No conflict for trustees on windfarm funding, say office bearers

The new heads of Shetland Charitable Trust are urging councillor-trustees to do their duty and vote on Viking windfarm funding next week instead of avoiding the crunch debate because of concerns about a conflict of interest.

Chairman Drew Ratter and vice-chairman Jonathan Wills say trustees now have “clear legal advice” from top charity law experts that they do not have a conflict of interest over Viking simply because of their position as councillors.

In an unusually forthright message issued through the charity, the pair say it is the trust’s view that all trustees who are able to be present and to vote on the proposed £6.3 million investment next Thursday “have a clear duty to do so”.

The decision they face is, they say, “momentous” and one that will “affect the inhabitants of these islands for generations to come”.

Setting out their case in a letter to The Shetland Times Mr Ratter and Dr Wills warns that “yet another farcical situation” where a meeting collapses due to councillor-trustees withdrawing from the chamber could lead to control of the £200 million charity being removed from Shetland’s elected representatives forever.

Such behaviour recently has helped cast the trust into the “very grave and dangerous” situation it is in now, they say, with the charity regulator poised to pounce.

Meetings to consider the funding injection for Viking have twice failed recently due to a shortage of trustees, prompting a third meeting to be called urgently. That was quickly outlawed by OSCR which said it was a decision for the new trust.

The £6.3 million comprises the trust’s contribution to a £14 million two-year programme with partners Scottish and Southern Energy and Viking Wind Limited to take the windfarm to the stage where a final decision can be made.

With the windfarm now “inevitable”, Mr Ratter and Dr Wills say the decision facing trustees is either to earn several hundred million pounds from it over the coming decades, do nothing or sell the trust’s shareholding now for over £50 million.

By doing nothing they say Shetland’s community share would first be diluted then possibly eventually lost to the other partners, should they continue to invest.

The anti-Viking group Sustainable Shetland does not believe the windfarm is “inevitable”. It announced on Wednesday it is still hoping to derail it by going ahead with its application for a judicial review of the government’s decision in April to approve the development.

In a short statement the group said a meeting of the organisation’s management committee had agreed to lodge a petition for judicial review – subject to their approval of their legal counsel’s “Formal Note of Prospects and Draft Petition” at their next meeting.

Responding to the intervention by Mr Ratter and Dr Wills this week, Sustainable Shetland chairman Andrew Halcrow said he still saw a conflict of interest for councillors discussing Viking, despite the assertion about new “clear legal advice” to the contrary. “The SIC’s own legal head Jan Riise has said there is a clear conflict.”

He also disputed the confident prediction of huge profits from the windfarm. “The government has plans to cut the subsidy to onshore wind by 10-25 per cent and there is a possibility that the subsidy will be cut entirely by 2020.

“The ruling from Ofgem that the transmission charges are now seven times higher than on the mainland and the news that banks are a lot less willing now to lend to onshore wind developers are further clues that the untold riches promised by VE may not be so forthcoming.”

Mr Halcrow also said that together with the interconnector the cost of Viking would be around £1 billion – twice the cost of Total’s gas plant at Sullom Voe. “The future for gas looks fairly promising. The trend is for gas prices to continually rise. The same cannot be said of wind power. Cutting the subsidy and increasing the transmission costs will cut the profit. The trend will be downwards. The windfarms of the future will not benefit from the unsustainable amounts of money thrown at them in the past.”

Shetland Charitable Trust is evidently hoping for no repeat of the embarrassing inquorate meetings which dogged the last set of trustees during their final months. The problem was partly of the trust’s own making since it had three trustees appointed as Viking directors who were clearly debarred from discussions about the windfarm. Three more had resigned from the trust – one while working for Viking – leaving a maximum of 18 to conduct Viking-related business. But combined with absences, several trustees would cite a conflict of interest and leave the room, causing problems reaching the required quorum of 12.

But when the trust convenes next Thursday most of the 15 new faces among its 24 trustees will be present for the first real business to be done since the council elections last month.

Mr Ratter and Dr Wills warn that failure to muster a quorum again could prompt OSCR to intervene and take action. Some or all trustees could be disqualified, they say, and new ones appointed. Alternatively, the trust could be directed by OSCR to invest or not to invest in Viking. OSCR might even take control of the trust’s £200 million assets or end the presence of councillors on the charity for good.

The letter to the paper seeks to clear up “confusion” in the community that being a councillor-trustee is an obstacle to voting about Viking. Mr Ratter and Dr Wills say that because the windfarm has been approved by the Scottish government it will go ahead and therefore the council will gain financially as landlord for some of the turbines regardless of what the trust decides next week. They say: “The trust vote on further investment cannot affect the council’s interests one way or the other. So there is no conflict.”

Even if a trustee has private family interests he or she may still be able to vote, they maintain, provided they declare them. This again is because the windfarm and therefore any benefits to the trustee or their family are going to materialise whatever way the trust votes on Thursday.

This apparent shift in advice could allow at least one other trustee – the independent Valerie Nicolson – to take part after previously withdrawing from Viking discussions.

One of the councillor-trustees who made a point of exiting meetings about Viking was Allison Duncan, based on the legal advice he had received. He said this week that nothing had changed despite the efforts of Mr Ratter and Dr Wills to persuade him otherwise.

His main concern remains the fact that the council will gain financially from the windfarm as a landowner. As it happens, he is due to be in Inverness next Thursday on council-related business and will miss the high-stakes meeting.

Asked what he would have done had he been at the meeting, he said: “I would still have declared an interest and walked out.”

His absence should actually help the Viking cause anyway because if he said if he had to vote it would be “No”.


Add Your Comment
  • John Tulloch

    • June 21st, 2012 22:01

    Thank you for clearing up my misunderstanding – there was me thinking the project couldn’t go ahead unless the shareholders or somebody else actually put up the money – now I understand; the Scottish government is guaranteeing that the money will be invested?

    Advance minutes of the next meeting;-

    “Gentlemen,” concluded Napoleon, “I will give you the same toast as before, but in a different form. Fill your glasses to the brim. Gentlemen, here is my toast: To the prosperity of The Manor Farm! ”

    There was the same hearty cheering as before, and the mugs were emptied to the dregs. But as the animals outside gazed at the scene, it seemed to them that some strange thing was happening. What was it that had altered in the faces of the pigs? Clover’s old dim eyes flitted from one face to another. Some of them had five chins, some had four, some had three. But what was it that seemed to be melting and changing? Then, the applause having come to an end, the company took up their cards and continued the game that had been interrupted, and the animals crept silently away.

    But they had not gone twenty yards when they stopped short. An uproar of voices was coming from the farmhouse. They rushed back and looked through the window again. Yes, a violent quarrel was in progress. There were shoutings, bangings on the table, sharp suspicious glances, furious denials. The source of the trouble appeared to be that Napoleon and Mr. Pilkington had each played an ace of spades simultaneously.

    Twelve voices were shouting in anger, and they were all alike. No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.” [George Orwell]

  • Johan Adamson

    • June 22nd, 2012 9:04

    Surely there is still a conflict of interest because if SCT does not invest more then it leaves it up to others, which is not a certainty, and therefore the development might not go ahead, therefore SIC as landowner would miss out? Or am I not following this?

    Do the trustees have best and worst case scenario forecasts of income and expenditure and risk in order to make an investment decision?

    And, should the Trust not wait until it follows OSCR advice and changes its make-up to non-councillors? I hope some of your readers can answer.

  • James Mackenzie

    • June 22nd, 2012 11:39

    I don’t understand why OSCR is poised to pounce – except possibly to prevent another decision Their previous intervention had nothing to do with the meeting being inquorate, as far as I can recall.

    The conflict of interest has been amply demonstrated in the past during the planning application process, for example when nine councillors voted to approve the windfarm, against their planning officers’ advice.

    Later the Scottish Ministers acted against the advice of their environmental body SNH, while completely ignoring some concerns raised by objectors.

    There is, coincidentally, now no planning policy for windfarms over 20MW in Shetland, as is or was required by the Scottish Government, which means that blanket development of wind farms is a real possibilty.

    I hope those trustees who do attend next week’s meeting will take these and other matters into account, if they believe they are acting in the best interests the trust, and for the well-being of the community.

  • Kenny Gear

    • June 23rd, 2012 8:09

    This article states that ” trustees now have “clear legal advice” from top charity law experts that they do not have a conflict of interest over Viking simply because of their position as councillors”.

    I would suggest that in reality the sad motivation behind much of the farcical and hypocritical behaviour about which we have been unfortunate enough to read is less about Council / Charitable Trust conflicts of interest and more about the split in community opinion making it politically expedient for some councillors to avoid the issue. In other words rather than resolving a simple issue, the conflict of interest matter has been exaggerated and whipped up to the maximum as a convenient political tool.

    Arguments against the “clear legal advice” “from top charity law experts” not backed up by very high level legal advice indeed, while entertaining, add nothing of substance to the issue. Given the current expert legal advice to the charitable trust, Drew Ratter and Jonathan Wills are absolutely correct to indicate that it is now time to move on from this issue and that it is the duty of all trustees to attend the upcoming meeting, and to vote; no excuses.

    In the face of both this legal advice and the scrutiny that has been induced by this issue, councillors who still refuse to do their duty should avoid further erosion of the Trust and Shetland’s credibility as a whole by resigning immediately from their roles as trustees.


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