National Assembly approves Public Enterprises Bill 2023 |25 May 2023
The National Assembly yesterday approved the Public Enterprises Bill 2023 which will supervise and direct state-owned enterprises.
Presented by the Minister for Finance, National Planning and Trade, Naadir Hassan, in the morning and after amendments were made to the 80-page document, the bill was approved late in the evening by 16 Linyon Demokratik Seselwa (LDS) members, while eight members of opposition party United Seychelles (US) abstained from voting. There were no votes against.
The bill seeks to repeal and replace the Public Enterprise Monitoring Commission Act (Act No 3 of 2013), and provides for other connected matters.
The objective is to provide for the continuation of the Public Enterprise Monitoring Commission (PEMC) to establish its governing body and to provide for its composition, functions, powers, management and governance.
It makes provision for the efficient governance of public enterprises and the monitoring of their performances and provides a harmonised and coherent framework for their establishment, governance, and operation.
It also seeks to clarify the accountability and the relationship between board members and those charged with governance and management of the public enterprises, responsible ministers, the minister responsible for finance and the commission.
There are 31 public enterprises and subsidiaries that are functioning in 14 sectors and contributing in the development of the Seychelles economy.
Presenting the bill, Minister Hassan said the state-owned enterprises (SOEs) play an essential role in the formation of a balanced economy. They contribute towards the country’s social development in terms of providing for infrastructure development, provision of public services, fair competition on the market, social benefits, finance service, energy and public utilities among others.
He stated that at the end of December 2021, the SOEs accounted for R35.6 billion in assets which was valued at 150% of the country’s gross domestic products (GDP).
In terms of dividends, they contributed R687 million in the government coffers, equivalent to 84% of untaxed revenue. As for the 7,558 individuals employed by SOEs, they represent 15% of the country’s total workforce.
Minister Hassan said given that it is no secret that public enterprises have been linked to many allegations in the past such as government interference, lack of transparency, lack of accountability, lack of good governance, lack of competition, inefficiency in their operations and in finance management and performance among others, the government took it as its responsibility to address those associated allegations, risks and challenges.
“To address those risks and challenges, we have to implement a solid structure of good governance that will encourage transparency, accountability, ensure that appointments are based on merit and to establish effective monitoring and surveillance,” said Minister Hassan, who noted that the proactive measures taken will improve their operations so they become more efficient.
Minister Hassan said since the economic crisis in 2008, government has introduced four legislations, among which include the first approved Public Enterprise Monitoring Commission Act in 2013, to monitor efficiency and good governance of public enterprises.
He added that with changes in laws locally and internationally over the years,with regard to improving efficient monitoring and running of SOEs, government has seen it fit to bring the new legislation to solidify transparency, accountability and good governance, among others, through better monitoring and surveillance.
He noted that the announcement for a new governance structure for SOEs was made in the 2023 budget address.
In the debate that followed, members of LDS and US, although with some reservations, spoke in favour of the bill. They said if the SOEs are well governed, the country will benefit economically.
Elected member for Beau Vallon, Hon. John Hoareau, said given past allegations towards the functions of public enterprises, where some among them were said to be untouchable, the bill will ensure that their activities are being held according to the law and following good governance and best practices, for the benefit of the people.
US proportionate member, Hon. Wallace Cosgrow, said although they (US) are in favour of the bill, there are some restrictive elements in the bill that give the minister concerned too much control over the public enterprises and that will prevent them (SOEs) from functioning freely.
In his presentation, leader of government business, Hon. Bernard Georges, said given that government is the principal shareholder, it is normal, in the national interest, for it to exercise some elements of control on the functions of SOEs to safeguard the investments of the people.
In his reply, Minister Hassan said the intention of the law is to give SOEs the tools to deliver as government does not want to see happening again cases like the Air Seychelles deficit situation, the selling of a tanker by the Seychelles Petroleum Company Ltd (Seypec) and land by the 2020 Development Company on Ile Soleil without its approval.
It is worth noting that although they run as businesses, some of the public enterprises are being subsidised by government to make their services more affordable to the public.