national law

Ireland’s Corrupt & Dysfunctional National Economic Governance !

Posted by CJ Walsh

2011-05-31:  Further to my earlier Post, dated 22 December 2010 …

     1.  Social & Economic Environments in Ireland ?

It has been a hectic few weeks here in Ireland … with successful visits to our country by Queen Elizabeth II of England and President Barack O’Bama(!) of the United States of America … not at the same time, of course … and, lest we ever forget, the Leinster Rugby Team winning the Heineken Cup in Cardiff … and the Munster Rugby Team then beating Leinster, a week later, to win the Magner’s League Final in Limerick.  It will take us a month of Sundays to recover !

It is slowly dawning on people in Ireland, however, that the Economic Environment is not the same as the Social Environment, which we are discovering is still resilient, robust, warm, vital and healthy.  As for our miserable Economic Environment … sin scéal eile (that’s another story) … please see #2 below.

Social Environment:  The complex network of real and virtual human interaction – at a communal or larger group level – which operates for reasons of tradition, culture, business, pleasure, information exchange, institutional organization, legal procedure, governance, human betterment, social progress and spiritual enlightenment, etc.

The Social Environment shapes, binds together, and directs the future development of the Built and Virtual Environments.

Built Environment:  Anywhere there is, or has been, a man-made or wrought (worked) intervention by humans in the Natural Environment, e.g. cities, towns, villages, rural settlements, service utilities, transport systems, roads, bridges, tunnels, and cultivated lands, lakes, rivers, coasts, seas, etc … including the Virtual Environment.

Economic Environment:  The intricate web of real and virtual human commercial activity – operating at micro and macro-economic levels – which facilitates, supports, but sometimes hampers or disrupts, human interaction in the Social Environment.

These are important distinctions !

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     2.  Ireland’s National Economic Governance ?

In Ireland, a big deal has been made of losing our National Economic Sovereignty.

BUT … on 19 April 2011 … the Report of the Commission of Investigation into the Banking Sector in Ireland was published … ‘Misjudging Risk: Causes of the Systemic Banking Crisis in Ireland’.  This document was prepared by Mr. Peter Nyberg, a Finnish Economist … and sole member of the Commission.

Immediately, it should be pointed out that this is just one report … in a series of reports purporting to thoroughly examine separate aspects of the Economic Catastrophe which befell Ireland in the period leading up to and during 2008.  The intention of the Irish Government, at the time that these Investigations were established, was to obscure … as much as possible … the Big Picture of a Completely Corrupt & Dysfunctional System of Irish Economic Governance.  Nobody saw anything … nobody heard anything … nobody knew anything !!

In order to protect the Guilty, the Incompetent, and the Inept … individuals are typically not named in such Investigation Reports.   We – the Citizens of Ireland – are therefore not in a position to clearly identify these ‘mothers’ … as they engage in an elitist game of musical chairs around the boardrooms and senior management levels of our national institutions.

The following extract from the 2011 Nyberg Report … will give you a small, and very mild, flavour of what was happening during the Celtic Tiger Years.  Please forgive the length of the extract … but try to stick with it.  You must understand.

2011 Nyberg Report

‘Misjudging Risk: Causes of the Systemic Banking Crisis in Ireland’

Chapter 5 – Findings & Final Considerations

5.1  Findings – General

5.1.1  The Report concentrates, as its Terms of Reference require, on explaining the reasons specifically for the Irish banking crisis.  However, it is useful to keep in mind that this crisis cannot be seen in isolation from what was happening elsewhere.  It appears, at least on the face of it, that many of the problems and failings in Irish banks and public institutions were quite similar to those in other countries.

5.1.2  For instance, Irish banks compared their policies and achievements with peer groups containing well regarded banks in the UK and the EU.  Risk management systems and remuneration practices were often adopted from abroad.  Judging from results, similar problems, as in Ireland, arose in implementing them in a manner consistent with prudent credit policies.  The relatively greater losses seen in Ireland may thus be seen as a consequence of somewhat greater abandon in accessing wholesale funding and in lending to domestic property than in other countries.  Thus, there is a difference in degree rather than in concept.

5.1.3  Similarly, central banks and regulators abroad generally were almost as unsuspecting of growing financial fragility as their Irish counterparts.  The method of regulation or the number of available macro-economists does not generally seem to have made a great deal of difference.  The same seems true of auditors, rating agencies, analysts and investors, most of whom remained calm and optimistic until the crisis actually broke.  Internal investigations in the IMF also indicate a widespread lack of understanding and clear communication of the accumulating risks by that organisation.  There were incentives to conform with prevailing views, even in cases where proper analysis would have identified growing risk.

5.1.4  The fact that Ireland was not special does not, of course, account for or diminish the failures in the performance of the people in private and public positions responsible for financial stability and prudent banking.  It does, however, put the many undoubted failings found by the Commission into perspective.  Regardless, it indicates that the problems experienced in Ireland in the 2000’s have a wider relevance, as do any suggestions on how to prevent similar things from easily happening again.

5.2  Findings – Banks

Business Models & Strategies

5.2.1  Responding to increased competition and pressure for increased earnings, banks set aggressive targets for profit growth.  In many cases, this drive for growth really implied a partial change in business model and strategy without the corresponding necessary strengthening of governance, procedures and practices.  This was accepted partly because future economic developments were trusted to remain benign in Ireland as they already had been for several years.  Comfort was also taken from peer bank practices and the lack of concern among authorities, market participants and observers.  The particular characteristics of the property and funding markets were not taken into account.

5.2.2  In practice, Anglo Irish Bank (Anglo) was a monoline bank providing rapid but not cheap financing to a number of long-standing customers mainly in the commercial property market; sales and customer retention were important drivers of activity.  Irish Nationwide Building Society’s (INBS) business model was unique and different to those of any of the other covered banks as it was concentrated primarily on speculative site finance, which proved initially to be very profitable in a rising property market.  The model was risky, however, and risk mitigation primarily involved selecting trusted and previously successful customers.  The business models of the other covered banks were more diversified, but during the Period most of them escalated their financing of commercial property in order to achieve profit growth.  While IL&P remained concentrated on mortgage lending, it was increasingly funded by the wholesale markets.

Governance & Procedures

5.2.3  The primary problem with governance in the majority of the covered banks was not that it was lacking or poorly structured but that, over time, it changed as controls gradually weakened to allow increased growth.  In some cases, management information systems were weak and did not give managers and the board meaningful or complete information.  In particular, inadequate consolidation and categorisation of lending sometimes resulted in an incomplete picture of total or type of property exposures.  In some of the bigger banks, the embedded internal divisional structures made group oversight difficult.  The INBS model was atypical; the Society lacked a number of formal functions usually considered necessary in banks and, in addition, documentation was substandard.

5.2.4  On boards, there appears to often have existed a collegiate and consensual style with little serious challenge or debate.  Among Non-Executive Directors (NED), it appears that the banking knowledge and expertise necessary to assess the lending and funding risks inherent in bank business models was insufficient.  They were therefore formally independent but, in practice, highly reliant on the knowledge, openness and ability of bank management.  In particular many NEDs, but also a number of senior management, seem to have believed that the existence of formal policies, structures and procedures were, on their own, sufficient for the prudent management of the business.  As they came to rely more on sophisticated models, partly in consequence of the introduction of Basle II, many of the basics were neglected.  It appears that senior management and boards did not appreciate how general growth targets affected operations lower down in the organisation.

5.2.5  In Anglo, some board members had significant shareholdings in the bank which indicates that they had particularly full trust in the operations and growth goals of the bank.

Remuneration

5.2.6  Financial incentives, while not the major cause of the crisis, likely contributed to the rapid expansion of bank lending since the incentives did not sufficiently stress modifiers for risk.  There are, however, also other important motivating factors which must be taken into account when assessing the behaviour of individuals.

Lending & Credit

5.2.7  Lending growth was substantial in all covered banks and was largely concentrated in the property sector.  In order to facilitate growth and make banks more competitive, credit and lending policies gradually became more relaxed and were frequently ignored or bypassed with exceptions to policy becoming commonplace.  Furthermore, sector limits and individual exposure limits, where they existed, were regularly exceeded.

5.2.8  Real estate valuations in a rising property market created a ‘confirmation bias’ and frequently went unchallenged in the credit functions.  The practice of equity release reduced the collateral buffers held by the banks and increased their risks accordingly.

Funding, Liquidity & Capital

5.2.9  On joining the EuroZone, Irish banks gained increased access to wholesale funding at a relatively low cost.  As retail and corporate deposits were not sufficient to fund lending growth, wholesale funding enabled the banks to respond to competition and to grow balance sheets and earnings at a pace that banks believed would protect their independence and market share.

5.2.10  Treasury operations, charged with the balanced and prudent funding of asset growth, were also profit centres.  This involved an inherent conflict as the use of cheaper short term funding frequently increased Treasury’s profitability at the expense of longer term funding stability.

5.2.11  There were significant increases in the loan-to-deposit ratios and in wholesale funding-to-total funding ratios.  Furthermore, risks associated with wholesale funding were not fully recognised or understood in many cases.  Banks consistently assumed that the uninterrupted and unlimited access to wholesale funding, at a low or reasonable cost, would remain.  They also believed that the option of securitising eligible portions of their portfolio would always be possible.

Risk Management

5.2.12  Risk management structures proved largely ineffective in prudently managing and controlling rapid growth.  As effective structures would have made high volume targets difficult to achieve, banks allowed their effectiveness to erode over time.  There was also insufficient understanding or acknowledgement of the risks associated with the adopted business strategies or the sector concentrations.  With easy access to funding, there was little effort by or incentive for the banks to diversify their property risks through measures such as syndications or loan selldown.  Furthermore, there was a general belief among bankers and others in political, media and academic circles (including some very influential commentators) that there would be, at worst, a soft landing.

Regulation as Seen by Banks

5.2.13  Banks, clearly somewhat in agreement with the Financial Regulator (FR) itself, believed that they were in a better position than the FR to judge and decide upon what was most prudent in their own operations.  This belief was underpinned by the fact that regulation was ‘light touch’ and seemed to stress consumer issues rather than prudential issues.  There was almost an element of the FR being ‘fobbed off’ by banks that had particularly full confidence in the quality and sophistication of their models and systems.  Subject to this, the FR and its communications were normally, however, accorded proper formal respect.

5.2.14  There were numerous instances of non-compliance with respect to banking regulations and guidelines which went unsanctioned by the FR.  In some cases (Anglo and INBS), where the FR did raise concerns, they sometimes led to little real change and there was little follow through by the FR.  Bank management drew undeserved comfort from the acquiescence of the FR in relation to this non-compliance.

5.2.15  There existed a loop of excessive reliance between the various authorities on the one hand and between accounting standards, internal risk structures, credit grading systems and board sub-committees on the other.  This systemic failure resulted in the dangers inherent in the business models remaining undetected until it was much too late.

5.3  Findings – Authorities

5.3.1  The speed and severity of the crisis was exacerbated by worldwide economic events.  The main reason, however, was the unhindered expansion of the property bubble financed by the banks using wholesale market funding.  Government policies and pronouncements tended to support this expansion.  The attendant risks went undetected or were at least seriously misjudged by the authorities whose actions and warnings were modest and insufficient.

5.3.2  The Irish authorities had the data required to arouse suspicion about trends in the property and financial markets.  The relaxed attitude of the authorities was therefore the result of either a failure to understand the data or not being able to evaluate and analyse the implications correctly.  Both macro-economic and banking data could, particularly when combined, have provided the authorities with an understanding of what was going on.  The Financial Stability Reports (FSR) provided information on individual perceived risks but, in the Commission’s view, the data should have raised greater suspicions by end-2005 or, at the latest, by 2006.

The Financial Regulator

5.3.3  Provided the appropriate structures and processes were in place, the FR’s approach was to trust bank leadership to make proper and prudent decisions.  However, even when problems were identified and remarked upon, the FR did not subsequently ensure that sufficient corrective action was taken.  Thus, even insightful and critical investigation reports tended to have little impact on banking practices.  Furthermore, readily available information on, for instance, sector or borrower concentrations was not sufficiently critically analysed by the FR.  Even if it were accepted that the FR was significantly under-resourced throughout the Period, this would not explain why available information was not acted upon.

5.3.4  It seems remarkable that the FR in practice accepted the severe governance problems in INBS.  Allowing this bank to continue operations without major reforms or sanctions must, on the part of the FR, have reflected either a reluctance to pursue legal action or a profound trust in bank management and the board.  Similarly, the rapid and concentrated lending growth in Anglo, and later in other banks, did not lead to regulatory action, with reliance being placed on management assurances that all was basically well.  The FR continued to accept these assurances, even after the Guarantee decision in late 2008.

5.3.5  The Commission is aware of the view that the FR did not have sufficient powers to intervene.  This view is not persuasive given that the FR could have acted in concert with the Central Bank (CB) and, ideally though perhaps unrealistically, with Government support.  The real problem was not lack of powers but lack of scepticism and the appetite to prosecute challenges.

The Central Bank

5.3.6  The CB chose to rely on the FR appropriately handling individual bank stability issues, much as the FR in turn chose to trust bank leadership.  By implication, unless there were problems in the individual banks, there could not be major stability issues in the system as a whole.  The Financial Stability Report (FSR) was constrained to present benign conclusions with a number of almost routine warnings voiced in the text itself.  Simultaneously, macro-economic data signalling the emergence of the two key risks – growing dependence on foreign funding and the concentration of bank lending in the property sector – did not appear to have caused acute concern.

