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Emile Leiba | Public-private partnerships: What does it mean to you?

Published:Wednesday | September 7, 2016 | 9:04 AM
Emile Leiba

In recent times, much has been said by Government on both sides of the political divide about public-private partnerships. This is a very nice sounding term, but what does it mean?

Dealings with government can take many forms and involve numerous pitfalls for the unwary. Government can broadly be divided between central government and statutory bodies. As the name suggests, a statutory body is not a part of central government, but an entity created by an Act of Parliament, usually to perform a specific function and/or mandate.

There are more than 20 statutory bodies in Jamaica, such as National Water Commission (NWC), Betting, Gaming & Lotteries Commission (BGLC), and HEART Trust/NTA.

These bodies are the vehicles through which central government frequently operates when contracting goods or services in a specific field or area.

Now, what does this mean to you? First, a statutory body has a specific mandate set out in the act which creates it. It usually has a board of directors or a commission which governs its functions and applies government policy in that field, subject to oversight by the ministry of government under which it falls and any other relevant ministry.

For example, if you, as a private individual had a great idea about how to transport water more cheaply in hard-to-reach areas, you would not go to HEART Trust/NTA or the BGLC with this idea. You would need to investigate whether the proposal should be made directly to the ministry with responsibility for water or to the National Water Commission.

If the proposal is accepted, you would then need to confirm whether you are contracting with the NWC or the ministry directly. In either case, it is always prudent to confirm that the person you are contracting with has the power to do so.

To determine this issue, you would need to look to the act which gives the minister with the portfolio for water his powers and/or the act governing the NWC.

 

CONTRACTS WITH PUBLIC OFFICIALS

 

The reason this is important is any contract entered into by a public official without the power to do so can be set aside by the court as being outside the powers of that official. If that happens, you may be left significantly out of pocket with very little remedy.

Contrast this with a private company, whereby, if the person you are dealing with appears to have the authority to contract on behalf of the company, it is likely the contract will be upheld by a court, even if it turns out that that person did not have the authority they claimed to have.

A case which brought this issue to the fore is the Jamaica Public Service Company Limited vs Dennis Meadows & Ors decided in 2015 by the Court of Appeal. In that case, Dennis Meadows and others sought to challenge the power of the minister of energy to grant an exclusive licence under the Electric Lighting Act (ELA) to JPS to supply electricity to the entire island.

The applicants argued that the ELA did not specifically give the minister the power to issue a licence of that nature. The court in its judgment noted that the ELA had been promulgated more than 100 years ago and, though amended over the years, the legislation did not explicitly state that the minister had no power to do what he did.

Had the applicants been successful, it is possible that the licence given to JPS might have been deemed invalid. This would have impacted JPS's entire business model, not to mention the potential effect on consumers.

There are many anecdotes of individuals who made investments on the basis of assurances or public announcements as to initiatives which were fixed to commence, but never came off the ground. While there is never certainty and always some risk in business, investing before the effecting of laws necessary for a plan to be legally viable is a very uncertain course of action.

For this reason, when engaging in a public-private partnership, it is always prudent to check whether the initiative requires Cabinet approval, ministerial approval, and/or the approval by the board/commission of the statutory body. If such approval is required, request written proof that the approval has been granted.

Persons should also determine the need to register with the National Contracts Commission (NCC), whether the contract requires NCC approval and the extent to which it requires compliance with the Handbook of Public Sector Procurement Procedures.

The private sector working alongside the publicsector can be very rewarding for both. However, to ensure that 'What sweet nanny goat don't run him belly', potential investors must do their own due diligence and, when in doubt, seek legal advice.

- Emile Leiba is an attorney at the law firm DunnCox in Kingston.

emile.leiba@dunncox.com