Lawmakers on Wednesday approved a major piece of legislation aimed at reforming the operations of government-owned or controlled corporations (GOCCs), with both chambers eyeing the President’s approval by mid-June.
Senator Franklin Drilon, chairman of the Senate Finance Committee and principal author of Senate Bill No. 2640, said the days when state owned firms have not been supervised are finally over with the bill’s approval.
“We have approved a landmark legislation—the GOCC Governance Act of 2011—which will have wide ranging reform in the GOCC sector which constitutes a substantial portion of government assets and liabilities. This is the first major reform law that this Congress would pass,” he said, adding that the measure will also professionalize the board of various GOCCs as the bill imposes a “fit and proper rule” on appointive directors.
The bill creates a Governance Commission for GOCCs (GCG) which shall be composed of five members—chairman with the rank of Cabinet secretary and two members with the rank of undersecretary to be appointed by the President—and the Budget and Finance secretaries as ex-officio members. The commission shall develop a new position and classification system that will apply to all officers and employees of GOCCs, whether covered by the Salary Standardization Law or exempt from it.
During the previous administration, Drilon said, there were instances where a manicurist was appointed to a trust fund. But with the measure’s approval, only qualified individuals will be appointed “because we have imposed that only those qualified to a fit proper rule can be appointed and there should be nominations from the GCG on who should sit as members of the board.”
“This is part of the reform agenda promised by President Noynoy Aquino to be implemented during his term,” added Drilon.
Members of the board of directors or trustees and officers of state firms have the legal obligation to act in good faith in all the dealings with the property and monies of the GOCC. Any board member or officer found to have benefited from the GOCC excess benefit or profit shall be subject to restitution without prejudice to any administrative, civil or criminal case.
“The board of directors must be accountable to the government and their performance as individual directors will be reviewed on a yearly basis whether or not they should be reelected to the board as representatives of government,” Drilon said, adding that there is no limit on reappointment.
Both panels agreed that the GCG be given the delegated authority of Congress to review the operations of the GOCCs so that they can determine whether the GOCCs should be abolished, merged or privatized, without prejudice to the power of Congress to reorganize a GOCC. No abolition or privatization can be done unless approved by the President.
“We expect that sometime mid-June, the bill should become law,” Drilon said.