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Organization Name

BP Plc

Case Story Title

Right to Development; BP Facilitates Black Economic Empowerment

Case Story Date

2004/03/11

Issues Addressed

  • Principle 1 - Businesses should support and respect the protection of internationally proclaimed human rights

Case Story Category

Partnership Project

Countries of Impact

South Africa

Case Description

BP believes that by doing business that it can best support and respect the protection of human rights within its sphere of influence. Doing good business promotes the creation of the conditions for societies to thrive and human rights enjoyed and protected.

In South Africa, where BP operates in the downstream market, the Government had an aspiration that within ten years, ownership, presence, management and/or control of oil companies operating in the country would reflect a 25% representation of those who had been disadvantaged by apartheid.

Out of many potential partners, BP selected the Mineworkers' Investment Company and the Women's Development Bank Group as preferred business partners in a major external empowerment initiative.

In addition to holding equity, MIC, WDBIH and BP would together form an oil marketing joint venture to market branded fuels and lubricants in specific industrial and commercial sectors. This agreement was designed to create a sustainable and mutually beneficial partnership.

The deal, which was both strategic and operational in nature, was deliberately an agreement requiring participation. It did not require external finance and all parties brought their own money to the table. Nobody was in debt as a result of it. This ensured that the value created from the partnership would flow into as many hands as possible. BP also ensured that its new partners would be insulated from the volatility of the oil business. This was important to ensure sustainability and provide a strong foundation for growth.The empowerment initiative has resulted in the creation of a participatory partnership between business and community geared to genuine and sustainable empowerment.

The deal empowered many previously disadvantaged South Africans, who now have a real stake in business. With 3 board seats and 25% shareholder voting rights the partners enjoy significant influence and control at board level. The marketing joint venture allowed the partners to become operationally involved in business and benefit through skills transfer.

BP's Economic Empowerment strategy was to develop empowerment opportunities at all levels of the organisation. Apart from an equity stake in BPSA, it also provided the partners with strategic influence over transformation initiatives within the company.

Sound business considerations have created opportunities for communities in both rural and urban South Africa to realise tangible benefits and to thrive.

The returns are performance based and the benefit is directed to job creation, education and poverty alleviation. The deal added significant value to BP's businesses in South Africa.

Both business and society benefited. Development and human rights were mutually supported and reinforced. It contributed to the eradication of racial discrimination and poverty, to the promotion of full and productive employment, and to the fostering of social integration in order to achieve a stable, safe and just society for all in South Africa.

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