Gandásegui, What to look for in ACP directors

The ACP board of directors. They are short-handed due to a resignation — which was NOT one of the four members who have been named in criminal investigations or unflattering audit reports. ACP Photo.

The qualifications for ACP board members

by Marco A. Gandásegui, hijo

The Panama Canal continues to be the centerpiece of any analysis of Panamanian reality. As a result of a negotiation – really an imposition — made at the beginning of the 20th century, the United States built the waterway that connects the two largest oceans on the planet. From 1914 to 1999, the canal was administered by the United States, based on the global geopolitical interests of that northern country. In 1999 the waterway, and all of the infrastructure that accompanied it, was transferred to the Panamanian government once the Torrijos-Carter Canal Treaty signed in 1977 was fulfilled.

Since 2000, the canal has been managed by the Panama Canal Authority (ACP), a public company whose sole shareholder is the Panamanian people. Canal revenues are almost entirely the product of tolls paid by more than 14,000 ships — of all sizes — that pass through their locks annually. In 2018 it had revenues that exceeded $3 billion. Nearly half went directly to the coffers of the Panamanian Treasury to be incorporated into the national budget.

Despite this enormous wealth that the treasury gets every year, little is known about how the canal is managed. The ACP is about to get its third administrator. It has a board of directors made up of 11 members. The board appoints the administrator. Of the members of the board, nine are appointed by the President of the Republic for a period of 10 years. Another is the Minister of Canal Affairs. There is also a deputy elected by the National Assembly. The board of directors should be accountable to the sole shareholder of the sanal: the Panamanian people. Every year in the National Assembly – which according to the Constitution represents the people — the president of the board of directors of the ACP delivers a check that leaves everyone astonished by the huge sum that it represents.

But who are the members of the board of directors? Are they prepared to fulfill their obligations? Are they at the service of the country or do they have other agendas?

It is up to the current president — Juan Carlos Varela — to appoint three new board members before he hands over his office to his successor on July 1, 2019. Like the last four presidents, everything indicates that he will select them under pressure from powerful economic interests. The members of the board of directors handle billions of dollars from canal revenues and related activities. Most do not have much knowledge about the waterway. Some do not know it at all. Many come to the ACP with another agenda.

What are the qualification that the members of the board of directors should have?

Let’s make a list of six basic areas with which the chosen one should be familiar. If she or he meets the six qualities mentioned below, that makes an excellent candidate for the position of director. If five traits are found, that’s very good. Those who can handle four are good or acceptable. Those who only have three or less they are unacceptable.

  • The first quality is that to know the details of world maritime trade. This incudes the projections of world production and maritime technologies. It includes knowing the importance of commercial routes.
  • The second quality is to have knowledge the security of the 9,000 ACP employees. Not just workplace safety, but their levels of education, health, pay scales and prospects for the future
  • Third, a director should know the details of how that complex structure that is the canal is maintained.
  • Fourth is a good knowledge of the watersheds that feed the canal the water that ships need to travel from one ocean to the other. In addition, urban growth and its impact on the waterway.
  • Fifth, knowledge of how to guarantee expeditious access to financial resources so as to be ever more autonomous.
  • Finally, the director should have a working knowledge of geopolitics and of the interests of the great powers, in order to maintain the neutrality of the canal and the country in a conflictive world.

Obviously, the board of directors should have naval engineers, environmentalists, economists and financiers, labor lawyers, international relations specialists and sociologists to be in a position to supervise the entire operation of the canal. At present, these are conspicuous by their absence. President Varela can fill that void. He can choose new directors from among his school friends or his fellow party members, as Panamanian presidents usually do. Provided that they master at least four or more of the qualities mentioned above.

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