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Sakmongkol ak 47

ariff.sabri@gmail.com

Tuesday, 30 June 2009

The PM and PETRONAS

Sometime ago, I wrote an article about PETRONAS appointments. In particular about the issue surrounding one person named Omar Ong. As usual, when I suggested that Omar Ong should not be disqualified on account of being close to KJ, I was labelled with the usual unmentionable characterisation.

I have also said it is the PM's call.

I wrote some lines critical of PETRONAS too. They were not meant to belittle the thousands of highly qualified and dedicated PETRONAS employees. They were intended to place PETRONAS in perspective or rather to remind the PETRONAS employees of the need to practise some humility. Getting employed in the oil and gas industry, PETRONAS included, does not require insurmountable rocket science qualifications. Properly trained, people can do the job assigned to them. Being trained by PETRONAS for that matter does not confer on anyone exclusive abilities. I am saying that being a PETRONAS employee does not qualify you as a special being. Of course, those suggestions were met by derisive responses.

Those lines had to be said as there were positions taken by some PETRONAS people to view the national oil company as an exclusive domain meant for certain approved people. Needless to say, such an attitude is further fortified by concerted attempts to paint PETRONAS in such light. There was a suggestion for instance to accept PETRONAS as a showcase of Malay management prowess. The implications are fairly obvious- among them, the admission of some elements may adulterate the Malay management prowess. On the part that PETRONAS's eminence is contributed by the fact that it is a legal monopoly, one is deviously silent.

I was not interested to prolong the argument about the technicalities of the oil and gas industry. I did not respond to some comments disputing my simplification of the O&G Industry in that article. I feel I am sufficiently qualified to discuss about some aspects of the oil and gas industry having worked with Shell for a decade.

We need to be mindful of the following points. One, it is the prerogative of the PM as to who he wants to appoint. The PDA (1974) confers him the absolute powers. Two, PETRONAS should rid itself of the high horse mentality and accept that entry into its organisation is very possible by anyone trained in his/her field. Three, why are people so protective of PETRONAS? It is not a sacred cow deserving of unsolicited pontificating as to the type of persons agreeable to PETRONAS.

So why the fuss about this Omar Ong? The PM believes he has the credentials. So he wants to place Omar as non executive board member. If Omar were to serve as his eyes and ears, what is wrong with that? The PDA (1974) confers absolute discretion on the PM.

I think PETRONAS board which has now twice repelled the PM is treading on dangerous grounds. The exercise of civility on the part of the PM seems to have been ignored by the PETRONAS Board. The PM requests NICELY that his proposal be considered. He was also willing to endure the humiliation to ask nicely a second time and was again rebuffed.

He is entitled to use the big stick and fire the entire board of directors whose prowess in the O&G can be debated if need be. I mean, years of training as a government administrator hardly confer on any one special managerial quality knowing the standard of government employees.

Having scrapped the bottom of the barrel, what is the remaining point to discredit the PM's choice? That's what it is really- to discredit the PM's choice. Once the objection to Omar Ong's appointments as a board member with non executive powers on account of being close to KJ and being a principal in a certain consulting firm were downplayed, the only arsenal left for those opposing Omar Ong, is the fact that Omar Ong had defaulted on the terms of PETRONAS scholarship.

This to me is nitpicking at its ugliest. It has finally come down to pettiness. Thousands of students received PETRONAS scholarship without being bonded. In the case of Omar Ong- if he has defaulted, ask him to pay back. Deduct his salary or if he is a rich fellow being a consultant and all that; ask him to pay the whole amount. PETRONAS is not about to buckle under because Omar Ong has defaulted. When he left PETRONAS, the national oil company knew that he has defaulted and asked him to pay back. Maybe he has defaulted on the payments, but that is not sufficient to condemn Omar Ong as an inherently evil and morally depraved person, is it?

The mistake committed by Omar Ong or his transgression is not something that is as complex or costly as exploring for oil on the high seas. It is easily addressed. This argument using Omar Ong being a scholarship defaulter is just a red herring. It hides the real but irrational reason- Omar Ong is forced to pay for his association with KJ. Getting rid of anyone associated with KJ or Pak Lah, or anyone not on the same page with the great helmsman, is part of the continuing Malaysian McCarthyism to cleanse Malaysia.

