Licensing the construction industry

Watching the collapse of the structure which killed Jean-Paul Sofia sends shock waves through every bit of my body each time I catch a split-second glimpse of the relative video.

The magisterial inquiry is under way but for some inexplicable reason there is a resistance to a much wider public inquiry. Faced with the resulting death and multiple injuries, the public inquiry is an essential tool which could make it possible to understand what actually happened, beyond the accident itself. The public inquiry could definitely unravel important information on a number of specifics which had a bearing on the accident even if at first glance these are possibly unconnected.

So far no one has been charged. It is not known whether anybody has been interrogated on the incident, except, probably, as part of the magisterial inquiry itself, which is unfortunately taking too long to conclude. It is possible that there are valid reasons for this delay, but we are not aware of these as the magistrate in charge of the inquiry does not normally go around explaining such matters. I believe that it is in the public interest for the Court Registrar to explain matters as we have a right to know, just as much as the Law Courts have a duty to explain.

It has been stated that the licensing of the construction industry will lead to its improvement. This, we are told, would ensure the development of an industry that respects rules and ensures their uniform enforcement, as a result being more protective of life and limb.

I do not think that anyone desires otherwise. However, the proposals in the draft licence regulations do not necessarily lead in that direction. They need much more than fine-tuning.

The proposed regulations list the qualifications and documentation which an applicant for one of the three types of construction licence (demolition, excavation/piling, construction) should comply with. One of these documents is the conduct certificate. The proposed regulations, however, do not clearly spell out whether, and the extent to which, the contents of such a conduct certificate should have a bearing on the adjudication process leading to a decision on the issuing or the withholding of a licence.

Specifically, being bankrupt is a licence disqualification which is clearly spelt out in the proposed regulations. Which conduct or behaviour will be considered as disqualifying an applicant for a licence or its renewal?  Zero tolerance of unacceptable behaviour should be clearly spelt out as grounds for disqualification. We do not need to wait for the ultimate consequences to disqualify an applicant or a licence holder. Acting in a timely manner, before it is too late, should be the objective of the licencing and regulatory process. This should be as clearly spelt out as bankruptcy in the proposed regulations! Being assumed, implied or discretionary is not sufficient.

How about those who have a history of enforcement issues with the Building Construction Authority (BCA)? Should such a history have a bearing on the issuing of a licence or its renewal?  Where do we draw the line? Considering the recorded behaviour of all applicants should definitely be the starting point of the licencing process. Applicants should not be considered as having a clean slate: all their existing baggage should have a direct bearing in the consideration of whether they should be licenced or not. Past behaviour is definitely a guarantee of future patterns of behaviour. If the past is ignored it is bound to be repeated. All this is unfortunately ignored by the draft regulations.

Specifically, the impacts of the whole process of construction on third parties needs to be given considerable importance even as a licencing requirement. Too many building contractors run roughshod over the concerns of neighbouring residents. This is not always satisfactorily addressed by the operators, at times leading to lengthy litigation. This is an area which, with proper enforcement, the licensing process should eventually improve substantially.

Case-law indicates that both the imposition of substantial administrative fines as well as the suspension or withdrawal of licences can be challenged on constitutional grounds. The long-drawn-out legal battles which will inevitably develop will render the regulatory process ineffective and as a result undermining the whole reform.

Likewise, there is serious potential for abuse. Administrative action may be used to intentionally eliminate the possibility for criminal action. The matter has already arisen in an environmental case where criminal action already initiated could not proceed due to the matter having been addressed through the payment of an administrative fine.

Furthermore, the Building and Construction Tribunal which would eventually consider appeals concerning licences, although described as independent and impartial, is nothing of the sort.  It is made up of part-timers who are in full-time private practice which includes advising operators in the building construction industry. This creates legal grounds for the contestation of all its decisions.

The effectiveness of the licencing process will, at the end of the day be dependent on the resources made available to the Building and Construction Authority in order that it can fulfil its regulatory responsibilities. The Authority must be proactive. It can only do this if its inspectors do not await the lodging of a report in order to take action.

Government’s declared willingness to act, regulate and enforce is positive. Only time will however show if this willingness is translated into concrete results. Signs so far are however not promising.

published in The Malta Independent on Sunday: 19 March 2023

Il-kumpaniji tal-PLPN jeħtieġ li jkunu regolati sewwa

Tal-PLPN, permezz tal-kumpaniji tagħhom tal-media, għandhom jagħtu l-miljuni lill-Kummissarju tal-VAT.  Kif jistgħu qatt ikunu kredibbli meta jitkellmu dwar il-miżuri meħtieġa kontra l-evażjoni tat-taxxa?  Mhux aħjar li jkunu huma minn tal-ewwel li jħallsu dak dovut u jagħtu l-eżempju?

Iktar kmieni din il-ġimgħa konna infurmati li l-kumpaniji tal-media tal- PL u tal-PN għandhom jagħtu mal-€5 miljuni lill-Kummissarju tal-VAT. Dan l-ammont hu dovut lill-kaxxa ta’ Malta u jirrappreżenta taxxa li nġabret mill-kumpaniji tal-PLPN u nżammet għandhom.  Iż-żamma għandhom da parti tal-kumpaniji tal-PLPN ta’ dawn il- €5 miljuni jfisser li dawn ħadmu uqed jaħdmu bi flus li ma humiex tagħhom, iżda tal-kaxxa ta’ Malta. Huwa self moħbi li minnu ibbenefikaw kemm il-PL kif ukoll il-PN. Għalhekk kważi skiet perfett. Fejn jaqblihom iħokku dahar xulxin: malajr jiftehmu bi ftit kliem.

L-għaqdiet tan-negozju għamlu sew li semmgħu leħinhom u lmentaw pubblikament dwar dan it-trattament preferenzjali tal-kumpaniji tal-PLPN dwar il-ħlas tal-VAT li dawn għad għandhom pendenti. Huwa essenzjali li l-mexxejja tal-pajjiż imexxu bl-eżempju. Kif ngħidu, l-kliem iqanqal, imma l-eżempju jkaxkar.  

Il-problema iżda hi ħafna ikbar minn hekk. Xi żmien ilu l-medja kienet ikkummentat dwar il-fatt li tal-PLPN l-anqas il-kontijiet tad-dawl u l-ilma ma kienu qed iħallsu. Il-kontijiet pendenti kienu enormi.  L-aħħar informazzjoni li sibt kienet tindika kontijiet pendenti tal-PLPN u l-kumpaniji tagħhom, flimkien, għall-ammont ta’ madwar  €2,500,000. Diffiċli biex ikollok informazzjoni preċiża u aġġornata minħabba li l-ARMS tqis li din hi materja kunfidenzjali minkejja li hi materja ta’ importanza nazzjonali enormi: għax il-PLPN qed jabbużaw mis-sistema u l-awtoritajiet mhux biss qed iħalluhom imma qed jostruhom.    L- ARMS għandha l-obbligu li tittratta lill-kumpaniji tal-PLPN bl-istess mod li timxi ma’ kumpaniji oħra: trid tassigura ruħha li anke huma jħallsu l-kontijiet fil-ħin!  

Għadni ma semmejtx l-arretrati dwar il-ħlas tal-kontribuzzjoni tas-sigurtà nazzjonali u t-tnaqqis tal-PAYE għat-taxxa tad-dħul tal-impjegati tal-partiti politiċi u tal-kumpaniji tagħhom. Minn dak li ġie indikat fil-passat dawn l-arretrati jistgħu jammontaw għal miljuni kbar, avolja l-ammont eżatt tagħhom mhux magħruf!

Dan ifisser li fil-prattika tal-PLPN għandhom sors ieħor mhux dikjarat ta’ dħul li bih jiffinanzjaw il-ħidma tagħhom: għandhom kreditu fuq it-taxxi u pagamenti oħra dovuti lill-istat u istituzzjonijiet oħra. Self ieħor iffinanzjat minn dawk li jħallsu it-taxxi: self mhux dikjarat li jista’ jammonta għal madwar €10,000,000!

Kull negozju li jkollu jħallas dawn l-ammonti f’taxxa u ħlasijiet oħra jkollu jkollu inkwiet mhux żgħir. Ikun qabad it-triq tal-falliment. Jkun qed jissogra li l-assi tiegħu jittieħdu biex bihom jitħallsu l-kontijiet pendenti. Imma mal-PLPN, qiesu ma ġara xejn!

Dan kollu irridu narawh ukoll fil-kuntest ta’ xi ftehim mistur li niskopru bih minn żmien għal żmien bejn il-partiti l-kbar u x’uħud fin-negozju. L-aħħar każ hu dak tal-abbozz ta’ ftehim bejn il-Labour u Yorgen Fenech liema ftehim kien jipprovdi ħlas ta’ €200,000 għal xi servizzi. Dan bla dubju jfakkarna fil-każ l-ieħor ta’ xi snin ilu bejn il-Grupp dB u l-PN, dwar servizzi ukoll. F’kull kaz wara dawn il-ftehim hemm moħbija donazzjonijiet politiċi “taparsi ħlas għal servizzi”. B’hekk il-partiti l-kbar ikunu qed iduru mar-regolamenti dwar id-donazzjonijiet li jistabilixxu li l-valur kumulattiv ta’ donazzjoni fi flus lil partit politiku ma tistax taqbeż il–limitu ta’ €25,000 minn sors wieħed speċifiku.  

Dan kollu jipponta lejn nuqqas gravi u intenzjonat fit-tfassil tal-leġislazzjoni li tirregola l-finanzjament tal-partiti politiċi. Għidna repetutament li kemm il-PL kif ukoll il-PN kontinwament qed jagħmlu użu mill-kumpaniji tagħhom biex b’mod konvenjenti jevitaw l-obbligi tar-regolamenti finanzjarji.  

Kif wieħed jistenna, l-PLPN jiċħdu dan kollu. L-PL jinsisti li l-kumpaiji tiegħu ma daħlu fl-ebda ftehim ma’ Yorgen Fenech. Il-PN, min-naħa l-oħra jinsisti li m’għandu xejn irregolari. Imma mbagħad it-tnejn li huma ma jimxux mar-regoli. L- accounts ivverifikati tal-kumpaniji tagħhom ilhom snin kbar ma jkunu ppreżentati lill-awtoritajiet skond il-liġi. Bħala riżultat ta’ dan ma hemm l-ebda dokumenti li jistgħu jindikaw  jekk u kif il-kumpaniji tal-PLPN humiex verament mexjin sew u b’mod partikolari jekk humiex kontinwament jintużaw biex ikunu evitati ir-regoli dwar id-donazzjonijiet lill-partiti politiċi.

Hemm ħtieġa urġenti li r-regoli li bihom huma rregolati l-kumpaniji tal-partiti politiċi induruhom dawra sew. Dawn il-kumpaniji għandhom ikunu eżaminati fil-kuntest tal-Att tal-2015 dwar il-Finanzjament tal-Partiti Politiċi.  Rappurtaġġ fil-ħin hu essenzjali biex ikun assigurat li dawn il-kumpaniji ma jibqgħux jintużaw biex tinkiser il-liġi.  

F’dan il-mument il-PLPN u l-kumpaniji tagħhom ikkapparraw self sostanzjali bla ebda awtorizzazzjoni. Dik governanza tajba!

Il-PLPN ma jistgħux isolvuha din. Huma parti integrali mill-problema.

