Activities 2022

AMAN: A clear government policy for government companies to regulate operations and enhance effectiveness

AMAN: A clear government policy for government companies to regulate operations and enhance effectiveness

In a session on the reality and effective accountability of government companies

AMAN: A clear government policy for government companies to regulate operations and enhance effectiveness

Ramallah – The Coalition for Accountability and Integrity (AMAN) held a session to discuss a paper on The Reality and Effective Accountability of Government Companies. The discussion was attended by representatives of government bodies, civil society organisations, private sector, and government companies.

In his opening statement, Mr. Jihad Harb, Senior Researcher at AMAN, explained that state-owned companies were part of public resources and properties. An appropriate environment is needed to ensure corporate management in line with proper principles and standards to achieve the purposes for which government companies were established. These will also ensure the efficient use of public resources to accomplish better outcomes and outputs.

Harb added that the paper did not seek to examine or assess the performance of government companies. It aims at investigating the public policy for incorporating public companies, availability of requirements for incorporation, including necessary technical, administrative, and financial conditions, and legal and institutional framework for corporate operations. The paper describes the current context of existing government companies, explores any obstacles to achieving their goals, and identifies how these companies can be supervised, monitored, and held to account. It makes sure that relevant operations and decisions are audited and held accountable by official control bodies. The paper presents policy recommendations to overcome challenges and enhance effectiveness.

Lack of a clear and informed policy to regulate government company operations

In his review, Researcher Ibrahim Abu Hantash highlighted that successive Palestinian governments have lacked a clear policy or informed plan to incorporate and manage state-owned companies. No comprehensive law or general piece of legislation regulates the incorporation and management of government companies. It seems unclear that economic and social feasibility studies have been made before government companies are founded. In addition, government development plans do not include direct references to the philosophy behind the establishment and management of these corporations.

AMAN: We stress the importance of a community debate on the incorporation of government companies as they are funded by the public treasury

The paper indicates poor community engagement in the debate and approval of laws or regulations on the founding and purposes of state-owned corporations. A lack of commitment to the principles of transparency affects operations and performance outcomes of these companies. In spite of the efforts made by state institutions, governance is generally poorly applied to government companies.

There is unanimity on the need for a central and standardised register to identify government companies

According to the paper, a few studies have addressed government or state-owned companies with a view to making them known widely to citizens, stating their number, or demonstrating applicability of the legal characterisation or Palestinian Central Bureau of Statistics’ definition of these entities as national government corporations. Information is unavailable to help identify other companies as government-owned. Based on information released by the Ministry of National Economy, there is only one government corporation, namely, the Palestinian Electricity Transmission Company. The Istiqlal Bank Company is in the process of registration.

Participants unanimously agreed to the need for an updated central register to introduce government companies. To be announced in the Palestinian Official Gazette, the register will be accessible by citizens, observers, and researchers to facilitate their mission of exercising community control over the performance of government companies, which manage public funds and national resources of the Palestinian people. These companies will also be registered as public treasury assets.

In his comment, Mr. Mohammed Al-Humeidi, representative of the Water Sector Regulatory Council, explained that several official bodies, including the State Audit and Administrative Control Bureau (SAACB) and Ministry of Finance, were in charge of the mechanism of accountability for government company performance. Depending on their operations, some government corporations do not provide public services and should be dealt with accordingly. Indicating that the concept and tools of corporate governance were generally weak, Al-Humeidi stressed the importance of providing a financial and administrative regulations in consistence with the general framework of the law.

Mr. Ayman Shahin, SAACB representative, stated that the SAACB released many reports on government companies. According to Shahin, the Bureau has genuine competence to audit government companies, which are subject to its control by law.

Need for a clear government policy for government corporations

In conclusion, AMAN emphasised the main recommendation, namely, the need for a clear government policy for the incorporation of government companies. A special law will be enacted to regulate these companies. Alternatively, a special law needs to be passed on each government corporation. These companies will be adequately addressed in a community debate with relevant parties. In addition to promoting transparency, periodic reports will be published. Feasibility studies and development economic rationale will be compiled before a government company is incorporated. The government will set criteria approved by different institutions to identify government, public, or state-owned companies.

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