Bahrain’s unemployment fund will finally come under parliamentary oversight.
The Shura Council yesterday unanimously approved amendments to the Unemployment Insurance Act 2006, which would require both houses of parliament to submit a final financial report within five months from the end of the financial year.
The landmark measure, which is expected to be approved by His Majesty King Hamad, comes nearly three years after it was first proposed that the fund’s finances be placed under parliamentary oversight.
The new financial governance measures are described as a step towards transparency and accountability.
Under this law, annual financial statements will only be considered valid and published in the Federal Register if both houses of Congress vote and approve them.
If this statement is rejected, it will lead to parliamentary action against the responsible officials.
Following yesterday’s approval, a final report in 2023 will be presented to lawmakers, the first since the fund was established in 2006.
The measures are different from those originally proposed by the Shura Council in 2020, but were supported by the cabinet and approved by parliament earlier this year.
However, the Shura Council suspended discussions on the issue in April this year following concerns from the Social Insurance Organization (SIO) that the proposed amendments would conflict with its own internal financial governance measures.
The changes were then withdrawn indefinitely to allow the Shura Council Services Committee to further assess the situation.
After extensive consultations, the committee chaired by Dr. Ibtisam Al Dalal unanimously recommended the green light for amending the law to incorporate the parliamentary changes.
Shura Council Chairman Ali Saleh said at yesterday’s weekly meeting that SIO officials are working effortlessly, efficiently and honestly in managing and administering all funds under their responsibility. .
“SIO officials are tasked with addressing any challenges or obstacles faced by the fund under their responsibility,” he said.
“This is a major undertaking involving public funds and we at the Shura Council will continue to work with the SIO to continuously improve, develop procedures and measures and make things better.”
Meanwhile, Dr. Al-Dalal said that in relation to the unemployment fund, the lawmakers are not talking about two different financial reports.
“The report will be audited, evaluated, reviewed and approved by the SIO Board before being referred to Parliament and the Shura Council for approval, rejection or approval with their observations and opinions,” she added.
“The legislative authorities do not interfere in the financial affairs of the Unemployment Fund and carry out its work in accordance with established plans and procedures.
“We are calling for increased parliamentary oversight of public finance, and having statistics like this is critical to whatever future legislative direction we seek.”
SIO CEO Eman Al Murbati, who attended yesterday’s Shura Council session, said earlier this year that the fund had BD542 million in its coffers.
Last month, the king issued a royal decree withdrawing BD200 million from the fund and directing it to the Tamkeen (Labour Fund) national wage support and employment program.
The fund also collected BD230 million to fund the early voluntary retirement scheme in 2019 and cover the wages of Bahrainis in the private sector during the COVID-19 pandemic.
The Shura Council said last year that if employees were exempted from contributing 1 percent of their monthly salaries to the SIO, the fund could lose millions of dinars and the unemployment rate could soar above 5 percent. refused to amend the law.
SIO officials said at the time that the fund’s revenue decreased to BD77 million in 2021, compared to BD78 million in 2020.
Of the annual contributions, BD20 million is paid by foreign workers, they added at the time.
The fund’s income consists of 1 percent of monthly salaries from employees, employers, and the government, for a total of 3 percent.
Former members of Congress approved a change in the law to exempt employees from paying 1%, citing the fund’s soundness.
Meanwhile, Labor Ministry officials pointed out that the fund’s structure was designed to revolve around three labor market partners, in conjunction with the International Labor Organization.
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