Nationalist former minister Michael Falzon should immediately resign his post as chairman of the Water Services Corporation because he had barefacedly been in breach of the code of ethics for board directors in the public sector, the Labour Party said yesterday.

This was clear from facts Mr Falzon himself had laid bare last Saturday, in correspondence with Minister Austin Gatt, who carries the political responsibility for the WSC. The correspondence was published after questions raised by the Labour Party over the previous three days about the business relationship the WSC chairman has with a Polidano Group company, which is awarded WSC contracts.

The relationship goes back to 2002 and today it is a fact that the WSC chairman, apart from being a director in a company set up with the Polidano Group, is also secretary and carries the legal duties imposed by the companies’ law, the Labour Party said.

Saturday’s correspondence establishes that Mr Falzon has since 2002, that is, for five years, kept secret his business relationship with the Polidano Group.

Mr Falzon himself had told Minister Gatt in the letter he sent him that he felt he had no duty to inform his superiors about this relationship. This was in spite of the fact that in the same letter, Mr Falzon admits that the Polidano Group had been awarded several contracts by the WSC. In the letter, Mr Falzon concludes that there had been no breach of the code of ethics for board directors in the public sector.

However, on the basis of what Minister Gatt wrote, it was obvious that on the contrary, Mr Falzon had barefacedly been in breach of the code which applied to him as chairman of the WSC.

Section 14(f) of the code is very clear on what Mr Falzon should have done after entering into a relationship with the Polidano Group. He had the duty to inform the WSC board in writing of his interests in every contract awarded by the WSC; he should have issued a statement giving all the relevant details for every partnership he held in commercial companies; and he had to release another statement with all the details on every interest he may have had in a business activity or a business which involved the WSC.

Mr Falzon was duty-bound to submit this information every year and if felt necessary, the information should have been passed also to the minister who was responsible.

As Mr Falzon himself had written to Minister Gatt, the WSC chairman did nothing of this.

On the contrary, Mr Falzon, who is paid Lm15,600 annually from public funds for his part-time chairman’s post, had for five years kept his business relationship with Polidano hidden.

In itself this had already raised many doubts. Now, in the light of the duties laid on Mr Falzon by the code of ethics, the doubts became more serious.

This was because among others, under the code of ethics, when the Polidano Group in 2004 won the multi-million-liri WSC contract for a drainage treatment plant in the north of Malta, Mr Falzon was bound to inform the WSC board in writing of his interests in that contract, and to submit all the information about his business activities in which he was involved with the Polidano Group.

In spite of this, however, when the drainage plant contract was awarded, no one knew that the WSC chairman was involved in a business relationship with the Polidano Group.

The obvious question is, if according to him there was no breach of the code, then why did Mr Falzon not declare his business relationship?

Transparency, accountability and efficiency made it incumbent on the WSC – one of the main corporations in the country – not to have a chairman who would daily be the cause of most serious doubts about the possibility of a conflict of interest on his part.

Minister Gatt, on his part, instead of assuming that there was no breach of the code, as he had written to Mr Falzon, should take all the necessary steps to remove him from the chairmanship, if he did not resign.

Playing with words would not exonerate Dr Gatt from his political responsibility as minister.

If Dr Gatt did not take steps, the Prime Minister should intervene to ensure that the WSC chairman was removed. While Mr Falzon occupied the position, the government would be sending another signal that for it, everything was to be allowed and nothing was wrong.