In SA at the time...
Struggle against apartheid
The anti-apartheid struggle was fought on many fronts, including the deployment of economic sanctions against the apartheid government. Sanctions against South Africa escalated during the 1980s, following the launch of the Nationalist Government's 'Total Onslaught' campaign which sought to crush all opposition to apartheid. A number of lobby groups and anti-apartheid organisations put pressure on multi-national companies and governments to disinvest from South Africa and apply trade boycotts.
The early 1990s was a period of massive change in South Africa. With the unbanning of liberation movements came the realisation that the political and economic climate of the country would change dramatically. Although this was a period of great optimism, it was tempered with uncertainty about how the politics of transition would play out.
The anti-apartheid struggle was fought on many fronts, including the deployment of economic sanctions against the apartheid government. Sanctions against South Africa escalated during the 1980s, following the launch of the Nationalist Government's 'Total Onslaught' campaign which sought to crush all opposition to apartheid. A number of lobby groups and anti-apartheid organisations put pressure on multi-national companies and governments to disinvest from South Africa and apply trade boycotts.
The early 1990s was a period of massive change in South Africa. With the unbanning of liberation movements came the realisation that the political and economic climate of the country would change dramatically. Although this was a period of great optimism, it was tempered with uncertainty about how the politics of transition would play out.
Foundation 1986
Like other large foreign firms in South Africa, Esso Oil, a US-based company, faced the question of how to disinvest from South Africa while still being able to contribute to South Africa's transformation and development. In dealing with this question, the company adopted an innovative approach to ensure that its assets remained viable business entities and at the same time used the proceeds from these assets to support socio-economic development in South Africa.
The transfer of Esso Oil's assets was structured as a commercial sale to a Jersey-based trust, which allowed this trust to assume ownership of Esso Oil's filling stations and its Durban-based chemicals plant (that later became known in South Africa as Zenex Oil). Esso advanced a loan to the trust, which provided it with the capital to make the purchase.
The expectation was that the profits from the filling stations would be used to repay the loan (both the capital and the interest) over a ten-year period. The sale was also subject to another very important condition: five per cent of the profits had to go to charitable projects that supported skills development and education. In January 1994 the trust paid the loan back two years ahead of schedule. Esso Oil's disinvestment from South Africa thus created the circumstances that gave birth to the Zenex Foundation.
Copyright © 2007 Zenex Foundation. All rights reserved.