Tag: state enterprises

EFCL’s warning letter

efcl-lalla-letterYes, Readers, I received this letter from Larry Lalla, attorneys for the Education Facilities Company Limited (EFCL).

The letter was hand-delivered to my office this morning, although it is dated 8th August – over three weeks ago.

I sent this email in immediate reply:-

From: Afra Raymond <afraraymond@gmail.com>
Date: Fri, Sep 2, 2011 at 4:57 PM
Subject: EFCL’s Confidentiality Policy
To: kiran.shah@efcl.co.tt
Cc: ronald.phillip@efcl.co.tt, larry.lalla@gmail.com

Good Day to you, Mr. Shah,

A copy of EFCL’s attorneys’ letter dated 8th August was hand-delivered to my office earlier today and I will soon be replying to those points in public.

In particular, I noted the third point in that letter –

“3. EFCL remains at all times committed to the principles of transparency in all aspects of its operations.”

Accordingly, I am again requesting a copy of the EFCL’s Confidentiality Policy.

Of course I am publishing this, in keeping with our shared commitment to transparency.

Thank you.
Afra Raymond

Property Matters – Taking Stock

As part of this pre-budget series, I am going to ‘take stock’ of some recent, significant happenings in relevant areas.

Given the unstable situation in relation to the State and its operations, many examples of which have been set out in previous ‘Property Matters’ columns, it is very important that a critical stance be maintained.  That said, it is also important that any progress be properly recorded and acknowledged.

The notable items were –

Housing Development Corporation (HDC)

hdc-logo
I was very pleased to read of the success HDC was having in collecting the serious rent arrears owed by its tenants, reportedly in excess of $240M.  Of course this is not the first time there has been an effort to rectify this situation, so hopefully this will be a sustained program as it is vital that housing be treated with proper responsibility.  That responsibility would extend from the quality of the designs and construction, the treatment of contractors and suppliers all the way to housing policies which respond to the needs of the needy.

Last week, there was a report in this newspaper that the Housing and Environment Minister, Dr. Roodal Moonilal, disclosed a new housing policy.  According to that report, the new policy will favour distribution of serviced lots, with foundation slabs, over the provision of new homes.  I have been calling for a review of our housing policy for some time now, so it was very disappointing to read that Cabinet had recently approved this important new policy without some formal process of dialogue or seeking wider views, much less a thorough examination of the shortcomings of the 2002 policy.  Yes, a new housing policy was sorely needed, but there are solid benefits to wider dialogue.

Housing is too important an element of our Welfare State to ever become solely a creature of Cabinet, whatever the credentials of the current crop of Ministers.

This leads directly into my point about the poor flow of basic information, which can be detrimental to the best intentions.  The 2002 housing policy disappeared from the internet about 6 months ago, but despite several written requests I have had no success in having those links restored, for whatever reason.  The new housing policy is also not available online.  In contrast, last month the Ministry of Finance issued a revised State Enterprises Performance Monitoring Manual and that is available online, together with the 2008 Manual it replaced.

Building code

Dr. the Honourable Roodal Moonilal, Minister of Housing and Environment
Dr. the Honourable Roodal Moonilal, Minister of Housing and Environment

The impending new Building Code is to be welcomed, having been developed in collaboration with key stakeholders.  There needs to be a solid commitment by all parties to establishing proper enforcement of those critical standards.  The Building Code will cover important areas such as earthquake and fire hazards as well as other quality issues.

The initiative is being piloted by Dr. Roodal Moonilal, Minister of Housing and the Environment.  UDECOTT and the HDC both form part of his responsibilities, so that is a good fit.  We will have to be vigilant to ensure that all State construction conforms to the new standards.

I can scarcely believe that the very Minister who understands the importance of collaborating with stakeholders on the new National Building Code, would state a week earlier that the new Housing Policy had been agreed by Cabinet, with no visible attempt at consultation.  Incredible, but true.

A Culture of Consequence

I have consistently stated that the absence of consequence is inimical to any development and that consequence has to be restored to a proper place if we are to progress.   Up to last Thursday, 11 August, I stated at a public meeting that I was unaware of any government in this country taking decisive action against its own appointees in the State Enterprises.  The pattern has been one of charging people from the last political administration in what almost always looks like revenge.

Dawn Annamunthodo, former chairman of the National Schools Dietary Services Ltd. Photo © Trinidad and Tobago Guardian
Dawn Annamunthodo, former chairman of the National Schools Dietary Services Ltd. Photo © Trinidad and Tobago Guardian

The Sunday Guardian headline of 14 August ‘Cabinet fires Chairman of School-feeding Programme’ was as welcome as it was surprising.  It was reported that the Cabinet had taken decisive action to fire a Chairman who had been appointed about 6 months before and that is a positive step, the first time any government in this country has done that, as far as I am aware.

According to that exclusive story, the fired Chairwoman of the National Schools Dietary Services Ltd (NSDSL)—Dawn Annamunthodo – had obtained extensive and expensive security guards for herself, due to some alleged death threats.  There were also details of what seemed to be deceptive attempts by that individual to become a signatory to the bank accounts of that State-owned company.  If those reports are true, there are two serious implications –

Firstly, it is extremely unlikely that this is the first time that this individual was involved in acts of that kind.  Grown people do not just change their behaviour in a few months’ time, we all know that.  My point being that this episode calls into question the screening which is carried out in relation to these appointments.  Whatever screening processes now exist, will definitely have to be made stronger, together with ongoing reviews of Board performance.

Given that the Prime Minister is widely reported to have approved the Chairpersons of State Boards, that screening process needs to be reviewed urgently so as to preserve the integrity of that office.

Secondly, this individual is reported to have attempted to convince Republic Bank’s Ellerslie Plaza branch to make her a signatory and that matter must be promptly investigated by the Fraud Squad, with charges to follow if those allegations are true.  It is an echo of the point I made here last week about a dutiful police officer allowing a motorist with a defective vehicle to just drive-off after a ticket is issued.  Not good enough, if we are serious about road-safety.  We have to restore a Culture of Consequence if White-Collar Crime is to be challenged.

But, even though no money appears to have been stolen in that School-Feeding episode, the saddest part was the bold-faced question that individual asked the Guardian reporter, when invited to give a comment

How did you get hold of those documents? Those are state documents.   These questions are state business.

It reminded me very much of the response of Jewan Ramcharitar, former PriceWaterhouseCoopers partner, who suddenly resigned as eTeck Chairman almost a month ago.  That entire affair remains mysterious, with Stephen Cadiz, the line Minister, stating that it was due to a ‘difference of opinion’ and the departed Chairman reportedly stating –

I am actually working on a project in the public service arena on a full-time basis and my time at eTeck is eroding the time and attention I pay to that.

“Just what that project is, he won’t say.”

I wonder if Ramcharitar would have found that dismissive answer to be acceptable when he was a partner at PWC?  Probably not, yet we are continually beset by these evasive attitudes in public affairs.  We need to hold our leaders to a high standard.