5.3.7  At least at policy level, the CB seems not to have sufficiently appreciated the possibility that, while each bank was following a strategy that made sense, in the aggregate, when followed by all banks, this strategy could have serious consequences for overall financial stability.  This was a classic macro-economic fallacy that must have been recognised in the CB and it remains unclear why it was not appreciated at senior levels there.  However, there are signs that a hierarchical culture, with elements of self-censorship at various levels, developed in the CB.  Of course, this eventually made it even harder to address the increasing instabilities in the financial market.

5.3.8  The Commission is aware of but disagrees with the view that the CB would not have been entitled to intervene to address stability issues concerning individual banks.  If the CB management had identified or given sufficient weight to macro-economic vulnerabilities, it could and should have initiated discussions with the FR to ensure a deeper analysis of individual banks’ regulatory returns.  However, as neither institution suspected any significant problems this does not appear to have been done.

The Department of Finance

5.3.9  The Department of Finance (DoF) did not, despite its mandate, see itself as concretely involved in financial stability issues; it also did not have the requisite professional staff for this.  There were regular formal contacts with the FR (via the approval process for its budget) and somewhat more frequently with the CB, both in practice responsible for operational stability assessments.  The DoF saw itself as preparing legislation to be implemented by the other authorities, but appears to have avoided addressing other financial market issues unless brought to the table by the FR or the CB (for instance, Credit Union issues during the Period).  This apparently was due to their legally independent status.  The Commission could find no evidence that the DoF formally tried to influence the FR in its work.  The DoF also did not make any efforts to strengthen its own financial market expertise despite crisis management exercises in the EU having shown a need for it among finance ministries.

5.3.10  Had the DoF taken a greater interest in financial market issues early on, preparations for dealing with the financial crisis would have been more comprehensive.  It is well documented that the DoF consistently, though not forcefully enough, supported a less expansive fiscal policy, particularly regarding property market incentives.  It also appears that worries about the developing financial situation were expressed internally from time to time by some DoF staff.  However, nothing came of this as the CB and FR were seen as responsible for financial stability.

The Guarantee Decision

5.3.11  From mid-2007 onwards, co-operation improved between the key institutions involved and some important preparatory crisis management work was undertaken.  However, the view that the only relevant problem was a threat to the liquidity position of the banks remained unchallenged throughout.  There appears to have been no fears and, at most, a modest discussion on possible underlying acute solvency problems.  This is true of the banks themselves, as well as of the authorities.

5.3.12  The discussions for alternative measures before and on September 29, 2008, were conducted on the basis of very deficient information.  The authorities were apparently convinced that bank solvency issues were not pressing or significant, as were the banks themselves, and that it therefore would be possible to resolve the acute liquidity issue.  Furthermore, the liquidity problems appear to have been seen as temporary only and related mainly to international developments.  If more relevant information on and analysis of the underlying position of some of the banks had been available, discussions and policy recommendations may have been very different.

5.3.13  Given the information provided, the Commission understands the Government’s decision to provide a broad guarantee for the banks; if no major solvency problems were expected the Guarantee would not have to be called upon.  However, given the size of the amounts involved as well as the domestic and global uncertainties, it could have been useful to access available temporary funding to gain time to examine more thoroughly the advantages and disadvantages of alternative approaches.  These could have included limiting the scope and duration of the Guarantee.  However, there were concerns that the market would not have acted positively to such a delay at the time.

5.3.14  The lack of information on bank exposures among the Authorities over time had profound implications for the decision actually taken.  Had better information on exposures and thus the risk of future impairments already been readily available in earlier years, government advisors could have suggested, even much before September 2008, that such banks with reasonably foreseeable problems should be taken into public administration immediately and gradually closed or restructured.  Management could have been changed to eliminate further lending and risk-taking.  Banks could, alternatively, have been required to raise additional capital from the markets while it could be accessed; markets still were open for this.  However, authorities continued to believe that banks did not have excessive property exposure and even outside evaluators only gradually came to a different view.  As it turned out, no bank restructuring was contemplated until several months after the Guarantee when plans announced by the Government on a piecemeal basis had proved to be insufficient, thus reducing the credibility of the Irish authorities.

5.3.15  Crisis management in Ireland, therefore, was rendered less than fully effective by long-standing insufficient appreciation of bank exposures on the part of all the authorities.  Decision makers and their various advisors, in autumn 2008, still mainly shared the common view that the banks were, and would remain, solvent.

5.4  Why Did It All Come Together ?

5.4.1  It has been argued in this Report that during the Period the paradigm of efficient financial markets was widely accepted, particularly among developed nations.  Believers in a naïve version of this paradigm would tend to assume that developments in the financial markets, almost by definition, could not be seriously flawed from a systemic point of view.  Furthermore, they would also tend to assume that regulation of the financial markets would reduce innovation and efficiency without improving stability; less and lighter regulation was therefore better.  Since there was widespread international belief in this paradigm, the international nature of the financial crisis, as well as the general unpreparedness of banks and authorities, is easier to understand.

5.4.2  To the extent that this paradigm, in its naïve version, had become widely trusted among Irish financial professionals in private and public institutions, such an assumption may have been made both across institutions and within institutions (strengthened through groupthink).  These assumptions in turn would have led, in the absence of strong and specific proof, to a belief that virtually any market feature or development was benign almost by definition, whether in the property market, the financial market or, indeed, in any individual bank.  In effect, if it was financed by somebody, it must almost by definition be sound.

5.4.3  However, it is the belief of the Commission that stronger, irrational forces were also present.  The widespread consensus as well as the confidence, until the very last moment in late 2008, that everything would end relatively well points to the existence of a national speculative mania in Ireland during the Period, centred on the sale and acquisition of property.  Warning signs were ignored as continuing economic stability was confidently assumed.  Traditional values and practices were seen as less relevant in the new financial order. When the mania ended, participants had difficulty in accepting blame for their own part in it since everything had seemed so normal and acceptable at the time.

5.4.4  Given this background, it is easier to understand why developing and clearly visible problems in the Irish banks and markets could remain ignored by so many.  It also helps explain why banks so readily crowded into speculative property lending, which appeared to be a certain road to success (herding on the mania).  It makes it easier also to understand why the authorities, despite being provided with information on increasing fragilities in the banking system, could remain complacent for so long.  Finally, it goes some way towards explaining why the crisis, despite being the culmination of a number of clearly unsustainable developments, was so totally and generally unexpected almost up to the very last minute.

5.4.5  The general acceptance of the paradigm of efficient markets also throws light on why most international institutions, foreign analysts, rating agencies, lenders, authorities and commentators were as relaxed about Irish developments as people in Ireland themselves.  It is argued that the long period of benign conditions in Ireland played a substantial role in convincing observers that developments were stable.  Furthermore, if large numbers of people also believed in the naïve interpretation of the efficient financial markets paradigm, very few developments in the financial markets would appear unsound or imprudent to them anymore.

5.4.6  It may seem remarkable that people in Ireland (and elsewhere) with extensive experience in regulating and operating in financial markets may have accepted such fairly extreme assumptions for their daily work.  It has been argued that various bandwagon effects (see Section 1.6 above) may have played an important role in this, as may the fact that international supervisory and banking peers abroad also accepted these assumptions at least to some degree.

5.4.7  Ireland’s systemic banking crisis would have been impossible without a widespread suspension of prudence and care by those responsible for bank management as well as by those charged with ensuring responsible financial conduct.  Investors and other borrowers as well as bank executive management have an interest in doing deals with each other for profit and for glory; what went missing was prudence in ensuring that such deals were soundly based.  Bank boards and public authorities, whose role it is to make it difficult for the dealmakers to go overboard, continued with their traditional work.  However, their authority and, unfortunately, their vigilance as watchdogs were in decline.  The stability of markets was becoming more dependent on bank management and their risk management systems.

5.4.8  The majority of bank executive management, despite their apparent superior technical knowledge of the business, chose to follow the new but unsustainable banking model.  Lending was seen (and rewarded) as selling a loan or service rather than as acquiring a risky asset.  Banks’ management and boards embraced a lending sales culture at the expense of prudence and risk management.  This view then spread down through the ranks, partly through the effects of volume targets and bonus systems and partly through indoctrination, causing the massive run-up in risky assets.

5.4.9  The external watchdogs generally remained inactive as management’s new banking model was introduced and implemented.  There was no strong external reaction when management prudence eroded within the Irish banking system, as evidenced by the very rapid growth in lending and wholesale funding.  The Commission has not found any clear and documented cause for the simultaneous lack of action by various watchdog authorities; it can therefore offer only the partly hypothetical behavioural factors described earlier in this section.

5.5  Specific Irish Features

5.5.1  The Commission proposes that the crisis points towards some interesting features of how Irish society appears to have functioned during the period 2003 – 2009.  It is considered that these features may be specific only to Ireland and, if present, they would further help explain why there was little recognition and even less prevention of the property mania in Ireland.

5.5.2  Firstly, there seems to have been little suspicion or doubt among Irish decision makers that the path being followed was the correct one.  A great number of persons in very responsible management and watchdog positions insisted that, until the end, they had no idea that a serious and acute problem with lending and funding exposures in the banking system even existed.  In the stated absence of this knowledge, little was done to prevent the crisis.  This is true of politicians (whether in government or opposition), central bankers, regulators, department officials and bank board members as well as influential analysts in the media, academia and financial enterprises.

5.5.3  The Commission has been widely assured by bank management, non-executive board members and others that the problems in banks’ loan books came as a complete surprise.  There is regret, incredulity and guilt among them at the lending and funding policies pursued and the lack, at the time, of any recognition of what was happening.  The credibility of their assertions is increased by the fact that a number of them personally suffered substantial losses in the crisis, easily avoidable if advance warnings had been available and recognised.

5.5.4  This suggests to the Commission that, in the absence of a liquidity crisis at this time, things would have continued much as before in Ireland, at least for a time.  The property market would have continued to expand, though at a slowing pace, and banks’ portfolios of property loans would have continued to grow.  Therefore, banks would have had time to become even more dependent on market funding and even more exposed to the effect of any doubt regarding the value of their assets.  At some point, financial markets would have realised the risks on the Irish banks’ balance sheets.  While a soft landing always would have remained a possibility in principle, overall international experience with the bursting of property bubbles, the general lack of foresight as well as the scale of the exposures seems to argue against it.

5.5.5  Secondly, there was a conspicuous lack of timely critical debate and analysis by bank analysts within institutions and among the public at large.  The complacent views of Government, other authorities, banks and their customers appear to have been very well aligned with each other.  Public policy and discourse seems to have almost unanimously accepted and encouraged views and practices that later proved disastrous.  Examples are not difficult to find; for instance, the pervasive assumption of continued growth, the failure to see growing indebtedness as a serious policy problem, the ‘soft landing’ scenario and, finally, an unwillingness to recognise the existence of long-standing problems in some banks.  When alarms were finally sounded, they were too late for meaningful action; the problem loans were already on the banks’ books and were largely illiquid.

5.5.6  The very limited number of warning voices was largely ignored. Attempts by banking insiders during the Period to send cautionary signals to market participants about escalating property values were dismissed as ill informed and wrong.  Doubters (the few that identified themselves as such to the Commission) in the main grew unsure over the years when nothing seemed to go wrong.  It also appears that some stayed silent in part to avoid possible sanctions.  The Commission suspects, on the basis of discussions held with a wide number of people, that there may have been a strong belief in Ireland that contrarians, non-team players, fractious observers and whistleblowers would be informally (though sometimes even publicly) sanctioned or ignored, regardless of the quality of their analysis or their place in organizations.

5.5.7  Thirdly, many institutions in the broader financial sector seem to have operated in silos.  There appears to have been little appetite or opportunity for looking at ‘the bigger picture’ since, as related earlier, each part of that picture was ‘owned’ by different authorities or, within the banks, by specific departments.  While clear divisions of responsibility are important, in Ireland such divisions appear to have reduced also the desire or (legalistically argued) the ability to co-operate effectively.

5.5.8  For organisational silos to work well there must either be strong and frank communication between their leaders or, alternatively, little interdependence between them.  It is unclear which one of these, if any, was believed to operate.  One possible consequence of this ‘silo think’ was that the DoF, discouraged from interfering in the work of the independent FR and CB, remained seriously underweight in professional financial expertise and engagement.  The Commission considers it likely that the lack of overall analysis and responsibility in so many Irish public institutions may have allowed a number of warning signs to remain undetected.  Indeed, overlapping interest is not necessarily a bad thing as long as responsibilities remain clearly differentiated.

5.5.9  Fourthly, adhering to either formal or traditional, often voluntary, constraints and limits on banking and finance, does not seem to have been greatly valued in Ireland during the Period.  The wide acceptance of the new financial paradigm may have amplified any such tendency as it applies to the banking sector.  The consequences for financial stability are, in any case, severe in the longer term.

5.5.10  Regulations, rules, procedures, constraints and sanctions exist primarily to prevent management and staff from going overboard during good times.  The better and longer the good times are, the more important it is that these safeguards exist and are adhered to.  If they do not exist, or are ignored, exposures can grow dramatically as confidence grows and risk is underestimated.  The risk of systemic disturbances therefore increases greatly if political leaders and public institutions do not insist on these safeguards being consistently and efficiently followed.  Therefore, any greater than average lack of willingness in Ireland to follow rules and constraints is likely to make for a more fragile financial system than elsewhere in the long run.

5.5.11  The Commission considers that it cannot have remained a secret from banking and audit professionals that time-honoured prudential limits and procedures were gradually falling into disuse, particularly in some banks.  Examples and indications of serious governance and prudential problems were clearly available to professional observers, including the FR.  Increases in credit concentration, loan size and volumes, as well as changes in funding structures, were not concealed.  They could also have been inferred from macro-economic data.  Information about ongoing and accelerating property speculation was common in everyday Irish life.

