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SOE social responsibility scrutinised

Published: 6:21PM Saturday June 02, 2007 Source: One News

The government says it is likely to firm up the obligations of state owned enterprises when it comes to social responsibility.

Social responsibility is one of the core functions of an SOE, but Minister for State Owned Enterprises Trevor Mallard says not enough is being done.

Mercury Energy's power disconnections and Solid Energy's spy-hiring have prompted uncomfortable questions about SOEs.

Last Tuesday, mother of four Folole Muliaga, who relied on an oxygen machine, died after power was cut off to the family home over an unpaid bill of $168.

In May, Solid Energy boss Don Elder was called on to resign following revelations the state-owned company used a spy to infiltrate protest group Save Happy Valley.

"An SOE is basically founded through it's very nature on something called the public good, and so therefore that tends to be the imperitive rather than the profit," says Professor Kate Kearins.

But has profit now become the dominant force?

"Earlier this year we've had government announcements about making SOE's more entrepreneurial, so it's how you balance those things," says Kearins.

Mallard has now come closer than before to admitting that balance may have tipped too far away from the people SOEs are meant to be serving.

"What's clear to me is that the links with our welfare system are not working properly, I mean, I don't think people's power should be cut off for relatively small overdue bills," Mallard told TV ONE's Agenda programme.

This could mean clearer directives as to what SOEs can, and more importantly, cannot do in pursuit of profit, especially when it comes to the most vulnerable consumers.

"I think we are going to have to head in that direction because it's clear to me that some of the companies working with poorer people and sicker people have not been doing what most thinking New Zealanders would require of them," said Mallard.

National Party's Gerry Brownleed is more reticent about change, but believes government committees alone struggle to hold SOEs accountable.

"We do our best but I don't think we get the same scrutiny if there was a series of large institutional shareholders," he says.

Government papers are due out soon on how SOEs might be forced back a little closer to their public service roots.

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