In last week’s article, we discussed the 2022 Corruption Perceptions Index (CPI) and noted that that most of the 180 countries surveyed failed to bring about improvements in their scores and ranking. From a review of the results, it is evident that countries with very low scores are either war-torn or have authoritarian systems of government. In some cases, the Index does not appear to take into account recent events. Transparency International (TI) attributed this to data sources often taking time to catch up to real-life experiences and situations which could take a year or more to affect a country’s score.
Critics have argued that the Index tends to be weighted more in favour of petty or bureaucratic corruption. TI defines it as ‘the everyday abuse of entrusted power by public officials in their interactions with ordinary citizens, who often are trying to access basic goods or services in places like hospitals, schools, police departments and other agencies’. Perhaps, it is for this reason that war-torn and post-conflict countries in dire need of resources to lift their citizens out of poverty, are the ones tainted most with perceptions of corruption. But according to TI, even those countries with high CPI scores contribute to the threats that corruption poses to global security, and ‘for decades, they have welcomed dirty money from abroad, allowing kleptocrats to increase their wealth, power and destructive geopolitical ambitions’. On the other hand, grand or political corruption is about high-level public officials exploiting opportunities in schemes that involve: bribery, including bribery by foreign officials and entities; embezzlement, misappropriation or diversion of public resources; trading in influence thereby creating undue advantage; abuse of authority; and obstruction of justice, among others. These officials tend to target major infrastructure development projects where large sums are involved and one-off payments made, and the risk of detection and exposure is significantly less compared with petty corruption. This form of corruption results in the diversion and misallocation of State resources, and areas that are in dire need of developmental assistance are often overlooked in preference to those that offer the greatest opportunities for the corrupt public official.
For countries with democratic forms of government, corruption tends to flourish where any of the following exists. This list is of course not exhaustive.
(a) Weak institutional and governance frame
works;
(b) Vague, archaic and cumbersome rules;
(c) High bureaucratic discretion;
(d) Lack of transparency, especially as regards the award of contracts as well as entering into agreements with other parties;
(e) Lack of timely and proper accountability for the use of public resources;
(f) Political interference in the decision-making of key agencies;
(g) Restricted flow of information on government programmes and activities;
(h) Nepotism and favouritism;
(i) Appointments to key positions based on considerations other than those relating to professional and technical competence; and
(j) Weak political accountability.
In today’s article, we focus on Guyana’s performance on the CPI over the years and what needs to be done to bring about an improvement in its score and ranking.
Guyana’s CPI score over the years
For the English-speaking Caribbean, Guyana and Trinidad & Tobago continued to score poorly on the 2022 CPI, jostling once again for the bottom place with scores of 40 and 42, respectively. In 2012, Guyana’s score on the CPI was 28. Eight years later, it moved to 41. The 13-point increase occurred mainly during the period 2016-2020 when its score increased from 29 to 41. The largest increase was in 2016 when it scored a five-point increase, moving from 29 to 34. This enhanced performance was mainly due to several initiatives undertaken, including:
(a) Holding of local government elections in 2016 and 2018 after a hiatus of 22 years;
(b) Amendments of the Anti-Money Laundering and the Countering of Financing of Terrorism (AML-CFT) Act 2009 in compliance with the requirements of the Financial Action Task Force (FATF);
(c) Conduct of numerous forensic audits of State institutions and the involvement of the Special Organised Crime Unit (SOCU) in instituting charges against those who have been fingered in the abuse and misuse of State resources;
(d) Establishment of the now disbanded State Assets Recovery Agency (SARA) in keeping with a key provision of the United Nations Convention Against Corruption (UNCAC) relating to freezing, seizure and confiscation of property;
(e) Activation of the Public Procurement Commission to provide the much-needed oversight of Guyana’s procurement processes;
(f) Activation of the Bid Protest Committee to investigate complaints from aggrieved suppliers and contractors in relation to the award of public contracts;
(g) Appointment of new members of the Integrity Commission and the revision of the Code of Conduct contained in the Integrity Commission Act;
(h) Establishment of Guyana’s Extractive Industries Transparency Initiative;
(i) Tabling of draft legislation for the establishment of the Petroleum Commission;
(j) Enactment of the now repealed Natural Resource Act 2019;
(k) Enactment of whistleblower protection legislation; and
(l) Amendment of the Fiscal Management and Accountability Act to provide for the financial independence of constitutional agencies.
Considering the above initiatives, we had stated that Guyana had the opportunity to build on this improved performance if it could continue to intensity its efforts to improve its governance, including transparency and accountability, and ensure appropriate disciplinary actions are taken against those found guilty of undermining such efforts. In this regard, we had estimated that within five years it would have been able to achieve the 50 percent mark on the CPI. Regrettably, events during the period 2019 to July 2020 following the vote of no confidence in the Government, marred such efforts. The CPI, however, did not appear to take into account the events that took place during this period, which would have resulted in Guyana achieving a lower score in 2021 or 2022.