5.5.12  The Commission accepts that the new, widespread paradigm, as well as the mania in the Irish property market, could create strong pressures for conformity in all the institutions discussed in this Report.  However, while this could explain such behaviour, it does not provide an excuse for those who conformed.  Only a naïve and opportunistic interpretation of the paradigm, together with a lack of either relevant experience, training or historical knowledge, could possibly have argued for a major dismantling of the traditional prudential safeguards.  History is replete with examples of what happens when bankers, authorities and others come to believe that ‘this time it’s different’.

5.5.13  The Commission therefore has reluctantly come to the conclusion that at least some of the financial market professionals at the time must have entertained private, undisclosed doubts on the sustainability of banks’ lending and funding policies.  However, for various reasons ‘the dance had to go on’.  Similarly, it seems likely that the public and private watchdogs remained less active than required, not only because they did not know, but also because it was not publicly acceptable, legally necessary or prudent to act at the time.

5.5.14  During much of the Period, Ireland was still seen as a success story that provided a large number of its inhabitants with self-esteem as well as rising incomes, wealth and welfare.  Anybody seriously interfering with this process would expect to be publicly castigated as causing the very distress, loss and crisis that they would have been trying to prevent.  Instead, by allowing the party and deal making to continue, management, investors and public and private watchdogs participated in its positive but temporary gifts.

5.5.15  That said, the Commission is not suggesting that financial professionals in Ireland consciously decided to let banks get into trouble.  As indicated earlier, it is much more likely that professional suspicions were explained away or suppressed, in light of the new financial dogma and a long period of good times, in order not to appear fractious, unprofessional or alarmist among colleagues, superiors and others who were believed to possess equal or even superior knowledge.

5.6  Lessons to be Learned from the Irish Experience

5.6.1  As already noted above (Section 1.4), emergence of a systemic banking crisis requires that a number of important safeguards all become ineffective simultaneously.  The likelihood of this is not large, since some part of society and the banking sector is likely to remain vigilant even if other parts do not.  However, as has been seen in a number of countries and regions before, at times the unlikely occurs.

5.6.2  The Commission has, having extensively examined the most relevant available documentation as well as interviewed very many people involved in the run-up to the crisis, explained the crisis essentially as a consequence of applying a naïve version of the efficient market paradigm, supported by groupthink and herding.  This helped create and strengthen a mania in the Irish property market.  Professionals and non-professionals alike became convinced, and convinced each other, that financial markets were stable by themselves, despite historical evidence to the contrary.  The implications of this conviction seemed to be in the immediate interest of the overwhelming part of Irish society.  The resulting activity was something that, later on, seemed quite unsustainable, puzzling and contrary to prudential requirements and common sense.

5.6.3  The development of excess indebtedness and property market overheating appears to have been fairly common in many countries in recent years and decades.  This Report contains a short indication of how a groupthink and herding mechanism could support a theory of recurring financial cycles.  The Commission has detected signs of such a mechanism both within Irish banks and within Irish public authorities during the run-up to the crisis.  This mechanism may have been particularly strong because of the widespread existence of a belief in self-regulating, efficient markets.

5.6.4  If this hypothesis is accepted, an important implication emerges.  Because the real reason for the crisis is the spread of an ultimately irrational point of view, regulations and watchdog institutions cannot be counted on to be efficient preventers of a systemic crisis.  As has been seen in Ireland and other countries, central bankers and regulators embraced much the same paradigm as the market participants and adapted their policies to their convictions.  The result, as shown by the crisis itself, was that no effective brake on risk-taking existed for years.  It does not appear wholly unfair to propose that this is what may happen also in the future if and when another new financial or banking paradigm appears.  Many of the very reforms that recently have been undertaken, at short notice, to shore up the functioning of the present financial system could turn out, once again, to be ineffective.

5.6.5  Permanently improving financial stability therefore should perhaps, instead, be done in ways that do not necessarily demand the unfailing attention, prescience or vigilance of ministries, central banks or regulators.  Arguably, the most important goal of such a system should be to directly reduce the likelihood of serious disturbances to the real economy.  A number of suggestions have been made to primarily address this problem.  They seem to have been made mostly by policy makers and practitioners; academic economists have often remained unconvinced by at least the more radical of these suggestions.

5.6.6  The prevalence of problem banks that are large in relation to both the economy and the sovereign (too big to fail and too big to save) suggests that measures limiting the size and growth of banks and the banking system in relation to the economy could be useful.  One alternative, not widely supported due to its arbitrary nature, would be to directly set a limit on the absolute size of a bank’s balance sheet.  Other alternatives, briefly discussed below, are indirect and would operate by raising the cost of expanding the (properly risk-weighted) balance sheet.  Such alternatives include: a high and progressive minimum capital requirement (set nationally); limiting implicit government subsidies to certain bank activity clusters only; and raising the potential default costs for investors in banks.  These alternatives can, of course, be combined.

5.6.7  Radically increasing the capital requirements of banks would reduce their vulnerability to both funding and solvency shocks.  Since banks would need much more capital to operate, the resulting buffer of private capital would be larger in case of a default.  Capital requirements could also be made progressive in relation to the size of the balance sheet.  Since different countries would be able to support different-sized banks, such reform would have to be nationally determined.  Competitiveness would be affected, creating pressure for an internationally agreed formula.  As indicated by the discussions around Basel III, the issues of definition and of interaction with other prudential constraints are always significant.  Problems of acceptance are likely to arise particularly in large countries able to support large (potentially problem) banks.

5.6.8  Banks are routinely provided with a number of indirect government subsidies.  These include, inter alia: entry-limiting licensing requirements; monopoly on gathering retail deposits; access to central bank facilities; and the possibility of government assistance.  Because such subsidies are designed to make the system more stable it would not be useful to eliminate them.  What may prove feasible, however, is to delimit types of allowed funding and lending activities in a way that makes government assistance dependent on the type of banking license provided.  This would limit the part of the banking system explicitly supported by the sovereign and increase ex ante the responsibility of private investors for the rest of the system.  Such a separation would need some way of, additionally, severely limiting both ownership and funding links between different types of license holders.  Competition issues would create pressure for international agreement on how various activities are defined and which may or may not be publicly assisted.  Similar, though not identical, effects could be achieved through sufficiently divergent capital requirements for various asset classes.  Nevertheless, if license groups are appropriately defined, much of the functionality of the present system could remain.

5.6.9  Accepting special restructuring regimes for financial enterprises would make it possible to address bad loans before the enterprise is insolvent.  Introducing mandatory, collective action clauses for bank and sovereign bonds would reduce the supply of unsustainably cheap bank funding, as well as weaken any implicit demand on and credibility of sovereigns to protect bondholders.  Both these features may be introduced more generally already as a result of the present crisis.

5.6.10  The costs to the economy of such reforms are undeniable; higher cost of credit (though mitigated by lower risk premia) and concentration of the banking business of large international enterprises to a smaller number of major international banks being the two most obvious.  However, given the losses suffered through systemic banking crises over recent decades, this might be an acceptable price to pay for less systemic fragility and attendant resource misallocations.  There is no free lunch and increased financial stability will always have costs.  In the end, of course, the extent to which the present crisis causes a rethink on the basic model for maintaining a stable financial system will remain a very political decision with a major impact on important and influential financial institutions.

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POSTSCRIPT

2011-10-16:  Two days ago, on 14 October 2011, in Dublin … the Organization for Economic Co-Operation and Development (OECD)  presented its latest Economic Survey of Ireland.

Becoming a Mature Independent National State, within a still developing system of shared sovereignty, balanced across all aspects of European Society … the European Union (EU) … must, sometimes, be a painful experience …

Organization for Economic Co-Operation and Development

OECD Economic Surveys – Ireland (October 2011)

OVERVIEW SUMMARY

The Irish Economy was hit by a severe crisis in 2008, after over a decade of strong growth that propelled Ireland to the fourth highest level of GDP per capita in the OECD.  Initially growth was well founded on solid productivity increases.  However, during a period of low-cost funding on international markets and low risk aversion globally, the expansion became increasingly reliant on a speculative housing bubble financed by lax bank lending standards and excessive credit expansion that collapsed in 2008 in the midst of the global economic and financial crisis.  During the latter part of the boom, the acceleration of wages eroded international cost-competitiveness and the banking system became over-extended and, once the bubble burst, would have been insolvent without state support.  Capital injections to help resolve the crisis have resulted in a sharply higher public debt.  In the aftermath, households have been hit by wage cuts, job losses, tax increases and falling house prices, though living standards and perceptions of wellbeing remain high by international standards.

Since 2008, the government has carried out a very sizeable fiscal consolidation.  This effort is continuing.  The three-year adjustment programme with financial support from the International Monetary Fund (IMF) and the European Union (EU) is on track and has started to tackle the roots of the imbalances.  Following comprehensive stress tests, the banking system has been recapitalised, but the banks still require liquidity support from the Euro System.  Good progress is being made to cut the fiscal deficit, but more needs to be done.  Against a challenging international backdrop of contagion risk and uncertainty about the policy of euro area governments on sovereign debt, financial-market sentiment towards Ireland worsened considerably but did improve somewhat during the summer.  The crisis caused a sharp rise in joblessness and large numbers of young less-educated males remain unemployed.  The risk is that joblessness becomes persistent, which could undermine the social consensus that is underpinning the economic and fiscal adjustment.  A modest recovery is underway, driven by gains in competitiveness and increases in exports, but it comes with significant downside risks associated with market fears regarding financial stability in the Euro Area.  While government gross debt as a share of GDP has reached one of the highest levels in the OECD area and official financial support remains indispensable in the near term, an orderly return towards a more balanced financial position is possible, provided that tight fiscal policies and wage restraint are in place sufficiently long.  To increase the chances of success, the authorities need to continue vigorously implementing the measures required to complete the unwinding of imbalances, ensure that the burden is fairly shared and capitalise on the structural strengths of the Irish economy.  These include its business-friendly environment, its flexible labour markets and a skilled labour force.

This Survey argues that the authorities should:

Persevere on the Path of Fiscal Consolidation

  • Continue to fully comply with the conditions and targets of the EU-IMF Programme ;
  • Reduce the budget deficit to below 3% of GDP by 2015 ;
  • Reduce the budget deficit faster than required by the Programme to help regain credibility in financial markets if economic growth allows ;
  • Focus spending restraint on public-sector efficiency, welfare reform and scaling back infrastructure projects ;
  • Broaden the tax base by reducing tax expenditures and proceeding with the planned property taxes ;
  • Strengthen the fiscal framework by focusing on the debt-to-GDP target to be met by a specified date; legislating multi-year budget plans; and introducing a nominal expenditure ceiling.

Exit from the Banking Crisis and Restore the Banking System to Health

  • As financial market confidence returns, restrict the bank eligible liability guarantee scheme to a narrower range of liabilities, with fees that are commensurate to risk ;
  • To help prevent future crises, focus supervision on a set of indicators including: a simple leverage ratio; loan-to-value ratio; loans-to-income ratio; and capital requirements linked to bank size.  Also establish a credit register to prevent excessive exposures ;
  • To prevent the recurrence of problems with regulatory forbearance, adopt a process where the breach of identified thresholds, such as excessive growth in overall lending, would accelerate a formal assessment of what, if any, corrective action may be required.

Prevent High Unemployment from Becoming Structural

  • Engage the employment services more actively with job seekers, and require participation in relevant training and job search in return ;
  • To promote return to work, relate unemployment benefits to unemployment duration ;
  • Review the work incentive effects of other welfare benefits, especially housing allowances ;
  • Better attune training programmes to labour market needs; in particular enlarge the set of trades covered by apprenticeships and temporarily close apprentice admission in construction trades ;
  • Extend the duration of the current cut in employers’ social security contributions.

Further Improve Competitiveness in Order to Support Export-led Growth

  • A further decline in unit labour cost is essential to support exports ;
  • Enhance competition in the electricity sector by clearly separating generation, transmission, distribution and supply ;
  • Focus feed-in electricity tariff support on the most cost-efficient renewable sources ;
  • Introduce civil fines in competition law, so as to reduce incentives for anti-competitive behaviour ;
  • To enhance the quality of education, systematically evaluate teachers’ and schools’ performance.

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END

Recent Terenure Terraced Housing Fires – Party Wall Failures !!

Posted by CJ Walsh

2011-04-06:  Further to my earlier Post, dated 11 November 2010 … specifically, the photographs in that Post which showed that there was NO Fire and Smoke Separation between a house and its neighbouring property … and my statement that those photographs “could have been taken in almost any house, anywhere in the country” … so widespread is this problem …

On Friday afternoon last, 1 April 2011 … fire spread through a long terrace of houses in the Dublin City Suburbs of Terenure.  Luckily, no one was killed … but it was reported that some people were injured, including a firefighter.  This was very far from being an April Fool’s Day Joke for the owners and occupants of the buildings.  The fire losses for everyone concerned, both direct and indirect, were enormous … and will continue to increase for quite some time.

The unsustainable losses to society, waste of valuable resources and environmental damage … will never be quantified and will remain unknown …

Colour photograph showing the cordoned-off scene in the aftermath of the fires at a Terrace of Housing in Terenure, Dublin City. In the foreground, Gardaí are keeping a watchful eye. Photograph taken by CJ Walsh. 2011-04-04. Click to enlarge.
Colour photograph showing the cordoned-off scene in the aftermath of the fires at a Terrace of Housing in Terenure, Dublin City. In the foreground, Gardaí are keeping a watchful eye. Photograph taken by CJ Walsh. 2011-04-04. Click to enlarge.

I will make no comment here about the fires, how they started, or any of the people involved on the day of the fire. 

Colour photograph showing the Detail of a Party Wall ... the wall separating one property from another ... in the aftermath of the fires at a Terrace of Housing in Terenure, Dublin. Photograph taken by CJ Walsh. 2011-04-04. Click to enlarge.
Colour photograph showing the Detail of a Party Wall ... the wall separating one property from another ... in the aftermath of the fires at a Terrace of Housing in Terenure, Dublin. Photograph taken by CJ Walsh. 2011-04-04. Click to enlarge.

