Those, including the recipients, who were ‘surprised’ by the tone of Clydeport’s Managing Director, Margaret MacKay, in her correspondence with current and former Scottish Government Ministers and with Argyll & Bute’s MP have arrived, obliquely, at the heart of the matter.

Ms MacKay’s behaviour toward Government and all elected representatives and the demands she attemopted to make of them, speaks for the – accurate – perception that she and her company, a private enterprise, are superior beyond accountability.

At the 1991 Labour Party Conference, Tony Benn said: ‘There are five big questions to ask any important person:

• How much power have you got?
• Where did you get it from?
• How do you use it?
• Who are you accountable to?
• How can we get rid of you?

Run that rule on Clydeport. It clarifies the issues like no other and it informs what follows.

Clydeport and the transfer of statutory authority

Clydeport is a statutory authority, meaning that its authority is confirmed by statute (the original Hebrew word for ‘statute’, a word recurring in the Bible, is chok, meaning, interestingly, a law given without a reason).

The relevant statute was not intentionally applied to a profit-driven private enterprise like Clydeport, owned ultimately by parent company Peel Holdings, itself 76% owned by John Whittaker, a billionaire property developer based in the Isle of Man, with the remaining shareholding owned by an Abu Dhabi family.

Peel Ports, a subsidiary group of Peel Holdings, simply acquired the statutory authority when it bought the former Clydeport Limited, not long after it was privatised in 1992 under Statutory Instrument 1992 No 304 (The Clyde Port Authority Scheme 1991 Confirmation Order 1992.)

Following the 1964 Harbours Act, Clyde Port Authority, a public sector statutory Trust port, was established in 1966 by bringing together the Clyde Navigation Trust, the Greenock Harbour Trust and the Clyde Lighthouses Trust.

It was at this time that the boundaries of Clyde Harbour were drawn, with, as Clydeport boasts today, ‘a 450 sq. mile area on the River Clyde, it’s estuary and sea lochs’ – an immense aea.

Then, in 1991, Clydeport Limited was formed. This arose, in legal parlance, ‘in pursuance of section 1 of the 1991 Ports Act’. Clydeport Limited was registered as No 134759 under the Companies Act 1985 and was a wholly-owned subsidiary of the Clyde Port Authority. Clydeport Limited was then specified as the Authority’s ‘successor company’ for the purposes of Part I of the 1991 Ports Act – the enabling of the transfers described below.

Clydeport Limited was a form of management buy out, owned by Clyde Port Authority’s management and staff.

The statutory instrument identified above was concerned with the transfer from Clyde Port Authority to Clydeport Limited of:

• ‘all property, rights and liabilities of the Authority’
• ‘all functions conferred or imposed on the Authority by any provision contained in the Clyde Navigation Acts 1858 to 1965, the Greenock Portand Harbours Acts 1913 to 1957, the Clyde Port Authority Orders 1965 to 1977 or any other local statutory provision’.

Excluded from transfer were securities offered by the new company, Clydeport Limited (obviously retained by Clyde Port Authority); and various rights and liabilities which, on the one hand protected Clyde Port Authority and on the other were liabilities the new company would not have wished to inherit.

In this statute, a clear distinction is made between the new company, Clydeport Limited and Clyde Port Authority, which seems to have been intended to continue as an overall authority. The statute makes specific provisions for the membership of the Authority:

• ‘The Authority shall consist of a chairman appointed by the Secretary of State and not less than eight or more than fifteen other members of whom—

(a) not less than six or more than twelve shall be appointed by the Secretary of State; and

(b) not less than two or more than three shall be full-time employees of the Successor Company appointed by the Authority.’

These arrangements keep the ‘successor company’, Clydeport Limited, clearly in the passenger seat.

This privatisation was completed in 1992 – along with Forth Ports, which underwent the same sloughing off process, driven by the weak Major government at Westminster, anxious to follow the Thatcherite doctrine of ‘selling the family silver’.

The arrival of Peel Holdings and its acquisition of Clydeport Limited

Peel Ports began quietly building up a shareholding in Clydelort Limited in July 1991, buying a modest 3% stake which no one noticed; taking that to 5% six months later; and then going to a more obviously purposive holding of 8.1% in 1992.

Then, on 18th November 2002, a surprise bid for Clydeport Limited emerged from Peel Holdings. The City and shipping sector alike were taken aback at Clydeport Limited’s sudden announcement of its plans to sell out to Peel Holdings for £184.4 million. However, Tom Allison, then CEO of Clydeport who eventually became CEO of Peel Ports and is now Chair of Clydeport trumpeted it as a great deal.

The serious press was not convinced. Industry wisdom questioned the foundation for the flat declaration of Clydeport Limited’s directors that they could not grow the company if it remained independent. Elsewhere the press expressed concern about yet another major listed company going out of Scottish control. How prescient they were.

But the deal went through and the rest is intermediate history. The story is not yet over. We see the beginnings of a level of public concern over the untrammelled power of big corporations, often extra-territorial, that may well lead to a 21st century form of efficient, business focused nationalisation.

However, constitutional and procedural questions remain. The Major Government was not known for its strategic intelligence. It is more than likely that, when it enacted Statutory Instrument 1992 No 304 to allow the transfers described to be made to Clydeport Limited, it did not see beyond the relatively safe transfer of authority to a team born from the public sector. Such a team was reassuringly au fait with and formed by the old public sector values.

