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Sunday, June 16, 2024

State ownership falls under scrutiny

A recent rash of corruption allegations involving several Norwegian corporations that are partly state-owned has caught the attention of Norway’s State Auditor General (Riksrevisjonen). Now the watchdog agency is launching an inquiry to take a closer look at how the government conducts its business as a shareholder.

Reports of alleged bribery at companies like Telenor and Yara have been a serious blow to the credibility of Norwegian companies operating abroad. In an interview with newspaper Aftenposten, Therese Johnsen, director general of Riksrevisjonen, said that her office has already begun an initial evaluation.

“At the end of the summer, we started the initial work to examine the state ministries’ role as owners,” Johnsen told Aftenposten.

Unprecedented inquiry
In the inquiry, which itself is unprecedented in Norway, the state auditor will examine how government ministries are living up to their responsibilities in monitoring how the corporations in which the state holds stakes are conducting their own affairs.

The state’s role as a shareholder, often in companies that previously were wholly state-owned such as Statoil and Telenor, is regulated in four different areas – climate and environment, human rights, the rights of employees and corruption.

“Corruption is one of the topics that always gets a lot of media coverage, while the rights of employees are given less attention,” Johnsen said. “We will, among other things, look closer at how it’s possible to prevent social dumping or enviromental and climate problems involving corporations.”

Officials in both the current and former governments will be questioned in the course of the auditor general’s inquiry. This means that both the present minister of trade and industry, Monica Mæland of the Conservatives, and her predecessor, Trond Giske of the Labour Party, will be evaluated.

11 ministries with scores of stakes
According to Norway’s ministry for business, trade and fisheries, the Norwegian state is today a player in around 70 public corporations through 11 different ministries. The ownership stretches from fully state-controlled companies with solely political goals to several of Norway’s major stocklisted cmpanies. The Norwegian state owns, for example, a 67 percent stake in Statoil, 54 percent of Telenor and 36 percent of fertilizer firm Yara.

It’s clear that increasing privatization and globalization in recent years have made governmental ownership more complex than ever. Challenges and risk also rise when companies operate in countries where corruption is believed to be rampant, for example in Uzbekistan, where Telenor’s partly owned mobile phone firm VimpelCom Ltd expanded and is now subject to a bribery investigation in four countries. Questions have also been raised around Statoil’s operations in Iran and Angola, and Telenor’s operations in Asia, while Yara paid the highest fine ever levied in Norway over alleged corruption in Libya and India.

Johnsen stressed that her office is not hunting for scapegoats. Although there are no new allegations against state-owned companies, that could change long before the audit is completed. The results of the the state auditor general’s inquiry will be presented to Stortinget next year. Johnson




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