I have been heartened in my short amount of time here that other political leaders, in government, the opposition, other political parties, also indicated that they will respect [the Caribbean Court of Justice] ruling and there will be a peaceful reaction to it. So, I am hopeful that would happen, and I would encourage all political parties and citizens to react in a peaceful way even if they disagree with the outcome.
U.S. Ambassador Sarah-Ann Lynch
Allegations of conflict of interest have surfaced once again, this time involving two senior Government officials. In the first reported case, the Central Housing and Planning Authority (CH&PA) awarded a contract for the construction of houses to the spouse of a Minister of the Government responsible for housing development. In the other case, the Department of Energy awarded a contract to a company to develop television and radio public service announcements ‘as part of its public awareness and sensitization campaign with regards to Guyana’s emerging oil and gas sector’. The company is owned by another Minister.
Not First Time
This is not the first time the latter has been embroiled in allegations of conflict of interest. In our article of 28 October 2018, we had stated that the Minister’s spouse, the Managing Director of a law firm in Guyana, announced the setting up of offices in Houston, Texas, to provide legal services in the oil and gas sector to potential clients desirous of setting up operations in Guyana. ExxonMobil is also headquartered in Houston and operates in Guyana through three subsidiaries – Esso Exploration and Production Guyana Ltd., CNOOC Nexen Petroleum Guyana Ltd. and Hess Guyana Exploration Ltd. According to the Petroleum Agreement with the Government of Guyana dated 27 June 2016, the registered offices of these three companies are the same as that of the law firm in question. It is, however, not clear to what extent the firm is associated with these subsidiaries but in a court matter relating to environmental permits, the Managing Director was reported to be representing two of the above companies.
The Minister had indicated that she notified the Integrity Commission on 10 October 2018 as well as the Cabinet of her spouse’s involvement and was awaiting further legal advice. Up to the time of writing, neither the Integrity Commission nor the Cabinet had issued any statement on the matter. There was also no indication if the Minister is in receipt of the requested legal advice. The Minister further stated that until such advice is provided, she would refrain from attending Cabinet meetings. However, given that oil revenues are expected to flow in early 2020 – mere months away – it is very likely that oil and gas matters will be a standing item in Cabinet’s agenda for its weekly meetings. This implies that, unless there is a resolution of the conflict, the Minister will be absent from all Cabinet meetings for the foreseeable future, a most undesirable situation. Besides, the Minister is likely to have access to all Cabinet papers and other related material, notwithstanding her absence from Cabinet meetings.
In our earlier article of 16 September 2013, we had stated that the Managing Director of the law firm in question was also the Company Secretary of the Amaila Falls Hydro Inc. at a time when he was the chairman of the Alliance For Change (AFC). The AFC had voted against an amendment to the Hydro Electric Act as well as the lifting of the ceiling for government guarantee of loans to public entities to facilitate the proposed power sharing agreement between the company and the Guyana Power and Light. Three weeks later, the AFC had a change of heart and voted in favour of the two amendments when they were re-tabled in the Legislature. The Managing Director resigned as chairman, but it is not clear whether such action had to do with the perceived conflict of interest or whether it was as a result of internal disagreements within the party. However, his spouse, another senior executive member of the AFC and a Member of Parliament at the time, through her company, was providing public relations services to Synergy Holdings Inc. and Sithe Global, both of which were connected to the Amaila Falls Project.
In response to the latest allegation of conflict of interest, the Minister stated that since becoming a Minister of the Government, she had relinquished day-to-day management of the video production company and is unaware of the transaction with the Department of Energy. As discussed below, this action does not mitigate the perception that a conflict of interest situation exists.
Need for Elected Officials to Avoid Conflicts of Interest
To put matters in perspective, a conflict of interest occurs where a public official’s decisions are influenced by his or her personal interest. It has the potential of undermining the impartiality and objectivity of the person because of the possibility of a clash between his or her self-interest and the person’s professional or public interest. A conflict of interest exists regardless of whether that influence actually takes place. Once there is reasonable belief that there is a risk that decisions may be influenced by ‘secondary’ interests, there is conflict of interest. It can also exist even though there are no improper acts since differing roles are likely to provide an incentive for improper conduct.