Otherwise it's no big deal. Omar Ong's presence as a non executive board member isn't about to cause PETRONAS to self implode. Don't tell us, the other PETRONAS board members couldn't hold their aces against one Omar Ong? If they can't, then they are not worth their presence. Maybe the PM should consider replacing them instead.

The present PM has a duty to place people who he thinks have the credentials to help his in his stewardship of PETRONAS. His duty is not any different from the duty and the exercise of that duty by previous PMs, Tun Dr Mahathir included.

Accordingly, I find the latest article by PETRONAS's first chairman and CEO, Tengku Razaleigh Hamzah worth a reading in between the lines to get to its true import.

PETRONAS' sole owner is ultimately the Malaysian people. The person charged with stewardship of the people's ownership is the prime minister, and he is accountable to the people through a democratic political process. Every member of the board is appointed by him to help him discharge this stewardship. In that situation if, as reported, any member of the board disagrees on principle with the prime minister's decision to appoint someone, he should resign. This is the proper way for board members all appointed by a sole shareholder to express strong objection to an appointment.

Therefore it is puzzling that appeals are being made for the prime minister not to interfere in the composition of the board of PETRONAS, when it is in fact his duty and sole prerogative to appoint members of the board who will help him in his function of overseeing the running of this wholly state-owned enterprise and seeing to the disposal of the wealth that it generates. Let us not suddenly forget the extent to which previous prime ministers directed the decisions of PETRONAS in service of their conceptions of the national interest.

When PETRONAS was formed by way of the 1974 PDA, it was NOT designed to become "a mega-corporation accountable only to privileged insiders. The real framework for understanding governance in PETRONAS is its accountability to the people of Malaysia through the prime minister of their elected government.'

The present PM has his conception of what constitutes national interests. Maybe it has something to do with his desire to realign the application of PETRONAS money. Since its inception PETRONAS has given more than RM400 billion to the government. The application of such gargantuan amount must now be made to fit in our present national interests.

The PM cannot be accused of being insensitive to the contrasting application of PETRONAS money. Pre 2003- PETRONAS was many times used as the lender of last resort. From 2003 to 2008, the application of the money remains a mystery known only to privileged insiders.

It will be an irony to see Malaysia becoming a net oil importer when it has its own oil.

24 comments:

Anonymous,  30 June 2009 at 08:59  

Hi Dato, Umno people say anyone connected to KJ would be an asset to him (KJ) but a liability to Najib. What's your take on that please. Thank you

INSIDER

vinnan,  30 June 2009 at 09:06  

We are importing LPG when Malaysia has a lot of it.

walla 30 June 2009 at 10:28  

If our enterprises are to achieve service excellence, we need to get over personal preferences.

If Najib thinks Ong can contribute to Petronas, then its board should welcome him. If Ong has defaulted on past support, then amends should be made if it is deemed necessary. And at the director's level, decision-making should be shorne of prejudices by association.

We have gone past race and religion. We should also go past personal preferences, fiefdoms and proxy views.

Otherwise the thrust for service excellence will again falter. As had too many of our past national thrusts and projects.

The most important thing we need to amass and amalgamate today is brain power. It doesn't matter where the DNA comes from. So long as it functions to make significant contribution to national progress in all its myriad forms, and so long as it creates new role models to enthuse and motivate others to believe that we can also achieve, then that can't be too bad.

It is no point running organizations to suit personal or idealized preferences grown from years of mollycoddled protection and then find one day that the enterprise is threatened from in and out by things that could not be seen because one had been wearing the same specs and gloves all the time.

What our enterprises need now are new and fresh viewpoints so that we can think out of boxes to reclaim past glories, build new rungs of achievement, provide the slide breakers and instill checks-and-balances in the development equation. If we don't start somewhere, we will end nowhere.

