Nordic Transparency as a Role Model

Ministeri Heidi Hautalan puheenvuoro “Transparency at the EU Level and in the Member States” -seminaarissa Brysselissä 28.9.2011[:]

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International Right to Know Day

“Nordic transparency as a role model”

– In December 1766 one of the greatest achievements of Anders Chydenius, a Finnish priest and Member of Parliament, and the foremost Finnish social thinker of the Eighteenth Century, saw daylight, when King Adolphus Frederick of Sweden issued His Majesty’s gracious Ordinance Relating to Freedom of Writing and of the Press. The King declared, having considered the “greater opportunities to each of Our loyal subjects to gain improved knowledge and appreciation of a wisely ordered system of government”, that all previous regulations issued on the matter were to be removed. It was “Our gracious will and command that all Our loyal subjects may make use of a complete and unrestricted freedom to make generally public in print everything that is not found to be expressly prohibited in […]this gracious ordinance […]”.

– The main principle of this legislation from 1766, the principle of open government and public access to government documents, became part of the constitution, thus playing an important role in the building of democracy both in Finland and in Sweden. Even though this constitutional principle of openness has been interpreted and applied in various ways over the centuries, the principle itself has prevailed, denoting the assumption of openness.

– I have been asked by the organisers of this event to speak about Nordic transparency as a “role model”. While claiming to act as a “role model” is perhaps to say too much, it is true that this is a matter of which we have a certain amount of experience, and these experiences are primarily positive.

– The state of openness in the European Union, and the potential effect of the Union’s secretive administrative culture on our national practices has always been a matter of a great concern When signing our EU Accession Treaty in 1995, Finland adopted a declaration in which it welcomed “the development now taking place in the Union towards greater openness and transparency” but underlined that “[i]n Finland, open government, including public access to official records, is a principle of fundamental legal and political importance”, and stressed that “we would continue to apply this principle in accordance with our rights and obligations as an EU member”.

– To us, transparency is not just a principle of historical importance, of relevance for some Nordic countries, but it is a principle of general importance for governance, and a principle that needs to evolve in time in order to meet new challenges. This is something that requires a clear vision, but also a certain amount of pragmatism.

– It is with mixed feelings that we follow the state of transparency in the Union. We have always had warm feelings for Regulation 1049/2001. The Regulation is, as far as its foundational principles are concerned, compatible with our national legislation, since based on both, openness is the main rule, and secrecy the exception. Regulation 1049/2001 establishes that access to all documents, irrespective of their subject-matter, is to be considered on a case-by-case basis, assessing the actual harm that their release might cause to the protected interests. The latter principle – the principle of individual examination – is absolutely crucial, since the possible harm of release can only be examined if the contents of the document are studied.

– Regrettably, this principle has recently been blurred in the case law of the Courts, which have quite surprisingly been willing to accept the Commission’s claims that many of its documents enjoy a presumption of non-closure, which frees the institution from the duty of examining them in any way. Instead, the Court places the burden of demonstrating that a particularly weighing interest in transparency exists on the applicant – who of course has not even seen the documents, and should not, according to the Regulation, need to justify her application. So far, such general presumptions of non-closure have been confirmed for cartels (VKI), state aid (TGI), Court documents (API) and infringement proceedings against Member State in a situation that also concerned environmental information (LPN), and the jury is still out on whether a general presumption also applies in the case of mergers (Agrofert). No doubt, more will follow.

– These “general presumptions” of secrecy – fundamentally incompatible with the widest possible access to documents – is a matter that would urgently require intervention by the legislature – before the Commission assisted by the Court of Justice has time to empty the Regulation of a significant amount of substance by claiming that whenever it receives an application for a document in its possession, a general presumption of non-closure applies. These are arguments that blur the role of openness as a principle that empowers the citizens, and highlight the discretion of the institution to an unacceptable degree. Such arguments should not be tolerated in a Union in which “decisions are made as openly as possible”.

– Also the relationship between transparency and data protection needs to be revisited following the Court’s ruling in Bavarian Lager. We believe that the Court did strike the balance wrong in establishing that handling out documents containing personal data – any personal data such as the name of an official in the context of his or her professional duties – always involves an infringement of privacy and should be settled with reference to rules on personal data. We welcome the recent draft report by Michael Cashman on the reform of the regulation which clearly underlines this point.

– Even in other respects, we welcome the clear vision of improving transparency in the EU reflected in Michael Cashman’s draft. If Regulation 1049/2001 is to be reformed, then of course it ought to be reformed in order to strengthen openness in the Union. My government looks forward to a good and close cooperation with Mr Cashman on this dossier.

– As regards access to legislative documents, the balance drawn by the Court seems much more justified. It is clear that the Treaty of Lisbon places both the Council and the European Parliament under an obligation to act as openly as possible in legislative matters. Now the challenge at hand is to decide how this is best realized. The European Parliament, when discussing the recent draft report by Michael Cashman, is of course extremely well-placed to continue this discussion. In this context, it is useful to keep in mind that also international agreements have binding effects and should not be categorically beyond transparency.

– But while improving access to legislative documents we must also keep in mind that it is equally important to guarantee the transparency of administration, a matter recently underlined by the Court in its excellent ruling in MyTravel, in which it rejected the Commission claims that transparency is merely needed in legislative work. Transparency in legislative work is only one side of the coin. As stipulated in Regulation 1049/2001 itself, “[o]penness enables citizens to participate more closely in the decision-making process and guarantees that the administration enjoys greater legitimacy and is more effective and more accountable to the citizen in a democratic system”.

