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| October 28, 2008 | Tuesday | Shawwal 28, 1429 |
From Karachi to Swat
Maze of unverifiable SIMs
OTHER VOICES - Sindhi Press
Improving public sector governance
A defiant McCain
PUBLIC sector corporations make up a sizable chunk of Pakistan’s business enterprises despite the significant privatisation that has taken place over the past two decades. The government even today is by far the biggest equity holder in listed companies as well as several other businesses that are not listed on our stock exchanges.
A DEFIANT John McCain dismissed polling numbers that continue to show him trailing Barack Obama both nationally and in several key battleground states, predicting that, when all the ballots are counted after voting one week, he will emerge as the new president of the United States.
THE Shaheed Benazir Bhutto Reconciliatory Committee on Balochistan that was formed last April is finally showing signs of stirring. On Sunday, it revealed a roadmap incorporating among other things a plan to work on reconciliation, reconstruction of national institutions in the province and the reallocation of resources. A jirga is scheduled for later this week to discuss the strategy that has President’s Zardari’s approval. It is to be hoped that there are no delays and its composition will be inclusive of all opinion. The government, in all sincerity, should attempt to implement the proposals aimed at dispelling Baloch grievances and bringing back the alienated people of the province into the national mainstream. True, there is some doubt on this score considering that some very concrete proposals made by a parliamentary committee in 2005 to address Balochistan’s woes fell by the wayside. But unlike the previous political dispensation, this government is the outcome of a popular mandate and there is greater pressure on it to turn in a better performance.
This is the right time to strive — and to be seen as doing so — for Balochistan’s uplift. The ceasefire declared by Baloch militants last month has largely held while the army has scaled back its operations. It may be difficult to effect a reconciliation among the various aggrieved segments of society at the moment, especially in view of the thousands of ordinary civilians who were made to feel the military’s wrath during an intense operation against the militants. But it is imperative that the path leading to reconciliation is paved with positive actions involving major development in the province, greater provincial autonomy, more equitable resource-sharing and job opportunities for the Baloch many of whom feel that outsiders are being given preference in employment.
Promises have to be translated into reality to make the Baloch have a real sense of ownership in their province. These include making the necessary constitutional amendments envisaged by the roadmap and promised earlier by the prime minister who said after the February polls that the Concurrent List would be abolished within a year to allow the provinces more autonomy in their affairs. It is equally important to give a fair hearing to Balochistan’s demand for more equitable resource distribution. It is incumbent on the new National Finance Commission to ensure that the next award guarantees satisfactory gains for the province which has long wanted factors such as poverty and under-development to be among the main criteria for distribution. Balochistan, along with the other smaller provinces, has strongly felt the injustice of a population-based formula that has favoured Punjab, and it is about time its voice was heard in this regard. Failing to do so would mean a return to militancy in the province and the consequent weakening of the state.
FROM Karachi to Swat, the Taliban are active. The ‘executions’ in what once was a tourist paradise and a police informer’s abduction in the port city show both, their tentacles in society and the ruthlessness of their philosophy and action. Pakhtun tribal traditions include respect for mediators. But on Sunday militants belonging to Maulana Fazlullah’s camp ambushed tribesmen on the way to a peace jirga and took 12 of them hostage, and when other tribesmen attacked the Taliban the hostages were shot. Later they were hanged to ‘teach a lesson’ to the non-Taliban. The police informer in Karachi was murdered because he tipped off the authorities about an Al Qaeda-Jundullah cell. How they kidnapped him is immaterial. It is doubtful he was trussed up and taken to Swat all along in that condition. Most probably he was lured into visiting his home district and then trapped. But what is shocking is the Taliban did not confine their wrath to the informer; they beheaded his wife, children and parents — a deed that testifies to their moral depravity.
The murder of the peace jirga members is not the first of its kind. The Taliban have been murdering non-combatants as a matter of policy now for years. In the past they have bombed mosques, Eid congregations, and civilian targets, including girls’ schools and UN relief offices, without any qualms of conscience. What is shocking, however, is that sections of society friendly to the Taliban keep mum about these barbaric acts and, thus, indirectly encourage terrorism. The government’s own handling of this menace has been anything but scientifically planned. The crackdown launched on the Swat rebels in November last has no doubt made some headway, but as Sunday’s crime shows Fazlullah’s men are far from vanquished and are still quite capable of making mischief. In Bajaur the military for the moment seems to have the upper hand, and the militants have shown a desire to negotiate. However, a well-coordinated strategy to crush the rebellion appears to be missing. Notice, for instance, the prime minister’s unhappiness with the FC commander’s remarks — later clarified — that it will take a full year for the authorities to restore peace to Fata. The unanimous parliamentary resolution demonstrated the nation’s will to combat terrorism, but regrettably some religious parties still have a soft corner for the terrorists and condemn suicide bombing and others acts of terrorism only for record’s sake.
