speaking to the media on the sidelines of a Parliamentary briefing, Zulu said the court proceedings would be based on a legal opinion with recommendations which had been commissioned by the former minister of energy Tina Joemat-Pettersson.

"The process has started to give effect to the recommendations made by the legal team," he said.

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