Fuel shipping contract complaint stumbles over urgency obstacle

A CHALLENGE on the urgency – or rather the lack of it – of a High Court case in which a Namibian black economic empowerment company is trying to force South Africa’s Sasol Oil to award it a massive fuel shipping contract saw that case falling at the first hurdle on Friday.

The application in which Namibia Energy Corporation (Namenco) is asking the High Court to order Sasol Oil and its Namibian black economic empowerment partner, Namibia Liquid Fuels, to use a Namenco ship to transport fuel from South Africa to Walvis Bay, does not meet the criteria for a case to be heard as a matter of urgency, Judge Mavis Gibson stated in a ruling in the High Court in Windhoek on Friday. With that, she ordered Namenco’s application to be removed from the court roll.Her ruling leaves Namenco in a predicament of choices.It would have to decide whether it should let the matter rest here, or if it wants to continue with its case as a normal, non-urgent court application; whether it wants to appeal against the ruling, or whether it should hurry to enter a tender for the contract that it claims it is entitled to.The closing date of that tender is today.Namenco claims that it and Sasol Oil had agreed – though not yet in a formal contract – that Sasol would award a shipping contract to Namenco if Sasol was granted a tender to supply half of the fuel that Namibia needs.Bids on that tender, worth some N$800 million a year, were called by the National Petroleum Corporation of Namibia (Namcor) earlier this year.Sasol indeed won that contract, in partnership with NLF, which describes itself as a black economic empowerment company, as does Namenco.The latter company has since claimed that it helped Sasol win that contract, only to see the South African fuel giant renege on an understanding that it would award Namenco the contract for shipping the fuel.It is Namenco’s argument that by awarding the shipping contract to a Namibian company, it would help establish a Namibian shipping industry that would benefit the country’s people rather than foreign companies, as is the case with the current set-up.Also, it would mean that tens of millions of Namibia dollars that currently leave the country each year to go into foreign companies’ pockets, would be kept in Namibia for the country’s own benefit.The prize at the centre of Namenco’s complaint to the High Court is a shipping contract that would be worth about N$78,2 million a year, or about N$236 million over its three-year term from 2005, according to Namenco.It is not just a case about money, though, it appears from documentation filed at the High Court.This is also a case with strong political undertones.In the earlier stages of Namenco’s manoeuvring to get a slice of the fuel contract, Namenco directors Lucius Murorua, Ananias Shikongo and Mihe Gaomab (“the first”) stated to Namcor Managing Director Joe Mazeingo that the use of foreign (South African) shipping companies to freight fuel to Namibia has led to around N$25 million dollars leaving Namibia each year.They described this as an astronomical figure that Namibia was losing.As they set out their interpretation of the political context of their offer to take over the shipping of fuel to Namibia, it appears that for them the legacy of apartheid remains a major motivational factor.As they put it: “When the international oil companies de-invested in South Africa most of the oil companies were bought by the broederbond [Afrikaners] and have only used the trade-marks of the majors.The new owners, the broederbond, have effectively formed a cartel so much that they have a virtual monopoly in the oil sector thus charging fictitious rates or double charging our Government and it’s people.Therefore it is imperative that we request that transportation must be divorced from the tender and local companies be allowed to do that.”On its part, Sasol maintains that it has not concluded an agreement with Namenco as the latter is claiming.In any case, Sasol says, it has met the requirement for it to engage a black economic empowerment partner through its partnership with NLF.The ownership of Namibia Liquid Fuels is distributed among some politically well-connected shareholders.These include Ndeutala Angolo, Secretary to the President, former trade unionist Ranga Haikali, and the National Youth Service.—–With that, she ordered Namenco’s application to be removed from the court roll.Her ruling leaves Namenco in a predicament of choices.It would have to decide whether it should let the matter rest here, or if it wants to continue with its case as a normal, non-urgent court application; whether it wants to appeal against the ruling, or whether it should hurry to enter a tender for the contract that it claims it is entitled to.The closing date of that tender is today.Namenco claims that it and Sasol Oil had agreed – though not yet in a formal contract – that Sasol would award a shipping contract to Namenco if Sasol was granted a tender to supply half of the fuel that Namibia needs.Bids on that tender, worth some N$800 million a year, were called by the National Petroleum Corporation of Namibia (Namcor) earlier this year.Sasol indeed won that contract, in partnership with NLF, which describes itself as a black economic empowerment company, as does Namenco.The latter company has since claimed that it helped Sasol win that contract, only to see the South African fuel giant renege on an understanding that it would award Namenco the contract for shipping the fuel.It is Namenco’s argument that by awarding the shipping contract to a Namibian company, it would help establish a Namibian shipping industry that would benefit the country’s people rather than foreign companies, as is the case with the current set-up.Also, it would mean that tens of millions of Namibia dollars that currently leave the country each year to go into foreign companies’ pockets, would be kept in Namibia for the country’s own benefit.The prize at the centre of Namenco’s complaint to the High Court is a shipping contract that would be worth about N$78,2 million a year, or about N$236 million over its three-year term from 2005, according to Namenco.It is not just a case about money, though, it appears from documentation filed at the High Court.This is also a case with strong political undertones.In the earlier stages of Namenco’s manoeuvring to get a slice of the fuel contract, Namenco directors Lucius Murorua, Ananias Shikongo and Mihe Gaomab (“the first”) stated to Namcor Managing Director Joe Mazeingo that the use of foreign (South African) shipping companies to freight fuel to Namibia has led to around N$25 million dollars leaving Namibia each year.They described this as an astronomical figure that Namibia was losing.As they set out their interpretation of the political context of their offer to take over the shipping of fuel to Namibia, it appears that for them the legacy of apartheid remains a major motivational factor.As they put it: “When the international oil companies de-invested in South Africa most of the oil companies were bought by the broederbond [Afrikaners] and have only used the trade-marks of the majors.The new owners, the broederbond, have effectively formed a cartel so much that they have a virtual monopoly in the oil sector thus charging fictitious rates or double charging our Government and it’s people.Therefore it is imperative that we request that transportation must be divorced from the tender and local companies be allowed to do that.”On its part, Sasol maintains that it has not concluded an agreement with Namenco as the latter is claiming.In any case, Sasol says, it has met the requirement for it to engage a black economic empowerment partner through its partnership with NLF.The ownership of Namibia Liquid Fuels is distributed among some politically well-connected shareholders.These include Ndeutala Angolo, Secretary to the President, former trade unionist Ranga Haikali, and the National Youth Service. —–