Today's world has changed even more dramatically. All assumptions have been torpedoed. Petronas itself faces new perils. People are talking more than peak oil. If Hassan Merican has to say that costs need to be cut, then that is also saying they have ballooned from lack of cost control. For instance, it has been known that the corporation has an office in Buenos Aires manned by argentinians. To oversee them, a local officer flies there just to meet them. Things like this warrant closer vigilance of what is going on beneath the metal and glass veneer of tower one. If only to take a leaf from what had happened to Pertamina with regards negotiation on contract terms with foreign oil companies as well as obfuscation of oil finds by its own geologists.

If we don't let the young who are bright, capable and energetic rub their noses in the grind of reality, how are they to receive the mantle of command later when they have to receive the legacy of today? They too will have to face the same problems with their juniors as those faced by their seniors today. It's an endless procession of grooming and orientating, something which we have seen as lacking by past administrations whose result is what we see today in the grey quality of our present set-up.

This country is not short of brains. Just that most of them when coming up get shafted elsewhere through no fault of their own, or if they are retained, wasting their energies trying to play political gimmickry just to maintain their status with view to making real contributions later.

People elsewhere had proudly said that Harry Lee has a double first from Cambridge. There is a young malaysian who's a triple first from Cambridge. Certainly because we have screwed up our human capital policies that he now languishes not doing what he has been gifted to do. If we see things like this through a bigger frame, we won't miss what is wrong which needs to be righted.

If one takes to uniformity, then the first jolt of reality may be the last. Mirror diversity so that one can hedge bets with more options. If one fails, another can kick in to contribute by ideas or solutions.

If even such a simple thing we cannot see or accept, then our tomorrow will be the same as our today which has been the same as our yesterday.

In the parlance of today's hyper-changing world, that's oblivion.

walla.

Anonymous,  30 June 2009 at 10:29  

Dato,

Good points!

Yet, I’ve some lingering questions related to the aspect of this management decisions in general;

‘Being trained by PETRONAS for that matter does not confer on anyone exclusive abilities. I am saying that being a PETRONAS employee does not qualify you as a special being.’

This is the same as many people who have had the impression that if u come from a prodigal source, be that family, school, company, then automatically u r one-up than the joe public. Personal ability & hardwork r irrelevant to their thinking. This is especially ingrained in the mind-set of some M’sian. No?

‘Omar Ong had defaulted on the terms of PETRONAS scholarship.’

The point that should be considered SHOULD be this fact has pointed him out to be a NON -PRINCIPLED person. That’s all! For a person to be his eyes and ears, as provided under the PDA (1974), this person MUST has high personal profile & behaviour worthy of that appointment. Anything less is only cronyism in disguise!

‘The present PM has a duty to place people who he thinks have the credentials to help his in his stewardship of PETRONAS.’

Those people who have been appointed must be able to hold truth to their OWN, to the extreme of showing disagreement with the PM’s choice, if such a choce is deemed wrong. After all, the present PM has his conception of what constitutes national interests. Maybe it has something to do with his desire to realign the application of PETRONAS money. The PM can make mistake due to whatever influences & these other PETRONAS board members MUST be able to hold their aces against such decision, if they think such appointment is detrimental to the well-being of Petronas, thus M’sia. Do remember Petronas belongs to all M’sian, not umno, not Malay etc etc.

anomie

Anonymous,  30 June 2009 at 10:32  

http://forum.mykmu.net/modules.php?name=Forums&file=viewtopic&t=26838#701266

http://forum.mykmu.net/modules.php?name=Forums&file=viewtopic&t=26886#701271

rebut this.

Wenger J Khairy 30 June 2009 at 10:58  

Hi Dato,
Its been a long time since I have commented on your blog. I too have been thinking of doing a piece on this but first have to point out the DAP's hypocrisy.

As to the all the brickbats and off topic comments, we just ignore them. They show no effort in talking about the topic, so we should not dignify them with a response.

