Why conflicts of interest matter

Jan 30, 2005 Leadership, Sunday Nation

Conflict. Of. Interest. Three simple words in the English language which, when put together in Kenya, create a concept that appears to be a mystery to most.

Judging by recent pronouncements by high-ranking people who really ought to know better, there is a need to go back to first principles where conflict of interest is concerned. Let’s keep it very simple: a conflict of interest is a situation in which someone in a situation of trust (e.g. a public official, legal officer or company director) is unable to fulfil his or her duties properly and fairly due to the presence of competing professional or personal interests. In short, conflicts of interest occur when someone is serving more than one master at the same time.

Now, is that really too difficult to understand? We have to wonder when a government minister grants a land tax waiver to a cabinet colleague, and then reportedly defends the decision by saying that it was in the public interest, because the colleague would be creating employment and earning foreign exchange for the country. Let us follow this logic through. If the reasoning holds, then we can only assume that all persons owning tea, coffee, pyrethrum and horticultural farms have been given similar waivers, as they certainly meet the conditions of generating employment and foreign exchange. And incidentally, why is it that whenever a Kenyan businessman earns foreign exchange (real or imaginary), he claims to be earning it “for the country”, as though he were making donations to the poor?

If we were serious about the issue of conflicts of interest, no minister would ever be allowed to grant public favours to political colleagues. Ministers would be required to excuse themselves from all decisions involving individuals in whom they have an interest – whether political, financial or personal. And no official would ever get away with using the security forces to intimidate anyone in a personal matter.

Conflicts of interest are holding this economy in a choking grip. When a minister obtains a loan from a financial institution that falls under his own jurisdiction, which master is being served? When ministers own companies that bid for contracts with parastatals that fall under their control – can the public gain? The public suffers every time, because resources are not allocated to their best uses.

The problem is not confined to public officials alone. Many lawyers and judges are routinely serving two masters at the same time. It is well known that some lawyers can be approached by the opposing side in order to ruin their client’s case – and do. And in the corporate sector, the concept of conflict of interest is the bane of many a board of directors. Many directors in Kenya are merely pretending to serve the interests of shareholders while advancing their own – by gaining an advantage in providing services or supplies to companies in which they are directors, for example, or in using company resources for personal gain. Again, the company loses as its resources are not put to their best use. And what of you, the average Kenyan? If you are running your own business whilst in full-time employment elsewhere, you are part of the same disease.

In the 1970s the government, in its wisdom, decided to open up the commuter transportation sector, and the animal known as the matatu was born. Had this been done with some care and proper regulation, the effects of competition would have been salutary. Instead, an obscene conflict of interest was allowed to occur: police officers were allowed to own matatus. So whose interests were those policemen going to serve – their own or those of the public? Is it any surprise that matatus have flouted all known traffic laws for decades since? How many thousands of Kenyan lives has that act of folly cost us over the years? And is it not one of the key underlying reasons why we are still unable to bring sanity to the sector?

Conflict of interest is no joke. It hurts, and it costs billions. It takes lives and arrests development. That is why we must protest loudly when we see it being dismissed so lightly in this country. Other countries take it very seriously indeed. In Britain, Home Office Secretary David Blunkett was forced to resign recently when it emerged that he may have used his office to speed up a visa application made by his lover’s nanny. Mr. Blunkett was no small fish – he was one of Tony Blair’s most trusted and powerful ministers – but he went nonetheless. In Kenya, I can imagine ministers laughing out loud at such a thing. Why become a minister if you can’t help out your friends, families, mistresses and clansmen, after all? And Hell’s Gate will certainly need to freeze over before a Kenyan minister ever resigns for breaching an ethical guideline.

In Australia, ministers operate under a strict code of conduct. They are, for example, not allowed to engage in any professional practice or in the daily work of any business. They are not allowed to accept any retainers or income from “personal exertion” other than their official remuneration. They are required to resign directorships in public companies. They must divest interests in businesses involved in their area of responsibility. They cannot accept any benefits that suggest improper influence. They are forbidden to use their public influence for personal gain. Their use of public facilities must never be wasteful or extravagant.

Don’t imagine that these sorts of rules are the domain of rich countries alone. In India last year, the Deputy Prime Minister used an Indian Air Force helicopter to attend an election meeting. On discovering this, the Election Commission forced the helicopter to be sent back, and the minister had to return home in his own car! Looking closer to home: Nigeria gets a bad press in governance terms, but has a wide-ranging code of conduct in place for its ministers. Amongst its provisions: a requirement to take decisions solely in the public interest; the declaration of all private interests relating to public duties; the obligation that when interests clash, they must be resolved in favour of the public; and the commitment to refrain from exercising official powers when private interests are being served. All ministers sign this code when taking office.

These rules matter. Their enforcement matters even more. If our drive to improve governance and ethics in this country is serious, we must not only develop similarly strict codes, we must also ensure that transgressors are brought to book. But we cannot depend on the powers-that-be to achieve this for us. We must all understand the issue, and we must all shout about it. A certain fellow called Jesus put it perfectly two thousand years ago: “A person cannot mount two horses or bend two bows” (Gospel of Thomas). The message is clear: one master at a time. If you are serving the public, serve the public. The failure to do this has set us back many years. We have neither ridden the horse to prosperity, nor shot the arrow to success.