NIW Saga Ch.135: Why is Dallat Rushing to Mellor’s Rescue?

The NIW saga is fascinating because of the volume and breadth of questions arising from it. There’s the elected reps vs. permanent govt (civil service) angle; the issue around procurement rules and potential for uncovering legacy of corruption, incompetence or bad practice; and the opportunity being presented for the scrutiny function of our legislators to be asserted and defined as never before.

And then there is the issue of watching how the political representatives react to an unfolding situation for which they have little experience nor understanding.

Mick has given a recent update gauging the responses from the different political parties.

Here, David Vance quotes and offers his views on Jim Allister’s critique of the signficance of contributions to date from Sinn Fein Chair of the Public Accounts Committee, Paul Maskey, in support of his fellow Sinn Fein MLA, Minister Conor Murphy.

Another interesting contribution has been the SDLP’s John Dallat calling for Chris Mellor and the remaining three other former non-Executive Directors to be reinstated in the aftermath of the suspension of Paul Priestley.

Mellor was acting chief executive of NIW as well as chairman for 14 months, so he was hands on in charge of the company for the chunk of the period when it was said to be breaking basic procurement rules.
 
And he is the same Chris Mellor who a certain John Dallat used to lambast in the not too distant past- here and here.
 
Given that Dallat used words like “comedy of errors”, “incompetence”, “dysfunctional”,  “inefficient” and “ineffective” when condemning the Mellor-led NI Water, we could be forgiven for wondering why he wants the man back.

And here’s Mr Dallat calling directly for the sacking of Chris Mellor in 2008:

Assembly Reg Dev Cttee
12 March 2008
 
John Dallat [to DRD official] “you confirmed that the Department is the sole shareholder in the water company. Therefore, you are the only people who are in a position to do anything about the situation. When will you sack the chairman, the chief executive and the chief accountant?”
 
The chairman was Chris Mellor
 
The issue was errors in bill calculation figures at NI Water
 
Dallat to Chris Mellor at same cttee meeting: “Northern Ireland Water spent £40 million on consultants, received huge back-up from the Civil Service and flew in new directors from, let us say, other islands. Despite all that, at the very last minute it discovered that the most elementary arithmetic was wrong. That begs the question: when will the people responsible realise that their time is up, that it is time to go?”

  • ranger1640
  • William Markfelt

    You could always ask the question (I think I detected a hint of a question in there) of Mr. Dallat directly, rather than invite mere speculation.

  • You start off with an extensive list, Chris. Can I add ‘opportunities for cronyism’ [Comh-Roghna (pron. ko-ronə), which translates to “close pals”, or mutual friends]?

    You make excellent points about Dallat’s ‘consistency’. Who isn’t batting on a sticky wicket in this fiasco? [rhetorical]

  • Pigeon Toes

    “the issue around procurement rules and potential for uncovering legacy of corruption, incompetence or bad practice”

    I’d start with DRD and a report commissioned by Priestly, to support their procurement practise.

  • Chris Donnelly

    William
    I think a question is clearly implied…

  • Pigeon Toes

    http://www.niassembly.gov.uk/regional/2007mandate/moe/080312.htm

    Ah Chris you forgot to mention that one of those DRD Officials , was Mr Priestly and he was discussing the quality of information within NIW..

    “Mr Priestly:
    We are all vulnerable to the quality of the information”

  • fitzjameshorse1745

    Certainly a botched or “kangaroo court” Report would not aid “justice”.
    It would make getting rid of the NEDs harder rather than easier.
    So surely the correct course is to re-instate directors until such times as a proper Reports condemns them or exonerates them.

    My impression here is that all sides….Priestly, SDLP MLAs, NEDs all know “more than their prayers” and theres a very high stake game going on here and not all cards are face up at the moment.

    But a curiousity. Its oft implied that Sir Humphrey is fully in charge in govt departments and certainly the buck stops here in Priestlys case but within DRD there would be divisions and sections and I find it incredible that Priestly would be the only one who made any decisions or did not consult.
    Whether he was shafted by an underling is certainly a question but Id guess that at least ten people would in some way be “involved” …..it could of course be that some leaks are coming from a disgruntled clerical assistant whose yearly contract is running out but Id suspect that there is a lot of leaking going on (appropriate enough for NIW).

    The mistake that journos make…and Ive referred to it often is to look on the JUNIOR civil servants…..clerical assistants, clerical officers, junior staff officers in the Stormont Building…….in the same way that Royalty views its liveried servants.
    These people are usually university educated, often in History, Politics whatever and are not stupid people. Nor are they as apolitical as their job description demands.
    They know the import of the ten copies of notes of interview that they are asked to photocopy, they always look inside a document folder marked “Restricted”.. There are a few very junior civil servants who probably know a helluva lot more than any PAC MLA or Journo.

    The great pity is that our political class (MLAs, higher ranking civil servants and Stormont journos) treat these people like unpleasant stuff on their shoes. The little people wont get invited to dinner parties, book launches, gallery charideee openings in the Ulster Tatler, where important folk gather.

