In a previous column, we had referred to a statement from the Private Sector Commission (PSC) that the Chief Justice’s ruling remains intact until it is overturned by a higher court and that it expects the President and his government to respect and honour the ruling by calling elections before 21 March 2019. The PSC also expressed concern about public statements emanating from government sources that the status quo remains the same until the entire judicial process is fully exhausted, including possible appeal to the Caribbean Court of Justice. Accordingly, it warned that such statements could lead to ‘grave instability and an illegal government’.
In today’s column, we continue to monitor developments since the 21 December 2018 vote of no confidence in the Government.
Results of Survey Within the Business Community
The Georgetown Chamber of Commerce and Industry (GCCI) released the results of a survey carried out within the business community, which indicated that there has been a significant decline in commercial activity because of the present political uncertainty. Two-thirds of the respondents indicated that they have experienced a decline in business ranging from 25-100 percent.
This is not good news for the state of economy as well as for investor confidence. One is reminded of the events during the period November 2014 to May 2015 when the economy was severely affected because of the prorogation of Parliament on 10 November 2014, its dissolution on 28 February 2015 and the holding of elections on 11 May 2015. A similar scenario appears to be playing out, with such polarizing effect this country has not seen since the early 1960s.
Statement by Minister of Business
In a recent address at an oil and gas forum at Rice University’s Baker Institute for Public Policy in Texas, the Minister of Business hinted at the possibility of holding elections before year-end, noting that such elections are usually held every five years unless some constitutional provisions are triggered. Unlike his other ministerial colleagues, the Minister appeared to have acknowledged the validity of the vote of no confidence and the requirement of Article 106(7) for elections to be held within three months. Or perhaps, he is anticipating the outcome of the judicial review process that the Government has initiated to challenge the Chief Justice’s ruling.
The President’s Letters to GECOM
In a letter dated 25 February 2019 to the Chairman of the Elections Commission, the President urged GECOM to begin the process of preparing for general and regional elections. He assured the Chairman that the Government will ensure that the necessary funds will be made available to do so. The letter was in response to an earlier correspondence from the Chairman indicating that the Commission would not be able to hold ‘credible’ elections within the three-month timeframe set by the Constitution; and because of the absence of funding to do so, GECOM would proceed with its work plan consistent with its current budgetary allocation, that is, conducting the house-to-house registration.
On the same day, the President wrote a second letter to the Chairman indicating the need for GECOM to have a new appropriation of funds approved by the National Assembly for the holding of elections in 2019, and ‘for us to initiate consultations’ on the readiness of GECOM to do so. This column does not wish to get involved in the controversy involving these two letters. We, however, agree that the language used was inappropriate, and in the absence of supporting evidence, an expression of regret would be in order.
The Commission had earlier written the Ministry of Finance seeking advice as to whether funds could be used from GECOM’s 2019 budgetary allocation to conduct the elections, to which the latter stated that parliamentary approval would first be needed. The Ministry cited Section 80B(7) of the Fiscal Management and Accountability (Amendment) Act 2015 as its authority for its advice. That section provides for the approval of the National Assembly for any alteration in the annual budget of a constitutional agency. However, the advice did not take into account Article 222A of the Constitution which states that in order to secure the independence of a constitutional agency, the expenditure of that agency shall be a direct charge on the Consolidated Fund determined as a lump sum by way of an annual subvention. A direct charge on the Consolidated Fund is not voted expenditure and is not reflected in an Appropriation Act.
Ignoring for the time being public enterprises and other State-owned/controlled entities, from a public financial management perspective, there are three main types of agencies, namely, a budget agency, a subvention agency (otherwise known as a statutory body), and a constitutional agency. A budget agency is a central government agency whose budgetary allocation is approved on a programme basis and can only be varied across programmes with the approval of the Minister. The maximum of such variation, known as virement, is ten percent of the programme budget. Beyond this amount, parliamentary approval has to be sought via a Supplementary Estimate.
On the other hand, a subvention agency is non-central government agency that receives a subsidy to meet the cost of operation, based on the submission of its budget to the Ministry of Finance during the budget preparation. Once the subvention is approved, the amount involved is included in the Appropriation Accounts of the subject Ministry. Article 222A therefore contradicts itself by considering the expenditure of a constitutional agency a direct charge on the Consolidated Fund while at the same time deeming it subvention. The overriding consideration, however, is the need to secure the financial independence of constitutional agencies to enable them to execute their mandates.
