The current Government’s effort to reform the operations of State-Owned Enterprises (SOE) in the extractive sector is to enhance transparency and install good governance.
The intention is for the extractive sector SOEs to take a proactive approach to information disclosure and increase transparency.
The intention is also for SOEs to disclose to the public the total contribution they make to PNG’s social and economic development.
This is according to the Vice Minister for Public Enterprises and Member for Mendi Raphael Tonpi.
The Vice Minister made this statement at an international panelist at the 20th Global Conference of the Extractive Industries Transparency Initiative (EITI) held in Dakar, Senegal last month. The Vice Minister attended this conference on behalf of the Minister for Public Enterprises who was not able to attend due to the recent Parliament session.
He was informing the panelists that the PNG Government was in the process of reforming the operations of its State entities (SOE’s) that were in the businesses of providing essential services such as water, transport, ports etc including its SOEs involved in managing and investing revenues derived from extractive activities (oil, gas and minerals).
He said the intention of undertaking the reform was to enhance transparency in the operations of these SOEs and for better management and good governance of the extractive sector.
The Vice Minister informed that such reforms were supported by donor partners such as the Asian Development Bank (ADB) that saw the importance of improving the operations of all SOEs to enhance good governance and bring about efficiency in their performance.
“With the support of the ADB, the Government has recently instituted reforms in SOEs in the services sector to improve their governance and performance efficiency and cost effectiveness.
He pointed out that some of the critical reform areas included:
- Clearer definition of the roles and responsibilities of the SOEs Boards and Management;
- Improvement in the transparency of SOEs operations by requiring them to prepare and publicly disclosing or releasing statements of their corporate objectives, a 3-year work plan and their audited financial accounts; and
- Establishment of a transparent, merit-based process for selection and appointment of CEOs and Managing Directors and the Board Members of the SOEs, and in ensuring women were equally represented on the SOEs Boards.
The Vice Minister further stated that “the SOEs reforms were undertaken from 2020 to 2022 and these were necessary due to these organisations’ poor performance in the past.
He said the Marape-Rosso Government was confident that these reforms were necessary to improve their performance and efficiency going forward into the future.
“The extractive SOEs have been performing well to date and declaring annual dividends to the State. This is largely due to them being used as vehicles to receive and retain significant revenues and windfalls derived from oil, gas and mining activities based on the State’s equity stakes in these resource projects. However, the extractive SOEs have been operating in an opaque environment and needed to be reformed in order to bring about transparency into their activities through the EITI reporting process”, the Vice Minister said.
“These SOEs are still subject to oversight and reforms as they are the entities set up by the Government. The recent reforms of the services SOEs set the platform for the Marape-Rosso Government to also consider wider reforms in the extractive SOEs”, the Vice Minister said.