What I can say, with clarity and precision, is that the Party Walls between the different properties utterly failed to perform, i.e. to provide adequate Fire Separation between those properties … in other words, to resist the passage of heat, smoke and flame from one side of the Party Wall to the other … both during the fire, and for a minimum period afterwards … during the ‘cooling phase’.

I was shocked at how these fires spread through the long terrace … but I was not surprised !

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Why has this serious problem with our housing stock been allowed to fester for so long ???

Most of the Answer lies not in the Relevant Functional Requirements of Part B of the Irish Building Regulations … but in this Diagram 13 below, which is contained in Technical Guidance Document B (2006): ‘Fire Safety’.  The details shown are technically incompetent, and will NOT work in a ‘real’ fire incident.  The reference to Paragraph 3.2.5.10 at the top right hand corner of the diagram is an error … the reference should be to Paragraph 3.2.5.11: ‘Junction of Compartment Wall and Roof’.

Black and white graphic image showing part of Diagram 13: 'Junction of Compartment Wall with Roof' ... in Irish Building Regulations Technical Guidance Document B: 'Fire Safety'. These details are technically incompetent. Click to enlarge.
Black and white graphic image showing part of Diagram 13: 'Junction of Compartment Wall with Roof' ... in Irish Building Regulations Technical Guidance Document B: 'Fire Safety'. These details are technically incompetent. Click to enlarge.

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Status of the Guidance Text in Ireland’s TGD B: ‘Fire Safety’

‘ The materials, methods of construction, standards and other specifications (including technical specifications) which are referred to in this document are those which are likely to be suitable for the purposes of the Regulations.  Where works are carried out in accordance with the guidance in this document, this will, prima facie, indicate compliance with Part B of the Second Schedule of the Building Regulations.  However, the adoption of an approach other than that outlined in the guidance is not precluded provided that the relevant requirements of the Regulations are complied with.’   [Page 2 of Technical Guidance Document B]

It is of critical importance to know and understand that Guidance Text in the Irish Technical Guidance Documents is NOT prescriptive regulation, and it is NOT ‘deemed-to-satisfy’.  All of the Technical Guidance Documents contain errors … they are not infallible documents … and, with sufficient time, technical guidance becomes outdated and inadequate.  This is routine, and to be expected.

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Similar Details to those in Diagram 13 above, which are shown in the various editions of the HomeBond House Building Manual, are equally incompetent.  Furthermore, before the First Edition of the Manual was ever published in the early 1990’s … I stated this fact, very directly, to the individual having responsibility for leading the Manual Project.

And furthermore … Similar Details, which are contained in Diagram 11 of the British (England & Wales) Building Regulations Approved Document B (2006): ‘Fire Safety’ … Volume 1 – Dwellinghouses, are just as incompetent as the Irish details.  This is compellingly relevant, at the present time, since word on the jungle drums is very strongly indicating that our Department of the Environment, Heritage & Local Government (DEHLG) is seriously considering a major updating of Ireland’s Technical Guidance Document B.  And just give one guess where they will go for the model template ??!!??   Ah, go on … go on … go on … go on … guess !!!

The Rest of the Answer can be put down to the Poor Technical Skills of Designers, Bad Workmanship on Site, building with Materials and Products which are not ‘Fit for their Intended Use’ … and an Inadequate National System of Local Authority and/or Independent Technical Control.

Check out the Party Walls in your Attic Roof Spaces today !!

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END

Personal Ethics – The Heart of Sustainability Implementation !

Posted by CJ Walsh

2011-02-15 …

Regular visitors, here, will have very little doubt about my understanding of Sustainable Human & Social Development … which is an intricate, open, dynamic and continuously evolving concept.  And about my firm conviction that Sustainable Design involves far more than merely substituting the word ‘sustainable’ … for ‘green’, ‘ecological’ or ‘environment-friendly’ … or any number of insipid alternatives which still regularly appear in the popular and/or academic media !   Who, in their right minds, wouldn’t be confused ?!?

‘Sustainability’ is Not … and Cannot … be just another graft onto Conventional Design Practice … whether that be Spatial Planning, Architectural / Engineering / Industrial Design or e-Design !

Sustainable Design & Construction … is the creative and ethical response, in resilient built or wrought (worked) form, to the concept of ‘Sustainable Human & Social Development’.

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SUSTAINABILITY IMPLEMENTATION

Opinion:  At the Heart of Implementation which is Authentically ‘Sustainable’ … (a colleague of mine is very fond of using that word ‘authentic’) … must lie a Personal Code of Ethics.  By that, I do Not mean … and I am Not referring to … a Professional Code of Conduct … which is mainly about the self-protection and self-preservation of a professional class !

Everyday Reality:  If we examine, for a moment, two interesting examples … Climate Change Mitigation & Adaptation or the 9-11(2001) Collapses of World Trade Center Buildings 1, 2 & 7 in New York … such is the great time-lag between general societal recognition of a critical design challenge … and then, the passing of relevant national legislation which can really only demarcate a minimal threshold of performance … and next, the associated production of standardized design guidelines … and finally, the imposition of effective monitoring and verification procedures … that the only practical approach is to base Sustainability Implementation on a robust Personal Code of Ethics … with an overt emphasis on Continuing Professional Development (CPD).

I hasten to add that this is not how we (society) are currently educating the design disciplines … and this is not how the professional institutes are operating.

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PERSONAL CODE OF ETHICS

For many years, in my presentations around Europe, the Arab Gulf Region, India and South America … I have been actively promoting the WFEO/FMOI (UNESCO) Model Code of Ethics as a suitable template for use by all of the design-related disciplines.  Recently, however, our Organization … Sustainable Design International … has undertaken a major review of this 2001 Code, and produced a 2011 Update which tackles the following matters of major concern in our world of shameful waste and social inequality:

  • Sustainable Human & Social Development ;
  • Climate Change Mitigation & Adaptation ;
  • Strengthening the Voice of Vulnerable Social Groups, particularly People with Activity Limitations.

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WFEO/FMOI (UNESCO)

World Federation of Engineering Organizations – Fédération Mondiale des Organisations d’Ingénieurs

MODEL CODE OF ETHICS

Since 1990, WFEO/FMOI has worked to prepare a Code of Ethics under the supervision of Donald Laplante (Canada), David Thom (New Zealand), Bud Carroll (USA), and others.  It is expected that the Model Code, adopted in 2001, will be used to define and support the creation of codes in member and related professional institutions.  This version of the Model Code was updated by C.J. Walsh (Ireland) in 2011.

CONTENTS

                   I.            BROAD PRINCIPLES

II.            PRACTICE PROVISION ETHICS

III.            ETHICS OF SUSTAINABLE ENGINEERING

IV.           CONCLUSION

INTERPRETATION OF THE CODE

  • Sustainable Development & Climate Change
  • Protection of the Public, and the Natural Environment
  • Faithful Agent of Clients and Employers
  • Competence & Knowledge
  • Fairness and Integrity in the Workplace
  • Professional Accountability & Leadership

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WFEO/FMOI MODEL CODE OF ETHICS

I.  BROAD PRINCIPLES

Ethics is generally understood as the discipline or field of study dealing with moral duty or obligation.  This typically gives rise to a set of governing principles or values, which in turn are used to judge the appropriateness of a particular conduct or behaviour.  These principles are usually presented either as broad guiding principles of an idealistic or inspirational nature or, alternatively, as a detailed and specific set of rules couched in legalistic or imperative terms to make them more enforceable.  Professions which have been given the privilege and responsibility of self regulation, including the engineering professions, have tended to opt for the first alternative, espousing sets of underlying principles as codes of professional ethics which form the basis and framework for responsible professional practice.  Arising from this context, professional codes of ethics have sometimes been incorrectly interpreted as a set of ‘rules’ of conduct intended for passive observance.  A more appropriate use by practicing professionals is to interpret the essence of the underlying principles within their daily decision-making situations in a dynamic manner, responsive to the needs of the situation.  As a consequence, a code of professional ethics is more than a minimum standard of conduct ;  rather, it is a set of principles which should guide professionals in their daily work.

In summary, the Model Code presented herein elaborates the expectations of engineers and society in discriminating engineers’ professional responsibilities.  The Code is based on broad principles of truth, honesty and trustworthiness, respect for human life and social wellbeing, fairness, openness, competence and accountability.  Some of these broader ethical principles or issues deemed more universally applicable are not specifically defined in the Code, although they are understood to be applicable as well.  Only those tenets deemed to be particularly applicable to the practice of professional engineering are specified.  Nevertheless, certain ethical principles or issues not commonly considered to be part of professional ethics should be implicitly accepted to judge the engineer’s professional performance.

Issues regarding protection of the natural environment, climate change mitigation and adaptation, and sustainable development know no geographical boundaries.  The engineers and citizens of all nations should know and respect the ethics of sustainability.  It is desirable, therefore, that engineers in each nation continue to observe the philosophy of the Principles of Sustainable Ethics, as delineated in Section III of this code.

II.  PRACTICE PROVISION ETHICS

Professional engineers shall:

  • hold paramount the safety, health and wellbeing of the public, particularly people with activity limitations, indigenous peoples and other vulnerable groups in society … and the protection of both the natural and the built environments in accordance with the Principles of Sustainable Human & Social Development ;
  • promote health and safety within the workplace ;
  • offer services, advise on or undertake engineering assignments only in areas of their competence, and practice in a careful and diligent manner ;
  • act as faithful agents of their clients or employers, maintain confidentially and disclose conflicts of interest ;
  • keep themselves informed in order to maintain their competence, strive to advance the body of knowledge within which they practice and provide opportunities for the professional development of their subordinates and fellow practitioners ;
  • conduct themselves with fairness, and good faith towards clients, colleagues and others, give credit where it is due and accept, as well as give, honest and fair professional criticism ;
  • be aware of and ensure that clients and employers are made aware of the environmental and socio-economic consequences of actions or projects, and endeavour to interpret engineering issues to the public in an objective and truthful manner ;
  • present clearly to employers and clients the possible consequences of overruling or disregarding engineering decisions or judgment ;
  • report to their association and/or appropriate agencies any illegal or unethical engineering decisions or practices of engineers or others.

III.  ETHICS OF SUSTAINABLE ENGINEERING

Engineers, as they develop any professional activity, shall:

  • try with the best of their ability, courage, enthusiasm and dedication, to obtain a superior technical achievement, which will contribute to and promote a healthy and agreeable surrounding for all people, including indigenous peoples and other vulnerable social groups, in open spaces as well as indoors ;
  • strive to accomplish the beneficial objectives of their work with the lowest possible consumption of raw materials and energy and the lowest production of wastes and any kind of pollution ;
  • discuss in particular the consequences of their proposals and actions, direct or indirect, immediate or long term, upon human health, social equity and the local culture and system of values ;
  • study thoroughly the environment that will be affected, assess all the impacts that might arise in the structure, dynamics and aesthetics of the eco-systems involved, urbanized or natural, as well as in the pertinent socio-economic systems … and select the best alternative for development which is environmentally sound, resilient to climate change and sustainable ;
  • promote a clear understanding of the actions required to restore and, if possible, to improve the environment that may be disturbed, and include them in their proposals ;
  • reject any kind of commitment that involves unfair damages for human surroundings and nature, and aim for the best possible technical, socio-economic, and political solution ;
  • be aware that the principles of eco-system interdependence, biodiversity maintenance, resource recovery and inter-relational harmony form the basis of humankind’s continued existence and that each of these bases poses a threshold of sustainability that should not be exceeded.

IV. CONCLUSION

Always remember that war, greed, misery and ignorance, plus natural disasters and human-induced pollution, climate change and destruction of resources, are the main causes for the progressive impairment of the environment and that engineers, as active members of society, deeply involved in the promotion of development, must use our talent, knowledge and imagination to assist society in removing those evils and improving the quality of life for all people, including indigenous peoples and other vulnerable groups.

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INTERPRETATION OF THE WFEO/FMOI MODEL CODE

The interpretive articles which follow expand on and discuss some of the more difficult and inter-related components of the Code, especially with regard to the Practice Provisions.  No attempt is made to expand on all clauses of the Code, nor is the elaboration presented on a clause-by-clause basis.  The objective of this approach is to broaden the interpretation, rather than narrow its focus.  The ethics of professional engineering is an integrated whole and cannot be reduced to fixed ‘rules’.  Therefore, the issues and questions arising from the Code are discussed in a general framework, drawing on any and all portions of the Code to demonstrate their inter-relationship and to expand on the basic intent of the Code.

Sustainable Development & Climate Change

Engineers shall strive to enhance the quality, durability and climate change resilience of the Human Environment (including the built, social, economic and virtual environments), and to promote the Principles of Sustainable Human & Social Development.

Engineers shall seek opportunities to work for the enhancement of safety, health, and the social wellbeing of both their local community and the global community through the practice of sustainable development.

Engineers whose recommendations are overruled or ignored on issues of safety, health, social wellbeing, or sustainable development, shall inform their contractor or employer of the possible consequences.

Protection of the Public, and the Natural Environment

Professional Engineers shall hold paramount the safety, health and wellbeing of the public, including people with activity limitations, indigenous peoples and other vulnerable groups in society … and protection of the natural environment.  This obligation to the safety, health and wellbeing of the general public, which includes his/her own work environment, is often dependent upon engineering judgments, risk assessments, decisions and practices incorporated into structures, machines, products, processes and devices.  Therefore, engineers must control and ensure that what they are involved with is in conformity with accepted engineering practices, standards and applicable codes, and would be considered safe based on peer adjudication.  This responsibility extends to include all and any situations which an engineer encounters, and includes an obligation to advise the appropriate authority if there is reason to believe that any engineering activity, or its products, processes, etc., do not conform with the above stated conditions.

The meaning of paramount in this basic tenet is that all other requirements of the Code are subordinate, if protection of public safety, the natural environment or other substantive public interests are involved.

Faithful Agent of Clients and Employers

Engineers shall act as faithful agents or trustees of their clients and employers with objectivity, fairness and justice to all parties.  With respect to the handling of confidential or proprietary information, the concept of ownership of the information and protecting that party’s rights is appropriate.  Engineers shall not reveal facts, data or information obtained in a professional capacity without the prior consent of its owner.  The only exception to respecting confidentially and maintaining a trustee’s position is in instances where the public interest or the natural environment is at risk, as discussed in the preceding section ;  but even in these circumstances, the engineer should endeavour to have the client and/or employer appropriately redress the situation, or at least, in the absence of a compelling reason to the contrary, should make every reasonable effort to contact them and explain clearly the potential risks, prior to informing the appropriate authority.

Professional Engineers shall avoid conflict of interest situations with employers and clients but, should such conflict arise, it is the engineer’s responsibility to fully disclose, without delay, the nature of the conflict to the party/parties with whom the conflict exists.  In those circumstances where full disclosure is insufficient, or seen to be insufficient, to protect all parties’ interests, as well as the public, the engineer shall withdraw totally from the issue or use extraordinary means, involving independent parties if possible, to monitor the situation.  For example, it is inappropriate to act simultaneously as agent for both the provider and the recipient of professional services.  If a client’s and an employer’s interests are at odds, the engineer shall attempt to deal fairly with both.  If the conflict of interest is between the intent of a corporate employer and a regulatory standard, the engineer must attempt to reconcile the difference, and if that is unsuccessful, it may become necessary to inform his/her association and the appropriate regulatory agency.

Being a faithful agent or trustee includes the obligation of engaging, or advising to engage, experts or specialists when such services are deemed to be in the client’s or employer’s best interests.  It also means being accurate, objective and truthful in making public statements on behalf of the client or employer when required to do so, while respecting the client’s and employer’s rights of confidentiality and proprietary information.

Being a faithful agent includes not using a previous employer’s or client’s specific privileged or proprietary information and trade practices or process information, without the owner’s knowledge and consent.  However, general technical knowledge, experience and expertise gained by the engineer through involvement with the previous work may be freely used without consent or subsequent undertakings.

Competence & Knowledge

Professional Engineers shall offer services, advise on or undertake engineering assignments only in areas of their competence by virtue of their training and experience.  This includes exercising care and communicating clearly in accepting or interpreting assignments, and in setting expected outcomes.  It also includes the responsibility to obtain the services of an expert if required or, if the knowledge is unknown, to proceed only with full disclosure of the circumstances and, if necessary, of the experimental nature of the activity to all parties involved.  Hence, this requirement is more than simply duty to a standard of care, it also involves acting with honesty and integrity with one’s client or employer, and one’s self.  Professional Engineers have the responsibility to remain abreast of developments and knowledge in their area of expertise, that is, to maintain their own competence.  Should there be a technologically driven or individually motivated shift in the area of technical activity, it is the engineer’s duty to attain and maintain competence in all areas of involvement including being knowledgeable with the technical and legal framework and regulations governing their work.  In effect, it requires a personal commitment to ongoing professional development, continuing education and self-testing.

In addition to maintaining their own competence, Professional Engineers have an obligation to strive to contribute to the advancement of the body of knowledge within which they practice, and to the profession in general.  Moreover, within the framework of the practice of their profession, they are expected to participate in providing opportunities to further the professional development of their colleagues.

This competence requirement of the Code extends to include an obligation to the public, the profession and one’s peers, that opinions on engineering issues are expressed honestly and only in areas of one’s competence.  It applies equally to reporting or advising on professional matters and to issuing public statements.  This requires honesty with one’s self to present issues fairly, accurately and with appropriate qualifiers and disclaimers, and to avoid personal, political and other non-technical biases.  The latter is particularly important for public statements or when involved in a technical forum.

Fairness and Integrity in the Workplace

Honesty, integrity, continuously updated competence, devotion to service and dedication to enhancing the life quality of society are cornerstones of professional responsibility.  Within this framework, engineers shall be objective and truthful and include all known and pertinent information in professional reports, statements and testimony.  They shall accurately and objectively represent their clients, employers, associates and themselves, consistent with their academic experience and professional qualifications.  This tenet is more than ‘not misrepresenting’ ;  it also implies disclosure of all relevant information and issues, especially when serving in an advisory capacity or as an expert witness.  Similarly, fairness, honesty and accuracy in advertising are expected.

If called upon to verify another engineer’s work, there is an obligation to inform (or make every effort to inform) the other engineer, whether the other engineer is still actively involved or not.  In this situation, and in any circumstance, engineers shall give proper recognition and credit where credit is due and accept, as well as give, honest and fair criticism on professional matters, all the while maintaining dignity and respect for everyone involved.

Engineers shall not accept, nor offer covert payment or other considerations for the purpose of securing, or as remuneration for, engineering assignments.  Engineers should prevent their personal or political involvement from influencing or compromising their professional role or responsibility.

Consistent with the Code, and having attempted to remedy any situation within their organization, engineers are obligated to report to their association or other appropriate agency any illegal or unethical engineering decisions by engineers or others.  Care must be taken not to enter into legal arrangements which compromise this obligation.

Professional Accountability & Leadership

Engineers have a duty to practice in a careful and diligent manner, and accept responsibility and be accountable for their actions.  This duty is not limited to design, or its supervision and management, but applies to all areas of practice.  For example, it includes construction supervision and management, preparation of drawings, engineering reports, feasibility studies, sustainability impact assessments, engineering developmental work, etc.

The signing and sealing of engineering documents indicates the taking of responsibility for the work.  This practice is required for all types of engineering endeavour, regardless of where or for whom the work is done, including but not limited to, privately and publicly owned firms, large corporations, and government agencies or departments.  There are no exceptions ;  signing and sealing documents is appropriate whenever engineering principles have been used and public wellbeing may be at risk.

Taking responsibility for engineering activity includes being accountable for one’s own work and, in the case of a senior engineer, accepting responsibility for the work of a team.  The latter implies responsible supervision where the engineer is actually in a position to review, modify and direct the entirety of the engineering work.  This concept requires setting reasonable limits on the extent of activities, and the number of engineers and others, whose work can be supervised by the responsible engineer.  The practice of a ‘symbolic’ responsibility or supervision is the situation where an engineer, say with the title of Chief Engineer, takes full responsibility for all engineering on behalf of a large corporation, utility or governmental agency, even though the engineer may not be aware of many of the engineering activities or decisions being made daily throughout the firm or agency.  The essence of this approach is that the firm is taking the responsibility by default, whether engineering supervision or direction is applied or not.

Engineers have a duty to advise their employer and, if necessary, their clients and even their professional association, in that order, in situations when the overturning of an engineering decision may result in breaching their duty to safeguard the public, including people with activity limitations, indigenous peoples and other vulnerable social groups.  The initial action is to discuss the problem with the supervisor/employer.  If the employer does not adequately respond to the engineer’s concern, then the client must be advised in the case of a consultancy situation, or the most senior officer should be informed in the case of a manufacturing process plant or government agency.  Failing this attempt to rectify the situation, the engineer must advise in confidence his/her professional association of his/her concerns.

In the same order as mentioned above, the engineer must report unethical engineering activity undertaken by other engineers, or by non-engineers.  This extends to include, for example, situations in which senior officials of a firm make ‘executive’ decisions which clearly and substantially alter the engineering aspects of the work, or protection of public wellbeing or the natural environment arising from that work.

Because of developments in technology and the increasing ability of engineering activities to impact on the environment, engineers have an obligation to be mindful of the effect that their decisions will have on the environment and the wellbeing of society, and to report any concerns of this nature in the same manner as previously mentioned.  Further to the above, with the rapid advancement of technology in today’s world and the possible social impacts on large populations of people, engineers must endeavour to foster the public’s understanding of technical issues and the role of Engineering more than ever before.

Sustainable development is the challenge of meeting current human needs for natural resources, industrial products, energy, food, transportation, shelter, and effective waste management while conserving and, if possible enhancing, the Earth’s environmental quality, natural resources, ethical, intellectual, working and affectionate capabilities of people and the socio-economic bases essential for the human needs of future generations.  The proper observance of these principles will considerably help to eradicate world poverty.

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WFEO/FMOI Model Code of Ethics, Adopted 2001.

This Version, Updated 2011 & Communicated to UNESCO.

[Footnote to the Code]

Sustainable Human & Social Development:  Development which meets the responsible needs, i.e. the Human & Social Rights*, of this generation – without stealing the life and living resources from future generations, especially our children, their children, and the next five generations of children.

*As defined in the 1948 Universal Declaration of Human Rights

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END

Climate Change ?#$#? … 2007 SDI Letter to John Gormley !

Posted by CJ Walsh

2011-01-29:  Some people say that a week is a long time in politics … but, here in Ireland, during the last two weeks … every single day feels like a year !   To the uninformed outside observer, this may have all the appearance of being an elaborate circus … but, we like our politics to be complex, interesting and very frothy.

Briefly … the Irish Green Party has recently removed itself, awkwardly, from the Ruling Coalition Government in this country … and the Green Party Agenda has gone up in smoke … definitely a Climate Changing Greenhouse Gas !   Mr. John Gormley T.D., Leader of the Green Party, has therefore resigned as Minister for the Environment, Heritage & Local Government … and his Green Party departmental colleague, Mr. Ciarán Cuffe T.D., Minister of State with special responsibility for Sustainable Transport, Horticulture, Planning and Heritage at the Departments of the Environment, Transport and Agriculture has also resigned.

With all of Ireland’s current economic woes … this decision by the Green Party has ensured that ‘Climate Change’ is fast dropping off the list of national priorities.

However, as a result of these political shenanigans … the word ‘Green’ has received a severe hammering and will induce a nasty taste in the mouths of many Irish Voters during the next few weeks which lead up to a General Election.  To be honest, I heartily cheer this development … since ‘GREEN’-ness, i.e. a sole and blinkered consideration for the Environmental Aspects of Sustainability is a ‘pre-version’ (fans of the film: ‘Dr. Strangelove’ will understand what I mean) of Sustainable Human & Social Development.  It is also a peculiar quirk of ‘greens’ that they love the environment … but hate people !

As a prelude to what I will say about the proposed enabling legislation for climate change action in Ireland … the 2010 Climate Change Response Bill … I thought that it would be interesting to reveal the contents of a submission I made to Mr. John Gormley back in late 2007.  Concerning his reaction … I wondered how it was possible for anybody to write such a long letter in reply, and say nothing.

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Mr. John Gormley T.D.,                                                                                           2007-12-18.

Minister for the Environment, Heritage & Local Government,

Department of the Environment, Heritage & Local Government (DEHLG),

Custom House – Dublin 1.

Re:  Your Meeting with IIEA on Friday, 7th December 2007

Dear Minister,

At the Meeting with the Institute of International & European Affairs (IIEA), in North Great George’s Street, I raised two points directly with you:

     i)   The Great Difference between ‘Real’ Building Energy Performance and Claimed ‘Theoretical’ Performance.   In a context where the mandatory use of long wave infra-red thermal imagery will not be introduced in the Revised Technical Guidance Document L of the Building Regulations, due to be issued shortly, and there will continue to be No Effective System of Building Control anywhere in the country … no relationship exists between Claimed ‘Theoretical’ Performance and ‘Real’ Performance, such is the poor quality of construction on Irish Building Sites.  The Energy Numbers which continue to be produced by Sustainable Energy Ireland are – almost – pure fantasy.

     ii)  Sourcing of Climate Change Research & Models for Necessary Institutional Reform Must Extend Beyond Britain.   The following is taken from the Irish National Climate Change Strategy 2007-2012 (page 45) …

‘ Ireland has also engaged in an exchange of information on impacts and adaptation activities through the British-Irish Council. This initiative has focused on exchanging data on research projects which have improved the understanding of climate change impacts at a local level.’

I suggested to you that if this were, actually, to be the approach to Research in Ireland … we will be in serious trouble.  Furthermore, far too many people in important organizations (including the IIEA) are only looking across the water for Models of Necessary Institutional Reform.  We must also, in Ireland, look to the rest of Europe and Japan to find the Best Research and the Most Effective Institutional Models.

Please see the enclosed World Business Council for Sustainable Development (WBCSD) Summary Report: ‘Energy Efficiency in Buildings – Business Realities & Opportunities’ (October 2007), which was presented at an important Paris Conference at the beginning of November, 2007.

This Report looks at what can be achieved in Europe and many other parts of the world – today – using currently available building technologies and systems … IF ‘real’ implementation is taken seriously.  Barriers to progress and costs have also been examined.

In the final analysis, however, a properly resourced Indigenous Research Capability, focused on Irish Conditions and Needs, is vitally necessary to drive ‘Real’ Performance and Innovation in this country.

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Post-Bali Leadership from Ireland (and DEHLG !)

A Kyoto II Instrument will be agreed and ratified before the end of 2012.  The 1997 UNFCCC Kyoto Protocol must now be seen, therefore, as just the beginning of a long-term process which will last until the end of the century.  Some Necessary Direction and a large pinch of Ethical Leadership are urgently required to properly re-position Ireland in this Process.

