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.