Politics
OMOV inches forward
(CNS): Three months after a government motion passed through the Legislative Assembly to establish the Electoral Boundary Commission to assess the political landscape in preparation for changing the voting system, the government and opposition leaders have announced their appointees. It is now up to the governor to appoint a chair to head up the team that will make the recommendations regarding the boundaries of the single member constituencies ahead of the introduction of one man, one vote. In a short statement Monday, the premier said the government had nominated Adrianne Webb, while the opposition leader said he had chosen local barrister Steven McField.
Making it clear where he stood, McKeeva Bush said everyone already knew he was against the proposal.
“Everyone knows I am against what they are trying to do but we have appointed Steve McField,” he said. “I don’t agree with the mess they are trying to create and I hope my nominee will carry the message to them.”
The PPM’s nomination Adrianne Webb is already an experience boundary commissioner having served on the 2010 commission. As well as being a veteran barrister, McField is also considered a constitutional and political expert.
On this occasion the commission, once it is formed, will not be looking at alternative options to single member constituencies but just how to divide the country fairly. It is expected to consider the numbers of voters in each constituency but will also have regard, the premier has said, for the historic boundaries of districts, which should preserve the separate constituencies of North Side and East End.
Relatively well balanced boundaries have already been drawn up and they have been represented, broadly by the polling station boundaries within the existing six multi-member constituencies, so there should be few surprises unless the commission takes the view that East End and North Side should merge, which would stir up considerable controversy and possibly derail the plans for a fair and equitably voting system by the 2017 General Election.
The main issues that the commission should need to examine are whether or not the current divisions adopted by the previous commission in 2010 are still fair and balanced given the increase in voters in the larger districts of George Town and Bodden Town, and where the dividing lines need to come for the new SMCs between Bodden Town and George Town. They will also need to decide where exactly the dividing line should come to create two constituencies for Cayman Brac and Little Cayman.
Once the commission has done its work, the Progressive government has committed to introducing OMOV by the next election, in accordance with its campaign promise and the wishes of the majority of voters who took part in the 2012 referendum.
However, the premier has demonstrated a certain reluctance to tackle the issue and it was as a result of the pressure applied by the member from East End, Arden McLean, who was committed to repeatedly bringing his private member’s motion until the government fulfilled its election promise, that he eventually agreed to begin the process and start with a new commission.
Premier dodges CoP issue
(CNS): The country’s leader dodged the issue relating to the police commissioner Monday when he made his first public comment about David Baines presiding over the recruitment of a Jamaican police officer charged with murder. Speaking in the Legislative Assembly, Premier Alden McLaughlin said that he and the government were “very conscious of the concerns” relating to the commissioner’s performance and the callsby for him to be removed from office but called on his political colleagues to “exercise restraint”. The premier made no comment onwhether he believed the police boss should resign but admitted the revelation was shocking.
McLaughlin said the police commissioner is appointed by the governor and since she is away for another week following the trip to London for the Joint Ministerial Council, he asked the parliament to wait for him to talk with her about the issue and give her the chance to address the concerns.
In a short statement he referred to Bernie Bush’s proposal to bring a private member's motion calling for a declaration of no confidence in the commissioner from the Legislative Assembly. The premier said he had grave doubts about the constitutionality of such a motion but acknowledged it was an example of the strength of feeling in relation to Commissioner Baines.
“Despite the emotive nature of this matter, I urge all members of the House to exercise restraint in what is said and done in relation to this issue and to not act pre-emptively. If we act in haste we are likely to repent at our own expense,” he said, falling short of offering the commissioner his continued support. He did, however, acknowledge that the news that a now convicted murderer had been working in the RCIPS was “shocking”.
“The commissioner is appointed by the governor and does not fall under the remit of the elected government. Her Excellency is currently out of office and will not return until next Monday. I ask all members of this House to exercise patience to enable me to discuss this matter with Her Excellency the Governor and to give her the opportunity to address the concerns raised,” he added.
