TOR NO. 2010/
TERMS OF REFERENCE FOR THE APPOINTMENT OF SERVICE PROVIDER FOR
AUDITING COMPLIANCE TO THE SOUTH AFRICAN PETROLEUM AND LIQUID
FUELS BY OIL COMPANIES AND ASSESS ITS IMPACT THEREOF
1.
GENERAL/BACKGROUND
The year 2010 marks the 10th anniversary when the South African Petroleum and
Liquid Fuels Charter (the Charter) was developed and signed to provide a
framework for progressing the empowerment of Historically Disadvantaged South
Africans in the liquid fuels industry. Petroleum Products Amendment Act; 2003
(Act58 of 2003) (PPAA), gives effect to the Charter which embraces Black
Economic Empowerment (BEE). Section 12C, of the PPAA authorises the Minister
of Department of Energy to make specific regulations and also prescribe a system
for allocation of licences as provided for by Section 2E. Hence consistent,
continuous monitoring; evaluation and enforcement of compliance is necessary.
Compliance with the Charter is key to accelerating economic growth and also
deracialising the ownership and control of productive assets and entrepreneurial
capabilities in the petroleum and liquid fuels industry.
The Charter signatories acknowledged that achieving set targets is an ongoing
process. The Department of Energy as a custodian of energy policies must
therefore consult, monitor, evaluate and report annually on the progress to
achieving objectives of the Charter as espoused in the Energy Policy White Paper,
i.e. ‘sustainable presence, ownership or control by Historically Disadvantaged South
Africans of a quarter of all facets of the liquid fuels industry, or plans to achieve
this’.
The Petroleum and Liquid Fuels industry is a strategically positioned to accelerate
shared economic growth and creation of decent jobs. An effective implementation of
the Charter
therefore requires a monitoring and evaluation system capable of
assessing progress with regards to measuring compliance to the Charter focusing
on all elements of the Charter across the value chain.
2.
THE OBJECTIVE OF THE PROJECT

To have a comprehensive, independent and representative assessment of
the state of transformation within the industry against the set Charter targets

To determine whether signatories of the Charter are in compliance with the
initiatives embarked on according to the 2002 BEE evaluation report (taking
into account the findings of the previous audit reports)

To identify bottlenecks in the implementation of the Charter and interventions
required

To develop standardised criteria to asses and monitor transformation and
compliance with petroleum and liquid fuels industry charter throughout the
value chain

To develop and implement skills transfer critical to strengthening of the
Department‘s capacity to conduct an annual survey of the industry to monitor
and evaluate progress on achieving the objective of the Charter

To develop an implementation strategy that will optimally contribute to
achieving transformation in the industry
3.
SCOPE OF THE AUDIT
To achieve the above objectives, a competent service provider is required to provide
the following:

Undertake a comprehensive Audit on the level of compliance of the
Petroleum and Liquid Fuels industry with the Liquid Fuels Charter.

Conduct impact assessment of all interventions by oil companies who are
signatories to the South African Petroleum and Liquid Fuels Charter

Develop an empowerment measurement framework for the petroleum and
Liquid Fuels Sector.

Make recommendations to the evaluation committee regarding short,
medium and long term goals for the Petroleum and liquid fuels industry in
meeting the objectives, and addressing challenges, of the Charter.
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
Undertake or investigate any matter as may be delegated by the evaluation
committee in relation to the government transformation programme relevant
for the Charter.

Develop and transfer of skills to enhance internal capacity on the
implementation of the evaluation and the monitoring systems and external
capacity to ensure accurate application of the Charter.
4.
OUTCOMES

A comprehensive Audit Report on the level of compliance with the Petroleum
and Liquid Fuels industry charter

An empowerment measurement framework for the petroleum and Liquid Fuels
Sector

Recommendations to improve future interventions for the Department of
Energy to fast track petroleum industry transformation across the value chain

5.
Report on training programme for skills transfer
REPORTING

The nominated company will report progress made or any other matter relating
to the project to the Liquid Fuels Charter Compliance Audit team.

Meetings and reporting by the service provider to the Liquid Fuels Charter
Compliance Audit team will be held bi-monthly from the signing of the contract.

The nomination and appointment of the Liquid Fuels Charter Compliance Audit
team members shall be ratified by the Head of the Hydrocarbon and Energy
Planning Branch.
6.
PROJECT DURATION/ COMPLETION DATE
The expected duration of the project is one year after the signing of a contract
7.
BRIEFING SESSION
A compulsory information session will be held at the Department of Energy Head
Office- 70 Meintjies Street, Travenna Campus, Sunnyside as per SBD 1 form
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8.1
EVALUATION METHODOLOGY/CRITERIA
Project Cost

The consultant will be requested to give a quote regarding the work to be
undertaken for this project. The cost must be VAT inclusive and should be
quoted in South African rand.
8.2

Costing shall be aligned with the project activities/ project phases.

Financial proposal shall be separate from the technical proposal
Previously Disadvantaged Individuals (PDI’s)

Provisions of the Preferential Procurement Policy Framework Act (PPPFA)
will apply.
8.3
Qualifications

Project team members’ Qualifications : Chartered Accountant, Post Graduate
qualification in Corporate or company Law, Post graduate degree in
Business administration, Industry audit related qualification

The team should have a combined experience of a minimum of four years in
the following areas: auditing, research, compliance, corporate law. Proven
track record by the service provider of assessing companies’ compliance
with their respective Charter requirements for a minimum of 2 years.
8.4
Company Experience

Companies are required to provide proof that they have facilitated/ performed
similar project, accompanied by correspondence from references proving
that such was executed as well as their contactable references

Failure to submit the recommended letter for previous similar rendered
project(s), will be interpreted as a lack of requisite experience or credentials.
8.5
Team Leader and Members Experience

Team leader and members should have a minimum of 2 years financial
and/or BEE audit and experience and industry related expertise

CV’s should be attached on the technical proposal
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8.6
Project planning/Methodology
The service provider is expected to indicate the
9.

methodology to be utilised to execute project intermediate

a detailed project plan with final outputs and time frames/ milestones
EVALUATION CRITERIA LINKED TO NUMERIC VALUES

Table below will be applied in order to evaluate each bid

90/10 principle in terms of the Preferential Procurement Policy Framework Act
is applicable
Phase 1: Technical Evaluation
CRITERIA
WEIGHT
Qualifications of team members
10
Company Experience
15
Team Leader & Members Experience
15
Project Plan / Methodology
20
Phase 2: Price and Specific Goals
CRITERIA
WEIGHT
Project cost
30
Historically Disadvanged Individual [HDI]
10
People with no franchise prior to the 1993
constitution
5
Women equity
4
Disability
1
NB:
Only bidders who obtain at least 50% under technical evaluation will be
considered for further evaluation
10.
ENQUIRIES
10.1
Ms. Daisy Maraba
Tel: 012 444 4373
E-mail: daisy.maraba@energy.gov.za
10.2
Ms. Sibongile Monoto
Tel: 012 444 4371
E-mail: sibongile.monoto@energy.gov.za
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