Wednesday, July 30, 2008

Transparency critical to each privatisation – Brassington

Transparency critical to each privatisation – Brassington
Tuesday, 29 July 2008 23:33 Guyana Times

Transparency talk: Mr Winston Brassington (right) addresses the seminar, Monday, July 29. Next to him is Chairman of the Private Sector Commission, Mr Gerry Gouveia. - Private sector says there is need to recognise niche industries

‘We do need new incentive regimes in Guyana since there are new and emerging sectors. We also need to recognise niche industries’ -

Vice Chairman of the Private Sector Commission (PSC) Ramesh Dookhoo

Head of the Privatisation Unit Winston Brassington says transparency is a critical component of each privatisation deal government makes. He said that except in special circumstances, each privatisation transaction is advertised for bids/tenders after which approval of the selected tender is done by the Privatisation Board and Cabinet.

Brassington was speaking yesterday at the seminar on Guyana’s Privatisation and Tax Policies and Practices, which was held at Le Meridien Pegasus. He said that government made clear its intention to retain a number of state entities, “for strategic purposes.”

Brassington said that the preferred method of making property available to investors is through leases and not sales, since leasing allows for clawback mechanisms to be activated, should the investor not comply with the conditions of the lease. The second phase of government’s privatisation programme raked in $23 B from 1994 to 2008 from privatisation of state enterprises and real estate deals at a number of industrial estates.

But not all of the money from those deals goes to the Treasury, since the Privatisation Unit and its parallel entity, National Industrial and Commercial Investments Inc, uses some of it to meet the expenses connected with properties under their stewardship.

The Privatisation Unit, in association with the Guyana Office for Investment (GO-INVEST) and the Guyana Revenue Authority (GRA), organised the half day session to make clear the policies governing privatisation of state entities and assets, and the associated tax incentives to investors. At the launching of this newspaper on June 5, President Bharrat Jagdeo asked that the Privatisation Unit hold the session to educate the public about the privatisation and concession framework.

This was in response to Chairman of the Demerara Distillers Group Yesu Persaud, who, at that forum had called for those concessions made available to Queen’s Atlantic Investment Inc. (QA11) to be given to all investors.

Niche industries

In delivering a private sector perspective on taxation, Vice Chairman of the Private Sector Commission (PSC) Ramesh Dookhoo said, “We do need new incentive regimes in Guyana since there are new and emerging sectors. We also need to recognise niche industries.”

He said that tax harmonisation in the Caricom region has to be fast-tracked. He said too that Guyana’s tax policies must be grounded in reality. He said that legislatively, Guyana has come a long way. “It is important that we think regionally and extra regionally when it comes to tax reform,” Dookhoo said.

In delivering his presentation entitled, “Guyana’s Privatisation Programme – Institutional Framework and Results” Brassington said that Guyana could be divided into two distinct phases: Phase 1 which ended in 2002 and saw the total or partial divestment of 14 entities; and Phase 2, which started in 2003 and resulted in 26 entities being totally or partially privatised.

He said that unlike the general approach used in Phase 1, which was to close down unprofitable entities and liquidate, with only three cases of the privatisation being complete through the sale of the businesses, the Phase 2 privatisation programme’s approach was largely the sale of the businesses.

In his remarks, Minister of Finance Dr Ashni Singh said Guyana’s privatisation programme over the years was, for the most part, successful. Dr Singh said that as a result of the privatisation programme, government has been removed significantly from business.

He pointed out that the companies that had been identified for privatisation were those that had been in financial distress and that were being a burden on the Treasury. Minister Singh made reference to the Guyana Electricity Corporation (GEC) as one of the “un-success” stories of privatisation, with the new entity, the Guyana Power and Light (GPL), reverting to government ownership upon the departure of the investor in 2003.

But he said lessons have been learnt from the GEC/GPL experience and stated that the utility company had peculiar circumstances which made the privatisation difficult. He said that the privatisation process has however evolved over the years and now there is some element of post-privatisation monitoring.

Praising the work of the Privatisation Unit, the Minister said that apart from the work of selling off state assets, the Unit has been instrumental in other activities, such as the Berbice River Bridge project, through the mobilisation of private resources from a number of investors.

The Minister said too that with the evolution of the fiscal incentives, the system has been made more rule-based with the elimination of discretionary powers with the passage of the Fiscal Enactment (Amendments) Act 2003.

He said that Government remains committed to the strictest standards of openness. He said that yesterday’s session provided a very important opportunity for the receipt of feedback and clarification on both sides. Flexibility in negotiations Chairman of the Private Sector Commission (PSC) Captain Gerry Gouveia said that there has been tremendous improvement from the 1970s and 1980s but said that there is still a far way for Guyana to go to achieve all the benefits of privatisation. “We still cannot provide adequate jobs [to match] the cost of living,” he said.

But he noted that the creation of an environment welcoming to investment is not the job of the private sector alone. He charged Brassington to be even handed in the way the Privatisation Unit deals with potential investors. “My view is that we must all expect to give [some] latitude for flexibility as we negotiate.

We have to have a level of trust in our public officers,” he said. Gouveia said that the aim of broadening the base for competitiveness is not always achieved through the privatisation.

Chartered accountant Christopher Ram asked the panel whether the proceeds that the Privatisation Unit collects are handed over to the Consolidated Fund. In response, Brassington told the gathering that the money is used to meet costs associated with properties under the control of the unit.

Brassington was asked why it was that agreements covering the various QA11 investments were signed and approved months before the Memorandum of Understanding. He said that this was so, because of the negotiations were ongoing to settle on the details of the investment.

Commissioner General of the Guyana Revenue Authority (GRA) Khurshid Sattaur said that his agency foregoes $20 billion a year in remitted taxes. But he said that more and more the GRA is coming down on agencies and individuals who breach the conditions of their tax remissions and they are made to pay the amounts owed.

Sattaur made the point that the GRA is culpable in the delay of shipments to be cleared, but he said that sometimes the importers don’t provide accurate information to the Customs and this delays their shipments.

The ‘separation of powers’ concept is not a sacred cow

The ‘separation of powers’ concept is not a sacred cow
Kaieteur News. July 30, 2008 | Letter by Prem Misir

Recently, there have been a couple of letters on the ‘separation of powers’ doctine, and I now want to reiterate some positions I previously addressed.

The media and opposition elements became frantic when President Bharrat Jagdeo recently expressed concerns over the Court’s ruling on how the scrutineering funds should be distributed.

And the implication is explicit, too, in that President Jagdeo should not make observations on judicial matters. Such observations constituted a violation of the notion of ‘separation of powers’, according to this misguided group of people.

And so we saw over the past week several communications pouring in, suggesting that the concept of the ‘separation of powers’ is a sacred cow; meaning that the concept must not be infringed; and that the judiciary also is some kind of holy animal.

Indeed, this accepted wisdom is akin to 19th century thinking. But, first, what is this ‘separation of powers’?
John Locke in his Civil Government (1690), second treatise, introduced only legislative and executive powers; and Montesquieu in his L’Esprit des Lois in 1748 included the judicial powers.

And Montesquieu believed that a country’s freedom is predicated on the separation of the three types of power - legislative, executive, and judicial.

Legislative power refers to the power to enact laws and parliament performs this function. Executive power denotes the power to implement laws, and government performs this function.

Judicial power alludes to the power to interpret laws in accordance with the constitution, and the high court performs this function. The U.S. was the first to initiate the concept of ‘separation of powers’ into its written Constitution.

But there is no explicit provision in its Constitution, indicating that there should be three separate branches of the Federal Government, according to Professor Doug Linder of the University of Missouri-Kansas City Law School.

However, James Madison did insert an amendment in his Bill of Rights’ proposal to make these powers explicit; but Congress rejected the proposal, intimating that the Constitution already carried an adequate amount of ‘separation of powers’, and possibly created a window of opportunity for appropriate encroachment of one type of power upon the other.

And so for pragmatic reasons, the U.S. exemplifies considerable executive and congressional infringements upon the ‘separation of powers’.

Picture the U.S. where there is the historically ‘strong president’ view: The U.S. President may do anything not explicitly prohibited by the Constitution; the Youngstown Sheet & Tube Co v. Sawyer (1952) and the Dames and More v. Regan (1981) cases amplify this ‘strong president’ view.

The Youngstown Sheet & Tube Co v. Sawyer (1952) case happened during the Korean War when there was industrial unrest at the U.S. steel mills; President Harry Truman then took control of the mills.

And seven justices of the court stipulated that the powers of the President are not explicitly prohibited under article II of the Constitution.

The Dames and More vs. Regan (1981) case addressed the constitutionality of President Jimmy Carter’s executive orders addressing claims by Americans against Iran to be adjudicated by a specially-created tribunal; in this case, the Executive branch proposed the establishment of a tribunal that would ordinarily be set up by the judiciary. However, the Court upheld President Carter’s Executive encroachment on the judiciary.

More recently, we saw other unique encroachments on the ‘separation of powers’ when President George Bush commented on an imminent Supreme Court case in 2006, Hamdan vs. Rumsfeld; the case that was intended to determine whether military commissions would adjudicate on the Guantanamo Bay detainees.

And again, another executive infringement on the ‘separation of powers’ happened when President Bush admonished the courts; indicating that they gave Americans only one option, and that is to have an amendment banning same-sex marriages.