The latest twist is the sudden resignation of George Nicholas as Chairman of Caribbean Airlines and the opaque statement by the Minister of Transport, Devant Maharaj – “…Yes. I can confirm this. I am in receipt of his letter but I cannot say anything more…”

In the three cases, bare-faced conflation of State Business with Business which is private, personal or confidential.

Good steps are to be recognized and applauded, but we must always strive for better.  We need to continue onward and upward.  It would be good to have a statement from the Minister of Foreign Affairs and Communications as to the governments’ commitment to a progressive policy in these important matters.  The Housing policy needs to be published for comment and we also need to have a clear statement as to whether there can be any such thing as a confidential state policy.

Confidential State Policy may seem like an oxymoron, but readers will be aware of the reluctance of the Education Facilities Company Limited to publish its new Confidentiality Policy.  I don’t want to say refusal, but when this budget season is over we will be continuing to examine those EFCL operations.

Property Matters – State Enterprise Accounts

State Enterprise Performance Monitoring Manual
In the next few weeks, this column will cover some of the issues which are likely to have a bearing on the 2012 Budget.

In my view the State and its Agencies must perform in an exemplary fashion if we are to progress.  A good example is worth a thousand words.

At page 22 of the 2010-2011 budget statement, the Minister of Finance said –

…Mr. Speaker, no coherent, co-ordinated planning or strategy for state enterprises exists.  As a result we have begun to rationalise the state enterprises, including the special purpose companies, which will incorporate a new accountability system that goes beyond the presently operating company ordinances. It is these loopholes in public accountability that resulted in the UdeCOTT scandal. This must never again happen in Trinidad and Tobago…

The Ministry of Finance has now published a new State Enterprises Performance Monitoring Manual 2011, it is over three times longer than the previous edition, so it will be something to consider in weeks to come.

Certainly, there are stricter requirements in relation to the filing of accounts – at pg 30 of the 2011 guidelines –

3.2.5 AUDITED FINANCIAL STATEMENTS

State Enterprises are required to submit the following:

  1. Audited Financial Statements (2 originals and 120 copies) to the Minister of Finance within four (4) months of their financial year end. These reports are to be laid in Parliament and subsequently submitted to the Public Accounts and Enterprises Committee for consideration;
  2. Copies of their Management letters issued by Statutory Auditors…

At pg 16 of the 2008 edition –

1.3.10 Publishing of Financial Statements by State Enterprises

Government has agreed that State Enterprises be required to publish in at least one (1) major daily newspaper a summary of the audited financial statements within four (4) months to the end of their financial year and a summary of the unaudited half-yearly statements within two (2) months of the mid-year date.

Such summary statements must be in accordance with the requirements of the Securities Industry Act, 1995.

The new guidelines appear to be stricter, but the requirement to publish to the press seems to have been removed.

There are swirling issues on this –

  • No accounts for years – As I have pointed out before, some of the largest State Enterprises have published no accounts for years.  UDECOTT and NHA/HDC are just two examples of this flagrant breach of the shareholders’ instructions as set out above. In the case of HDC, there is a greater concern in my view, since sections 18, 19 and 20 of the HDC Act require the audited accounts to be produced and published.  Anyhow you try to spin it, those are terrible signs.  For a private company to have no accounts, for even a few months, is indicative of poor performance at the very least.  No accounts for years is unacceptable.  One can only wonder how clearly could anyone plan if basic information is being obscured in this fashion.  We expect better from the chiefs of these State Enterprises and certainly we expect better from the Peoples’ Partnership.  In his preamble to the 2010-2011 budget, Minister Dookeran said –

…We must at all times remember who we work for. We must make Government work for the people.  As our Prime Minister always says: serve the people, serve the people, serve the people…

  • Serious debts outstanding – There are continuing reports, despite some efforts, that contractors, consultants and suppliers are owed substantial monies by State Enterprises for extended periods.  That has a disastrous effect on our local economy both on an immediate tangible level and in terms of the more subjective element of confidence.
  • Ambitious new projects continue to be announced, even as the basic accounts are incomplete and substantial bills remain unpaid.

Apart from the evident confusion, at the very highest levels of the State and Government, the unacceptable part is that there is not even an attempt to explain what is the hold-up or what areas of the accounts remain unresolved.  The few times anyone in authority has attempted to explain the delays in those accounts, it has been a model of vagueness and ambiguity.  That uncommunicative behaviour does not augur well.  These State Enterprises are not building a wartime bunker or a new spy satellite, only new homes and offices.

But there is more, according to S. 99 (1) of the Companies Act 1995

  1. every Director of a company shall in exercising his powers and discharging his duties act honestly and in good faith with a view to the best interests of the company; and
  2. exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Those provisions make mismanagement of a company an offence.  It is literally impossible to manage or direct the affairs of a multi-billion dollar company in the absence of audited accounts.  So there must be serious concerns as to how the Directors of those State Enterprises without accounts could have properly discharged their obligations under S. 99 (1).

SEC logoApart from these points, there is now the fact that the SEC has made Orders in respect of Contraventions of the Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997.  Those Orders are in relation to the failure of these huge State-owned Enterprises to publish their accounts –

  1. 19th March 2010 against HDC, with fines totalling $121,000 – see http://www.ttsec.org.tt/content/pub100326.pdf.
  2. 15th June 2011 against UDECOTT, with fines totalling $120,000 – see http://www.ttsec.org.tt/content/Order-for-settlement-re-UDECOTT.pdf.
  3. 25th July 2011 against HDC, with fines totalling $400,000 – see http://www.ttsec.org.tt/content/Order-for-settlement-re-Trinidad-and-Tobago-Housing-Development-Corporation.pdf.

I was pleased to see the SEC taking this firm action against these offending State Enterprises, it is an important and necessary intervention.  I am not at all sure what, if any, ongoing penalties are being applied.  If there are no ongoing punishments or fines, this important regulator needs to take a tougher stand.  It is simply not good enough in my view for the regulator to levy these fines and allow the companies to carry on with ‘business as usual‘.  That would be like a dutiful policeman ticketing a motorist for smooth tires, no seatbelt and no headlights – issuing the ticket and then letting that motorist drive off.  The SEC needs to consider heavy daily fines and banning orders against Directors of these companies in breach of the law, if such do not already exist.

The era of irresponsibility in high office needs to be brought to a close.  The role of the Treasury in supporting this grossly irresponsible behaviour is questionable.  The silence on the missing accounts is intolerable.  The chapter of getting away with it needs to be ended.

Expenditure of Public money – Accountability – Transparency = CORRUPTION

Property Matters – The EFCL Query part 3

On Thursday 14th July, the EFCL published a full-page response to the first article in this series – it was also the same day that the second article in this EFCL Query was published.  Although it was comforting to see the clear statements on EFCL’s ‘speak out’ component, Whistle-Blowing policy and procedure and Fraud Policy, the central concerns are greater, if anything.

I deliberately used the word response, since no reasonable person could consider that advertisement to be a reply to my emailed queries.

If EFCL were really replying to my query, it would have been no problem to provide a copy of the documents and answer the simple questions.

EFCL’s preferred course of action is to spend more taxpayers’ money on expensive artwork and advertising, so the further question is ‘Why?’.

