BY NED GAGAHE

Frank Wickham, Chairman of Solomon Airlines Limited (SAL), indicated that the company is possibly the lowest in terms of employee remuneration compared to other State-Owned Enterprises (SOEs).

Wickham made this revelation when he appeared before the Parliamentary Bills and Legislation Committee last week on the State-Owned Enterprise (Amendment) Bill 2024.

“We probably are the lowest remunerated of the SOEs, but if the standard is deemed to increase, we will be very happy,” the Chairman said.

SAL is one of the State-Owned Enterprises that presented its views on the proposed legislation before the Committee.

The State-Owned Enterprises (Amendment) Bill 2024 seeks to amend the State-Owned Enterprises Act 2007 in alignment with the Government’s SOE Ownership Policy 2018 and the National Gender Equality and Women’s Development Policy 2016-2020.

It aims to consolidate ownership monitoring under the Minister of Finance, clarify the process for SOEs to fulfill Community Service Obligations, strengthen publication requirements for documents tabled in Parliament, and introduce regulations for evaluating directors and electing board chairpersons and deputy chairpersons.

Commenting on the proposed amendment, Chairman Wickham noted that the change designates the Minister of Finance as the primary overseer of SOEs.

He suggested that previously, having two ministers involved allowed for shared responsibility—one focusing on the technical aspects and comparative strengths of the SOEs, while the other addressed broader ministry concerns.

“It’s important for the expertise related to the functions of the SOE to be considered in the process. However, we recognize that it now falls under the Ministry of Finance. Additionally, Chair, we acknowledge the new criteria for appointing directors, which include remuneration and performance evaluation—elements that were not part of the original Act. We have no objections to these changes.

“While we may be among the lowest in remuneration compared to other SOEs, we would welcome any increases to that standard. The decision is ultimately yours. We acknowledge the change, and we suggest that there could be a mechanism for involving the relevant ministry, which has the expertise related to the SOE’s mandate, in this process.” He said.

Wickham stated that he understands others may wish to discuss specific interventions, particularly regarding dividends.

He noted that the provision allowing the minister to call for dividends from SOEs aligns with the rights of the majority shareholder.

However, he suggested that SOEs should be encouraged to develop their own dividend policies, which could then be negotiated with the minister.

“Some SOEs may want to reserve a good proportion of their dividends for their capital budgets and other reasons, so perhaps there could be a rationale for negotiating the dividend payout by the SOE to the government,” Chairman Wickham said.

Solomon Airlines Limited (SAL) is a Solomon Islands company registered under the Companies Act 2009. One hundred percent of its shares are owned by the Government of Solomon Islands, through the Investment Corporation of the Solomon Islands (82.3%) and Solomon Island Holdings (17.7%).

This SOE is commercially focused on providing domestic and international air and ground handling services that fully maximize the benefits for its customers. The company is subject to the State-Owned Enterprises Act 2007 and State-Owned Enterprises Regulations 2010.

Solomon Airlines is governed by a board of directors that is responsible to the Minister of Finance and Treasury, who is the Accountable Minister for Solomon Airlines Limited.

According to reports, Solomon Airlines received SBD 9.9 million, SBD 3.039 million, SBD 2.766 million, SBD 3.8 million, and SBD 4.0 million in payments for the provision of community service obligations (CSOs) from the Government in 2016, 2017, 2018, 2019, and 2020, respectively.

These CSOs are air services to provincial airstrips where ticketing revenue is insufficient to cover the costs of service.

BY INDY MAEALASIA

PEOPLE With Disability Solomon Islands (PWDSI) has urged the Minister of Health and Medical Services (MHMS) and the Royal Solomon Islands Police Force (RSIPF) to launch an urgent campaign to eradicate marijuana in rural communities.

PWDSI’s Chief Executive Officer (CEO), Casper Fa’asala made this request during World Mental Day last week, alluding it to being a major cause to mental health conditions. 

“…we go to the gardens where marijuana is planted among the vegetables, that’s where the cause is,” he stated “You don’t need a survey, you don’t need data, it’s all evidence in the village.”

Fa’asala emphasized that addressing this issue could significantly reduce the prevalence of mental health conditions.

“Seriousness is what I am talking about, it’s not about a campaign of awareness. It’s about going to the villages, pulling every marijuana out, then we can realize the realities of bringing this country to some normalcy,” he said.

He warned that failing to take action could hinder the country’s progress for its youth and children.

“I just simply call on the government to commission the authorities to be more proactive, to carry those roles to reduce the effect of what we see today.” he added.  

BY NED GAGAHE

Chairman of the Solomon Islands Postal Corporation (SIPC), James Apaniai disclosed that the organization has not turned a profit since its establishment as a State-Owned Enterprise (SOE) in the 1990s.

He shared this revelation when appearing before the Bills and Legislation Committee in Parliament regarding the SOE (Amendment) Bill 2024 in Parliament last week.

During the hearing, the Solomon Islands Broadcasting Corporation (SIBC) Chief Executive Officer Johnson Honimae shared similar sentiments with the Committee stating that this is one of the reasons why government has removed them from the schedule of the SOE Act.