In a further statement to the Legislative Assembly, the premier, who is responsible for home affairs, pointed to several other uncomfortable issues in his ministry this week, including the suspension of the chief immigration officer, Linda Evans, and the director of immigration boards, Kimberly Davis. He also noted the revelation and resignation of an officer who was recruited to the prison service with an undeclared criminal record.
As well as the suspension of the two senior immigration officials, he noted that a third was facing charges in the court this summer. Although he did not name anyone, it is understood he was referring to Deputy Chief Immigration Officer Gary Wong, who is facing a drinking and driving charge.
“While I do not want to get into specifics, it has been noted that two top immigration department officials are on paid suspension and a third faces charges before our court system next year,” the premier said in his first public discussion of some of the issues facing his ministry.
He also noted that his own political assistant had been placed on required leave as a result of charges in the court. Although Kenneth Bryan is not a civil servant, the premier told the LA that he was following the example laid out by the civil service as there is no formal protocol for political appointees.
Despite what he described as his great concern over the issues, he said that he was “satisfied that the appropriate actions have been taken in each instance” and said he expected thorough and efficient investigations.
McLaughlin said he wanted to assure the country that the Progressives-led Administration was doing all that it could to continue to restore and maintain the good name of the Cayman Islands.
“In so doing will dig deep when allegations are made of wrongdoing,” he said. ”Placing our employees on administrative leave in no way implies their guilt of any accusation. It is a formality to protect them and the integrity of each investigation. This government will continue to take seriously and investigate any and all reports of maladministration and misconduct. If we cannot restore the faith of all in the Cayman Islands, then we have failed to do what was mandated of us in the polls in May 2013.”
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Passport problem not resolved
(CNS): The UK’s planned implementation of the repatriation and centralization of passports for its territories has been delayed again, the premier told the Legislative Assembly Monday morning when he reported on his trip to London last week for the Joint Ministerial Council meeting. Alden McLaughlin said the date had been pushed back to May next year, and until the repatriation was complete, the local passport office would still manufacture Cayman passports from its current stock. But he warned that stocks are running out and may be finished by the time the UK implements the new system and said that the FCO had still not sorted out the issue of Cayman issuing its own emergency passports after repatriation.
The premier said there was nothing he could do about the UK’s he decision to repatriate and centralize all passports, including those for the overseas territories. He said it was made unilaterally by the Home Office without any consultation with Cayman or other overseas territories and long before the PPM took office.
“As I have reported before, we have been able to ensure that aspects of a BOTC passport, such as the name of the territory on the front remains,” he said. “We have also had robust talks with HMG regarding timeframes for the manufacturing of the new passports to ensure that this is done as fast as possible and also for the Cayman Passport Office to maintain control over the actual issuing of passports. And we also raised the concern regarding the need for Cayman and other OTs to be able to provide emergency passports when needed.
“The issue of emergency passport issuance is, however, still outstanding. I made strong representation to the Home Office and the FCO that this must be treated as a priority,” he added.
McLaughlin said the Home Office acknowledged the need and has agreed to send a small number of officials involved with the repatriation project to Cayman early next year. The premier said that he had also requested that the issue is added to the agenda at a meeting the CIG will have with the FCO early in the New Year.
Among the other issues dealt with was the beneficial ownership register. McLaughlin said all of the territories had stood firm and there will be no centralized public territories register relating to the offshore sector any time soon. (See full story on this issue on CNS Business tomorrow).
Many other issues, from environment to public finances, were also on the agenda and the premier said much of the discussions were useful, though the OTs and the UK did not always agree. Though in the end he said there was more agreement than not and a final joint communiqué was produced.
“Regardless of what some may think, the relationship between the OTs, CDs and the UK remains mutually beneficial. The UK benefits in many ways from the relationship, including in meeting its environmental obligations, as the OTs have some of the most bio-diverse environments around, in fact accounting for more than 90% of such bio-diversity found within the UK and its Territories. And similarly, the OTs, including Cayman, also benefit from historic and constitutional arrangements,” he said.
Reviewing the week-long trip, McLaughlin said members would see from the communiqué, which was laid on the table at the Legislative Assembly, that many areas were covered during the week of discussions and side meetings, including acknowledging the obligations of the UK to its territories, the protection of children, enhancing the economies of the OTs, matters concerning the environment, required major projects, security and crime and other matters.
