Tell us Energy Commission chairman Rashdan’s ‘superpowers’, minister

 

By Ibrahim M Ahmad

Minister Nik Nazmi Nik Ahmad has a duty to properly explain to the energy industry and the public why he is prepared to overlook serious conflict of interest issues surrounding the appointment of the new Energy Commission chairman.

Last Friday, the national resources, environment and climate change minister was reported staunchly defending the appointment of Gamuda group deputy managing director Rashdan Yusof to head the commission.

Perhaps, the minister should turn to retired Court of Appeal judge Darryl Goon, who was also appointed to the commission in February, for some serious legal advice on the matter.

Section 5 of the Energy Commission Act 2001 specifically provides that the chairman “shall not, while holding such office, hold any other office or employment, whether remunerated or not, without the Minister’s prior written approval.”

To most fair-minded people, the clear and obvious legislative intent of that provision is to ensure the commission is led by someone fully focused on the task at hand and devoid of vested interests.

No doubt, the minister is given the discretion to approve the chairman holding some other office, but surely that could not have been with a view to overriding an issue as fundamental as one involving a clear conflict of interests. Otherwise, Section 5 would be rendered virtually meaningless.

To his credit, Nik Nazmi acknowledges that there are “genuine concerns” in the industry that the appointment violates the time-honoured “conflict of interests” principle.

“I am not saying that there is no conflict. The Act foresees that there will be situations like this, and they have remedies or safeguards for that,” he is reported to have told the Edge last week.

The minister cannot be more wrong in his understanding. It is inconceivable that Section 5 was intended to allow the minister to override serious conflict of interest issues.

Even if it was, then the minister must show strong justification for the exercise of his discretion.

Thus far, however, Nik Nazmi’s explanation has been rather lame.

Firstly, he says, Rashdan has magnanimously recused himself from sitting on – not one or two – but seven “key sub-committees,” including those concerned with licensing, finance and tender.

Rashdan’s is a “macro” level role, apparently, which will see him sit on the economic and strategic sub-committee.

Any outsider looking in will know that as the highest-ranking officer in the commission, the chairman would be in prime position to exercise control – directly or indirectly – over all activities of the commission, irrespective of whether he sits in on the proceedings of any of the sub-committees.

That gives opportunity for a potential abuse of his position by giving Gamuda and himself an unfair advantage over others. Whether Rashdan actually does this or not is irrelevant. The test is an objective one. The fact is, he can.

Alternatively, many would take Rashdan’s recusal as meaning that he will be severely restricted in the performance of his duties and in his participation in the commission’s plans and activities. How then can he be expected to take the proverbial bull by its horns and, in the words of the minister himself, “shake things up”?

Nik Nazmi also seeks to assure us that all board appointees are vetted by the Prime Minister’s Office (PMO). Presumably, he means that the PMO will ensure all appointees are properly vetted.

The question is, what criteria does the PMO use to vet board appointees?

In the case of the chairman, the minister has already used his power to bypass the single-most important criterion laid out by Parliament in Section 5 of the Act – the avoidance of conflicts of interests – seemingly with little or no justification.

Surely it is not enough to say – as the minister has done – that Rashdan is the best man for the job given his vast experience in the corporate sector and in government-linked projects. If that was the basis, many others would qualify. If so, why go for the candidate with a serious conflict of interests?

Rashdan is also said to possess clear ideas to support the government’s visions and targets. What are they? How are they unique to justify the suggestion that only Rashdan and Rashdan alone can lead this high-level commission despite his conflict of interests?

In short, what superpowers does Rashdan have that stands him head and shoulders above other candidates?

Nik Nazmi cannot simply brush aside such a glaring conflict of interests by downplaying Gamuda’s involvement in the energy business and playing up the government’s own participation in the sector.

Presumably, the minister is saying that the government is in a dominant position and can prevent potential excesses on the part of the chairman. Why is the government offering to be policeman just to push Rashdan’s appointment through?

In any case, irrespective of the size of Gamuda’s involvement in the energy sector, the potential for Rashdan to act with a bias in favour of his employer is always there.

It is worth repeating that, when it comes to conflicts of interests, the test is an objective one. It has nothing to do with whether Gamuda and Rashdan are likely to abuse the position for their private gain.

Contrary to what the minister may suggest, Rashdan’s declaration of interests is not a safeguard against him acting for Gamuda’s and his own interests.

Section 11(1) of the Act specifies that “no person shall be appointed as a member of the commission unless before such appointment such person makes a statutory declaration whether he has any interest, financial or otherwise, in any undertaking involving energy supply activities.”

Rashdan’s position in Gamuda was information already in the public domain prior to his appointment. Surely he has been prudent enough to make the necessary disclosure under oath prior to his appointment, as required by law.

The fact is he was appointed despite knowledge of his conflict of interests.

The unhappiness in the industry is understandable. It is unwise for the minister to insinuate that there are ulterior purposes behind the protestations.

Ultimately, the industry and the public must be assured of the integrity and objectivity of members of the energy commission, starting with its chairman.

The minister’s justification falls short of providing the assurances needed.

Meanwhile, Rashdan’s and Gamuda’s silence on the matter is deafening.

There can be no happy ending. It seems an honourable exit by the chairman is the only way out of this mess. Energy will be better spent elsewhere. - FMT

Ibrahim M Ahmad is a FMT Reader.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.