BY NED GAGAHE
Chairman of Solomon Islands Postal Corporation (SIPC) James Apaniai has expressed both support and concerns regarding the proposed consolidation of oversight for State-Owned Enterprises (SOEs) under the Minister of Finance.
Appearing before the Bills and Legislation Committee (BLC) on the State-Owned Enterprise (Amendment) Bill 2024 last week, Chairman Apaniai said that consolidating oversight under one minister could streamline governance but may limit essential international representation and expertise needed for effective operation of SOEs.
One of the objectives of the bill is to consolidate ownership monitoring responsibility for State Owned Enterprises (SOE) in the Minister of Finance alone.
Apaniai said that bringing the SOEs under one minister comes with advantages and disadvantages.
He said in the proposed legislation the disadvantage would be the minister of finance may not be well acquainted with the issues relating to the functions of the SOEs, for example SIPC and Solomon Islands Airport Corporation Limited (SIACL).
The Chairman said these two SOEs are not only governed by domestic rules or laws but international laws or rules as well.
“In the case of postal corporation, we deal with quite a number of complicated postal issues. And one of the issues that I note is that postal corporation, as well as SIACL, the airport corporation, they are not only governed by the rules of domestic laws, but they are also governed by international laws or rules.
“For example, SIPC comes under the jurisdiction of a UN organisation called Universal Postal Union. The SIACL comes under the rules formulated by another UN organisation called International Civil Aviation Organisation (ICAO) rules. They make rules regarding safety of passengers, safety for airports, security for airports, and all that.”
Apaniai said in order for a minister to properly direct an organisation, he has to be familiar with those rules as well and that is one of the drawbacks identified if these corporations be placed under the ministry of finance.
“The ministry of finance is basically responsible for the financial matters of the nation.
“But they will not be responsible for the rules made by UN organizations which apply to these SOEs.
“So that’s one disadvantage we find with them.”
The Chairman adds that related to that is, there are times when these UN organisations will call for general assembly meetings and the SOEs are obliged to attend those meetings.
He said the ministers responsible for the SOE normally lead those organisations.
“In fact, on most occasions, we want these ministers to accompany us. Because they have more weight when they speak in overseas meetings.
“So now we have this minister of finance will be responsible. He will be the responsible minister for these organisations. So, one disadvantage we find is that maybe they might not be accompanying us even if we invite them to these overseas meetings,” Apaniai said.
Meanwhile, the Chairman said that after reviewing the proposed amendments, they found few significant differences compared to the existing legislation.
“In summary, we are generally satisfied with the proposed changes. While there aren’t many variations between the current act and the amendment, the key shift is the consolidation of all SOEs under a single minister. This has its advantages, but there could also be potential drawbacks.”