– A similar connection between good administration and the need to function openly, efficiently and independently is also recognised in the new Article 298 TFEU on good administration. This is an area in which much remains to be done, and we encourage the Commission to launch discussions on a regulation on good administration, regulating comprehensively and horizontally the relationship between EU administration and citizens, without any further delay.

– As new Minister for International development, I would also like to touch briefly upon the linkages between transparency, good governance and development.

– Even though good governance materializes in myriad contexts and the definition depends on the international organization in question, there is something universal about the concept. The normative principles of governance (e.g. participation, rule of law, transparency, responsiveness, effectiveness, efficiency and accountability) are all found from legally binding international conventions ratified by Finland and also by the partner countries of Finland.

– Transparency means that decisions are taken and their enforcement is done in a manner that follows rules and regulations. It also means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is distributed and that it is provided in easily understandable forms and media.

– Central good governance principles e.g. participation, transparency and access to information, and accountability are inherently linked to the rule of law and human rights. For instance, effective participation depends on implementation of several human rights: freedom of association, freedom of expression and right to access to information. Transparency and access to information enable individuals to exercise their political and civil rights and economic, social and cultural rights. In concrete terms this means that people need to have complete, up-to-date and comprehensible information in order to fully enjoy their rights in practice (for example voting, access to housing, health, water).

– Accountability links to human rights agenda in the sense that on the basis of human rights obligations states have to protect individuals and provide recourse and justice if their rights are violated. Again, in concrete terms this means that states should ensure that relevant institutional arrangements are in place and that people without any discrimination have access to these accountability mechanisms (e.g. courts, Ombudsmen, other mechanisms for complaint).

– (“Aid transparency guarantee”) Greater transparency helps developing countries to improve their governance systems and thus, grow an economically inclusive and sustainable way. A full openness in the official aid system is urgently needed because for too long citizens in developing countries have lacked information about aid given in their name. It means that spending information need to be publicly available across the world. This is not only to safeguard taxpayers’ interests but most and mainly the rights of the people in the developing world. Transparent aid is only one building block for development but it can drastically support the strengthening of good governance in the developing countries.

– In development co-operation programmes one can use simple but efficient tools like notice boards and pictures to show communities where their money is going and to develop aid programmes with people who benefit from them. In addition, training local organizations (including NGOs) and media that they can influence and keep an eye on government spending is a necessity in governance strengthening and thus, in improved development results. In larger scale programmes or with aid instruments like budget support, one might need to invest in larger scale exercises like supporting the formation of civil society or political parties or e.g. supporting the budgetary control capacity of the parliament. “Knowledge is power” and the responsibility of donors is to take care that the transparency component of governance is considered in every aid programme and in every aid instrument.

– Aid transparency guarantee should end the deals behind closed doors. It should mean a full disclosure of budgets and spending so that citizens can exactly see what is being spent, on what and where.

– Working globally to improve transparent natural resource management. It is paradox that people who live in a country full of diamonds and oil suffer from poverty. The majority of the world’s poorest people live in resource-rich countries. The oil and diamond revenues haven’t transformed into positive development outcomes. On contrary, finding natural resources can be a curse – especially for the societies of the bottom billion. Paul Collier’s famous book Bottom Billion analyzes this paradox of the poorest countries not being able to grow economically even if most of them have valuable natural resources. Thus, it is not surprising that natural resource management has become a crucial aspect in the discussion on good governance.

-Weak governance and corruption lie behind a natural resource curse. The relationship between natural resources and corruption is twofold. Firstly, when resource rent is high and institutional quality is the opposite, a number of entrepreneurs choose to become rent-seekers and as a consequence, total national income will be reduced. Secondly, corruption may happen inside natural resource management itself; instead of diverting state’s public funds to poverty reduction efforts, public funds may be targeted to areas and sectors that guarantee the continuum in power, patronage implying to inefficient allocation of public resources.

– As a response to bad governance and to the rise in resource-related conflicts since the end of the Cold War, a number of global and domestic initiatives and mechanisms have been created in order to increase transparency in natural resource management.

– One of the most established global responses to more transparent natural resource management is the Extractive Industries Transparency Initiative (EITI) which Finland is also supporting.

– The Extractive Industries Transparency Initiative (EITI) aims at strengthening governance by improving transparency and accountability in the extractives industry. The EITI is a global standard that promotes revenue transparency. It has a robust yet methodology for monitoring and reconciling company payments and government revenues at the country level. The process is overseen by participants from the government, companies and national civil society.

– EITI has been a major incentive for changes in legal frameworks for natural resource management at national level. A major step was taken by President Obama when transforming the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as the Dodd-Frank Act, into law in July 2010.

– The Dodd-Frank poses mandatory disclosure obligations for companies getting revenues from natural resources, companies that have securities registered with the US Securities and Exchange Commission. The Act obligates the biggest companies in the world to strict transparency. The Act represents a major step to improve national anti-corruption legislation in the field of natural resource management.

– We have come a long way since the adoption of the gracious Ordinance of 1766, which I quoted in the beginning of my intervention. Quite crucially, even in the European Union, we have moved from the age of believing that access to information is granted to the loyal subjects as an act of grace, to a time where it is a right that citizens can, when need be, enforce in a court of law.

– I believe that Anders Chydenius would be glad if he could witness our joint efforts to guarantee openness in the Union. After all, it is as true today, as it was in 1765, that “the legitimacy of the freedom of writing and printing is one of the strongest defences of our freedom.[…] The highest power must therefore with tender and caring eyes also regard this facet of our freedom.”