Prime Minister Gives Instructions to Strengthen Governance Control of Public Bodies

Prime Minister, the Most Hon. Andrew Holness, has given instructions for measures to be put in place to strengthen the oversight powers and governance control of public bodies, in light of the operational weaknesses at the State-run oil refinery, Petrojam.

Addressing the House of Representatives on July 10, Mr. Holness explained that in the matter of Petrojam, assertions have been made that seem to assume that Permanent Secretaries have significant authority over operations.

“Those of us in the past, or who currently hold ministerial responsibilities, should be fully aware of the limits to the potential for Permanent Secretaries to intervene in the operations of entities such as self-financing statutory bodies,” he said.

In this regard, the Prime Minister said consideration has been given to this situation and that directions have been given to the Minister of Finance and the Public Service to bring to Cabinet, proposals for amendment to the Public Bodies Management and Accountability Act, in order to bring clarity to the accountability architecture.

He said it is clear from interviewing the Acting Permanent Secretary and the officers of the Energy Division that the central Ministry was not aware, or was made aware after the fact, of most of the instances of maladministration at Petrojam.

Mr. Holness pointed out that Petrojam is a self-financing public body, in the form of a limited liability company jointly owned by PDV Caribe of Venezuela and the Petroleum Corporation of Jamaica, a statutory body owned by the Government of Jamaica.

“Petrojam has a Board that is responsible for the good governance and management of the operations in keeping with the Public Bodies Management and Accountability Act, and is required to conform with all policy guidelines as may be set by the Government from time to time,” the Prime Minister noted.

Mr. Holness explained that the Board reports directly to the Minister, not the Permanent Secretary, and takes policy directions from the Minister.

“The Cabinet is satisfied that there are indications where the previous Board may have departed from policy and where certain actions, such as personally making travel arrangements, would be in breach of policy guidelines,” he added.

He noted that, to this end, the Cabinet has acted to reconstitute the Board with the appointment of former Chairman of Supreme Ventures Limited, Paul Hoo, as its new Chairman; and two former Vice-Presidents of major banks in Jamaica, Rosie Pilner and Wayne Powell, as Directors.

Prime Minister Holness pointed out that the new Board has had its orientation with the Petrojam staff, and has started to give oversight and direction to governance and management of the company.

He also stated that the Board has been given directions to settle the staff industrial relations environment at the company, ensure that the management is efficient and effective, and return the refinery to full operation in the shortest possible time, as a matter of urgency.

Mr. Holness said the refinery is now in a routine maintenance mode, almost two weeks beyond the projected timeline, which has created some supply disruption, mainly in bitumen for asphalt.

The new Board of the refinery has also been directed to examine the management systems, including accounting, administrative, procurement and human resource management, for weakness and make the necessary changes, both in systems and personnel, to ensure effective operation in the short term.

Mr. Holness said the Cabinet’s review of the Permanent Secretary’s report and interview of senior personnel in the Ministry’s Energy Division and Petrojam, revealed that the process of approval by Board members needed greater oversight.

It was also noted that Cabinet has refined the procedures for travel to mandate that all Board travel, whether it be from Jamaica to attend a conference, or from elsewhere to attend a Board meeting in Jamaica, must have the approval of the Minister, through the Permanent Secretary, and then the Cabinet Secretary.