Are you missing this line:
use HTML::Entities;
From the HTML::Entities CPAN page, it should be used like this:
use HTML::Entities;
my $a = "Våre norske tegn bør æres";
decode_entities($a);
encode_entities($a, "\200-\377");
If you think there is something wrong with the HTML::Entities package, you can check the source on your system. From bash:
vim $(perldoc -l HTML::Entities)
Once the file is opened in your text editor, you can check that the subroutine is defined. I suspect that the package is correct though, it is more likely that the package isn't "used".
You can also test this at the command line to see if it works outside your program:
perl -MHTML::Entities -le 'print HTML::Entities::decode_entities( "Våre norske tegn bør æres" )'