Public accounts watchdog calls for ‘greater diligence’ in use of public funds

Channel NewsAsia 5 Feb 15;

SINGAPORE: The Public Accounts Committee has responded to a report by the Auditor-General flagging irregularities in the use of public funds for the financial year 2013/14.

In a report submitted to Parliament on Wednesday (Feb 4), the committee – comprising eight Members of Parliament, and chaired by Mr Cedric Foo – urged government agencies to “exercise greater diligence in managing public resources and to review their usage regularly so as to optimise their use and minimise wastage”.

Released in July 2014, the Auditor-General’s report highlighted lapses in the administration of grants, schemes and programmes, as well as instances of weak management of resources which resulted in wastage.

LAPSES IN LICENSING OF LAND

Among the ministries and statutory boards cited in the report was the Ministry of Defence (MINDEF), which entered into an agreement with its contractor in 1995 to sublet land at a nominal rate of S$45 a year to provide services solely to MINDEF. However, the ministry did not raise the rent even after the contractor was privatised in 2000 and used the land for commercial activities.

MINDEF clarified that the contractor was a wholly Government-owned company prior to 2000, and there was no clause in the 1995 agreement to state that the land leased was not to be used for commercial activities. MINDEF told the committee that it has since entered into a new agreement with the contractor and would be charging it annual rental for the land used for commercial activities.

UNDER-UTILISATION OF ASSETS

The Agri-Food and Veterinary Authority of Singapore (AVA) was cited for the under-utilisation of land, buildings and facilities at two of its sites, as well as assets being under-utilised or left unused.

In response, the Ministry of National Development (MND), which oversees the AVA, said that the AVA will conduct a comprehensive review on the usage of all its land, buildings and facilities by early 2015. It has since completed a review of its Sembawang site and submitted a land return proposal to the Singapore Land Authority, MND said.

The AVA has also identified under-utilised equipment and machinery, and reminded departments to dispose of those no longer required. In addition, its finance department plans to carry out annual independent checks on the assets, MND said.

ERRONEOUS MEDISAVE CLAIMS

The Central Provident Fund Board (CPFB) was rapped for erroneous Medisave claims by medical institutions, and has since taken several remedy actions: Formalising and documenting procedures on the follow-up of erroneous claims, improving the tracking system, and sending reminders to all restructured hospitals to improve their medical classification of claim cases and to make the appropriate refunds to the claimants’ Medisave accounts.

As of January 2015, 90 per cent of erroneous claims have been settled, the Ministry of Manpower (MOM) said.

CPFB has also been working with the Ministry of Health (MOH) since 2011 to explore various deterrent measures against medical institutions that made erroneous claims, such as the possibility of imposing administrative or penalty fees.

According to MOM, the majority of the erroneous claims arose from misinterpretation of the surgical procedures and guidelines. MOH has since stepped up efforts to educate clinical practitioners and providers, and will update the list of surgical procedures claimable under Medisave or MediShield more regularly, MOM said.

ADMINISTRATION OF SCHEMES

The Health Sciences Authority (HSA) was cited for “lax controls” over the approval of applications for the import of medicinal products. Of 1,479 import applications checked, 386 contained errors.

The committee was told that HSA has since conducted checks on the 386 applications and verified that the products had been licensed or approved for importation. MOH added that HSA would be enhancing the current trade declaration system to ensure that information in the application forms are verified electronically.

PROCUREMENT

The HSA was also rapped for awarding contracts to five incumbent contractors even though their tender proposals did not fully meet tender requirements. The agency has since tightened its procurement process and amended its procurement guidelines, MOH said.

The Public Accounts Committee said it was concerned that the instruction manual on procurement did not specify if agencies should invite a fresh tender if variation works exceeded a certain percentage of the approved original procurement value.

In response, the Ministry of Finance (MOF) said there are “complex and multi-dimensional considerations” in determining whether a contract variation is justifiable. Setting a threshold may drive agencies towards calling contract variations as long as it is within the threshold and not considering calling fresh tenders, even when it may be more appropriate to do so, it said.

However, MOF said it has recently enhanced its guidelines on contract variations. Where additional works are necessary, and especially if the additional works are substantial, calling fresh tenders remains the default option, it said.

BACKDATED AUDIT DOCUMENTS

During the audit of the National Parks Board's (NParks) development of the Gardens by the Bay, certain documents were found to have been created and backdated to give the impression that they existed when the transactions took place.

An internal inquiry by the Ministry of National Development (MND) confirmed that an NParks officer had created and backdated 16 letters, purportedly issued by NParks to its suppliers, to satisfy audit queries. The same officer also arranged for the suppliers to issue a further 11 backdated letters – five of which were created by the officer on their behalf.

According to MND, Gardens by the Bay has taken disciplinary actions against the officer for misconduct. It will also tighten its internal procurement, project management and contract management processes to prevent future recurrence, MND told the committee.

