Governance, the NHT, and the Partnership for Jamaica

Governance, the NHT, and the Partnership for Jamaica


Wednesday, December 03, 2014

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As president of the PSOJ, I have always been guided by the principle that the PSOJ should, at all times, present a balanced, non-political position on national issues, and in forming these positions must not only take into account the views of its members, but when appropriate, the views of civil society.

In the case of the NHT purchase of the Outameni property, an issue which has deeply divided and distracted the country, the PSOJ has, acting jointly with the JCC and the JMA, as well as taking into account the views of other private sector and civil society groups, issued three public statements which I think have been faithful to this principle.

These statements have become increasingly more critical of the NHT as new information has been made available to the public, and the final statement issued on Nov 26 stated up front that we were deeply disappointed that the opportunity has been missed to restore public confidence in this critical national institution, by wiping the slate clean and appointing a new NHT Board; that the NHT has erred in its decision to purchase the Outameni property for J$180 million; and that public concerns about this issue continue to distract the nation from focusing on other critical economic and social issues.

We also expressed the fear that governance concerns could negatively affect investor confidence in the wider economic reform being undertaken by the Government.

We have thus far stopped short of an explicit call for the removal of anyone on the board, but on reflection and in consultation with my colleagues, I have changed my position and would like to set out in this piece my reasoning for this change.

The main trigger driving this new view is a most unbelievable statement made in a press conference on Monday Nov 24th by the chairman of the NHT, Mr Easton Douglas, when he stated that in "38 years of the operations of the National Housing Trust, on no occasion has the trust ever advised the minister about the sale or purchase, or any transaction". Whether this statement is true or not, it speaks to the mindset of the current NHT chairman, and one must conclude that for him it is acceptable for the NHT to carry out a transaction such as Outameni without any discussion with the minister who has responsibility for the NHT and who is accountable to the electorate for its performance.

The latest position of the NHT is that Outameni was purchased to become the "Emancipation Park of the West" and for the chairman to think that it is acceptable, or even the norm, that the NHT could establish such an important national symbol in western Jamaica without consulting with the prime minister and her Cabinet, and indeed the wider society, is totally at odds with modern concepts of good governance and not credible.

The fact that the website of the current Emancipation Park in New Kingston states that "the NHT board of directors together with the former Prime Minister the Right Honourable PJ Patterson visualised creating a park in the city where Jamaicans and visitors alike could relax and play" underscores this point.

On July 31st 2013, I was honoured to sign the Partnership For Jamaica (PFJ) agreement on behalf of the private sector. Other signatories to this historic agreement were the Most Hon Prime Minister Portia Simpson Miller on behalf of the Government, Mr Lloyd Goodleigh on behalf of the trade unions, and Miss Kemesha Kelly on behalf of civil society. The guiding principles of the PFJ state inter alia that the parties to the agreement :

"Believing that nothing short of a nationwide transformation of people and institutions around performance accountability, gender equality, individual and collective responsibility, respect for the human rights and civil liberties of all Jamaicans, tolerance and maturity in conflict resolution will account for the realisation of a more equal, safe, secure and prosperous Jamaica for all, the partners envisage an ongoing social partnership in Jamaica, which will:

* Deepen the process of participatory decision-making: by recognising that no one sector has all the answers, and reaffirming the commitment to the Government of Jamaica (GOJ) Code of Consultation which recognises that better development decisions result from an inclusive and consultative approach.

* Engender trust and confidence: by building the partnership process and the ownership by the wider society of national development plans and goals, through ongoing dialogue and agreed actions based on mutual respect and a commitment to genuine co-operation, meaningful consultation and honest communication."

The PFJ agreement goes on to state the specific commitment of the GOJ as:

"The Government, reaffirming that the key principles of transparency, accountability, integrity, genuine consultation, thoughtful people-centred action, including gender, youth and environmental awareness, focused on long-term national goals, rather than short-term political imperatives, are required to engender trust and confidence in all national processes, commit to bring these principles to the partnership process."

Interestingly, Auditor General (AG) Adrian Strachan, in 1999, probably because such a covenant as that envisaged by the PFJ did not exist at that time, expressed alarm at the danger he saw from the poor state of public sector reporting to Parliament, and the resulting inadequate oversight of government expenditures. The AG called for "stronger" action to ensure, among other things, that the statutory bodies and public enterprises reported their financial and expenditure activities to Parliament on a timely basis so that "people everywhere who are extremely anxious to see that the taxes they grudgingly pay are properly used to achieve the objectives approved by Parliament... will have greater confidence in governmental activities".

I call attention to the PFJ agreement and the former auditor general's words because I deeply believe in the sensibility and necessity of their theme as a necessity for Jamaica practising responsible governance and public finance management as a pillar in its pursuit of development, growth and shared prosperity aspirations.

This is where I am convinced Easton Douglas and his defenders are just not aligned with the new framework governing public management in Jamaica. Their noisy talk of "we did nothing wrong and broke no laws" and that "the NHT has never reported expenditures of this nature to its portfolio minister in over 38 years" misses the core principle of this new PFJ covenant. It is not about the technicality of whether laws were broken or what was past practice under failed public finance management paradigms. Instead, it is about whether the NHT's actions were consistent with the PFJ covenant governing the collaborative partnership between government and stakeholders in Jamaica's future who have been asked to make enormous sacrifices. It is about whether these actions satisfied the moral standard of the AG's 1999 demand on agencies of government that people grudgingly forgo their income to, in the form of taxes -- and make no bones about it, NHT, HEART and NIS deductions are involuntary taxes on income.

It is now apparent that Easton Douglas doesn't understand this, and judging from... some of his own PNP colleagues' current commentary on his public behaviour and responses to the current NHT crisis, he doesn't seem emotionally constituted to ever get it. The very substance of the dialogue under the new covenant is one of respectful, collaborative dialogue with those with contending views, and by his own words and deeds Mr Douglas just doesn't seem to fit this new paradigm.

I have now come to the strong view that Prime Minister Simpson Miller needs to... restore confidence in the NHT and to bring it in line with the requirements of the new covenant.

My recommendations are thus twofold.

1) that Easton Douglas be separated from the chairmanship of the NHT for the good of the country; and

2) that the Ministry of Finance and Planning and a newly appointed chairman of the NHT board begin immediately the task of strengthening the reporting and oversight relationships between the entity and its portfolio minister, and the Parliament.

The big picture is that Jamaicans deserve nothing less than to have the confidence that their sacrifices and aspirations will amount to something positive and lasting, and that their government is a full partner to their efforts and ambitions. It is therefore important for us to appreciate that there is no substitute for the GOJ's unwavering daily demonstrated and practised commitment to prudent and transparent fiscal policy management over all of its revenue and expenditure commitments -- central gov't, public enterprises, etc -- if it hopes to earn credibility for its policies of economic reform, and credibility for the policymakers charged with overseeing the execution of these reforms.

Both areas of credibility are critical and the programme of reform fails without either. This fiscal management should include establishing transparent mechanisms, or transparency guarantees, by which civil society, private sector, markets and others can judge how well the Government is complying with its agreed-on and established good governance processes, as well as delivering on its priorities and goals.

Perhaps this should guide the prime minister in her reconsideration of the position of Mr Easton Douglas as chairman of the board of the NHT.

— Christopher Zacca is president of the PSOJ

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