“My friend, SIBC, has mentioned that they have not made any profit since they were incorporated. And I’m sad to say that SIPC is in the same boat. And it is likely we might join this team in removal from the schedule.” Chairman Apainiai said.

He said despite this the Postal Corporation is trying its best and is now in the process of proposing new ideas how to become profitable.

The Chairman said under the present Act SOEs are given the mandate to run businesses and to run them in a profitable manner.

“Under the existing act, as I said earlier, SOEs are allowed to run businesses. And the understanding was whatever business they run must relate to their core business. So that’s one of the understandings that we have relating to the SOEs powers to run businesses.” He said.

The Chairman during the hearing has expressed both support and concerns on the propose amendment.

“So that’s what we are doing. But as I said, we are generally happy. We don’t really disagree with the amendments that are proposed in this bill.

“But yes, we are generally happy with the proposed changes.

“As I said, there is not much difference, substantial difference between the old one. I mean the present; I think the proposed new ones. Except in certain areas.

“And getting in line with what my other colleagues have said. I have already mentioned. Those major changes are for us, for the corporation.” He said.

SIPC is a state-owned enterprise established by an Act of Parliament in 1996 to provide postal services within Solomon Islands and to other countries.

As a state-owned enterprise, it is also subject to the State-owned Enterprises Act 2007 and State-owned Enterprises Regulations 2010.

SIPC is governed by a board of directors that is responsible to the Accountable Ministers, being the Responsible Minister and the Minister of Finance.

The Responsible Minister is the Minister for Communication and Aviation, currently Minister.

According to its website SIPC received SBD1.9 million in 2015, 2016 and SBD2 million in 2018 and 2019 on Community Service Obligation (CSO) payments.

While in 2017 there were no CSO payments to SIPC.

These CSOs are for the provision of postal services to 8 provincial post offices (Auki, Buala, Gizo, Kirakira, Lata, Munda, Tulagi and Taro).

The CSOs were subject to a contract with the Ministry of Finance.

SIBC CEO warns of risks in single-Minister oversight proposed in SOE Bill

BY NED GAGAHE

The Chief Executive Officer (CEO) of the Solomon Islands Broadcasting Corporation (SIBC) Johnson Honimae has voiced strong opposition to the first objective of the State-Owned Enterprises (Amendment) Bill, stating that consolidating power in the hands of a single minister poses significant risks.

The State-Owned Enterprises (Amendment) Bill 2024 aims to revise the State-Owned Enterprises Act 2007 in line with the Government’s SOE Ownership Policy 2018 and the National Gender Equality and Women’s Development Policy 2016-2020. The key objective of the bill include consolidating the ownership monitoring responsibility solely with the Minister of Finance.

The bill also aims to clarify the process for state-owned enterprises to provide Community Service Obligations, enhancing publication requirements for documents presented to Parliament, and establishing regulation-making powers concerning the evaluation of directors and the election of board chairpersons and deputy chairpersons.

Speaking during the Bills and Legislation Committee (BLC) hearing last week, Honimae emphasized the potential dangers of this monopoly of authority and called for careful consideration of its implications.

“The first objective of this State-owned Enterprise Amendment Bill, as far as the CEO of SIBC is concerned, I think this is very dangerous, putting the power into the hands of one minister. I’ll stop there.” CEO Honimae said.

The SIBC CEO said whilst he concurs with a lot of comments that have already been made by our other SOEs, he also made clarification that legally SIBC is no longer an SOE.

“In case you don’t know about that yet.” He said.

However, Leader of the Opposition Matthew Wale clarified that SIBC is still an SOE but was only removed from the schedule of the Act.

Mr Honimae also commented on why the government has removed SIBC from the schedule stating that they haven’t receive any clarification on that matter.

“There is a bit of confusion. We haven’t had any clarifications from the Office of the Prime Minister on that matter.

“The reason why we were omitted was that we were not making any profit for the government. There was a different reason for when the other SOE was omitted recently.

Regarding Community Service Obligations (CSO), CEO Honimae highlighted that SIBC actively engages in them, as every minute of its airtime contributes to fulfilling this role.

“All these free announcements that we make, which are not paid for, are considered Community Service Obligations.

“We don’t have to go on a tour of a certain area in the country to be considered as Community Service. When we announce the weather, what the weather is going to be like for us, that is considered Community Service Obligations.

“Nobody pays us for that one. So that is our short comment on that Objective B.

Regarding Objective C, the requirement of a State-owned Enterprise to publish whatever documents it has brought into Parliament a week after, CEO Honimae said they have no problem with that.

On the issue of appointment of Board Members, Honimae said this is one that must be considered very carefully, because in some cases at SIBC the issue of conflict of interest comes into play.

“Because under the State-owned Enterprise we’re looking for people who have experience or qualifications in the area that the SOE is operating in. But those Board Members may have a current business that is related to their qualifications, and there is clearly a conflict of interest in some of the Board decisions. So, what we at SIBC have done is we have a standing agenda item.

