PROCLAMATION No. 412/2004
A PROCLAMATION TO PROVIDE FOR THE ESTABLISHMENT OF THE PRIVATIZATION AND PUBLIC ENTERPRISES SUPERVISING AUTHORITY
WHEREAS, it has become necessary to change the role and participation of the state in the economy and to encourage the expansion of the private sector and thereby promote the economic development of the Country;
WHEREAS, as long as public enterprises have to continue under state ownership, it is necessary to provide them with such guidance and support so as to enable them to be competitive and profitable and thereby play appropriate role in the implementation of the Country’s industrial development strategy and the enhancement of economic growth;
WHEREAS, to achieve these objectives, it has become necessary to amalgamate the Ethiopia Privatization Agency and the Public Enterprises Supervising Authority with a view to coordinating the implementation of the Privatization Programme with the activities of supervising public enterprise;
NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:
1. Short Title
This Proclamation may be cited as “Privatization and Public Enterprises Supervising Authority Establishment Proclamation No. 412/2004.”
In this Proclamation, unless the context requires otherwise:
1. The word “Privatization” shall have the meaning assigned to it under Article 2(1) of the Privatization of Public Enterprises Proclamation No. 146/1998;
2. “Public Enterprise” means an enterprise as defined under Article 2(1) of the Public Enterprises Proclamation NO. 25/1992, or a wholly state owned share company, but excluding those enterprises for which specific supervising authorities are designated by other laws of decisions of the Government.
3. “Share Company” means a share company partially owned by the state, but excluding those share companies in which the state owns shares through public enterprises;
4. “board of management” means a board of management of a public enterprise and includes board of directors of a wholly state owned share company;
5. “Ministry” and “Minister” means the Ministry and Minister of Trade and Industry respectively.
1. The Privatization and Public Enterprises Authority (hereinafter referred to as the “Authority”) is hereby established as an autonomous federal government office having its own legal personality.
2. The Authority shall be accountable to the Ministry.
4. Head Office
The Authority shall have its head office in Addis Ababa and may have branch offices elsewhere as may be necessary.
The Authority shall have the following objectives:
1. To implement the Privatization Programme in accordance with the privatization of public enterprises legislation and in a transparent and efficient manner;
2. To support public enterprises in attaining higher level of capacity utilization and the employment of better management systems and technology and thereby to improve their performance and to maximize their achievements;
3. To cause the establishment of new enterprises in sectors where private investors could not participate for various reasons and which will be bottlenecks for the overall economic development;
4. To supervise the management of public enterprises;
5. To protect the ownership rights of the state in public enterprises and share companies.
6. Powers and Duties
The Authority shall have the following powers and duties:
1. To implement the Privatization Programme in accordance with the Privatization of Public Enterprises Proclamation No. 146/1998; and, without prejudice to the generality of this provisions, to:
a) Submit, to the Ministry, the list of public enterprises and government shareholdings to be privatized, and obtain approval thereof;
b) Cause the undertaking of all necessary preparatory works for the privatization of enterprises;
c) Determine bid evaluation criteria for the selection of investors participating in privatization; and design ways and means of encouraging domestic investors to participate in the privatization of enterprises;
d) Prepare necessary documents to be used in the privatization process;
e) Take all necessary measures to publicize the Privatization Programme and its implementation;
f) Through post privatization monitoring, ensure compliance or investors’ obligations, and undertake impact assessment of the privatization in general;
2. Without prejudice to the relevant provisions of the Public Enterprises Proclamation No. 25/1992 and other laws, to:
a) Undertake project studies for the establishment of enterprises pursuant to Article 5(3) of this Proclamation:
b) Evaluate and submit to the Ministry, for by investors intending to invest in partnership with the government; and follow up the implementation of same;
c) Undertake studies and provide guidelines with a view to assisting public enterprises in building their capacities;
d) Appoint and remove the chairpersons and members of boards of management of public enterprises and fix their fees; provided, however, that the provisions of Article 12(2) of Proclamation No. 25/1992 shall apply to the appointment of members of board of directors of enterprises the shares of which are wholly state owned;
e) Approve the appointment of external auditors of public enterprises;
f) Approve corporate targets and investment plans of public enterprises;
g) Follow up and evaluate the performance of public enterprises;
h) Approve financial reports of public enterprises as audited by external auditors;
i) Issue directives on writing off the accounts of public enterprises and follow up their implementations;
j) Undertake appropriate studies and submit recommendations to the Ministry where the amalgamation or division of public enterprises becomes necessary;
k) Undertake studies and implement result oriented incentive schemes applicable to members of boards of management of public enterprises and their management staff;
l) Represent the Government in general meetings of shareholders of share companies and nominate directors on behalf of the government;
m) Give final decisions on requests to retain, in accordance with the law, employees and management staff members of public enterprises in service beyond retirement age;
3. To own property, enter into contracts, and to sue and be sued in its own name;
4. To perform other acts as are required for the attainment of its objectives.
7. Organization of the Authority
The Authority shall have:
1. A Privatization Board (hereinafter referred to as the “Board”)
2. A Director General to be appointed by the Government;
3. Deputy Director Generals to be appointed by the Minister as may be necessary ; and;
4. The necessary staff.
8. Members of the Board
Members of the Board including the Chairperson shall be designated by the Government, and their number shall be determined as may be necessary.