Periodically, these Executive infringements or encroachments become a prerequisite for making necessary adjustments to ever-present changes; and so we need to perceive ‘separation of powers’ pragmatically, and not as ‘black’ and ‘white’, but as a continuum.

Recall that even the Congress of James Madison’s days thought it was inappropriate to make the notion more explicit to the point of redundancy; the Congress appropriately left a window of opportunity for encroachments that would facilitate better adjustments to changes.

A democracy enables those adjudicating in the judiciary to carry the necessary and sufficient professionalism, in order to present just and fundamentally fair rulings; and Guyana is a democracy.

Clearly, then, under this type of political system, those adjudicating in the judiciary need not bother about comments on their rulings, regardless of the quarters from which they emerge; unless, of course, such rulings really are the ‘pits’.

And so President Jagdeo is well fortified, both historically and contemporaneously, in expressing concerns about the Court’s ruling on the ‘scrutineering fund’.
Prem Misir

Between 1994-2007… $23 billion realized from privatization deals- …but not all went to Treasury- Winston Brassington

Between 1994-2007… $23 billion realized from privatization deals- …but not all went to Treasury- Winston Brassington
Kaieteur News. 30 July 2008

Between 1994 and 2007, in excess of $23 billion was realized from the privatisation of public companies and real estate. But not all of monies came directly into the revenue coffers.
Mr Winston Brassington, when asked about the deposit of the $360 million accrued from the sale of a plot of land to John Fernandes Limited, said that the money went to NICIL, a government holding company.
When monies go to the public treasury, Parliament must decide on its release. However, when it goes to another fund, there is no need for Parliamentary intervention.
According to figures released by the Privatisation Unit, yesterday, during the hosting of seminar on Government’s privatization and taxation policies and practices, between 2003 and 2007, the Guyana Office for Investment (GO-Invest) also granted some 285 companies concessions.
Up to 2002, 14 companies were either partially or totally divested while from 2003 in the second phase of privatization, 26 entities were privatized.
Yesterday’s event at Le Meridien Pegasus was hosted jointly by the Privatisation Union, GO-Invest and the Guyana Revenue Authority, and was prompted after several questions were raised earlier this year over the privatization of the Sanata complex to the owners of the New Guyana Marketing Corporation.
According to a Privatisation Unit report yesterday, from 2003 there were 99 transactions from 29 Government entities. These were broken down into 26 privatization deals, 46 real estate transactions, and 27 restructuring/wind-up deals.
Of the 26 privatisation transactions, four were not advertised with two of these ending up in an employee sale in the case of Guyana National Newspapers Limited and an employee/management buyout in the case of Surapana Farms.
Of the remaining 22, three were negotiated and finalized after inadequate responses from advertising. These include Linmine and Aroaima Mining Company/Bermine. Queens Atlantic Investment Inc was actually a fourth but the seminar made no mention of the QAII deals in the initial presentations.
According to the Privatisation Union, while proceeds from Phase 1 were more than $1.1 billion, gross proceeds from Phase Two exceeded $23 billion from privatization/real estate transactions between the period 1994 and 2007.
“Overall, the Phase 2 privatisation has been done in a transparent and open manner. The modes employed emphasized the continuation of the business in most cases. Considerable attention was given to optimizing value, investment, and employment.”
According to the PU, difficult businesses which could easily have been liquidated have been privatized saving thousands of jobs.
“A reasonable review of the privatization policy paper indicates a general achievement of policy objectives and intentions.”

Sanata Complex deal… ‘We made a mistake’

Sanata Complex deal… ‘We made a mistake’ - We THOUGHT it was covered in law - Da Silva
Kaieteur News, July 30, 2008. | News

…Rovin Deodat stymies questioning at tax seminar

“We made a mistake…We thought it was covered in law.”
This admission was made by Head of the Guyana Office for Investment (Go-Invest) Geoff Da Silva, yesterday, during a discussion segment of the long-awaited seminar on Guyana’s Privatisation and Taxation Policies and Practices.
This position was confirmed by a piece of legislation tabled in the National Assembly last Thursday to amend the principal Act to include the Queens Atlantic Investment Inc deal.
The event was attended by scores of eminent businessmen and women, and was organised by the Privatisation Unit in collaboration with the Guyana Revenue Authority.
Notably absent was Chief Executive Officer of Demerara Distillers Limited (DDL), Yesu Persaud.
President Bharrat Jagdeo had suggested the forum on June 5 during the launch of the latest daily to hit the streets, namely the Guyana Times.
The forum was suggested in response to statements eminent businessman Persaud had made. In his remarks at the forum Persaud had said that concessions similar to those granted to QAII should be given to other local companies.
Opening the questioning segment of the seminar yesterday, Chartered Accountant Christopher Ram told the panel which included head of the Privatisation Unit Winston Brassington, GRA’s Commissioner General Khurshid Sattaur and Da Silva among others that there was a lot of talk of transparency but it appeared that there was a coordinated effort to misrepresent information with regard to a particular investment (QAII).
According to the eminent chartered accountant, “Had information not been leaked to the press there would have been no outcry for information that contributed to the seminar.”
Ram also posited that the deal with the adjoining six acres of land which John Fernandes Limited caused raised eyebrows.
JFL paid some $320M which was never placed into the consolidated fund so that its use would have to be approved by the National Assembly.
He posited that either somebody was over charged or somebody undercharged but it could not be both.
Regarding QAII investments, Brassington told the seminar that after the Chinese occupancy of the Sanata Textiles Complex in Ruimveldt came to an end in 2006, the government decided to tender out for investment proposals.
He said that the advertisements for the proposals were issued in December 2006 and ran until February 2007 after it was extended from January.
He also added that given that there was no suitable response from investors, at that time the government approached QAII to formulate a proposal.
In May 2007, QAII submitted its business proposal which the Privatization Unit approved that very month. On May 15 Cabinet approved the lease proposals.
Brassington also admitted that what was advertised and the negotiated deal was different.
When questioned as to how it is that a Memorandum of Understanding (MoU) between the two parties was entered into months after an investment deal was approved, Da Silva told the gathering that all investments do not require a MoU.
The MoU brought into force several subsidiary concessions and tax waivers such as a five-year tax free holiday, he said.
Brassington noted that with any long term lease there are two stages, namely the agreement for lease and the lease deal.
“The Cabinet decision said that tax incentives are to be granted in accordance in the law.”
He noted that the process of tax deals and concessions would be referred to then be left in the realm of the investor and Go-Invest, and sometimes other agencies such as GRA and the Privatisation Unit.
“It did take a while for the MoU to be concluded.”
He noted that the document that dealt with the incentives was only completed in March of 2008 although investment agreement was completed in 2007.
At this point in time Dr Rovin Deodat who was the Master of Ceremonies informed a member of the media who was posing questions about the investment that, “I don’t want this to become a press conference on a particular issue (QAII).”
This, he said, was due to the fact that there were several members of the private sector present who may want to question other issues.
Da Silva then went on to say that in an investment deal a MoU is not necessary.
“The MoU has to do with tax matters.”
According to Da Silva, the appealing part of the legislation was the Bio technology and the Textile aspect of the investment.
These, he said, were the investments that required the tax holiday. “We made a mistake…We thought it was covered in law.”

Niles’s death reminds us of dangerous trends which are developing

Niles’s death reminds us of dangerous trends which are developing
Stabroek News. July 29, 2008. Letters

Dear Editor,
I refer to Mr T King’s letter captioned ‘Prisoner said he found bullets at army camp’ (GC July 26) in response to a letter by me seeking clarification on the government’s position on torture (SN July 25). King wrote, “The President said that his administration does not sanction torture and she ought to believe that.” I am indeed saddened by this statement and would wish to suggest that such a demand would only stem from a society where progressive, democratic thinking is alien. If Guyanese are to shut up and just accept what the President and his administration tell us we should very well declare this a dictatorial state, and cease touting around the world that Guyana is some kind of democracy. I believe the President and his administration should be worried that someone supporting the government is making such damaging statements. In addition, comments such as these may offer a good reason to critics as to why those who question the government and offer negative criticisms are apparently singled out for unwarranted treatment by the government. Look at SN and the ads; Kaieteur News and the threats; Gordon Moseley and his persona non grata status; Oliver Hinckson and his sedition/treason charge; Nagamootoo and his ‘prodigal son’ status, and the list goes on. It is not good enough for the President to say one thing and then his government’s action to intimate otherwise.

On the issue of torture it is public knowledge that the Government of Guyana is a signatory to human rights conventions which make torture unlawful; however, one would assume that any government which fully subscribes to the text and spirit of these would demonstrate that its position on torture is clear. Guyanese must not get mixed signals. For instance, in the wake of the torture claims the Minister of Home Affairs made statements to the effect that Guyanese were more interested in the stuff they got in barrels than any allegation of torture. An apology was never given to the people of Guyana. Then, months after the torture report was said to have been completed the nation is still waiting for its release. In the interim, a prisoner is burnt and beaten to death while in custody. Aren’t these mixed signals that are being sent to the people? One would assume that any torture complaint would have been treated with dispatch, but instead the entire nation is in limbo on the issue, while the administration seems not to be bothered.

