The Malta Independent 3 February 2023, Friday
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After greylisting, country learnt a lot about importance of good governance – MCESD chairman

Kevin Schembri Orland Sunday, 22 January 2023, 09:00 Last update: about 11 days ago

Due to Malta’s recent greylisting experience, the country has become more sensitive to, and learnt a lot, about the importance of good governance, the newly appointed chair of the Malta Council for Economic and Social Development David Xuereb told The Malta Independent on Sunday.

“We have understood the value of good governance, not only at government level, but also at business and society levels. This experience taught us a number of lessons that I hope we will embrace and build on, to ensure that the governance structures within our country and at all levels of society are developed in a manner that is resilient enough to give us the value that we expect in our general societal actions."


Malta had been removed from the Financial Action Task Force’s list of jurisdictions under increase monitoring, known as the grey list, back in June 2022, after having been on it for a year.

In an interview with this newsroom, Xuereb described the role of the MCESD in the country, but also highlighted the pillars he believes will underpin the Council’s work, which he identified as environmental, social and governance values, tested for economic competitiveness.

The MCESD was set up as a national advisory body in order to provide a forum for consultation and social dialogue between social partners on matters that may acquire national agreement or, at least, convergence, regarding subjects of national sustainable, social and economic development importance in order to advise government, he said.

Xuereb was president of the Malta Chamber of Commerce, Enterprise and Industry between the years 2019-2021. He had sat on the MCESD Board during those years and also when he was deputy president of the Chamber. "I appreciate the importance of MCESD as an institution,” he said, explaining that he knows its strengths and areas for improvement, what could work and what wouldn't work and how social partners can come together to put forward ideas, suggestions and influence change in the country in a strong collaborative environment.

"In Malta, we have a table of decision-makers which we know as the Cabinet on Ministers, which brings together all the ministers voted in by the people to take all the executive decisions. And then there is this important consultative body, the MCESD, and this represents everybody in our country with relative opinions and aspirations. It provides advice to Cabinet on matters pertaining to sustainable economic and social development. The Council encompasses unions, employers, civil society, the Gozo Regional Committee, one representative of the Ministry for Social Dialogue, one representative of the Ministry of Finance and the Governor of the Central Bank, who all sit around this table representing pretty much the whole country's interests."

The MCESD tries to digest anything that's happening, or should be happening, in Malta and in its consultative capacity promotes ideas, suggestions and studies to Cabinet or individual ministers, he said.

He said that the members sitting on the MCESD, although representing a specific social partner, would promote discussions that are unifying and converging. "The MCESD doesn't change the role and responsibilities of any of the individual social partners, as all have their independent role." What the MCESD does, he said, is “seek to find areas of alignment driven by mature and researched considerations for all these representatives to come together to be able to make coordinated and collaborative proposals to government and therefore add serious value to national debate and decisions".

Asked about his ability to remove his business representative cap, given his history with the Malta Chamber of Commerce, he said: "When I used to participate in the MCESD while I was president of the Malta Chamber of Commerce, during a time where the country had governance shortcomings, when there was a change in prime minister, when Covid hit, I honestly felt that everyone's contribution in the MCESD, irrespective of our independent opinions, was to rise above any sectorial interests, to negotiate and agree convergence, to the extent that we were able to agree with government on serious recommendations that were of national importance and which were hugely successful." He sees himself as being balanced, collaborative, empathetic, inclusive and solution driven.

The interview was conducted before Xuereb presided over his first MCESD meeting, which was held on Friday. He said that he does not set the MCESD’s agenda himself, and that what takes place within the MCESD is driven by the members themselves and respective priorities. Asked what, in his opinion, are some of the most important issues, he said that the three pillars he believes will underpin any decision that the MCESD takes will be the environmental, social and governance values while tested for economic competitiveness.

He said that due to Malta’s recent greylisting experience, the country has become more sensitive to and learnt a lot about the importance of good governance. The value of good governance is now understood better, by the government, business and society in general. What happened to us was a lesson that we learnt from, ad Xuereb hopes that “we will embrace and build” upon it to make sure that governance structures are developed to become more resilient.

On the environmental aspect, he suspects it will be a main area of interest by the social partners. "When I speak about the environmental aspect, I am not necessarily speaking only of gardens, trees and greenery, but also about how our resources, whether it is clean air, renewable energy, water resource, waste, land, our time, materials, buildings, human resources, food, etc. will steer the quality of life we expect for our society. The environmental aspect is expected to be a strong, important expectation of our society and could potentially be an area that will offer us a competitive advantage that we expect to develop in our society."

As for the social aspect, he said that society is changing. A fifth of the people, he said, comes from many countries with different cultures, different religions, different expectations and are now becoming an integral part of society.  This is now becoming a reality.