He said the 2014-15 roadmap includes working jointly to raise international standards to tackle money laundering, tax evasion, illicit finance and corruption. It also implores the UK government to explore with international partners how territories can engage directly to commission technical and policy supports to introduce renewable energy sources. Another roadmap mandate was the ratification of multilateral environmental agreements.
Premier happy with trend in public accounts
(CNS): Premier Alden McLaughlin has said that some local pundits are increasingly “liberal with their criticisms but careful with their praise” when it comes to government, and despite what he said were real improvements in the public accounts situation, he expected some would still not be happy about it. However, speaking in the Legislative Assembly last week before 16 financial reports from government were tabled, he said he was happy with the trend and happy with the work of civil servants to turn things around. “Despite the naysayers, this government is doing its job and doing it well,” he said.
McLaughlin said that the announcement about the improvements in government accounting by him last month was greeted with cynicism but he said he believed there were genuine improvements and there was more good news coming. Of the 16 reports tabled in the LA last Thursday 75% were unqualified 18% had qualified opinions and just one late report from 2012 had a disclaimer.
The reports he said for 2013/ 2014 were looking very good and the expectation was that this could be the first year where government would not receive any disclaimers across the financial reporting entities.
“Just this week the auditor general’s office advised my office that a total of 24 out of 42 entities have been signed off by his office and 16 are unqualified and eight are qualified and two waiting a resolution of matters,” he said.
He admitted that not everything is well and government was still striving for improvement. But he said the auditor general had said he is happy with the improved position and happy with the trend that he is seeing.
“I am also happy with this as is my government,” he said. “I believe the country as a whole can be happy that the position and trend are improving. They will see further improvements…But I have been around long enough to know that no matter how well we do there will be some who will find no pleasure in this announcement and complain. There is an increasing tendency for the pundits to be liberal with their criticisms and careful with their praise but that is par for the course.”
Commending the civil servants he said they had worked long and hard to ensure the country was improving its accounting practices and he said he believed that government had now established a good working relationship with the auditor general’s office.
Complaints boss resigns
(CNS): Nicola Williams, the complaints commissioner, has handed in her resignation and will be taking up a new post next year in the UK. In a statement released from her office on Thursday, Williams said she had accepted the appointment as the UK Service Complaints Commissioner (the Ombudsman for the UK Armed Forces), based domestically and worldwide. She will leave her job in Cayman in early January 2015. Williams had recently had her contracted renewed but only for twelve months and not for the full five year tenure normally offered and not until the eleventh hour before her first contract had expired.
Speaking to CNS in the wake of the announcement, Williams said, “Everyone knows I was reappointed for only one year instead of what would be the usual five years and as a consequence I thought it best to start to looking. I had previously been approached about jobs in the UK on visits in my capacity as a judge and given the situation here I thought I would pursue those other opportunities. On any view this position is a big step up.”
The role of the SCC was established by the Armed Forces Act 2006, as part of a service complaints system which came into effect from 1 January 2008. Williams was selected following open competition and a rigorous five stage selection process, which was chaired by an independent assessor from the Commissioner for Public Appointments in the UK.
In order to secure the powerful post, Williams also had to appear before the House of Commons Defence Committee for a pre-appointment hearing.
Pre-appointment hearings enable select committees to take evidence from preferred candidates for major public appointments before they are appointed. The Minister of State for Defence Personnel, Welfare and Veterans, Anna Soubry described Williams is an excellent candidate.
Williams confirmed that she will speak more before departing about the circumstances in Cayman at present regarding the office she held and how complaints are being treated in the civil service, as well as how government has addressed some of the issues she has brought to their attention via her reports.
Immigration boss suspended
(CNS): The Home Affairs Ministry has confirmed that Linda Evans, the chief immigration officer, has been placed on required leave. A number of questions sent to government officials by CNS on Tuesday remain unanswered but government issued a short statement confirming that the immigration boss had been placed on required leave. “The ministry has received information related to a number of allegations of misconduct by the CIO, which require a full investigation,” the statement read. “As a result it determined that invoking the provision for required leave was appropriate in the circumstances, to allow the allegations to be investigated quickly and thoroughly.”
