By Julian Manduca
Under the impression that it was sponsoring all the constituted bodies the government decided to grant Lm200,000 yearly to the Malta Business Foundation, and only recently realised that the GRTU and Malta Employees Association were not part of it.
Up until this year, constituted bodies were supported by the government separately in their attempts to assist their members make EU membership a reality, but in February of this year the minister of finance pledged Lm200,000 for four years (2004 – 2008) to the Malta Business Foundation under the mistaken belief that all the Constituted bodies were members.
The Malta Business Foundation incorporates the Federation of Industry, the Chamber of Commerce and the Malta Hotels and Restaurants Association, but while the MEA and GRTU did consider joining at one time, both have since gone their own way.
When The Malta Financial and Business Times asked the finance ministry about the assistance being offered to the constituted bodies, the ministry replied: “In November 2003, the Ministry of Finance was approached by The Malta Business Foundation (made up of the FOI, Chamber of Commerce, MHRA, MEA and GRTU) which pledged a consolidated approach amongst the employers’ organisations to focus Malta's business community on EU membership implications and benefits.” But the GRTU and MEA never joined the Foundation.
GRTU Director General Vince Farrugia told this newspaper: “We never joined the MBF because we felt that in the current situation it made more sense for each organisation to go focus on their areas of interest. We were never even part of the discussion related to the MBF. Since the EU presents different challenges it has to be tackled from different angles.” On his part the MEA Secretary General Joseph Farrugia said: “the MEA has never been a member of the MBF.”
The finance ministry is now claiming that it only recently discovered the MEA and GRTU were not part of the Malta Business Foundation: “During the past few weeks, the Ministry of Finance has been informed that not all organisations (as originally indicated) have accepted to participate in the Malta Business Foundation.”
This leaves both the GRTU and MEA high and dry and the FoI, CoC, and MHRA pledged Lm200,000 yearly. When this newspaper contacted FoI president Anton Borg it was told that the Malta Business Foundation was “there for the other constituted bodies to join, with a statute that makes it clear that no distinction is made between the members. None of the constituted bodies that join will be in an inferior position to any of the others.”
This newspaper asked the finance ministry whether it verified that the funds would be going to all the constituted bodies when it made its pledge in February of the year, but the government would not answer the question and continued to insist that: ““Based on the premise of the successful setting up of this Foundation, the Ministry of Finance, in February 2004 pledged Lm200,000 per annum for the first five years starting in 2004 in order to enable the unfolding of the presented business plan (2004-2008) of the Malta Business Foundation.”
When The Malta Financial and Business Times had informed the ministry of finance that this reply did not answer its question, the Department for Information replied: “The funds were pledged to the Malta Business Foundation not to the constituted bodies. The fact that the set-up of the MBF has so far not materialised as planned does not mean that government was misguided.” When pressed, the Ministry replied: “No one is contesting whether the media has a right to put questions. But that doesn't mean that government is ‘obliged’ to give a reply! Whether one considers the reply given is adequate or not, is another kettle of fish and another argument altogether.”
This newspaper also asked whether the government is planning to provide funds for the MEA and GRTU but government would not reply except to say: “The Ministry of Finance is reviewing the situation in the light of these developments which seem to indicate that the original conditions for the approval have - so far - not materialised.”
On his part Vince Farrugia told this newspaper he has written to the finance ministry “requesting the Lm25,000 due to GRTU for 2004. This is the amount, which government has committed to GRTU and which is now long overdue. Ex-Minister Hon John Dalli, both as former Minister for Finance and as former Minister for Foreign Affairs, was personally aware of our pending claim and the understanding has been that the reimbursement will be effected in due time, but before September 2004.”
Farrugia is furious about what has happened: “We are the only national body that represents small businesses that has not been financially assisted by the State. This makes for lousy economics. Our members needed our assistance prior to EU accession, but they need it even more now.
“We are being forced to look for funding through the organisations we are affiliated with abroad. It is disgraceful considering the complexity of EU directives and regulations that the government has not lifted a finger to assist, especially when everybody recognises the importance of giving a boost to enterprise,” the GRTU boss explained.
The MEA Secretary General was not so critical and commented: “When it had expressed its desire to join Malta Business Foundation (MBF), years ago, the negotiations became protracted as MBF members were not clear about their true intentions.
“As negotiations were taking a long time, MEA subsequently discovered that the two MBF members had in the course of the negotiations acquired property in Brussels and obviously there was no way that MEA could get involved in the purchase, or even in the decision to purchase.
“When the MBF members eventually came back to MEA, the Association was offered membership in MBF on the condition that we would not participate in the ownership of this property. In time, MEA came to the conclusion that it did not have any interest in spending money on a property in Brussels.”
Farrugia is of the opinion that the government may have been misled: “We believe the government may have been induced into believing that all the constituted bodies had joined MBF. In fact, on this basis, an agreement was reached with MBF whereby the government will forward a substantial sum per annum to the MBF in lieu of the EU familiarisation funds that were allocated to the MEA, CoC, FOI, MHRA and GRTU. This agreement was negotiated without the knowledge of MEA, which only got to know of it after the EU familiarisation funds for this year were not forwarded.”
MEA sees Malta House in Brussels as ideal for constituted bodies
MEA’s Joseph Farrugia is convinced that the constituted bodies would best be housed in the controversial Malta House in Rue Archimede, and said he believed the reason for buying such a large property could have had something to do with an intention to accommodate the representatives of business.
“With government having set up extensive premises in Brussels we believe that it now makes more sense, particularly for a small country like ours, to have all the social partners (unions, employers, government organisations) benefit from the synergetic effect of operating from a central building. In fact we believe that the government should adopt this stance.
“Given the scale of the building, there is certainly sufficient space to accommodate the social partners. I would like to believe that the premises were purchased precisely for this purpose, which would certainly be in the national interest.”
The FoI and CoC have purchased their premises at 289 Avenue d'Auderghem, Brussels.