Poverty is also an issue that he mentioned, adding that it "is no longer only measured through wage income and affordability, but also through access to developing education systems, IT, AI and other resources. We really need to work to empower our citizens to be healthy, happy and productive if we are to retain competitive advantage with other countries."

He is hopeful that ESG, in its wider sense, will be able to drive a clear vision of where Malta needs to be in 2030 and 2050, and "will enable us to take easier and clearer decisions about many issues like the use of land, manufacturing, choice of foreign direct investment, our education system, etc. All decisions should be motivated by a clear vision and expectation of where we want our society to be in the future. Accountability to future generations is key."

He said that the inclusion of youths in the MCESD's outreach should also be an important aspect, "if we are to remain relevant and focussed. We need to be sensitive to the opinions and expectations of future generations and we need to remain accountable to them in a tangible and responsible manner".

The Ministry for Transport, Infrastructure and Capital Projects and the Parliamentary Secretariat for Social Dialogue recently hosted the Civil Society Committee (CSC) within MCESD to discuss their proposals for the improvement of transport in our country.

Xuereb said that this was his first meeting in his role and the discussions focused on how to improve mobility in Malta. The CSC, he said, represents an important number of societal sectors. "They came together and said ‘our committee reached out to the public. We have compiled feedback and want to tell you what this feedback looks like before you take the next steps in terms of what the country needs to do to minimise the mobility shortcomings on our road network’.” During this meeting, Xuereb said, he was impressed with the value being offered by this one member of the MCESD that submitted real data and suggestions that would add value to the government policies as these develop. 

Priority bus lanes should be a serious consideration if we want to make a tangible difference, he said.

"If a trip from Naxxar to Valletta would take 30 minutes because of traffic, maybe we can consider having dedicated bus lanes that would see buses reach their destination in the shortest period of time... but yes it could also mean that people driving their private car might take longer. That would discriminate in favour of people using public transport over those who use their private car."

"We could also look at logistics. If we manage to avoid having trucks carrying concrete, groceries, etc. out on the roads during peak hours, it may offer tangible solutions to the current state of affairs," he said.

"So we need to educate, but possibly also discriminate in favour of people who really need to get to places at that time as against those who don't; in favour of people who will use shared mobility transportation like buses, and against those who don't. And yes, people who want to resist that will find this change hard, but actually, this is what may get us the efficiency we yearn for.”

He clarified that these were all points brought up by all parties during the meeting and which will be considered by the government.

“If you think about it, such a shift would not be too different from how we expect to travel when visiting other countries. We take it for granted that driving a car in London, Paris, Rome is an absurdity, and that we would always use the underground or a bus or taxi. Why is it different in Malta? "

A recent issue in the media was the potential discussion on the COLA mechanism. He wasn’t able to say much at this stage as he had not yet held the first official MCESD meeting.

He did speak about wages however, and said that "there had been negotiation and agreement within the MCESD in 2017 and a public event celebrated agreement by the parties on how the minimum wage would rise".

He said that the agreement also meant that the Low Wage Commission will submit its recommendations to government every four years. The first recommendations will be due this year, in 2023.

"Here we are in 2023, so I expect that this is a conversation we will need to have in the MCESD and I expect it to be one important agenda item that will be discussed."

"I am hopeful that we will find a way forward for the coming years, as we did in 2017."

It was reported that PN MP Claudette Buttigieg had last year criticised the MCESD for being too secretive.

Asked about this, he said that the MCESD requires resources and structure, not only to be efficient in terms of what it does, but also to ensure the involvement of the public. He highlighted that this is a social dialogue Council. "Our ability to ensure that we remain connected to all of society is going to be a priority for the MCESD. Has it been like that? I know that the MCESD did not have a website until recently, did not have a Facebook page until recently," he said, adding that these were set up by his predecessor. "So there was a realisation that we needed to do something. Now is that enough? I don't think what anyone does is ever enough, but certainly from where I sit and with my expectations and my experiences in organisations I've led, we have a lot to do. I'm hoping that what we will see in the next couple of months is not only an improvement in terms of MCESD business, but also a more effective outreach in terms of what we do and how we engage with everyone to ensure that our opinions and suggestions are as comprehensive and inclusive as possible."

"I don't think there was, but there certainly should be no agenda for secrecy. You cannot have secrecy around a table that is meant to focus on wider consultation. It certainly jars."

Asked about opening meetings between the MCESD and the government to the public, he said that there should be outreach to the media, but there also needs to be time when members of the MCESD must feel comfortable and protected when opinions are controversial or even during healthy divergent conversations before the social partners are able to come together and collectively find common ground and converge a way forward on issues. "This is a healthy process and I will encourage such mature, diverse and responsible conversations while protecting members to feel free and objective enough in a protected collegial space," he said, explaining that this is why such meetings are not held fully in public.

But, he said, openness, inclusion and engagement are the overall goals of social dialogue.

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