05 June 2007

Disconnected power!

The recent tragic death of Mrs Folole Muliaga has numerous implications for public policy. While I am hesitant to comment about the events – let alone to pass judgement – before we hear all the facts, I think everyone can agree that the power to her home should not have been disconnected, given the vulnerable state of Mrs Muliaga’s health. The persons involved in the disconnection may claim that they didn’t know about her health – but then surely they had a responsibility to find out before they took that step. So, if they really didn’t know, why didn’t they know?
Now, the SOE Act does have a clause that requires these enterprises to be ‘socially responsible’, but it has always been considered a weak and ill-defined provision, and likely to take second priority to the enterprise’s commercial objectives. And so now government is considering stronger regulation to control such behaviour in the industry. See Herald Article.
But these events also raise general questions about essential utilities (including electricity, gas and water) as public goods. Does the fact that these utilities are essential to health and household well-being over-ride considerations of costs of production, competitive pricing, efficient allocation, etc.? I imagine, given the mood of the country over these recent events, that ‘social responsibility’ may be back on the rise.
There is also a question about contracting out. The power was disconnected by a contractor. One may now ask whether such an action should be given to a contractor, for whom considerations of ‘social responsibility’ may be further weakened. Indeed, the commercialized SOE governance model itself could now be placed under public scrutiny… at least for those goods that are essential for health and well-being.