Zambian Watchdog

Sata’s powers to appoint heads of parastatals questioned

April 27
19:23 2012

A few days ago, President Sata informed the Nation through his press aide, Mr. George Chelah that he had appointed some Chief Executive Officers for some of the statutory bodies and at least one parastatal organization. The appointments made are that of Mr. Charles Mpundu as the Director General and CEO of the National Pension Scheme (NAPSA), Dr Nkumbula as the Commissioner and CEO of the Workers Compensation Fund, and Mr.  George Silutongwe as Managing Director and CEO of the Zambia State Insurance Corporation (ZSIC) Group.

While the individuals appointed to the said position may have the requisite qualifications and experience, the mode and style of their appointments raise a number of troubling issues from both a constitutional and corporate governance stand point.

It is not clear where the President derives power to make some of these appointments. In the case of NAPSA, the National Pension Scheme Act Chapter 256 of the Laws of Zambia provides in section 6 (2) that the Director General shall be appointed by the Minister (the Minister in this case being the Minister responsible for social security).  The President is not mentioned anywhere in the Act as having the authority to appoint the Director General for NAPSA.

In the case of the Workers Compensation, Act No.10 of 1999 also explicitly states at Section 16 (1) that the Minister shall, in consultation with the Board, appoint the Commissioner or CEO. Again, the Workers Compensation Act does not invest the president with any powers to appoint the CEO.

The constitutive documents for ZSIC also repose the power of appointing the CEO in the Board and not the President. Indeed Ms Muyenga the immediate past CEO of ZSIC was recruited and appointed by the ZSIC Board after being interviewed by the Board.

Soon after taking power, President Michael Sata also appointed Mr. Matongo as the CEO for the Food Reserve Agency. This was in spite of the Food Reserve Agency Act explicitly stating at Paragraph 8 (1) of the schedule that the Agency (Board) shall appoint the Director and CEO of the FRA.

A somewhat similar situation was orchestrated at ZESCO where the CEO was appointed at the instigation of State House without being subjected to any interview by the ZESCO board.

Since the PF took over power, we have seen a number of CEOs for various institutions being appointed in a manner that is neither transparent nor fully supported by the law. The appointments of the Media Chiefs at the state owned Daily Mail and Times of Zambia are other cases in point.  In both instances, the constitutive documents of the concerned companies state that the CEO shall be appointed by the Board. The same is true of the CEO for the Zambia National Broadcasting Corporation, where Mr Chibamba Kanyama was appointed Director General without being interviewed by the Board.

The question then arises as to what are the possible implications of these appointments?

Firstly and foremost, unless these appointments are being made by a competent and legitimate authority, it could be argued that the appointments are voidable at best or null and void ab initio  at worst.

To examine the legality of these appointments, let us consider each or some of the appointments.

As has been illustrated above, the President is not mentioned in either the NAPSA or Workers Compensation Acts as the appointing authority for the CEO. In both instances, this power is vested in the Minister acting in consultation with the Board.

In the case of ZSIC, FRA, the Daily Mail, Times of Zambia and ZNBC, it is only the Board which is authorized to appoint the CEO. Where then did the President purport to draw power to make these appointments? Having scoured and trawled all possible legislation, I could not find any clear provision which gives the President authority to make the appointments.  The closest I could come is Article 44(2) (g) of the Republican Constitution which stipulates that the President has power, subject to the constitution, to appoint such persons as are required by this constitution or any other law to be appointed by him.

I would submit that, it would be erroneous for the President to rely on this constitutional provision as a basis for his having made the appointment. I say so because in all the instances illustrated above, the law does NOT REQUIRE the President to make any of the appointments discussed above; the law requires someone else to make all those appointments. In some cases, the law requires the Minister to make the appointments while in other cases the obligation to make the appointments is placed on the Board. In no instances does the law require the President to make the appointments.  It follows therefore that the President could not have relied on Article 44(2) (g) of the constitution to make the appointments in issue.

In case one is tempted  to conclude that if the Minister  ,( who is lower than the President )is authorized to make the appointment of a CEO, then the President who  is responsible for an even bigger constituency should have even more power to make more than just such appointments, one only needs be reminded  of the  issuance of subsidiary legislation  to  see the fallacy of this argument.  Most enabling legislation for statutory corporations authorize the Ministers to pass regulations by way of statutory instruments to give efficacy to the concerned enabling legislation. It would be wrong to assume that since the President has greater powers than a Minister, he can proceed to pass the subsidiary legislation for a statutory body. Absurd as this sounds, it best illustrates what the President has done by making appointments which are by law reserved for either the Minister or the Board.  The consequences in both instances would be identical; both acts being void of legal basis would be a nullity.