The following Post-Bali Target Scenario for Ireland is presented for your consideration:

  • Ireland should set 1990 as the Benchmark/Base Year for All Kyoto Greenhouse Gases ;
  • Statements of Measurement and Calculation Uncertainty should be fully transparent (nationally, and at EU level), and made at every stage of Ireland’s Kyoto Compliance ;
  • The EU’s Objective of a 30% Reduction in Greenhouse Gases by 2020, compared to 1990, is the Relevant Short Term Target (refer to Paragraph 31 of the German Presidency Conclusions from the E.U. Council’s Brussels Summit on 8th and 9th March 2007) ;
  • As our ‘Real’ Performance, under Kyoto I, continues to be so weak and disingenuous … we should not expect to receive as generous an intra-EU burden sharing arrangement as before.  Instead, Ireland should adopt the 2020 National Target of a similar 30% Reduction in Greenhouse Gases, compared to 1990 ;
  • Our Contingency Target for 2020 should be a 33% Reduction in Greenhouse Gases, compared to 1990.  When considering ‘real’ performance in any field of human endeavour, it is usual to include a safety factor in any calculations …. in this case, 3% ;
  • Ireland’s Recourse to the Use of Carbon Sinks and Kyoto Mechanisms in meeting the 2020 Contingency Target should be restricted to 1/4 of ‘Real’ Performance …
    • ‘Real’ Performance (no sinks/mechanisms) – minimum 24% Reduction in Greenhouse Gases by 2020, compared to 1990 ;
    • Use of Carbon Sinks and Kyoto Mechanisms – 9% Reduction in Greenhouse Gases by 2020, compared to 1990 (this figure includes the contingency 3%) ;   and
    • As the Construction Sector (when properly identified) should share more of the national burden than, for example, Agriculture …. its Target should be a 40% Reduction in Greenhouse Gases by 2020, compared to 1990.  Remember the range of reductions which were initially proposed at Bali …. 25-40% ?
  • Part 1 of SDI’s Submission for the Irish Construction Sector (IIEA Climate Change Project, Sectors Sub-Group – June 2007) stressed the great need to properly restore the Construction Sector’s Infrastructure.  Otherwise, this Sector will not be able, in reality, to reach any Energy Performance Targets … low or high.  Of course, what will eventually appear on paper, or as a computer print-out, is an entirely different matter !

However, having been able to access information about the recent WBCSD Research Project, and using it as a valid substantiation … it then became possible to deal with the issue of Energy Performance Targets for All Buildings (new, existing and those of historical, architectural and cultural importance) more aggressively.

Enclosed, please also find Part 2 of SDI’s Submission for the Construction Sector (IIEA Climate Change Project, Sectors Sub-Group – November 2007).

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Ireland’s Climate Change Strategy ?

     1.  Ireland’s Current ‘Real’ Situation with Regard to Kyoto (I) Compliance should be clearly understood by the Irish Public.  Using the recently issued European Environment Agency (EEA) Report 5/2007: ‘Greenhouse Gas Emission Trends & Projections in Europe 2007 – Tracking Progress Towards Kyoto Targets’, we have extracted just a few snippets of interesting information (enclosed) …

  • Instead of 1990, Ireland has chosen 1995 as the Base Year for HFC’s, PFC’s & SF6 ;
  • Ireland’s Per Capita greenhouse gas emissions are nearly the worst in the EU-27 ;
  • Ireland’s Per GDP greenhouse gas emissions are far too high ;
  • Ireland’s ‘Real’ Distance-To-Target (no sinks/mechanisms) is very bad.

Ireland is still grimly grasping on to a ‘Business as Usual’ Approach.  This is actually being reinforced by the relevant Institutions of the State, who insist on merely Playing with Numbers … and then publishing Cosmetic Public Relations Brochures for consumption in Ireland and, unfortunately, on the wider European and International Stages.

     2.  The following National Policy/Strategy Documents & Legislation should directly relate to one other, and their implementation should be tightly co-ordinated …

  • National Sustainable Development Strategy ;
  • National Climate Change Strategy ;
  • National Climate Change Adaptation Strategy ;
  • National Spatial Strategy ;
  • National Development Plan ;
  • National Public Procurement Law.

Not only have some of the above not yet even been drafted, but others are unacceptably inadequate, outdated and/or fundamentally flawed.  And the synergies which would normally accrue from co-ordinated implementation are being lost.

     3.  The World Business Council for Sustainable Development has identified Buildings as one of the five main users of energy where ‘megatrends’ are needed to transform global energy efficiency in the immediate short term, and so meet the daunting challenge of Climate Change Adaptation.  They account for 40% of primary energy (primary energy includes the energy required to generate, transmit and distribute electricity, as well as energy directly consumed on site) in most developed countries, and consumption is rising.

Nothing less than a Complete Cultural Shift will be necessary throughout this Sector, beginning with all research and design disciplines and extending right across to any person who works on a construction site or has any part to play in managing, maintaining or servicing a building.

Yet, Irish Construction is not presented as a Coherent Sector anywhere in National or European Greenhouse Gas Databases.

Separate Strategies are urgently required to greatly improve the energy performance of:

  • Existing Buildings … onto which many energy efficiency measures can be successfully grafted, but they will not be cheap ;
  • Buildings of Historical, Architectural or Cultural Importance … the integrity of which must be protected ;   and
  • New Buildings, which must therefore carry the major burden.

     4.  Raising the (General) Awareness of Irish Society regarding Climate Change and Mobilizing People and Organizations for (Effective) Action are two entirely different concepts.  Which concept is informing Strategy Development within the DEHLG ?

A €15 m. Marketing Campaign, spread over 4-5 Years and including the ‘Change’ WebSite (!?!?), will not mobilize anyone … to do anything.

     5.  Your proposals concerning Necessary Building Energy Efficiency Improvements to be included in the Revised Technical Guidance Document L are inadequate.  Part L should be applicable to ALL New Buildings.

It has also been insufficiently emphasized in public discussions/consultations concerning this issue that any proposed Building Energy Efficiency Improvements must take place in a context of stringent control during construction (by a sufficient number of competent Local Authority Building Controllers and/or Independent Technical Controllers) and rigorous post-construction energy performance monitoring (using long wave infra-red thermal imagery, in conjunction with building external fabric air seepage tests).  Follow-up observation of post-occupation building energy performance will also be required.

This is the one – and only – means of …

  • tweaking Computer Software Tools so as to produce more realistic outputs ;   and
  • obtaining reliable construction-related energy performance data and statistics.

Please Note Well:  Without suitable references to the use of long wave infra-red thermal imagery (essential, if working at ambient temperatures – short wave, if working at high temperatures) in Section 5, the Revised TGD L will be absolutely meaningless !!

Because of wasteful patterns of building management and/or use – even in the most energy efficient building – we would also stress that far more attention should be paid to the concept of Intelligent Energy Efficiency Management.

     6.  We strongly urge you, in accordance with the 2007 Bali Action Plan, to rapidly advance development of the National Climate Change Adaptation Strategy, and to ensure that it is properly implemented.

     7.  We call for the creation of an adequately resourced Sustainable Development Commission with the necessary legal mandate, independence and technical expertise to monitor – in an integrated, continual and proactive manner – Ireland’s mitigation and adaptation performance in relation to the adverse effects of climate change.  We also call for a New Social Partnership for Sustainable Development & Climate Change Adaptation.  Addressing Climate Change must be considered an integral element of Sustainable Development Policies.

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At Sustainable Design International … we continue to find, in everyday practice, that the most challenging barriers to Policy Implementation are Institutional – lack of proper horizontal policy integration in Public Authorities, and antiquated approaches to management in Private Organizations.  At every level, the concept of Sustainable Human & Social Development is poorly understood.

Should you have any questions or comments, please contact me at your convenience.

Yours sincerely,

C.J. Walsh,  etc., etc.

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END

EU Accessibility & Ratification of UN Disability Rights Convention

Posted by CJ Walsh

2011-01-15:  Recently, I was waiting … and waiting … for the first mention of this important news to pop up on any of the European Disability Networks … the Formal Ratification by the European Union (EU) of the 2006 United Nations Convention on the Rights of Persons with Disabilities … on 23 December 2010 last.

History in the making !!

This U.N. Convention was adopted on 13 December 2006 (2006-12-13), at the United Nations Headquarters in New York … and was opened for signature on 30 March 2007.  It entered into force, i.e. became an International Legal Instrument, on 3 May 2008 (2008-05-03).  A copy of the Convention can be downloaded, here, on this Site … in my post, dated 31 October 2009.

Finally, on Monday 10 January 2011 … via ICTA-Europe, EDeAN, and the EU Press Release below … it was announced …

EU Press Release IP/11/4 – Brussels, 5 January 2011

EU Ratifies UN Convention on Disability Rights

Click the Link Above to read and/or download PDF File (25kb)

So much for instant communication in our much-vaunted Information / Knowledge / Smart Society !!

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Ordinarily, this news would be nothing to get excited about.

BUT … since the Lisbon Treaty entered into force on 1 January 2009 … the European Union now has a legal personality all of its own, separate from those of the individual EU Member States.  See Article 47 in Title VI – Final Provisions – of the Treaty on European Union (consolidated version).

This is the first time that the EU has become a party to an international treaty.

The 2006 United Nations Convention on the Rights of Persons with Disabilities is now part of the European Union’s Acquis Communautaire, i.e. the extensive body of EU Law.

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The consequential impacts flowing, therefore, from the EU’s Ratification of the U.N. Convention … at both European and Member State (National) levels … will be very, very interesting to observe during the immediate short term.  [A note of caution … be patient, and allow for a short period of ‘bedding-in’ at the start.  See below.]

The European Commission, for example, must now take full account of the Convention in the drafting and implementation of any new legislation, policies and programmes … in fact, all of its activities.

The European Court of Justice must also take full account of the Convention in all of its work.

This will, inevitably, heavily influence what is … or is not … happening with regard to social and other policies at national level in the Member States.  Many Member States (16) have already ratified the Convention … and more power to them !   BUT among these 16 … the Czech Republic and Denmark have not yet ratified the UN Convention’s Optional Protocol … how strange … and unacceptable !!

Some Member States … and I am thinking specifically of Ireland … will have to be dragged, screaming, to the point of ratification.  And even when that position has been reached … proper implementation will always be an issue.  Just consider, for a moment, Ireland’s uncaring and ham-fisted approach to implementation of the 1989 U.N. Convention on the Rights of the Child … which it did actually ratify way back on 28 September 1992 !   See my post, dated 30 November 2009.

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Accessibility of the ‘Human Environment’ – A Harmonized EU Understanding !

As far as the European Union must now be concerned … and all of the EU Member States … Preamble Paragraph (g) and Articles 9, 10 & 11 of the 2006 United Nations Convention on the Rights of Persons with Disabilities – together – form the basis of a harmonized understanding for Accessibility of the ‘Human Environment’ … which includes the Built Environment, the Social Environment, the Economic Environment, and the Virtual Environment … concepts which I have defined, here, many times before.

Preamble Paragraph (g)

Emphasizing the importance of mainstreaming disability issues as an integral part of relevant strategies of sustainable development,

Article 9 – Accessibility

1.  To enable persons with disabilities to live independently and participate fully in all aspects of life, States Parties shall take appropriate measures to ensure to persons with disabilities access, on an equal basis with others, to the physical environment, to transportation, to information and communications, including information and communications technologies and systems, and to other facilities and services open or provided to the public, both in urban and in rural areas.  These measures, which shall include the identification and elimination of obstacles and barriers to accessibility, shall apply to, inter alia:

     (a)  Buildings, roads, transportation and other indoor and outdoor facilities, including schools, housing, medical facilities and workplaces ;

     (b)  Information, communications and other services, including electronic services and emergency services.

2.  States Parties shall also take appropriate measures:

     (a)  To develop, promulgate and monitor the implementation of minimum standards and guidelines for the accessibility of facilities and services open or provided to the public ;

     (b)  To ensure that private entities that offer facilities and services which are open or provided to the public take into account all aspects of accessibility for persons with disabilities ;

     (c)  To provide training for stakeholders on accessibility issues facing persons with disabilities ;

     (d)  To provide in buildings and other facilities open to the public signage in Braille and in easy to read and understand forms ;

     (e)  To provide forms of live assistance and intermediaries, including guides, readers and professional sign language interpreters, to facilitate accessibility to buildings and other facilities open to the public ;

     (f)  To promote other appropriate forms of assistance and support to persons with disabilities to ensure their access to information ;

     (g)  To promote access for persons with disabilities to new information and communications technologies and systems, including the Internet ;

     (h)  To promote the design, development, production and distribution of accessible information and communications technologies and systems at an early stage, so that these technologies and systems become accessible at minimum cost.

Article 10 – Right to Life

States Parties reaffirm that every human being has the inherent right to life and shall take all necessary measures to ensure its effective enjoyment by persons with disabilities on an equal basis with others.

Article 11 – Situations of Risk & Humanitarian Emergencies

[My Note: An outbreak of fire in a building would be a situation of serious risk.]

States Parties shall take, in accordance with their obligations under international law, including international humanitarian law and international human rights law, all necessary measures to ensure the protection and safety of persons with disabilities in situations of risk, including situations of armed conflict, humanitarian emergencies and the occurrence of natural disasters.

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Accessibility of the ‘Human Environment’ – Competent & Effective EU Implementation !

Within the European Union as a whole, because it is a party to the Convention in its own right … and also within the individual EU Member States … Articles 31 & 33 of the 2006 United Nations Convention on the Rights of Persons with Disabilities – together – mandate that implementation is taken seriously … that it is competent and effective … and, most importantly, that independent monitoring and verification is a fundamental part of the process.

Article 31 – Statistics & Data Collection

1.  States Parties undertake to collect appropriate information, including statistical and research data, to enable them to formulate and implement policies to give effect to the present Convention.  The process of collecting and maintaining this information shall:

     (a)  Comply with legally established safeguards, including legislation on data protection, to ensure confidentiality and respect for the privacy of persons with disabilities ;

     (b)  Comply with internationally accepted norms to protect human rights and fundamental freedoms and ethical principles in the collection and use of statistics.

