Financial Crime World

State’s Regulatory Oversight in St Helena Gap

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A review of the financial services and utility services sectors on the island of St Helena has revealed a lack of effective regulatory oversight by the State, leading to concerns about the viability and sustainability of its state-owned enterprises (SOEs).

Lack of Direction and Guidance for SOEs

According to a recent report, the State’s failure to exercise ownership rights and develop an ownership policy has resulted in a lack of direction and guidance for its SOEs. This has led to confusion among stakeholders and a potential risk to the financial health of these entities.

Key Issues

  • The Executive Council (ExCo) is responsible for overseeing the state-owned companies, but there is no clear mechanism in place for exercising ownership rights.
  • The Financial Secretary is responsible for financial oversight, but this role is not adequately coordinated with ExCo’s responsibilities.

Recommendations

To address these concerns, the report recommends that the State:

Develop an Ownership Policy

  • Define its role in the governance of SOEs and how it will implement its policy.
  • Include clear guidelines on the exercise of ownership rights and the responsibilities of government offices involved in implementation.

Strengthen Governance Structure

  • Ensure ExCo provides strategic direction to SOEs through a Statement of Intent (SOI) or Memorandum of Understanding (MOU) serving as a formal performance agreement between the SOE and Government.

Key Findings

  • The State’s failure to exercise ownership rights has resulted in a lack of direction and guidance for its SOEs.
  • There is no clear mechanism in place for exercising ownership rights, leading to confusion among stakeholders.
  • The Financial Secretary is responsible for financial oversight, but this role is not adequately coordinated with ExCo’s responsibilities.

Recommendations

  1. Develop Regulatory Authorities: SHG should develop and implement legislation to establish regulatory authorities in key industries where it has an interest through its SOEs.
  2. Exercise Ownership Rights: SHG should exercise its ownership rights and identify them clearly within its administration, with a single ownership entity or coordinating body responsible for carrying out these duties.
  3. Develop Ownership Policy: SHG should develop an ownership policy that defines its role in the governance of SOEs and how it will implement its policy.

By addressing these gaps, the State can ensure that its SOEs are well-positioned to deliver effective services and contribute to economic growth on the island.