Instead of making the appointments himself, the President should have directed his Ministers to first constitute the Boards for the said organizations. The Boards and the Minister, as the case may be , should then have proceeded to recruit the CEOs.

I therefore challenge the Law Association of Zambia, the Opposition Parties, NGOs and all concerned citizens who are interested in seeing our Constitution which the President swore to protect, to test this matter in our courts of law by asking the Courts to determine whether the President has powers to make the appointments referred to in this discourse.  It would appear that the lamentation that the constitution gives the President too much power, may not be true in this particular case as he has no power to make these appointments in the first place. The President has in my view usurped the powers of other entities.

The opposition has been particularly disappointing in this country in that they have failed to hold the Executive accountable. The opposition is by and large feeble and timid, only offering the occasional whimpers of discomfort when their interests are threatened. Otherwise, how does one explain the wanton and continuous violation of laws by the Executive. It is high time the opposition earned their keep in our democratic equation by offering real and effective checks balances. The opposition has lawyers and other resources they can call upon to test this matter in the courts of law. They should not always wait to debate issues in the house only – there are many avenues of offering checks and balances . They can take some issues to court, for instance. This is what happens in other countries, including South Africa. This is what nourishes democracy. I hope the opposition will rise to the occasion.

Apart from being patently unconstitutional, the appointments of the above CEOs by the President is an affront to good corporate governance.

All progressive Corporate Governance Codes, including our own LuSE Code strongly recommend that CEOs should be appointed by the Board of Directors. This is because the CEO reports to and is responsible to the Board. If the CEO is appointed by someone else, the CEO will almost invariably feel beholden to and answerable to that appointing authority. This situation will put the Board in a very awkward position as they will not be able to properly supervise, monitor, hold accountable, let alone, discipline such a CEO.

In the instances referred to above, I do not see how the NAPSA board (which is yet to be appointed by the Minister) will be able to have effective oversight over Mr. Mpundu who has been appointed by the President.

The same applies in the case of ZSIC Board vi a vis Mr. Silutongwe , the FRA Board vis a vis Mr. Matongo, the ZESCO Board vis a vis Mr. Chitundu or the ZNBC Board vis a vis Mr. Chibamba Kanyama. Ironically, all these CEOs are well aware of the corporate governance principle on this matter – they nevertheless proceeded to accept the appointments for which they were not interviewed by the competent authority.  They should be under no illusion that   the mode of their appointments make for potentially very incendiary relationships with their boards. Perhaps more troubling is the fact that after giving Zambians hope that appointments  in the public sector would be made  more transparently  and in accordance with the good corporate governance practices, the PF government has propelled us back into the stone age as far as corporate governance is concerned.   I challenge the Institute of Directors and all the Corporate Governance advocates whose silence over this matter is almost deafening , to rise to the occasion and remind the PF government of the   immense  benefits of good corporate governance.

I would venture to add, such appointments are not consistent with the PF’s professed crusade against corruption. It is as much corruption to make appointments that are not based on law as it is to accept illicit money.

The at hand is issue is that the President has no authority to make the appointments he has purported to make. The law is very clear on this issue. It is very disheartening that in the last seven or so months that the PF government has been in Power, President Sata has contravened the constitution on several occasions. As Zambians we should take it upon ourselves to oppose and resist this type of conduct . It appears Sata wants to run this country the way Kenneth

Kaunda ran the country. What Sata has forgotten ( assuming he knew it in the first place) is that Kaunda operated under a one party state , and as Chairman General of all Parastatal organisations had authority to hire and fire CEOs of parastatal organisations. Things have since changed and the President is no longer invested with such powers.  I challenge the Attorney General, who is the principal legal advisor to Government to inform the Nation what authority the President used to make the said appointments. I am also challenging the legal fraternity which is gathered in Livingstone for their Annual General Meeting, through their President Mr James Banda to pronounce themselves on this matter. We should not sit idle and watch as our constitution is raped day and night. We should take steps to nip the emerging dictatorial tendencies in the bud before we find ourselves in a similar situation as our brothers and sisters in Zimbabwe.

Please, please, we owe posterity better.

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