Bahrain's Unemployment Fund will finally come under the legislators’ scrutiny.

The Shura Council yesterday unanimously approved amendments to the 2006 Insurance Against Unemployment Law that would see both chambers of the National Assembly getting their hands on the closing financial report no more than five months after the end of the fiscal year.

The breakthrough move, which will be now ratified by His Majesty King Hamad, comes around three years after it was first proposed that the fund’s finances come under the legislators’ watch.

The new financial governance measures are described as a step towards transparency and accountability.

Under the legislation, the annual closing financial statements would be considered valid and published in the Official Gazette only if they are voted on and approved by both the chambers.

Rejection of the statement would mean parliamentary action against responsible officials.

Following yesterday’s approval, the 2023 closing report will be now referred to legislators as the first-ever since the establishment of the fund in 2006.

The measures are different from the ones originally proposed by the Shura Council in 2020 but have been backed by the Cabinet and were approved by Parliament earlier this year.

However, the Shura Council suspended debate on the issue in April this year following concerns by the Social Insurance Organisation (SIO) that proposed amendments would clash with their own internal financial governance measures.

The changes were then indefinitely withdrawn to allow the Shura Council services committee to further assess the situation.

After extensive talks, the committee chaired by Dr Ibtisam Al Dallal unanimously recommended the go-ahead to the amendments to the law incorporating Parliament’s changes.

Shura Council Chairman Ali Saleh Al Saleh said during the weekly session yesterday that the SIO officials were working effortlessly, efficiently and with honesty in managing and operating all funds under their responsibility.

“SIO officials are up to the task in dealing with all the challenges and obstacles being faced by funds under their responsibility,” he said.

“This is a huge task involving public coffers and we in the Shura Council will work hand in hand with the SIO to continuously improve and develop procedures and measures to elevate things.”

Meanwhile, in reference to the Unemployment Fund, Dr Al Dallal said legislators were not speaking about two different financial reports.

“The report is that audited, assessed, reviewed and approved by the SIO board before being referred to Parliament and the Shura Council for endorsement, rejection or approval with observations or opinions,” she added.

“The legislative authority will not interfere in the financial affairs of the Unemployment Fund and it will conduct its business according to set plans and procedures.

“We are seeking more parliamentary monitoring of public money and getting such statistics was vital in whatever legislative direction is sought in future.”

SIO chief executive Eman Al Murbati, who was present during the Shura Council session yesterday, had earlier this year said the fund had BD542 million in its coffers.

Last month, the King issued a royal decree to withdraw BD200m from the fund and direct it to Tamkeen’s (Labour Fund) national wage support and employment programmes.

The fund has also seen BD230m taken from it to fund the early voluntary retirement scheme in 2019 and to cover wages of Bahrainis in the private sector during the Covid-19 pandemic.

The Shura Council last year rejected amendments to the law on the basis that the fund could lose millions of dinars and the jobless rate could shoot up beyond five per cent if employees are exempted from contributing one per cent of their monthly wages to the SIO.

SIO officials said at the time that the fund’s revenues fell to BD77m in 2021 compared with BD78m in 2020.

Out of the annual contributions, BD20m are paid by expatriate workers, they had added then.

The fund’s revenues are made up of 1pc of monthly wages each from an employee, employer and the government – adding up to a total of 3pc.

Former MPs approved amendments to the law to relieve employees from paying the 1pc on the basis that the fund was in a healthy position.

Meanwhile, Labour Ministry officials had then pointed out that the structure of the fund had been drawn up in co-ordination with the International Labour Organisation to revolve around the three partners in the labour market.

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