THE data gathered by Karachi police showing more than 100,000 unregistered mobile phone connections to be still active has once again raised questions about the effectiveness of a long-running campaign by telecom operators to ensure a verifiable subscriber base. The security environment being what it is, the need to feel confident about such vital data cannot be over-emphasised. That we still have so many unverifiable SIMs functional in Karachi alone is, to say the least, worrisome. What it would be like on the national scale can only be imagined until similar figures are worked out by the relevant agencies. When seen against the backdrop of the simple fact that the numbers relate to a campaign that had its deadline extended twice, it betrays, on the one hand, the lack of focus on the part of those who were supposed to do the job, while, on the other, it underlines the presence of loopholes in the system. The remarks of the city police chief, who called the whole exercise ‘an eyewash’ to satisfy authorities at various levels, do make sense. They also confirm the fears that were echoed when tall claims were first made by the Pakistan Telecom Authority in April, a month ahead of the first deadline.
As many as 10.5 million unregistered SIMs were claimed to have been blocked by the end of the drive on July 31. The contention of the police intelligence report that most of these connections happened to be the ones that had already been abandoned by the subscribers only adds to the worries. With the national customer base as wide as 90 million, the number of SIMs blocked thus far represents no more than 12 per cent of the total. The number of abandoned connections is likely to be much higher because the total time span covered by the drive extended beyond five years. Instead of reacting negatively to the police report, telecom operators and the regulator would be better off giving it another go. After all, it is a vital undertaking in view of the rising security concerns and the use of mobile phones as a means of communication between coordinating militants.
Politics of wheat
Daily Kawish
IT appears that Punjab has veto powers in every matter. It is not ready to respond positively to the call of the smaller provinces as well as of the centre. The latest move was its refusal to lift the ban on inter-provincial movement of wheat. The Federal Committee on Agriculture and three provinces demanded that Punjab government lift the ban but this appeal was rejected. Sindh is facing a wheat crisis which has been aggravated due to Punjab’s rigid attitude.
Even on issues such as financial resources, water distribution or any other matter, Punjab has been using its veto power. It has been looking out for its own interests and getting more than its due share.
During this tumultuous time of a wheat crisis, Punjab has banned the movement of wheat. This ban will adversely affect three provinces. Punjab is a big province where a large area of land is brought under cultivation. It is also getting more water. Therefore it has the ability to meet the wheat requirements of the other three provinces…. Punjab utilises electricity from NWFP, gas from Balochistan and water from Sindh. But it has refused to share its wheat with these provinces.
The food crisis in Sindh is worsening as millers and traders are not complying with the orders of the government. The administration has failed to implement the prices fixed by the government. A large amount of wheat has been smuggled out of the country while the remaining is lying with the hoarders…. The mismanagement of the Sindh government sparked the crisis while the ban made it worse. Why did the administration let the wheat crisis reach this point? The government has been ineffective in dealing with the mafia.
The solution to the wheat crisis is putting an end to smuggling. The ban on movement of wheat between provinces cannot be justified as hundreds of trucks of cement, fertilisers and other goods are going to Punjab. Sindh is not getting its share of water which has led to a fall in agriculture production. If investigated Punjab would be held responsible for it. Sadly, Punjab is letting the crisis grow.
It is strange that the federal government has failed to intervene and has stood by Punjab in getting an undue share in the NFC award. The federal government should step in and rescue the smaller provinces from the food crisis. — (Oct 23)
— Selected and translated by Sohail Sangi.
These massive assets are owned by the people of Pakistan who through their representatives in parliament empower the government of the day to take care of them efficiently and responsibly.
Some of the big corporations, such as OGDC, NBP, PTCL, PIA and the gas companies, are all substantially owned by the government whereas other entities such as Pakistan Steel are under total government ownership. To fulfil its obligation as a trustee the government appoints directors to the boards of these enterprises who under company law, statutes and the code of corporate governance are charged with managing these concerns.
Until a few years ago, the government appointed mostly serving bureaucrats and executives of the enterprises to their boards. Subsequently people belonging to different walks of life came to be appointed as representatives of the government’s shareholding. Drawn mostly from the private sector and including professionals, the board members were inducted with the idea of bringing in diversity in the governance of these enterprises. This arrangement works well provided the process of director appointments is well-considered.
My purpose in writing this article is to make some observations on the procedure of board appointments which has been in vogue for some years. I also have some recommendations to improve the governance process of our public sector enterprises. Having served on several public sector boards, I can draw from my experience.
The principal task of governing an enterprise rests with the board of directors and not with the shareholder — big or small. The shareholder is, however, fully empowered to appoint and under certain conditions remove the appointed director. The appointment may take place through a vote of shareholders or through a process of nomination. In either case, this is the most crucial role of the shareholder in influencing the enterprise in which it holds an investment. Shareholders who do not take the responsibility of nominating their directors diligently and choose to interfere in the running of the company usually cause serious problems. This has been happening in the public sector corporations in Pakistan.