Local government elections
The holding of periodic elections, whether at the national, regional or local levels, is indispensable to all forms of democratic governance. The law requires local government elections to be held every three years in respect of the ten municipalities and 70 neighbourhood democratic councils. However, during the period 1994 to 2015, no such elections were held, and therefore the affairs of these bodies were administered by unelected officials for 19 years, which was a significant blow to local democracy. Upon a change of Administration, elections were eventually held in 2016 and again 2018. At the moment, however, most of the local government bodies, especially the municipalities, are significantly in arrears in terms of financial reporting and audit, without evidence of any actions taken against the responsible officials for their failure to ensure financial accountability for their stewardship.
The statutory deadline for holding the next local government elections has so far been overrun by some 16 months. In November 2022, the Minister announced the date of 13 March 2023 for such elections. However, due to political differences between the two groups of members constituting the Elections Commission as regards the use of the voters’ list and the work plan for the conduct of the elections, the Commission has decided that the date set was no longer achievable and that a more likely date is sometime in May or June. We trust that there will be no further delay since a lack of democracy often results in a lack of accountability which in turn feeds corrupt behaviour. Should there be any further delay beyond June, Guyana’s performance on the CPI is likely to be adversely affected.
Considering what took place during the period 20-month period between January 2019 to July 2020, as described in detail in my publication captioned “Triumph of Democracy and the Rule of Law: Guyana 2020 Elections and their Aftermath”, the time is long overdue for the Commission to be comprised of persons who are in no way connected to any political party. Indeed, the independence of any body charged with the responsibility of holding periodic elections is of paramount importance and should jealously guarded.
Amendments to AML/CFT Act 2009
We are pleased that after almost a decade of struggle due to political wrangling, first to enact legislation to address money laundering and financing of terrorism, and to update the Act to bring it in line with international standards, Guyana is about to become a member of Egmont Group of Financial Intelligence Units (FIUs). Comprised of 166 members, the Egmont Group is an international network of FIUs that facilitates improved communication, information sharing, and training coordination amongst its members. This development is likely to have a positive on Guyana’s performance on the CPI.
Special Organsed Crime Unit
SOCU was established in 2013, consistent with one of the key recommendations FATF, to ensure Guyana’s compliance with its international financial obligations as regards monitoring of the implementation of the AML/CFT Act. It is responsible for investigating suspected money laundering and other financial crimes and to prosecute persons suspected of being involved. SOCU is a unit under the Guyana Police Force.
According to Guyana’s second National Risk Assessment report dated 13 July 2021, during the period 2016 to 2020, the FIU forwarded to SOCU 100 Suspicious Transaction Reports, including follow-up reports relating money laundering. However, less than half of these reports were investigated, none of which resulted in prosecution or convictions, and approximately 36 were not assigned for investigation. See https://fiu.gov.gy/wp-content/uploads/2022/11/FINAL-NRA-Report-August-12-2021.pdf.
According to the present Administration, this state of affairs was mainly due to staff constraints. It is somewhat heartening to learn of the recent the action of SOCU to bring about charges against three members of a family alleged to have been involved in money laundering activities. However, questions remain as to why other individuals and/or business entities that may have been the masterminds behind these activities, are also not being prosecuted. That apart, the Unit needs to do considerably more as an anti-corruption body, considering the large number of individuals and businesses that are flaunting unexplained wealth with impunity. Additionally, there should be no political interference in the work of the Unit, an allegation that has been made by both sides of the political divide since the Unit’s establishment. We also hope that the staffing situation has since been remedied.
State Assets Recovery Agency
SARA was established by Act No. 14 of 2017 to investigate and recover, through civil proceedings, state property unlawfully acquired by a public official or any other person. It is one of the key requirements of UNCAC provided for under Articles 51-59 of the Convention to which Guyana acceded in 2005.
This all-important anti-corruption body was, however, disbanded in October 2020 on the grounds that the Act was too oppressive and that several of the provisions were in conflict with certain provisions of the Constitution. Additionally, concerns have been expressed that senior officials of SARA were too closely associated with the then Administration, a situation that was most undesirable, considering the need to protect the Agency’s independence, the professionalism of its employees, and to insulate it from political interference.
Although the Authorities have given the undertaking to enact new legislation to address the shortcomings in the Act, to date no action has been taken. We urge that this matter be given the urgency it deserves, considering that the provisions of UNCAC are legally binding on all parties to the Convention. After all, an effective mechanism for the freezing, seizure and confiscation of property derived from the proceeds of crime and other illicit activities is an indispensable element in any the fight against corruption. This was the intention of the now disbanded State Assets Recovery Act.
– To be continued –
