Tag: Ethiopian pension law

 Private Organizations Employees Social Security Agency Establishment Council of Ministers Regulation Number 202/2011

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Brief note

Following the promulgation of  the Private Organization Employees Pension Proclamation No. 715/2011 which which was published and became effective on, 24th June, 2011, the council of Ministers issued a regulation establishing   the Private Organizations’  Employees Social Security Agency on the 25th day of March 2011. The Agency is now in charge of the overall implementation of the Pension Proclamation No. 715/2011 particularly the administration  private organizations’ employees  pension funds.

There are two issues related to the issuance of this regulation worth considering. The first one is a minor   error in legislative drafting. If you look at the English version of the heading of pdf version (which is scanned from the hard copy) of the document you will read a title “Private Organizations’  Employees Social Security Agency Establishment Proclamation.” As a proclamation refers to statutes issued by the House of People’s Representatives, it is surely confusing when the term is used for delegated legislation made by the Council of Ministers. However,  when you compare the Amharic version of the same regulation (which is to be given effect in case of discrepancy) it becomes easy to realize that it is definitely a mistake to be blamed on the drafter. The Amharic version uses the term “ደንብ” which is use to represent the term “regulation. ”  The official title of the text, as indicated in Article 1 is also indicated as “This Regulation may be cited as the “Private Organizations’  Employees Social Security Agency Establishment Council of Ministers Regulation No. 202/2011.”  Hence the use of the term “proclamation” instead of “regulation” is an error in legislative drafting.

The second one is a fundamental constitutional issue likely to have  serious implications on the basic principles of representatives democracy and accountability of government. As it is true in all democracies, the executive organ of government does not have a power of making primary legislation. However, irrespective of the principle of separation of powers, the complexities of public  administration have necessitated the delegation of legislative powers to the executives organ. In Ethiopia, the council of Ministers and administrative agencies issue regulations and directives respectively based on a delegation conferred on them by the House of People’s Representatives. This being the case, delegation legislation as it offends the constitutional principle of separation of powers, is to be exercised narrowly. Constitutional fundamental public policy issues, therefore could never be delegated to executive organs.

When you see the above regulation, it essentially creates a government organ in charge of  implementing a law made by parliament. In effect, a law made by parliament is left to the fate of a decision of the executive organ. Imagine a case whereby the council of ministers refuses to establish an agency, when a law by parliament endlessly waits for implementation.  However, the basic issues involved goes beyond this.

The council of ministers by establishing an agency bestows a power upon itself.  What powers to be give to an agency is solely a matter to be decided by the legislature. This is also at odds with the principle of accountability.  How is it possible for parliament to hold a certain agency accountable when it is clear that parliament is not the source of power to that agency. Only the legislature has the power to create or ‘uncreate’ an administrative agency.  But, when the agency is directly established by the executive only the executive will have a final say on the fate of the agency.

This is not the first time the Council of Ministers establishes an administrative agency. The power to create and ‘uncreate an administrative agency was given to the council of ministers by Article 34 of proclamation number 691/2010 (Definition of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 691/2010)  which reads

“The Council of Ministers is hereby empowered, where it finds it necessary, to reorganize the federal government executive organs by issuing regulations for the closure, merger or division of an existing executive organ or for change of its accountability or mandates or for the establishment of a new one.”

The Private Organizations Employees Social Security Agency, just like other Council of Minister Agencies is established based on article 34 of this proclamation.

I will try to post more on this issue in the future. Here follows the text of the regulation.

Private Organizations Employees Social Security Agency Establishment Council of Ministers Regulation Number 202/2011 

This Regulation is issued by the Council of Ministers pursuant to article 5 and 34 of the Definition and Duties es of the Executive , Organs of the Federal Democratic  Republic of Ethiopia Proclamation No. 691/20120.

1. Short Title

This Regulation may be cited as the “Private Organizations’  Employees Social Security Agency Establishment Council of Ministers Regulation No. 202/2011

2. Establishment

1/ The Private Organizations Employees Social Security Agency ‘(hereinafter “the Agency”) is hereby established the as an autonomous federal agency having its own juridical personality

2/  The Agency shall be accountable to the Ministry of Labour and Social Affairs.

3. Head Office

The Agency shall have its own Head Office in Addis Ababa and may have branch offices elsewhere as necessary.

4. Objective

The objective of the Agency shall be to strengthen and expand private organizations’ employees social security programs.

