Senate Minority Leader Richard Lewis and Senator Shawn Nicholas are apprehensive about some aspects of the Statutory Corporation Amendment Bill.
The two Opposition Senators made their comments yesterday during debates in the Senate where Bill was passed.
Senator Lewis expressed concern with Clause 3 of the Bill, particularly the provision which states: “A Statutory Corporation may enter into an arrangement with another statutory corporation to assist that other statutory corporation financially to carry out its statutory functions on terms and conditions approved by the Cabinet, and to guarantee the repayment of a loan or the performance of an obligation of that other statutory corporation.”
Lewis said this provision should only be used for the short-term financial stability of statutory corporations.
He considered Clause 3 of the Bill to be “a sort of propping up of other statutory corporations. I don’t think that this is something you want to do over the long-term; it must be a short-term process.”
Using the Social Security Board as an example, he added: “So you may have a statutory corporation assisting Social Security, and at another time another statutory corporation is assisting Social Security. If there are institutional problems within that statutory corporation, you want to address those problems so it can be placed on a sound footing.”
The Minority Leader also said that Boards of Directors for statutory corporations should receive further scrutiny for their actions following the passage of the Bill.
“We need to hold the directors accountable. Whatever challenges the statutory corporation is facing, the directors must ensure they address those problems. We cannot have another statutory corporation lending assistance, affecting its own financial integrity,” he said.
Senator Shawn Nicholas also had misgivings with the provision, stating that the Bill cannot be seen by statutory corporations as an invitation to use other statutory corporations like ATMs.
She said, “While [the Bill] will allow a statutory corporation to bail out another, it may not allow that failed corporation to improve.”
While granting that some cases could be acceptable, Nicholas warned that the provision “should not be used as an ATM, whereby we have statutory corporations below par and not functioning, so they turn to another.”