Several changes to SOE Bill proposed

A NATIONAL Council Select Committee is proposing wide-ranging changes to the State-Owned Enterprises Bill in line with majority views expressed at public hearings two weeks ago.

Among these is that the Prime Minister should not head the envisaged SOE Governance Council and that Government should extend the list of enterprises covered by the bill to academic institutions and those registered purely through the Companies Act. The committee is also proposing that the bill should more clearly define what is meant by a “State-owned enterprise” and insert a section in the bill outlining the various categories of SOEs such as productive, service and economic enterprises.The proposed changes are currently up for debate in the National Council.The report was presented to the House last Thursday for further input and discussion on whether amendments should be proposed to the National Assembly.The committee is proposing that instead of heading the SOE governance council, the Prime Minister should play the role of ensuring that the bill is implemented as envisaged.The council, they say, should be accountable to the Prime Minister and in so doing, strengthen the role of the council.In its view, the Select Committee says that it is not the board of directors’ functions that need to be brought under control, but rather the supervisory ability of the portfolio Ministers and the inability of some boards to competently manage the affairs of SOEs.”It is a combination of these factors and others that have largely contributed to failed and embarrassing investments and the subsequent loss of public money to fictitious investment companies,” says the committee report.It agreed that an investment policy for each SOE and approved by the council should be prescribed in place of the stringent stipulations regarding investments currently in the bill.SOEs expressed the view that that the investment stipulations in the bill would be impractical and unworkable in reality.SOEs should be required to submit quarterly progress reports on investments to the portfolio minister, which must also be approved by the governance council, the committee suggests.In line with concerns from contributors at the hearing, the committee says the bill should not aim to dilute the functions of boards but should rather put measures in place that would ensure the appointment of competent, skilful, knowledgeable and suitably qualified people.These include advertising vacancies rather than them purely being appointed on the decision of the council to allow for broader choice and finding the most suitable candidate.All board members, even civil servants, should be paid for the services they render as SOE board members.The bill currently states that no civil servant also serving as a board member on an SOE would be paid for these duties.”Paying allowances to public servants would serve as an incentive for them to properly discharge their duties as board members,” the committee report says.The committee validated public concerns that the bill does not clearly delineate between the functions of the council and that of the board and that these needed to be more clearly spelled out in the law.As pointed out by some contributors at public hearings, the bill in its current form does not include parastatals such as the Government Institutions’ Pension Fund (GIPF), Unam and the Polytechnic from following the proposed law, nor the Bank of Namibia and the Offshore Development Company, of which Government is a 95 per cent shareholder.In its report the committee argues that these should be covered by the bill because they too receive State subsidies for their activities and hence have to be accountable in the same way as would the other 52 enterprises listed in the schedule of the bill.The committee is also proposing that the bill should more clearly define what is meant by a “State-owned enterprise” and insert a section in the bill outlining the various categories of SOEs such as productive, service and economic enterprises.The proposed changes are currently up for debate in the National Council.The report was presented to the House last Thursday for further input and discussion on whether amendments should be proposed to the National Assembly.The committee is proposing that instead of heading the SOE governance council, the Prime Minister should play the role of ensuring that the bill is implemented as envisaged.The council, they say, should be accountable to the Prime Minister and in so doing, strengthen the role of the council.In its view, the Select Committee says that it is not the board of directors’ functions that need to be brought under control, but rather the supervisory ability of the portfolio Ministers and the inability of some boards to competently manage the affairs of SOEs.”It is a combination of these factors and others that have largely contributed to failed and embarrassing investments and the subsequent loss of public money to fictitious investment companies,” says the committee report.It agreed that an investment policy for each SOE and approved by the council should be prescribed in place of the stringent stipulations regarding investments currently in the bill.SOEs expressed the view that that the investment stipulations in the bill would be impractical and unworkable in reality.SOEs should be required to submit quarterly progress reports on investments to the portfolio minister, which must also be approved by the governance council, the committee suggests.In line with concerns from contributors at the hearing, the committee says the bill should not aim to dilute the functions of boards but should rather put measures in place that would ensure the appointment of competent, skilful, knowledgeable and suitably qualified people.These include advertising vacancies rather than them purely being appointed on the decision of the council to allow for broader choice and finding the most suitable candidate.All board members, even civil servants, should be paid for the services they render as SOE board members.The bill currently states that no civil servant also serving as a board member on an SOE would be paid for these duties.”Paying allowances to public servants would serve as an incentive for them to properly discharge their duties as board members,” the committee report says.The committee validated public concerns that the bill does not clearly delineate between the functions of the council and that of the board and that these needed to be more clearly spelled out in the law.As pointed out by some contributors at public hearings, the bill in its current form does not include parastatals such as the Government Institutions’ Pension Fund (GIPF), Unam and the Polytechnic from following the proposed law, nor the Bank of Namibia and the Offshore Development Company, of which Government is a 95 per cent shareholder.In its report the committee argues that these should be covered by the bill because they too receive State subsidies for their activities and hence have to be accountable in the same way as would the other 52 enterprises listed in the schedule of the bill.