Here are some recommendations to ensure that this does not happen. First, the process of appointments should be institutionalised and undertaken in a manner that is based on the collective judgment of a carefully constituted panel. Director appointments are not to be considered as dole handed out to friends and interest groups without due regard either for suitability of the person being nominated or the skill and experience required to run the enterprise.
Appointments should not be the prerogative of one person be it the prime minister, the president or the chairman of the ruling party. This is extremely important for we as a society are vulnerable to sifarish. Further, the temptation to use these institutions to pursue narrow political interests is a real threat to the long term viability and effectiveness of these entities. Cronyism especially makes these institutions vulnerable to such exploitation.
Second, the government should constitute a panel of eminent citizens with requisite backgrounds in business and public service to make recommendations for director appointments. If the government is confident it should make the selection panel as bipartisan as possible to create a better buy-in across the political divide.
The selectors should be tasked to consult with the key stakeholders of the public sector enterprise, which should include the ministry holding majority shareholder rights of the concerned entity, with a view to understanding the corporation’s issues and opportunities. The selection panel could be set up as a commission but it should not be turned into a bureaucratic organisation. It must have the ability to move fast, be independent, discreet and welcoming to potential director candidates.
Third, the selectors may articulate a ‘fit and proper’ criterion to guide them in their selection of candidates. Integrity, business and professional track record, time availability, mental fitness, etc are all important considerations. Further, the skill sets required by the board needs to be carefully considered by the selectors and matched.Fourth, the directors once appointed should not be removed following a change in government. Changes may be made upon completion of the normal term. In exceptional cases where premature removal is required on grounds of, say, a serious breach of trust, a predetermined procedure should be followed. Uncertainty of tenure can influence the director’s behaviour and may result in decisions not in the best interest of the corporation. Forcing or causing change mid term is not only disruptive for the organisation but it also undermines accountability of the board. Dramatic dismissals should be avoided unless there are sufficient grounds of impropriety.
Fifth, upon selection, the directors should receive a briefing on what are the issues and opportunities the ministry expects them to deal with as a member of the board. It should be borne in mind that once the director assumes responsibility he will need to mind the interest of the corporation before that of the nominating shareholder. Be that as it may, the ministry should set up mechanisms to gauge the performance of its nominee directors to gauge their contribution. Certain essentials such as attendance of board meetings, grasp of the issues, quality of participation in the meetings, etc would be the key factors. This assessment would be useful to determine renewal of term of the director.
Sixth, the directors should receive reasonable compensation for their services as they are expected to devote time, due care and bear responsibility for the enterprise. The compensation must not be excessive and must be fully disclosed. The directors should also be provided insurance to defray any litigation cost connected with their duties. This would of course exclude protection against cases of wilful neglect or fraud. Such measures would increase the pool of quality people to select from.
Seventh, the appointment of the CEO should be the prerogative of the board. This is fundamental to good governance. The CEO should look to the board for guidance and as the ultimate source of authority. Direct appointment of the CEO by the government, which at best requires the board to rubber stamp the nomination, undermines the board. In such situations the CEO knows that he is there at the pleasure of the government and as such may not take the board too seriously. Splitting the position of the chairman-cum-CEO is also highly desirable as these are two distinct responsibilities and the separation would be in keeping with basic principles of good governance.
A clean and well-thought-out appointment system at the board level is the first important step to good corporate governance of institutions in the public sector. We need to reform this area and it is not difficult to do.
The writer is former CEO Engro Chemical and former chairman PTCL, KSE and PIA.
zaffarak@yahoo.com
“You are going to be up very late on election night,” Senator McCain told Tom Brokaw of NBC’s Meet the Press on location in Iowa, one of several states that might normally vote Republican but which seems now to be tilting heavily towards Mr Obama. “I guarantee you that, two weeks from now, you will see it will have been a very close race and I believe we are going to win.”
The McCain-Palin ticket continues to fight against the headwinds created not just by the relentless barrage of discouraging polling numbers but also by the superior spending power of Mr Obama as well as a lengthening list of newspaper editorial boards siding against them and with the Democratic candidate.
Fighting despondency, Republicans remember that Mr McCain has often thrived as the political underdog and staged comebacks that only he has believed in, most notably last summer when his bid for the Republican presidential nomination was completely out of cash and had widely been written off as hopeless.
A new poll in Iowa gave Mr Obama a 54 to 39 per cent lead over Mr McCain. A Boston Globe poll in New Hampshire put Mr Obama ahead by the same margin. But Mr McCain said: “We are going to win, it’s going to be tight.” He cited a new Zogby-Reuters poll released on Saturday that gave Mr Obama only a five-point edge, after enjoying a 12-point margin just last Thursday.
— © The Independent