CNS understands that Evans’ suspension is not directly connected to the investigation into Kimberly Davis, the director of immigration boards who is also on required leave in connection with irregularities and potential immigration and labour infractions relating to her private businesses.
In recent weeks CNS has been given copies of complaints and correspondencesent to government officials, including the former premier, regarding the CIO. the complaints make myriad allegations about her approach to the job and the management of the department. There were also unsubstantiated allegations regarding more specific and serious infractions regarding status grants and other issues relating to the department.
Dart’s waivers exceed $11M
(CNS): The public purse is light by well-over $11 million on the development of the Kimpton Hotel on Seven Mile Beach by Dart Realty and its construction company DECCO due to duty and fee waivers. The results of an FOI request by North Side MLA Ezzard Miller also show that the developer was given the red card permit to construct the hotel well after work had started on the building, something the independent member said no one else would get away with. Concerned that government authorities are simply overlooking infractions because of the size of the developer, Miller told CNS that enough is enough and government had to stop bending rules to suit powerful individuals.
“We have got to put a stop to this. As government bends over backwards for these developers, Caymanians get nothing in return,” he said.
Miller pointed to the massive waivers given to Dart on the hotel project, which he said he did not believe were justified. He queried exactly how many jobs had been created on the hotel project for local workers and exactly how Caymanians would benefit from the more than $7 million waived.
The FOI request, which was granted in full and given to Miller within the lawful timeframe, revealed that planning fees of almost a quarter million dollars were waived for Dart’s development, as well as a whopping $2.65 million waiver on infrastructure fees. In addition, almost $1.7 million on building permit fees were scrapped and over $2.7million was waived in affordable housing fees, which Miller described as "outrageous".
However, answering a question in the Legislative Assembly on Thursday posed by East End member Arden McLean about the size of the waivers so far, Finance Minister Marco Archer said that, as at 26 November, the concessions regarding fees, duties and taxes had now reached $11.8 million. In addition to the revelations in the FOI response, there was also $2.4 million in stamp duty waivers, and import duty waivers of more than $1.2 million.
Arden McLean asked if the cost of the waivers were to offset the cost of the road. Archer responded that, to the best of his understanding, he believed this was the case.
Although Dart has committed to a major project that is expected to generate jobs and which includes covering the cost of the Easterly Tibbetts Highway Extension into West Bay, in addition to the significant duty and fee concessions, the developer has received and a stretch of the West Bay Road, turning a huge swathe of his land into beachfront property, multiplying its value by many millions of dollars.
As government continues to negotiate with Dart over the ForCayman Investment Alliance, which was entered into by the UDP administration, the developer is still receiving significant duty waivers, despite the minister of finance’s promise when he came to office that he was going to examine the duty and fee waivers and put an end to the government giveaway.
However, when answering the East End member's questions, Archer said that he could not predict how muchwould be given away to Dart as a result of the agreement.
Miller declared that this government was continuing on with the disaster created by the former administration.
“The ForCayman Investment Alliance was the worst thing to happen to this country,” he told CNS, as he pointed to the massive fee waivers and the infractions that the planning authorities were simply ignoring. “How did Dart get a red permit weeks after he had already started the hotel?” he asked, noting that a local trying to build his house without a red permit would have been stopped. Miller even queried whether the planning department would have bothered to issue a permit at all if he had not made the FOI request.
In the wake of the controversial planning law changes, which government ushered through the Legislative Assembly recently, Miller said he is exceptionally concerned that the changes are all designed to meet demands of developers and that laws are being manipulated for these investors against the best interests of the local population..
Given the massive waivers that Dart has received, Miller said he wanted to know exactly how many Caymanians were given jobs on the Kimpton project and what the people of Cayman are getting for their $11 million.
According to the premier, half of the people working in government earn less than $3,300 per month. The duties and fees on the Dart project if they had been collected could have created almost 300 jobs in the public sector.
