EDITORIAL: Everybody understands that corruption and accountability are touchy topics, especially these days, but something clearly needs to be done about the phenomenon of the threat of action from the National Accountability Bureau (NAB) that has paralysed decision-making in government institutions all the way from the civil service to State-Owned Enterprises (SOEs) and even the federal cabinet committees. That is precisely why the federal government’s decision to seek indemnity for directors, chief executive officers (CEOs), and employees of SOEs from any legal proceedings in the proposed State-Owned Enterprises (Governance and Operation) Bill 2021 is so important. Hopefully, this will do something to loosen the stranglehold of fear that the shadow of NAB has put on state officials because the law at present seems to be that the slightest red flag can land them in endless inquiries, sometimes even corruption cases, where they are presumed to be guilty until they can prove themselves innocent.
The proposed law states in no unclear terms that “no suit, prosecution or other legal proceedings shall lie against the directors, CEO, or any other employee of an SOE if the liability arose out of an act of omission of the director, CEO or employee and the act of omission was done in good faith and with due care.” It’s a little sad already that it has taken so long for this thinking to find its way to the federal government because this is generally how large institutions are run all over the world. For whenever any senior employee takes a decision that impacts the long-term functioning, and of course profitability, of an institution he or she invariably makes a judgement call. And all that is needed is for that call to be made after proper due diligence and planning and there are no hard feelings, and definitely no inquiries, even if things take a turn for the worse.
This is also proving to be quite a problem in terms of attracting the right kind of talent from the private sector, quite as expected, as the government goes about experimenting with its hybrid public-private model to turn SOEs around. Why, after all, would well-placed professionals in the commercial sector give up their carefully crafted careers to take part in an exercise of national importance when any of their decisions could be called into question at any time by the accountability bureau and that would effectively be it for their growth trajectory? Faced with a choice between keeping their heads down and sticking the jobs that helped them prosper and a situation where they could be left high and dry trying to prove their innocence with little chance of returning to the private sector in a hurry, it’s no surprise that the general trend is in favour of the former.
Given the state most SOEs are in it would obviously take a lot of out-of-the-box thinking to get them back on their feet. That, of course, would entail some amount of risk. Yet all this is easier said than done when even applying the smartest ideas have about as much of a chance of leaving you disgraced and under investigation or trial as it does of making you successful. Right now the sword of NAB hangs over all institutions. That has made bureaucrats do what they always do in times of uncertainty, which is pretty much nothing at all, and nobody is willing to risk giving a dose of entrepreneurial novelty to SOEs until they have some semblance of legal cover.
Needless to say of course that this is in no way an argument in favour of dismantling NAB, as some in the opposition have indeed called for; just that the kind of influence its overbearing presence is having on some departments that are central to the government’s efforts to save the public sector from complete collapse ought to be curtailed a little bit. Neither meaningful reform of the bureaucracy nor any attempt to cut SOE losses will bear fruit until this little irritant is taken care of. And with only half the electoral cycle left for the government to fulfil some of its promises from the election campaign, the sooner it goes about some of the most basic reforms the better for everybody, especially the intended targets of all such efforts.
Copyright Business Recorder, 2021