In the context of the General Investment KIA’s response to one of the parliamentary questions related to the request for annual reports submitted by the Chairman of the Board of Directors of the General Investment KIA to the cabinet with the KIA’s draft on the KIA’s work, and the status of invested funds in accordance with the provisions of the law establishing the KIA, it was noted that the KIA was unable to provide copies of those reports Financial .
The KIA considered in its response that the investments of sovereign funds are among the issues that the legislative and executive authorities cooperate in keeping information about them with a fence of secrecy, as this information is presented to the National Assembly annually in a secret session, without distributing any written statement about it to the members of the National Assembly. By reading out a statement of the financial situation of the state, which includes all the information about these investments, and about the investment policy, rules, and programs, in accordance with Article 150 of the Constitution, noting that by reviewing the provision of the aforementioned article, it has not been evident that the legislator has touched on the confidentiality of the statement of the financial situation .
The General Investment KIA has also justified not publishing reports on its activities and the status of the invested funds on its website because the law establishing the KIA prohibits this, as the KIA believes that the law contains articles that regulate the dissemination of information, as Article No. (8) of the law prohibits giving statements or information about Conditions of invested funds. Article No. (9) of the law also stipulates imposing penalties on anyone who divulges work secrets in the General Investment KIA or information he has access to by virtue of his work .
Also, by reviewing the legal texts to which the KIA referred, it becomes clear that these texts regulate the duties and responsibilities of the KIA’s employees and do not regulate the duties and responsibilities of the KIA, and these texts are mainly contained in the Civil Service Law, which regulates the public service in general .
It follows from this answer that what the KIA declares adopting the principles of governance and transparency in my opinion is inconsistent with its practice. The principles of transparency must be achieved by initiative rather than by binding, and the best example of this is that the Audit Bureau voluntarily initiated the initiative a decade ago by publishing its annual reports on its website. After those reports were classified as confidential, and thus the Bureau, with this initiative, ended the issue of secrecy of its annual reports, and this is an indication of the extent to which the Bureau adheres to the principles of transparency and governance in its work, especially with regard to its reports .
Therefore, in my opinion, the General Investment KIA is not characterized by full governance and transparency, and my opinion came based on what was confirmed by the Maduell-Linaburg Transparency Index, and according to the latest available data, the sovereign fund of the State of Kuwait, which is managed by the KIA, is ranked fifth Within the top 95 classifications of the largest sovereign wealth funds by total assets, the Kuwaiti fund scored 6 points out of 10 on the “Linaburg – Maduel” transparency index and this is a relatively low rating compared to other countries that scored 10 points, for example, Bahrain, the UAE, Norway, and the United States.
This index was introduced in 2008 by the Sovereign Wealth Fund Institute (SUFI), which aims to assess the transparency of sovereign wealth funds. Sovereign wealth funds are classified according to this index every three months.
This index is based on ten basic principles that portray the transparency of sovereign wealth funds to the public so that each of the following principles adds one point of transparency to the index’s classification. The Sovereign Wealth Fund Institute recommends a minimum rating of 8 in order to demand adequate transparency, and the ten SWF classification principles are :
1. The date and justification for establishing the fund, the sources of wealth, and the governmental ownership structure.
2. The existence of audited annual financial reports.
3. A statement of the percentage of participation in the fund’s assets and the geographical distribution of those assets.
4. A statement of the total market value, returns, and director’s remuneration.
5. The existence of outlines of ethical standards and investment policies and the bodies that supervise the application of those standards.
6. Having clear strategies and goals.
7. Disclosure of the identities of the subsidiary and subsidiary companies and the means of contacting them.
8. Disclosure of the external directors.
9. The existence of a special website for the fund on the Internet and under its administration.
10.The presence of the addresses and locations of the main offices of the Fund and the means of communicating with it, such as phone, fax, etc .