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'There is no more fascinating story today than how South Africans who were enemies now work together to confound the prophets of doom who expected the rivers of blood to flow' - Nelson Rolihlahla Mandela

Embracing the transformation vision of South Africa's national government, the Strategic Fuel Fund Association (SFF) has made enormous strides in catalysing and supporting social transformation by means of its employment equity process. SFF's transformation from 1997 to 2001 is a positive success story of pioneering of which both the organisation and the government can be proud. Doors have been opened and where future prospects were once bleak, the worlds of staff from previously disadvantaged groups have transformed through opportunities, personal empowerment, and individual respect.

The Business of SFF

The Strategic Fuel Fund Association is part of the Central Energy Fund (CEF) group of companies which co-ordinates all the South African government's activities in the liquid fuels industry. Wholly owned by government, CEF is the holding company of government's interests in liquid fuels. These include a wide range of strategic businesses from Soekor and Mossgas operations to catalyst manufacturing by Syncat.

The main business activities of SFF are trading crude oil, leasing out spare storage ullage and managing the state's strategic crude oil stocks and government-to-government crude oil contracts. The organisation operates out of terminals in Saldanha, Milnerton and Ogies with the head office situated in Sandton, Johannesburg.

The SFF of the Past

Established in the 1970's, SFF was by its very nature a highly secretive organisation. Its mission was to procure and store strategic oil reserves for South Africa at a time when the country was subject to an international oil embargo as a result of its apartheid policies. This meant that oil was clandestinely sourced and, once brought into the country, stored and rigorously guarded by government. There was no limit to the stringent security measures in place.

The public had no knowledge of how South Africa managed to secure its essential oil reserves, let alone the existence of SFF. This furtive shroud was extended internally where the job functions of each member of staff were highly confidential, and known only to themselves and their superiors. Each compartment was completely watertight.

Other than security guards, company policy was to only employ whites. Even as times began to change in the early 1990's after the unbanning of the ANC and South Africa's move towards democracy, opportunities for promotion remained the privilege of white staff. The mainly coloured staff at the terminals understood, in no uncertain terms, that future prospects remained bleak and there was no room for aspiration. Belonging to a union was frowned upon and members were subject to subtle victimisation. The relationship with unions was anything but constructive or co-operative.

Many staff members felt that the company showed little concern for basic human dignity and a 'victim' syndrome developed in response to policies entrenching white privilege. Staff members were racially polarised and openly separated by a gulf of fear and mistrust. Dismissal for petty offences was rife.

Motivation among employees was low. Secrecy over job functions effectively excluded teamwork that, in turn, led to managerial levels being able to foster and accelerate personal agendas. In short, by the mid-1990's, SFF was completely in conflict with the changing external context - with very little prospect of alignment. The organisational climate was certainly not conducive to social transformation of any kind.

Transformation through Participation

Recognising the 'unenviable' likely future of SFF in the changing South African context, the human resources executive launched a number of initiatives aimed at social transformation, accompanied by a radically different approach to industrial relations at SFF. Using a vision of an 'inclusive and transparent' management approach as the trigger with emphasis on diversity, human dignity and sound industrial relations, SFF began to move towards formally establishing institutionalised employee participation structures in 1997. A series of sensitisation workshops were held and by 1998 senior management had realised that in the interests of a successful social transformation process, constructive industrial relations and sound human resources practices, they needed to create participatory governance structures involving staff and unions at all levels. This was the only avenue of reaching a 'transformed' SFF.

The Foundation for Sustainable Transformation

The first tangible outcome appeared when stakeholders jointly created the framework for their participatory initiative at a externally facilitated breakaway workshop during August 1998. A smaller working group thrashed out details over the next few months, and in January 1999 the Constitution of the 'SFF Main Forum' was adopted on a consensual basis with full support from management, unions and representatives of non-unionised employees.

In future, the Main Forum (a 'non-statutory' structure for institutionalised employee participation) would deal with all organisation-wide policies and practices that could affect SFF employees. Additionally, the Main Forum would also manage the disclosure of information. This formally marked the end of autocratic and paternalistic decision-making and tangibly represented the beginning of a new era of employee participation and constructive industrial relations at SFF.

Transparent, Legitimate Decision-Making

Externally facilitated by Change Management Facilitation and serviced by a Steering Committee in combination with a number of regional forums and Task Groups, the Main Forum is the most senior policy decision-making structure at SFF. Consensus at the Main Forum has the same status as a decision made by the Chief Executive Officer and is implemented accordingly. Representation at the Main Forum includes the Chief Executive Officer in person, all levels of management as well as the officials and shop stewards of all unions at SFF. Non-unionised staff members are represented as an interest group with democratically-elected representation of their choice.

The combination of structures at SFF provides for comprehensive employee participation on all matters that may affect them - from day-to-day interaction at shop floor level to joint decision-making on policies and transformational issues at corporate level.

A different approach to industrial relations, joint problem-solving and a greatly improved flow of information, communication and opinion voicing as a result of the various participatory structures, have spearheaded the social transformation drive at SFF. In addition to the 'usual' human resources-related policies, a number of policies and other measures specifically aimed at promoting employment equity and impacting on social transformation have been adopted at the Main Forum since its inception in August 1998.

A Transformed Company

Following extensive workshops with all employees, full consensus was achieved at the Main Forum on a target of 70% representation by previously disadvantaged groups (at all levels and in all departments) to be reached by the end of the year 2004. Full consensus was also achieved on SFF's Employment Equity Report and SFF became one of the very first (and very few) South African companies that submitted its Employment Equity Report to the Department of Labour on time in June 2000.

Against the background of the very specific history of SFF, perhaps one of the most prestigious accolades in formally benchmarking its industrial relations, employee participation, human resources and social transformation processes by mid-2002, is the fact that the target of 70% representation (at all levels and in all departments) was largely achieved by the beginning of the year 2002 already.

This is resounding evidence that SFF/CEF is indeed a glowing South African example of how transformation can be successfully achieved through effective employee participation.


The above case study is based on SFF's circumstances by mid-2002. It should be noted that SFF underwent major changes since then. At the instruction of the Minister of Mineral and Energy Affairs, SFF, Mossgas and Soekor were integrated into one new entity, namely PetroSA. SFF therefore ceased to exist in its original form by the end of 2002.

The parent company CEF however decided to continue with its employee participation process. The forum was redesigned and now provides for CEF's new circumstances.

By early 2006 91% of staff members were from the designated groups and more than 60% of employees were female - very different demographics in comparison to the 'old' SFF.

Kobus Opperman facilitated the conceptualisation and development of the employee participation process at SFF/CEF since inception to early 2006. This case study, based on CEF circumstances by early 2006, was developed for purposes of lecturing, communication and discussion, and is not intended as a critique of the circumstances at SFF/CEF.
Copyright 2014 Change Management Facilitation (Pty) Ltd & Conflict Dynamics cc. The authors assert all moral and intellectual rights. No part of this publication may be reproduced in any format - electronic, photocopied, or otherwise.

+27 (0) 82 880 5600 skype kobus.opperman www.facilitation.co.za cmt@iafrica.com