Now, Mr King tells us to shut up and believe the President, even though there are these glaring concerns and talk appears to be out of sync with action. What should we believe?

Mr King tells me that Niles might have been beaten by other prisoners before the police got him. If this is so, there are serious problems regarding the proper supervision of prisoners while they are out working in the community, which is a further cause for concern for the community. Thus my question on the state of the investigations, since only proper investigation will reveal what actually happened. The question now becomes whether other prisoners were allowed to beat Niles to death, or whether they were unsupervised at the time of the beating, and burning? If the first, it might be the open sanctioning of torture, if the latter, then it might be serious administration glitches which tacitly encourage torture. Herein lie the dilemma and the confusion. What are Guyanese to believe?
In his letter, while King states the administration does not condone torture, he went on to suggest that torturing criminals might be justified. This is the usual kind of “unthinkable shallow psychology” those like Mr King try on the Guyanese people, who will not be sold on cheap, backward politics. The fact is, no Guyanese would say that those who reap havoc in our society should be treated lightly. From the drug cartels, the massacre crew, the phantom gang, the kick-down-the-door bandits, the rapists, the child molesters, the white-collar criminals, the market thieves, the ‘Texas Rangers,’ etc, the fact is, every law-abiding Guyanese is demanding that the full extent of the law is meted out to those who are bent on disrupting the lives of others. Similarly, every Guyanese understands that it is only a court of law which can impose the proper penalty on these persons once they are found guilty. And beating a prisoner to death is definitely not the way to go about solving the problem, unless we declare that Moses’ Law is the order of the day. Remember the intention is to solve the crime, not to criminalize the society more and further dampen the relationship between the security forces and the citizenry. Co-operation is needed on all fronts to stem the crime tide that has engulfed Guyana within recent years.
Mr King states that “Niles broke the law and should have known better not to smuggle ammunition in the prison.” This statement is again another sad revelation; the suggestion is that Niles should have imagined that he was likely to be beaten to death for his action. Isn’t this cruel thinking tantamount to promoting torture? Let the court deal with Niles, and all other accused. King said in his letter, “Do not let your heart bleed for convicts like Niles.” The issue is not one of ‘bleeding hearts’ for convicts; it is ‘bleeding hearts’ to ensure that the human rights of Guyanese are protected. There are too many instances and allegations of the infringement of people’s human rights, and this certainly does not look good on the part of the government.

These are serious issues which we must address without partisan motives and without the sole interest being the defence of the authorities. I believe that there needs to be a clear statement followed by corresponding action on the part of the government regarding torture. Guyanese deserve this much.

So, yes, as we lament the brutal slaying of the Lindo Creek victims, the Lusignan victims, the Bartica victims, Kalamadeen’s beheading, Ronald Waddell’s execution, Minister Sawh’s slaying, those young men slaughtered and kidnapped during that infamous period, and many more we must acknowledge the unprecedented level of crime in Guyana. Niles’s death must remind us of dangerous developing trends, where those legitimately tasked with the responsibility to protect Guyanese are accused of committing heinous crimes. So, we must likewise mourn Niles’s death.
Yours faithfully,
Lurlene Nestor

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Monday, July 28, 2008

Wrongly attributed to Privatisation Board

- Stabroek News - -

Wrongly attributed to Privatisation Board

Posted By Stabroek News On July 28, 2008 @ 5:08 am In Letters | No Comments

Dear Editor,
As a result of an error in the reproduction of Business Page in yesterday’s Sunday Stabroek, the third para-graph misplaced the title of the Paper prepared and circulated by Mr. Winston Brassington, Executive Head of the Privatisation Unit and wrongly attributed to the Privatisation Board the rush to enter into an agreement with QAII. The relevant portion of the paragraph should have read:

“……the role of the Privatisation Unit (PU) headed by Mr. Winston Brassington has been seriously exposed by a document I received earlier this week titled PRIVATISATION BOARD/ CABINET SUBMISSION dated May 3, 2007.

It is clear from that document that Mr. Brassington was prepared to rush the Privatisation Board - which includes Ministers Robert Persaud and Manniram Prashad - into an agreement with QAII …..”.

I note as well in the same edition a letter captioned ‘Guyana Times is not published by Global Printing and Graphics Inc.’ appeared in which there are several references to me which are not only mis-informed but are libellous. l will address this matter separately.

Yours faithfully,
Christopher Ram
Business Page Columnist

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Sunday, July 27, 2008

The role of the Privatisation Unit in the QAII deal

Business Page

Posted By Stabroek News On July 27, 2008 @ 5:11 am In Features, Sunday
The role of the Privatisation Unit in the QAII deal

The President’s postponed Privatisation and Taxation Seminar finally gets underway this Tuesday at Le Meridien Pegasus, on a by-invitation only basis. I am touched at the unusual number of enquiries about my travel arrangements which I hope reflect an interest in my welfare and are unrelated to the seminar. The invitation does not include a programme, which is probably still being worked on, as the government this week was cleaning up the relevant incentives legislation which it passed with much fanfare in 2003 and then misunderstood and misapplied for five years. Hopefully the sponsors of the seminar will tell us how much their failure has cost the nation and how the government plans to regularise all the improprieties since the hurriedly introduced legislation does not. I understand that the seminar will be addressed by Messrs Winston Brassington, Geoff DaSilva and Khurshid Sattaur of the Privatisation Unit, Go-Invest and the Guyana Revenue Authority respectively, all associated with the Queens Atlantic Investment Inc (QAII) deal that has raised serious concerns about governance, accountability, the rule of law and competence.

Readers will recall that when Business Page entered the exchange on the QAII deal on June 8 it sought mainly to clarify some issues arising from statements made by President Jagdeo on the perceived tax concessions given to QAII. As early as then, this column suggested to the newly established Guyana Times that it run its own story on the concessions and called on the government to observe its own laws and disclose in the Official Gazette information on the fiscal incentives granted, as required by section 37 of the Investment Act 2004. The whole truth from those with access to the relevant information would have avoided much of the speculation among members of the public who have become cynical with the knee-jerk reactions and piecemeal, half-accurate information from the government. The consternation generated is partly responsible for the corresponding deluge of information which well-placed members of the public have volunteered, and that highlights serious credibility problems particularly for the Minister of Finance and the agencies under his control.
Without exonerating the Cabinet and very specifically the Minister of Finance for the disastrous public relations and credibility problem caused by the handling of this matter, the role of the Privatisation Unit (PU) headed by Mr Winston Brassington has been Privatisation Board/Cabinet Submission seriously exposed by a document I received earlier this week titled dated May 3, 2007. It is clear from that document that the Privatisation Board – which includes Ministers Robert Persaud and Manniram Prashad – was prepared to rush into an agreement with QAII. Notice of the meeting to consider the application for concessions was given even before the application had been received from the company, and within one day of an unsigned application involving hundreds of millions of dollars, the PU had not only considered but could actually recommend the concessions sought. To place that into perspective, my experience is that it takes the unit more time to return a simple telephone call!

Schedule of planned construction
According to QA II the project should have started in 2007, but for reasons unknown there has been a delay of about one year. Making allowance for this the investment programme of QAII will run into 2013 as follows:
[1] graph


Without seeking to understate the group’s much hyped promised investment, the only project set for completion within a year is the printery, with the construction of a hardware warehouse and a bonded duty-free pharmaceutical warehouse scheduled for completion in two years. Contrary to what the President had said the only commitment on a textile mill is for a feasibility study to be completed within 18 months, while two full years are expected to elapse before a 3 ½ year construction of the antibiotics plant, to be followed five years later by the construction of the Research and Development Facility. In other words the 600 jobs will be a long time in coming, if they come at all, and so too, will the much emphasised US$30 million investment. In any case they will be very welcome, and assuming that the investors have been acting in good faith, Business Page wishes them well.

Where is the newspaper?
What is striking in reading the application by the company and the recommendations of the Privatisation Unit is the absence of any reference to the printing and publishing of the newspaper which in fact is the first real venture to materialise and which would have benefited, if not directly then indirectly, from any concessions granted to the other companies. The paper is being produced at the Sanata Complex for which QAII companies have received approval for concessions for all kinds of building materials, generators, etc.
The proposal by QAII assumes that the group will benefit indefinitely from the sweetheart arrangements it has with the government for the purchase of drugs, and speaks of being “able to order and retain buffer stocks to prevent drug shortages, which is a recurring problem with the existing system.” It does not explain, and nor does Mr Brassington explore, the relationship between the retention of buffer stock and the vast advance payments the group receives from the government for the purchase of drugs. What if this arrangement comes to an end – does the project stand or fall on this?

The lease payment
Messrs Brassington and DaSilva have told us that the country will receive $50 million dollars in rental per year, pegged to the US$ and adjusted for US inflation. Brassington’s document tells us otherwise. These are the arrangements:

i. The lease of the land and buildings for 99 years at the US $ equivalent of G$50/annum per square foot (payable in G$ at the prevailing exchange rate) subject to:
a. A rent free period of 5 years for the printing and dying section/with storage. This area is estimated to be approximately 6 acres; and
b. A 60% reduced rental for the remaining 14 acres for the first five years commencing from the date of execution of a lease agreement.”