Article 222A goes on to state that the subvention is to be managed in such a manner as the agency deems fit for the efficient discharge of its functions, subject only to conformity with the financial practices and procedures approved by the National Assembly. Article 162(1) identifies functions of the GECOM as ‘connected with or relating to the registration of electors, or the conduct of elections as conferred upon it by this Constitution or, subject thereto, any Act of Parliament…’
GECOM’s budgetary allocation for 2019 is $5.4 billion, of which $3 billion has been earmarked for conducting house-to-house registration of voters. We had expressed the view that GECOM could reallocate the funds to conduct the elections since, as a constitutional agency, it has wide discretion in the use of its budgetary allocation within the confines of its functions. The Auditor General, who has to certify the accounts of GECOM, is unlikely to conclude that there is financial impropriety or legislative breach if this is done. Given that the Ministry of Finance (of which the Minister is the head) is an interested party, it would have been more appropriate for GECOM to seek guidance from the Auditor General. In all probability, the latter would have sought independent legal advice before offering such guidance.
Opinion is divided, mainly on political lines, as to whether or not GECOM should forego plans for the house-to-house registration scheduled for this year and instead use the current voters’ list, as amended during a period of claims and objections, to conduct the elections. After all, this list was used for the local government elections that were held just four months ago. Based on a statement from GECOM that it would need 148 days to prepare for elections using the latter approach, we had suggested that the Assembly be convened to approve an extension of the 21 March 2019 deadline to July 2019. This will require the votes of two-thirds of all the elected members. With at least six Members of Parliament (MPs) not eligible to sit in the Assembly by virtue of holding dual citizenship, the votes will have to be taken from among the 59 MPs. However, the political Opposition is insisting that it will not be attending the sitting of the Assembly unless a date is proposed for holding elections. This further complicates matters in that if the Opposition MPs decline to attend the sitting of the Assembly, all the elected Members would not be present and therefore the vote cannot take place.
Invitation to the Opposition Leader for Talks
The President has invited the Opposition Leader for consultations on Wednesday regarding: (i) the National Assembly’s constitutional role in the present situation; and (ii) GECOM’s readiness and requirement for funding to enable it to conduct General and Regional Elections. So far, the Opposition Leader has not responded to the President’s invitation. However, at a recent press conference, the Opposition Leader indicated that he would not participate in the meeting unless a date for the elections is proposed.
It will be recalled that a similar meeting was held on 10 January 2019 at which it was agreed that that the Government would respect the ruling of the Speaker of the National Assembly while at the same time seek a judicial review of his ruling. We had interpreted the latter statement to mean that the Administration would adhere to the requirement to hold elections by 21 March 2019 (or such later date as approved by two-thirds of votes of the members of the National Assembly), unless within this timeframe the Court rules that the no confidence vote is invalid.
As regards funding for the elections, it is estimated that GECOM would need at least $2.2 billion to meet the cost of training polling day staff, transportation, printing of ballot papers, and purchase of indelible ink and stamps. This amount is less than the $3 billion earmarked for house-to-house registration and has already been received since January 2019 by GECOM. As stated above, the latter amount could be reallocated to conduct the elections. On the other hand, if GECOM decides to act on the advice of the Ministry of Finance, this amount would have to be returned to the Consolidated Fund and a new allocation sought as a direct charge on the Fund and not as an Appropriation. Does this really make sense?
If the Opposition does agree to attend a sitting of the National Assembly for the purpose of extending the date for holding elections, the question of funding for such elections could also be dealt with to satisfy the requirements of Section 80A(7) of the FMA (Amendment) Act 2015. The former Attorney General had commented that this amendment is unconstitutional and was approved at a time when the Opposition did not participate in the sittings of the National Assembly.
Final Note
The Court of Appeal has declined an application by Attorney General for a stay of the Chief Justice’s ruling of 31 January 2019 and for a conservatory order to be issued to enable the President and Cabinet to remain in office until the outcome of Government’s appeal of her ruling is concluded. Hearing of the appeal is set to begin on 12 March 2019.
