OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA 8th Year No. 24 ADDIS ABABA - 27 " June , 2002 CONTENTS Proclamation No. 277/2002 Public Enterprises Supervising Authority and the Industrial Development Fund Establishment Proclamation Page 1760 PROCLAMATION NO . 277/2002 A PROCLAMATION TO PROVIDE FOR THE ESTABLISHMENT OF THE PUBLIC ENTERPRISES SUPERVISING AUTHORITY AND THE INDUSTRIAL DEVELOPMENT FUND WHEREAS , as long as public enterprises have to continue competitive and profitable and thereby play appropriate role WHEREAS , to fulfill this objective , the Public Enterprises ganized as an autonomous government office and the existing NOW , THEREFORE , in accordance with Article 55 ( 1 ) of the Constitution of the Federal Democratic Republic of Ethiopia , it is hereby proclaimed as follows : PART ONE General Provisions This Proclamation may be cited as the “ Public Enterprises Supervising Authority and the Industrial Development Fund Establishment Proclamation No. 277/2002 ” . In this Proclamation , unless the context requires otherwise : Unit Price The African Law Archive 1 ) “ Public enterprise " means an enterprise as defined under Article 2 ” ( 1 ) of the Public Enterprises Proclamation No. 25/1992 , or a wholly state owned share company , but excluding those enterprises for which specific supervising authorities are desig nated by other laws or decisions of the government ; 2 ) “ Share company ” means a share company partially owned by the state , but excluding those share companies in which the state owns shares through public enterprises ; 3 ) “ Board of Management ” means a Board of management of a public enterprise and includes the Board of Directors of a wholly state owned share company ; 4 ) “ Ministry ” means the Ministry of Trade and Industry . PART TWO The Public Enterprises Supervising Authority 3. Establishment 1 ) The Public Enterprises Supervising Authority ( hereinafter referred to as the Authority ' ) is hereby established as an autonomous government office having its own legal personality . 2 ) The Authority shall be accountable to the Ministry . 4. Head Office The Authority shall have its head office in Addis Ababa and may have branch offices elsewhere as may be necessary . 5. Objectives The Authority shall have the following objectives : 1 ) to support pubic enterprises in attaining higher level or capacity utilization and the employment of better management systems and technology and thereby to improve their performances and to maximize their achievements ; 2 ) to cause the establishment of new public enterprises in sectors where private investors could not par ticipate for various reasons and which will be bottlenecks for the overall economic development ; 3 ) to supervise the management of public enterprises ; 4 ) to protect the ownership rights of the state in public enterprises and share companies . 6. Power and Duties Without prejudice to the relevant provisions of the Public Enterprises Proclamation No. 25/1992 and other laws , the Authority shall have the powers and duites to : 1 ) undertake project studies and , without prejudice to the provisions of Sub - Articles ( 1 ) ( a ) and ( 2 ) of Article 13 of this Proclamation , cause government allocation of funds necessary for the initial capital of public enterprises to be established pursuant to Article 5 ( 2 ) of this Proclamation ; 2 ) evaluate and submit to the Ministry for its approval project proposals presented by investors intending to invest in partnership with the government ; and follow up the implementation of same ; The African Law Archive 27 June , 2002 Page 1762 3 ) undertake studies and provide guidelines with a view to assisting public enterprises in building their capacities ; 4 ) appoint and remove the chairperson and members of Boards of management of public enterprises and fix their fees provided , however , the provisions of Article 12 ( 2 ) of the public enterprises proclamation No. 25/1992 shall apply to the appointment of members of Board of directors of enterprises the shares of which are wholly state owned . 5 ) approve the appointment of external auditors of public enerprsies ; 6 ) approve corporate targets and investment plans of public enterprises ; 7 ) follow up and evaluate the performance of public enterprises ; 8 ) approve financial reports of public enterprises as audited by external auditors ; 9 ) submit information with its recommendation to the Ministry with a view to obtaining the decision of the government on the amount of state dividends to be paid to the Government by public enterprises of each financial year ; 10 ) issue directives on writing off the accounts of public enterprises and follow up their implemen tations ; 11 ) decide the increase or decrease of the capital of a public enterprise ; 12 ) cause the establishment of reserve funds or the allocation of funds by the Government so that the authorized capital of a public enterprise shall be fully paid up within the period specified under Article 20 ( 2 ) of the Public Enterprises Proclamation No. 25/1992 ; 13 ) undertake apporopriate studies