Passing of new legislation in PNG a key step to reforming governance and improving performance of state-owned enterprises
Supported by PSDI, the Government of Papua New Guinea (PNG) on 17 August 2021 passed a key legislation in its efforts to reform governance, increase transparency, and improve the performance of the country’s state-owned enterprises (SOEs).
The passing of the Kumul Consolidated Holdings (Amendment) Bill 2021 is a key milestone of the Government of PNG’s broad SOE reform program that aims to reduce political interference in SOE operations, create opportunities for private investment, and reduce the cost of doing business in PNG. The amended act follows the government’s SOE Ownership and Reform Policy, which was endorsed in 2020. The amended act
- clearly defines the roles of ministers, SOE boards, and management;
- refocuses KCH’s role on monitoring SOE performance;
- improves SOE transparency by requiring the timely preparation and public release of statements of corporate objectives and audited annual accounts;
- establishes a transparent, skills-based process for SOE director selection and appointment (that supports KCH’s goal of having at least 30% representation of women on PNG’s SOE boards); and
- requires community service obligations to be identified and costed as part of the corporate planning process.
The Government of PNG’s SOE reform program is supported in part by an Asian Development Bank policy-based loan.