While from year 6 the rent will be the equivalent of G$43.5 million in today’s money, during the first five years it is a mere $18 million for 871,200 square feet of land plus the building, and here I am giving Mr Brassington the benefit of his miscalculation since he reckons it will be only $12 million. Let me say as well that I believe that the government’s financial experts are confusing indexation with the discount rate, but that is not an issue for this column even though the implication is a cost to the country.

Professional valuators value property including land by reference to recent transactions in the same or similar areas. In 2007 the government charged John Fernandes Limited $320 million for 6 acres of land in the same complex, so that on a proportional basis, 20 acres of land to QAII will be valued at over G$1 billion dollars.

To convert a capital value to an annual lease payment, professional valuators as a rule of thumb divide the capital sum by ten years, which would put the amount of the annual lease for the 20 acres at over G$100 million. In other words, the lease payment is reduced by over $80 million per year for the first five years with the building thrown in free! And in each year thereafter, the reduction is approximately G$50 million.

Expedient law-making
We will look next week at other issues concerning the Privatisation Unit whose very existence in law is doubtful and which takes advantage of its questionable legal status to engage in creative governmental accounting. For now we turn attention to the bill tabled by the Finance Minister this past Thursday designed to restore discretionary concessions being granted by the political directorate. It is a complete reversal of the 2003 repeal of a 1970 provision in the Income Tax Act which allowed the President to remit taxes where he had felt it was “just and equitable” to do so. The 2003 repeal was explained as the elimination of the broad discretionary power to concede amounts of income tax payable and under some extremely narrowly defined conditions such as “natural disaster, disability, mental incapacity or death” and only if it was expressly provided for in a tax act. Five years later Bill # 14 of 2008 empowers the Minister of Finance to make regulations for the remission of all or part of the tax payable by any person or category of persons subject only to negative resolution of the National Assembly! In respect of discretionary waivers, we are now worse than we were 38 years ago, let alone 5!

If passed in its present form, the bill could render meaningless critical sections of the Financial Administration and Audit Act even as it fails to legitimise all those concessions given since 2003 based on a wrong interpretation and application of the Income Tax (In Aid of Industry) Act, including tax holidays granted to non-companies. It is possible that since the Minister and those under his control are the only persons with access to that information and further, since there appears to be no intention to comply with section 37 of the Investment Act 2004, there is nothing to correct.

The last hope is that the Audit Office will highlight the improprieties and one hopes the almost two year delay in the publication of the 2006 Audit Report has allowed the Office enough time to do a thorough job, including the Investment Act section 37 omissions. The bill now allows the Minister of Finance in his discretion to grant tax holidays in respect of infrastructural development for an indefinite period as opposed to existing legislation which does not include infrastructural development and limits tax holidays to ten years. It will also allow the Minister to grant tax holidays to value-added wood processing, rice millers and chicken farms, sugar refining and of course to the QA II investments like textile production, new pharmaceutical products (new to science or to Guyana?) and the processing of raw materials to produce injectables. Instead of limiting tax holidays to 30 + room tourist hotels the Minister will now be able to grant these to any tourist facilities, the definition of which he will decide for himself.

The bill
It maintains the geographical as well as the industrial-type classes of investment for which the Minister can grant tax holidays so that in practice, once the activity creates new employment in a widely defined range of economic activities that leaves out mainly financial and distribution services, it can benefit from the Minister’s generosity. The scope of this legislation in my judgment and experience borders on the reckless, and if this is the government’s considered view then it may as well abolish Corporation Tax altogether.

Business Page offers no prize for guessing who will finance all this extravagance – of course it will be the salaried workers in the more legitimate and formal businesses and the consumers in the form of VAT. Coupled with the generosity of the politicians to some entities, this is a dangerous piece of legislation that shows how little the powers understand the tax system and how it works.
I hope that the debate on the bill in the National Assembly will be lively and that it will resonate with civil society and the trade union movement. Most of all I hope that that debate starts at the seminar or else more difficult times will lie ahead for the working and unemployed poor. And I hope too that the International Financial Institutions that have helped so much to avert economic disaster are now paying attention.

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Friday, July 25, 2008

Court of Appeal bill for Committee

Court of Appeal bill for Committee
-Opposition calls it ‘political legislation’
Thursday, 24 July 2008 23:43 Guyana Times

The National Assembly last night sent the Court of Appeal amendment bill to a Special Select Committee after opposition parliamentarians rejected it, deeming it an oppressive piece of legislation, which will add clutter to an already sluggish judicial system.

The House made the decision after close to six hours debate on the bill which will give the Director of Public Prosecution (DPP) the right to appeal decisions by a High Court Judge.

But opposition MPS said the bill was a political legislation, taking away the constitutional rights of a person and adding burden to a judicial system that is already taxed.

Raphael Trotman, Alliance for Change (AFC) Leader said he believes that the Bill should be withdrawn and his party will not take part in any Special Select Committee (SSC) process since nothing can be done to change the oppressiveness of the Bill.

He said that the government should explain to its citizens the real reason for bringing such a Bill to the House which according to him is for political reasons.

“I am saying that this Bill has nothing to do with the strengthening of our judicial system but it has more to do with the propping up of a political system that some believe is under threat.”

He said, “I believe not even Burnham who many claimed was the worst thing to have happened to Guyana would not have risked Mr. Speaker what is being risked today by this administration.” The main opposition, People’s National Congress/Reform (PNC/R) although objecting to the Bill, supported it going to going to a SSC.

Trotman said the Bill is being used as the beginning of a sinister plan to carefully and systematically roll back the fundamental rights of Guyanese. The Bill is expected to allow for the DPP to appeal against a judgment by a High Court Judge to the Court of Appeal.

If it does not succeed at the level of the Court of Appeal, the DPP can then go to the Caribbean Court of Justice.

Basil Williams, PNC/R MP in his contribution to the debate said that it would allow continued detention of a person in prison despite being acquitted by judgment of the court, or verdict of the jury.

“This Bill ought not to be passed in this House because it takes away the constitutional right of an individual to a free hearing because if the Judge is not independent and is acting in terrarium of the State the accused cannot have a fair trial.

It abolishes the right to jury trials in this country which has been here for one century and as the saying goes “if it is not broken why fix it,” Williams argued. The Bill would also allow the DPP to appeal an acquittal based on a defect in the depositions or the committal of the accused; the exclusion of material evidence sought to be adduced by the prosecution; substantial misdirection of the jury in the course of the judge’s summation; or a material irregularity in the trial.

Williams also said that he feels there is some other motive to the rush in wanting the Bill to come to the National Assembly citing the pending case of sedition accused ex-soldier Oliver Hinckson.

“There is something strange with the Bill springing up and we shouldn’t believe that this has to do with Hinckson because it might take him five years if he ends up in that…and we know that if they had their way Mark Benschop would have been convicted.”

Meanwhile, People’s Progressive Party/Civic (PPP/C) MP Anil Nandalall in his presentation said that the Bill does not in any way take away or interfere with those protective facilities which the defence enjoys.

He said all the Bill doses were to confer upon the Prosecution, a right of appeal, “and of course, this right of appeal can only be exercised at the conclusion of the trial. So this Bill seeks to change nothing during the course of the trial.”

He said it confers upon the Prosecution, for the first time in the legal history of Guyana, the right of appeal at an indictable trial.

“Trials in the Magistrate’s Court, the Prosecution have a right of appeal and this right of appeal has existed for the last one hundred years. I can see no just reason nor can I conceive a convincing argument why this right of appeal should not be extended to criminal trials in the High Court.”


Members of the opposition argued that if the state has a problem with the level of work of some Judges they should put measures in place to attract better judges in the judicial system.

“There should first of all be a law reform commission to help clean up the system…This piece of legislation will only add to the mess and will be a recipe for disaster. There will end up with more convictions and less acquittals. This Bill is really frightening,” Khemraj Ramjattan AFC MP said.

Most of the opposition MPs argued that the government instead of blaming the Judges should work on ways of improving the work of investigators and prosecutors to put forward better cases.

“This administration should strengthen its prisons, police and prosecutors… I strongly believe that the work of investigators needs to be improved, that is what they (administration) should be focusing on,” Ramjattan explained. Manzoor Nadir, Minister of Labour during his contribution said that the argument by the opposition is without merit since the state cannot intimidate any Judge. He said that it’s the duty of the state is to protect its citizens pointing out that the families of victims are often forgotten.

“This is going to be a political decision…it’s not just about draconian laws…we are going to strengthen the capacity to provide justice for the family of victims.” But Ramjattan said the state, by passing the Bill, is putting a lot of power into the hands of the DPP and there is no guarantee that the DPP would not abuse that right.

“I am certain Mr. Speaker that the DPP may not abuse her rights…but it is important that we understand what will be in the mind of such a DPP and we cannot definitely be certain that it will be sparingly used …This Bill is really constituted downright torture to any accused.”

Opposition members argued that the provision for bail in the bill does not really matter since almost all of the offenses that will be affected by the Bill are non-bailable.

Among the matters which could be appealed are; treason, manslaughter, rape, defilement and other sexual offences, piracy, hijacking, money laundering, robbery, drug offences, burglary, housebreaking, theft, offences involving dishonesty, firearms offences, conspiracies and attempts to commit offences referred to previously; and aiding and abetting.

“Often times, it is believed that justice is only about the interest of the accused person…Justice is not a one way street but is dual carriageway which must accommodate, in a balanced way, the interest of the accused along with the interest of the State, Nandalall said.