All the Government of the day thought it was doing was shedding burdensome financial responsibilities. And politicians have never worried about whether the lunch is free or not. Moreover, the team for the wholly owned privatised subsidiary was one hugged close to Clyde Port Authority by the arrangements put in place as described above.

No sane and competent Government should knowingly contemplate the passage of statutory authority into private sector hands without very robust arrangements for review and renewal and without real leverage at any necessary point. Buccaneers are always in the offing and Clydeport is a lesson now learned the hard way.

Accountability

To the Government

The simple fact is that, as things stand, Clydeport’s statutory functions are beyond Government intervention. The company’s corporate ethos, evincing no shred of formal or actual social responsibility, is similarly beyond Government power to impact upon, where, as is the case, the company proves resistant to the notion of such responsible conduct.

To the Crown Estate

In our own – continuing journalistic challenge to find some lever to which Clydeport will respond, we drew another blank with the Crown Estate. Clydeport’s status as a statutory authority leaves the Crown Estate with no legal authority to licence – or not – its activities. And the Crown Estate gets no revenues in respect of Clydeport’s Loch Striven lay ups.

But interestingly…

In our discussions with the Crown estate we were informed that ‘public rights to navigation and anchorage are inalienable and take precedence over the Crown Estate’s ownerships of the sea bed’.

To clarify what this might mean, we presented the Crown Estate with a hypothesis:

Supposing that a yacht or a RIB or a fishing boat came along and anchored in the middle of operations in, say, one of the parcels of the sea bed the Crown Estate has leased for the development of harvesting offshore wind or tidal flows… Could the Crown Estate or their tenant have the boat removed?

The answer, gloriously, is no. The boat would have the right to stay there for a week before any action could be taken. And, of course, towards the end of that week and before the first boat left, another boat might just happen along and drop anchor in an inconvenient position – but would have the right to stay for a week.

So even the law is open to left field application.

An outstanding question

In and after the acquisition of Clydeport Limited by Peel Holdings, what happened to Clyde Port Authority, its superior role and the securities and liabilities which it retained in its own continuation as a superior authority?

There must be an answer to this and it would be good to have information clarifying the position.

Potential actions to recover democratic accountabilty or limit its abuse

There is a spectrum of actions open to the Scottish and Westminster Governments to take and to voters to press for. Action is not necessary in relation only to Clydeport and Peel Holdings. There are other private businesses with statutory authority, similarly beyond accountability.

This is a serious democratic deficit and it the concern that drives our own anxieties and will do so into the future until this situation is redressed.

Possible actions include:

• Reform of the 1964 Harbours Act
• Redrawing the 1966 boundaries of the Clyde Harbour
• Blocking future acquisitions by Peel Holdings in Scotland until social responsibility becomes enshrined in its constitution and in its practice.

The 1964 Harbours Act

The main issue is the reform of the 1964 Harbours Act, of the necessary statutes and of the circumstances in which they may be revoked. In the 21st century, we would suggest that the absence of robust evidence of corporate social responsibilty should be one cause for revocation.

Other issues include the strengthening of accountability and the setting of periods for review and renewal of the exercise of given statutory powers, with clear criteria, updatable at the point of renewal.

The Clyde Harbour boundaries

We understand that the boundaries of the Clyde Harbour can be redrawn under the 1964 Harbour Act as it stands.

It is no longer defensible that so immense a waterway area should be controlled without accountability by a private enterprise whose shipping business is in steady decline. The harbour boundaries as drawn, were predicated upon a very different industrial and commercial scenario when shipbuilding and tonnages handled were of a very different order than they are today.

We understand that this could be undertaken by the Scottish Government. A member of the Loch Striven community, with relevant expertise, has explored the 1964 Harbours Act, identified Section 15 as germane to the power to redraw the harbour boundaries – and discovered that Section 15 is devolved to the Scottish Government. We understand that this situation has been confirmed by Westminster authorities.

Such action could be taken in advance of the more complex constitutional reform of the 1964 Harbours Act and the relevant statutes. This would at least impose some limitation on the unfettered rule of a socially irresponsible private sector statutory authority.

Obstructing further acquisitions in Scotland by Peel Holdings

If the Government will is there to see corporate social responsibility enshrined in Scots law as a requirement of public and private sector bodies, there will be a way to do this.

Corporate social responsibility matters very much in the larger picture of the sort of society Scotland is and aims to become. Without it, the country is becoming little other than a colonial plantation.

In 2007, when Tom Allison stood down as CEO of Peel Ports (replaced by Stephen Baxter), it was rumoured in the press that this move augured an aquisitive advance upon Forth Ports by Peel Holdings.

This has not happened – yet – but billionaire owner, property developer John Whittaker, is know for playing the long game.

It would certainly be profoundly damaging to the social and political fabric of Scotland if its two major Atlantic and European facing ports were owned by a massive private enterprise exercising no social responsibility and above Government or other intervention.

The key role of property acquisition

It is important to remember that John Whittaker is fundamentally a highly skilled property developer. His interest in most of the ports he has acquired for Peel Holdings goes beyond their role in the shipping industry. These ports and docks have themselves been owners of significant property holdings with immense opportunity for development and profit-taking when times are right.

Such developments extend the power to shape our society which, again, in the hands of a company beyond democratic intervention, is a further matter of real concern. Planning authorities are famously feeble guardians against the might of the dollar.