    The “little people” are having a good laugh.

  • William Markfelt

    Yeah.

    But you’ve overcooked it.

    Words are stripped of inflection and emotion on the page, for one thing. Secondly, Dallat’s poking a DRD official with a stick, hoping to create a reaction. I’d start from there.

    And even if we wish to focus on an apparent volte face from Dallat, it’s not really approaching the same league as

    Adams: We’ll never support the police

    Paisley: We’ll never go into government with SF

    Murphy: The Perm Sec has my full support

  • PT, I’ve had a quick look at that March 2008 CRD report. It looks as if Laurel and Hardy are still in the building.

    “Jim Wells: Are we going to be mugged by new issues in the next few weeks? Is the Department looking for any more smoking guns?

    Paul Priestly: If we look forward, I cannot put my hand on my heart and say that there will not be more similar issues: I would be lying if I said that. However, I am not aware — and I do not think that my colleagues are — of any other similar issues at the moment.”

    Yet he was having problems at this time getting access to audited accounts. The light at the end of the tunnel was a train coming down the tracks.

  • Pigeon Toes

    ” I would be lying if I said that”

  • William Markfelt

    ‘So surely the correct course is to re-instate directors until such times as a proper Reports condemns them or exonerates them.’

    Once again, we can see the entire machinery of the NIA and its agencies adopt a devil may care attitude to that little known (in the context of the governmental machine) concept of ‘innocent until proven guilty’.

    NEDs don’t have the same employment rights as direct employees, but the usual course of action is suspension pending proper investigation, and I cannot see how suspension pending full, rigorous and transparent investigation would have been to the detriment of NIW.

    The debacle surrounding the non-independent IRT demonstrates just how flawed and suspect these investigations are.

    There is a fundamental problem in allowing these bodies to self-investigate and (beyond a certain point) self-audit.

    The time has come to abandon all of these flawed ‘investigations’ and agree that, in matters such as these, they are to become matters involving the police and thereafter a proper legal system, with a right of reply afforded the accused.

  • PT, here’s a PP quote from July 1, 2010:

    “When I became permanent secretary, I was concerned about the Department’s oversight of Northern Ireland Water; I did not think that it was sharp enough. Let me be candid with you:”

    Now, if only he had been more candid in March, 2008.

  • the old Manxman

    I always stand in awe of the ability of of Northern Irish folk to turn any topic into “themuns” and “usuns” in no time; but surely the obvious answer to Chris Donnelly’s question is that: if the NEDs were improperly dismissed there must be offered the chance of reinstatement. The current temporary NEDs should be asked to stand aside, because of the doubts over their appointment, but assured that they can apply for possible future vacancies on the Board without prejudice.

    Until the whole mess is sorted out, other temporary NEDs should be brought in; hopefully with the background to oversee the sorting out the various messes here, but with no intention of continuing after that. I would imagine there is no upper limit on the number of NEDs, though they don’t need to go round in quartets like Victims’ Commissioners.

    The Chairman is another matter. If there are accusations that malpractice took place when he was Acting CEO, then, even if he wishes to return, he should suspended until the problems are resolved and a temporary Chairman brought in. In any case, although sometimes a previous CEO can become Chairman in some PLCs (usually family type firms), like combining CEO and Chairman it’s usually considered bad practice – for obvious back-seat driver reasons. It’s not the sort of thing that NIW should be doing.

    I won’t pretend to have read all previous 134 installments (an underestimate surely?) or trawled through every midnight flame war; but surely there’s one important point here that’s being missed. The core of the problem is that Mackenzie, the CEO, was unable to get on with his Board’s NEDs. Isn’t that the point of NEDs? The main purpose of the NEDs is to make sure a company is run correctly, legally, uncorruptly etc. To do that they should be independent of the executives of the company and their only duty is to the shareholders – in this case effectively the public. If CEOs find that this gets in the way, tough.

    It’s possible that the shareholders (in this case represented by the Minister) could replace the NEDs if they/he feel that they are failing in their duty. But it needs a better reason than the CEO throwing a hissy fit – that probably indicates the NEDs are doing their job. And whatever the cause it needs to be done openly with regard to the shareholders/public.

    That brings up to the position of the remaining original NED, Don Price. If he has signed any sort of undertaking as to automatically carrying out a future action, he has failed in his job as an NED and should step down. he has forsworn his independence, which is integral to the position, and is no further use.

  • “the shareholders – in this case effectively the public”

    Manxman, the DRD is the shareholder in NIW; it has a SHU, a shareholder unit – headed by a Mr Fair ….

    The SHU also has a BAP, a business advisory panel ie the SHU lacks sufficient in-house expertise.

    As for the ‘hissy fit’ this might say as much about the CE as to whether or not the NEDs are doing their job.

    The whole governance structure of NIW is a shambles; confusion reigns when it comes to accountability mechanisms.

  • the old Manxman

    Oh agreed to all that. I was trying to simplify the Schleswig Holstein Question of our times, but in the end it’s the Government who owns it and they are, in practice, responsible to the people.

