Within our political landscape SOEs have become synonymous with political appointments, tools for the dispensing of political patronage, lack of good Corporate Governance and deficiency of effective mechanisms to monitor and evaluate the functioning their performance.
While no one would dispute that SOEs play an important role in the economic, infrastructure and social fabric of many countries. It is important that proper legislative and monitoring protocols be rigorously adhered to in order that these organisations provide the benefit that they were created to do and not become a burden on the State.
Given the current uncertain economic climate, Disclosure Today advocates that the time is right for the Government to not only re-examine our corporate governance structures as they relate to the state sector, but to conduct a comprehensive and holistic evaluation of our state sector of which corporate governance structures would be but one component.
To this end Disclosure Today offers the following recommendations which we believe can have a vital impact on the operations of SOEs going forward:
- The implementation of the Public Procurement and Disposal of Public Property Act No. 1 2015 (as amended). The legislation creates a more accountable framework for public contracting decision-making.
- The passage and implementation of Campaign Finance Legislation. Public trust in our institutions is seriously undermined by reports of known party financiers receiving the largess of the state. While we agree every corporate citizen has a right to tender and be awarded contracts by an SOE, what we would not want are contractors/suppliers being preferred on the basis of their political allegiances and financial contribution. Together with the procurement legislation, proper Campaign Finance Legislation would allow for party contributors to be known and the public would be in a better position to evaluate the transparency of the process used.
- The passage and implementation of comprehensive Whistle-Blower Legislation. Whilst whistle-blower protection provisions exist in the Integrity in Public Life Act 2010 and the yet to be implemented Public Procurement & Disposal of Property Act 2015, their scope of protection is limited in that a system for the provision of compensation and reliefs for the whistle-blower is not provided. This continues to operate as a barrier to persons knowledgeable of wrongdoing to speak up in the public interest. Without a proper legislative framework to offer a robust system for the protection of these individuals, there may be reluctance to come forward to expose the wrong doing.
- Transparent and Participatory Board Appointment Process. The State exercises the ownership of SOEs on behalf of the citizens of Trinidad and Tobago. Our current system for State Board appointments is archaic and non-inclusive and has little public confidence in the appointees who invariable are seen to be persons with political party allegiances. Consideration should be given to a more open, transparent and participatory process for the appointments of State Boards.
- Open Board Meetings. Another aspect of promoting openness and transparency in the way that SOEs operate is via having their meeting open to the public. This is not a new phenomenon and has been utilized in several other jurisdictions such as the UK, Singapore, India and Kenya. It is therefore recommended that consideration be given to having Board meetings open to public scrutiny. This suggestion adopts an open governance approach as it allows citizens to scrutinize the activities of elected officials and public servants to ensure that they are acting in the public interest.
- The adoption of the Trinidad and Tobago Corporate Governance Code. Good corporate governance and ethical conduct are central to a more stable business environment and the role and contribution of the board of directors (in both the public and private sectors) in establishing ethical standards and good governance is critical. The full adopting of the Corporate Governance Code can lead to greater transparency and accountability and by extension improve the efficiency and delivery of service to the public by their organizations.
- Monitoring of SOEs
- At present SOEs are subject to the State Enterprise –Performance Manual and report directly to the Ministry of Finance Corporation Sole. However the question must be asked, if the proper systems for oversight of State enterprises were in place and properly followed, would it be necessary for the Prime Minister to be making the statements re the performance and usefulness of these organisations? Therefore it is recommended that a proper monitoring and evaluation framework for SOEs be properly implemented to allow not only for the Ministry of Finance but also for independent institutions such as the Auditor General and the Parliament through its committees to appropriately assess, remedy and/or sanction SOEs based on their performance.
Disclosure Today is a non-partisan, not-for-profit organization working to advance transparency and increase citizen capacity for responsible and effective civic engagement on all matters of public interest.
For more information please contact the following or visit our website www.disclosure.today