5. Powers and Duties

The Agency shall have the powers and duties to:

1/  implement private Organizations’ empioyees social security laws, regulations and directives:

2/ establish efficient and effective system to implement the private organizations’ employees pension scheme;

3/ establish a system for the collection of private organizations’ employees pension contributions, collect contributions, ensure that pension contributions are collected by the appropriate organ in time and in the correct amount, supervise the implementation of the system by employers and, where necessary audit their documents and records by requiring their  submission or through site visits;

4/ administer private organizations’ employees  pension funds and assets related thereto;

5/collect in advance and maintain records of evidentiary data that entitle private organizations employees to pension benefits;

6/ take legal actions against employers and other individuals who fail to  pay pension contributions, maintain accounts of contributions and furnish required documents and information on time;

7/         determine, the adequacy and validity of evidentiary data submitted in connection with claims of the employees of private organizations pension entitlements, as well as the types and amounts of benefits, and effect, payments of benefits;

8/ decide on claims related to pension rights and benefits of employees of private organizations;

9/ invest the private organizations’ employees pension fund in treasury bonds and ocher secured investments specified by directives issued by the Ministry or Finance and Economic Development;

10/ cause periodical actuarial study and review of the private organizations’ employees pension funds;

11/ undertake studies to strengthen pension programs of employees of private organizations, submit the studies to the government and implement same upon approval;

12/ issue directives on matters that come within its powers and duties;

13/ own property, enter in to contracts, sue and be sued in its own name;

14/ carry out such other activities as may be necessary for the fulfillment of its objective.

6. Organization of the Agency

The Agency shall have:

1/ a Board of Management (hereinafter the “Board”),

2/ Director General and, as may be necessary Deputy Director Generals to be appointed by the government, and

3/  the necessary staff.

7. Members of the Board

1/ Members of the Board shall be equally represented from the government, private organizations and the employees of the private organizations; and their number shall be determined as may be necessary.

2/  The Chairperson and government representatives shall be assigned by the government. The election procedure ,applicable’ to representatives of private organizations and employees shall be determined by government.

3/  The· Director General of the Agency shall be member and secretary of the Board.

8. Powers and Duties of the Board

1/  The board shall oversee and supervise operation of the Agency

2/  Without limiting the generality of sub-article (1) of this Article, the Board shall have the powers and duties to:

a)  approve the strategy, plans, budgets and performance reports of the Agency:

b) submit to government, for approval, general policy matters regarding the Private organizations’ employees pension scheme and fund;

c)  approve directives of the Agency to be issued pursuant to sub-article (2) of Article 5 of this Regulation.

9. Meetings of the Beard

1/ The Board shall meet once in every three months: provided, however, that it may meet at any time as may be required.

2/ There shall be a quorum where more than half of the members are present at a meeting of the Board.

3/ Decisions of the Board shall be passed by majority Vales of the members present at a meeting; provided, however, that the Chairperson shall have a Casting vote in case of a tie.

4/ Without prejudice to the provisions of this Article, the Board may adopt its own rules of procedure

10.  Powers and Duties of the Director General

1/  The Director General shall be the chief executive officer of the Agency and shall, subject to the general directives of the Board, direct and administer activities of the Agency,

2/  Without limiting the generality of sub-article (1) of this Article, the Director General shall:

a)  exercise the powers and duties of the. Agency. specified in Adele 5 of this Regulation.;

b)  employ and administer employees of the Agency in accordance with the federal civil service laws;

c)  prepare and submit to the Board the strategy, plan and budgets of the Agency and implement same upon approval;

d)  effect expenditure in accordance with the approved budget of the Agency;

e)  represent the Agency in all its dealings with third parties;

f)  submit performance and financial reports of the Agency to the Board and, upon approval, to the concerned government bodies,

3/  The Director General may delegate part of his powers and duties to the officer and other employees of the Agency to the extent necessary for  the efficient performance of the activities of the Agency

11. Budget

The Budget of the Agency shall be allocated from the pension fund; provided however, that the government shall allocate initial budget to commence operation.

12. Books of Account

1/ The Agency shall keep complete and accurate books of a Accounts.

2/ The books of accounts and financial documents of the Agency shall be audited annually by the Auditor Genera! or by auditors appointed by him,

13. Effective Date

This Regulation shall come into force ill’ on the date of publication in the Federal Negarit Gazeta.

Done at Addis Ababa, this 25th day of March 2011,

MELES  ZENAWI

PRIME MINISTER  OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA