According to Yle News, Prime Minister Juha Sipilä is under attack because Katera Steel, an engineering company owned by his uncles, cousins and his children (through an investment holding company) had won a lucrative order of 500 000 euros from the taxpayer-funded Terrafame mine, formerly Talvivaara. And just two weeks prior to the deal, Sipilä’s government had decided to provide 100 million euros in additional financing for the Terrafame. And logically opposition leader Antti Rinne of the Social Democratic Party and, surprisingly, Sipilä’s government partner Petteri Orpo of the National Coalition Party called for independent reviews of the circumstances.
I seriously doubt that there will be any consequence, as chances are high that Sipilä really did not know about the deal, and certainly no chance that he intervened with the aim to support a family company. But it really looks bad that taxpayer money goes in Sipilä’s family pocket: it is bad, because it may discredit his political action, and more generally politicians, and provide some weapons for the growing populism.
In fact, Sipilä is the victim of the absence of a consistent policy of conflicts of interest in the political and the public sector in Finland. The European Commission and OECD stated that “Conflict of interest occurs when an individual or a corporation (either private or governmental) is in a position to exploit his or their own professional or official capacity in some way for personal or corporate benefit”. This means that there can be a conflict of interest without wrongdoing, but still the perception is that there is a possibility of wrongdoing.
That is the reason why there is a need to have in Finland a consistent conflict of interest policy. It would be useful and not too complicated to have a set of rules establishing that:
- All Ministers, all Parliament members and all public sector executives should publish a regularly updated public declaration in which they would declare their assets (and those of their close family members), together with all information which may put them in a situation of conflict of interest;
- For Ministers, and at least the Prime Minister, all their assets should be managed by an independent trust fund managed by people not linked to them, as it is the case in the US
- In case of a decision for which the public eye might perceive that they could have a conflict of interest, they should declare a possible conflict, and stand down, letting a replacement take the decision.
With these rules, Sipilä would have declared that his children had these shares. He would have perceived a possible problem, and would have let the lead on Terrafame to his replacement (Soini or Orpo). Or he would have established an independent trust fund for him and his family to put their assets in independent hands during his Prime Minister office time, in order to be able to decide independently.
Now it would be clever for Juha Sipilä, Antti Rinne, and Petteri Orpo to do the right thing and establish clear rules for the prevention of conflicts of interest, and stop with the accusations and the usual political game…