The Network on Corporate Governance of State Owned Enterprises in SADC (SOE Network) was founded and managed by the Organisation for Economic Cooperation and Development (OECD) in 2007. The first meeting of the Network took place in Cape Town in 2008. Since then it has been run and managed by the OECD for the benefit of SOEs in SADC. The APRM has been part of the Network from its inception and has regularly participated in the meetings. In accordance with the OECD website, the Network, aims to boost the performance of the SOE Sector through improved governance arrangements and can potentially lead to better economic and social outcomes in Southern Africa. Furthermore, given that the APRM is an AU agency and that its member states extend beyond SADC, it is intended that in the medium to long term, the APRM will open participation to the Network to all member states of APRM.
THE FOLLOWING NETWORK MEMBERS ATTENDED THE MEETING:
- ACGN Secretariat;
- African Peer Review Mechanism (APRM);
- Development Bank of Southern Africa;
- DPE-SZ (Kingdom of eSwatini);
- Institute of Management of Assets and State Participations (IGAPE);
- Organization for Economic Development and Corporation (OECD);
- Principal Finance Officer – Public Enterprises Unit: Ministry of Finance;
- Public Enterprise Monitoring Commission (PEMC);
- Public Enterprises Evaluation and Privatisation Agency (PEEPA);
- Second Secretary at the Mauritius High Commission in Pretoria;
- The Government of South Africa: Department of Public Service Administration;
- The Government of South Africa: Department of Public Enterprise;
- The APRM CEO, Prof. Eddy Maloka, was represented by Prof. Melaku Desta, Technical Advisor to the CEO, who welcomed the participants to the meeting. In his opening statement, Prof Desta noted that challenges faced by SOEs are not unique to the African continent and can be found across different levels of development and or ideological orientation. Furthermore, he noted that the importance of State-Owned Enterprises (SOEs) cannot be overemphasized as they are paramount to the development of economies and the welfare of emerging markets – SOEs in most African countries constitute the largest segments of the economy. Prof Desta further noted that it is within these vital sectors of the national economy that governance systemsare often found wanting and suffer from a reputation for cumbersome bureaucracy, inefficiency, and even embezzlement and corruption. In this regard, the APRM and its mandate provides the platform for shared practices in improving governance, more importantly within corporate governance; it is from this that the relaunch of the SOEs Network can further play a vital role in improving and promoting state of the art best practices in corporate governance, applicable to SOEs in Southern Africa and beyond. Prof Desta also noted that it is in appreciation of this potential that the APRM entered into discussions with the OECD to take forward the work of the Network. To this end, the two institutions are negotiating an agreement for the OECD to transfer the Network Secretariat to APRM while the OECD will remain a technical partner of the APRM and the Network. Ahead of the relaunch of the Network in Mauritius in November 2018, this preparatory meeting is expected to provide technical inputs, guidance and direction on how the APRM can best promote the objectives of SOEs Network for the service of the sub-region and indeed the continent at large.
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- The OECD forwarded a statement by Ms Sara Sultan Balbuena, the Policy Analyst and Network Manager of the Corporate Governance Division, which welcomed to the meeting by thanking participants for their attendance and provided a brief history and the impact of the SOE Network, which i) Developed regional consensus regarding good SOE governance; ii) Supported concrete national reform efforts; and iii) Reinforced the Network as a hub for a structured policy dialogue to promote better corporate governance of SOE. In her statement, Ms Balbuena noted that the OECD is pleased that the APRM has engaged the OECD in taking forward the work of the Network with the OECD serving in its capacity as a technical partner of the APRM and the Network, to the extent that resourcing allows. Ms Balbuena further expressed hope that the future work of the Network will draw on the OECD revised standards in this area, including in particular the 2015 OECD Guidelines on Corporate Governance of State-Owned Enterprises and the G20/OECD Principles of Corporate Governance.
CONSIDERATION AND ADOPTION OF THE AGENDA
- The Agenda was adopted without amendments;
OBJECTIVES OF THE PREPARATORY MEETING: SESSION CHAIRED BY MR EZEKIEL OBAKENG MOUMAKWA
- The Chairperson of the meeting, Ms Itumeleng Dlamini, presented the scenario note prepared by the APRM Continental Secretariat in its capacity as the coordinator of the platform. The outline of the scenario note highlighted the following: i) Conduct of the preparatory Meeting, ii) objective of the Preparatory meeting, iii) Participation in the preparatory meeting iv) Organisation of the work of the preparatory meeting and v) the desired outcome of the preparatory meeting.
- The meeting noted the following considerations with regards to the rules of procedures, governance structure for the SOE network and the capacity:
- Format and structure of the Network in an institutional sense: Traditionally, the SOE Network functions through its secretariat. The Network is represented by SADC Member States through their relevant government departments, intergovernmental and non-governmental organisations and institutions; the meeting noted that it will be essential for the network to seek guidelines on the nature of the Network from the OECD, as the previous secretariat of the Network, particularly with reference to the benchmarks, multilateral networks of institutions, funding, resources and the launch of the Network in November 2018 in Mauritius;
- Member State Representation and Participation: after much deliberation, the meeting concluded that the representation and participation of Network needs to be continental wide; The process, however, was cautioned to be a gradual process.