The Bill makes provision for the DPP to appeal against a sentence passed on a convict, on the grounds that the court had no power to pass it; it was manifestly inadequate, or wrong in principle.

Roger Khan drug trial Judge writes Guyana for witness help

Roger Khan drug trial Judge writes Guyana for witness help

Posted By Stabroek News On July 19, 2008 @ 5:16 am In News | 28 Comments

Justice Dora L. Irizarry, who is presiding over the Roger Khan drug trial, has written to judicial authorities in Guyana seeking assistance in obtaining evidence from eight witnesses for the defence to be used in the trial set to commence on November 3.

In the letter, seen by this newspaper, the judge said her court is seeking “international judicial assistance to obtain evidence to be used in a criminal proceeding before this court… in accordance with Laws of Guyana, Chapter 5:01 Evidence (Proceedings in Foreign Tribunals) Act).

The judge said the witnesses “may have information material to the trial of this matter, but have indicated that they are unwilling to travel to the United States to testify at the trial.” She had therefore ordered on June 2 last that the depositions be taken locally, following a request by the defence.

The letter said the court needed the assistance in the interest of justice. “The assistance requested is that the appropriate judicial authority of Guyana compel the appearances of the [witnesses] to give evidence at a deposition in Guyana,” the letter said. The names of the witnesses were redacted from the court document so as to protect their identities.

The court requested that the witnesses be examined in Guyana orally and under oath by counsel for Khan and by counsel for the prosecution. A request was also made for the latter to be permitted to participate in the depositions from the US via video-conferencing. The depositions would be taken in accordance with Guyana’s laws and they would be “contemporaneously recorded at the arrangement and expense of defendant Khan for the purpose of creating a verbatim transcript, and may be videotaped at the arrangement and expense of defendant Khan if the rules permit.

“It is requested that the depositions take place as promptly as the parties may arrange, at a time and place in Georgetown, Guyana, to be arranged by the parties,” the letter said.

“Each witness who is required to attend and be examined shall be paid by defendant Khan such fees and expenses as are allowed for the attendance of a witness in civil proceedings before the judicial authorities of Guyana. Any cost incurred by the judicial authorities of Guyana in executing this request shall be subject to reimbursement by defendant Khan.”

The judge also offered to “entertain any requests for similar judicial assistance which the appropriate authority of Guyana may from time to time find it appropriate to make.”

The Guyana Government has indicated its interest in gathering information from the US on claims that Khan was close to a group which may be responsible for around 200 killings.

Khan is facing 18 counts of conspiracy to import cocaine into the US between 2001 and 2006 and heading a criminal enterprise. He is charged with violating the narcotics law of the US.

It is unclear if the request has already been received by the authorities here. Trans-mittal is usually done via the Ministry of Foreign Affairs.

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Bill presented to enable QA11 concessions

Bill presented to enable QA11 concessions

Posted By Stabroek News On July 25, 2008 @ 5:08 am In News | No Comments

The government yesterday tabled a bill to enable tax concessions to two subsidiaries of Queens Atlantic Investments Inc (QA11) at the Sanata Complex and to remedy oversights in the principal legislation.

Two QAII subsidiaries – one to produce textiles and the other engaged in biotechnology – were earmarked tax concessions as pioneering industries when the law did not cater for this. This came to the fore after the launching of the Guyana Times newspaper in June when President Bharrat Jagdeo berated private sector businessman Yesu Persaud for asking that the tax concessions granted to the investors be accorded to others. The President told the June 5 launching that Persaud’s comment had exposed his ignorance of the tax laws. The President went on to say that the concessions were bestowed on the basis of their pioneering industry status.

Chartered accountant Christopher Ram in his Sunday Stabroek Business Page column three days later however pointed out that the President was incorrect as the Income Tax (In Aid of Industry) Act described pioneering industries as non-traditional agro-processing, information and communications technology, petroleum exploration, mineral exploration and tourist hotels but not textiles and biotechnology.

The government via the Ministry of Finance later signalled that the law would be amended to redress oversights in the original legislation including the regions where investors would be eligible for tax concessions and the types of industries that could be described as pioneering.

The bill tabled in Parliament yesterday will also enable the Minister of Finance to remit wholly or in part tax payable by any person or category of persons. This is likely to be seen as a regressive provision as tax legislation has progressively moved away from such ministerial discretion. In 2003, the broad discretion to waive such taxes was reposed in the President and the law was amended to remove this discretion. This new amendment now confers these powers on the Minister of Finance instead.

Clause Two of the bill says that the Income Tax Act would be amended by the insertion of section 105 which says “The Minister may make regulations, subject to negative resolution of the National Assembly, to provide for the remitting wholly or in part of the tax payable by any person or category of persons on such income, in respect of any year of assessment, and in accordance with such conditions as may be specified in the regulations”.

Under Clause Three of the bill, the Income Tax (In Aid of Industry) Act will be altered to grant tax concessions to activities that create new employment in any of the following regions: 1, 7, 8, 9 and 10 and “such other regions as the minister may, by Order, subject to negative resolution of the National Assembly.

The amendment bill says that the activities which can attract concessions are as follows: non-traditional agricultural development and agro-processing, including aquaculture and production of bio-fuels; information and communications technology, not including retail and distribution; petroleum exploration, extraction and refining; tourist facilities; value-added wood processing; textile production; biotechnology; development and manufacturing of new pharmaceutical products, chemical compounds and the processing of raw materials to produce injectables; infrastructural development, including the production of electricity using renewable sources of energy; such other fields as the Minister may, by order subject to negative resolution of the National Assembly specify.

The bill if passed would also enable tax exemptions for a period longer than ten years for “infrastructural development, including the production of electricity using renewable sources of energy”.

The QA11 deal for the Sanata Complex has been mired in several controversies since being announced earlier this year.

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Wednesday, July 23, 2008

Sacred Heart insurance scam

Sacred Heart insurance scam

Posted By Stabroek News On July 23, 2008 @ 5:05 am In News | No Comments
GuyFlag manager says policy was found but no claim filed by church

By Zoisa Fraser

After months of delays, the 2004 US$2 million GuyFlag insurance scam trial continued yesterday with the manager of the company, Anthony Soares, testifying that he had found an insurance policy for the Sacred Heart church but that there was never a claim by the church.
[1] Frederick Sukhdeo

Frederick Sukhdeo

Soares, the president of the Caricom General Insurance Company, formerly known as Guyana Fire, Life and General Insurance Company (GuyFlag) took to the stand when the case was called by Magistrate Hazel Octive-Hamilton in the Georgetown Magistrate’s Court.

Frederick Sukhdeo, who is accused of being the mastermind of the insurance scam committed on the Scared Heart Church, which was completely destroyed by fire on Christmas Day in 2004, was present for yesterday’s proceedings. However his lawyers, Sanjeev Datadin and Winston Murray were absent and Sukhdeo made his own notes on the witness’ testimony.

The magistrate advised him that on the next occasion they will be taking a new witness and if his lawyers do not show up he will have to do the cross- examination himself.

In his evidence in chief, Soares testified that when he checked the records he found that there was no insurance claim for the church though there was a policy. The church has said it was self-insured and was unaware that there was a policy.

Led through his evidence by Police Prosecutor Desiree Fowler, Soares recounted that he knew Sukhdeo to be the chairman of the National Cooperative Credit Union which is located at Ocean View, Ruimzeight, West Coast Demerara, the same address that his company is located at.

Following the fire, he said he checked the company’s records as is customary to see if they had any properties in the area and discovered there were two policies: one for the church and the other for the Kirpalani bond.

He said that he collected the files from the Ruimzeight head office and took them to the company’s Chief Executive Officer (CEO) Joshua Safeek at the Georgetown Office located at Regent and Oronoque streets. He further explained that while the insurance company is owned by Safeek, the cooperative credit union belonged to several shareholders whose names he did not know.

He testified that while there he and Safeek checked the files after which he contacted Gregory Yeadon who conducts investigations pertaining to fire claims in Guyana. Yeadon, who resides in Barbados, arrived in the country about two weeks after the conversation and went to the Regent and Oronoque streets office where he was given the two files to conduct his investigations.

Soares recalled that the investigator returned to the office a week after and they had a conversation about the Kirpalani bond but at no point was the church fire discussed.

Then, he said they visited the bond two to three days after and within that period of time, the church site was also visited.

Soares recalled that on January 17, 2006 he was shown a copy of an insurance claims form at the Criminal Investigation Department (CID), Eve Leary after which he was asked some questions before giving a statement which he signed.

He told the court that at no time did he receive any document from the investigator but pointed out that Safeek received one which was shown to him and he read it. At no time, he testified, did he write a letter to the investigator but did not know if that was done by Safeek.

After being on the stand for about one hour, the prosecutor requested that Soares be recalled after two policemen had given their testimony.

Also present for the proceedings was Bishop Benedict Singh. Because of his health situation, the magistrate yesterday decided that on November 17 when the case continues he will give his evidence in chief and be cross-examined afterwards so that he would not have to return.

Special Prosecutor

In December, attorneys-at-law Gino Persaud and Nigel Hughes had written to the DPP requesting that they be appointed special prosecutors in the matter, free of cost to the state. They had sent several follow-up letters. But to date there has been no word on the status of the application and repeated efforts by this newspaper to ascertain from the DPP what would be done, proved futile.