Considering that all I was doing was questioning the existence and origin of an important policy of this State-owned company, it is perturbing to be having this level of challenge in getting a simple clarification.

As I wrote in this space last week – ‘So, what is the secret?’

What could be the delay or difficulty in providing a copy of the EFCL’s Confidentiality Policy, as requested?

In the first article in this series, I posted the documents which had been passed to me.  The simple question is whether these are the genuine documents.  There was no attempt by EFCL to even answer that important query.

It is important because the EFCL advertisement told readers that “…Employees were not asked to sign under threat of dismissal…”

The first sentence of the preamble of the Staff Confidentiality Agreement is –

“All new and existing employees will be given a copy of this confidentiality policy and will be required to sign a confidentiality agreement at the time of hiring or during their service to the company.”

The emphasis is mine – yes, it reads ‘required to sign’.

But there is more, because the EFCL advertisement also stated that –

“Staff who asked for time to get external advice, were allowed to.”

However, clause 1 d. of the Confidentiality Agreement states –

“The existence of this agreement and its terms are confidential and none of the parties to this agreement may disclose anything about this agreement or its subject matter or implementation to any person except if required by law to do so.”

It is clear that the EFCL advertisement and the documents sent to me cannot both be true.

So, which is true?

Why did EFCL not send or publish the documents?

Quite frankly, it appears that EFCL is making a great effort to conceal or obscure its true policy on confidentiality, for whatever reason.

If this is the kind of effort being put into obscuring the elementary policy of this State-owned company, I can scarcely imagine their reaction to queries on particular projects, Directors’ benefits or tender procedure.

The behaviour of the State and its agents must be exemplary.  Public Officials have an obligation, in my view, to behave in a fashion which fosters trust and good order.

It is all starting to resemble a tangled web, sad to say.

Again, I hope that my doubts are misplaced.

SIDEBAR

Five simple questions for EFCL…

  • Is there a new EFCL Confidentiality policy?
  • When did that come into effect?
  • Would you please provide a copy of that policy?
  • Was that policy approved by the Board of Directors?
  • Is the Ministry of Education aware of this new policy?

Property Matters – The EFCL Query part 2

efcl-confidentialDespite the first column in this series, I have had no direct reply or even acknowledgement from any of the EFCL officials to whom my initial queries were directed.

It seems that the people concerned would rather not write, on this matter at least.  A meeting has been indirectly suggested, which of course would have to be properly recorded and minuted – no word on that meeting as I write again.

What could be the delay or difficulty in answering the five simple questions posed last week –

  1. Is there a new EFCL Confidentiality policy?
  2. When did that come into effect?
  3. Would you please provide a copy of that policy?
  4. Was that policy approved by the Board of Directors?
  5. Is the Ministry of Education aware of this new policy?

Four of those questions require basic yes/no responses, while only one requires a date.

I closed Sunday Guardian’s article by reminding readers of the equation

Expenditure of Public money – Accountability – Transparency = CORRUPTION

The elementary accountability of a public company having its policies available for the public to consider seems to be either lacking or of low priority in the case of EFCL.  As we move along, it will be interesting to see how the Transparency part of the equation works out.

In researching this article, it emerged that our country is a signatory to two relevant international conventions.  As I understand it, the effect of our State having become signatory to those agreements is that the country has adopted those standards.

The first one is the Inter-American Convention against corruption, which was signed by our country in April 1998.  At that time, UNC was in power, under PM Basdeo Panday.  At Article III, clause 8, we are obliged to

“…consider the applicability of measures to…create, maintain and strengthen…Systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities, in accordance with their Constitutions and the basic principles of their domestic legal systems…”

The second convention is the United Nations’ Convention against Corruption, which was signed by our country in December 2003.  At that time, PNM was in power, under PM Patrick Manning.  At Article 8 – Codes of Conduct for Public Officials, clause 4 obliges us to

“…4. Each State Party shall also consider, in accordance with the fundamental principles of its domestic law, establishing measures and systems to facilitate the reporting by public officials of acts of corruption to appropriate authorities, when such acts come to their notice in the performance of their functions…”

So, what is the big secret?

I do understand that staff at companies like this can jeopardize the integrity and effective operations of the organisation by leaking certain confidential information.  That would be a proper concern of management and a confidentiality policy is one of the ways that could be dealt with, just one.

During the Uff Enquiry, UDeCoTT claimed several times that this or that document was confidential and used its lawyers to protest strongly, sometimes even seeking the protection of the High Court.  That was outrageous conduct by a state-owned company, which appeared to be trying to frustrate the Uff Commission, appointed by the State, by seeking to conceal documents.  A case of ‘the tail wagging the dog’.

This situation is one in which it seems that the dangers of leaks in relation to tendering estimates, for example, has been conflated to cover all information in the company.  It appears to be part of a new policy which does not conform to either good labour relations or our country’s international obligations with respect to Whistle-Blowers.

Given the electoral promises made by this government and the importance of the struggle to reduce the menace of corruption in our society, it is very important for us to be attentive to these matters.

UDeCoTT wanted to conceal certain documents and one had to wonder why, given that they are not involved in secret work.  If it was not so serious it would be comical, they are not a spying, military or health institution.  UDeCoTT is just a facilitator for erecting buildings, yet their chiefs were able to pretend to the public that a large part of what they did was confidential. That kind of secrecy could never be in the public interest.  Not ever.

Similarly with EFCL, one has to ask – What is the secret?  That organisation is responsible for the repair and maintenance of schools, using Public Money to do so.

I wonder if that document, which a number of EFCL staff have now been required to sign, is legal and binding?  Could it withstand a challenge in the Courts?  Did EFCL take proper legal advice in this matter?  Was that advice followed?

The legitimate interests of taxpayers require that the management of State Enterprises take proper steps to handle these integrity challenges – Does the EFCL Confidentiality Agreement achieve this?

There is a certain kind of way in which this episode with EFCL is starting to remind me of the early UDeCoTT grappling, before Uff and so on, with tremendous difficulty in getting basic dialogue going, shadow-boxing and bizarre positions being taken.

I really hope that I am wrong, because the correct, encouraging attitude to Whistle-Blowers is essential for the success of the larger Public Procurement agenda.

Property Matters – The EFCL Query

Continuing the series of examinations into the purpose and performance of our State Enterprises, this week I am looking at an important issue which seems to be emerging at the Education Facilities Company Ltd. (EFCL).

EFCL is a state-owned company involved in the building and maintenance of schools.  It consumes public money in the execution of its functions and that is why it is important to put these points now.

efcl excerpt 3

One of the biggest public concerns is the high level of white-collar crime, which means bribery, corruption, fraud, over-billing, ‘back-fitting’, tax-evasion, asset-stripping and so on.  White Collar crime is a growth industry, since the rewards are very high, while the risk of being caught or punished is extremely remote.

Due to the size of the State, a great deal of that white collar crime can be found in State Institutions.  Once Public Money is being spent, we must demand a high standard of accountability and transparency.

In terms of principles, there needs to be an appropriate balance between the long-established ‘Right of privacy‘ in commercial transactions and the growing ‘Right to know‘ which is part of the emerging social order.  There will be different views as to where the correct balance exists and furthermore, the consensus position will shift as time passes.

