Barriers to Transparency and Good Governance

"Employment and Social Protection Fund for Workers"

- Any public fund ...that involves the possession of public money amounting to millions of dollars, from various sources whether domestic or regional or international or from allocations of the general budget of the state... ..it is incumbent that there be audited financial-accounting reports annually ..by external accountants...which I did not find...!!, to clarify and explain the implementation of this fund’s activities and evaluate them compared to its objectives including this important and public fund "Employment and Social Protection for Workers"...!!

- However, the State Audit and Administrative Control Bureau (SAACB) in Ramallah explained in its 2016 report, "the absence of the principles of good governance in the work of the Palestinian Employment and Social Protection Fund for Workers, due to the inability to apply the principle of accountability between the Board of Directors and the Executive Council of the Fund because the members of the Executive Council are members of the Board of Directors"

- The Bureau recommends defining clear tasks for the Executive Council of the Palestinian Employment and Protection Fund, in addition to correcting the structural defect in the decision forming the Executive Council to ensure the achievement of the principle of accountability and separation of powers from the Board of Directors...!!

- We hope that the fund has responded to the Bureau’s observations and restructured its administrative and executive situation..in accordance with the observations of the State Audit and Administrative Control Bureau, although I did not find evidence of that, other than the continued chairmanship of the fund’s Board of Directors by the Minister of Labor and the chairmanship of the fund’s Executive Council also by the Minister of Labor...according to the law....that is, the one who sets the policies in the fund is the one who chairs the team that implements them and not another executive body chaired by another person.. ..in order to observe the foundations of integrity, accountability and governance..!!! The presidential decision should be amended regarding council membership and chairmanship!

- The fund was established in 2003 by Presidential Decree No. (9) for the year 2003 concerning the establishment of the Employment and Social Protection Fund for Workers.., and the Presidential Decree consists of 9 articles; in its second article, it defines the Fund’s mandate as providing financial and technical resources to assist in the development of human resources and the development of the business sector in the Palestinian territories and creating job opportunities that respond to the needs of population aggregates by financing or supporting projects in the productive or service fields

· The Fund shall have a Board of Directors formed as follows:

1- Minister of Labor as Chairman, 2- a representative of the Ministry of Planning – member, 3- a representative of the Ministry of Social Affairs – 4 member, a representative of the Ministry of Finance – member, 5- a representative of the Ministry of National Economy – member, 6- 3 members representing the General Federation of Trade Unions of Palestine, 7- two members representing employers, 8- a member representing civil society, 9- two figures from women’s bodies, 10- two national figures (Munib Al-Masri and Eng. Nabil Al-Sharif) - at that time -, 11- the Executive Director of the Fund as a member, and membership of the Board for those who are not ministry representatives is three years..

· As for Article 3, it provides that the Fund shall have an "Executive Council" chaired by the Minister of Labor, - despite his being chairman of the Board of Directors-!!, with the membership of one representative of workers and one of employers and a representative of the Ministry of Finance and the Executive Director, and this council shall manage the Fund’s affairs, implement the Board of Directors’ decisions and represent the Fund in court....

· Article 4 - The Fund’s financial resources shall consist of grants and donations and amounts received from individuals and Arab and foreign governments and institutions and international and regional and local organizations for the purposes of the Fund and amounts allocated to it in the general budget

· Article 5 - The rules and provisions related to public funds and their control shall apply to the Fund’s money..
As for Article No. 7 - it provides that the Board of Directors shall set a financial regulation to organize the Fund’s accounts and manage its funds and accounts and documents to be approved by the Council of Ministers...!!

· I tried to find any financial reports issued by oversight bodies or external accountants, since the Fund’s money is public money, but I did not succeed in finding any data showing the annual resources and projects and a statement of the number of beneficiaries..in a genuine and sustainable way.., other than what the State Audit and Administrative Control Bureau mentioned in its 2016 report, that the composition of the Fund’s Board of Directors and its Executive Council contradicts the principles of oversight and good governance. I tried hard to find information on the Fund’s activity from the date of establishment in 2003 through 2011 when statements were issued by the Minister of Labor, Dr. Majdalani at that time, where he said on 3-7-2011 of the necessity of institutionalizing the Palestinian Employment and Social Protection Fund, and the necessity of reactivating it!!! Up to 2016, I was unable to obtain information on the Fund’s activities and its data and approvals on budgets or financial statements for years ...and any surpluses or deficits it had..in an audited..according to the rules....manner....and its activities since its establishment in 2003 until 2016 ...except what appeared to me through brief publications limited to photos of working teams and visits on the Fund’s electronic page.....and there was a reference to several projects in 2016 and 2017 including:

· Project to Support and Empower New Graduates – Gaza Strip, program to integrate settlement workers into the Palestinian labor market...!!, enterprise development program, human resources development program, establishment of self-employment projects within the program to expand the Fund’s targeted groups, project to empower and qualify women entrepreneurs in rural areas and areas adjacent to the wall, Project Engineers in the Field, Guaranteed Employment Project... as for the Youth Employment for Development project – Rekindling the Spirit of Hope. One of the indicators of the project’s success was that 13 beneficiaries were appointed in the private sector, and 5 in local community institutions....and these employment results for sustainable employment, despite the positives of employment on the practical level, qualifying others and building their capacities and training them to integrate into the labor market, the number of employees in a sustainable way is small, and does not match the high unemployment rate which increases continuously over the years..!!

· Mr. Abu Shehla, the current Minister of Labor, and Chairman of the Fund’s Board of Directors, and Chairman of its Executive Council, said that the next phase will witness the Fund undertaking large and qualitative development lending projects in cooperation with local banks to implement the government’s financing strategy by mobilizing half a billion dollars to inject as concessional loans for graduates and the unemployed...!

· Date: 1-3-2019