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”.