Huma biss Membri Parlamentari eletti minn fost dawk ippreżentati minn ADPD li jistgħu jibdew it-triq tat-tindif tat-taħwid li ħoloq u kattar il-PLPN.

ippubblikat fuq Illum: il-Ħadd 12 ta’ Settembru 2021

Regulating the commercial companies owned by PLPN

PLPN media houses owe millions to the VAT office.  How can PLPN be credible when speaking about measures to bring tax dodging and tax evasion under control? Would it not be more appropriate if they bring their own house in order first?

Earlier this week we were informed that the PL and the PN media houses have a combined unpaid VAT tax bill to the tune of €5 million. This amount is due to the exchequer and represents VAT collected by them and not paid to the state coffers. The retention by the PLPN of this sum of €5 million also signifies that the party media houses are making use of monies due to the national exchequer in their day-to-day workings!  It is an undeclared loan to the benefit of both the PL and the PN. Whenever it suites them, PLPN are in agreement. They are on the same wavelength. They are taking a free ride on the taxpayers back, year-in year-out.

Business is right to publicly complain on the preferential treatment meted out to the PLPN media houses on outstanding VAT payments. It is a reasonable expectation that the country’s leaders should lead by example!

The problem is however much larger than that. Some time back the media alerted us on the PLPN pending water and electricity bills too. The pending amounts due were known to be substantial. The latest available information is of a combined outstanding bill of €2,500,000. Up to date information is difficult to come by as ARMS considers it as a confidential matter, notwithstanding it being a matter of public interest due to its abusive nature.  Is it not about time that ARMS deals with PLPN companies in the same way as it deals with its other customers and ensures that they pay their bills on time?

There are also arrears due for National Insurance contributions and Income Tax deductions for employees of political parties and their companies. It has in the past been indicated that these arrears may run into many million euros even though the precise quantum is not known.

In effect this means that the PLPN have another undeclared source of finance for their day-to-day operations: an interminable credit on taxes and payments due to the state and its various institutions. Another loan financed by taxpayers in the region of around €10,000,000!

This has to be seen within the context of the underhand deals revealed from time to time between PLPN and business. The latest revelation of a possible draft agreement between Labour and Yorgen Fenech through which a €200,000 “deal for services” by the party media was planned, is a case in point. This is reminiscent of the other deal some years back between the dB Group and PN companies also for “services” by the party media. In both cases these deals are intended to disguise effective donations as “payment for services” thereby circumventing the donations regulations which impose an annual cumulative limit of €25,000 for donations to political parties from any one specific source.

Any business owing so much to the exchequer would be in deep trouble, on the inevitable fast track road to bankruptcy. Such a business would also be risking a takeover of its assets to make good for the substantial amounts due. But for the PLPN it seems that there is nothing to worry about!

All this points to a major intended deficiency of the legislation regulating the financing of political parties. It has been repeatedly pointed out that the PL and the PN are continuously using their companies as a convenient front to go around the political party financial regulatory framework.

As expected PLPN are in denial. The PL insists that its companies have not entered into a deal with Yorgen Fenech. The PN on the other hand insist that all is above board. Yet they continuously fail to play by the rules. Audited accounts for their companies have not been presented for many years. As a result, there is no way to verify whether and to what extent the PLPN commercial companies are innocent of the charges that they are being continuously used to circumvent the rules regulating the funding of political parties.

The rules regulating companies owned by political parties should be tightened up. Such companies should be scrutinised within the framework of the Financing of Political Parties Act of 2015. Real-time reporting is essential in order to ensure that such companies are not used any more to circumvent the rules.

As things stand, at this point in time, the PLPN and their commercial companies have appropriated a substantial loan without authorisation. How’s that for good governance? Another contributory factor to grey-listing?

PLPN cannot solve this. They are an integral part of the problem.

Only the election of Green MPs can clean up this PLPN mess.

published in The Malta Independent on Sunday : 12 September 2021