It seems to me that the default position should be that, in doubtful cases, the right of the public to information should prevail, since we are the ones paying the costs.  Indeed, that position forms part of the Freedom of Information Act, so that is substantial support.

In early 2009 we witnessed an attempt by the then PNM government to amend the Integrity in Public Life Act (IPLA) so that people reporting breaches of that Act would have been forced to give their names and addresses.  That arrangement would have given even greater protection to corrupt officials, since virtually no-one would want to make a report.  Of course people are strongly encouraged to report ‘normal’ crime like rape, robbery, murder and so on – further encouragement is offered by allowing them to make anonymous reports via 800-TIPS, for example.  Those proposals to amend the IPLA would have encouraged corrupt behaviour by reducing the reports.

That Bill was piloted by then Attorney-General, Bridget Annissette-George.  The proposals were strongly opposed in the Parliament and in the wider society, eventually being withdrawn.  One of the strongest protestors in the Parliamentary debate was Dr. Tim Gopeesingh, who was reported to have accused the government of trying to intimidate people into not making reports. [Hansard, 1 May 2009 p.441] On that occasion, the Standing Orders were used by Colm Imbert, to curtail Gopeesingh’s presentation. [Hansard, 1 May 2009 p.455]

The normal good governance provisions for annual accounts, Board Meetings, minutes and so on are very important.  But those provisions must be supplemented by an atmosphere and a series of institutional arrangements which facilitate Whistle-Blowers.  There must be clear channels and protection for Whistle-Blowers if we are to have any chance of reducing corruption in our country.

Without the assistance of Whistle-Blowers, we would not have known of the Piarco Airport or UDeCoTT fiascos and we know for sure that somebody leaked the file on the Heights of Guanapo Church just prior to last year’s election.  We need encouragement for Whistle-Blowers – in some countries they are even given big cash rewards.  The JCC has been active with its partners – TTMA, the Chamber of Commerce and the Transparency Institute – in making Public Procurement proposals to the Joint Select Committee.  An important element of those proposals is the creation of proper channels for Whistle-Blowers.

I recently received a copy of some EFCL documents, which were stated to be their new Confidentiality Policy Statement and a Staff Confidentiality Agreement for the signature of employees.  I was also told, separately, that EFCL staff are being required to sign that Agreement, under threat of dismissal.  What is more, the Agreement contains a specific clause which forbids revelation of either the existence or the terms of the agreement.

efcl excerpt 2

If those documents are genuine, there are serious grounds for concern, so I made a written query via email on Friday 1st July to the EFCL’s CEO, Paul Taylor, and its Chairman, Ronald Phillip.  I outlined what had been reported to me and asked these questions –

From: Afra Raymond <afraraymond@gmail.com>
Date: Fri, Jul 1, 2011 at 1:13 PM
Subject: EFCL Confidentiality Policy
To: paul.taylor@efcl.co.tt
Cc: ronald.phillip@efcl.co.tt

Hello Paul,

I am reliably informed that EFCL staff were recently directed to sign a ‘Confidentiality Agreement’, the rationale being that it is the new Company policy.

Before taking this any further, I am requesting your written response to these questions –

  1. Is there a new EFCL Confidentiality policy?  When did that come into effect?  Would you please provide a copy of that policy?

Assuming a new Confidentiality Policy is in place, these are my queries –

  1. Was that policy approved by the Board of Directors?
  2. Is the Ministry of Education aware of this new policy?

I would appreciate a timely response.

With best wishes.
Afra Raymond

That email was also copied, purely for information, to the Minister of Education.  At the time of writing, there has been no acknowledgment or reply.

efcl excerpt 1

This is a serious development for these reasons –

  1. The Super-Confidentiality provisions mean that staff are forbidden to obtain any advice, which seems to be a breach of good labour relations, at the very least.
  2. The unilateral imposition of this new document does violence to the proper meaning of the word ‘Agreement’.
  3. The ‘Guiding Principles’ at page 2 refer to ‘privileged information‘ and ‘EFCL’s right to privacy‘, both of which seem to me to be leading away from greater transparency and improved procurement procedures – which leads into the final point
  4. This administration promised, both on the campaign trail and post-election, to make new procurement legislation a priority.  The Joint Select Committee on Public Procurement was Chaired by Dr. Tim Gopeesingh, Minister of Education.   EFCL is the principal State Enterprise within the Ministry of Education, so what is Dr. Gopeesingh’s position on all this?  Is this taking place with Dr. Gopeesingh’s knowledge and/or approval?

It is clear to me that this kind of stealthy restriction on the possibility of staff becoming whistle-blowers is incompatible with the high-profile public statements of support for a new, effective public procurement system. Those statements range from the promises at page 18 of the People’s Partnership Manifesto to numerous speeches by the present Prime Minister.

The reality is inescapable –

Expenditure of Public money – Accountability – Transparency = CORRUPTION

I am closing by wondering, aloud, if this is the shape of the new Information policy for our State Enterprises.

SIDEBAR: What is a Super Injunction?

It is possible for a prominent person to obtain a Court Order called an injunction to prevent the publication of material which is likely to be damaging to their reputation.  That is a long-standing legal right and there has been a recent series of decisions in the UK in which super-sensitive, high profile people have been able to obtain ‘Super-injunctions’ from the High Court, which have the effect of prohibiting the publication and further prohibiting revealing the very existence of the injunction itself.  Of course the media have been fighting that in Court and there are two investigations underway into whether the ‘Super-Injunction’ is itself an abusive instrument.  The emerging thinking seems to be that these ‘Super-Injunctions’ are destroying the information balance I outlined earlier.

efcl excerpt 4

This EFCL Confidentiality Policy, if it is so, would seem to be a similar device, doing great violence to the information balance.

State Enterprises and Public Procurement

procurement cycleState Enterprises were created to enhance the pace and quality of Public Procurement, yet they are now the scene of the most bedeviling paradoxes in the entire system of public administration.

Some of the key procurement issues which arise in this arena flow directly from the split character of the governance model.

The basic rationale for the existence of State Enterprises is they can be more effective because they are not bound by the strict rules which control the conventional civil service.  The absence of those rules is supposed to allow more latitude in terms of hiring, borrowing and contracting.  State Enterprises can hire professional staff at market rates, enter complex commercial arrangements and borrow on commercial terms, all of which should amount to significant improvements in public services.

The typical State Enterprise is owned by the State, with the shareholding held by the Corporation Sole, an exceptional legal creature which exists within the Ministry of Finance.  Apart from its owner, the State Enterprise will sometimes have a ‘line Ministry’, which would be its sole or main client.  For example, the Ministry of Housing & the Environment is the sole client of the Housing Development Corporation (HDC) and the Ministry of Education is the sole client of the Education Facilities Company Limited (EFCL).

State Enterprises can operate within the existing Companies Act or be established by a separate Act of Parliament, as is the case with the HDC.  That legal framework ought to ensure that a satisfactory standard of corporate governance and accountability is maintained.