- CNA/cy

MPs flag ministries' underuse of land resources
Charissa Yong The Straits Times AsiaOne 6 Feb 15;

The weak management of land resources by two ministries has been pinpointed by Parliament's watchdog of public-sector accounts.

The panel of MPs was particularly concerned with the underuse of land, buildings and equipment, such as at the Agri-Food and Veterinary Authority (AVA).

The AVA, a statutory board under the Ministry of National Development (MND), had vacant buildings and underused laboratories in Sembawang as well as research equipment bought in the 1970s that had not been used recently.

But the matter is being resolved, the AVA has informed the Public Accounts Committee (PAC).

The issue of resource management is one of four areas the PAC noted in its latest annual report submitted to Parliament on Wednesday and released yesterday.

The other lapses are in the administration of schemes and programmes, procurement, and the backdating of documents.

In another case, the Ministry of Defence (Mindef) had wrongly rented out a plot of land to a contractor at a nominal rate, the panel noted. This has since been rectified, as Mindef has drawn up a new agreement with the contractor and will charge it rental according to its revenue.

The PAC, made up of eight MPs who scrutinise how public funds are spent, tracks what government agencies have done to correct irregularities in the use of public funds.

It studied the latest Auditor-General's report, which found lapses in five ministries and 13 statutory boards for the financial year 2013/2014.

It then asked the ministries to account for how they had addressed the gaps.

The AVA said it would dispose of old equipment to free up storage space. It is also exploring the possibility of returning its unused land to the Singapore Land Authority.

The Auditor-General had found that several of the AVA's buildings and laboratories in Sembawang were vacant or underused. One even had termites, while others contained condemned furniture.

The Auditor-General had also highlighted some underused equipment, such as a tractor and a water filter, and research tools bought in the 1970s and 1980s that had gone unused in recent years.

The AVA told the panel that it has since completed a review of how all its land, buildings and facilities are used.It has also looked at whether it can relocate some of its offices and laboratory testing facilities from its Sembawang site to its Lim Chu Kang premises.

Mr Cedric Foo, the MP for Pioneer and chair of the PAC, said: "Singapore is land-scarce. Government agencies, as stewards of the land, ought to use land in the most efficient way. Otherwise, they are wasting resources."

Turning to other areas, the PAC found that where schemes and programmes had been improperly administered, the ministries and statutory boards had acted to redress their lapses.

For example, the Central Provident Fund (CPF) Board has settled 90 per cent of the Medisave claims that had been wrongly given out, and the Ministry of Health is working with it to recover the rest, said the report.

To prevent future wrong claims, the CPF Board has improved how it tracks and follows up on Medisave claims.

Also of concern was how an MND officer had created and backdated documents during the audit of the Gardens by the Bay development project.

The officer, who is still employed, has been disciplined, the MND told the panel.

It added that internal procurement, project management and contract management processes will be tightened to stop such misconduct from happening again.

Unlike in past years, the panel's report this year does not focus heavily on procurement lapses.

The reason is that the Auditor-General has shifted attention from procurement to other lapses "to give other agencies time to fix their procurement processes", said Mr Foo.

But the PAC will revisit the issue in future reviews, he said. "We will give the agencies time to fix it. But we will surely want to come back to procurement."

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Malaysia: Tonnes of flood debris to be cleared from 10 Kelantan districts

The Star 6 Feb 15;

KOTA BARU: The thousands of tonnes of waste and debris from the recent flood that affected 10 of 11 districts in Kelantan will be cleared by the end of the month.

The authorities in the state are working hard to reach the target with the help of local councils from other states.

State Local Government, Health, Housing and Environment Committee chairman Datuk Abdul Fattah Mahmood said so far almost 100,000 tonnes of flood debris and mud had been cleared.

Kota Baru, he said, topped the areas with the most debris collected with over 40,300 tonnes already cleared.

The waste and debris collected, he said, had been sent to a temporary landfill in Sabak.

He said workers have also completed cleaning up Pasir Mas and Tanah Merah districts.

“Between Jan 4 when the clean-up works started until last week, 1,558 tonnes have been collected in Pasir Mas and 23,302 tonnes from Tanah Merah,” he said yesterday.

He thanked local councils from outside the state which had sent hundreds of workers to help in the clean-up.

“Without their help, it would have taken much longer for the towns to return to normal,” he added.

Kelantan was the worst hit during the recent floods, which also hit several other states including Te­­rengganu, Pahang and Perak.

Almost 200,000 people in Kelan­tan were displaced during the flood, the worst in the country in recent memory.

The state and federal governments have formed a joint post-flood recovery/operations committee, jointly-chaired by Mentri Besar Datuk Ahmad Yakob and International Trade and Industry Minister Datuk Seri Mustapa Mohamad to solve the many problems caused by the flood that destroyed more than 2,500 homes in Gua Musang, Kuala Krai and Tanah Merah districts.

