Mandatory petroleum stockholding proposed; Labour Court curbs broad restraints of trade

The Minister of Mineral and Petroleum Resources has published the Draft Strategic Petroleum Stocks Policy, 2026 (GG 54975, GN R. 7691) for public comment. The policy transitions South Africa from a voluntary to a mandatory stockholding regime. Licensed petroleum wholesalers and importers will be required to maintain 21 days of refined product cover (on a 70/30 crude-to-refined split), with monthly stock-level reporting to the Department. The state, through the newly established SANPC, must hold 60 days of net imports. A tiered emergency trigger mechanism empowers the Minister to declare fuel emergencies and release strategic stocks, including potential fuel rationing at the highest tier. Non-compliance attracts penalties under the National Energy Act, 2008. Strategic stocks must be replenished within 60 days and commercial stocks within 45 days of a drawdown. The policy also contemplates new storage infrastructure investment at Saldanha Bay, Durban/Heidelberg, and inland demand centres.

A senior employee in the water technology sector resigned to join a named competitor (Xylem). The employer sought to enforce a restraint of trade clause barring the employee from joining the competitor across Sub-Saharan Africa and several European countries. The employee offered voluntary protective undertakings covering non-solicitation, non-disclosure, and non-inducement, which the employer rejected without explanation.

The court held: The court found the geographic restraint — spanning Sub-Saharan Africa and European countries — unreasonably wide and declined to enforce the blanket restraint. It held that the employer failed to explain why the employee's undertakings were insufficient, rendering the rejection unreasonable. Following the Dot Activ approach, the court converted the employee's voluntary undertakings into a court order imposing targeted 12-month non-solicitation, non-disclosure, non-inducement, and product-separation obligations (1 July 2026 to 30 June 2027), while permitting the employee to take up employment with the competitor. Each party bore its own costs.

Legal impact: Develops restraint-of-trade jurisprudence by reinforcing that overly broad geographic restraints will be struck down as unreasonable, and that an employer's unexplained rejection of an employee's protective undertakings undermines the case for enforcement. Endorses the Dot Activ mechanism of converting undertakings into tailored court orders as sufficient employer protection. Employers relying on wide-ranging restraints should expect courts to scrutinise geographic scope and to require justification for rejecting narrower alternatives.