Chair admits SCP Board failure [1]
Thursday, January 28, 2010 - 07:30. Updated on Friday, May 9, 2014 - 21:47.
SCP Chairperson 'Alisi Taumoepeau on Wednesday accepted that the SCP Board are accountable in relation to the sinking of the Princess Ashika, in that they failed to verify or request vital survey certificates prior to the purchase of the vessel.
On January 27 in her third day of evidence at the Royal Commission of Inquiry into the sinking of Ashika, the Chair accepted their failure and said at the time they did not realise that the Managing Director John Jonesse was providing false information prior to their decision to recommend to Government to purchase the vessel.
In her affidavit 'Alisi was quite frank in pointing out the extended failure of Government, the Ministry of Transport, the captain and crew in relation to the cause of the tragedy.
'Alisi agreed with Assisting Counsel to the Commission Manuel Varitimos, that the SCP Board had failed in its duty to ensure that all proper information was provided in order for them to make an informed decision about the Ashika.
The counsel pointed out to a particular Managing Directors Report April 21, 2009 presented by Jonesse in a Director's Meeting where he asserted that "the independent survey and the evaluation of the circumstance has fallen very well in our favour."
She was asked whether anyone in the board asked Jonesse to provide the so-called independent survey?
She said, no, and that was because they were under the assumption that this was what Government was doing.
She affirmed that no independent survey was provided at the meeting or at any time.
She was asked what it meant when he said, "the independent survey was very well in our favour." She said she thought it meant that's what Government had done.
"If you had asked for the so-called independent survey it would have revealed there was none and it would have put the Board on high alert?" Varitimos said.
'Alisi agreed that in those circumstances the board would not have made the recommendation to Government to buy vessel.
No survey
"It did not cross your mind or anyone in the Board to ask for a copy?" he asked.
'Alisi answered that she should have asked but, no, she didn't as she thought Jonesse was reporting what Government was doing.
Counsel Varitimos put to the Chair whether she agreed that the Board lacked understanding in order for them to make an informed decision. She agreed and said they were happy that they got a new vessel with double cargo space.
"And we were under the assumption that Government was doing that. At the time we had no reason to doubt that due diligence was not done by Government because Jonesse was reporting to us what Government was doing," she said.
She also confirmed to the inquiry that the SCP Board was never provided nor did they request Jonesse for any other Survey Certificates of the vessel. She said at one point Jonesse informed them that survey documents from Fiji were filed with Ministry of Transport.
'Alisi said that looking back now they should have done their own survey, and admitted that the SCP needed a Survey Certificate to operate the vessel.
On the report by Jonesse there was handwriting of FJ$600,000, which she affirmed as Dalgety's signature.
"Did someone ask how much the vessel cost?" Varitimos asked.
'Alisi said the information was orally volunteered, and agreed that the report did not mention a purchase price.
Failure
The Chair also agreed that SCP was the operator of the Ashika vessel and that they did not want to operate a vessel that was unseaworthy or unreliable.
"I suggest as operator, SCP had a responsibility to ensure proper due diligence was conducted prior to purchase?" Varitimos asked.
'Alisi said that was one of the reasons that Jonesse was sent was to assist Government "and we were relying on Government.
"In the end Government failed and we failed in assuming that they could not have failed."
She was asked that it was prudent for a company or SCP Board in this case to know it was operating a vessel that was safe, reliable and suitable, she said yes and in this case they were a Public Enterprise 100 percent Government owned.
Heavy Duty
'Alisi agreed with counsel that under the Shipping Act, as an operator, the SCP has a heavy duty, and heavy obligations.
The counsel put to her that the SCP Board could have been more proactive in ensuring that proper due diligence was conducted.
"Yes, that is clear now," said 'Alisi.
She agreed that the SCP Board and Company Secretary should have been more proactive in ensuring that due diligence was conducted prior to purchase.
She was then asked to look at the pictures provided on the same report by Jonesse of April 21, 2009, where it showed rust on the floor of the cargo deck.
'Alisi said she did not see this at the time but having now read the transcripts, it wasn't what she thought it was.
"I suggest the photo shows the ramp closed had a very large gap where one could see the light coming through?" said Varitimos.
"Yes."
"Are you aware that a cause of the disaster was water coming through the bow ramp onto the cargo deck?"
'Alisi said she is aware of that now, and admitted to having no technical expertise on vessels.
"Did anyone at the Board meeting pointed out the rust and gap of the bow?"
'Alisi said all she could remember said was there was minor rust. She confirmed that Jonesse also did not report to the Board what modification was required on the vessel.
No valuation
'Alisi also admitted that no one asked for the valuation of the vessel as they were told that documents were to be provided at later stage and that no valuation document was ever provided in relation to the Ashika.
She agreed that the failure to obtain the valuation report is a failure to carry out due diligence.
"Do you accept the failure of the Government of Tonga to get valuation of the Ashika before purchase was negligent on behalf of Government? asked Varitimos.
'Alisi replied, yes, by not complying with the Government Procurement Policy.
She was also aware that a recent valuation report of the vessel provided to the inquiry asserted that it was of nil or negative value.
Board accountable
She agreed with a suggestion that the failure of Government to seek advice of the Procurement Committee disregarded proper procedures; and the government committee was bypassed by government.
When the counsel suggested to her whether she agreed, if that did not occur the tragedy would have not taken place, 'Alisi said yes.
She also agreed with counsel that if Government had sought the Procurement Committee's advise it could have stopped a tragedy like this.
"Do you accept SCP Board could have acted more responsibly?"
'Alisi said, yes, if she had known what she knows now in the evidence provided.
She also accepted that Board are accountable in relation to the sinking of the Ashika.