See FOI request posted below
Charities demand action against OTs at JMC
(CNS): The Cayman Islands delegation along with other overseas territory representatives in the UK this week for the annual Joint Ministerial Counsel meeting with the FCO were greeted by demonstrators from UK charities that want to see more action against offshore secrecy. Christian Aid campaigners say that a year after what it described as “Britain’s tax havens” agreed to consider lifting the secrecy around who really owns the companies domiciled in the territories have made “alarmingly little progress”. As leaders from Bermuda and the British Virgin Islands as well as Cayman met in London the charity said government needs to fulfill the UK Prime Minister’s promise to end secrecy and “set a new standard for transparency”.
Joseph Stead, Senior Economic Justice Adviser at Christian Aid, said: “Over the last year, so little has changed that it is hard to believe the Overseas Territories were genuine in their commitment to consider public registers of who owns companies. In April the Prime Minister reminded them that ‘the rest of the world is watching’ but they seem to be stalling in the hope that their promises will be forgotten.”
At last year’s meeting of the Joint Ministerial Council the territories had agreed to hold public consultations on creating public registers of who really owns companies but there has been no reports or conclusions made public.
The issue has been one of significant controversy not just in Cayman but in other financial service centres as well. Although, Wayne Panton, the financial services minister has initiated a consultation process he has made it clear that there will be not be a public register accessible by all in Cayman before the on-shore jurisdictions do the same thing. Cayman has argued persistently that unlike the US, the UK and other onshore financial centres, the Cayman Islands already collects the information regarding beneficial ownership. However, the charities continue to note that it may be collected but it is rarely accessible.
With none of the territories coming up with a plan on how they intend to make that information more accessible after some ten months of consultation the charities say it is not good enough.
“It’s clear that secretly owned companies in the Overseas Territories are used for international corruption, money laundering and tax evasion,” Stead stated in a release from the charity.
“The BVI, the Caymans (sic) and Bermuda are in the World Bank’s top 20 jurisdictions for cases of grand corruption. They need to be among the first to change. The failure to clean up the Overseas Territories risks being a blot on the Prime Minister’s record of getting tough on tax dodging. While the Overseas Territories stall, the UK is one of a growing number of EU countries supporting public registries across the EU to counter money laundering."
The legislation to create a public register in the UK was scheduled to be debated in the House of Lords Tuesday and there are concerns in the offshore industry that the pressure from the UK will increase on the territories to do the same once Britian comes up with a publicly accessible register.
CIG to use spending muscle
(CNS): The finance minister has said that government will soon be doing a better job of utilizing its spending power to cut costs. During his address last week in the Legislative Assembly on government’s Strategic Policy Statement outlining its future fiscal plans, Marco Archer said that his ministry would be leading an initiative to “leverage the immense buying power of the Cayman Islands Government”. Sticking to his theme of fiscal prudence, he said the introduction of a centralized procurement system would help to keep core government expenses down. Keen to rein in spending on goods and services, Archer said he wanted to optimize every public dollar spent.
“To ensure public sector expenditures remain in-check and further enhance the prudent management of public sector finances, the government will be taking steps to improve its procurement regime,” Archer stated.
The news comes more than a year after Deputy Governor Franz Manderson announced plans for the creation of a government procurement department headed up by a procurement director, based on recommendations made by the auditor general. In September last year Manderson told the Public Accounts Committee that Cabinet had given the go-ahead and budgeted some $350,000 to create the specialized office that would deal with everything from developing new laws about the procurement process to establishing business cases for public projects.
Last week Archer said that government was taking steps to improve its procurement regime and the Finance and Economics Ministry had recently concluded the recruitment of the director of the Central Procurement Office.
He said, “Standardization in specification and policies are expected to yield numerous benefits, such as reduced costs, reduced future maintenance on vehicles, machinery and equipment, greater transparency in the procurement process and greater compliance by private sector merchants wishing to do business with the government.”
Pointing to the need to keep operating expense in check, Archer said the ministry would move “swiftly to develop the policies and procedures that will be used going forward to ensure that the citizens of this country receive optimum value for every dollar spent”.
