Editorial

In an editorial headed "Private interests and public figures", carried on July 6, The Times said: "While it can well be argued that, technically-speaking, the Venice port does not compete with Malta Freeport as it is not involved in transhipment, personal direct involvement in two different ports - in one as chairman and in the other as shareholder - would seem to be undesirable as it may at one time or other involve, directly or indirectly, some conflict of interest".

The message was clear enough - except, it seems, to the Labour leader. We were referring to the 50 per cent stake which a company belonging to Mr Marin Hili, the Malta Freeport chairman, took in the port terminal of Venice. We stand by what we said then, even though, given its present set-up and geographical location, the Venice port can hardly compete with Malta Freeport at this point in time.

The economic services ministry has publicly declared that the government did not believe Mr Hili's acquisition of a stake in the Venice port gave rise to any conflict of interest. The Labour Party does.

Indeed, according to Labour MP Evarist Bartolo, business plans were already being drawn up to develop container facilities there. Writing in The Sunday Times, Mr Bartolo said the port of Venice would operate on all the routes of the Mediterranean and would service ports in the Middle East and Far East. In the coming years, the port of Venice would start competing for the container business in the Mediterranean.

Like Mr Bartolo, the ministry has a right to its opinion but perhaps the ministry should have a close look at the provisions of the code of ethics for board directors in the public sector, issued by the Office of the Prime Minister in November 1994.

Paragraph 12 lays down that: "Like other fiduciaries, board of directors are required not to put themselves in a position where there is a conflict (actual or potential) between their personal interests and their duties to the organisation."

The following paragraph does make a proviso, adding that some conflicting interest may be permitted if, "and only if", they are disclosed beforehand to the organisation.

This proviso adds: "Thus, a non-executive board director may be interested in a business which competes with his or her organisation, provided that he or she does not break the board of directors' fiduciary duty by, for instance, misappropriating trade information or trade opportunities of the organisation".

As Malta Freeport chairman, Mr Hili's function cannot be described as being non-executive and his position is now untenable. Malta Freeport is determined to strengthen its market presence by upholding the loyalty of the carriers and broadening its business.

Malta Freeport is also in the process of being privatised which means that its future development cannot be fully known at this point in time. Mr Hili, who has taken quite a substantial share in the Venice port, insists that there is no conflict of interest as the Venice operator does not compete with Malta Freeport. This may very well be the case at this point in time, but the potential for a conflict of interest exists nonetheless.

In view of all these factors, the economic services ministry's statement did little, if any, to allay doubts.