Our Guiding Principles - Libyan Investment Authority - LIA

Implementing best practices in line with the Santiago Principles

The Libyan Investment Authority (LIA) is a member of the International Forum of Sovereign Wealth Funds (IFSWF), a global network of sovereign wealth funds (SWF) committed to working together and strengthening the community through dialogue, research and assessment.

We are firmly committed to implementing best practices in line with the IFSWF’s Santiago Principles – a set of 24 guidelines designed to promote good governance, accountability, transparency and prudent investment practices, whilst encouraging a more open dialogue and deeper understanding of SWF activities.

30

IFSWF members

The Santiago Principles are currently observed by more than 30 IFSWF members around the world, including the LIA.

We are continuing to adopt the Santiago Principles in our governance and risk management frameworks. We track our progress against the Principles regularly to ensure that we continue to build on our strengths, while further developing key areas.

The Santiago Principles


The Santiago Principles can be categorised into three broad frameworks:

Legal framework, objectives and coordination with macroeconomic policies

Overview: This category summarises the laws and regulations surrounding an SWF’s operations, as well as its interactions with the government, its purpose and approach to formulating investment strategies.

Guiding principle: Sound practices and principles in this area underpin a robust institutional framework and governance structure of the SWF, and facilitate the formulation of appropriate investment strategies consistent with the SWF’s stated policy objectives.

LIA’s implementation: The legal framework of the LIA is outlined in Law No. (13), passed by the Libyan government in 2010. This sets out the institutional framework by which the LIA is governed, and defines our purpose, Board responsibilities, funding mechanism and structure.

The LIA is working to further clarify our policy objectives, improve disclosure of our approach to spending and withdrawals, as well as enhance our ability to report regular and accurate statistical information to government bodies and beyond. In particular, we have appointed third-party international advisors to develop a disclosure plan that enhances our ongoing reporting requirements under Libyan Law and global best practices.

Institutional framework and governance structure

Overview: This category summarises an SWF’s organisation, functions, roles and responsibilities, accountability, reporting and disclosure. It covers an SWF’s ability to facilitate the operational independence of its management from political interference.

Guiding principle: A sound governance structure that separates the functions of the owner, governing body(ies), and management, facilitates operational independence in the management of the SWF to pursue investment decisions and investment operations free of political influence.

LIA’s implementation: Law No. (13) sets out the roles and responsibilities and overarching governance structure of the LIA. It defines clear operational independence and establishes standards of public accountability. The LIA is a legally and financially independent investment entity – this means that while we are accountable to the Libyan government, we have full operational independence. It is the ultimate responsibility of the Board of Directors and Leadership to pursue the LIA’s objectives and drive the delivery of our strategy, mission and purpose.

The LIA prepares its financial statements on an annual basis using accounting principles that are considered appropriate to our unique situation. We are currently undergoing a comprehensive transformation programme aimed at improving our governance, transparency and accountability in line with best practice. With the support of our international advisors, we are soon to issue financial statements aligned to International Financial Reporting Standards.

Investment and risk management framework

Overview: This category aims to ensure that an SWF’s investment policy and outlook is clear, appropriate and implemented fully; and that risks are managed and monitored correctly.

Guiding principle: A clear investment policy shows an SWF’s commitment to a disciplined investment plan and practices; a reliable risk management framework promotes the soundness of its investment operations and accountability.

LIA’s implementation: The LIA has developed a new Investment Policy Statement and risk management framework as part of our ongoing transformation efforts, and in view of our current operating environment. We are evaluating all options and the associated investment approaches to enhance the management of Libya’s assets. The LIA understands and is committed to fulfilling our responsibilities as a global investor where practical, in compliance with the UN sanctions regime.

2020

OUR LATEST SELF-ASSESSMENT

The IFSWF encourages members to undertake a self-assessment of their level of adherence to the Santiago Principles once every two years. The latest self-assessment of members took place in 2020.


© 2021 LIA,  ALL RIGHTS RESERVED.

© 2021 LIA,  ALL RIGHTS RESERVED.