and submit recom mendations to the Ministry where the amal gamation or division of public enterprises becomes necessary ; 14 ) undertake studies and implement result oriented incentive schemes applicable to members of Boards of management of public enterprises and their management staff ; 15 ) represent the government in general meeting of shareholders of share companies and nominate Board directors on behalf of the government ; 16 ) undertake studies on the conditions under which a public enterprise may be operated under a management or lease contract and , upon approval by the Ministry , supervise the execution of same ; 17 ) encourage and assist public enterprises in coor dinating their activities and thereby promote their mutual interests ; 18 ) to give final decision on requests to retain , in accordance with the law , employees of public enterprises in service beyond retirement age ; 19 ) own property , enter into contracts , and sue and be sued in its own name ; 20 ) perform other acts as are required for the attain The African Law Archive ment of its objectives 27 June , 2002 - Page 1763 staff . 7. Organization of the Authority The Authority shall have : 1 ) a Director General to be appointed by the govern ment ; and 2 ) the necessary 8. Powers and Duties of the Director General 1 ) The Director General shall be the chief executive officer of the Authority and shall , subject to the general directives of the Ministry , direct and ad minister the activities of the Authority . 2 ) Without limiting the generality stated in Sub - Article ( 1 ) of this Article , the Director General shall : ( a ) exercise the powers and duties of the Authority specified under Article 6 of this Proclamation ; ( b ) employ and administer employees of the Authority in accordance with the federal civil service laws ; ( c ) prepare and submit to the Ministry the work program and budget of the Authority and implement same upon approval ; ( d ) effect expenditure in accordance with the approved budget and work program of the Authority ; ( e ) represent the Authority in all its dealings with third parties ; ( f ) prepare and submit to the Ministry the operational and financial reports of the Authority . 3 ) The Director General may delegate part of his powers and duties to the officials and other em ployees of the Authority to the extent necessary for the efficient performance of the activities of the Authority ; provided , however , that in the case of delegation to an official who acts on behalf of the Director General for more than 30 days , prior approval of the Ministry shall be required . 9. Budget The budget of the Authority shall be allocated by the Government . 10. Books of accounts 1 ) The Authority shall keep complete and accurate books of accounts . 2 ) The Books of accounts and financial documents of the Authority shall be audited annually by the Auditor General or by an auditor designated by PART THREE The Industrial Development Fund 11. Establishment The Industrial Development Fund is hereby established . 12. Source of the Fund Financial sources of the Fund shall be deductions , in percentages to be fixed by the Ministry upon the recommendations of the Authority , from the surplus profits of public enterprises after deducting state dividend as determined pursuant to Article 6 ( 9 ) of this Proclamation . The African Law Archive 27 June , 2002 - Page 13. Utilization of the Fund 1 ) The Fund shall be utilized for the following purposes : ( a ) to finance project studies and initial required for the establishment of public enterprises pursuant to Article 5 ( 2 ) of this Proclamation ; ( b ) to finance the capital expenditure required for upgrading and expansion of existing public enterprises that may play key roles in the economic development of the country ; ( c ) to replenish the capital of a public enterprise which has sustained loss where it is deemed necessary to salvage it from dissolution . 2 ) Any disbursement from the Fund in accordance with Sub - Article ( 1 ) of this Article shall require the permission of the Ministry . 14. Accounts of the Fund 1 ) The Authority shall separately keep complete and accurate books of accounts of the Fund . 2 ) The accounts of the Fund shall be audited annually by the Auditor General or by an auditor designated by him . PART FOUR Miscellaneous Provisions 15. Inapplicable Laws 1 ) The provisions of Article 11 of the Public Enter prises Proclamation No. 25/1992 shall not be applicable with respect to the Authority . 2 ) No law , regulation , directive or practice in so far as it is inconsistent with this Proclamation , shall have effect with respect to matters provided for in this Proclamation . 16. Transfer of Rights and Obligations The rights and obligations of the Office of the Supervising Authority of Public Enterprises are hereby transferred to the Authority . 17. Effective Date This Proclamation shall enter into force as of the 27th day of June , 2002 . Done at Addis Ababa , this 27th day of June , 2002 . PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA The African Law Archive *