Regulatory Agencies Must Maintain Arm’s Length Relationship with State-Controlled Enterprises
Maintaining a clear separation between regulatory agencies and state-controlled enterprises (SCEs) is crucial in Saint Helena, Ascension and Tristan da Cunha. A recent assessment highlights the importance of this relationship and provides recommendations to improve it.
Lack of Regulatory Authorities
The report notes that while there are regulatory authorities for some industries, such as utilities and financial services, there is a lack of similar bodies for other sectors where SHG has an interest through its SCEs. This includes:
- Retail
- Automotive repairs
- Farming
- Fisheries
- Currency fund
- Hospitality
- Shipping
To address this issue, the report recommends that SHG develops and implements legislation to establish regulatory authorities in these industries to achieve its regulatory objectives.
Executive Council Oversight
Meanwhile, the Executive Council’s role as owner/shareholder of SCEs should be reviewed. While ExCo is concerned with ensuring financial viability and returns on investments, it lacks a clear policy direction and does not exercise shareholder oversight through a single ownership entity.
The report highlights that SHG does not have an ownership policy in place, which defines its role in the governance of SCEs and how it will implement its ownership strategy. It also recommends that ExCo ensures the strategic direction of SCEs is aligned with government policy on service delivery and economic growth.
Recommendations
In light of these findings, the report makes several recommendations to SHG:
- Develop and Implement Legislation: Establish regulatory authorities in industries where it has an interest through its SCEs.
- Exercise Ownership Rights: Exercise ownership rights clearly identified within its administration, centralized in a single ownership entity or coordinating body.
- Develop an Ownership Policy: Develop an ownership policy that defines the overall rationales for state ownership, the state’s role in governance of SCEs, and how it will implement its ownership strategy.
These recommendations aim to promote a more effective and transparent relationship between regulatory agencies and state-controlled enterprises, ultimately benefiting the people of Saint Helena, Ascension and Tristan da Cunha.