The Engen refinery, located south of Durban, KZN.
The Malaysian-owned Engen Petroleum group has threatened to pull out of its ageing and controversial Durban fuel refinery after coming under strong pressure from government officials to sort out long-standing air pollution and safety problems.
Miffed by the high-profile visit earlier this week by senior government officials to serve a legal notice on refinery managers to clean up or face prosecution, Engen CEO Ahmad Nazim Salleh has taken exception to the attempts to “portray Engen in a bad light” by eThekwini mayor James Nxumalo and MEC for Environmental Affairs Lydia Johnson.
“If this persists it may well undermine all our efforts to earn the right to operate the refinery… Do we continue to with the refinery as our business?” he wrote in an internal communication to Engen officials on Thursday.
“This is an option our majority shareholders have been debating for a while and is receiving careful consideration.
Salleh’s memo was sparked by the highly publicised government visit to the refinery on Tuesday by Nxumalo, Johnson and the chairman of the provincial legislature’s portfolio committee on environmental affairs, Omie Singh.
They arrived at the 57-year-old refinery in Tara Road, on the Bluff, to deliver to refinery manager Kamal Bahrin Ahmad a pre-directive legal warning notice that described the refinery as “an immediate danger” to the environment and people of neighbouring residential areas in South Durban.
The notice was issued in the wake of a major fire at the refinery about three weeks ago, the latest in a series of fires, explosions and leaks.
The petrol refinery was established in 1954 by the American-owned Standard Vacuum Company and later operated by the Mobil group.
It imports or processes about 30 percent of the country’s liquid fuel requirements.
In his communication to senior staffers, Salleh said it seemed that Engen was faced with two options – “business as usual” or “business unusual”.
The latter option included a reappraisal of Engen’s involvement in the Durban refinery.
Repeated attempts to contact Salleh and senior Engen spokesmen in Cape Town for comment were unsuccessful last night.
However, according to a leaked version of Salleh’s communication to staff, Engen executives appear to have been outraged by recent media coverage of the provincial government’s attempts to hold Engen to account for the fires and pollution at the refinery in Tara Road, Wentworth.
“The KZN MEC for Environmental Affairs, Lydia Johnson, came to the refinery on the pretext of a low-key, fact-finding mission, but instead arrived with a 20-strong delegation that included the media,” it read.
“She used this forum to issue Engen with an ultimatum in the form of a letter demanding certain preventive and environmental measures..
“For the record, I would like to to state that I take strong exception to the way the way the MEC handled the situation as the demands were ill-informed and appeared to be based on incorrect information.
“Furthermore, the preventive safety and the environmental measures contained in the letter have already largely been addressed.
“We have invested millions to reduce our environmental footprint and have undertaken numerous initiatives to reduce our impact on the community, as well as provide funds for the betterment of the people and neighbourhood.”
Senior officials in Johnson’s department said last night that they had not seen the letter and could not comment on it.
However, local community representatives were not impressed by Salleh’s assurances.
Bobby Peek, the director of the groundWork environmental justice group and who grew up next to the refinery and developed asthma as a youngster, said it seemed that Engen was “feeling the heat” but was unlikely to shut down.
“This could be part of a ploy to get the department to back off – or they are thinking of selling off the refinery to a BEE group after running the refinery into the ground and extracting whatever profit they can,” he said.
“My feeling is that they won’t close down the refinery. Most likely they want to sell it off.”
Alternatively, the fuel company intended to play “hardball” by continuing business as usual, within the minimum requirements of the country’s environmental and safety laws.
Peer-reviewed medical studies by local and international medical researchers have shown that the incidence of asthma in youngsters at the nearby Settlers Primary School in Merebank is among the highest in the international medical literature. – The Mercury