NO LEGAL LIMB TO STAND ON

May 14, 2012 Features / Columnists, Peeping Tom

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This is not a defence of NICIL. It is a counter to the proposition that the revenues and other moneys earned by NICIL should be passed into the Consolidated Fund.
There has been an uninformed and misguided attempt over the past few weeks to deflect attention from the Budget cuts instituted by the opposition. As part of this diversion, the spotlight has been thrown onto NICIL and in the process, erroneous argument advanced that NICIL is required to pass its revenues through the Consolidated Fund because the constitution says so.
The Constitution of Guyana does not state that all revenues and moneys earned by Guyana should be paid into the Consolidated Fund. What it says is that all revenues or other monies raised by Guyana shall be paid into the Consolidated Fund except for moneys which are payable by or UNDER any Act of Parliament, into some fund created for a specific purpose.
NICIL was created UNDER an Act of Parliament and specifically the Companies Act, and as a body corporate is required to keep certain accounts and funds. This very fact excludes it from having to pass its revenues through the Consolidated Fund.
The critics also find themselves in a quandary when it comes to explaining how it is that the revenues earned by GUYSUCO, also a body corporate, are not paid into the Consolidated Fund. And the reason is that, like NICIL, the revenues of GUYOIL, GNSC and GUYSCO are not controlled by the Consolidated Fund because if this were the case it would make these agencies Budget agencies and not corporations.
It should be recalled that when the former PNC government wanted to extract moneys from the Guyana Sugar Corporation, it did not argue that the revenues from the sale of sugar should pass through the Consolidated Fund. What it did was move a law that allowed it to institute a levy on the corporation.
When interpreting an article of the Constitution, one has to, apart from examining the literal words used, consider the specific intent of the article. Article 216 was intended to create the Consolidated Fund.
When interpreting constitutional provisions, it is also at times necessary to do so in the context of case law since this can clarify useful concepts and relationships, including about the standing of public corporations.
Denning L. J. in Tamlin v Hannaford (1950) had this to state about the public corporation:
‘ In the eye of the law, the ( public) corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities and privileges of the Crown. Its servants are not civil servants and its property is not Crown property.’
NICIL is not required under the constitution to pass its revenues through the Consolidated Fund. It, however, as a 100% government owned entity, can pay dividends, as it claims it has been doing for the past twenty years, into the said Consolidated Fund.
NICIL is not the first and will not be the last holding and parent company for state assets and entities. Before NICIL, there was the Public Corporations Secretariat. And before that, there was GUYSTAC, and also COFA and a host of other parent companies that were responsible for the many public enterprises that existed. As the State divests itself of public assets and invests the proceeds, there will always be a need for a NICIL type body.
Those who wish to see parliament control the funds held by NICIL have no legal case. If they did they would not have been arguing these in the letter pages of the newspapers. They would have sought judicial review of the actions of NICIL. They have not and are not likely to risk their considerable reputations on this score.
Having no case they have resorted to certain schemes that are well known. First, they believe that by constantly repeating a contention, it will stick regardless of its lack of merit. And so we can expect that this discredited argument about NICIL having to pass its revenues through the Consolidated Fund will be constantly repeated in the hope that unlike a rolling stone it will through repetition gather the moss of credibility.
Secondly, extraneous matters to the argument will be introduced. We have had a lot of that also.
Thirdly, arguments relating to the use of the funds by NICIL will be used to create a moral case against NICIL. And this is happening also.
We have been hearing a great deal about the possible abuse of funds and the lack of audited statements by NICIL. This column is on record as having expressed concerns about many of the activities of NICIL, including controversial divestments. This column has also been in the forefront of arguing that state funds should not be sunk into the hotel project at Kingston.
There have also been criticisms about the level of transparency and disclosure of NICIL. This is all part of the arguments to establish a political/moral case against NICIL.
Those who wish to see greater accountability by NICIL have a line of recourse. The executives and directors of NICIL can be summoned before the Economic Services Commission of parliament and answers demanded. But why instead of going this route can a simple request not be made for the government to provide the information requested.
The government has said that it is willing to do so. And it has made public some of the contracts which the opposition was querying. And it has even held a special meeting to answer questions about the Amalia Falls Hydroelectric Project.
So there are options but to press these options now would not deflect from the raging criticisms about the Budget cuts.
The issues about disclosure, transparency and the wisdom of investments of NICIL are however separate from the legal arguments about whether NICIL is lawfully required to pass its funds through the Consolidated Fund.
Those who are insisting that the constitution allows for NICIL funds to pass through the Consolidated Fund and this be controlled by parliament, may have a moral case about the need for timelier and greater disclosure by NICIL about its work. But they have no legal limb to stand on when it comes to the right of NICIL to not pass its revenues through the Consolidated Fund.

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