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“The octopuses on Fiji PE boards” (FT 9/12/2017)

10/12/2017

The octopuses on Fiji PE boards (FT 9 Dec. 2017)

Over the last few decades, government after government has been criticized for fostering multiple board memberships where a few powerful individuals sit on many public enterprise boards like octopuses, with their tentacles dipping into many pies.

The Bainimarama Government has also appointed a few individuals who sit on multiple boards, even thought it is not conducive to efficiency and some have potential but clear conflicts of interest.

Although Fiji since the 1987 coup has devoted a huge amount of energy and taxpayer funds towards discussions on the need for “democracy”, these have been focused merely on the election of members of parliament and government.

Voters have rarely focused on the non-election of hundreds of board members who sit on public enterprises which crucially affect tax-payers in ways just as, if not more important as elected members of parliament.

These boards often make corporate decisions they affect the quality and quantity of public services; they obtain government subsidies that taxpayers have to fork out; they obtain government loan guarantees that effectively increase Public Debt which must be paid for by current and future generations.

Why is it then that the public (and voters and political parties) are not concerned that not a single board member of these public enterprises is elected by them or accountable to them, even if many of them serve faithfully, honestly and to the best of their ability?

Even though many a board member has come and gone, often  after being party to decisions that have cost taxpayers massive amounts, there is no mechanism or process in place in Fiji, that holds board members accountable to the public for their actions or lack of actions?

Why is the public not concerned that while board members proudly sign their names in Annual Reports, these glossy document which are littered with colorful photos reveal less and less and usually nothing of substance, despite being legitimated by our money-making “auditors” (another glorious oxymoron in Fiji)?

Just take three examples – Fiji National Provident Fund, the Fiji Sugar Corporation and Fiji Broadcasting Corporation.

There are many more the reader can think about.

FNPF board membership

Although FNPF is not a public enterprise since it is merely owned by a large group of “private” shareholders (mostly current and past employees) the FNPF board is totally controlled by Government.

Before the Bainimarama coup in 2006, some unions used to be asked to nominate the workers’ representative, and the employers federation, their representative. But not any more.

Today, the Fiji workers who own the money in the FNPF do not elect a single board member, and all FNPF Board Members and Chairman are appointed by the Government.

Strangely, the Chairman of FNPF is a Sri Lankan citizen who is also the Financial Controller of a private company which receives preferential financial treatment from the Government through its milk importing company, a newspaper and purchases for schools.

The same person is also Chairman of ATH, FINTEL and Vodaphone, all commercial organizations in which FNPF has controlling interest.

How can this one person, as Chairman of FNPF, demand accountability from subsidiary company boards of which he himself is a board member?

How can some of these fairly compete with each other when the same persons are sitting on both boards?

The same person is also Chairman of FRCA which is also responsible for taxing not just the FNPF owned or controlled enterprises, but also the private company CJ Patel.

Taxpayers may well ask: why is there a need for the Bainimarama Government to appoint foreigners to such important boards and multiple boards at that?  Are there no qualified locals available?

Why are FFP supporters not complaining? But then, no FFP Member of Parliament has complained that Khaiyum is personally in charge of more than 10 ministries (his own and Bainimarama’s who is holidaying around the world). Are there no other FFP MPs who could be given some experience?

[The public can only chuckle at a  certain Koya who recently went into the cloud cuckoo land  of his late father, because of a few seconds of “Acting” Prime Ministership” courtesy courtesy of Aiyaz Khaiyum. Again, was there no other senior FFP Minister (eg a certain Inoke Kubuabola) who could legitimately have been made Acting Prime Minister?].

Another recently appointed FNPF Board member (a powerful FFP fund-raiser for the 2014 Elections) FFP is associated with a company which has very remunerative contracts with the FNPF and would naturally be interested in the many potential and current investment projects of FNPF, a clear potential conflict of interest.

The Permanent Secretary of Finance, who is also the chief financial officer for Government which borrows massive amounts from FNPF, also sits on the FNPF Board which makes the decisions on such loans. She also sits on other boards (such as FSC) which Government has lent money to  and whose large loans have been guaranteed by taxpayers. Does she not have enough work as a Permanent Secretary of Finance, Planning, etc. etc.?