    And if the CE is having hissy fits when the NEDs aren’t doing their job …

  • Well, he confides in other utility CEs, Manxman. But NI is such a small place that one can be a CE in one utility and an investigator of another.

  • William Markfelt

    ‘lacks sufficient in-house expertise.’

    If someone can translate this into Latin, I’m sure DRD would be amenable to adopting it as their motto.

    ‘Nos penuria satis in domus professor’ is one such translation, but I can’t vouch for its accuracy.

  • William, I’ve mentioned BAP a few times but here’s the quote from the Hillyard Review in Jan 2008:

    “2.43 We accordingly recommend that a small Business Advisory Panel should be set up which would bring an independent financial and commercial perspective to the Shareholder Unit’s oversight and review of NIW’s performance. The Panel would meet no more than four times a year and would report to the Minister once a year on the Unit’s performance. This would help compensate for the limitations created by the fact that (a) there is only one shareholder in the company, and (b) that shareholder is
    not an expert in financial and commercial affairs
    . It would also improve openness and inclusion, and promote public confidence.”

    Sometimes you don’t need to make it up 🙂

  • Pigeon Toes

    http://www.niassembly.gov.uk/record/committees2009/PAC/100624_MeasuringthePerformanceofNIWater.htm

    Dawn Purvis had some of those hard questions asked at the PAC meeting on 24th June

    “Ms Purvis:

    Have you come across any case in Great Britain where the head of a regulated utility body has been part of a team that has conducted a review of an area in another regulated utility?

    Mr Osborne:

    The nature of the review that DRD commissioned recently is quite unusual, because DRD’s status is quite unusual. I shall broaden the focus of my answer and say that, in general, it is usual for a shareholder to call in some help from serving or, frequently, recently retired, senior utility figures to improve the company. You need someone who knows what a well-run company looks like. That does not seem to me to be unusual.

    Ms Purvis:

    That was not what I asked.

    Mr Osborne:

    To answer your question literally, I would have to say that the recent review was sui generis; it was unique. Therefore, there is no comparison to be made.

    Ms Purvis:

    Have you never come across such a case?

    Mr Osborne:

    As I said, this is the only one of its kind, so a comparison cannot be made. Northern Ireland Water’s status is unique.

    Mr McGlone:

    I found that to be quite a diplomatic answer, but the Committee will come to those issues in more detail next week.

    Mr Osborne, you discussed aspects of benchmarking, and I know that you have extensive knowledge of it. Given your unique experiences and that you now have taken NI Water under your wing, can you say that the company could have undertaken benchmarking exercises that are similar to those that have been done in other utilities in other areas, yet they remain to be done?

    Mr Osborne:

    Undoubtedly.”

  • Two errors which I hope you can amend.

    Chris Donnelly is wrong to suggest I have altered my opinion on Chris Mellor but even Mellor has rights and he and other non-executive directors should NOT have been …

  • wild turkey

    WM

    try this on for size

    “scum quoque orior oriri ortus”

    any difs, translation available on request

    good luck

  • William Markfelt

    Grade 9 Latin GCE ‘O’ level for me, WT, but I still managed to work that one out.

  • Chris Donnelly

    John
    Can you clarify a few things for me please, John, and I’d be more than willing to update the thread intro.

    1. Do you still believe Mellor should have been sacked following the incidents which led to your comments as quoted above?
    2. Do you want him reinstated now, or just one/ several of the other NEDs that were sacked?
    3. Your post seems to have got cut off. If my first ‘error’ is to suggest you have altered your opinion on Mellor, then what’s the second error?

  • Mike Scott

    So what happened to the rest of the John Dallat post?

  • Mike Scott

    Interesting that the papers sent to the PAC at the end of last week have not yet found their way into the public domain. They provide DRD’s answers to the questinos they were unable to answer in July. Maybe they show Chris Mellor and co in a less than favourable light?

  • William Markfelt

    ‘Maybe they show Chris Mellor and co in a less than favourable light?’

    Even if they do, it’s immaterial to the core of the investigation as it stands right now. That;s the PP email. Everything else may drop into line thereafter.

    In my experience, people who are innocent of wrongdoing don’t waive anonymity and front up in quite so public a manner as Declan Gormley if they know, or suspect, that there are going to be matters dow the line that will undermine their initial arguments. It just males them look like pillocks. So when someone like Mr. Gormley fronts up and claims innocence we do well to pay close attention.

    I think, since devolution, we’re running at something like one a year where the innocent waive anonymity to highlight governmentlal abuses. That’s not coincidental or evidence of NIW being ‘unprecedented’. There’s a pattern here.

    It might also be useful to treat, with a jaundiced eye, ‘evidence’ placed before PAC about the NEDs wrong-doing. It would be totally like government departments to invent stuff or run a black ops campaign against those they attempt to vilify.

  • Jj

    A reasonable pov, spoiled only by referring to Vance’s predictable and reflex unthinking attitude to Shinners in government – they should all go…

    This is an issue on which Slugger has excelled, kicking such third-rate ranting hate sites into touch.