IF THERE IS ONE PUBLIC institution in Barbados that has proven its worth to the population, particularly the working class, it is the National Insurance Scheme (NIS).
We acknowledge that it has not always delivered perfect service, and one of the major blemishes on its record has been its failure of late to produce annual reports on time.
But without doubt, Barbadians would know of few reasons to complain about the way it has managed the money that has been entrusted to it, or the way it has been able to meet the demands placed on it by social and economic circumstances or political policy decisions.
What is apparently of major concern for many Barbadians in relation to the NIS, though, is the consistent failure of state entities to fulfil their commitments to the scheme. Two Sundays ago, for example, there was a newspaper report indicating that the state-owned Transport Board owed the NIS $32 million, and the Queen Elizabeth Hospital and National Housing Corporation in the region of $10 million each.
While a spokesperson for the Transport Board disputed the amount, what there is no doubt about is that this and other state entities owe the NIS substantial sums that together can only serve to weaken the capacity of that institution to provide that vital safety net for Barbadians.
However, the story is not just about numbers and debt. As one prominent Barbadian complained in response to the publication, had such sums been owed by any private sector company the directors would have been hauled before the courts on criminal charges – as provided for under the law.
His questions were simple: Why have the directors of these state boards not been charged? Is this not a double standard?
On the face of it, it would seem natural that if the law stipulates a specific action on the part of an individual and that individual fails to comply, then the penalties prescribed in the law ought to be imposed. For the record, though, the law does protect directors of statutory bodies from liability in such circumstances. But there is another side to this problem, one that cannot be ignored.
Entities such as the Transport Board, NHC and QEH were not set up as profit-making institutions and never were expected to operate in the black. Their very existence has been based on the supply of funds from the Treasury to meet their day-to-day expenses. It would be unreasonable to expect the Transport Board to turn a profit when it is obligated to charge a fare that is below the true economic cost of providing the ride, and on top of that transport pensioners and schoolchildren “for free”.
Under such arrangements if those who are supposed to provide the funds fail to do so, those who are expected to be paid by these entities will only find themselves standing in a long line for a long time. The NIS is one of those standing in line – metaphorically.
It would therefore, in our judgement, be unconscionable to hold anyone on the board of such a state corporation criminally liable for failing to pay out money they never took in. Yes, from an accounting, and in a sense simplistic, perspective the “money” was deducted from the wages of the workers.
But when an entity is literally broke and scrapes together enough to meet its net wages commitment to employees each week, those “deductions” to NIS and other statutory obligations amount to nothing more than “paper” or theoretical transactions. The money never came in, they never had it, and therefore it never could have gone out.
What the country urgently needs is a fresh approach that promotes the efficient management of these state entities – including proper funding where there is a significant social agenda, allowing or mandating them to charge fees that are economically sensible to clients who can afford to pay, or simply closing those whose level of inefficiency is so great there is little chance of turning them around.
Only then can we contemplate “locking up” directors when the entities fail to meet statutory obligations such as payment of NIS contributions.