Timothy Hamel-Smith: TT has power to influence how it grows

kmmpub@gmail.com

“Stop focusing on individuals and focus on institutions!” For all that he has argued against our collective obsession with individual leaders, Timothy Hamel-Smith has by now become an institution himself.

Over decades Hamel-Smith built his firm into one of the largest in the country, working on almost all the important financing deals that built our industrial economy. His passion may be law, but his calling was always public service – having served as president of the Senate, acting president of TT, and advising several governments – including most recently on the transformation sub-committee of the Government’s team (on which I had the honour to serve with him).

What was it like as a young lawyer starting out?

I was in the right seat at the right time. Most of my clients would have been international clients. The transactions were US$300-400 million upwards. We did some of the very initial ones when they were breaking into the market.”

This was at the time that our energy sector was first developing and the downstream energy sector was first coming together.

At the beginning the financiers were far more cautious and therefore everybody would come down to Trinidad. There might be five, six banks involved in a transaction. It was exciting. I distinctly remember one time a remark was made, and everyone thought that the transaction would fall apart. About 15 people rushed to find a landline at the same time to call home base!

How did you become that first call for these big international firms?

I had a really wonderful experience, and I’m not sure that our lawyers would really experience that again. It starts with one transaction, and it’s a small community of lawyers that works in this matter internationally, so people call each other up (and recommend you).

I look for solutions. So you tell me what the obstacle is and I will look for solutions.

One of the important elements you have to have with a complex transaction is to break it down and then put it back together, because there are some nuances in Trinidad law that may not mesh with international practice and there are lots of competing interests. I did Atlantic LNG: you have four shareholders and six banks, each of them separately represented.

So when I moved into the political arena, I approached it in the same approach in terms of breaking it down, and you have to create a prioritised list and determine what is essential, and where we were falling short. For me politics was an extension of my law.

I was an activist, if you like, from the ONR to the COP in 1981, 1986, 1995 and onwards to 2010. After that I stepped back, because it seemed to me that there was no way to get representation for 23 per cent of (our) people.

You will see the ONR won 23 per cent per cent and got no seats. They had more votes than the ULF got at that time, and they got eight or nine seats, and we got zero. That was the first time you recognised it.

And we went through the PP to form a government and I’m not sure they understood that there was a component of TT (the 23 per cent) that you needed to win an election. The UNC treated that with disdain and didn’t recognise the value that the COP brought to the table.

The UNC had never become an institution. There was no structure to it, just a leader that you galvanise around at election time. Today one blames Kamla (Opposition Leader Kamla Persad-Bissessar), but back then it was just the same. I went to a congress meeting that they invited me to, to represent the COP. I attended the meeting and you realised that yes, they had a chairman, board members etc, but in reality Bas (former prime minister Basdeo Panday) ran everything. You could see them going up to him, asking him about everything. Now he was brilliant and charismatic, but you need institutions.

What attracted me (to the COP) was that they created communities to address specific problems in TT and people felt that they could contribute. It was never about power. But of course politics is about power, if you want to do anything.

I still believe that there is nothing like a political party to make a difference.

What is holding TT back from growth? What do we need to do?

Procurement legislation. That was the single most important piece of legislation that has been introduced to Trinidad.

Government-to-government contracts are still a sticking point to this day (to the operationalising of the Procurement Act), but I recall we got confirmation in the Senate, and UNDP for instance – those sort of bodies came back and said they are quite content to have the law applied to them.

There was a drawn-out process. MPs actually walked out of it. Politicians thought that this was stifling their ability to “get things done.”

But there is no reason why following the act should take any longer than a proper process should.

That said, I can’t say that I am 100 per cent sure that the PP government would have proclaimed the legislation any faster.

Not long after I was fired, I was made chairman of the procurement regulating team. From the beginning – you can’t imagine – one of the real mistakes was that they were going to go about making the appointments of the regulator without reference to the president (of TT) and I set them straight: you cannot do that. It must go to the President.

And so I went to the President with a group. I sent him a note: "I want to alert you" this is just being passed. It is one of the most important decisions you will ever have to make (the appointments of the regulator)." As chairman, I asked for an audience.

The process, I found, was akin to throwing some names in the hat and picking it out. Although it was in their independent discretion, the approach of the President was to give a veto power to each of the parties. Usually the person who had less experience and less competence was picked. I don’t employ a clerk in my office the way they hire people for important positions.

In the first instance you must engage an HR firm to come up with some terms of the capabilities you require, and what you do is, you advertise. You should be in the Economist. Those are the people you want – this wasn’t restricted to Trinidad.

