See Chee How
KUCHING (May 24): The Premier of Sarawak has been called share with the august House his experience, as well as the learning and the outcome of the discussion with officials of the Norges Bank Investment Management.
See Chee How (PSB-Batu Lintang), who made this call yesterday, commended the Premier for having taken a right step forward in visiting the Norges Bank at its headquarters in Oslo, Norway, which he regarded as ‘an earnest effort towards the successful management of Sarawak’s own sovereign wealth fund’.
“The widely-acclaimed success of Norway’s sovereign wealth fund, the Government Pension Fund Global (GPFG), was described as being managed with the highest standard of governance – a standard that Sarawak needs to benchmark upon,” he said in debating the motion of appreciation on the Yang di-Pertua Negeri Sarawak’s opening address.
See said he concurred with the Premier about Norway’s GPFG being managed with the highest standard of governance, of which Sarawak sovereign wealth fund should set a benchmark upon.
According to him, the GPFG – also called the Oil Fund – is meant to ensure responsible and long-term management of revenue from Norway’s oil and gas resources, so that this wealth would benefit both current and future generations.
He said to date, the GPFG had a market value of 11.794 trillion Norwegian krone – equivalent to US$12.018 trillion, or RM52.750 trillion.
See added that the Norwegian fund’s governance model was built on a clear delegation of duties and effective systems for control and supervision.
“Above all, the Norwegian Parliament, or the ‘Storting’, had laid down the formal framework for the fund in the Government Pension Fund Act. The state-owned Fund comprises the GPFG and the Government Pension Fund Norway (GPFN).
“Transparency and accountability are prerequisites, and practised throughout, to ensure widespread confidence in the management of the Government Pension Fund. The Ministry of Finance gives an account of the management of the fund in an annual report to the Storting, the Parliament, also called ‘the white paper The Government Pension Fund’, as well as in the National Budget.
“The ‘Report to the Storting’ is a ‘White Paper’ because it is not only distributed to the Parliament for review and debate, it is also made available to the Norwegian public,” he said.
See added that the Norwegian Ministry of Finance had the overall responsibility for the fund’s management, and based on the Parliament and the executive decisions and direction, issued management mandates and guidelines for its management, including guidelines for the observation and exclusion of companies.
The Central Bank of Norway, Norges Bank, according to See, is tasked with the management of the fund, and its executive board delegates the operational management of the fund to Norges Bank Investment Management (NBIM) – a separate part of Norges Bank.
“The Norges Bank has laid down the executive board principles, the investment mandates, the chief executive officer (CEO)’s job descriptions and is responsible to approve financial instruments, markets and bond issuers submitted by the NBIM.
“The CEO of the NBIM has the overall responsibility for implementing requirements defined by the executive board, sets policies, and delegates mandates and job descriptions to the leader groups, which are responsible for work tasks and investment mandates within their delegated areas of responsibility, to deliver good return for the Norwegian people in a responsible way.
“It is open to all Norwegians and including all others, how the fund is invested, their guidelines and mandates to invest in four areas: equities, bonds, real estates and infrastructure for renewable energy, with and its stakes in 9,338 companies in 70 countries.
“Not only that its market value shows on its website, almost ‘real-time’, but the fund’s stakes in the 9,338 companies is an ‘open-book’ account,” he pointed out.
See said people could go to the website and find out that it has invested in 147 listed companies in Malaysia, which industrial sector each of this named company belongs to, its market value and the percentage of the fund’s ownership as well as the voting rights in these companies.
He said the good governance, particularly the transparency and public accountability, besides the employment of Norwegian professionals and expertise of various fields, was indeed the hallmark of this biggest sovereign wealth fund in the world.
“And it has reaped tremendous profits out of this exemplary governance,” he pointed out.
See said with a start-up capital of two billion Norwegian krone in 1990, the fund had grown and was fetching a market value of 11.794 trillion krone today, growing 6,000 times within mere 32 years.
“We can, and we must turn the Norwegian mirrors into the windows that are open for Sarawak.
“And nobody can stop us from acting on all that we have learned; to take the similar and crucial first step from this august House; to contemplate, assess and enact the Sarawak Sovereign Wealth Fund Ordinance, and undertake the necessary reform of our Sarawak institutions relating to the governance and management of our public fund, immediately,” stressed See.
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