Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 36
In Sasol Mining, the wage negotiations for
2022 have recently resumed with trade unions having
submitted demands for 15% wage increments. Should
there be no settlement in this regard, one or more trade
unions bargaining within Sasol Mining may declare a
dispute at the Commission for Conciliation, Mediation
and Arbitration (CCMA). Inability to reach any
resolution pertaining to such dispute could lead to the
CCMA issuing a dispute non-resolution certificate
which will entitle the relevant trade union to embark on
a strike action at Sasol Mining.
based Black Economic Empowerment Act, 53 of 2003
(B-BBEE Act). See “Item 4.B—Empowerment of
historically disadvantaged South Africans”.
Value creation, if any, to the majority of the
Khanyisa shareholders at the conclusion of the
transaction is exposed to the inherent business risks of
SSA during the empowerment period, including any
adverse impact from the COVID-19 pandemic. The
value created is determined with reference to the extent
the fair value of SSA and any dividends declared by
SSA exceed any outstanding vendor financing related
to these Khanyisa shareholders at the end of the
transaction period. Any adverse impact on dividend
distributions to the Khanyisa shareholders or on the
valuation of the SSA business on conclusion of the
transaction will reduce the ultimate value created.
The wage negotiations process at Mozambique
CPF Plant is imminent. Similarly, the inability to reach
a settlement could potentially give rise to strike action
by the relevant trade union.
In view of all the aforesaid, although we have
positive relationships with our employees and trade
union partners, labour disruptions could occur in the
future and this may have a bearing on our labour costs
which could increase in the future.
iii. Disruptive industrial action
The majority of our employees worldwide
belong to trade unions. These employees comprise
mainly of general workers, artisans and technical
operators. While the Sasol employee relations
landscape remains stable, amid the global economic
turmoil as well as COVID-19, the South African labour
market remains volatile and can be characterised by
major industrial action in key sectors of the economy
especially during wage negotiations.
(b) Fiscal and monetary policies
Macroeconomic factors, such as inflation and
interest rates, could affect our ability to contain costs
and/or ensure cost-effective debt financing in the
countries in which we operate.
In SSA, the wage negotiations process in
respect of the Industrial Chemicals and Petroleum
sectors resumed in May 2021 under the auspices of the
National Bargaining Council for Chemicals Industry
(NBCCI) with trade unions in both sectors demanding
15% wage increments for 2022. The employer
associations and trade unions in both sectors have not
been able to reach any settlement on their own and the
wage negotiations processes have now progressed to
conciliation stages in terms of which the NBCCI has
assigned facilitators to assist with potential settlements.
Should the conciliation processes fail, the facilitators
will respectively issue dispute non-resolution
certificates which will entitle the trade unions to
embark in strike actions in respect of both industries or
sectors.
Our sustainability and competitiveness are
influenced by our ability to optimise our cost base. As
we are unable to control the price at which our products
are sold, an increase in inflation in countries in which
we operate may result in significantly higher future
operational costs.
South African consumer price inflation
averaged 3,5% in 2021, compared to 3,7% in 2020.
Recent inflation trends were affected mainly by
contained inflation expectations, rand-denominated oil
price movements and generally weak economic
conditions. With inflation remaining around the lowerend of the South African central bank’s 3-6% inflation
target range during the year, combined with COVID19-induced economic challenges, the South African
Reserve Bank maintained the policy interest rate at a
relatively low 3,50% during 2021.
Considering that this process entails the
assessment of the unaffordability of the wage increases
to Sasol, we may be ordered to comply in the event that
the Exception Panel of the NBCCI arrives at a different
conclusion.
South Africa’s economic outlook remains
challenging. Strained government finances, declining
real per capita gross domestic product, civil discontent,
COVID-19-related pressures, slow vaccine roll-out,
electricity supply constraints, policy uncertainty, low
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