I agree broadly with your points, and I feel that everybody wants to think that the Petronas BOD is some sort of exclusive club. Even Fergie will tell you that he will chop and change his side even after they have won championships. But we dont have bloggers running amok claiming that to axe lets say a Rio Ferdinand in place of a Dani Alves is tantamount to comprimising on English rights

Anonymous,  30 June 2009 at 11:15  

since the people of malaysia owns petronas, WE DO NOT WANT OMAR ONG IN THE BOD.

why so hard to comprehend?

now you are licking your own words... dulu kata government knwos best era is over..

just look at the sentiment of the people and HEED THEIR WORDS!

WE DO NOT WANT OMAR ONG.. the board members are right. thye practise what najib was preaching... listen to the people...

yet najib thinks he is smart enough to judge people's character..

one million ppl think omar ong is bad for petronas, why rely on his own gut feelings?


'the real board member (the rakyat)-

donplaypuks® 30 June 2009 at 11:24  

No doubt the PM has the authority, and if push comes to shove, he can have his way.

But, these are dangerous times for UMNO and MCA. If Najib is seen bulldozing his way through with Ong's appointment, it will lose him votes at GE 2013; and UMNO/BN are losing ground by the hour! Even Obama has to deal with rejections by Congress and the Senate!!

Why should Najib champion Omar Ong who brings a lot of controversial baggage with him, especially accusations of profiteering at the expense of the M'sian Taxpayer through crony business deals?

Having said that, it is untenable that Merican should continue to be both Chairman and CEO. There is an inherent danger of compromising internal checks and balances in Petronas. And oversights in this area are usually discovered long after the damage is done! We are not short of suitably qualified, experienced and talented people in M'sia who can also fill in these positions.

It's time for a change at Petronas.

Something must be done to redress the lop-sided representation in Petronas as regards the composition of its Board of Directors, Management, Staffing and Vendor Programmes.

More than that, there is very little public scrutiny of admissions to Petronas' University and the award of scholarships, loans and bursaries thereto.

Petronas belongs to no individual or a particular Group, whatever the thinking of the PM or elitists may be.

There has to be more transparency and accountability! The public has a right to know because it concerns 100% Taxpayers' money.

Anonymous,  30 June 2009 at 11:34  

wat do you think?
--------------------------------
Pelabur asing boleh miliki hartanah Bumiputera, kerajaan: Najib

KUALA LUMPUR: Perdana Menteri, Datuk Seri Najib Razak, mengumumkan pelabur asing kini boleh memiliki hartanah milik Bumiputera atau kerajaan di Malaysia dengan mudah tanpa perlu kelulusan Jawatankuasa Pelabur Asing (FIC).

Transaksi ini hanya membabitkan hartanah bernilai RM20 juta dan ke bawah saja, manakala bagi RM20 juta ke atas kelulusan daripada FIC diperlukan.

Beliau berkata demikian pada Persidangan Invest Malaysia 2009 di sini, hari ini.

now, wat is stopping wayward malays to sell their lands to outsiders?

geram kat najib

kuldeep 30 June 2009 at 11:35  

Blogs are just fantastic reading..but the comments are really where the meat is.

Of cos Pm can propose a director ..but its within the Board's right to decide whether to accept/reject.Then,it goes on to AGMs to decide?Thus,its all above board and truly a demonstration of transparency etc..isn't that wat we hv been asking for?

Then,as is normal..the rumor mills will be going full strength with titbits from each side of the divide.Now,there are insinuations that Petronas is insular,thinks they are above the hubris...then there are also stories linking the Ong guy to Carlyle,Republicans..
Its freedom of opinions and expressions at best.

Its stimulating reading unless ur the parties involved.But,then its the price one have to pay when the public owns you.

My real concern is if this guy was involved in suggesting the disposal of Augusta and formulating the NAP..we just need to be careful.We know who created WAU for MAS and the jury is still very much out on that one.

a outsider looking in,  30 June 2009 at 11:39  

Dato tell me i am wrong when i say never disturb the gravy train,humans will be humans worse still in Malaysia.The easy cari makan culture wherby you scratch my back and i your's has got to stop,another thing i find strange is why the fuss about hassan merican,did he know anything about oil n gas when he started.