9. Powers and Duties of the Board
1. Without prejudice to the provisions of Sub-Article (2) of this Article the Board shall have the powers and duties to:
a) Oversee and supervise the implementation of the Privatization programme;
b) Ensure the orderly execution, the legality, transparency and efficiency of the privatization process;
c) Issue directives necessary for the proper implementation of the Privatization Programme;
d) Decide or submit recommendations to the Ministry, as may be appropriate, on policy issues relating to the implementation of the Privatization Programme;
e) Examine complaints submitted to it in relation to the execution of the Privatization Programme and give administrative decisions thereon;
f) Take all other measures necessary to expedite the privatization process.
2. The powers and duties given to the Management Board of Ethiopian Privatization Agency under Sub-Article (2) and (3) of Article 6 and Sub-Article (2) of Article 7 of Proclamation No, 146/1998 and the provisions of Proclamation NO. 110/1995 are hereby given to the Board.
10. Powers and Duties of the Director General
1. The Director General shall be the chief executive officer of the Authority and shall, without prejudice to the provisions of Article 9 of this Proclamation and subject to the general directives of the Ministry, direct and administer the activities of the Authority.
2. Without limiting the generality stated in Sub-Article (1) of this Article, the Director General shall:
a) Participate in the meetings of the Board as a member;
b) Exercise the powers and duties of the Authority specified under Article 6 of this Proclamation;
c) Employ and administer employees of the Authority in accordance with the federal civil service laws;
d) Prepare and submit the Ministry the work programme and budget of the Authority; and implement same upon approval;
e) Effect expenditure in accordance with the approved budget and work programme of the Authority
f) Represent the Authority in all its dealings with third parties;
g) Prepare and submit to the Ministry the operational and financial reports of the Authority.
3. The Director General may delegate part of his powers and duties to the officials and other employees of the Authority to the extent necessary for the efficient performance of the activities of the Authority
The budget of the Authority shall be allocated by the Government.
12. Books of Accounts
1. The Authority shall keep complete and accurate books of accounts.
2. The books of accounts and financial documents of the Authority shall be audited annually by the Auditor General or by an auditor designated by him.
13. The Industrial Development Fund
1. The Industrial Development Fund established under Article 11 of Proclamation No. 277/2002 shall be deemed established under this Proclamation.
2. Financial sources of the Fund shall be deductions, in percentages to be fixed by the Government, from the net profits of public enterprises.
3. The fund shall be utilized for the following purpose;
a) To finance project studies and initial capital required for the establishment of enterprises pursuant to Article 5(3) of this Proclamation.
b) To finance the capital expenditure required for upgrading and expansion of existing public enterprises that may play key roles in the economic development of the Country.
c) To replenish the capital of public enterprise which has sustained loss where it is deemed necessary to salvage it from dissolution.
4. Any disbursement from the Fund in accordance with Sub-Article (3) of this Article shall require the authorization of the Ministry.
5. The Authority shall separately keep complete and accurate books of accounts of the Fund.
6. The accounts of the Fund shall be audited annually by the Auditor General or by an auditor designated by him.
14. Powers and Duties of other Organs Supervising Public Enterprises
The Powers and duties enumerated under Article 6 of this Proclamation shall, mutatis mutandis, be applicable to other organs supervising public enterprises excluded form the definition provided for under Article 2(2) hereunder.
15. Repeal and Applicable Laws
1. The following laws are hereby repealed:
a) Articles 16 to 26 of the Privatization of Public Enterprises Proclamation NO. 146/1998;
b) The Public Enterprising Supervising Authority and the Industrial Development Fund Establishment Proclamation No. 277/2002.
2. The following laws shall be applicable:
a) Without prejudice to Sub-Article 1(a) of this Article, the Privatization of Public Enterprises Proclamation No. 146/1998 and the Review of Properties Taken in Violation of the Relevant Proclamations Proclamation No. 110/1995 (as amended); provided, however, that any reference to the “Agency” in these Proclamations shall read as the “Authority”;
b) The provisions of the Public Enterprises Proclamation No. 25/1992 in so far as they are not inconsistent with the provisions of this Proclamation.
16. Transfer of Rights and Obligations
The rights and obligations of the Ethiopian Privatization Agency established under Proclamation No. 146/1998 and the Public Enterprises Supervising Authority Established under Proclamation No. 244/2002 are hereby the transferred to the Authority.
17. Transitory Provisions
The salary scale approved for the Ethiopian Privatization Agency shall be applicable to the employees of the Authority until the introduction of new civil servants’ salary scale pursuant to the civil service reform programme.
18. Effective Date
This Proclamation shall enter into force on the date of its publication on the Federal Negarit Gazeta.
Done at Addis Ababa, this 2nd day of August, 2004
PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA