• Home
  • ENERGY
  • Namcor reacts to World Bank findings
CONFLICT OF INTEREST: The World Bank said some public entities lack separation between their operational and regulatory functions. PHOTO: FILE
CONFLICT OF INTEREST: The World Bank said some public entities lack separation between their operational and regulatory functions. PHOTO: FILE

Namcor reacts to World Bank findings

‘We don’t want to be in this position’
In a recent country diagnostic, the World Bank said some Namibian public entities lack separation between their operational and regulatory functions.
Ogone Tlhage
National Petroleum Corporation of Namibia (Namcor) managing director Immanuel Mulunga says there is a need for the establishment of a petroleum agency to regulate the downstream fuel industry, a role currently played by the state oil parastatal.

He made the remarks following a report by the World Bank that raised concerns that certain public entities are both regulator and operator in the sectors in which they operate.

In a country diagnostic for Namibia, the World Bank observed that some public entities lack a separation between their operational and regulatory functions, providing incentive to keep competitors out.

According to international best practices, a state-owned enterprise (SOE) that is active in a sector of the economy should not have a simultaneous regulatory function for that sector, it said.

High time

“This is probably the time for government to amend the law to remove the advisory and regularly function from Namcor. We don’t actually want to be in that position because we do identify ourselves as purely commercial enterprise.

“It is probably also high time for government to create a petroleum agency to serve the emerging oil industry better,” Mulunga said.

According to him, many countries operate with a ministry which sets the policy, a petroleum agency that regulates the industry and a national oil company that participates in the commercial activities on behalf of the state.

“In practice, Namcor has largely evolved from its advisory duties and operates entirely as a commercial entity. In fact, it has been classified as a commercial public enterprise by the ministry of public enterprises and is on course to become the largest public enterprise in Namibia,” he said.

Amendment in the works

Mines minister Tom Alweendo echoed the World Bank’s sentiments, adding that the ministry is reviewing the Petroleum Act to address the shortcomings that had been identified.

“It is correct that the Petroleum Act of 1991 makes provision where Namcor can be requested to assist the Petroleum Commissioner, who is the industry regulator, in his/her functions.

“I therefore do agree that there’s a potential conflict of interest. We’re currently busy amending the law and this is being addressed,” he said.

Comments

Namibian Sun 2022-12-04

No comments have been left on this article

Please login to leave a comment