Safeguards against potential conflicts of interest for former State servants must be introduced urgently, argues John Devitt.
I wish Tom Parlon well in his new role as director general of the Construction Industry Federation (CIF). Mr Parlon brings with him a great deal of expertise and experience gained while a government minister at the Office of Public Works. Nonetheless and without dealing with the specifics of the current controversy over Parlon's appointment, it is essential that we address future potential conflicts of interest facing retiring office-holders sooner rather than later. It is also worthwhile looking at how such concerns are dealt with elsewhere.
In Canada, for instance, a retired minister is prohibited from "switching sides" to work for any body (including trade unions and business groups) that would have a stake in contracts or negotiations on pay deals the minister had overseen while in office. This moratorium or cooling-off period lasts for up to two years depending on the role of the department.
The Conflict of Interest and Post-Employment Code for Public Office Holders 1994 went further by barring Canadian ministers from passing on information not accessible to the general public to any non-governmental or corporate interests. It also stated no office-holder "may act as consultant, lobbyists, or accept employment as in-house lobbyists, for a period of five years after leaving public office". Sanctions in respect of any breach of the code can amount to a fine, damages or termination or reduction in a government pension.
While Ireland's image for fighting corruption is quite good, its reputation for preventing what the World Bank Institute defines as "legal corruption" leaves a lot to be desired. In 2004, a survey by the World Economic Forum of Irish and international business leaders found that only 42 per cent of those polled felt there was little undue interference in public policymaking by vested interests in Ireland.
Respondents from Ghana, Malaysia, South Africa and China said that vested interests had less control over government policy than the figures from Ireland would suggest. One can conclude that a significant proportion of Irish business feels there is not a level playing field in how public policy and spending is determined.
Even the perception of ministerial favouritism to special interests can breed mistrust among businesses in the public contracting system or negotiations on social partnership for instance. There is also a very real risk of unfair advantage being granted by a minister to an individual sector, industry or company in return for lucrative contracts or employment for those same interests after they have stepped down from Government.
Our reputation for fair play also affects the decisions of foreign investors - those companies that may wish to develop joint ventures with Irish companies or establish a European base in Ireland. If foreign small and medium-sized companies in particular feel they are squeezed out of the market because of corruption or favouritism towards established Irish players, they are likely to go elsewhere and bring their jobs and innovation with them.
Most importantly, weak conflict of interest rules governing retired ministers, political funding, and appointments to State boards make it difficult to tell whether our public representatives are representing Irish citizens or something else. Conflict of interest undermines public trust in democracy and ultimately the quality of our politicians' decisions.
Whatever measures we adopt to prevent office-holders from serving two masters, they must be proportionate to be effective. Too weak, and the rules are pointless; too harsh and the rules lose their legitimacy. The Canadian model would probably go the furthest to prevent potential conflicts of interest in the employment of former office holders. As a minimum precaution, retiring ministers should be prohibited, for a defined period, from taking up employment with outside groups or companies that may have directly benefited from public contracts or decisions made by that minister. An independent statutory panel would decide on whether any such benefit arose and whether an apparent conflict of interest arises.
It is important to note that government, business and non-profit-making organisations need to understand one another. It would therefore be counter-productive to prevent former office-holders from passing on their knowledge and expertise to other sectors if and when appropriate.
In Ireland, we already compel retiring senior civil servants and local authority employees to seek advice from an Outside Appointments Board (OAB) before accepting certain posts in the private sector within a year of retiring. This rule comes into play where the perception of a conflict of interest arises and could lead to disciplinary action against that employee. As yet, there is little by way of legal sanction for anyone who ignores the advice of the OAB but, where a court action subsequently arises against the employee, this could be taken into account.
Why such post-employment restrictions do not also apply to the ministers who are ultimately responsible for government decisions remains something of a mystery.
John Devitt is chief executive of Transparency International Ireland