NEC amends IPBC Act

THE National Executive Council has approved changes to the Independent Public Business Corporation Act.
“The changes reinstate and strengthen sections of the Act relating to corporate governance, accountability and transparency and customer service,” Public Enterprises Minister Sir Mekere Morauta announced yesterday
“Given the importance of IPBC in the provision of essential services, the amendments will be drafted and presented to Parliament as soon as possible.
“The Act is a framework for the delivery of affordable services across the country.
“But that framework has been severely weakened over the past 10 years and as a result service delivery has gone backwards rather than improved.
“NEC’s changes are aimed at restoring the strength, independence and accountability of IPBC itself and public enterprises.”
Sir Mekere said the main changes include :
g    Reinstating Section 6.5 of the IPBC Act, which expressly guarantees IPBC’s independence from political interference. This section was removed by the Somare regime;
g    Adding a new provision allowing the responsible minister to issue directions to IPBC only after consultation with NEC and the directions being published in the National Gazette;
g    Replacing Section 9A with a provision enabling NEC to directly appoint directors to Public Enterprises. (At present directors are appointed by the IPBC board, with NEC having the right to reject the IPBC Board’s nominees);
g    Amending Section 29.4 to remove the IPBC managing director from coverage under the Salaries and Conditions Monitoring Committee Act, in line with other IPBC and public enterprise staff;
g    No staff of IPBC or any other enterprise is a member of the Public Service. All CEOs and staff of IPBC and public enterprises are required to work on a fully commercial basis;
g    Amending Section 38, which at present enabled IPBC to lend money to any public enterprise in which the state or IPBC has any level of ownership.
The amendment would confine IPBC to lending only to majority-owned public enterprises.

If the IPBC wanted to lend money to an enterprise in which IPBC has only a minority stake and does not control, it must first get NEC approval.
gStrengthening the transparency of public enterprises by changing Section 44, which provided for the auditing of the IPBC and its trusts by the Auditor-General;
The proposed change would require all majority-owned public enterprises to be audited by the Auditor-General. This would restore a requirement which was repealed by the Somare regime; and
gAmending Section 46B, which required majority-owned public enterprises to get ministerial approval, on the recommendation of the managing director of the IPBC, for all commitments in excess of K1 million.
The proposed change would give more flexibility to enterprises by allowing urgent expenditure of up to K10 million if it is in accordance with the enterprise’s annual plan approved by the IPBC Board, and if it had been approved in principle by the managing director of IPBC.