The SDTF has created the Sudan Company Report that is intended to serve as a listing of all companies that they feel warrant extra scrutiny by investors on account of their business operations in Sudan. While there are over 500 companies with connections to Sudan that SDTF has reviewed, only a small subset appear to warrant further investigation.

We asked Jason what it meant for PetroSA to be included in this report.

In the Sudan Company Report, companies are placed into four categories. “Category 1” companies, the “Highest Offenders” are those companies with the most problematic operations in Sudan and are seen as likely candidates for divestment. PetroSA is only listed as a “category 4 Company”. What does this mean? Does this mean that PetroSA’s involvement in Sudan is not that problematic?

"Category 4 companies" are actually strongly problematic companies, but they just happen not to be publicly-traded. That means either they are private (which is the case for many Middle Eastern firms that are entirely owned by wealthy businesspersons from the Middle East) or completely owned by national governments (as is the case with PetroSA). So PetroSA should certainly be thought of as a problematic company, but one in which "everyday" investors can't invest (because PetroSA has no publicly-available stock to purchase).

We do need to remember, however, that PetroSA is currently simply exploring for oil in Sudan. They aren't actively extracting oil. This means they aren't technically generating revenue for Khartoum right now, but the minute they transition into extracting oil, they will be generating revenue.

The model of divestment that the Sudan Divestment Task Force propose calls for a brief period of shareholder engagement with the problematic companies before divestment is encouraged. If everyday South African’s can’t invest in PetroSA and can’t be shareholders, then who should South Africans be engaging with?


South African citizens should be engaging with either your government or with PetroSA itself. In this case, I would tie PetroSA directly to the government (since it really is an extension of the government) and the policies of the South African government (which have been variably supportive and mildly critical of Sudan at times- but certainly not critical enough). It is reasonable, therefore, to draw the conclusion that PetroSA's investment in Sudan represents a reason for South Africa to muzzle its criticism of Sudan, which it shouldn't. PetroSA provides an economic incentive for the South African government to stay neutral on Sudan. PetroSA's acquisition of its oil block in the north gives a degree of "comfort" to Khartoum that companies will continue to explore and extract oil in Sudan despite the Darfur genocide.

 
So what should we as South Africans be asking PetroSA to do?

Obviously, PetroSA could do many things:

A - Stop operations but maintain its oil block in Sudan
B - Sell its assets and leave Sudan
C - Form partnerships with other oil companies in Sudan to present a united front to Khartoum asking for a more robust security force to be allowed into Darfur, per the November Addis agreement.
D- Create a highly robust humanitarian program for Darfur

But even short of pulling out of the country or suspending operations, there are a dozen things that South Africans could be asking of PetroSA. For example:

- What exactly constitutes a substantial corporate philanthropy effort by PetroSA in Sudan?
- What human rights and security issues should PetroSA be addressing in Sudan? - How can PetroSA support the establishment of a robust peacekeeping force in Darfur without jeapordizing its oil rights in Sudan?


So, in your opinion, what is a simple message that we as South Africans should be giving to PetroSA or the South African government about PetroSA’s involvement in Sudan?

The ideal is for PetroSA to dialogue with South Africans about its Sudan operations and then, after that dialogue, be willing to change (including the possibility of pulling out of the country and/or suspending operations).

The simple message is:

PetroSA invests in Sudan's oil industry; the majority of Khartoum's revenue from this oil goes to Sudan's military; Sudan's military is prosecuting the Darfur genocide, considered the worst humanitarian crisis in the world today by the UN.

What is PetroSA going to do about this?