Insulate state-owned companies from political interference: Barbara Hogan
The government has to find a way to develop a best-practice document to help manage the relationship between the president and cabinet, and how they interact with state-owned companies.
These were the concluding remarks of former public enterprises minister Barbara Hogan on Wednesday to the commission of inquiry into state capture.
Hogan told the commission that having been put through a lot of pressure by then president Jacob Zuma, the ruling party and some of the alliance partners during her time in charge, she felt something had to be done to manage the interface between the executive and state-owned companies.
"(We should) establish once and for all what is the authority of the president? What is the authority of cabinet? What is the authority of the minister in relation to board appointments at state-owned enterprises? I could find no recognisable practice or understanding. It was a matter of legal opinion only that I could rely on. We have to set up a far better understanding of the powers and limits of authority in that regard," Hogan said.
Hogan has detailed over the past three days how Zuma constantly interfered in the running of SOCs. This included giving her instructions not to appoint anyone at Transnet until an internal disciplinary hearing into Siyabonga Gama’s conduct had been concluded. Gama was Zuma’s preferred candidate for the position of CEO.
She also told the commission how Zuma had effectively stripped her of key functions, instructing her not to interfere in the governance of SOCs until a commission of inquiry he had appointed to probe their functioning had reported back to him.
She said there needed to be a common understanding as to what was expected of all parties and how the performance of the boards of SOCs should be assessed.
"We need to research ways and also ask assistance regarding the ways that boards can evaluate themselves and the way that a minister, or whoever is a shareholder, monitors the performance of the boards and the performance of the companies," Hogan said.
She added that the government needed to look at who was best placed to play a role as a shareholder in SOCs.
"The insulation from political interference is extremely important. International literature mentions that one of the greatest risks that state-owned enterprises face is political interference in the execution of their duties," Hogan concluded.