The fact is that many of the Directors and Officers of State Enterprises are political appointees, which puts the entire rationale onto a doubtful footing.  Because the salaries and perks are so attractive, not to mention the commercial opportunities, the State Enterprises are prize targets for political appointments and favours.

Some of the main issues which arise when one is considering this sector are –

  • the number of State Enterprises – there needs to be a reduction in the number of State Enterprises.
  • If the politicians can instruct the State Enterprise, via the Permanent Secretary, on specifics, what is the purpose of the Board?
  • Given the preceding point, do the Board members of State Enterprises have the same duties under the Companies Act as in the case of other registered companies?
  • In terms of our proposed Public Procurement legislation, what is the boundary between the fiduciary responsibility of the Directors and the contracting powers of an ‘authorised officer’ – i.e. someone identified as having the power to enter certain contracts?

Proceeding along the Procurement Cycle and using the International Waterfront Centre (IWC) as an example –

  1. Needs Identification – This is the first stage of the Procurement Cycle and it ought to be an objective assessment of needs.  In this case, the IWC was part of a huge, disastrous boom in building new offices in POS – this is all detailed at ‘Capital Concerns – New Office Buildings’ – here.  Before the boom started in 2005, there was 6.5M sq. ft. of offices in Greater POS, at the start of the boom some 3.2M sq. ft., or an additional 50% of the capital’s office supply was approved for construction.  Please remember that Nicholas Tower, which took 5 years to fill, is only 100,000 sq. ft.  Just under 2.8M sq. ft of new offices was actually built in POS in the last 5 years, with 2.3M sq. ft. of that space (82% of it) actually built by the State.  Every State project identified at the outset was executed, but in stark contrast, virtually half the private sector projects stopped before construction began.  The obvious consequence of that over-building by the State has been a collapse in the office rental levels in the capital, which is detailed in the next point.
  2. Reconcile Needs with Funds – This is the stage at which a developer ought to consider critical questions such as the cost of funds, the cost of the project and the returns from it.  That is sometimes called a feasibility test and this is where the IWC dissolves into utter confusion.  When then PM Manning addressed the Senate on 13May 2008, he emphasized that every UDeCOTT project was approved by Cabinet and had been vetted by a Finance Committee on Financial Implications.  That is the most important address if we are to see the depth of the problem with these State Enterprises – see here.  The break-even point on such projects is the rent at which the project can repay its costs of construction – at minimum, those costs would have to include for land, design, construction and finance.  On that ‘bare-bones’ basis, which makes no allowance for maintenance or periods when spaces are vacant, the break-even rent for the IWC is in the $30 per sq. ft. range.  This is the largest single office building ever built in our capital and the best rents ever achieved for space of comparable quality is about half the break-even figure.  There is no way that the IWC project could ever have satisfied any proper feasibility test.  Every new office project started in our capital only increased the supply of offices, which reduced the market rent, which, in turn, increased the gap with the break-even rent.  Under oath at the Uff Enquiry, Calder Hart tried to rationalize the confusion when he confirmed that only one of UDeCOTT’s projects had been subject to a feasibility test and that one was the IWC.  He was even so bold-faced as to estimate a break-even rent in the $20 range, but, when pressed, had to admit that he had left the cost of the land out of the calculations!  That is the extent of the deformed thinking which typified the best schemes of the leading State Enterprise.  Only one of the State’s many office development projects tested for feasibility and in that case, the cost of the land is omitted, yet that same land is included as a part of UDeCOTT’s Assets at $224M in that very financial year.  Political imperatives were allowed to pervert a process which exists to protect the public interest from this kind of empire-building.  But it is in the next part that the full confusion comes to bear.
  3. The rest of the procurement cycle – This is the stage at which tenders were invited for design-build and the winning bidder selected, the project built and the complex opened.  According to UDeCOTT’s statements, the IWC project is its flagship and an outstanding success, having been built on time and within budget.  Even if one accepts those assertions as being true, the IWC project is an example of the tragic consequences of a limited application of proper procurement processes.

As a result we have a completed project which is said to have been built on time and under budget, yet makes no economic sense and has a break-even point at some uncertain point in the future, if ever.

Some collateral damage needs to be noted, to quote one of the former PM’s notable phrases.  Contrary to his statement to the Senate which is cited here, UDeCOTT did not publish its accounts since 2006, which is a breach of both the Companies Act and the Ministry of Finance guidelines.  A total breach of the elementary norms of good corporate governance, which is the protection the private sector structure was supposed to give us taxpayers as a safeguard.  Because of the political element in the operation, we can see clearly that UDeCOTT was carrying-out the instructions of the Cabinet and those Directors have not been punished or censured in any way, apart from their public dismissal.  The consequence of those breaches being condoned at the largest State Enterprises – UDeCOTT and HDC – how does one get the smaller and less-visible State Enterprises to conform to good governance?

If the priest could play, who is we?

This is why we need a complete review of our procurement controls.

An Overview on the CIVIL SOCIETY submission to the Joint Select Committee on PUBLIC PROCUREMENT

This special publication is dedicated to the important issue of Public Procurement.  It is written by the a private sector group, headed by the Joint Consultative Council for the Construction Industry (JCC).  The JCC consists of:

  1. Association of Professional Engineers of Trinidad & Tobago (APETT)
  2. Trinidad & Tobago Institute of Architects (TTIA)
  3.  Board of Architecture of Trinidad & Tobago (BOATT) – observer status
  4. Trinidad & Tobago Society of Planners (TTSP)
  5. Trinidad & Tobago Contractors’ Association (TTCA)
  6. Institute of Surveyors of Trinidad & Tobago (ISTT) comprising Land Surveyors, Quantity Surveyors and Valuation Surveyors.

The private sector group consisted of –

  • Joint Consultative Council for the Construction Industry
  • Trinidad & Tobago Chamber of Industry & Commerce
  • Trinidad & Tobago Manufacturers’ Association
  • Trinidad & Tobago Transparency Institute.

The members of that Private Sector group were part of the Working Party on the Public Procurement White Paper, which was published in August 2005 and laid in Parliament the following month.

The Peoples’ Partnership’s manifesto, at page 18, commits to –

Procurement

  • Prioritise the passing of procurement legislation and appropriate rules and regulations
  • Establish equitable arrangements for an efficient procurement system ensuring transparency and accountability by all government departments and state enterprises…

In keeping with those campaign promises, the Minister of Finance tabled two legislative proposals in Parliament on 25 June 2010.  Those were a Bill to amend the Central Tenders’ Board Act (originally prepared in 1997, when Ramesh Lawrence Maharaj was Attorney General) and the Public Procurement Bill (originally prepared in 2006, after publication of the White paper).  A Joint Select Committee (JSC) was established on 1 October 2010 to examine those proposals, invite submissions and make recommendations.

The stated target of the PP government is to have the new Public Procurement legislation in place by the first anniversary of their electoral victory – i.e. by 25 May 2011.

Our Private Sector/Civil Society group reconvened last year and made a joint submission to the JSC in December 2010 – it is available here from the JCC‘s website.  Our Private Sector group has had several meetings with the JSC – which was chaired by Education Minister, Dr. Tim Gopeesingh – but the results of those are not featured in this publication.