2.  The information collected in accordance with this article shall be disaggregated, as appropriate, and used to help assess the implementation of States Parties’ obligations under the present Convention and to identify and address the barriers faced by persons with disabilities in exercising their rights.

3.  States Parties shall assume responsibility for the dissemination of these statistics and ensure their accessibility to persons with disabilities and others.

Article 32 – International Co-Operation

1.  States Parties recognize the importance of international co-operation and its promotion, in support of national efforts for the realization of the purpose and objectives of the present Convention, and will undertake appropriate and effective measures in this regard, between and among States and, as appropriate, in partnership with relevant international and regional organizations and civil society, in particular organizations of persons with disabilities.  Such measures could include, inter alia:

     (a)  Ensuring that international co-operation, including international development programmes, is inclusive of and accessible to persons with disabilities ;

     (b)  Facilitating and supporting capacity-building, including through the exchange and sharing of information, experiences, training programmes and best practices ;

     (c)  Facilitating co-operation in research and access to scientific and technical knowledge ;

     (d)  Providing, as appropriate, technical and economic assistance, including by facilitating access to and sharing of accessible and assistive technologies, and through the transfer of technologies.

2.  The provisions of this article are without prejudice to the obligations of each State Party to fulfil its obligations under the present Convention.

Article 33 – National Implementation & Monitoring

1.  States Parties, in accordance with their system of organization, shall designate one or more focal points within government for matters relating to the implementation of the present Convention, and shall give due consideration to the establishment or designation of a co-ordination mechanism within government to facilitate related action in different sectors and at different levels.

2.  States Parties shall, in accordance with their legal and administrative systems, maintain, strengthen, designate or establish within the State Party, a framework, including one or more independent mechanisms, as appropriate, to promote, protect and monitor implementation of the present Convention.  When designating or establishing such a mechanism, States Parties shall take into account the principles relating to the status and functioning of national institutions for protection and promotion of human rights.

3.  Civil society, in particular persons with disabilities and their representative organizations, shall be involved and participate fully in the monitoring process.

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The European Union’s Disability Strategy 2010-2020 [COM(2010) 636 final]

The general approach to, and the quality of, Accessibility Implementation in Europe … when compared, for example, with Japan … is pathetically inadequate.

It is quite amazing, therefore, that the texts which deal with Accessibility of the ‘Human Environment’ in the EU’s Disability Strategy Document 2010-2020 … are weak and far too vague … basically, meaningless claptrap drafted by desk jockeys / ‘suits who do not know’ !   We did not achieve a ‘Europe Accessible For All’ by 2010 (see below) … do you see it ??   And … at the current rate of progress, neither will we achieve a ‘Europe Accessible For All’ by 2020 !

The European Union’s Accessibility Strategy, related Policies and Programmes … and the monitoring, targeting and independent verification of Accessibility Implementation … all require a radical overhaul !

All those Officials in the European Commission who are involved, in any way, shape or form, with Accessibility of the ‘Human Environment’ would do well to RE-READ AND MEDITATE DEEPLY on the contents of the 2003 Final Report from the Group of Accessibility Experts, which was established by the European Commission itself …

EU 2003 (EYPD) Expert Group on Accessibility

October 2003

2010: A Europe Accessible For All

Click the Link Above to read and/or download PDF File (294kb)

I was a Member of that Expert Group !

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AND SOME WIDER CONCERNS …

1.  The European Union HAS NOT RATIFIED the UN Disability Rights Convention’s Optional Protocol.  If the Union is so Open and Transparent … and so committed to Human and Social Rights for All EU Citizens … somebody, somewhere, has to scream out loud “Why is the EU Not Ratifying this Optional Protocol ???”.   And … we demand an honest answer !!!

Optional Protocol – Article 1

1.  A State Party to the present Protocol (‘State Party’) recognizes the competence of the Committee on the Rights of Persons with Disabilities (‘the Committee’) to receive and consider communications from or on behalf of individuals or groups of individuals subject to its jurisdiction who claim to be victims of a violation by that State Party of the provisions of the Convention.

2.  No communication shall be received by the Committee if it concerns a State Party to the Convention that is not a party to the present Protocol.

2.  The EU Code of Conduct between the Council, the Member States and the Commission setting out internal arrangements for the implementation by and representation of the European Union relating to the United Nations Convention on the Rights of Persons with Disabilities.  Above, I talked about a short period of ‘bedding-in’.   BUT … get your teeth into the ‘meat’ of this document … which indicates that it might be a much longer and more difficult process !?!

Official Journal of the European Union (15 December 2010) – 2010/C 340/08

EU Council – UN Disability Rights Convention – 2010 Internal Code of Conduct

Click the Link Above to read and/or download PDF File (729kb)

3.  At EU Council … How Important is this Issue Considered ?   In the 37 Page Report on the Justice and Home Affairs Council Meeting, which was held in Brussels from 2-3 December 2010 … the adoption of the above Internal Code of Conduct rated just a very brief mention on the last page.  It was not mentioned, at all, among the Main Results of the Meeting !

4.  Will Disability Networks, at both European and Member State (National) levels, have the stamina … and be sufficiently competent and focused … to rigorously monitor European Union Implementation of the UN Disability Rights Convention ??   And … will these Networks be courageous in challenging the EU Institutions … if Implementation is found to be Inadequate ???   I’m not so sure !

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END

Carbon Monoxide (CO) Protection in Building Habitable Spaces

Posted by CJ Walsh

2011-01-13:  Carbon Monoxide (CO) is an odourless, colourless and toxic gas.  Because it is impossible to see, taste or smell the toxic fumes, CO can kill you before you are aware it is in your home.  At lower levels of exposure, CO causes mild harmful effects which are often mistaken for the flu (influenza).  These symptoms include headaches, dizziness, disorientation, nausea and fatigue.  The effects of CO Exposure can vary greatly from person to person depending on age, overall health and the concentration and length of exposure.  Source: Environmental Protection Agency (EPA), USA.

Recent tragic deaths from CO Poisoning have occurred in Ireland … not only in the home, but also in a hotel.

Sources of Carbon Monoxide (CO) … unvented kerosene and gas space heaters; leaking chimneys and furnaces; back-drafting from furnaces, gas water heaters, wood stoves, and fireplaces; gas stoves; generators and other gasoline powered equipment; automobile exhaust from attached garages; and tobacco smoke.  Incomplete oxidation during combustion in gas ranges and unvented gas or kerosene heaters may cause high concentrations of CO in indoor air.  Worn or poorly adjusted and maintained combustion devices (e.g., boilers, furnaces) can be significant sources, or if the flue is improperly sized, blocked, disconnected, or is leaking.  Car, truck, or bus exhaust from attached garages, nearby roads, or parking areas can also be a source.  Source: EPA, USA.

 

If there is a fuel burning / heat-producing appliance in any habitable space, in any building … and if you have not done so already … you must do something NOW to check that you are protected effectively from CO Poisoning.  Shift your ass !

In order to improve energy conservation and efficiency in buildings … direct, natural ventilation from the exterior is still being actively discouraged … and buildings are becoming more tightly sealed, during construction or major refurbishment, to prevent unintended air seepage.  Generally, this has been causing a serious increase in Building Related Ill-Health (also known as ‘Sick Building Syndrome’) … much of which is still going un-reported.

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BRIEF CHECKLIST – IMMEDIATE ATTENTION

1.  Check that there is sufficient, clear, direct natural ventilation in any habitable space which contains a fuel burning / heat-producing appliance.  Next … Check that the terminal unit / outlet of the flue coming from that appliance is not blocked.  Then … Check the route of any flue from the appliance.  If, for example, a flue passes through another habitable space … that space must also be properly ventilated.

2.  Check that all fuel burning / heat-producing appliances are ‘fit for their intended use’ (this must be shown !), are working properly … and that they are regularly serviced by people who are competent to do so.  Paperwork is not a reliable indicator of competence !   Remember the problems with FÁS !?!

3.  Do not confuse Carbon Monoxide Detectors with Smoke Detectors !   Only install a dedicated Carbon Monoxide (CO) Detector for the task of detecting Carbon Monoxide.  And … that Detector must be shown to be ‘fit for its intended use’.  Read the writing on the outside of the box carefully … and then read all of the instructions inside the box !

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With regard to the issue of Carbon Monoxide (CO) Poisoning in Ireland … Statistics Gathering is not reliable.  National Legislation concerning the installation of Carbon Monoxide Detectors in buildings should have been introduced many years ago … but this has not yet happened.  Furthermore … don’t hold your breath waiting for this much-needed legislation.  Based on past performance, technical and administrative officials in our relevant authority having jurisdiction, i.e. the Department of Environment, Heritage & Local Government (DEHLG), will prefer to wait before acting until similar legislation is introduced in Britain (England & Wales).

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I will just describe what I have done in my own house … in the kitchen …

[Smoke Detectors are separately linked into a monitored security and fire warning system.]

In every room where a fuel burning / heat-producing appliance is located … a Carbon Monoxide (CO) Detector is installed.  In the kitchen, for example, the Detector is fixed on the wall … at about head height, when sitting down at a table (appropriate for the normal pattern of use there) … and at a distance of approximately 2 metres from the natural gas kitchen range.  Control of direct, natural ventilation to the appliance is active … meaning, it always receives attention.  The usual kitchen clutter, e.g. clothes ‘waiting’ for ironing, etc., is never allowed to cover or block the Detector.  Everybody in the house understands the purpose of this product.

Colour photograph showing a battery-operated Ei Electronics Carbon Monoxide (CO) Detector, Model Ei206D, fixed (tamper proof) to the kitchen wall. Two of the hanging decorative plates are from France and Turkey. As for the third plate ... does anyone remember the Willow Pattern ? Photograph taken by CJ Walsh. 2011-01-12. Click to enlarge.
Colour photograph showing a battery-operated Ei Electronics Carbon Monoxide (CO) Detector, Model Ei206D, fixed (tamper proof) to the kitchen wall. Two of the hanging decorative plates are from France and Turkey. As for the third plate ... does anyone remember the Willow Pattern ? Photograph taken by CJ Walsh. 2011-01-12. Click to enlarge.

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About the performance of the Carbon Monoxide (CO) Detector in the event of a ‘real’ CO Leakage … I am comfortably assured, as I have known the EI Company in Shannon since the mid-1980’s.  At that time, I was the first architect in Ireland to install smoke detectors in any local authority housing scheme … and EI gave great technical back up and support, for which I am still very grateful.  I might add that those same smoke detectors were installed against the wishes of the local fire department.  A report on the whole test installation process was later presented, by Dr. M. Byrne, Engineering Manager of EI, to an International Fire Conference in Dublin.

The particular Carbon Monoxide (CO) Detector shown in the photograph above is a battery-operated Model Ei206D.  There are no heavy, smoke sealed fire-resisting doorsets in the house … so the sound level of the distinct alarm / warning signal [85 dB(A) minimum at 3 metres] is more than adequate.  A few years ago, this was an expensive item to buy !   Now, however, CO Detectors are widely available … and at a more reasonable price.

Very Importantly … Ei Electronics have also developed a range of products – Solutions for All – which are suitable for use by People with Activity Limitations … http://www.eielectronics.com/ei-electronics/special-needs

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Harmful Health Effects Associated with Carbon Monoxide (CO) Inhalation … at low concentrations: fatigue in healthy people and chest pain in people with heart disease.  At higher concentrations: impaired vision and co-ordination; headaches; dizziness; confusion; nausea.  Can cause flu-like symptoms which clear up after leaving home.  Fatal at very high concentrations.  Acute effects are due to the formation of Carboxyhaemoglobin (COHb) in the blood, which inhibits oxygen intake.  At moderate concentrations: angina, impaired vision, and reduced brain function may result.  At higher concentrations: CO Exposure can be fatal.  Source: EPA, USA.

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Health Service Executive (Ireland) Factsheet

January 2011

Carbon Monoxide (CO) Poisoning – A Guide for GP’s & Other Medical Professionals

Click the Link Above to read and/or download PDF File (375kb)

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DAC’s & An Bord Pleanála (Ireland) – Brief SDI Announcement

Posted by CJ Walsh

The following ‘Warrant of Appointment’ as a Specialist Consultant to the Board … was signed on 17 December 2010 by Mr. John O’Connor, Chairperson of the Board …

An Bord Pleanála

Building Control Acts, 1990 to 2007  |  Building Control Regulations, 1997 to 2009  |  Building Regulations, 1997 to 2008

An Bord Pleanála hereby appoints  C.J. Walsh – Sustainable Design International (SDI)  to:

     (a)  carry out Inspections in relation to appeals against decisions of Building Control Authorities for applications for a Disability Access Certificate (DAC) ;

     (b)  conduct Meetings convened by the Board under Article 34 of the Building Control Regulations, 1997 ;

     (c)  make Written Reports (including Recommendations) to the Board in relation to such appeals ;

and

     (d)  be an Authorized Person, for the purposes of Section 11 of the Building Control Act, 1990.

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The Functions of the Board in Ireland are …

An Bord Pleanála (Irish) … established in 1977, under the Local Government (Planning and Development) Act of 1976 … is responsible for the determination of appeals and certain other matters under the Planning and Development Acts, 2000 to 2010 … and the determination of applications for Strategic Infrastructure Development, including major road and railway projects.  The Board is responsible for dealing with proposals for the compulsory acquisition of land by Local Authorities and other Agencies, under various legal enactments.  The Board also has functions to determine appeals under Water and Air Pollution Acts, and the Building Control Act.

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European Union Economic Governance – Too Late For Dithering !

