4 CARACTERIZACIÓN DE LOS PRODUCTORES
4.4 CARACTERIZACIÓN ALIMENTICIA
21.5.4.1 Legal Position of Ministers and Actual Access to Information
The SIC examination indicates that, as regards the internal functioning of the ruling Government in the period preceding the collapse of the banks, the flow of information and communications on economic affairs, including mat- ters concerning the Icelandic banks in critical periods, were largely limited to a small group of ministers. These were, on the one hand, Prime Minister Haarde and Finance Minister Mathiesen, and on the other hand, Foreign Minister Gísladóttir, leader of the Social Democratic Alliance. A distinction has to be made between ministers that have direct obligations and responsi- bility for financial market and/or economic affairs through their ministerial functions, such as Mr. Haarde and Mr. Mathiesen, and ministers involved principally through their political position within the Government and not their legal position as a minister, such as Ms. Gísladóttir.
Pursuant to the division of functions within the government at that time, the Ministry for Foreign Affairs did not exercise independent powers in regard to the implementation of laws and rules on the regulation and control of financial activities in Iceland. However, the duties of the Foreign Minister may have had relevance in some cases with reference to consultations and exchange of information on economic affairs in a broader context within this group, as well as with other public bodies. The ministry and the foreign service could e.g. have been involved in communications with foreign par- ties, both authorities and private parties, because of the financial activities of Icelandic companies abroad, and the impact of such activities on Icelandic interests abroad, and in relations with other countries. For reference, it is pointed out that government actions in areas under the responsibility of the foreign service in the period preceding the collapse of the banks is criticised in other parts of the report, cf. Chapter 20.4.2. Furthermore, it has been established that Ms. Gísladóttir participated as Foreign Minister in a public relations campaign, which was supported by the Icelandic authori- ties, to improve the public image of the banking system, cf. for example the Conference of Ambassadors hosted by the Minister for Foreign Affairs on 22 February, and the Foreign Minister’s address at the Conference. This issue is discussed in more detail in Chapter 19.3. In chapter 21, the SIC criticises the emphasis the government placed on such issues at that point in time.
All things considered, the SIC believes it is clear that the involvement of Ms. Gísladóttir in regard to the issues under discussion here, cf. in particu- lar Chapter 21.5.4.2 below, was first and foremost based on the political premise that she was the leader of one of the coalition parties, the Social Democratic Alliance, and that she could on the basis of the information obtained at these meetings decide whether there was cause to take further action at Government level on behalf of her party and/or vis-à-vis the minis- ters concerned. To the extent that the performing of duties by individuals of this group are put to scrutiny here, with regard to issues concerning mistakes or negligence within the meaning of Article 1(1) of Act No. 142/2008, there are not sufficient grounds, in the opinion of the SIC, to further investigate Ms. Gísladóttir‘s performance of her duties as Foreign Minister.
It has been established that the flow of information and communications on economic affairs and the affairs of the banks within the Government, including participation and consultation with other governmental authori- ties, was to a degree characterised by the fact that the Minister of Business Affairs, who was responsible for matters concerning the financial market and thereby the affairs of the Icelandic banks, was not always involved. This was true inter alia in regard to meetings with officials, including the Board of Governors of the CBI, where important issues concerning the banks were discussed amongst other things, cf. Chapter 21.5.4.2 below. Also, the Minister of Business Affairs was not consulted directly when the authorities determined their response to the request for financial facilitation submit- ted by Glitnir Bank hf. to the CBI during the weekend of 27-28 September 2008. The SIC expresses its opinion concerning this situation within the Government in other parts of the report, cf. Chapter 21.4.2 and Chapters 21.3.4 and 20.2.7, but does not see grounds to discuss this in the context of this Chapter, i.e. with regard to the provisions of Article 1(1) of Act No. 142/2008. Nonetheless, this may in some instances lead to it being necessary
to view the Minister of Business Affairs’ access to information in the events leading to the collapse of the banks in a different light than in the instance of the Prime Minister and Minister of Finance, at least during certain periods, and thereby it being necessary to subject the opportunities the Minister of Business Affairs had to react to a special valuation in some cases.
