Divisions could scuttle parastatal reform, says MP

THERE seems to have been very little or no consultation between the promoters of the State-Owned Enterprises Bill and existing parastatals, and this has created the impression of distrust between the two parties, a Member of Parliament said yesterday.

In a critical analysis on SOE reform, MP Johan de Waal said it was vital that all stakeholders from parastatals, the private sector, trade unions and civil society be involved in consultation before the bill became law. The bill was the topic of discussion at a forum held by the Namibia Economic Society (NES) in Windhoek.De Waal said ‘distrust’ between the parastatals and promoters of the Bill would definitely create antagonism and would demoralise workers.He said no meaningful reform would occur if it started with confrontation.He said Cabinet was divided on the future of the parastatals, and if Cabinet could not sort out its differences, the State Owned Enterprises Governance Council – which would be established in terms of the bill – would keep itself busy with cosmetic changes and no real reform would be implemented.”It is doubtful whether the members of the Governance Council will have the time and energy to really apply their minds to the problems of parastatals.They are after all Ministers who have their own portfolios to worry about.”De Waal highlighted what he said were the shortcomings of the SOE Bill, describing the new chain of command that would be established by the bill as cumbersome and inevitably ineffective.The Bill stipulates that the CEO of a parastatal would have to report to its Board of Directors, which in turn must report to the portfolio Minister, who reports to the Governance Council, which reports to Cabinet, which finally reports to Parliament.De Waal said it would be problematic to do business profitably in such a scenario.He proposed that the bill be “put on ice” until a united team was built that would be able to successfully reform parastatals in the interest of all Namibians.Defending the bill, the Chairman of the National Council’s select committee on the Bill, Jhonny Hakaye, said people were unhappy with the way taxpayer’s money was squandered by parastatals, and the bill sought to address this.He said the bill did not seek to interfere in the matters of SOEs or to scare away investors, but to clean up the image of parastatals.The Namibian representative of the Friedrich Ebert Foundation, Hubert Schillinger, said the three options for SOE reform were privatisation, public-private partnerships and enterprise reform.He presented an international perspective on a framework of reform that had worked for developed countries, saying it involved assessing sector performance, formulating a government strategy on reform, selecting reform options, revising the legal structure of SOEs and evaluating organisational and managerial performance.The bill was the topic of discussion at a forum held by the Namibia Economic Society (NES) in Windhoek.De Waal said ‘distrust’ between the parastatals and promoters of the Bill would definitely create antagonism and would demoralise workers.He said no meaningful reform would occur if it started with confrontation.He said Cabinet was divided on the future of the parastatals, and if Cabinet could not sort out its differences, the State Owned Enterprises Governance Council – which would be established in terms of the bill – would keep itself busy with cosmetic changes and no real reform would be implemented.”It is doubtful whether the members of the Governance Council will have the time and energy to really apply their minds to the problems of parastatals.They are after all Ministers who have their own portfolios to worry about.”De Waal highlighted what he said were the shortcomings of the SOE Bill, describing the new chain of command that would be established by the bill as cumbersome and inevitably ineffective.The Bill stipulates that the CEO of a parastatal would have to report to its Board of Directors, which in turn must report to the portfolio Minister, who reports to the Governance Council, which reports to Cabinet, which finally reports to Parliament.De Waal said it would be problematic to do business profitably in such a scenario.He proposed that the bill be “put on ice” until a united team was built that would be able to successfully reform parastatals in the interest of all Namibians.Defending the bill, the Chairman of the National Council’s select committee on the Bill, Jhonny Hakaye, said people were unhappy with the way taxpayer’s money was squandered by parastatals, and the bill sought to address this.He said the bill did not seek to interfere in the matters of SOEs or to scare away investors, but to clean up the image of parastatals.The Namibian representative of the Friedrich Ebert Foundation, Hubert Schillinger, said the three options for SOE reform were privatisation, public-private partnerships and enterprise reform.He presented an international perspective on a framework of reform that had worked for developed countries, saying it involved assessing sector performance, formulating a government strategy on reform, selecting reform options, revising the legal structure of SOEs and evaluating organisational and managerial performance.