Posted by CJ Walsh

2010-12-22:  November & December 2010 … when the shit really started to hit the international economic fan ! … there has been an excess of hysterical nonsense in the Irish Media concerning growing European Union (EU) Economic Governance … and a perceived erosion of Irish National Sovereignty.  How sad ?!?

Economic Environment … the intricate web of real and virtual human commercial activity – operating at micro and macro-economic levels – which facilitates, supports, but sometimes hampers or disrupts, human interaction in the Social Environment.

Social Environment … the complex network of real and virtual human interaction – at a communal or larger group level – which operates for reasons of tradition, culture, business, pleasure, information exchange, institutional organization, legal procedure, governance, human betterment, social progress and spiritual enlightenment, etc.

However, let me sketch out an altogether different and much more positive picture !

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Thesis – My Argument

[During 2009, I first raised this issue in meetings of the IIEA (Institute of International & European Affairs) Economists’ Group, in Dublin.]

Towards the end of 2010 … we can now see that Inter-Governmental Economic Governance in the European Union has failed … miserably.  This has not only destabilized the EuroZone … but the entire European Union, itself, as a political entity … and will continue to do so … until Economic Governance is brought much closer to, and fully within, the Community Method … which is a lengthy and complex process.

Back in 2009, however, when the Financial Markets were not in such a mad frenzy … it would have been natural to imagine that an interim stage in this process would most probably be to adopt an Open Method of Co-Ordination.  This is no longer an option … being too little, too late, to calm the Markets.

Throughout this process of reform, the European Central Bank (ECB) and the National Central Banks can, and must, retain their independence … as legally mandated in European Union Primary Legislation, i.e. the Treaties.

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Three Concerns I have had for some time …

–  Economists don’t know the Community Method from the Rhythm Method, and they are ill-equipped to deal with matters of Mainstream European Union Institutional Reform ;

–  The use of Economic Performance Indicators in the EU Stability & Growth Pact is simplistic and crude … and, therefore, very problematic ;

–  Economic Performance Indicators must be improved … qualitatively … and be mainstreamed in considerations, and the implementation, of Sustainable Human & Social Development … as legally mandated in the EU Treaties.

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Mr. Olli Rehn, European Commissioner for Economic & Monetary Affairs recently delivered a speech at the Institute of International & European Affairs, in Dublin …

Mr. Olli Rehn, European Commissioner

9 November 2010

Reinforcing EU Economic Governance: Relevance for Ireland

Click the Link Above to read and/or download PDF File (39kb)

However … instead of trying to desperately backfill the holes and gaps in the current, failed Inter-Governmental Method of Economic Governance in the European Union … Commissioner Rehn should be clearly identifying the proper target as the Community Method of Economic Governance … and plotting an appropriate course to reach that target … as soon as practicable !

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This is a useful background document … and includes a lot of information about the EU Stability & Growth Pact …

European Commission & General Secretariat of the EU Council

June 2007

EU Economic & Monetary Union – Legal & Political Texts

Click the Link Above to read and/or download PDF File (2.66 Mb)

Since Ireland joined the European Economic Community (EEC) in 1973 … after 10 years of accession negotiations ! … an ‘informed’ view of European Integration has always been that the different Countries are pooling their national sovereignty, in an expanding range of specific areas, for the greater benefit of all their citizens.  This has certainly been the experience of Ireland.  And … let us also not forget that Irish Politicians and Senior Civil Servants have participated directly – at all stages – in the development of the EMU Legal & Political Texts listed.  There is no such thing as a Domineering ‘Brussels’ Big Brother !

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This is the most recent update of the EuroZone’s Economic Performance Indicators …

European Commission, Directorate-General for Economic & Financial Affairs (DG ECFIN)

2 December 2010

Key Economic Indicators for the Euro Area

Click the Link Above to read and/or download PDF File (360kb)

It is now widely acknowledged that Gross Domestic Product (GDP) is neither a reliable nor an adequate indicator of Sustainable Human & Social Development.  But … that is another story … for another day !

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Community & Inter-Governmental Methods of Governance

The Community Method is the expression used for the most common and effective operating and decision-making mode of institutions in the European Union.  It proceeds from an integration logic, with due respect for the subsidiarity principle … and has the following salient features:

  • European Commission monopoly of the Right of Initiative, with a strong monitoring role in implementation ;
  • should consensus not be achieved, widespread use of Qualified Majority Voting in the Council of the European Union ;
  • an active, participatory role for the European Parliament ;
  • uniform interpretation of EU Law by the Court of Justice.

In contrast to the … Inter-Governmental Method … which proceeds from an inter-governmental logic of co-operation between EU Member States … to a large extent outside the institutional framework of the European Union … and has the following salient features:

  • the European Commission’s Right of Initiative is shared with the Member States or confined to specific areas of activity … with little, if any, monitoring role for the Commission in implementation ;
  • the Council of the European Union generally acts unanimously … and unilaterally ;
  • the European Parliament has merely a consultative role ;
  • the Court of Justice plays only a minor role.

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Open Method of Co-Ordination

The Open Method of Co-Ordination (OMC) developed as an instrument of the 2000 Lisbon Strategy, and provided a new framework for co-operation between the EU Member States, whose national policies could thus be directed towards certain common objectives.

Under this method of governance, the Member States are evaluated by one another (peer pressure), with the European Commission’s role being limited to ‘lite’ surveillance.  The European Parliament and the Court of Justice play virtually no part in the OMC process.

The Open Method of Co-Ordination takes place in policy areas which fall within the competence of the Member States … such as employment, social protection, social inclusion, education, youth and training.

It is based principally on:

  • jointly identifying and defining objectives to be achieved (adopted by the Council of the European Union) ;
  • jointly established measuring instruments (statistics, indicators, guidelines) ;
  • benchmarking, i.e. comparison of the Member States’ performance and exchange of best practices (oversight by the European Commission).

Depending on the areas concerned, the OMC involves so-called ‘Soft Law’ Measures which are binding on the Member States to varying degrees but which never take the form of ‘Hard Law’ Directives, Regulations or Decisions.  Thus, in the context of the Lisbon Strategy, the OMC required the Member States to draw up national reform plans and to submit them to the European Commission.

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Colour photograph showing the last resting place, in Arbour Hill Cemetery Dublin, for many - not all - Executed Leaders of the 1916 Revolution. The Memorial was designed by G. McNicholl. Photograph taken by CJ Walsh. 2010-10-24. Click to enlarge.
Colour photograph showing the last resting place, in Arbour Hill Cemetery Dublin, for many – not all – Executed Leaders of the 1916 Revolution. The Memorial was designed by G. McNicholl. Photograph taken by CJ Walsh. 2010-10-24. Click to enlarge.

Ireland’s National Sovereignty in 2010/2011 ?

On a beautiful sunny day, this past autumn … I again visited Arbour Hill Cemetery in Dublin … the last resting place for many Executed Leaders of the 1916 Revolution … an event which finally initiated an irrevocable process of terminating a prolonged period of barbaric external imperial domination and cultural cleansing of the indigenous population …

Colour photograph showing, in the background, a latin cross and the Irish language version of the 1916 Proclamation of Independence inscribed on the stone wall, with the simple grass-covered graves of Executed Leaders in the foreground. Detail of the 1916 Revolution Memorial in Arbour Hill Cemetery, Dublin. Photograph taken by CJ Walsh. 2010-10-24. Click to enlarge.
Colour photograph showing, in the background, a latin cross and the Irish language version of the 1916 Proclamation of Independence inscribed on the stone wall, with the simple grass-covered graves of Executed Leaders in the foreground. Detail of the 1916 Revolution Memorial in Arbour Hill Cemetery, Dublin. Photograph taken by CJ Walsh. 2010-10-24. Click to enlarge.

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On the wall behind the graves … the 1916 Proclamation of Independence is inscribed in the Irish Language, and also in English …

Poblacht na hEíreann

THE PROVISIONAL GOVERNMENT OF THE IRISH REPUBLIC

TO THE PEOPLE OF IRELAND

IRISHMEN AND IRISHWOMEN:  In the name of God and of the dead generations from which she receives her old tradition of nationhood, Ireland, through us, summons her children to her flag and strikes for her freedom.

Having organized and trained her manhood through her secret revolutionary organization, the Irish Republican Brotherhood, and through her open military organizations, the Irish Volunteers and the Irish Citizen Army, having patiently perfected her discipline, having resolutely waited for the right moment to reveal itself, she now seizes that moment, and, supported by her exiled children in America and by gallant allies in Europe, but relying in the first on her own strength, she strikes in full confidence of victory.

We declare the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible.  The long usurpation of that right by a foreign people and government has not extinguished the right, nor can it ever be extinguished except by the destruction of the Irish people.  In every generation the Irish people have asserted their right to national freedom and sovereignty:  six times during the past three hundred years they have asserted it in arms.  Standing on that fundamental right and again asserting it in arms in the face of the world, we hereby proclaim the Irish Republic as a Sovereign Independent State, and we pledge our lives and the lives of our comrades-in-arms to the cause of its freedom, of its welfare, and of its exaltation among the nations.

The Irish Republic is entitled to, and hereby claims, the allegiance of every Irishman and Irishwoman.  The Republic guarantees religious and civil liberty, equal rights and equal opportunities to all its citizens, and declares its resolve to pursue the happiness and prosperity of the whole nation and of all its parts, cherishing all the children of the nation equally, and oblivious of the differences carefully fostered by an alien government, which have divided a minority from the majority in the past.

Until our arms have brought the opportune moment for the establishment of a permanent National Government, representative of the whole people of Ireland and elected by the suffrages of all her men and women, the Provisional Government, hereby constituted, will administer the civil and military affairs of the Republic in trust for the people.

We place the cause of the Irish Republic under the protection of the Most High God, Whose blessing we invoke upon our arms, and we pray that no one who serves that cause will dishonour it by cowardice, inhumanity, or rapine.  In this supreme hour the Irish nation must, by its valour and discipline and by the readiness of its children to sacrifice themselves for the common good, prove itself worthy of the august destiny to which it is called.

Signed on Behalf of the Provisional Government,

THOMAS J. CLARKE,

SEAN Mac DIARMADA,          THOMAS Mac DONAGH,

P. H. PEARSE,          EAMONN CEANNT,

JAMES CONNOLLY,          JOSEPH PLUNKETT.

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As We Approach the 100th Anniversary of the 1916 Revolution … Ireland has failed to implement and foster the social values so eloquently elaborated in the 1916 Proclamation of Independence … widespread, deeply ingrained corruption infects our economic environment … and the institutions of national governance are dysfunctional and no longer ‘fit for purpose’ … while individuals within those institutions rise in rank according to their own natural level of incompetence.

Politically … Ireland has not yet properly matured as an Independent State.

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Ireland’s Relationship with the European Union … I am more than a little curious as to why Ireland is not associated with Declaration No.52, which is annexed to the Treaty of Lisbon …

52.  Declaration by the Kingdom of Belgium, the Republic of Bulgaria, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the Italian Republic, the Republic of Cyprus, the Republic of Lithuania, the Grand-Duchy of Luxembourg, the Republic of Hungary, the Republic of Malta, the Republic of Austria, the Portuguese Republic, Romania, the Republic of Slovenia and the Slovak Republic on the symbols of the European Union

Belgium, Bulgaria, Germany, Greece, Spain, Italy, Cyprus, Lithuania, Luxemburg, Hungary, Malta, Austria, Portugal, Romania, Slovenia and the Slovak Republic declare that the flag with a circle of twelve golden stars on a blue background, the anthem based on the ‘Ode to Joy’ from the Ninth Symphony by Ludwig van Beethoven, the motto ‘United in diversity’, the euro as the currency of the European Union and Europe Day on 9 May will for them continue as symbols to express the sense of community of the people in the European Union and their allegiance to it.

Yes … we have a lot to discuss before 2016 !

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Update:  2013-06-03 …

On Friday, 31 May 2013, at the Institute of International & European Affairs (IIEA) in Dublin … I attended the third seminar in a series organized to mark Ireland’s Presidency of the Council of the European Union (January to June 2013) … the seventh such Presidency … and 40 years since Ireland officially joined the European Economic Community (EEC), on 1 January 1973 … after a long, long, long accession process …

‘Economic Sovereignty in an Age of Globalization and EU Integration – Economic, Legal and Political Perspectives’

[ For full information about this IIEA Economic Seminar:  www.iiea.com ]

Because the seminar was not only very interesting, but is directly relevant in the context of this post … and the remarks of Mr. Peter Sutherland, Chairman of Goldman Sachs International and the London School of Economics, and former Irish Attorney General, former European Commissioner and former Director-General of the World Trade Organization, caused quite a stir in the printed media on the following day … here is Paper 2 from Seminar Session I … which went to the heart of discussions on the day …

Prof. John W O’Hagan, Dept. of Economics, Trinity College Dublin, Ireland

Shared Economic Sovereignty: Beneficial or Not, and Who Decides ?

Click the Link Above to read and/or download PDF File (635 Kb)

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Update:  2014-07-04 …

Economists exist and operate in a special bubble … in their own little isolated world of quasi-science and fantasy, where everything in ‘our’ society is seen merely as an input, or fuel, for economic development.  And when they talk about Sustainable Economic Growth … believe me, their notion of ‘sustainable’ is altogether different from our understanding of that word !

European Union Economic Governance

It should come as no surprise to learn, therefore, that economists are blissfully unaware that the EuroZone’s current directionless (and dysfunctional) economic governance is causing enormous instability and harm to the whole political entity that is the European Union …

EU Economic Governance & The European Semester - Who Does What and When, Every Year
Flow chart diagram, in colour, showing how it is proposed that The European Semester will operate … which EU Institution will do what, and at what stage every year.  Source: Council of the European Union.  Click to enlarge.

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This issue is too important for all of us … to be left to economists and national politicians, alone, to muddle through !

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