In deciding whether there is a conflict of interest, the overriding consideration, indeed the standard test, is whether a reasonable, unconnected and uninformed person, weighing all the specific facts and circumstances available at the time, would be likely to conclude that the risk of conflict of interest exists, despite safeguards that may be put place to minimise the effects of such a risk.
There are a number of ways of mitigating conflicts of interest. These include: eliminating the conflict of interest in its entirety; disclosure of the facts to the appropriate authorities; recusal from any deliberations of the matter giving rise to the conflict; third party evaluation; and adherence to codes of ethics. For elected public officials, the options are, however, very limited by virtue of the fact that they hold positions of public trust, and the first and foremost consideration is the public interest. As such, the highest standards of integrity, ethics and probity are expected of them. Elected public officials should at all times avoid conflicts of interest, and where such conflicts are likely to exist, elimination by removal from the setting is perhaps the best option. For example, if someone elected to public office owns corporate stocks and is a member of several corporate boards, he or she is expected to either dispose of such stocks and resign from the boards or demit public office.
Disclosure does not eliminate or remove the existence of a conflict of interest. Rather, it serves to inform stakeholders of the existence of competing interests. It is then the responsibility of those in authority to decide whether there are enough safeguards to prevent private interests taking precedence over the public interest and advise accordingly. In the final analysis, in the resolution of any conflict of interest, it is the concerned individual who has the obligation of taking appropriate action.
Adherence to Codes of Conduct/Ethics
While in principle conflicts of interest should be eliminated in their entirety, it is recognized that in certain cases removal of the conflict can present difficulties. Many organisations and professional bodies have therefore developed codes of ethics or conduct which members are obliged to follow, and the failure to do so can result in disciplinary action being taken against the person involved. In Guyana, the Code of Conduct for senior public officials, Ministers of the Government and other Members of Parliament, is contained in Schedule II to the Integrity Commission Act.
Revised Code of Conduct for Public Officials
The Code of Conduct for public officials was amended by Order No. 10 of 2017 dated 12 June 2017 and signed by Prime Minister Moses Nagamootoo. It states that a person in public life must not allow private interests to conflict with his or her public duties or improperly influence the public official’s conduct in the performance of his or her public duties. Where any such conflict is perceived to exist, the public official must seek the guidance of the Integrity Commission, and any resolution must be in favour of his or her official duties. The Code further states that a person in public life and members of his or her family shall upon assuming office declare their private interests as well as their and assets with the Integrity Commission; and the failure to avoid or declare any conflict of interest may give rise to criticism of favouritism, abuse of authority or even allegations of corruption.
Article 4 of the Code specifically states that a person in public life shall, among others, ‘refuse or relinquish any outside employment, shareholdings or directorships which create or are likely to create a conflict of interest’.(Emphasis added)
By Section 27(2) of the Act, a person in public life who is in breach of any of the provisions of the Code shall be liable, on summary conviction, to a fine of G$25,000 and to imprisonment for a period of between six months to one year. Any person who believes that there has been a breach of the Code can file a complaint with the Commission providing specific information relating to the alleged breach. If the Commission is of the view that there is merit in the complaint, it shall hold a public hearing into the matter. At the conclusion of the hearing, the Commission shall transmit a report to the Director of Public Prosecutions (DPP) if it considers it necessary. Where the DPP is satisfied that a breach of the Code has occurred, it shall initiate criminal proceedings against the person in public life.
Conclusion
The Integrity Commission Act is clear on the issue of conflict of interest. The two concerned Ministers have to make a choice. If they wish to remain in office as Ministers, they have to divest themselves entirely of the conflict of interest. In the case of the Minister responsible for the CH&PA, an investigation should be launched to ascertain the basis of the award of the contract. If it is found that the spouse won the contract in an open, competitive and transparent manner, the issue becomes of lesser importance. However, he should be precluded from bidding for future government contracts, given the status of his spouse as a Minister of the Government. Alternatively, the Minister could choose to resign from her position.
As regards the other Minister, to the extent she continues to retain ownership of the company in question, or an interest in it, she is in breach of the Code of Conduct contained in the Act. This this could trigger an investigation by the Commission and possibly criminal proceedings. Alternatively, the Minister could choose to resign from her position.
