| Yemen: Integrity Scorecard Report > Sub-Category: State-Owned Enterprises | ||
| Indicators | Score | |
| 67 | Is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | 100 |
| 68 | Is the agency, series of agencies, or equivalent mechanism overseeing state-owned companies effective? | 25 |
| 69 | Can citizens access the financial records of state-owned companies? | 20 |
Indicator and sub-Indicator Details
| 67 | Is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | |||||||
| 67: In law, is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | ||||||||
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Comments: There are many economic parastatals in Yemen, including enterprises involved in trade, industry and services. Each has its respective government line ministry supervising its operations, depending on their nature. There are also mixed-sector enterprises with mixed public/private ownership, including the Yemen Bank for Reconstruction and Development and the Yemen Drug Company. References: Ministry of Trade and Industry (Government trade and industrial enterprises) Ministry of Water and the Environment (Water and Sanitation utilities) Ministry of Electricity and Energy(Public Electicity utilities) Ministry of Telecommunications and Information Technology (Yemen Telecommmiunications Company, Internet Services)
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| 68 | Is the agency, series of agencies, or equivalent mechanism overseeing state-owned companies effective? | |||||||
| 68a: In law, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies is protected from political interference. | ||||||||
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Comments: Each ministry has its own law, such as the Law of Electricity, and procedural bylaws. The overseeing agencies are mostly government line ministries. Ministries are subject to sectoral laws and administratvie guidelines for their work. Being as they are government ministries, they are subject to political interference. References: n/a
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| 68b: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies has a professional, full-time staff. | ||||||||
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Comments: The above study, although old, gives an indication of the parastatals and the respective ministries overseeing them, from page 38 to 56. "Yemen has no single entity to exercise ownership rights of state-owned enterprises; ownership still lies with line ministries." Staffing of these oversight ministries is as good as the civil service can provide, given the poor training, poor salaries, lack of procedures and the many administrative ills that the Yemeni administrative apparatus suffers from. Most oversight is limited to receiving periodic reports or acting as liaison between the enterprises and other ministries or government agencies. References: [ LINK ]
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| 68c: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies receives regular funding. | ||||||||
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Comments: Funding may be disproportionate to the supervision roles they play. All ministries have their respective appropriations in the government budget. Sometimes, they have access to funding from the parastatals they oversee, as is the case with the Public Electricity Corporation funding some expenditures of the Ministry of Electricity and Water and paying the salaries of seconded staff to the ministry. References: 2007 and 2008 General State Budget Personal experience
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| 68d: In practice, when necessary, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies independently initiates investigations. | ||||||||
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Comments: The mandate for investigation rests with the ombudsman and audit organizations, or authorities such as the Supreme National Anti-Corruption Committee (SNACC). Initiation has come from the press (newspapers Mareb Press, Yemen Times and Al-Wasat), including the Mareb Press revelation of the fraud in the Nuclear Power Station Contracts. Oversight ministries can initiate investigations into matters pertaining to the parastatals under their supervision, but they allow parastatals to enjoy a high degree of autonomy. References: Law 39, 1992, Concerning the Central Organization for Control and Auditing (COCA), Article 2, [ LINK ]
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| 68e: In practice, when necessary, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies imposes penalties on offenders. | ||||||||
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Comments: There is very little that any oversight entity can do beyond following the stipulations of the Civil Service Law, which controls disciplinary and other remedial actions. However, the worst punishment is dismissal WITH PAY. References: Civil Service Law No. 19, 1991, Concerning Civil Service, Article 112 Personal Experience
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| 69 | Can citizens access the financial records of state-owned companies? | |||||||
| 69a: In law, citizens can access the financial records of state-owned companies. | ||||||||
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Comments: Information of any kind is available only those parastatals subject to privatization. There is no stipulation for public access to any information on other parastatals. References: Law No. 35, 1991, for Public Corporations, Companies and Authorities Law No.7, 1999, amending Law No. 35, 1991 Law No. 45, 1999 ,Concerning Privatization, Article 4 (a)
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| 69b: In practice, the financial records of state-owned companies are regularly updated. | ||||||||
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Comments: The laws of each parastatal require this. Otherwise they would not get approval for their budgets. References: Law No. 35, 1991, for Public Corporations, Companies and Authorities Law No.7, 1999, amending Law No. 35, 1991
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| 69c: In practice, the financial records of state-owned companies are audited according to international accounting standards. | ||||||||
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Comments: Law 39 gives COCA the mandate to carry out all auditing work on government entities and parastatals. Law 49 empowers the Higher Committee for Privatization to assign independent auditors if necessary, or as may be required by potential buyers of parastatals undergoing privatization, although this is more implied within general contexts. References: Law 39, 1992, Concerning the Central Organization for Control and Auditing (COCA), [ LINK ] Law 49, 1999, Privatization of Parastatals
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| 69d: In practice, citizens can access the financial records of state-owned companies within a reasonable time period. | ||||||||
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Comments: This may be so for enterprises undergoing privatization, but not for all parastatals, which are only required to present their final accounts of budget implementation, which are standardized formats used for all government entities. "With independently audited, open bookkeeping and accounting (attributes, it should be said, that are not always found in the large parastatal agencies and donor organizations that absorb virtually all the considerable financial resources that constitute development budgets!)" Personal experience working with a major government-owned utility and a mixed-sector enterprise shows that since 1981, when the government imposed "uniform procedures for all government entities and public sector economic units," most government parastatals ceased to publish audited financial statements or to provide them in the standard format of private commercial enterprises, which renders the "final accounts" provided to Parliament at year-end useless for the purpose of financial analysis. Some parastatals like commercial banks (the National Bank of Yemen and the Yemen Bank for Reconstruction and Development) do have audited financial statements, and they may be accessible to public.
References: Law No. 45, 1999, Privatization of Parastatals Various laws of parastatals
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| 69e: In practice, citizens can access the financial records of state-owned companies at a reasonable cost. | ||||||||
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Comments: This may be so for enterprises undergoing privatization, but not for all parastatals, which are only required to present their final accounts of the implementation of the budgets, which are standardized formats used for all government entities, administrative or economic in nature. Source 3 confirms this: "with independently-audited, open book-keeping and accounting, (attributes, it should be said that are not always found in the large parastatal agencies and donor organizations that absorb virtually all the considerable financial resources that constitute development budgets!)" Note that personal experience working with a major government owned utility and a mixed sector enterprise shows that since 1981, when the Government imposed the "uniform procedures for all government entities and public sector economic units", most government parastatals ceased to publish audited financial statements and provide them in the standard format of private commercial enterprises, which renders the "final accounts" provided to Parliament at year end useless for the purpose of financial analysis. Some parastatals like commercial banks (the National Bank of Yemen - Aden - and the Yemen Bank for Reconstruction and Development do have audited financial statements and they may be accessible to public. References: Law No. 45, 1999, Privatization of Parastatals Various laws of parastatals
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