The lack of public accountability

Notice that FNPF Reports have become glossier and glossier over the years, and giving less and lest hard facts about the distribution of FNPF Members and their funds and other important statistics.

The latest 2016 FNPF Report conveniently does not mention, as it used to before, what percentage of retirees are actually taking the pension after reaching the age 55 has dropped significantly after the “restructuring” (daylight robbery) from above 20% once upon a time, to less than  6% two years ago, and probably even less now.

One indicator is that FNPF’s “annuity payments” to pensioners halved from around $43 million in 2011 to around $20 million after the “restructuring” aka the “Great FNPF Robbery” and in 2016 was still around $24.2 million. So much for pensioners trusting the FNPF Board and management.

In other words, it is a big fat lie for the FNPF management board and Annual Reports to claim that they are safeguarding Fiji workers’ pensions when less than 5% of those reaching 55 are actually taking the pension option, all courtesy of the efforts by the FNPF Board (including Ajit Kodagoda, Tom Rickets, Sashi Singh, Tevita Kuruvakadua, and Taito Waqa) and management led by Aisake Taito (who received a great award internationally and thanked Government, the Board and his staff for their “sacrifices”- not the workers who made the real sacrifices.

What a sad horror story that the unions are no longer demanding that they, the workers’ representatives, must  have a say in the FNPF management.

Why are they, the real FNPF owners, not demanding that all reports on the massive write-down of investment values at Natadola and Momi Bay should be released to the public so that they can identify who caused what losses to the Members?

But sadly, the real FNPF owners also stayed pathetically quiet when the Bainimarama Government, with the active collusion of the FNPF Board and FNPF management, illegally reduced by military decree not just future pension rates from 15% to 9%, but also those of pensioners who already had “binding” contracts with FNPF at higher rates than 15%.

None of these board members were ever held to account. Having done their evil deeds, they go home to their families and sleep soundly.

Today, some hold so many board memberships that it is a wonder that they have any time to do their normal work.

FSC Board

At the troubled FSC, an ordinary board member became a fully paid “Executive Chairman” and as CEO thereby also became “accountable” to the Board Chairman- himself.

While the company was making a loss, this Executive Chairman apparently paid himself massive salaries and perks never revealed to the public in the FSC “accounts”.

Why have taxpayers never questioned how the FSC Board Members signed the annual reports and accounts which apparently indicated “profits” when the company to all intents and purposes was financial insolvent or bankrupt?

Why have taxpayers never demanded to know how the Executive Chairman was allowed to resign allegedly for “health reasons” but stating that he was simultaneously in his sick state going to spend more time on his personal businesses?

Has that Executive Chairman or even the other board members ever been held to account for all the these  irregularities at the FSC?

FBC Board

The FBC Board is currently chaired by a person who also used to be on the FNPF Board.

The FBC has borrowed heavily from the Fiji Development Bank and receives many preferential benefits from Government, not received by other private broadcasting companies, both radio and TV.

Why is it that this FBC Board has never called for the Annual Accounts to be placed on the FBC website for the public to see how the finances of this supposedly publicly owned company are being managed?

Have the FBC Board members ever questioned the lack of impartiality of the FBC stations and journalists towards all political parties and government, especially important again in the run-up to the 2018 Elections?

Best practice internationally?

Readers might wish to visit the Australian Institute of Community Directors website here:

https://www.communitydirectors.com.au/icda/tools/?articleId=1341

This website sets out clearly many of the elements of best practice that can help to ensure that boards are  more accountable, transparent and consultative as follows: (and I quote):

  •  “Being answerable or responsible for the community group’s results, including its successes and failures;
     
  • Being responsible for the community group’s decisions and actions;

 

  • Ensuring information about the group (including operations, procedures, financial status, directions, etc.) is clear and available on request.

 

  • Ensuring information about the board (including members’ profiles and interests and board decisions) is clear and available on request.

 

  • Being willing to ask stakeholders and other relevant individuals and groups their view of a particular issue, strategy or direction and to take into account their views before a decision is made or action is taken.”

Readers can easily see that most public enterprise boards in Fiji are severely lacking by even these standards.

But will voters and political parties demand any changes in board memberships from the government of the day?

Hell will freeze over before the all-powerful and arrogant government ministers give away their powers.

 

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