He said he expected public spending would remain relatively static over the next three years with an increase of just 1% between the current 2014/15 expenditure budget and the SPS financial targets for the 2017/18 year. The minister also noted that the tight spending regime was before any other efficiency gains that may result from the implementation of any of the Ernst & Young report recommendations for cutting the public sector.
Despite inflation, keeping government expenditures constant was a result of increasing efficiency, he said.
Last year the deputy governor said the centralized procurement department would address the numerous concerns that had been raised by the Office of the Auditor General over how government manages procurement.
Manderson said at the time that the recruitment process for the procurement director had already started. He had told the PAC that the future goal in managing projects would be to get things right from the start, and it will be this office that will establish the business case for any project before it goes to tender. The plan at the time was to include the Central Tenders Committee in the new department, which was to be renamed the Procurement Committee.
See related story on CNS: Procurement office in works
Debt turn around promised
(CNS): The PPM administration has announced a reversal of the public debt in a move they described as a demonstration of government’s “financial prudence”. Finance Minister Marco Archer revealed Wednesday that over the next three years government will repay around $127.6 million in debt principal, reducing the debt balance to a forecast amount of just over half a million by the end of the 2017/18 fiscal year. He said the reduction in interest payments would fall to $28.2 million — enough to fund the education ministry’s entire scholarship programme. The finance minister also said that with enough operating cash to cover government throughout the entire year, it would no longer need a costly overdraft facility.
The public sector debt has long been a point of contention, with the previous UDP administration often criticizing the PPM for mismanagement of public-sector funds and driving the CIG into the red.
At its peak, government debt reached almost $800m in 2010/11. A fundamental reason for government failing to comply with the Public Management and Finance Law. Archer said that net debt ratio would fall by the 2015/16 financial year to 9.8%, placing government back in compliance with that aspect of the law. He told the LA that government would repay the existing debt at an aggressive pace.
“This will be achieved through a prudent debt management strategy which includes the setting aside of approximately $18 million of future debt servicing payments in a restricted Sinking Fund during the current 2014/15 financialyear. A portion of our future debt repayments will therefore come from this Fund instead of from recurrent revenue,” he explained.
Government has an overdraft facility and the overdrawn balance peaked at CI$22.6 million on 20 December 2013 but this was well within the overdraft limit. On 14 January 2014 the government’s operating bank account balance became positive and remained positive to the end of the 2013/14 financial year. According to Archer, government will not require an overdraft facility to fund its operations during 2014/15 and subsequent financial years, since operating cash will be sufficient to fund its operations.
"If there are no natural disasters, the economy performs as expected … the central government is forecast to have more cash in its bank accounts ($514.5 milion) than the total outstanding debt of the entire public sector ($509.7 million)," Archer said, calling it a “monumental achievement” considering where the balance lay a couple of years ago.
Given that the Cayman Islands lost 183% of its GDP in 3.4 billion dollars thanks to Hurricane Ivan, it is certainly worth mentioning the possibility of another natural disaster to knock this plan off track.
The hoped for turn around with government debt also means more support for local small to medium enterprises, with government credit grants and quarterly payments for businesses with less than 10 employees, as opposed to a single annual payment. Archer described SMEs as having the greatest potential for employment and growth in the private sector, while Premier Alden McLaughlin spoke of continuing to attract multinational companies for our private sector.
It was announced that there would be $47 million for capital investments and expenditures in the 2015/16 financial year. Thereafter, they plan to allocate $57 million and $47 million respectively in fiscal years 2016/17 and 2017/18.
These claims all came along side statements of public sector debt declining and of modest growth in financial services. In his speech Archer stated that the consumer price index is expected to grow 2.3% over a 2 year period and unemployment is expected to fall from 5.9% to 4.9% during 2017-18.
On the topic of local Caymanian unemployment rate, Archer said, "We have to be careful for whom we are building this country." He said that Cayman was currently in a "sweet spot" in regards to economic growth.
There was also an announcement that the immense leverage and buying power of CIG would be put through a central procurement office.