An Article from the Sunday Gleaner
Attorney Gordon Robinson gives the legal grounds on which the Government of Jamaica is acting illegally in taking contributors’ payments out of the National Housing Trust.
by Gordon Robinson, Gleaner Contributor
I understand Government is attempting to justify its rape of the foremost institution creating real benefits for the ‘most vulnerable’, namely, the National Housing Trust, by relying on the provisions of the Public Bodies Management and Accountability Act (PBMAA).
Before looking at the detailed provisions, I ask readers to pause for a moment; step away from the trees and trees of obfuscation being peddled; and take a look at the forest which is the massive incongruity created by the use of a statute expressly passed as: “An act to make additional provisions for the management and accountability of public bodies and for connected purposes” to validate a breach of the sacred trust envisioned by the National Housing Trust Act (NHTA). Only politics could make such an oxymoron appear real.
Section 4 of the NHTA sets out the functions of the Trust as follows:
“(a) To add to and improve the existing supply of housing by –
(i) Promoting housing projects to such extent as may from time to time be approved by the minister;
(ii) Making available to such contributors as may be prescribed, in such manner and on such terms and conditions as may be prescribed, loans to assist in the purchase, building, maintenance, repair or improvement of houses;
(iii) Encouraging and stimulating improved methods of production of houses;
(b) To enhance the usefulness of the funds of the trust by promoting greater efficiency in the housing sector.”
In the beginning, the trust had no function that didn’t relate to the improvement of the existing housing stock or greater housing efficiency. In 2005, when a similarly disgusting rape of the organisation was contemplated, the act was amended to add the further function:
“(lA) In addition to the functions specified in subsection (i), the Trust may provide financing up to a maximum amount in the aggregate of $5 billion for projects for the development of education.”
Outside of housing, its power is limited to an aggregate of $5 billion and only for education. It’s immediately clear that the NHT has no authority whatsoever to transfer or use any of the Trust Funds for any other purpose, least of all “fiscal consolidation”. In my opinion, any such use of a dollar of Trust funds is an egregious breach of Trust for which NHT contributors can hold the directors personally liable.
I’ll go to the PBMAA in a short time, but the provisions of that and any other statute are completely irrelevant to the use of Trust funds by the members of the Trust. No other statute, except by express provision, can override the provisions of the NHTA. The PBMAA does not purport to do so. The purpose of the PBMAA is to ensure that public bodies, like the NHT, are held to account and TO MAKE CERTAIN THEY DON’T USE THEIR FUNDS FOR EXTRANEOUS PURPOSES.
A quick look at the title of the parts of that act makes this clear beyond peradventure. Part II is titled ‘Corporate Governance and Accountability’. Part III’s title is ‘Duty of Care, Disclosure, etc, of Directors and Officers’. Parts I (Interpretation) and Part IV (General) do nothing to derogate from these pellucid purposes.
A quick run-through will establish that this statute had no intention of being used by finance ministers to dip into the surpluses or otherwise of public bodies. The PBMAA, as initially passed, mandated public bodies to file audited reports for tabling in Parliament (Section 3); restricted public bodies’ ability to hold shares (s.4); restricted borrowing powers (s.5); forced public bodies to be efficient, goal oriented, etc (s.6); work to a pre-prepared corporate plan (s.7); and establish an internal audit committee (ss.8, 9).
The financial secretary was empowered to create a code of conduct for auditors of public bodies (s.10) who may consult the auditor general (s.11). The minister may order a special audit (s.12) or himself prescribe the criteria for appointment of auditors (s.13) who have wide-ranging powers of enquiry and audit (s.14-16). Every director of a public body is mandated to act honestly (s.17), including avoidance of conflicts (ss. 17, 18), but he may rely on the statement of any independent professional without fear (s.19) and must follow finance ministry guidelines regarding emoluments (s.20).
General provisions in Part IV include biannual reports to go to the minister and court actions, where necessary.
Where in all that would one fit a ministerial right to demand a “contribution” to “fiscal consolidation” from any public body? It’s nonsense.
NHT Chairman Easton Douglas is quoted as saying, “Under Section 4(5) of the PBMAA, and in accordance with the Public Bodies Financial Distribution Regulations 2012, the minister of finance has the power to legally require the NHT to make a financial contribution … .” But Section 4(5), which was introduced by way of a 2011 Amendment Act, changed the marginal note to Section 4 from “acquisition of shares by public bodies”, to “shareholdings and distributions”, and provides as follows:
“(5) Nothwithstanding subsections (3) and (4), a public body may be requested by the financial secretary to pay a special distribution into the Consolidated Fund in accordance with regulations made under Section 24.”
OVERRIDE NOT POSSIBLE
Now that it’s clearly understood the PBMAA can’t and doesn’t attempt to override any provision of the NHTA (or any other statute), it’s clear why this desperate attempt to legalise central government raids on the assets of public bodies was worded the way it is. Public bodies “may be requested” by the financial secretary to “pay a special distribution”. Because every public body is different; operates under different statutory regimes; and has autonomy under individual statutes, such requests can’t ever be compulsory.
Directors, not shareholders, run every company. A shareholder can’t demand anything from directors more so when those directors are trustees of a sacred trust to use funds in their possession for the benefit of…(Read more)
Gordon Robinson is an attorney-at-law. Email feedback to email@example.com.