- Sustainability of the Network: the meeting noted this network belongs to its Member States and as such, it is vital for the Network to have a separate character to the APRM, as this will avoid the assumption that membership of the Network is based on membership to the APRM or that the success or demise of the Network is associated with that of the APRM. Furthermore, the role of the APRM within this Network will remain purely that of a coordinating and facilitating platform and technical support; the OECD will serve as a technical partner;
- Financial Matters: the meeting noted the previous experience of the SOE Network, which secured the financial backing from one of its member states, for the duration of 3 years; it is suggest that a similar model be emulated. The APRM Continental Secretariat will contribute to the Network through technical support, costs towards human resources to manage and coordinate the Network; with regards to knowledge production, the Network will have to look into mobilising resources through developmental partnerships;
- Value addition and influence of the Network: The value addition of such a network is the platform for peer sharing, learning, review and exchange. With regards to the expected outcomes, the meeting considered the value addition of such a platform, being the quality of influence on governance, in particular, the manner in which Corporate Governance is defined, reviewed, evaluated and monitored. The mandate of the APRM has been expanded to the evaluation and monitoring implementation of African Union, Agenda 2063 and the United Nations SDGs goals 2030, which speak to the various standards, codes, policies and treaties geared towards improving and dealing with challenges on governance issues. Against this, the meeting noted that having the APRM serve as a secretariat for such a platform, affords the network the opportunity to influence and further deepen the nature of work involved in reviewing issues of Corporate Governance on a continental level;
- Capacity: Does the APRM have the capacity to build the bridge to cover the institutional gap to serve as the secretariat for this network. The APRM recognises its challenges, however, one of its targets is the development of the mechanism into a think tank. This is recognised in its strategic plan.
STRATEGIC AND SUBSTANTIVE MATTERS: THE 7TH SOES NETWORK CHAIRED BY MR GEORGE TIRANT
- The Meeting considered the following substantive strategic matters: i) achievements, challenges and lessons learnt of the SADC Network; ii) Lessons from other regional OECD SOE network bodies; iii) Consideration of the outcomes emanating from the 6th SOE Network Meeting in Victoria Falls, Zimbabwe.
DISCUSSION ON THE PROPOSED THEME FOR THE 7TH MEETING OF THE SOE NETWORK, CHAIRED BY MS EVELYN CHANGE OF THE AFDB.
- After much deliberation, the meeting agreed on the following themes and sub-themes for the 7th Meeting of the SOE Network:
- Overarching Theme: “Positioning Africa’s SOEs to deliver on the developmental mandate of Agenda 2063”
- Sub – themes for consideration:
- Current SOE reform initiatives in Africa: Best practices, trends and experience sharing
- Ownership policy model: interference and intervention
- Ethics, integrity, transparency and disclosure
- The meeting agreed on the following structure for the 7th Meeting of the SOE Meeting:
- Day 1: (Stocktaking): A Retrospect glance at challenges, learnt lessons and best practices that have emerged from participating member countries in the past four years. Member states will be requested to prepare a presentation for the November meeting outlining challenges, lessons learnt and best practices. APRM will circulate a guidance paper/questionnaire that will guide the areas for members states to report on.
- Day 2: Mapping a way forward. Day 2 will be dedicated to mapping the way forward towards the next three/five years of the Network and specifically towards the 2019 meeting. Based on the discussions today, it is proposed that emerging out of the country presentations, a Taskforce / Steering Committee be set up for 2019 which will lead the preparations for the 2019 meeting. In this regard, it is further proposed that one of the outcomes of the 2018 meeting should be a decision to commence work towards the development of “The African Codes for Governance of SOEs”. The work of development of the Codes will be coordinated by APRM, undertaken by the Steering Committee/ Taskforce with the aim to present final Codes at the 2019 meeting. The APRM, through its inter-governmental processes within the AU, will seek to have the Codes adopted at the AU level for domestication by African countries.
PROPOSED SPEAKERS/ EXPERTS FOR THE NOVEMBER MEETING, CHAIRED BY MS BUSANGANI MKHALIPHI
- The meeting reflected on proposed speakers and experts and after deliberation concluded that the APRM Secretariat will propose the following:
- Five Countries that will be sharing experiences both regionally and internationally and from which participating member states could draw valuable lessons from;
This is a preliminary list of countries from which experts could be drawn. It is however proposed that further consideration is necessary. In this regard, the APRM must undertake further research and submit a list of names and countries to the Steering Committee in two weeks.
- Review of the board and universal OECD universal guidelines on SEOs;
As the host of the 7th Meeting of SOE Networks, the Republic of Mauritius should take up the role of Co-Host; propose a list and level of participation from the Government, private sector, other governance institutions in Mauritius and stakeholders. ;