This special publication is intended to inform readers of the necessity for new Public Procurement legislation in our country and to set out the objectives of our proposals.

The guiding Principles

 These are –

  • Transparency
  • Accountability
  • Value for Money

The broad picture

One of the most serious findings of both the Bernard Enquiry (Piarco Airport Project) and the Uff Report (UDeCOTT and HDC) was the extent to which the largest State projects were being executed outside of any normal system of accountability.  The very purpose of setting up these companies and procurement methods was to bypass the Central Tenders Board.  The natural consequence of that way of proceeding being that if the CTB could be sidelined as a deliberate act of public policy, then other important elements of the regulatory framework are violated as a matter of course.  In the case of both UDeCOTT and NHA/HDC, accounts were not filed for years – since 2006 for the former and 2002 for the latter – in flagrant violation of the rules and laws.

These were the largest State projects – often described as being the flagship or centre-piece of this or that government’s policy – yet they were breaking the main rules and getting away with it.  The ‘getting away with it’ is the cloudy part of the picture, because we never hear of any penalty being sought against those State Enterprise Directors who broke the governance rules.

But that is the very centre of the puzzle and we need to understand it before we can try to unlock it.  So, we are told, time and again, that the only way to really get important and urgent projects done in the correct fashion is to go outside the rules.  The stated reasons are that the old rules are too cumbersome, slow etc… and yet, we end up, time and again, in the same mess.

Some of the features of these fiascos are –

  • Huge cost over-runs on virtually every project.
  • Unfinished projects which virtually no one can make sense of – to date there is no proper rationale for the huge and loss-leading International Waterfront Project, apart from Calder Hart’s bogus explanation to the Uff Enquiry.
  • A gross burden on our Treasury going forward – The continuing delay in completing the accounts for these State Enterprises shows how difficult it is to work out exactly what the State owes and to whom.

What all that tells us is that the existing rule-book seems to be blocking progress and the attempts to bypass it have done little better, if not far worse.

The dismal picture on public procurement is not limited to construction projects and can be found in all the other areas.

A new approach is needed and that is what is at the foundation of these legislative proposals.

What is Public Money?

Central to the new proposals is that any new Public Procurement system must be in full effect whenever Public Money is spent.

‘Public Money’ is defined at page 5 of our proposals as money which is either due to, or ultimately payable by, the State.

Our proposals are intended to form part of a financial management reform package to include for a National Audit Office and a Financial Management and Accountability Bill.

The intended move is towards a greater transparency and duty of care in terms of how taxpayers’ money is spent.  Our citizens, particularly the unborn ones who will have to pay for some of the wasteful schemes which are littering the landscape, deserve no less.

The new equation confronting us is –

Expenditure of Public Money
minus            Accountability
minus            Transparency
equals         CORRUPTION

We must fix that.

So, what is at stake here?

Our society is beset by large-scale corruption, which sustains wrong-headed decision-making.  The wider social consequences of that toxic culture are now hatching, with a vengeance, in the naked violence and wily crimes which pre-occupy our head-space.

The killing-fields of East POS, the decimation of African urban youths, the URP and CEPEP gangs and the battle for turf are all part of this picture.

As long as our society continues to applaud and reward dishonest, corrupt behaviour, we will continue sliding downhill.

The structure of our economy is that most of the country’s foreign exchange is earned by the State in the form of oil & gas earnings.  The rest of the society relies on the State and its organs to recycle those earnings for the benefit of those of us not directly engaged in the energy sector.

For that reason, the State casts a very long shadow in our country, far more so than in other places.  Virtually every substantial business relies on the State and its organs for a significant part of its earnings.  A healthy connection with the State is essential for good profits.

But that is where the particular problem is, since the conduct of the State and its organs is often found to be lacking in the basic ingredients of fairplay, accountability and transparency.

If the State is the biggest source of funds in the place and the State is not playing straight at all, a serious question arises – How can we hope to uplift our society?

The State has an over-riding duty to behave in an exemplary fashion in its policy and operations.

Due to its tremendous footprint, the State has to behave in that exemplary fashion if we are to move out of this mess.  A positive shift in State conduct will have a salutary effect on the commercial culture and wider society, one that is long overdue.

So, who spends Public Money?

We have a vast, expensive and confusing array of organs, all of which are authorized to spend our money.  For a country of about 1.4M people, we have 26 Ministries.  Just consider that the UK, with a population of about 65 million, has 19 Ministries and the USA, with a population of about 300 million, has 16 Ministries.  For a Caribbean example, Jamaica has twice our population and 16 Ministries.

Quite apart from the number of Ministries, there are two further layers of agencies which also have the power to spend – our country has 73 Government Bodies and 58 State Enterprises.

Given the vast range of operations undertaken by these agencies, any new system would have to be flexible in order to cover all those types of transactions.

The main features of the new system

Three new independent organs will be created –

    1. The Procurement Regulator (PR), with the duty to create overall Guidelines and a common handbook to guide the public procurement process.  The Regulator is appointed by the President in his own discretion and reports only to the Parliament.  Agencies can create their own procurement handbooks, once these conform to the overall Guidelines, as approved by the Procurement Regulator.
    2. The Public Procurement Commission (PPC) will be the investigative arm of the new apparatus to which complaints will be directed.
    3. The National Procurement Advisory Council (NPAC) will be purely advisory and comprises 14 members from a broad range of named private sector/civil society organisations – the JCC, Manufacturers’ Association, Chamber of Commerce, Transparency Institute – as well as the Ministry of Finance and the Tobago House of Assembly.

All expenses are to be drawn on the Consolidated Fund, with the Procurement Regulator and Advisory Council required to report annually to Parliament.

A vital part of our proposals is that Cabinet, Government Ministers or politicians are prohibited from instructing or directing these new agencies in any way.

They are intended to be entirely independent of political influence, which conforms to the proposals in the White Paper.

That freedom from political influence was also specified in both the 1997 and 2006 draft legislation.

A Complaints Procedure

The proposed system will create clear rights to make complaints or report wrongdoing.  Those rights are an important aspect of any modern procurement system and we propose three types of complaints/investigations –

  1. Potential tenderers/suppliers can complain, in the first instance directly to the Agency with which the tendering opportunity resides, then, if that is not dealt with satisfactorily, they can complain to the Public Procurement Commission.  Ultimately, the right to seek the protection of the High Court is preserved, once the established complaints procedure has been followed.
  2. The Whistleblower – We are proposing that whistleblowers be given legislative protection and practical means to bring their complaints direct to the Public Procurement Commission.
  3. The Public Procurement Commission can also, on its own initiative, start an investigation into an area of concern.

There are strict time-limits for acknowledgement and resolution of complaints.

Our proposal is for the Public Procurement Commission to have powers to punish both frivolous complainants as well as parties found to be in breach of the new system.  Those can range from fines to embargoes, during which offending parties can be banned from tendering opportunities.  Offending public officers can be subject to both fines and/or imprisonment.

The concern over the cost of the new apparatus

One of the most frequently expressed criticisms is that as critics of the rationale and operations of significant State Enterprises, we seem to be proposing a new series of state-funded agencies.  Some people have pointed out that these offices are unlikely to be cheap, particularly the PPC, which is to be constituted as a standing Commission of Enquiry under those existing legal provisions.

