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Travel MONITOR
IMTIAZ MUQBIL
Another former chairman of the Bangkok-based Pacific Asia Travel Association has backed calls for good governance and transparency, warning that "if things do go off the rails, and the law steps in, it can get very ugly".
The comment by Jon Hutchison, the Pata chairman between 1997 and 1998, is significant because he chaired a task force that issued an October 2004 report designed to do exactly that. Another former Pata chairman, Ram Kohli of India, has also called for an independent investigation into Pata's finances.
Although Pata is headquartered in Bangkok, it maintains an office in California where it was once based, and is registered as a non-profit organisation (NPO). That makes it subject to the US Internal Revenue Service regulations as well as California state laws.
In recent weeks, trade media investigations have brought to light inaccuracies in Pata's financial statements with the IRS and potential lapses in financial disclosure under the US laws governing NPOs.
Questions have also been raised about the way Pata board members are provided reports about its financial status, and the fact that many members lack access to the information. Pata is a membership-based organisation funded to a large extent by taxpayers through national tourism organisations, including the Tourism Authority of Thailand.
Mr Hutchison, managing director of the Sydney Convention and Visitors Bureau, also a non-profit joint venture, said the task force report issued under his chairmanship was prompted by publicity at the time about financial scandals at the now-defunct US energy corporation Enron.
He said the need to ensure good governance and sound financial management in every organisation involving taxpayers, shareholders or membership dues was just as true today.
Mr Hutchison said he did not know what happened to the task force's recommendations because he had scaled back his Pata links to focus on the SCVB and involvement with other travel groups.
"I do say though, that regardless of what, or where an organisation is, governance and transparency should be an ongoing task of scrutiny and review for any board today. When things are flowing along smoothly it may seem to be unnecessary," Mr Hutchison wrote in an e-mail response.
"But I can assure anyone (and I have the advantage of experience in this) that if things do go off the rails, and the law steps in, it can get very ugly. It's a little like an approach to the environment, it's everyone's responsibility.
"I am not directing any criticism or concerns toward Pata, its management or board specifically. It's a general comment and it would be appreciated if it was kept that way. It is up to the Pata board and management like any other organisation, to ask and answer these questions themselves (or in fact tell me to mind my own business)."
The task force report contained a key recommendation that Pata should consider appointing a dedicated chief financial officer to enhance financial management and give "the membership at large the sense that there was independent oversight in place".
This recommendation was never fully implemented after Pata president and CEO Peter de Jong wrote to the executive committee saying, "Given Pata's modest budget and simple financials, it would be difficult to offer a qualified CFO a challenging position, and we would be hard-pressed to pay for it."
Asked to comment last week, Mr de Jong said that the Pata executive committee during its meeting in Colombo in early April had authorised a major review "on the most suitable governance model for Pata as a not-for-profit association, to ensure that we maintain an effective decision-making body with transparent procedures, checks and balances.
"A comprehensive first report will be presented to the executive committee during their meeting in Hyderabad in September 2008."
Meanwhile, another industry grouping, the American Society of Travel Agents (ASTA), is also facing calls for more transparency and openness.
One of the candidates for election to the ASTA board, Alan Fiermonte of Down2earth adventures, has written to the ASTA Northern California Chapter members seeking their votes in order to "fight for a reform agenda".
He wrote that ASTA had a $4.6-million operating deficit, "built over five years of secretive budgeting", and some serious fiscal and management problems.
"Has anyone heard from the current board on these matters even though they have a duty to report them?"
Imtiaz Muqbil is executive editor of Travel Impact Newswire, an e-mailed feature and analysis service focusing on the Asia-Pacific travel industry.
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