In his response to the letter from the SIC, sent pursuant to Article 13 of Act No. 14272008, Finance Minister Mathiesen expressed his opinion that the wording of Article 1(1) of Act No. 142/2008, with respect to most of the issues addressed in the letter, would have to be interpreted in such a manner that the examination of the SIC did not apply to the functions of the Finance Minister. In this context, the SIC points out that pursuant to the then existing provisions of Regulation No 177/2007 on Icelandic Government Ministries, cf. former Regulation 3/2004, the Ministry of Finance was responsible inter alia for the financial affairs and assets of the state insomuch as these have not been reposed to other bodies, as well as in regard to producing assessments of developments and future prospects in economic affairs. In addition, the SIC draws attention to the fact that the Ministry of Finance was one of three min- istries, along with the Prime Minister’s Office and the Ministry of Business Affairs, that agreed to establish a government consultative group on financial stability and preparedness, and that it was from the onset a participant in its functions in an equal measure to the other ministries. It must be assumed that this participation was based on the fact that the aforementioned roles of the Ministry had a bearing on the tasks entrusted to the consultative group. Views expressed in Mr. Mathiesen’s letter point in the same direction, for exam- ple where it is stated: „The participation of the Ministry of Finance [in the government consultative group] was i.a. based on the fact that the Ministry is responsible for government financial affairs, which would be affected by consequences and reactions from events in the financial system.“ With fur- ther reference to the discussions in Chapter 21.5.1 and 21.5.2 above, which covers the framework for the examination of the SIC and its basis for assess- ment in that respect, the SIC maintains that it is beyond any doubt that the responsibilities of the Ministry of Finance relevant in this context fall within the framework of the provisions of Article 1(1) of Act No. 142/2008 govern- ing the SIC examination. Views concerning the difference in importance of the roles of the three ministries in relation to each other in this respect can not alter this conclusion in the opinion of the SIC, but may, under certain circumstances, be significant when it comes to assessing the accountability of the Finance Minister.
In assessing, on the one hand, the information or circumstances it believes ministers had been or should have been aware of, and, on the other hand, the initiative or reaction that could have been expected in this regard, the SIC first of all looks to their position within the government and their respective areas of responsibility according to applicable laws at that time. Based on that posi- tion, the SIC believes that individual ministers were or should have been aware of the situation and the development of matters falling under their respective areas of responsibility. The SIC further states that in its opinion the minister and the relevant ministry were obligated, pursuant to constitutional law, to maintain general surveillance of developments in areas under their responsi- bility with the view of determining whether the Ministry should intervene on the basis of applicable legal rules and, where applicable, to take the initiative
regarding suggestions for amendments to laws and/or government review of the case as an important issue for the government, cf. Article 2(1) of Act No. 73/1969 on the Icelandic Government Ministries, and the provisions of Article 17 of the Constitution of the Republic of Iceland. In other respects, general reference is made to discussions in Chapters 16.1.2.3-16.1.2.5 con- cerning the ministries relevant in this case, i.e. the Prime Minister’s Office, the Ministry of Finance and the Ministry of Business Affairs. A general over- view is presented in Chapter 16.1.2.6 on the administrative and supervisory powers of ministers as well as the obligation to take initiatives under certain circumstances. As a rule, reference is made to the aforementioned discussion. It should be reiterated that the SIC generally uses these rules of law and points of view as the basis for its assessment and conclusions in this Chapter, without necessarily referring to them in each instance.
Secondly, the SIC looks to specific events applicable in each case, i.e. meetings or consultations with other authorities and the information pre- sented, consultations with foreign bodies and other specific information or evidence, which, based on the SIC examination, appear to have been available in the period preceding the collapse of the banks.
Thirdly, the SIC considers information presented within the govern- ment consultative group, the participants of which were inter alia the permanent secretaries of the Prime Minister’s Office, Ministry of Finance and the Ministry of Business Affairs, acting as special representatives of the ministers concerned for tasks entrusted to the group. Due to this structure of the group’s work, the SIC deems it appropriate to recount especially the evidence in its possession concerning the dissemination of information to ministers about the work carried out by the group at any given time, and its position on aspects relevant to this.