Enough of this games being played dah cukupla sandiwara ni,the nation must come first.

Greenbug 30 June 2009 at 13:46  

The key emphasis, Dato, should be the wellbeing of our national asset ie Petronas. We should be more responsible in making decisions based on this key parameter, not politics.

I am not in support of Omar Ong's candidacy to the board nor am I against it. He should be judged on his qualifications and his ability to contribute to the progress of our national asset.

Those retired politicians having played a hidden hand in this debacle should think that they have only a few years to live and should not deprive this country's future for the sake of massaging their own ego. (Siapa makan cili, dialah yg berasa pedas!)

Anonymous,  30 June 2009 at 13:53  

it has been PETRONAS policy not to recruit back anyone who leaves the company! Ask Hassan Merican and he will confirm this to you.

Why should PETRONAS give the credit to Omar Ong while thousands of other ex-PETRONAS staff is not given the same fair treatment.

You allow 1 ex-staff into PETRONAS then thousands of them will be asking for the same opportunity!

I am working in PETRONAS right now, I strongly stress we do not need these kind of unloyal ex-staff to come back! PETRONAS has been growing our own timber to stay internationally competitive and we have successfully done it!

Omar Ong might join today and he might just leave tomorrow! Can you guarantee he will be loyal despite all the benefits he will enjoy (which is the best in Malaysia and competitive globally).!

NO TO OMAR!

Anonymous,  30 June 2009 at 14:06  

Kapal Selam,PKFZ dan lain2 lagi apa nak jadi dengan pembaziran duit rakyat kerana YES men

Ree,  30 June 2009 at 16:18  

Dato,

Why PM had to ask the Petronas Board to approve the appointment in the first place? PM could just appoint this guy and the Board will have no choice but to accept the appointment. I am sure Mahathir would just do it.

Anyway, kudos to the PM for the liberalization measures announced today. Much more significant than the 27 services sub sector thing announced previously.

Tok Pendita 30 June 2009 at 16:23  

Having worked in Petronas for 10 years, all I can say is that I will not recommend university graduates to join the corporation. However, if your highest qualification is a certificate from a polytechnic or something, that's the best place for you -- this is because your chance of being promoted to the highest level of management is high. It's all about perceived hard work (office politics) and bodekism. If u graduate from Oxford or Cambridge, better not to tell anybody. If ur boss doesn't know, it's even better.

Ree,  30 June 2009 at 19:55  

Kuldeep,

You are mistaken. Petronas is not like any other company. PM has absolute discretion. There is no such thing as an "AGM".

Anyway even in a normal company a Board has no say on who gets appointed as its member. This is for the shareholder to decide. In Petronas case, shareholder is the government.

Further, Najib wants this Omar Ong to be a non-exec director, not an employee. Petronas hiring policy is irrelevant.

Personally I dont really care much whether this Omar Ong is a director or not. However, I am a bit concerned when the country's premier becomes "too nice", asking for permission when he does not have to. Reminds me too much of Pak Lah!

Dr. Adrian Wong 30 June 2009 at 20:23  

As far as I, a taxpayer, is concerned, Petronas should NEVER hire ANYONE who defaulted on their scholarship.

It's not just a matter of Omar Ong paying a fine so he can get on the board of Petronas. You cannot just throw money at the problem. To suggest that is ludicrous, but I guess, second nature to BN politicians.

The fact of the matter is it shows his CHARACTER and sense of RESPONSIBILITY, or the lack thereof. If he can so easily default on his scholarship, why should we trust him to be any more responsible when he's on the board of Petronas?

My vote is NO, period.

Suci Dalam Debu 30 June 2009 at 20:35  

Dato,

Omar Ong may be smart but if his integrity is suspect, then he shouldn't be accepted. At this juncture I am very concern that many opportunist will try to dip their hands into the kitty.

Najib may have the prerogative to appoint anybody to the board but he should choose someone that can command the respect of the other board members.

It is true that Petronas and many oil companies do not re-hire staff who has resigned.

Sir, not only must he be clean, he must be seen to be clean.

