Revamp the national treasures

Revamp the national treasures
Ezam Mohd Nor
Malaysiakini, Mar 10, 06 12:38pm


The government says the oil price hike is inevitable, because it does not control world crude oil prices. That statement is debatable but in calling for a change in lifestyle, the government should be introspective and look towards its own unhealthy spending habits and lax financial control.

The roller-coaster ride towards what may well be the world of US$100 (RM380) per barrel of crude oil has been going on for many years, but the government has yet to show its willingness to change the murky ways in which our oil resources are managed.

As Malaysians, we can be proud of Petronas’ achievements as an internationally-recognised economic powerhouse. But Petronas is not merely another corporate entity. As an organisation set up by a Parliamentary act, it does not, strangely enough, answer to parliament.

Instead, it is answerable, finally and ultimately, to the whims of the prime minister.

Too much power

As shareholders in Petronas, Malaysians are expected to put their faith in a single trustee, who, along with his many other responsibilities, is expected to play a major role in guiding the macro-movements of this financial behemoth.

This, simply put, is too much power in the hands of one man.

While the government may argue that many big Multinational Companies (MNCs) are headed by a single executive chairperson and president, the Petronas case is different.

While Petronas too has its chairperson and often times, a separate chief executive, they are not held to account by the owners of the company, but instead act as elevated personal assistants to the prime minister of the day.

When the government argues that Petronas is a national treasure which should not be plundered, it is presenting an oxymoron. The lack of checks and balances, accountability, transparency and the perception of openness means that Petronas is a national treasure only in name.

We do not know how this national treasure works, its current and past states of financial health and the actual situation behind the razzmatazz of being a Fortune-500 company.

The public furore over the oil price hike is a good opportunity for the government to reform the way it runs Petronas and other nationally important corporations such as Khazanah. Much of the protest against the 30 sen hike is really aimed at the lack of transparency as often promised by the government, but not often delivered.

The time is ripe for a major revamp of these organisations, to make them more transparent and accountable.

Check and balance

A good start would be to create a better trusteeship for the check and balance of Petronas. While the prime minister, for strategic reasons, should still be ultimately in charge, he should be helped by a board of experienced and noteworthy trustees who have the clout to examine Petronas’ books and strategic decisions.

Members of the board should be drawn from the ranks of public personalities, but also some must be elected by parliament, through the mechanism of a committee of the whole House or representatives of the Public Accounts Committee (PAC).

Petronas should also have an audit committee comprising private firms and also the Auditor-General and his officers, answerable both to the prime minister and the PAC. In addition, parliament should make the Petronas charter renewable every five years and be allowed to debate its continuation at these regular intervals, to hold it to better account.

Several national companies around the world, as well as the BBC in the United Kingdom, are subject to some form of renewable charters and they all have to explain why their special status should be continued.

Equally important is how Petronas’ resources are allocated. While it is understandable that the government does not want to open up all the exact details, it is ridiculous to say that all of Petronas income is allocated towards national development .

Instead, the finance minister, in his annual budget, should report the percentage of Petronas income that is allocated under which general topic. This may be a rough figure but at least it indicates the sincerity of the government’s widely disbelieved statements.

The government says the oil price hike is a good opportunity for the people to change the way they lead their lives. We now give the same advice to the government.

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Ezam Mohd Nor 39, is the former political secretary of ex-deputy premier Anwar Ibrahim. He is currently Parti Keadilan Rakyat Youth chief and the chairperson of Gerak, the non-political Movement For Democracy and Anti Corruption.