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Each risk is explained in relation to why it is material to Sasol, and how we are managing it. 

Risk of increasing portfolio exposure to high-risk countries. This covers a broad range of risks from those related to human rights to the availability of reliable utilities and infrastructure. 

Not succeeding with the engineering, construction and commissioning of new plants. 

Failure to deliver timeously on cultural change initiatives and transformation in South Africa. 

Non-compliance with applicable laws, regulations and standards. 

## Context: 

Sasol’s growth ambitions depend mainly on the opportunity to commercialise its GTL and CTL technologies across new frontiers. Most of the world’s available gas and coal reserves are in developing countries, often in remote and underdeveloped locations. 

## Mitigation: 

Sasol follows strict procedures for measuring country risks. We use our carefully formulated business development and implementation model, the level of equity participation through joint ventures as well as information from reputable rating agencies to assess country risk on a regular basis. Wherever it operates, Sasol is guided by its values and code of ethics. We believe in business and social partnerships, based on our South African experience. 

## Context: 

Sasol’s growth ambitions include a number of large projects that require significant technical skills, as well as capital equipment and raw materials. The recession has led to some easing in the market for construction talent, but critical skills needed to execute projects are still relatively scarce, putting pressure on the cost of projects. Additionally, the prices of many key inputs, like steel, remain high. 

## Mitigation: 

Sasol has a comprehensive plan to access, train and retain appropriate skills. We are broadening our supply base, building relationships with new manufacturers of equipment in countries like India and China. We regularly review international benchmark findings on project management and incorporate into practice the learning from previous projects. We work to continuously optimise project design. 

## Context: 

To sustain Sasol’s business, the group understands the importance of creating a high-performance, ethical, inclusive culture for all its employees. In this way we will be able to attract and retain the skills we need. South Africa has various laws in place to meet the country’s transformation targets, and which are required to obtain various licences, permits and mineral rights. Failure to meet these may have material consequences for Sasol’s reputation, licence to trade and ability to attract and retain skills. 

## Mitigation: 

Five processes underpin Sasol’s success in delivering on its goal to develop the company’s culture and meet its targets in South Africa for transformation. These are Values-driven Leadership, talent management, employment equity, diversity management and compliance with the broad-based black economic empowerment (BEE) scorecard. The Sasol BEE office coordinates activities to optimise Sasol’s compliance with transformation requirements. The Sasol Inzalo BEE equity ownership transaction was concluded in 2008, and our BEE focus also includes enterprise development to support sustainable small businesses. 

## Context: 

Authorities globally are intensifying their efforts to identify and prosecute conduct that is in violation of laws. In particular, they are focusing on anti-competitive behaviour, which can lead to fi nes, civil claims and damages awards. Various jurisdictions have specialised legislation aimed at combating corruption and companies found guilty of contraventions face fines and damage to their reputations. Tax laws are becoming increasingly complex, as are sanctions against certain jurisdictions. 

## Mitigation: 

A group legal compliance committee has been established and additional legal compliance employees have been recruited. Regular legal compliance risk assessment workshops are held throughout the group and specific compliance programmes are implemented. These include training in high-risk legal compliance areas such as competition and anti-corruption. Sasol is setting up a public policy and regulatory affairs department to focus on finding solutions to the key policy and regulatory challenges the group faces. 

