Parliamentary oversight of parastatals will be dramatically scaled back and the flow of information about their activities into the public domain curtailed, if a new model punted by Public Enterprises Minister Alec Erwin is adopted.
The proposal by Erwin is accompanied by a draft Bill that lays out how the new model would work. Stakeholders have been asked to comment on it.
This was confirmed by Transnet’s spokesperson, John Dludlu, who told the Mail & Guardian that Transnet had only recently received the Bill. ‘We’re studying it and will be providing inputs to the DPE [Department of Public Enterprises],†said Dludlu.
In his budget vote speech on Wednesday Erwin outlined what he called the ‘government shareholder management modelâ€, arguing that the wrong kind of oversight of parastatals by Parliament could ‘erode the shareholder relationshipâ€.
For the new model to work Erwin wants to protect executives and boards at state-owned companies from direct oversight by the legislature, arguing that the line of accountability should, instead run through him.
He also wants stringent new secrecy rules to prevent sensitive information from emerging through the parliamentary process.
At present parastatals present their annual reports to Parliament and are accountable to its public enterprises committee.
Board members and senior executives regularly appear before the committee to explain their performance, argue for more funding and defend their failures.
This can result in embarrassing questions and intense media attention, particularly when the more troubled of the state-owned enterprises (SOEs) — notably South African Airways, Eskom and Denel — appear before the committee.
Erwin suggested that MPs do not understand the working of these companies well enough and that parliamentary procedures do not adequately protect the information they hold.
‘The SOEs operate in a commercial environment where they have to contract with other parties on a commercial basis,†he said.
‘Accordingly, information is sensitive and the means of its disclosure has to be well understood and on the same basis with other enterprises in the private sector. In addition there are SOEs such as Denel and PBMR [Pebble Bed Modular Reactor] whose strategic activities are related to national security.â€
Procedures modelled on the intelligence oversight committee, he suggested, could be adopted to protect this information.
The intelligence committee deals with highly classified information about national security. Its meetings are closed to the public and its reports are kept secret, while members are vetted by the National Intelligence Agency and promise not to disclose anything that is discussed in their meetings.
Adopting such procedures would potentially draw an extraordinary cloak of secrecy across the work of the public enterprises committee.
Erwin also wants to protect execu-tives and board members from needling by MPs.
‘Are the management and boards of the SOE directly accountable to Parliament?†he asked. ‘Such a situation would be very problematic and few managers and skilled professionals would be prepared to accept such a widely defined line of reportage.â€
Instead Erwin wants them to be accountable to him and the department, which in turn will account to the committee.
‘The executive and department are accountable to Parliament for the implementation of the strategic intent. Interaction with the SOE is for the purpose of understanding and information and not to exercise authority over them,†he said.
Needless to say, this would make it impossible for state enterprises to use Parliament as a channel when they have a problem with the conduct of the executive.
At present, for example, Denel has pleaded through Parliament for the finalisation of its R5-billion recapitalisation plan and has called for more support from the Department of Defence.
Erwin made other potentially controversial proposals in the speech.
He called for a more flexible approach from trade unions, saying: ‘Traditional labour market structures were not developed in the fast-changing environment that most economies are now faced with. We have to develop new structures that can combine equity, benefit, skill and flexibility.â€
He also wants infrastructure planning to be done on the basis of aggressive growth targets, to ‘lead†the economy, and argues that the national treasury needs to adopt a different approach when capitalising SOEs.
Attempts by the Mail & Guardian to contact the department were unsuccessful.
Reduce parliamentary oversight: Alec Erwin