Having completed my four-part series [1, 2 & 3, 4] on what I termed ‘The Integrity Threat‘, I was intrigued by two recent public notices on the meaning of the Appeal Court’s recent activity on these matters.
- 6 October – The Integrity Commission issued a Public Notice which was a clear statement by the Commission that State Enterprises were within its lawful remit, according to the Appeal Court ruling on 27 June. My reading of that ruling was that it effectively narrowed the 9th part of the Schedule to the Integrity in Public Life Act (IPLA) so that it only applies to Directors of Statutory Bodies performing public functions. I maintain that view. Even if one accepts the Commission’s reading of events, as set out in the exchange of emails in the sidebar, this ruling was a seriously retrograde step in the operation of our nation’s Integrity Framework, as I will illustrate;
- 5 November – the Judiciary issued a Media Release on the recent reports in other newspapers on a 28 October Appeal Court hearing on a 2006 Freedom of Information request made to TSTT. I want to read the actual ruling/findings of the Appeal Court at that hearing before writing in detail on this. Two things are clear – firstly, the Judiciary is able to set the record straight if there is a danger of the media misunderstanding important rulings. That is the behaviour of a healthy Public Institution. I am also noting here that the Judiciary has made no such efforts in respect of #30 of 2008, despite the several pointed criticisms in the media. The second point is about the subject-matter of this lawsuit, which is the 2006 letter the Commission wrote to TSTT’s Directors confirming that they did not have to submit declarations. That letter and the official efforts to conceal it, were the subject of this 7-year lawsuit. I had raised this arrangement with senior officials of the Commission in earlier discussions, since it seemed incredible to me that TSTT could have gained such a concession. I was told that the Commission had agreed to ‘hold its hand‘ since the issue was subject to the Court’s ruling – this is my paraphrasing of conversations, so of course I am subject to correction. On the one hand I was recently told by the Commission that this arrangement was ‘in order‘ and on the other, it is now emerging that TSTT expended considerable time & money to conceal those details. I am calling on the Commission to publish those details.
Correspondence with the Integrity Commission –
Good Afternoon to you, Mr. Farrell,
I read in the penultimate paragraph of yesterday’s BG View, a reported statement from your office that “…The Commission will determine on a case by case basis which statutory bodies and state enterprises meet the criteria established by the Court of Appeal…”
Before writing further and out of an abundance of caution, I am seeking your early confirmation that such is indeed the case.
IC reply of that day –
Dear Mr. Raymond
In determining which Members of the Boards of Statutory Bodies and State Enterprises fall within the purview of the Integrity in Public Life Act, the Integrity Commission is guided by the decision of the Court of Appeal in Civil Appeal No. 30 of 2008 which construed the relevant provision of the Integrity in Public Life Act (paragraph 9 of the Schedule).
The Court of Appeal made it clear that there are 2 separate and distinct categories of bodies:
- ) statutory bodies, that is, bodies incorporated by statute who exercise public functions, that is, functions which are not private in nature but public, irrespective of whether the State has a controlling interest in them.
- ) state enterprises, that is, companies incorporated under the Companies Act. In respect of such companies, the de jure or legal test of control is the first guide in determining whether the State has a controlling interest. However in exceptional circumstances the de facto or factual test of control can be resorted to if the legal sources cover up a naked attempt to evade the provisions of the Integrity in Public Life Act.
In the light of the above, the Commission will determine on a case by case basis which statutory bodies and state enterprises meet the criteria established by the Court of Appeal.
I thank you for your interest in the work of the Commission.
This speaks to the fundamental importance of a proper account and the transparency of our country’s Public Institutions. We need to have a clear understanding of how we went wrong in the past, if we are to have a real chance of avoiding those lapses in the future. In the case of intentional acts of bad faith, or ‘misfeasance‘, we need to be even more insistent that the proper record be established. The Public Interest demands no less.
Institutions are comprised of individuals, whose behaviour can affect the functioning of those Institutions. Institutions therefore have rules, procedures and policies so as to limit the capacity of individuals to take the whole Institution ‘off-course‘. I am maintaining that its 2008 Annual Report and the subsequent appeal to alter the Commission’s remit are also a significant part of this serious collapse.
It is also noteworthy that the fault in that sorry period was found to be with the Commissioners. The rot had started at the very top, so the systemic aspect makes this a critical lesson for a nation at our stage. Plainly, the procedures within the IC were either inadequate or just ignored. Either way, we have a striking failure of what was established as an Independent Public Institution. Given their sustained silence, it would be unrealistic to expect those erring Commissioners to give a proper account of their actions in this period.
The Integrity Commission has a responsibility, as a Public Institution, to give an account of the ways in which its safeguards were sidelined in that period of derailment 2004 to 2009. That is fundamental if we are to avoid a repetition of this tragic episode.
The Appeal Court’s June ruling seems to have removed all those State-owned companies which are held by National Enterprises Ltd (NEL) from the oversight of the IPLA. The stated reason was that in those cases State control is exercised ‘indirectly‘, since the shares are held in a holding company.
As Andre Bagoo pointed out in his 7 July article, this ruling means that to escape the oversight of the IPLA, the State only has to transfer its shares in a particular company to a holding company. I am unable to understand the Integrity Commission’s silence on this retrograde development.
A significant proposal in the Commission’s 2012 Annual Report is that its own members be required to make declarations, which is a direct acceptance of the need for Institutional accountability and transparency.
- Persons in Public Life
- The Schedule of Persons in Public Life should be widened to include:
- Chairman and Members of the Integrity Commission…
(from Proposed Amendments to the IPLA at pg 33)
The Gordon Commission appears, from its 2012 Annual Report, to have taken a strategic and intelligent view of the challenges of properly discharging its onerous mandate.
…Significantly the Commission has also embarked upon a policy which will communicate more fully with the public as it is considered desirable to do so…it is recognised that public confidence in the work of the Commission can only grow if the misunderstandings of the past, at all levels, are avoided by clearer communication of the Commission’s role.
For the future it is our hope that assessment of the Commission’s performance will now be based on what it does rather than on the complications of its legacy…”
(from the Chairman’s Remarks at pg 2 )
The only way to ensure good performance going forward is to give an account, as a responsible Public Institution, of ‘the complications of its legacy‘.