Lawmakers raise doubts over public capital enterprises regime

Lawmakers from the First Standing Committee of the Legislative Assembly (AL) have expressed several concerns and raised many doubts over a new bill which aims to establish a new legal regime to regulate enterprises with the participation of public capital either in full or part, the president of the committee, lawmaker Ella Lei, said.

Lei was speaking at a media briefing held at the AL yesterday afternoon, after the first meeting of the committee on the matter.

“Today we had a general discussion on the bill without the presence of the government [representatives]. We essentially heard the opinion of the members [of the committee], which was to draft a list of questions we want the government to answer,” Lei said. 

She added, “There are many questions, from the definitions to the scope [of the bill], as well as matters such as the operations of the companies in which the government has non-dominant participation, supervision, and several other concerns.”

The apprehension of the lawmakers is not new and seems to follow the debate on May 26, when the bill was approved in the first reading at the AL plenary. At the time, several lawmakers aired similar concerns that have not yet been clarified by the government.

Although the bill was generally greenlit by a large majority, two lawmakers  José Pereira Coutinho and Che Sai Wang, abstained from voting at the first reading.

One big concern continues to be the uncertainty over which government department will be in charge of general supervision over the activities of public capital companies.

“Who will supervise and how will the government manage the different competencies and responsibilities of different government departments over this matter?” Lei asked, expressing the doubts of the lawmakers. She said that lawmakers “know that this bill is being proposed by the Office for the Planning of Supervision of Public Assets (GPSAP) but the bill does not clearly state if it is this office that will be in charge of supervision over the enterprises. We also know that the Financial Services Bureau has responsibilities and competencies in this matter, so we need to clarify who will be in charge of what.”

“It might even be that a new department is created. We don’t know,” Lei said.

In disharmony with the Commercial Code

Another big issue noted by the lawmakers yesterday was the articulation of the new regime with the existing Macau Commercial Code, Lei said.

“There are several types of companies with different interests and purposes, some aim to make profits, others have a more social-oriented purpose. … We are anticipating [potential] problems in the articulation and harmonization of this regime with the existing commercial code,” she said, adding that these problems are more obvious in relation to companies where the government has only “small participation” or a minority stake (of less than 50%).

Lei also noted regulations over the granting of subsidies to support operations and the alienation of public assets, among others.

“Regarding the alienation of public assets or capital, there is a line [in the bill] that states that it should be done only in cases where there is ‘reasonable compensation,’ but what does it mean to be ‘reasonable,’ who defines this reasonability?” Lei asked.

Legal hindrance 

regime needs clarity

In yet another issue that raised questions from lawmakers, the committee members are concerned with a “lack of clarity” on some procedural matters, including the regime that regulates the legal impediment or hindrance over the participation and decision-making of people who may have to represent both public and private interests.

Lei said that a mechanism to regulate the Legal Impediment Regime is necessary so there is no room for doubt when it is enforced.

Lawmakers think that more duties, such as “loyalty” and “reputability,” should be added to the portfolio of the administrators or government representatives on the companies’ boards.

Concerns also extended to the procedures regarding the decision of the general assembly or board of directors of some of these companies.

“In some aspects [the bill] states that the general assembly or the board can decide but it seems that the procedures are not very clear,” Lei remarked. She added that the law is not that extensive — containing fewer than 40 articles — but that there are many questions and issues that deserve attention from the government.

There will now be a listing of all the questions for the government and a future meeting will be scheduled with government officials to hear their explanations.

Lei said that she didn’t know when this meeting would take place as “the committee needs to give some time for the government to find the answers.”