Yes, there will be new agencies and yes, they will cost money.

Given the recent revelations as to the cost of the Uff Enquiry – already estimated to exceed $50M – there are genuine concerns that we could soon have three new state-funded agencies which could absorb maybe $100M a year.

The challenge here is to move beyond the obvious and factual observations so that we can consider the decisive factors.  Our proposals have the promotion of Value for Money as one of its founding principles and that is good for the public.  So, how can we measure the value for money of these proposals, at this stage?

The scale of public procurement spending

In the case of expenditures direct out of the Ministries, the 2011 Budget has an anticipated capital expenditure for the Ministries of $7.050Bn, as per para 8 at page 4 of the Public Sector Investment Program (PSIP).

Also in that Budget there is an anticipated capital expenditure for the State Enterprises of $6.725Bn, as per the Foreword at page 4 of the Supplementary Public Sector Investment Program (Supplementary PSIP).  The combined figure of $13.775Bn is only for projects, so it excludes the salaries, rents and normal running expenses.  Please note that other elements in public expenditure, beyond just capital projects, will be covered by these proposals.  The guiding principle being that those activities involve the expenditure of Public Money.

There are very limited exemptions from the proposed provisions and those can be viewed at the JCC website.

I am also sure that there are other ways in which Public Money is being expended which are not shown in the national Budget, so the amounts are surely larger than that estimate.

The potential for savings

The scale of the public transactions, involving Public Money, which will come under the control of this new system is huge, at least $14Bn in size.  Even if the new system only saves 5% of that sum every year, we can easily justify an annual running expense in the $100M range, as mentioned earlier. 5% of $14Bn is $700M.

In the next 30 days, we expect our Legislators to make the crucial decisions on this series of proposals and we all need to be vigilant to preserve the key points.

Those key points would include –

  • Heads of Independent organs to be appointed by the President
  • Separation of the Regulator from the Investigator
  • Regulations laid in Parliament for negative resolution, with no Ministerial or Cabinet approval required.
  • Independent Organs funded from the Consolidated Fund, with no requirement to seek a Ministerial approval or Budget vote.
  • Accountability is ensured by the requirement to report annually to Parliament.
  • Private Sector/Civil Society oversight via the National Procurement Advisory Council.
  • Proper provisions for complaints and Whistle-Blowers.

The ultimate question, given what we know now, is – Can we afford not to take this step?

At this unique and challenging moment in what has been a long, twisted journey, the prospects of more corruption and waste are grim.

For these proposals to succeed, the legislators will have to vote in favour of a new law which reduces their power and discretion.  To some, that might be an impossible contradiction and an unreasonable thing to expect, but there will be considerable political credit to the account of those who make this change happen.  Our citizens deserve no less.

Property Matters – The Business of Government

Once again, I am using this edition of Property Matters to consider the ever-controversial State Enterprises, against the wider question of the role of the State.  This is no small area for examination and I start by using what seems to be the favourite quote of Trade and Industry Minister, Stephen Cadiz, “Government has no business running business“.

Given the politics practiced here, it should be no surprise that all our political parties give emphasis to the important role of the private sector in the economy and society and so on.

The line of reasoning goes like this – “The State is only here to facilitate and clear the way for Private Enterprise.  The State does not intend to stand in the way of or compete with Private Enterprise” Those are not actual quotes, but they are just a paraphrasing of the sentiments expressed by various politicians over the years, whatever the party in power.

But the actual scale of the State’s involvement in the economy is in stark contrast to the political speeches.  It is my view that the State is in direct competition with the Private Sector in significant areas of the economy.  The large numbers of State Enterprises are inescapable examples of that.

We have to remember that it wasn’t always so.  A major part of the physical development in this country took place via the Ministries and without the involvement of any State Enterprises.  For instance, all the Primary Schools, Government Secondary, Junior and Senior Secondary Schools were built by the Ministry of Education.  All the Health Centres were built by the Ministry of Health and the Highways etc – up to the recently-opened extension to the Diego Martin Highway – were all built by Works & Transport.

Our State apparatus is huge, expensive and mystifying.

Growing up in the 1960s and 1970s, I can only remember a few State Enterprises – BWIA, TTEC, WASA, TELCO, Caroni, NP, NHA, PLIPDECO and maybe TRINTOC.    That sector grew hugely since that time. So today, for a country of about 1.4M people, we have 26 Ministries, 73 Government Bodies and 58 State Enterprises (according to ttconnect – The Government of Trinidad and Tobago portal).  To me, those are staggering numbers.    There is more on that in the sidebar.

Clearly the tendency is for that sector to grow, I cannot remember the last time the State disposed of any of their companies.  That seems to be given serious consideration only when there is an absolute crisis of the sort which confronted the NAR government in the late-1980s downturn.

In terms of expense, just consider that the 2011 Budget has an anticipated capital expenditure for the State Enterprises of $6.725Bn.  That figure is only for projects and so it excludes the salaries, rents and normal running expenses of those companies.

In this article, I am going to start asking about the State Enterprises which are in the Construction/Property field.  Those are, in descending order –

  • UDeCOTT – Urban Development Corporation of T&T
  • HDC – Housing Development Corporation of T&T
  • MTS – National Maintenance, Training & Security Company Limited
  • NIDCO – National Infrastructure Development Company
  • EFCL – Education Facilities Company Limited
  • RuDeCoTT – Rural Development Company of T&T
  • East POS DV Co – East POS Development Company

Some people would include National Insurance Property Development Company (NIPDEC) near the top of that list, but that is not a State-owned company, although many times one would be forgiven for thinking so.

Given the serious allegations of corruption at UDeCOTT leading to the Uff Commission and the continued public concerns on the State Enterprise sector, we are entitled to ask some searching questions.

There has been tremendous growth in the size of the State since independence.  Some doubts arise when one tries to consider why we now have so many of these State Enterprises.  Even more sobering than the purpose for their existence, are the questions of what has been the real performance of these State Enterprises.

When one considers that the State Enterprises listed are required to engage consultants and enter contracts for those construction works, the question has to be – What value do they add to the process of State procurement?

In the case of both UDeCOTT and the HDC, these State Enterprises are operating without accounts for several years and therefore in breach of the elementary rules of governance.  UDeCOTT’s last accounts were at the end of 2006 and NHA/HDC has had none since 2002 (I am informed that HDC recently filed its 2006 accounts).  In neither case have the Directors of those companies been sanctioned in any way.

Two of the hugest State Enterprises operating as rogues in a manner which is impermissible by Private Sector norms.  Even Lawrence Duprey’s CL Financial group had to publish its accounts within a year.

We have a large, subsidized State Enterprise sector, all paid for by taxing the very people against whom they are competing.  That is ‘advantage with a V’.

We need to ask how compatible is this arrangement with our National Development?

I am saying that it is hardly possible to blame this administration for the errors and excesses of the last one, but the honeymoon is running out fast.  Some say it is already done.

The point is that there is now an opportunity to engage in some reflection as to the purpose and performance of these huge State Enterprises.

