B-BBEE AND SASOL’S TRANSFORMATION JOURNEY

1 B-BBEE AND SASOL S TRANSFORMATION JOURNEYTHE OBJECTIVES OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT ( B-BBEE )What is the objective of B-BBEE ? B-BBEE is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfer the ownership, management and control of South Africa s financial and economic resources to the majority of its citizens. It seeks to ensure broader and meaningful participation in the economy by Black people to achieve sustainable development and prosperity. It does not aim to take wealth from one race group and give it to another. It is essentially an economic growth strategy, targeting the South African economy s weakest point: VALUE BETWEEN TIER 1 OF SASOL KHANYISA AND TIER 2 OF SASOL KHANYISAWhy are Tier 2 participants of Khanyisa receiving 5 times more value than Tier 1 participants?

2 The financing of the two Tiers of the Sasol Khanyisa transaction are very different. Tier 1 is a debt free share grant that matures over 3 years, because no debt is involved, participants will receive benefit at the end of the three year period. The value of Tier 1 benefit is dependent on what the values of the shares will be in 3 years, but we are certain that there will be value. Tier 2 of Sasol Khanyisa relies on Notional Vendor Funding provided by Sasol, which is similar in principle to a loan agreement. There is still a risk that if the performance of Sasol is severely hampered over the next ten years, for whatever reason, there is a chance that there will not be sufficient value in the shares to pay back the National Vendor Funding. You can therefore not compare the value of the two and it certainly is not correct to compare the value of R100 000 to the value of the loan of R500 LONGEVITY OF B-BBEE IN EMPOWERMENT OF GENERATIONS NOT IMPACTED BY APARTHEIDS hould B-BBEE not end now since it has been running for long enough to empower the generation impacted by Apartheid?

3 The impact of a generation s exclusion ripples into the generations that follow. The impact of Apartheid cannot be rectified as part of a once- off exercise, it requires an on-going commitment until such time that economic access is proportionately allocated to all South Africans. Progress has been made over the years in undoing the legacy of the past. However, we still have not reached a point where all South Africans have access to the same economic opportunities and the economy has not yet been transformed. B-BBEE is also an evolutionary process; legislation is continually updated to make sure that TRANSFORMATION is more effective. This has also meant that for us at Sasol, B-BBEE compliance is not only a business and social imperative, it is also a legal requirement which directly impacts our licence to KHANYISA AND ALIGNMENT TO SASOL VALUESI nzalo was initiated in 2008 and this transaction had key qualifying criteria for employees: Permanent South African employees in non-managerial positions; and Black Permanent South African employees in managerial positionsSasol Khanyisa, Sasol s new B-BBEE transaction which was announced in Sept 2017, has key qualifying criteria for employees : Eligible Inzalo employee participants still in service on 18 May 2018.

4 And Black permanent employeesFor those that are unable to participate in Sasol Khanyisa, Sasol offers many incentives and benefits as part of its Employee Value Proposition which are available to all race groups. DUPLICATION OF EXCLUSION PRINCIPLES SIMILAR TO THAT OF APARTHEIDWhy does B-BBEE favour Black, Indian and Coloured racial groups over others?In the decades before South Africa achieved democracy in 1994, the Apartheid government systematically excluded African, Indian and Coloured people from meaningful participation in the country s economy. Black Economic Empowerment (BEE) is a racially selective programme launched by the South African government to redress the inequalities brought about by the Apartheid system. It gives certain previously disadvantaged groups: Black, Coloured (including Chinese), and Indian South African citizens (or those who were naturalised before 1994), economic privileges previously not available to them under B-BBEE reverse racism?

5 B-BBEE is not reverse racism; its objective is to accelerate access to the economy for those who were previously excluded from this; to ensure a sustainable economy for all South Africans into the future. In 1994, the economy was, to a large extent, in the hands of the minority group being White citizens, which constituted 11% of the population at the time. It is not sustainable to exclude, or partially exclude, 90% of the population from contributing to the economic success of South Africa. Hence, we as a nation need to put in place measures to accelerate the participation of South Africans who were placed on the back foot so that all South African citizens can be equally responsible for the success of our country s economic growth and progress.

6 In addition, the Labour Relations Act makes employment equity the only legal form of discrimination in South Africa.