“Whenever the Board meets there is a standing agenda item which asks for anybody who has a conflict of interest in the matter that is before the Board. They have to declare their interest before the issue is discussed by the Board.

Honimae stated that when making board appointments, it is essential to consider the potential candidates, specifically looking into their current business dealings. He emphasized that these factors should be taken into account during the selection process.

BY NED GAGAHE

Chief Executive Officer (Acting) of the Solomon Islands Electricity Authority (SIEA), Delilah Homelo, highlighted concerns during the hearing on the State-Owned Enterprises (Amendment) Bill 2024.

Appearing before the Bills and Legislation Committee (BLC) last week, Acting CEO Homelo presented five comments during her appearance before the committee.

“The first one is on the consolidation of ownership and monitoring responsibility that will now sit with the Minister of Finance alone. Under this bill, the Minister of Finance may direct the Board regarding the statement of corporate objectives. The Board shall be accountable solely to the Minister of Finance. The Minister of Finance shall exercise the powers available under the SOE Act. We do not anticipate that the amendment will have much impact on Solomon Power, as the Minister of Finance is expected to exercise these powers consistently with government and cabinet policy.”

Acting CEO Homelo stated that the SOE Act provides governance for state-owned enterprises. Given that the principal objective of a state-owned enterprise is to operate as a successful business and to be profitable and efficient it seems practical for the Minister of Finance to have this oversight role under the SOE Act.

She added that the Electricity Act, which establishes Solomon Power as a statutory corporation and provides for its statutory functions and duties, remains in force despite the amendment to the SOE Act.

Homelo also stated that under the Electricity Act, the Minister of Mines, Energy and Rural Electrification has certain powers, including the right to receive advice from Solomon Power on all matters related to generation, transmission, distribution, and use of electricity, as well as to receive statements of accounts, allow reports, determine appeals against the revocation of licenses, and make regulations based on recommendations from Solomon Power.

Regarding community service obligations, Homelo stated that under this Bill, the responsible Minister’s power to direct a SOE to provide a community service has been removed.

“Instead, a SOE must comply with prescribed procedures for proposing, costing, and authorizing the provision of community service obligations. Solomon Power’s comments on this amendment reference Section 24 C of the SOE Act. The Minister of Finance has the power to make regulations for directing a state-owned enterprise to provide community service obligations pursuant to Section 8 of the SOE Act.

“However, by Clause 12 of the Bill, Section 24 C will be omitted, and therefore it is unclear where the power to make regulations for the purpose of Section 8 will come from. This should be clarified. Furthermore, under the Bill as drafted, it appears that the provision of community service obligations is to be proposed by the state-owned enterprise rather than by the Minister. This should also be clarified.”

CEO Homelo explained that the community service obligations defined under the SOE Act include providing goods or services to customers or users on terms that are not expected to generate a normal return to the SOE.

“In essence, the provision of community service obligations may conflict with the principal objective of a state-owned enterprise, which is to operate as a successful business and to be profitable and efficient. Therefore, when providing community service obligations, it is critical to maintain the right balance to avoid risking the sustainability of the SOE. We would like to know what the prescribed procedures regarding community service obligations will be.”

Her third comment was on the evaluation and remuneration of directors and the election of the chairperson and deputy chairperson.

“Under the Bill, the Minister of Finance may make regulations for the selection, appointment, reappointment, evaluation, remuneration, removal, and disqualification of directors of a state-owned enterprise. The additions specifically relate to the evaluation and remuneration of directors. The Minister of Finance may also regulate the election of the chairperson and deputy chairperson of the Board of a state-owned enterprise. Solomon Power welcomes these amendments, as they appear to strengthen governance, and we are interested in knowing what the regulations, particularly regarding these amendments, will entail.”

CEO Homelo’s fourth comment addressed the publication requirements for documents tabled in Parliament.

“Under this Bill, the state-owned enterprise must publish the same document or information within one week after it is tabled in Parliament, by publishing a summary in a newspaper, on a website maintained by the state-owned enterprise, and making copies available free of charge at the offices of the state-owned enterprise. Solomon Power welcomes the removal of the requirement to publish in the Gazette, but we do not have direct control over publications in the Gazette, as this is a matter for the government.”

Lastly, Mrs. Homelo discussed the personal policy provisions, including those on discrimination.

She explained that under the Bill, a provision will be included in the personal policy of a state-owned enterprise to ensure there is no discrimination on the grounds of gender, race, place of origin, political opinion, color, or creed.

The Acting CEO said Solomon Power’s comments on this amendment highlight that the SOE Act requires state-owned enterprises to have personnel policies that ensure fair and proper treatment of all employees. Solomon Power does have policies that ensure there is no unjustified discrimination.

However, she noted that there may be instances where certain policies and practices might be perceived as discriminatory.

“For example, in recruitment, diversity in the hiring of employees in terms of gender, race, and place of origin may be encouraged. Additionally, as Solomon Power is an essential service, employees in certain fields may need to work late and on weekends. Therefore, clarification is needed on what types of discrimination are prohibited and which may be accepted and thus lawful.” She said.