Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 47
interpretation of tax laws and regulations will be
addressed in a transparent and constructive manner.
undivided working interest in certain associated
midstream assets. The transaction was subject to a
number of conditions precedent. The transaction closed
on 29 July 2021 when the final condition precedent was
met.
For a description of the legal review of the
NERSA maximum pricing and transmission tariffs refer
to “Item 3.D—Risk factors—Legislation in South
Africa petroleum and energy activities may have an
adverse impact on our business, operating results, cash
flows and financial condition—Regulation of pipeline
gas activities in South Africa—The Gas Act”.
Refer to “Item 4.D—Property, plants and
equipment—Gas” for detail regarding key contracts in
Mozambique.
Legal proceedings and other contingencies
A judgement by the South African
Constitutional Court in 2011 confirmed the right of
employees in the mining industry who contracted
certain occupational diseases to claim damages from
their employers. Similar cases have also been
threatened against participants in the coal sector of the
mining industry. As a result of the Constitutional Court
judgement referred to above, Sasol Mining is currently
the defendant in three separate litigation matters. The
first matter was instituted by 22 claimants who allege
that they contracted coal dust related lung diseases,
including pneumoconiosis, while in Sasol Mining’s
employment. The plaintiffs allege that they were
exposed to harmful quantities of coal dust while
working underground for Sasol Mining and that the
company failed to comply with various sections of the
Mine Health and Safety Act, 29 of 1996; failed to
comply with various regulations issued in terms
thereof; and failed to take effective measures to reduce
the exposure of mine workers to coal dust. The
plaintiffs allege that all of the above increased the risk
for workers to contract coal dust related lung diseases.
From time to time, Sasol companies are
involved in litigation, tax and similar proceedings in the
normal course of business. Although the outcome of
these claims and disputes cannot be predicted with
certainty, a detailed assessment is performed on each
matter, and a provision is recognised, or contingent
liability disclosed, where appropriate in terms of IFRS.
As reported previously, the South African
Revenue Service (SARS) conducted an audit over a
number of years on SFI which performs an offshore
treasury function for Sasol. The audit culminated in the
issuance of revised assessments in respect of the 2002
to 2012 tax years and the dispute relates to the place of
effective management of SFI. SFI has co-operated fully
with SARS during the course of the audit relating to
these assessments. The potential tax exposure is R2,58
billion (including interest and penalties as at 30
June 2021), which is disclosed as a contingent liability.
SFI lodged an objection and appeal in the Tax
Court against the revised assessments. SFI and SARS
have come to a mutual agreement that the appeal and
related Tax Court processes will be held in abeyance
pending the outcome of the judicial review application
noted below.
The first lawsuit is not a class action but rather
22 individual cases, each of which will be judged on its
own merits. Two plaintiffs have since passed away and
their claims have been withdrawn. The remaining 20
plaintiffs seek compensation for damages relating to
past and future medical costs and loss of income
amounting to R67,7 million in total. Sasol Mining is
defending the claims.
Sasol has launched two judicial review
applications against the SARS decision to register SFI
as a South African taxpayer and certain related
elements of the revised assessments over which the Tax
Court does not have jurisdiction. Final pleadings were
exchanged between the parties in the first review
application and Sasol is expediting the allocation of a
court date for the hearing of this application. In the
second judicial review, the required pleadings are being
exchanged between the parties, after which a court date
for the hearing of this application will also be allocated.
Insofar as the trial has not commenced yet and
a response from the plaintiffs to a request for further
particulars is still being awaited, it is not possible at this
stage to make an estimate of the likelihood that the
plaintiffs will succeed with their claim and if
successful, what the quantum of damages would be that
the court will award. Therefore, no provision has been
raised at 30 June 2021.
Sasol is committed to comply with tax laws
and any disputes with tax authorities on the
In addition to the above, during 2009, certain
employees in Sasol Mining were charged with
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