Article 10 of Act No. 73/1969 on the Icelandic Government Ministries states that permanent secretaries run the ministries under the authority of the minister. However, it can be inferred from Article 14 of Constitution that the minister is responsible for all government actions. This is based on the premise that ministers oversee the issues falling under their areas of responsi- bility. Therefore, the minister carries the ultimate responsibility for the work carried out within his/her ministry, and, thereby, for the application of the ministry’s administrative and supervisory powers. It is evident that the con- stitutional system and administrative practice in Iceland does not assume that the duties of permanent secretaries as officials vis-à-vis the minister should, as a rule, go beyond providing the current minister with professional advise and assistance in urgent governmental issues under deliberation in the minis- try. For this reason, the permanent secretary should ensure that the minister is at all times informed concerning the communications and information he/ she becomes aware of in the course of his/her work as the representative of the ministry, thus enabling the minister to make informed decisions in his/ her political policy-making role.
The information and evidence described above in this report reveal that the permanent secretaries of the aforementioned ministries were in various ways involved as representatives of their respective ministries in tasks and events relevant to the collapse of the banks in the autumn of 2008. In the statements made by the permanent secretaries and ministers concerned in the hearing before the SIC, the Commission was especially seeking answers
on how information concerning the progress at any given time in the work of the government consultative group on financial stability and preparedness was disseminated to the ministers by the permanent secretaries, and how the opinion of the minister was sought concerning the proposals formulated within the consultative group as regards the preparation of a contingency plan in case of a financial crisis and any related proposals. Chapter 19.4.2 describes the answers provided in the hearing concerning the dissemination of information from the meetings of the consultative group to the ministers. The answers provided do not indicate clearly how much information the min- isters received, although they acknowledged having discussed these meetings with the permanent secretaries. During hearings, it was further revealed that the ministers had in general not been presented with the information and proposals submitted at the meetings of the consultative group, such as about the preparation of a contingency plan.
Therefore, the SIC considered it appropriate, in the letters it sent pursu- ant to Article 13 of Act No. 142/2008 to the former permanent secretaries of the Prime Minister’s Office, the Ministry of Finance, and the acting per- manent secretary of the Minister of Business Affairs, during the period from the middle of December 2007 to the end of July 2008, and the former Prime Minister, Minister of Finance and the Minister of Business Affairs, to provide these individuals with an opportunity to explain further how the permanent secretaries disseminated information to the ministers concerning their work in the consultative group. In the replies enclosed in Annex 11 in the elec- tronic edition of the report, the then permanent secretaries of the Prime Minister’s Office and the Ministry of Finance, and the acting permanent secretary of the Ministry of Business Affairs, in the period from the middle of December 2007 to the end of July 2008, emphasised that they did provide the ministers with adequate information on topics under discussion at any given time in the consultative group.
As far as can be inferred from the responses of the relevant ministers in office at the time, they acknowledge that they received adequate informa- tion from the permanent secretaries through verbal communication, to be familiar with the tasks the consultative group was occupied with at any given time. Consequently, the SIC is of the opinion that they were in a position to be aware of if there was any cause for them as ministers, in regard to issues falling under their respective responsibilities, to initiate further collection of information or seek closer involvement in the tasks carried out by the consultative group, including vis-à-vis other ministers and agencies repre- sented in the consultative group. In accordance with constitutional principles concerning the administrative and supervisory powers of ministers, the SIC believes that the responsibility for initiating requests for further evidence, information or advice from the permanent secretary, or, as the case may be, other officials of ministries or external experts, lies first and foremost with the minister if he/she finds that he/she does not have sufficient grounds to take informed decisions on policy issues in the work he/she is constitution- ally responsible for. Inferring from the discussion above, the SIC does not see further cause to examine in more detail the activities of the said permanent secretaries, as regards the provision of information to the ministers con- cerning the work of the consultative group, with regard to the provisions of Article 1(1) of Act No 142/2008.
Regarding the treatment of the subject matter in what follows it should be added that chapters 21.5.4.2-21.5.4.5 should be viewed within the same context. Chapter 21.5.4.6 deals with issues which are somewhat unique in nature and therefore, to a degree, stands separate from other chapters. In chapter 21.5.4.7, the SIC presents its assessment and conclusions based on the chapters above. It is reiterated that the assessment of the SIC is based on Chapters 21.5.4.2-21.5.4.6 in their entirety insofar as it applies to individual ministers and not sub-divided relating to isolated events and issues dealt with in these chapters. The final assessment of the SIC is therefore general in nature and not specific, i.e. based on particular incidents.