Man­ag­ing the tran­si­tion be­tween ad­min­is­tra­tions is more com­plex than it ap­pears. A Cab­i­net must be con­sti­tut­ed, and skillsets matched with the var­i­ous port­fo­lios to get the best fit. The cur­rent tran­si­tion has al­so in­volved the move­ment of de­part­ments be­tween min­istries, which cre­at­ed a few er­rors in the gazetting process.

 Gov­ern­ment pol­i­cy is ex­e­cut­ed through min­istries, statu­to­ry bod­ies/agen­cies and state en­ter­pris­es (SOEs) and falls un­der dif­fer­ent min­is­te­r­i­al port­fo­lios. These en­ti­ties are gov­erned by dif­fer­ent pieces of leg­is­la­tion. Statu­to­ry bod­ies such as PTSC, PATT etc are gov­erned by their own Act.

Civ­il Ser­vice Reg­u­la­tions gov­ern civ­il ser­vants. SOEs are gov­erned by the Com­pa­nies Act. Some SOEs are as­signed to min­istries and the over­sight of the min­is­ter.

The com­pli­ca­tion with SOEs is that the Com­pa­nies Act does not recog­nise the au­thor­i­ty or pow­er of the Min­is­ter. Di­rec­tors have a du­ty of care to the com­pa­ny and its share­hold­ers, not to the min­is­ter or min­istry to whom Cab­i­net over­sight is del­e­gat­ed. This cre­ates a le­gal co­nun­drum.

The con­fu­sion be­tween the Pub­lic Util­i­ties Min­is­ter and the TSTT board has brought to the fore the is­sue of min­is­te­r­i­al con­trol and over­sight, la­cu­nae that var­i­ous ad­min­is­tra­tions have ei­ther re­fused or “ne­glect­ed” to ad­dress. Nei­ther the Com­pa­nies Act nor the State Per­for­mance Man­u­al, the “guid­ance” man­u­al that ad­dress­es the re­la­tion­ship be­tween gov­ern­ment and SOE boards, gives any guid­ance on the mat­ter. How­ev­er, the con­ven­tion is that board mem­bers of­fer their res­ig­na­tion to be in­voked at the min­is­ter’s plea­sure.

While SOEs ex­ist for spe­cif­ic pur­pos­es, Cab­i­nets of­ten ex­pand these pur­pos­es to achieve po­lit­i­cal ob­jec­tives. Some­times these ini­tia­tives are gov­ern­ment-fund­ed and at oth­er times, com­pa­ny funds are used.

NGC’s ex­pen­di­ture on Train 1 cost hun­dreds of mil­lions and ex­posed NGC di­rec­tors to the pos­si­bil­i­ty that they could be sued in their per­son­al ca­pac­i­ty, as it could be ar­gued that such ex­pen­di­ture was not in the com­pa­ny’s in­ter­est. The same is true of de­vel­op­ing a waste­water plant.

The Com­pa­nies Act makes di­rec­tors re­spon­si­ble. If they fol­low Cab­i­net di­rec­tives and the com­pa­ny suf­fers a loss, they can be held li­able when ad­min­is­tra­tions change. The slew of civ­il cas­es against for­mer UDE­COTT, Petrotrin and ETECK  di­rec­tors ex­em­pli­fies this risk of rep­u­ta­tion­al and mon­e­tary loss.

The Com­pa­nies Act has been amend­ed to deal with is­sues of ben­e­fi­cial own­er­ship, but the is­sue of

min­is­te­r­i­al con­trol, over­sight, re­spon­si­bil­i­ty and li­a­bil­i­ty has nev­er been ad­dressed. This is a crit­i­cal omis­sion, and every ad­min­is­tra­tion has been aware of the la­cu­na in the law. This is not a triv­ial mat­ter.

Trans­fers to SOEs to ex­e­cute the Pub­lic Sec­tor In­vest­ment Pro­gramme amount to bil­lions of dol­lars cre­at­ing the op­por­tu­ni­ty for wastage and the abuse of pow­er.

The na­tion­al in­ter­est re­quires that SOEs have boards com­posed of com­pe­tent and trust­wor­thy in­di­vid­u­als who will pur­sue the na­tion­al in­ter­est. Board ap­point­ments are al­so a source of pa­tron­age or re­ward to gov­ern­ment sup­port­ers. Over 500 ap­point­ments will be re­quired. Some ap­pointees may not see their ap­point­ment as a mat­ter of na­tion­al ser­vice. The over­sight mech­a­nisms must be im­proved.

A whole­sale re­moval of boards may not be in the coun­try’s best in­ter­ests. If the new­ly ap­point­ed di­rec­tors are not in­dus­try ex­perts, they will need time to set­tle in and un­der­stand the in­di­vid­ual SOEs prob­lems and pri­or­i­ties. Valu­able time will be lost. Fur­ther, not all the pre­vi­ous ap­point­ments may have been po­lit­i­cal­ly mo­ti­vat­ed.

While the pri­or­i­ty should be viewed as get­ting on with the job of “gov­ern­ment” there should al­so be a recog­ni­tion that the sys­tem and the law need to be im­proved.