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Indonesia: More to conservation than Asia Pulp & Paper's forest clearing halt

WWF 5 Feb 15;

Jakarta, Indonesia – Two years after Asia Pulp & Paper (APP) announced a new “forest conservation” policy, APP’s pledge to halt forest clearing has held, but its forests are still disappearing.

A Rainforest Alliance audit released today confirmed the findings by WWF and local NGOs that APP is failing to stop deforestation and illegal activities in its concessions by other parties, even in areas already identified by the company as containing high conservation values and carbon stocks.

“APP has halted its own forest clearing and embarked on a wide array of assessments in its concessions,” said Aditya Bayunanda, Forest Commodity Leader WWF-Indonesia. “But not much has changed on the ground - forests continue to disappear, peat soils continue to be drained and social conflicts remain unresolved. The company has even failed to protect forests they are legally required to conserve.”

"No concrete plans on where forests will be restored or conserved, and with what financing"

Progress is lacking on action to reduce the climate impacts of APP’s vast concessions on peat. The Rainforest Alliance audit confirmed that other than stopping new canal development APP has taken no action to reduce greenhouse gas emissions resulting from the draining of over a million hectares of peatland under company control.

WWF is also very concerned with the lack of progress by the company to resolve hundreds of social conflicts. The findings of local NGOs were confirmed in the Rainforest Alliance audit and should send high alerts through APP headquarters.

WWF had welcomed APP’s 2014 announcement to restore and conserve 1 million hectares of tropical ecosystems beyond legal requirements as the right measure to address the company legacy of deforestation of an estimated 2 million hectares of tropical forest.

“WWF has participated in numerous stakeholder meetings and task force activities since the announcement,” said Bayunanda. “These discussions have resulted in very little progress. There are no concrete plans on where forests will be restored or conserved, and with what financing. Even in APP’s priority landscape, Bukit Tigapuluh, the company has yet to take promised steps to provide wildlife corridors and stop illegal loggers, poachers and encroachers from accessing the forest through its logging road.”

WWF commends APP for having invited Rainforest Alliance to audit its progress, and urges APP to act quickly and decisively to address the audit findings. WWF will also carefully study the audit findings and advise APP customers accordingly.

“After two years of assessments and planning, APP needs to shift its focus to action. Today, APP promised change and WWF will monitor its next steps to see how serious it is about saving forests,” said Rod Taylor, Director, Forest Programme at WWF International. “APP customers should be alert to the risk of doing business with a company that has not yet eliminated deforestation and peat carbon emissions from its wood supply areas.”

For more information, visit the WWF APP/APRIL webpages

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Indonesia: E. Kalimantan to Stop Issuing Mining Permits in Forests

Tunggadewa Mattangkilang Jakarta Globe 5 Feb 15;

The governor of East Kalimantan has said he will no longer issue permits for mining or plantations. (Antara Photo)

Samarinda. The governor of East Kalimantan has announced a plan to stop issuing land-use permits for mining and plantation concessions in the province’s forests.

“Starting from this year, there will be no more permits for land lend-use for coal mining and forestry activities,” East Kalimantan governor Awang Farouk Ishak said on Thursday.

Awang said he was confident banning the awarding of concessions for mining and logging would not hamper the province’s economic growth. He said the measure was necessary to protect the environment for the longer term.

A land permit, known as a IPPKH, is required for companies wanting to carry out economic activity in forestry areas.

Awang said the government would still issue licenses for infrastructure projects, such as power plants or roads. But he emphasized that the government would tighten the monitoring of the permits it does decide to issue.

“After the permit is issued the progress of the development would be tightly monitored because we don’t want the permit to be misused,” he said. “Excessive land conversion is very concerning and will affect the effort to achieve food security status.”

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Thai crops to suffer worst drought in 15 years

Kaweewit Kaewjinda, Pracha Hariraksapitak and Panarat Thepgumpanat PlanetArk 6 Feb 15;

Thailand will experience its worst drought in more than a decade this year, the irrigation department said on Thursday, damaging crops in one of the world's biggest rice-exporting nations.

Thailand was currently battling drought in eight of 76 provinces, but 31 other provinces remained at risk, the Interior Ministry said, adding that it had allocated around 6.8 billion baht ($208.65 million) to alleviate drought, up from 430 million baht ($13.19 million) last year.

The funds would be used to install water pumps and provide mobile water tanks in affected areas, it said.

"This year's water levels are the worst in 15 years but we have managed our water supply so people can be confident that there will be no problems regarding water shortages," said Lertwiroj Kowattana, director-general of the Royal Irrigation Department.

Drought will cut major rice exporter Thailand's 2015 off-season crop by over 30 percent, according to the latest report from the Office of Agricultural Economics.