Yesterday Persaud appeared in court watching over the interest of the church. The magistrate subsequently told him that she had recently received a letter from Datadin requesting that he (Persaud) hold the matter for him.

He however explained that a mistake must have been made on the part of his colleague.

According to Persaud, Datadin before leaving the jurisdiction asked him to hold for a few matters in the High Court. He said that the letter to the magistrate must have been an oversight. “I think it was an innocent oversight”.

After listening to him, the magistrate said that witnesses were present and she was moving ahead with the matter since Murray should have been present. She pointed out that she had already given a long adjournment.

It is alleged that on December 29, 2004, Sukhdeo, with intent to defraud forged a document purporting to be a GuyFlag fire and perils claim for US$2 million ($400 million) for the Sacred Heart Roman Catholic Church. He is also accused of trying to obtain the said sum of money by virtue of a forged fire and perils claim form. According to the facts of the case, GuyFlag submitted a bogus claim for payment to its reinsurance agent AON Re and Sukhdeo, who was the head of the sister operation, the National Cooperative Credit Union Limited, was presented as a representative of the church dealing with the fire.

It was when GuyFlag/Sukhdeo allegedly approached a claims adjuster here that the alleged scam was discovered and he was arrested on November 17, 2005 and placed on $50,000 station bail.

He was charged in March of the following year with forgery and endeavouring to obtain upon a forged document and he appeared at the Georgetown Magistrate’s Court on March 21 that year. He was released on $75,000 bail on that occasion.

Since the trial was set in the latter part of 2006, there have been several delays.

In August last, the prosecution opened its case with testimony from Roman Catholic Bishop Francis Alleyne.

He has since concluded giving his evidence. Then there were adjournments fuelled by the letters to the DPP for the position of special prosecutor.

When the matter was called on April 18, it had to be adjourned owing to the absence of the magistrate who was on sick leave.

Prior to that Persaud has indicated to the court that he had received no word from the DPP and as such a three-week adjournment was given.

On that occasion, the magistrate had suggested that the attorney go to the DPP’s chambers and attempt to seek an audience with the DPP.

On the last occasion, May 2, the magistrate once again adjourned the matter while stressing that the court could not continue to adjourn the matter while it awaited word from the DPP on the special prosecutor application.

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Monday, July 21, 2008


- Stabroek News - -


Posted By Stabroek News On July 21, 2008 @ 5:01 am In Editorial | 1 Comment

It has become increasingly clear that one of this government’s favourite methods of addressing controversies is to pretend as if it is doing something about them and to hope that public interest dies away. It would then only act if doing so was in its interest and would accrue some public relations benefit. Otherwise, where the local audience is concerned, it presents a countenance of inscrutability.

That is the only conclusion that can be drawn if one were to consider the government’s handling of the torture allegations that sullied the Military Criminal Investigation Department (MCID) of the Guyana Defence Force (GDF). Following the theft of a single rifle from Camp Ayanganna in November last year, several soldiers complained that they were brutalized by senior ranks attached to the MCID. The army remained silent in the face of several reports which were carried in the Stabroek News giving graphic details provided by the soldiers about their torture. Eventually, under the weight of the published reports the army said that it would be conducting an investigation and as far back as January of this year there were suggestions from Camp Ayanganna that several soldiers from the MCID would be disciplined for the torture. Or so we thought.

In March of this year, President Jagdeo, who is the Commander-in-Chief of the Armed Forces said that a report had been submitted by the army to the Defence Board but that it had not been discussed as yet. July has arrived and there has yet been no word from the Defence Board or President Jagdeo on what has happened to the report and its recommendations. The MCID has had a recently interesting history. It was thought to be behind the interception at Good Hope several years ago of Mr Roger Khan and his colleagues with their sensitive eavesdropping equipment. Quite a coup. The word was that their good interception work angered some in authority and as a result the MCID was miniaturized. It was recently resurrected with apparently close ties to officials in the Office of the President. The delay in the release of the findings of the GDF’s report lends credence to these suggestions.

At the minimum, the delay has severely eroded the credibility of the GDF’s report and as a consequence the GDF itself. Whenever the report is released it will be viewed with great skepticism unless it offers decisive and credible recommendations. Moreover, the delay in release has sent the unmistakable message that this government and its armed forces are very laid back in relation to investigations of torture allegations. This would of course put them in direct conflict with the provisions of the UN Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment and make a mockery of the government’s first submission to the UN committee in 2006.
It must also be borne in mind that prior to the allegations stemming from the November theft from Camp Ayanganna, there had been similar allegations levelled against both the army and the police by two men from the East Coast who said that they were taken from the custody of a police station by soldiers to a location on the East Bank highway where they were tortured. One said he felt sure that he was about to die. There again, neither the police nor the army has presented any satisfactory or credible account of what happened to the men. There, too, the credibility of these institutions has been compromised.

Now, we have the death of a prisoner, Mr Edwin Niles which raises questions for three sections of the Disciplined Services: the army, the police and the prison service. The most searing questions have been asked of the latter in relation to serious burns on Mr Niles’ back which eventually led to a fatal clot and a fractured arm. Before being taken to the hospital he had been transported to the Brickdam police station where he was further interrogated over ammunition he was found in possession of. Clearly, the finding of the ammunition was traumatic for the prison authorities considering the bloody break-out from the same Camp Street jail in 2002 and its violent aftermath. The response of the prison authorities to the discovery, it appears, was unorthodox and brutal.

Already, the signs of fumbling among those in the administration are clear. No inquiry into Mr Niles’ death should involve anyone associated with the prison service, army or police and we hope that that is crystal clear to those whose mandate it is to make the decision.

Unfortunately, the handling of torture cases by the government and the armed forces is not convincing and must lead to serious questions as to whether they are committed to pursuing these. This approach of nonchalance and dereliction disrespects the families of the alleged victims and their communities. The government must understand this and act urgently to repair this injustice. As the GHRA has pointed out there is a need for an impartial inquiry into Mr Niles’ death and this must be proceeded with as soon as possible.

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Sunday, July 20, 2008

Another try at preventing money-laundering

Another try at preventing money-laundering
By Christopher Ram
- Stabroek News Business Page
Posted By Stabroek News On July 20, 2008 @ 5:10 am In Features, Sunday


The current select committee review of Bill No 18 of 2007 Anti-Money Laundering and Countering the Financing of Terrorism Bill 2007 took me back to the Hansard report of the debate on The Money Laundering (Prevention) Bill 1998 which was piloted by then Attorney General Charles Ramson when he famously announced how proud he was to be associated with a government that had “zero tolerance for corruption.”

On that occasion the government rejected pleas by the parliamentary opposition to refer the bill to a select committee and seemed to have paid little attention to the submission of the Guyana Association of Bankers (GAB) on the bill. To read Mr Ramson extolling the bill’s virtues, strengths and capacity to solve what had become a scourge that distorted every single measure of the economy was like celebrating the discovery of sliced bread. He said for example that the new law if given scope could exorcise the much wider range of illegal schemes which can be “disruptive of the conventional economic matrix.” He did not explain what constituted that matrix.

Ten years on a select committee of the National Assembly is meeting to bury that bill which has really never seen much light or action, although there is a Financial Intelligence Unit (FIU) that was set up not within the Bank of Guyana as recommended by the GAB, but essentially as a one-man operation within the Ministry of Finance and which never published a single report on its activities.

The 1998 bill became law and is still on the statute books as The Money Laundering (Prevention) Act 2000, but for the near-life of the act (an SN editorial to mark the third anniversary of its enactment described it as a “bear in hibernation”) it has been more words than action.

The list of persons who pronounced on the act at various stages included then Finance Minister Sasenarine Kowlessar who after the act’s assent announced that no decision had been made as to who would supervise the act; President Jagdeo, who one year after the act was passed said no funds had been budgeted for its implementation; then Director of Budget Dr Ashni Singh who pronounced that “money-laundering could have significant influence on currencies, market prices and financial stability”; Home Affairs Minister Gajraj who in discussing money-laundering spoke of non-working millionaires and the “Siamese twins of the narcotics scourge”; his successor Ms Gail Texeira who called on consumers to boycott drug lords’ businesses and Commissioner General Kurshid Sattaur who announced that GRA’s software would pinpoint money launderers.

But perhaps the most striking non-action was the establishment in 2001 of a special task force under Dr Roger Luncheon to oversee the implementation of the act – that too never got anywhere. Significantly, never a word from the Director of the FIU.

History favours pessimists

History is not therefore on the side of the optimists. Between then and now money laundering has earned itself – helped by the inaction of the politicians and technocrats – to become one of the most significant segments in the economy although the Bank of Guyana hardly thinks it worthy of comment in its just released report for 2007. The non-bank cambios, almost all controlled by individuals, have become lawful vehicles for the pursuit of unlawful activities. Someone needs to explain why we would not allow insurance companies and commercial banks to operate as sole traders but would do so for the non-bank cambios, with little reporting obligations and no audit requirements.

To argue that we need the cambios because of the fear of driving foreign currency transactions underground is to admit that there is something wrong with the market and the regime for foreign exchange, including the exchange rate. As currently operated the cambios have legal cover to transact transactions, a number of which involve laundering.