Fi-sha 30 June 2009 at 21:33  

Datuk Sak

I'm with Petronas BOD's decision to keep the door close to Encik Omar Ong - they know best. It is not about YB KJ, our PM or whoever he is connected to.

As mentioned earlier by Kuldeep, i am troubled, deeply troubled if he gets into our nation's sacred cash cow.

Comparing Petronas and Pertamina is like comparing "langit dengan bumi". If the Government gets too involved on how Petronas should be governed, one fine day it will be the next Pertamina.

Smart without integrity and utmost respect to the responsibility entrusted by people, for me, equals to 'musang berbulu ayam'.

Yes, the malaysian guys got to fly himself down to Buenos Aires because he is working on behalf of malaysian people. The love for your country - thats priceless. Thank God, Petronas is not governed on auto-pilot mode.

When people are trying their very best to work with Petronas, I wonder why Encik Omar Ong left. If Petronas was not good enough for him back then, what about now?

BTW, he is not MCKK thoroughbred, is he Sir?

Some say we comment simply for the sake of arguing but some of us feel that by sharing our views would lessen our burden if we did not do our small part to make better of this nation.

It's not politics nor identity - its purely integrity but if some say morality comes from morons, too bad you smart people out there have to deal with us morons - for the rest of your life.

Anonymous,  30 June 2009 at 21:55  

Whatever, if this fellow has really defaulted on his loan until today, I do agree with the BOD that he should not be allowed on the board.That would be the same as condoning the action of any and all defaulters.He should not even allowed on even if he agrees to make good on the loan now, after the fact that he has been proposed for the board.

It's not the amount defaulted, but that one has failed to honour his obligation.How can one support the appointment of someone who has no honour? Is that the type of people we want to sit on the board of such an important establistment?

I'm surprised that Sakmongkol AK47 feels otherwise.

MAS Liberators 30 June 2009 at 22:54  

Dear Dato',
They have screwed up MAS, don't let em screw up PETRONAS too.

kuldeep 1 July 2009 at 00:02  

Ree...
Thanks for the clarification..
But essentially the Board do decide on who to appoint as directors..though ultimately the shareholders endorses at the general meetings.I believe Petronas should work in the same manner as essentially the owners have given certain mandates to the Board and that should be respected if we subscribe to transparency.

The next step for the owners if it see fit ,is to completely change the Board.

If the Board remains unchanged and This Mr Ong somehow gets onboard..then there will be questions of the Board's independence.

If the Board is changed then we can well assume that the owners is not happy with Petronas performance as a whole and lots of other heads (including executives)must also roll.

I am sure that the Govt will not do anything drastic for such a major national asset just to accommodate a person...whatever forthcoming actions must have been thoroughly discussed.

Lets see what develop cos this will provide an insight to our PM's leadership and direction.

Siti Kemboja,  1 July 2009 at 14:46  

Dato' kami berasa risaulah dengan pemilikan 70% oleh orang luar atas kekayaan negara.

Walau secara "surface" menjana ekonomi, tetapi secara perbandingan, sedangkan sekarang pun bumiputra jauh kebelakang, lihat saja research mengenai ASB; inikan pulak dah 70% cheqqq..

Bagaimana 70% dapat menjamin hak2 bumiputra atau telah tiadakah istilah demikian lagi, dengan adanya motto ONE Malaysia?

Kemudian, dengan adanya ONE Malaysia, adakah ONE Malaysia pada diri Melayu sahaja, tetapi tidak pada org2 lain? Siapakah yg akan membuat kajian mengenai keberkesanan 70% itu dan keberjayaan ONE Malaysia. Seperti seliaan kajian setelah 2 tahun, 5 tahun dan berapa? Ada target? Jika tak berjaya, adakah usaha2 utk menstruktur nya lagi? Takut2 lepas tak berjaya, masih diteruskan sebab menjayakan pihak2 yg nak berkuasa?

Akan terkuburkah Melayu yang dibanggakan Hang Tuah?

Siapa Tuah? Siapa Melayu? Tuahkah yang salah atau Melayukah yang salah?

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