Thailand's off-season rice is grown between November and April after the main crop is harvested. The second crop needs irrigation as there is little rain during that period.

The government had announced that it would not provide water for second-crop rice farming. On Thursday, it said it had persuaded farmers to halve second-crop production in 2015.

Around 160,000 hectares, or around 1.3 percent of Thailand's total rice farm land, will be affected by drought, the Agriculture Ministry estimates.

Palm oil production has also been hit by ongoing drought prompting the government to import around 50,000 tonnes of crude palm oil due to a domestic shortage.

Thailand's military government has said it plans to invest $7.5 billion in urgent water management projects over the next two years.

The projects are part of a 10-year water management plan across the country after the military government scrapped a 350-billion baht water plan initiated by the previous administration.

(Editing by Amy Sawitta Lefevre and Nick Macfie)

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U.S. weather forecaster maintains forecast for weak El Nino

Chris Prentice PlanetArk 6 Feb 15;

The U.S. weather forecaster on Thursday maintained its forecast for a 50 percent to 60 percent chance of El Nino during the Northern Hemisphere winter and early spring, with neutral conditions thereafter.

The Climate Prediction Center, an agency of the national Weather Service, in its monthly report kept its outlook unchanged for the possibility of a weak El Nino if the conditions emerge.

El Nino, the warming of Pacific sea-surface temperatures, can trigger drought in some parts of the world and cause flooding in others, adding to uncertainty in commodities and energy markets.

The CPC's outlook comes after Australia's weather forecaster reduced the likelihood El Nino due to easing indicators in recent weeks.

The CPC has dialed back its outlook for El Nino after going on alert for the conditions about a year ago for the first time since 2012.

To read the full CPC report: http://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.html

(Editing by Chizu Nomiyama and Lisa Von Ahn)

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World's biggest sovereign wealth fund dumps dozens of coal companies

Norway’s giant fund removes investments made risky by climate change and other environmental concerns, including coal, oil sands, cement and gold mining
Damian Carrington The Guardian 5 Feb 15;

The world’s richest sovereign wealth fund removed 40 coal mining companies from its portfolio in 2014, citing the risk they face from regulatory action on climate change.

Norway’s Government Pension Fund Global (GPFG), worth $850bn (£556bn) and founded on the nation’s oil and gas wealth, revealed a total of 114 companies had been dumped on environmental and climate grounds in its first report on responsible investing, released on Thursday. The companies divested also include tar sands producers, cement makers and gold miners.

As part of a fast-growing campaign, over $50bn in fossil fuel company stocks have been divested by 180 organisations on the basis that their business models are incompatible with the pledge by the world’s governments to tackle global warming. But the GPFG is the highest profile institution to divest to date.

A series of analyses have shown that only a quarter of known and exploitable fossil fuels can be burned if temperatures are to be kept below 2C, the internationally agreed danger limit. Bank of England governor Mark Carney, World Bank president Jim Yong Kim and others have warned investors that action on climate change would leave many current fossil fuel assets worthless.

“Our risk-based approach means that we exit sectors and areas where we see elevated levels of risk to our investments in the long term,” said Marthe Skaar, spokeswoman for GPFG, which has $40bn invested in fossil fuel companies. “Companies with particularly high greenhouse gas emissions may be exposed to risk from regulatory or other changes leading to a fall in demand.”

She said GPFG had divested from 22 companies because of their high carbon emissions: 14 coal miners, five tar sand producers, two cement companies and one coal-based electricity generator. In addition, 16 coal miners linked to deforestation in Indonesia and India were dumped, as were two US coal companies involved in mountain-top removal. The GPFG did not reveal the names of the companies or the value of the divestments.

“One of the largest global investment institutions is winding down its coal interests, as it is clear the business model for coal no longer works with western markets already in a death spiral, and signs of Chinese demand peaking,” said James Leaton, research director at the Carbon Tracker Initiative, which analyses the risk of fossil fuel assets being stranded.

A report by Goldman Sachs in January also called time on the use of coal for electricity generation: “Just as a worker celebrating their 65th birthday can settle into a more sedate lifestyle while they look back on past achievements, we argue that thermal coal has reached its retirement age.” Goldman Sachs downgraded its long term price forecast for coal by 18%.

On Wednesday, a group of medical organisations called for the health sector to divest from fossil fuels as it had from tobacco. The £18bn Wellcome Trust, one of the world’s biggest funders of medical research , said “climate change is one of the greatest challenges to global health” but rejected the call to divest or reveal its total fossil fuel holdings.

In January, Axa Investment Managers warned the reputation of fossil fuel companies were at immediate risk from the divestment campaign and Shell unexpectedly backed a shareholder demand to assess whether the company’s business model is compatible with global goals to tackle climate change.

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