A more ambitious task

What is different this time? The 2000 act had the modest objective of “the prevention of money laundering and for matters connected therewith,” and had a total of twenty-nine (29) sections. The new bill is far more comprehensive and now extends to the prevention of the financing of terrorism, a consequence of the attack of September 11, 2001, that allowed US President Bush to reorganise the priorities of all regulators in a one-size-fits-all solution. The bill now extends to “politically exposed persons,” and I hope that the lawyer/politicians now reviewing the bill will cover all the bases and not leave any technical loopholes to be exploited by their political parties, particularly at elections time.

The bill, an immensely complex piece of legislation covering some one hundred and fifteen (115) sections, will require several pieces of supplementary legislation to support it and confers both powers and duties, some of which are mandatory and others discretionary. Even if only some of these were to be carried out with minimum efficiency, it would require a significant bureaucracy and budget which the government may be unwilling or unable to finance, and external financing may be required for its viability. In fact we will probably hear, as we did with its predecessor, that there is no money to operationalise it.

The bill optimistically assumes that a politically appointed director supported by an attorney-at-law and an accountant with personnel trained in financial investigation or other employees (s. 9) will be able to administer this legislation that would include both domestic and cross-border transactions. The same structure and person could not enforce the 2000 act, and never prepared a report or analysis to indicate the favourable features and its weaknesses, so it must therefore be wishful thinking to believe that a similarly structured FIU could administer a more complex piece of legislation.

Look out

I believe it would be helpful if various options across similar jurisdictions with similar legislation were explored. Data suggest that while FIUs appear to be the most common form in the Caribbean, these are not uniformly staffed and that there is no single, uniform structure. As drafted, there is no parliamentary oversight and the minister is not required to table the annual report of the FIU in the National Assembly. In Barbados the FIU comes under the Anti-Money Laundering Authority that has wide professional membership including the Commissioner of Police, the Comptroller of Customs, the Commissioner of Inland Revenue, the Supervisor of Insurance, the Registrar of Corporate Affairs and Intellectual Property and representatives of the Governor of the Central Bank and the Solicitor General.

Look at

Despite some serious lapses that have eroded public confidence, the bill presupposes adequate regulatory mechanisms, the existence of a capacity and independence within the police force and Office of Director of Public Prosecutions to investigate and prosecute suspected wrongdoers, and a court that is attuned to the many forms of money-laundering. Will the court under the new law allow a major public company to refuse to divulge to its regulator the identity of the individuals behind major blocks of trustee-held shares?

Ministerial authority for the legislation is split between the Ministers for Legal Affairs and Finance. Yet the Ministry of Legal Affairs has taken a secondary role at the select committee level, and one wonders whether this will be another example of one thinking the other will act and both ending up doing nothing. The other main legislation where there is such joint responsibility is the Companies Act 1991, which has not been very successfully implemented and which cries out for amendments. It must be over one year ago that I made detailed representation to the Minister of Finance on some necessary amendments to the Companies Act but all I have heard is that the recommendations are engaging the attention of the Ministry of Legal Affairs.

Having had the opportunity to appear before the select committee I was struck by the exuberance of some of the members about the expected effectiveness of the bill which is largely an imported piece of legislation. Its origin is the international Financial Action Task Force set up by western governments, but even that body recognises in the Glossary to its 40 Recommendations and 9 Special Recommendations that “countries have diverse legal and financial systems and so all cannot take identical measures to achieve the common objective.” There is little evidence, however, that this bill has been sufficiently localized, and it does not identify the necessary consequential amendments to a number of other statutes, including the Bank of Guyana Act. Unless this is done, we can expect some lawyers having a real field day as they draw attention not only to the conflicts with other laws but also with the constitution which is the supreme law.

Gail’s barons

Apart from the laundering associated with the drug barons, the fuel smugglers and those who are called businesspersons, money-laundering is also related to tax evasion for which we already have many laws and other arrangements which are seldom invoked. We clearly need to develop capacity in the Guyana Revenue Authority to deal with rampant tax evasion, the proceeds of which must themselves be laundered, and I can only wonder why better use is not made of the Property Tax Act and the exchange of information provisions under the Double Taxation Treaties with Canada, the UK and Caricom states and the Income Tax (Exchange of Information) USA Order.

There is in fact a raft of other legislation that can help to ferret out money-laundering, with the Integrity Commission Act coming to mind, but what about the Companies Act itself, section 496, which allows for the Minister of Finance “on his own motion” and for the protection of the public to appoint inspectors to look into the affairs of a company. Certainly one prominent company comes to mind, but is there the will?


The real test of this bill is in the detailed provisions as well as the subsidiary legislation to follow. These should ensure a balance between dealing with money laundering and the financing of terrorism and the pursuit of legitimate business. But in the final analysis it will be in how serious the government is in stamping out money-laundering or whether this bill will be simply as ineffective as its predecessor.

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OAS committee concerned at Guyana’s lack of moves on access to information

OAS committee concerned at Guyana’s lack of moves on access to information
Stabroek News news item. Sunday 20 July 2008

Deep concern has been expressed by an Organization of American States (OAS) committee about Guyana’s non-implementation of some recommendations it made in 2006, including one for setting up mechanisms for access to information.

The report of the Committee of Experts of the Inter-American Convention against Corruption, which was adopted at the June 27, 2008 plenary session of the OAS held in Washington DC, was the second since the first report, which was adopted in 2006.

One of the recommendations made in the first report was for the establishment of legal provisions supporting access to information. The committee had suggested that Guyana consider the creation or adoption of systems to ensure that the public has access, when appropriate, to information on public government organizations and their financial and programme planning activities, specifically including oversight bodies responsible for matters covered in the report.

Freedom of Information legislation has long been advocated by many including the media and last month a Commonwealth Parliamen-tary Association (CPA)-sponsored Parliament and media workshop had urged that such legislation be enacted within a clear timeframe and efforts made to implement it fully.

The committee report in 2006 had urged the development and regulation of the processes through which requests are received in order to respond to them on a timely basis, for appeals in cases where requests are denied and establish sanctions in the event of failure to comply with the obligation to furnish public information.

A number of other recommendations were made including several that dealt with corruption and the reporting of such acts.

The committee has expressed concern that Guyana has not “advanced” in the recommendations put forth in the first review. It noted Guyana’s response, which stated that there had been no concrete steps to implement the measures suggested by the committee and that there was no available data on any difficulties that have been observed in the process of implementing the recommendations.

“The lack of concrete steps taken with respect to the implementation of the recommendations deeply concerns the committee and it has the even more serious consequence of making it very difficult to pursue the basic goal of facilitating, promoting and strengthening cooperation among the state parties, in accordance with the terms of the convention, the Docu-ment of Buenos Aires and the Rules of Procedure,” the report declared. The Document of Buenos Aires established the committee and one of its goals is “to follow up on the commitments made by the state parties to the convention and to study how they are being implemented”.

The report added, “thus, in the absence of relevant information on the difficulties experienced by the country undergoing review (Guyana), it is not possible to facilitate international cooperation for the state in overcoming these problems”.

The committee urged Guyana to take concrete steps in the implementation of the recommendations formulated in the first report and to report on its progress at the forthcoming meetings of the Committee in compliance with Article 31 of the Rules of Procedure.

Caricom Insurance licence application still under review

Caricom Insurance licence application still under review
Stabroek News news item. Sunday 20 July 2008

The insurance licence application for Caricom General Insurance Company Inc is still under review at the Office of the Insurance Commissioner (OCI), almost a year after it was submitted.

Last year the company announced its intention to change its name from Guyana Fire Life and General Insurance (GuyFlag) and apply for a licence under its current name. It had been denied a licence in October 2005, under its former name.

Assistant Insurance Commissioner Tracy Gibson told Stabroek News on Monday that the situation had not changed and the application was still under review. However, she said the review was expected to be finished by August.

The company had challenged the OCI’s decision in 2005 through the courts but the case was dropped last year, paving the way for it to re-apply for a licence under the new name. In January, OCI Commissioner Maria van Beek had told this newspaper that a decision was expected since December, but that there was a delay in the final report of the auditors who visited the company. She had said at the time that the OCI had concluded an inspection and special audit of the company but the auditor’s reported had been expected by January month-end. The findings of this report are expected to influence the decision about the company’s licence application.

The company, which also manages the Linden Economic Advancement Fund (LEAF), a government of Guyana/European Commission funded project, received the final tranche of the $251 milion from the EC in March. The EC had taken the decision to withhold the funds in 2005; following allegations of fraud.

The fund is worth 1.9 million euros and began operations in January 2005. It is a component of the Linden Economic Development Programme (LEAP) that began operations in 2002 and is worth $2 billion. LEAP and LEAF are expected to come to an end next June.

Saturday, July 19, 2008

The Customs/ Fidelity probe ordered by the President must not be derailed

The Customs/ Fidelity probe ordered by the President must not be derailed
Stabroek News Business. Friday 18 July 2008

There is a distinct and disturbing air of dissonance to the unfolding saga of the Customs/ Fidelity Affair. The twists and turns in the labyrinthine drama may have already had the effect of losing a public eagerly awaiting the outcome of the investigation into the fraud claims, which investigation is surely a matter of profound national interest and one which was publicly promised by the President himself.