Then you engage somebody who has the expertise to make a shortlist of all the applicants.

I told him (the President) that "the UNDP are prepared to help you with this exercise, at no cost, to review all the candidates and to make a shortlist. It is at your discretion. All I want to do is set in train a process."

You have to interview them and interview their references, which was not the practice but I actually did. One appointee’s referee was the governor of the Central Bank. He was surprised I called him. He said, "That person is a good boy, I went to school with him – but he can’t become chairman. That would be a horrible appointment."

(When acting president) I was a boldface president. I spoke to everyone. I called all the service commission (chairmen).

The framers of the constitution expected you to exercise power and delegate that authority. If I hire you, I have the right to fire you.

Instead, they meet maybe once a month to manage 60,000 public servants. Who in their right mind could think that you could do that? Management must expect outcomes, performance. You could make a framework, but you have to delegate authority to other people to get it done, which they don’t do.

If you divorce accountability and authority the results are clear. I said (to the service commissions), "You have this power!" Of course, the next two weeks you won’t be there, so when I was acting president I don’t know how much they listened. But I think every single President is falling down on their duty to arrive at a process before they consult (with political leaders).

The process is important, and our presidents have a far greater role than they understand.

They also have another role – they have the role of uniting the country. If you want to see the role of the president in the Caribbean, you want to look at Dominica. It is the best description. But nobody does anything.

If you don’t develop people, you ain’t getting anywhere. Development of people requires that they have a values system that we all share. You have two big camps (in TT) and there must be a way out.

The best way of achieving those outcomes is by incorporating pay for performance in the system. I’ve read the reports by Mercer and others. If you talk about PS or ministers – link their pay to GDP, to inflation, housing – can you imagine the influence of that on achieving whatever you want?

They (presidents) don’t understand their role. It is an abomination. The institutions are crumbling. So whether it's the chief justice or whoever...

The downfall of this country is the rampant corruption. I may not pay for a connection directly, but I have to know somebody who knows somebody to get anything done – and something is really wrong when that becomes the norm. What happens to the small man in the street?

By and large we have a good judiciary. Your auditor general is another good institution that should work, but is ignored. Some of these state enterprises haven’t published accounts in years: there are no consequences.

Everyone should have access. That comes back to our ease of doing business.

Look at two websites. Look at TT and...New Zealand. Look at their website and you would conclude that the TT Public Service Commission sees itself as a trade union. Whereas in New Zealand they (the New Zealand equivalent) say that their mission is to provide first-class service to the people.

That brings you back to the President. Putting names in a hat. It is totally absurd. The third leg (apart from procurement and public appointments) is the fiscal responsibility legislation. The importance of that as an institution. I like the Bahamas legislation. It imposes upon you certain disciplines that you need to have.

One of the very baseline requirements is that you have an accountant. Our accounting system is a cash basis. So we run a parlour in TT. There are a similar type of standards to IFRS (the main international accounting standard) that proper fiscal responsibility legislation would set.

You want flexibility but need to have certain parameters. Your fiscal council gets the oversight. If you look at the Bahamas, there is a real independent body whose role is to have oversight over those things.

There are other simple-majority things that can be done with a constitution. We haven’t really gotten on the path of development.

How do you do that? Well, people talk about setting targets.

First, we don’t have a social compact. If the government in power says XYZ, surely before imposing that law you should take civil society into account? This is where you get consensus-building. This is good for politicians, too. When I have to take hard decisions, surely I don’t want to be seen as mean?

The ones at the bottom are the ones who are going to experience hardship. They’ll say: why should I band my belly? We’re going through very hard years. But if you have people who have achieved consensus, then you can set targets.

There’s a lot to be done. I would put that need for consultation in the constitution. That would only take a simple majority.

Institutions. We need two terms maximum not just for the PM but for the opposition. The parties need to be moulded in a certain way.

We need a feeling that this place is ours! We get a chance to contribute!

In New Zealand, a party with 12 per cent got no seats and they appointed a commission, got proportional representation. We’ve reached 23 per cent and done nothing. That may be pie in the sky. of course. as the two parties will be against it. But you can change the system to preferential voting, when you indicate your first, second preference and so on.

How does a young person get involved? What would you tell a young Timothy starting out?

First, find what you are passionate about – what people call work will be pure joy. How do you find what you are passionate about? I can only say in my case it was pure luck or more likely synchronicity.

I became an articled clerk in 1968 at the princely wage of $15 (per) fortnight. I really had no real sense of what law involved. When I opened my first law book on torts, I fell in love with law, which has remained a lifelong love affair. Politics and ability to contribute to transformation grew out of that.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh