Zero tolerance on corruption

Energy minister voices gov't displeasure over transparency issues at Shell vendor forum

QUESTIONS on business integrity, transparency and checks against corruption in the relationship between Brunei Shell Petroleum (BSP) and contractors have surfaced, and doubts have been raised over the oil company's sincerity in helping small and medium enterprises (SMEs).

Minister of Energy Pehin Datu Singamanteri Colonel (Rtd) Dato Seri Setia Dr Hj Mohd Yasmin Hj Umar yesterday accused BSP of letting bigger companies monopolise contracts at the expense of SMEs.

"The same people are winning tenders everytime," he said at the Brunei Shell Joint Venture (BSJV) Companies' Vendor Forum yesterday at The Empire Hotel & Country Club. This is hurting the development of Brunei, he added.

It is critical to have a level playing field in the energy sector, he said, adding that allowing the big companies to monopolise contracts stifles Brunei development in the oil sector. He did not name the five companies.

"The big players are also going into smaller tenders. Big players must ... give space to small players," he said.

"How are the SMEs going to compete if five big companies dominate the market?" Pehin Dato Hj Mohd Yasmin of the Energy Department at the Prime Minister's Office (EDPMO) said.

Serious about SMEs?

The minister, during the forum's official opening ceremony, said that it has come to his attention that Brunei Shell's website is not being updated accurately. He cited as an example the tender plans where there were once only 13 contracts tabled.

"How can we have transparency and opportunity if all the basic information is not there? Also, the vendor registration process can take months, or even over a year," he stated.

"Furthermore, timing of the tender submissions are sometimes only tabled even up to a day before it expires. Is that how Brunei Shell as an organisation runs its business? It makes us think that the company is not serious about LBD (local business development) or its tender process," said Pehin Dato Hj Mohd Yasmin.

The minister said that they have heard allegations of a certain contractor or individual, dominating or controlling departments like TSW (drilling) or STL (supply and logistics).

"We should not be taken on a ride by claims that they are not controlling, for example, the TSW department for the sake of national interest. How can it be if this particular individual is reaping personal gains of 20 per cent from each transaction? No one should be above the law," he said.

Investigation

He said he hoped that this matter is merely an allegation, but said that an investigation is carried out, and it is left to the authority to ensure nothing like this ever happens in the SCM (Supply Chain Management) process.

"On the government part, we are focusing our investigation on this as well," he said.

The minister said he did not want Bruneian companies to become known for lobbying or corruption.

BSP responds

BSP Managing Director of BSP Ken Marnoch told The Brunei Times that they are currently working "very hard" to increase transparency and address some of the issues raised by the minister.

"Some things that he (the minister) talked about we are already doing, like what we can do to be transparent and increase the speed of vendors getting registered," he said.

"It is a constant challenge to catch up, but we are very clear and aligned with him and how important it is to be transparent and to treat people fairly," Marnoch said.

In his speech, Marnoch said that safety and business integrity are two of their fundamental principles, and they will not compromise on those core values.

After EDPMO raised these concerns, BSP has committed to ensure that the registration process will be done within a month and that only during any tendering will the assessments be made. BSP said its website with tender information is currently up to date.

Checks on corruption

As for the anti-corruption programmes, Pehin Dato Hj Mohd Yasmin lauded the BSJV companies and their clear business principles and anti-bribery and corruption programmes.

"But how can we make sure that these programmes reach out to every individual member of the staff. How do we know it is effectively implemented across the organisations? Do the vendors have similar programmes?"

He also questioned owners and managers whether or not they have advised staff to deplore any form of corruption and lobbying, and how many have a clear policy of no gift, no entertainment, no golfing holidays, for example, "trips to Eastwood Golf club, or having drinks in Miri pubs or other holidays and entertain the BSJV's staff to lunch".

He added: "How many of you have a system in place to prevent corruption, monitor and investigate if there is an allegation?

Contract info leaks

"I salute those of you who say yes. But we know for certain, from time to time, contract information is leaked. Vendors get a hold of contract information they are not supposed to have, and some vendors' employees who have free access to companies' offices or sites," Pehin Dato Hj Mohd Yasmin said.

Non-conformances to the tendering process do happen, he said, and during contract executions, milestone zero requirements are not met but the contract continues.

In some cases, false claims whether intentional or not were made, the minister said, adding that there have been instances when contractual obligations were not met, but no actions were taken on the defaulters.

"This leads me to asking vendors, do you have a system in place to monitor this and correct it right away? Or do you rely on BSP to pick this up and if they missed it intentionally or not, are you happy to reap the benefit that should not be yours?" he said.

Integrity

On the issue of integrity, Pehin Dato Hj Mohd Yasmin said that Contract holders and Technically Authority should not be holding the same positions year after year.

"This is not a lifetime job," he said, adding "we cannot also have Contract Holders becoming contractors in the same area of work when they retire".

The minister asked if it is right that BSP employees retire and straight away join the contractor in the same area of work.

"They will know what are the rates and submissions from the various contracts to the disadvantage of other contractors," he said.

"What I am asking for, and all we want, is for there to be transparency," the minister said.

"Some TAs have made questionable judgements. If there are any disqualifications (of tenders), be transparent. If there is any discrepancies on this, the EDPMO will ensure that actions are taken, for example, by requiring audits to be done to verify the facts," Pehin Dato Hj Mohd Yasmin added.

'A pretty good process'

In this regard, Marnoch said that a "cooling off" period can be considered by BSP for their employees who retire as contractors in the same field.

"We can actually look at how we can build that into contracts for our staff. We can also work on our relationship with contractors to make it very clear, that if (an employee) working on our side of the fence, then works with them, they can't be associated with our business for a few years," he said.

BSP Marnoch said that there are a few ways to do it, but the real challenge is to make sure they are enforced. "It can also be (seen in a way) that Brunei Shell staff are very good people. We spend a lot of time developing them, for them to learn skills and we develop them as leaders. Therefore, they are going to be a sought after resource that people want to recruit. We must just make sure that it is done in a way that it doesn't treat other companies unfairly," he added.

Marnoch also said that BSP can get "more transparency and more openness" around what already is a "pretty good process".

All about transparency

Pehin Hj Mohd Yasmin on the sidelines of the forum told The Brunei Times that in terms of tenders, it is BSP's accountability.

"At the end of the day, they are accountable to the BSP board. Again, we are asking for transparency," he said.

The minister said that this is all for the element of competitiveness, and the EDPMO wants transparency in the sense that BSP will show how much it is charging for what particular work, per day, and so on.

"That will be very clear and very transparent. Nothing should be hidden away and costs should be seen accordingly," he said.

In terms of improving the integrity of the BSP Tender Board, the government has appointed three senior ministry representatives from the EDPMO, and one from the Ministry of Finance.

"The purpose is not to take over BSP operations, but to ensure the highest integrity in tendering processes and to further advance local business development towards a genuine Bruneian business. Although you may be sceptical, these senior officials have experience in the industry, and know the business. Instead of affecting operations, on the contrary, it will add value to them," the minister said. The Brunei Times

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