In relation to the property and construction sector, there is also a recently-announced and large-scale national planning exercise taking place in two parts.  That is also a good reason to pause to review the character and pace of the State’s activity, particularly in the construction sector.

At the strategic level, there is no clarity as to the purpose of these State Enterprises.

At the level of performance, there is little evidence of value-added, far less value for money.

At the level of Corporate Governance and the transparent management of taxpayers’ dollars, there is extremely poor performance with no apparent intention to penalise the wrongdoers.

This sector of the State is in need of urgent, public and thorough examination.

SIDEBAR: What are the real numbers?

According to the Supplementary Public Sector Investment Program 2011 (p.5) – “…The State Enterprise Sector is comprised of fifty eight (58) companies of which forty seven (47) are wholly owned, six (6) majority owned and five (5) in which Government has a minority shareholding…”

But the TTConnect website shows only 38 State Enterprises on a list which excludes HDC, UdeCOTT, RuDeCoTT, EFCL, VEMCOTT and East POS Development Company.  That list also includes the Securities and Exchange Commission – which had never seemed to fit the profile of an enterprise – and Trinidad & Tobago Mortgage Finance, which is only 49% owned by the State, according to their own website.

The State of the Media

The recent series of changes at CNMG have sparked a series of evolving discussions.  I was one of the three people ‘let go’ from CNMG and that was reported briefly on my blog.

I am starting to reflect on some aspects of all this recent interest, but no, this not an anti-PP column or one about how wicked politicians are and so on.

What kind of talk is that?
The first thing that occurred to me is how the media conversation has blown up in sheer size and how that has had an effect on the quality of our national conversation.

In the so-called ‘good old days’, before the shift I am about to describe, the only people who really had a voice in our society were those who were approved, such as government ministers and their spokespersons, established journalists, the ‘great and good‘ and of course the brave and imaginative ones who were our activists.  In fact, the last-named group were the voice of the voiceless, who fought to uplift our society.  Of course in that group you would have to include the leading calypsonians and ‘troublemakers’ of their era.

From its beginnings about 20 years ago, we have moved far from the post-independence period in which the voices heard on the national media of Radio and TV were very limited.  The NAR regime 1986-1991 decisively brought that to an end with the grant of more broadcast licences and the real birth of ‘talk radio’.  TV call-ins soon followed and of course, the internet/email broke onto the scene in the mid-1990s.  The final stage in this progression is the growth of new-wave social media – such as Facebook, YouTube, Twitter etc. – to the point where they have now eclipsed the older formats like web-pages.

As a result of all that, we now have many people, who never had a voice as individuals, being able to project their ideas onto a huge stage.  That is literally unprecedented.  The new conversation has opened up serious new challenges and opportunities.

One of the most detrimental of our habits is mauvais langue – just plain bad-talking people behind their back, but not showing it when you meet those same people.  As young people would say – Pure hate, just acting normal.

I hold the view that mauvais langue is the biggest cultural obstacle to our development as a nation.  I say that because it is my view that without an open exchange of ideas, the possibility of change is very limited.  In this new situation, someone can add a mischievous or irrelevant comment to the discussion, without ever identifying themselves or backing-up what they are saying.  As a result of those possibilities and its combination with our habits, we now have most of our blog commentators and callers-in choosing to remain  anonymous.

But what are we saying to each other?  The essential message of a large number of the comments on these T&T blogs boil down to ‘Shut Up…I don’t agree with you and don’t want to hear what you have to say…Go away!‘  Our new national conversation is on a huge scale and on a range of issues which is extremely fertile, but the dominant habits of that conversation are perturbing.

To be fair, there is a solid body of research to show that anonymous conversations of this type are extremely effective at finding-out the views of the public, workers or customers.  Indeed, this social media is now a very important part of how progressive states and corporations take their bearings as to where things stand.

One important difference I have seen is that the blogs for newspapers and news-sites in the advanced world have almost no anonymous content – people actually write as themselves.

opm websiteMore to the point, we have a situation where we have embraced the new situation and its possibilities, while our leaders and organisations lag far behind.  Just as an example, the website for the Prime Minister is http://www.opm.gov.tt/ – the last officeholder had no publicly-available email address and that website is now temporarily offline, being under re-construction.

There is also the secondary aspect of all this, the essence of our commitment  to a free press.  Of course, I am talking about the silence of Newsday – ‘The People’s Newspaper which offers daily news from Trinidad & Tobago’.  There was a huge response to the news on Monday 8th November, that Fazeer Mohammed was removed from CNMG’s morning line-up.  I think that article in the Express of the next day had over 825 comments – which must be some kind of local record. It is staggering to me that Newsday had nothing to say about this, until the Thursday after, even as a pure item of news. Just unbelievable.

It is easy to criticise the politicians and their mistakes, but this silence by Newsday is just another level of irresponsibility which would make any right-thinking person pause. Newsday have their own patchy track-record in that they forced-out Kevin Baldeosingh over his challenge to Fr. Henry Charles for plagiarism. The parliament discussions on Friday 12th and the news releases from both the Media Association of Trinidad & Tobago (MATT) and the Congress of the People (CoP) formed the basis of articles on the issue from Thursday 11th. Given that behaviour it is interesting to watch them, as The People’s Newspaper, minimizing a matter of such great concern to so many people. A matter concerning an apparent threat to freedom of the press.

We have to be honest and admit that a significant part of the national conversation is the impatient snarl to ‘shut-up’ the person we do not agree with.  That tendency has borne some strange fruit in the case of Newsday and Fazeer.

Yes, I think Fazeer was forced-out too – given his popularity, it all seems very wrong-headed to me. At several levels, but the pregnant question here is how come the State owns companies which are in competition with private ones.  The notion of the State Enterprise was originally one which performed some specialist task which the private sector did not provide, but the discussion is an involved one.

One of the criticisms of our State Enterprises is that in significant cases, they they are in competition with private business interests.  For example, First Citizen’s Bank, Udecott, HDC, EFCL and so on.  Of course the closest example of this is CNMG.  Ironically enough, the Special Purpose Entities/State-owned sector were the topic of my last show on CNMG and we did discuss this issue of competition.

So, exactly why does the State own CNMG?  How fair is it for the other media houses to have to compete with a State-funded entity?  In my view, CNMG had established a solid reputation as a topical and fearless current affairs and news source.  Of course, all of this is going to damage the brand, so its private sector rivals would be smiling to themselves.

Returning to one of my earlier discussions on the ‘Two Tendencies‘ – published in this space on 16th May 2010 – it seems clear that these are a big part of this story.  The first tendency is to say that our State Enterprises are too important to be run by anyone but the best people.  The second tendency says that, having won an election, all these bodies are ours to command and that is all.  The second tendency can distort good sense and professional standards to the bizarre extent we saw in the Udecott case.  This case of the Fazeer Mohammed ‘re-assignment’ is definitely one in which both tendencies have battled it out on the blogs and the airwaves.

It is unlikely to be settled anytime soon.

The big questions for me are –

  1. Which of the Two Tendencies is in control?
  2. How committed are we to a conversation with people who hold different views?