Here, it is worth reminding that what the President promised was an investigation that transcends the Fidelity Affair and delves into the deeper “goings on” inside the Customs and Trade Administration. Taken together, the public pronouncements made by the President and the GRA Commissioner General have left no doubt that there is indeed much that warrants investigation inside the Customs Department.

Fidelity aside, there are two reasons why such an enquiry is important. First, there is the need to address what has long been an unshakeable public conviction that the operations of the Customs Department are replete with corrupt transactions that defraud the public treasury of billions of dollars and from which those functionaries involved in the corrupt practices profit. This much was made clear by the President himself some months ago during a press conference in the wake of the alleged Fidelity fraud revelation.

Secondly and consequently, a fair and transparent investigation into these scams and rackets that fingers and punishes the masterminds will place the government in a far better position than it is at this time to make a believable public declaration regarding its commitment to fighting corruption.

The problem is that given all the various recent revelations associated with the alleged Fidelity/Customs fraud, there now appears to be a good deal of uncertainty about the status of the enquiry promised by the President, which enquiry, we were told towards the end of May, was almost completed. Since then we have learnt that there are other issues pertaining to Fidelity that may warrant – presumably another – investigation. More recently, Fidelity convened a press conference during which it proclaimed its innocence.

The day after the Fidelity briefing Mr. Sattaur publicly accused the company of having attempted to defraud the GRA of sums in excess of $300m!

The point about all these claims and counter-claims reposes not in their truth or lack thereof but in their relevance to what we can only assume is the still ongoing enquiry ordered by the President. What exactly is the status of that enquiry and will these new revelations by Fidelity and Mr. Sattaur impact on the proceedings and on the timing and outcome of the enquiry.

All of this is taking place against a backdrop of overwhelming public cynicism about the enquiry and its likely outcomes. Few people, if any, seriously believe that the enquiry will precipitate the collapse of the culture of corrupt customs transactions and if the President may perhaps feel discomfited by the public cynicism no one can justifiably deny that it derives from previous experiences of corruption-related probes associated with transactions that have been ‘rigged’ to evade the payment of customs duties.

It is here that President Jagdeo is challenged to ensure that the enquiry which he ordered personally is completed and that its outcomes deliver on his promise that the investigation will “dig deep” and that the masterminds will be exposed and made to answer. Nothing short of this will do. What certainly will not do is any long and pregnant pause in the probe itself that gradually descends into a permanent deafening silence on the issue. It is up to President Jagdeo – on whose directive the probe was ordered - to ensure that this does not happen.

The question also arises as to whether the broader enquiry into the operations of the Customs Department ordered by the President ought not to proceed separately from the Fidelity enquiry since, presumably, the former is likely to be far more complex and presumably more protracted.

It would certainly do little good if the imperative of bringing the Fidelity enquiry to an expeditious end serves to truncate and, consequently, compromise the broader Customs enquiry.

Finally, it has to be said that by giving a clear and profound public commitment to an enquiry President Jagdeo has placed his own credibility on the line. This newspaper has consistently insisted that the enquiry ordered by the President be allowed to proceed despite calls from other quarters for an independent enquiry.

We believe, therefore, that is up to the President to ensure that nothing is allowed to derail the completion of the enquiry and the placing of its full findings in the public domain.

Friday, July 18, 2008

The granting of concessionary arrangements to investors must be done in accordance with existing laws

The granting of concessionary arrangements to investors must be done in accordance with existing laws
Stabroek News letter. Friday 18 July 2008

Dear Editor,

I refer to Mr Christopher Ram’s Business Page commentary published in SN of June 29, 2008, on the concessions which the government purported to grant to Queen’s Atlantic Investment Inc. Mr Ram had timely brought to the attention of the Guyanese public that some of the concessions to be enjoyed by the prospective investor were not authorized by the enjoyed laws. The statement issued by the Ministry of Finance subsequent to Mr Ram’s disclosure concedes that the existing law does not authorize the granting of some of the concessions intended to be granted to the prospective investor QAII and, therefore, confirms Mr. Ram’s observations. This admission by the Ministry of Finance certainly raises the issue as to the governmental functionaries who were responsible for processing the application of QAII and their default in not ensuring that the concessions intended to be granted by the government to QAII complied with the existing law.

It will be recalled by keen observers that the Fiscal Enactments (Amendment) (No.2) Act 2003 was so structured with the intention of providing for some consistency, predictability and transparency in the granting of pioneering concessions. One is compelled to ask the reason for the secrecy surrounding these concessionary arrangements particularly in the light of the obligation of the Minister of Finance under section 37 of the Investment Act 2004 to publish in the official Gazette information relating to the public grant of fiscal incentives and thereby make disclosures of these concessionary arrangements. Similar criticisms have been levelled at the negotiations being conducted with respect to the Marriott Hotel.

The explanations emanating from the government give the impression that negotiations with prospective investors have been taking place without careful consideration being given to the existing laws. To their credit, the opposition parties in the National Assembly have demonstrated that they are fully aware of the lapse on the part of the government thereby making it necessary in this case, involving QAII for the government to take corrective action by means of making legislative amendments.

The need for the early enactment of Freedom of Access to Information legislation is evident. The concessionary arrangements negotiated with respect to the construction of the Marriott Hotel are another example of unwarranted secrecy. What can be the special circumstances in Guyana, as compared with other countries, for stalling or preventing the enactment of this desirable piece of legislation for Guyana?

The explanation by the Ministry of Finance that the law as enacted does not properly reflect the intention of the Cabinet in relation to fiscal incentives seems incredible when one considers the number of governmental functionaries who must be directly involved in ensuring that the grant of fiscal concessions complies with the existing law.

The position must surely be that the granting of concessionary arrangements to investors must be done in accordance with existing laws. If none of the governmental functionaries noticed that the existing legislation did not provide for all of the concessions which the government intended to grant to QAII, then our system of checks and balances which was carefully crafted to avoid just such a contretemps, has not fulfilled its purpose.

Yours faithfully,
Brynmor Pollard SC

Thursday, July 17, 2008

Freedom of Information Laws

Freedom of Information Laws
Kaieteur News Editorial. On July 15, 2008

If we were to go by the statements of our political elite it would appear that all of them are in favour of us having a “freedom of information” (FOI) law in our country.

According to one member of the government bench, it is only a matter of timing and getting certain prefactory matters settled.

This is something of a rarity in our fractured politics and we can only hope that this landmark legislation will soon be enacted.

After all, there is so much that is shrouded in secrecy that the average citizen can be excused for becoming a bit jaded.

A FOI law is therefore also for the benefit of those who are in office since it is their honour that can more easily be saved providing access to the facts.

With the common origin of our legal systems as former colonies of Britain, we thought it might be of interest to identify some features of the FOI law in some Commonwealth countries.
We have selected South Africa, India and Pakistan because of their varied developmental trajectories.

South Africa’s Promotion of Access to Information Act (PAIA) came into effect in 2000. India promulgated its Right to Information (RTI) Act in 2005, while Pakistan issued its Freedom of Information Ordinance (FIO) in between them in 2002, in rather troubled times.

The primary lesson that strikes a reviewer is that the design of the FOI legislation is crucial since, as numerous experts have pointed out flatly: “where legislation is inherently weak, implementation will automatically fail”.

In both India and Pakistan, all citizens are granted the right to access public records but in the South African legislation, citizens can access information held by all private as well as public bodies.

This is unique. Civil society had a very prominent role in drafting the South African legislation and this may explain its expansive reach.

While one may believe that there would be a clear statement of what is the meaning of a “Right to Information”, in South Africa and Pakistan there is no such provision.

In India it is spelled out: “the right to information accessible under the Act which is held by or under the control of any public authority and includes the right to (i) inspection of work, documents, records; (ii) taking notes, extracts, or certified copies of documents or records; (iii)taking certified samples of materials; (iv)obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device.”

In terms of applicability and scope of the legislation, South Africa’s is succinct and applies to “any Department of Government, body performing public function under any legislation and private bodies where the information is required for the exercise or protection of any rights.”

The Pakistan variant is somewhat more specific: “any Ministry, Division or attached department of the Federal Government; Secretariat of Parliament; any office of any Board, Commission, Council, or other body established by, or under, a Federal law; courts and tribunals.”

India is most expansive and includes any authority or body established or institution of self-government established or constituted: (i) by or under the Constitution; (ii) by any other law made by Parliament or a State Legislature, (iii) by notification made by an appropriate government, and includes (a) any other body owned, controlled or substantially financed and (b) non-government organisation substantially financed; by funds provided directly or indirectly by the appropriate Government.

For “public interest” disclosure, in South Africa, both public and private bodies must disclose information when there is evidence of substantial contravention of law or imminent and serious public safety or environment risk involved. And the public interest in disclosure outweighs the public interest in refusing.

In India, information may still be disclosed if the public interest in disclosure outweighs the harm to protected interests notwithstanding anything in their Official Secrets Act.

In Pakistan, the government can broadly refuse to disclose any other record from the purview of this Ordinance in the public interest.

The required time for providing access to information is clearly stated in all three jurisdictions: In South Africa, it is within thirty days of request; Pakistan, within twenty one days; and India, thirty working days for granting or refusing the information request or forty days where confidential third party information has been requested.