High Court overturns entitlements for MPs

Alfred Sasako

NOVEMBER  2009

How would you feel being awarded huge tax-free fringe benefits as entitlements only to be told three months later you won’t be getting them?
It’s not a good feeling. Such a feeling is exacerbated by the thought that the only way to realise any or all of these entitlements is a guarantee to retain your job next year.
That’s probably how most MPs in Solomon Islands are feeling right now after the country’s High Court last month declared “null and void” new entitlements awarded to them last July.
For most MPs, there’s no guarantee they will keep their jobs. The country goes to the poll in June next year after Parliament is dissolved in April.
So the ruling meant that MPs across the political spectrum would miss out on the new entitlements for 2009.
Granted by the Parliamentary Entitlements Commission [PEC] last July, these new awards worth hundreds of thousands of dollars were to come into force on April 1 this year, according to an Extraordinary Gazette published on July 6, this year.
Given the High Court ruling, sitting MPs will not get the entitlements even if they are reinstated after a full review, which the court has allowed.
This is because the Solomon Islands Parliament will be dissolved next April in preparation for the country’s next national election.
New entitlements for national politicians in Solomon Islands come into force on April 1 each year.
To give you some idea, table above shows snippets of some of the new entitlements which have now been quashed by the nation’s High Court.
Given the economic downturn, it’s not a bad nest egg at all, if your position at the next election is not secure. Three of the new awards caused widespread public outcry as soon as the details became known.
At the top was a new $50,000 [about USD6,065] grant for spouses of Members of Parliament. Each was to get $50,000 every four years—the end of their spouse’s parliamentary stint.
Controversial: Equally controversial were the entitlements for Prime Ministers, beginning with Sikua when he retires next year. A $400,000 ex-gratia payment to each retiring politician or anyone who could not make it at the next election was just as controversial.
In the case of the Prime Minister, he was to be given a choice of getting a new house at the taxpayers’ expense with free supplies of electricity and gas. Cost of telephone calls would also be free and so as medical treatment and a state-supplied vehicle.
When he’s assigned to undertake any work on behalf of the government, travel would be by business class.
On the other hand, if he chose to live in his own house, he would receive tax-free monthly rentals at “the rate equivalent to that of a minister”.
Solomon Islands government ministers who live in their own houses today receive $15,000 [about US$1,820] in rentals a month or $180,000 [about US$22,000] annually.
The High Court ruling by Chief Justice Albert Palmer capped three months of internal wrangling within the Coalition for National Unity and Rural Advancement [CNURA] government led by Prime Minister Sikua.
At one point, both cabinet and caucus were split, threatening the viability of the coalition. Caucus members quietly confided they were angered by the decision by cabinet to take the matter to the High Court.
At issue was whether the High Court should rule on the entire 2009 entitlements or be restricted in its consideration to just the three controversial items, which included the $50,000 Spousal Grants and the new and significant entitlements for prime ministers.
In the end, it was agreed the High Court be allowed to consider the entire 2009 awards. The High Court was also asked to examine whether the PEC has the constitutional powers to order payment of the award to be backdated to April 1 this year.
Handing down his decision on October 22, Palmer said “the commission [PEC] acted beyond its constitutional powers by awarding the spouse grant of $50,000”.
He also declared “the commission acted beyond its constitutional powers by making the PER 2009 to commence retrospectively from 1st April 2009”.
“In view of the blatant errors committed in the decision-making process, the only proper thing to do in the circumstances is to order that they be quashed with immediate effect,” Palmer said.
But he left the door open, saying his decision “does not stop the commission from reconvening at some later stage to reconsider any or all of the entitlements”.
Sikua and the Opposition Leader, Manasseh Sogavare, were quick to welcome the ruling.
Sikua told a news conference that “the government’s decision to take the matter to court shows his government is not prepared to accept what is unlawful”.
“I make this statement with all due respect to our constitutional and democratic institutions such as the Parliamentary Entitlement Commission,” he said.
Although he’s responsible for appointing members of the PEC, Sikua denied his government was involved in its decision to make the awards.
“The government’s decision to seek declarations from the High Court demonstrates that we were never part of the decision-making process by the PEC, nor the submissions for the 2009 Parliamentary Entitlement Regulations to the PEC,” he said.
“I make this statement with all due respect to our constitutional and democratic institutions such as PEC,” Sikua said.
Sikua appealed for understanding saying the public should “appreciate and support the decision” and that “the matter should now be put to rest”.
But the High Court ruling by Chief Justice Palmer on October 22 could not have come at a worst time for many MPs.
Reports said the audits of tens of millions of dollars in grants and other monies paid to electorates via Members of Parliament have begun in earnest in some rural communities.
Intended to establish whether the funds were spent as intended, these audits cast a long shadow over the future of many sitting MPs after alleged abuse and misuse of funds were reported to be widespread.
Alleged misuse of funds was so bad that earlier this year, the Office of the Auditor-General informed the Ministry of Finance it had identified at least 17 MPs as targets for auditing.
Government sources said that when Finance Minister Snyder Rini broke the news in a caucus meeting soon afterwards, silence was total.
“It was as if MPs have been hit by a ton of bricks,” sources said.
At the same time, there were frantic efforts to stop the Auditor-General’s Office from carrying out the audits.
“Rini simply told the government caucus there was little he could do. The Auditor-General has its own powers,” one source who was present at the meeting told ISLANDS BUSINESS.
In the end, it was decided the only way to perhaps slow the process down was to ask the Auditor General’s Office to start some place else first. One official said this was conveyed to the Auditor-General’s Office suggesting provincial governments and state-owned enterprises [SOEs] as candidates. It isn’t clear whether the suggestion was accepted.
“The approach is really like continuing with a life support system for someone who’s dying just to buy time. It does not mean the audits would take place. It would,” one other source said.
One area being targetted is the $15 million given by the government for rehabilitation work following the tsunami which devastated Western and parts of Choiseul Provinces in April 2007.
Grants given to the constituencies via Members of Parliament will also feature in the audits.
At the same time, many MPs could end up in jail after it was revealed they broke the law by obtaining personal loans of more than $1 million [about US$140,000] from a businessman in Honiara last year. Up to 23 MPs including some senior government ministers are implicated.
While Solomon Islands politicians are allowed to borrow from lending institutions such as the banks, politicians are prohibited by law to obtain personal loans from any other sources. It is understood some MPs have made repayments using constituency grants. However, it is widely known in business circles in Honiara that the businessman has rejected these payments.
Those familiar with the transaction said the businessman rejected the payment as the borrowed monies were given out as personal loans and should be repaid with personal funds, not with constituency grants.