Namibian State-Owned Enterprises (SOEs) are facing further scrutiny after Public Enterprises’ (PE) minister Leon Jooste expressed his shock at the poor quality of governance in most PEs.
Speaking in Parliament last week, the Minister claimed that some parastatals take advantage of Government funding by holding more than 20 meetings per annum, which clearly exposes the failure of the entity.
He added that PE’s holding too many board meetings also expose the failure of corporate governance, and the blurred separation between the fiduciary duties of the board and the executive functions of the management teams.
His remarks come just months after Jooste condemned the practice of suspending SOEs’ Chief Executive Officers (CEOs). In the last few years, there have been several suspensions at a number of SOEs. Former Managing Director of Air Namibia, Theo Namases, was suspended by the national airline just months after the suspension of the General Manager of Operations, Jonas Sheelongo amidst financial losses at the company.
Earlier this year, the Namibian power utility Nampower suspended its managing director Paulinus Shilamba over alleged tender irregularities.
Bob Kandetu, who served as the Namibian Broadcasting Corporation (NBC)’s Director- General, was fired in 2008 following internal professional issues, which included the controversy over the appearance of an opposition party flag after the former president’s national address.
Maria NangoloRukuro, the former CEO of the Namibia Training Authority (NTA), was also fired due to several allegations of fraud, dishonesty, conflict of interest and failure to declare a perceived conflict of interest to the NTA board, amongst others. Conversely, the institution had to shamefully announce that it had not found any evidence against her.
“My expectation is that by us addressing the various non-compliance issues, we will expose a number of financial and operational deficiencies, which once rectified, should yield immediate results,” stressed Jooste.
He added that copies of existing board remuneration policies should be submitted to his office, and in case such policies do not exist, the formulation of such policies should be implemented hastily.
Section 24(3) of the Public Enterprises’ Act indicates that a chief executive officer who refuses or fails to furnish information requested by the Minister, or furnishes information which is false or misleading, knowing that it is false or misleading, commits an offense, and is liable on conviction to a fine not exceeding N$20 000, or to imprisonment for a period not exceeding 2 years, or to both such fine and such imprisonment.
“It should not be necessary for the board of a well-managed PE (or any company/entity for that matter) to meet more than four times per annum. I have, therefore, prepared letters to all chairpersons of PEs to request their CEOs to provide my office with a detailed total ‘cost-tocompany’ of the Boards of PEs,” Jooste said in his Ministerial statement.
The purpose of the ministerial statement is to provide information on the public enterprises, and Ministry’s first hail of remedial actions to address the serious noncompliance of a number of PEs.
“My previous attempts to gather other information from PEs was a rather arduous and painful exercise, and I want to declare publicly before Parliament that I will not hesitate to invoke the provisions of Section 24, when forced to do so. My desire and expectation is that this will not be necessary, and that we will be able to reach a stable situation with all PEs complying with the provisions of the legislation and all directives when issued without any undue conflict,” he stated.
Jooste furthermore indicated that the critical requirement of PEs to submit business and financial plans at least 90 days before the commencement of the next financial year should be adhered to. He said the inability of PEs to submit annual reports after every financial year raises suspicion towards the entity, and what they are indeed hiding.
“There is no reason why PEs should not conform to the provisions of Section 26 of the Act, which states that the board of a public enterprise must as soon as possible, but in any case not later than six months after the end of each financial year of the public enterprise, submit an annual report on the operations of the public enterprise,” added Jooste.
Performance agreements with individual board members as per Section 18 will indicate that the PE Minister must, within one month of appointing a person as a member of a board, enter into a performance agreement with such member.
“I am by nature someone who prefers to avoid confrontation, and it has always been my intention to cultivate conducive relationships between the Ministry of Public Enterprises (MOPE) and our portfolio of PEs. I have, however, taken the oath to uphold and defend the laws of the Republic of Namibia to the best of my ability, and request the chief executive officer of a State-owned enterprise, or a person acting in that capacity, to furnish to the Minister any information or documents required by the Minister,” he reiterated.
On Thursday 24 September 2015, the amended Public Enterprises’ Governance Act (PEGA) was finally gazetted. Jooste motivated that the amended legislation will be a temporary legal solution to enable the Ministry of Public Enterprises to become functional. He added that in spite of the temporary nature of this legislation, they will nevertheless be implementing it in its current form.
Meanwhile, former Motor-Vehicle Accident Fund (MVA) CEO Jerry Muadinohamba has announced that he will not be renewing his contract in 2014 with the Fund to pursue other interests.
He was also known as one of the country’s best parastatal CEO’s. Earlier last year, Namibian Ports’ Authority (NamPort) CEO Bisey Uirab was also recognized by former President Hifikepunye Pohamba as an exemplary leader. Meanwhile, current acting CEO of Transnamib, Hippy Tjivikua, was in agreement with the Minister.
“The minister’s words are very fair, and we should support strong governance from our ministry. It is very clear that we have witnessed many cases of poor governance from SOEs lately”, he reasoned.
On the issue of board members having over 20 meetings per year, he was non-committal. “I don’t know which institutions the minister was referring to specifically, but boards are supposed to meet once quarterly. However, in matters of urgency or crisis management, it may be required to meet more than that. There should, nonetheless, sufficient reasons be given to justify why they had to meet those many times”, he said.
When reached for comment, suspended Transnamib CEO Sara Naanda said she was not at liberty to comment as she was still serving her suspension. Similarly, Shilamba told The Villager that commenting on the Amendment Bill will ‘complicate things’ for him.