In our article of 5 February 2024, we began a discussion on the various anti-corruption measures implemented by the Guyanese authorities over the years and what may have been reasons for Guyana continuing to score poorly on Transparency International’s Corruption Perceptions Index. We identified 13 such measures, including the passing of the Integrity Commission Act in 1997; the Fiscal Management and Accountability Act 2003, the Procurement Act 2003; the Audit Act 2004; the Anti-Money Laundering and Countering of Financing of Terrorism Act 2009 and its subsequent amendments; and the Natural Resource Fund Act 2021.
Today’s article concludes our discussion on the subject.
Ratification of the UNCAC in 2008
The United Nations Convention Against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument. It was adopted by the General Assembly on 31 October 2003 by Resolution 58/4. UNCAC came into force on 14 December 2005, and as of October 2023 there were 190 parties to the Convention. It is unfortunate Guyana was not one of the 140 signatories to the Convention. It nevertheless acceded to it five years later, on 16 April 2008.
The Convention covers five main areas: preventive measures; criminalization and law enforcement; international cooperation; asset recovery; and technical assistance and information exchange. It also deals with different forms of corruption, such as bribery, trading in influence, and abuse of functions. Preventive measures include:
(a) Establishing a body or bodies to promote effective practices aimed at preventing corruption. These bodies should be granted the necessary independence to carry out their functions effectively, free of undue influence. They should also be provided with adequate resources, specialized staffing, and relevant training.
(b) Adopting, maintaining, and strengthening systems for the recruitment, hiring, retention, promotion and retirement of civil servants and non-elected officials based on, among others, transparency, and the application of objective criteria, such as merit, equity, and aptitude. Disciplinary action should be taken for any violation of established codes and standards of conduct.
(c) Prescribing criteria concerning candidature for and selection to public office, enhanced transparency in the funding of candidates for elected public office, and funding of political parties.
(d) Adopting, maintaining, and strengthening systems to promote transparency and prevent conflicts of interest.
(e) Promoting integrity, honesty, and responsibility among public officials.
(f) Applying codes or standards of conduct for the correct, honourable and proper performance of public functions; and
(g) Establishing measures and systems to facilitate reporting by public officials of acts of corruption that have come to their notice in the performance of their duties.
(h) Requiring public officials to make declarations to the appropriate authorities regarding outside activities, employment, investments, assets and substantial gifts or benefits from which conflict of interest may result.
(i) Establishing appropriate systems for public procurement based on transparency, competitiveness, and objective criteria in decision-making, including an effective system of appeal by any aggrieved party.
(j) Having simplified access by members of the public to information on government programmes and activities, including the functioning of public entities, their decision-making processes, and their decisions.
(k) Adopting good commercial practices among businesses as well as those with contractual relations with the State.
(l) Promoting transparency among entities, especially as regards the identity of persons involved in establishing and managing corporate entities.
(m) Preventing conflicts of interest by imposing restrictions on the professional activities of former public officials or on the employment of public officials by the private sector after their resignation or retirement, where such activities or employment relate directly to the functions held or supervised by those public officials during their tenure.
(n) Ensuring the proper books of accounts and related records are maintained, there are adequate financial statement disclosures, and appropriate accounting and auditing standards are used to prohibit, among others: off-the-books accounts, recording of non-existent expenditure, the use of false documents, and tax deductibility of expenses that constitute bribes.
Some of the above measures as they relate to Guyana have already been discussed in previous columns, including the creation of the Guyana Revenue Authority; Guyana being a signatory to the Inter-American Convention Against Corruption; and the establishment of the Integrity Commission; the enactment of the Fiscal Management and Accountability Act, the Procurement Act the Audit Act; and the activation of the Public Procurement Commission.
In relation to criminalization and law enforcement, the Convention covers bribery, embezzlement, abuse of functions and other related acts; laundering of proceeds of crime; concealment and obstruction of justice; freezing, seizure and confiscation; and preventing and detecting transfers of proceeds of crime.
AML/CFT Act 2009 and its subsequent amendments
After almost a decade of struggle, due to political wrangling amid the threat of sanctions by the Financial Action Task Force (FATF), the Anti-money Laundering and Countering of Financing of Terrorism (AML/CFT) Act was passed in 2009. Since then, there were several amendments to bring the Act in line with international standards based on recommendations from the FATF and the Caribbean Financial Action Task Force (CFATF).
One such recommendation relates to the establishment of the Special Organised Crime Unit (SOCU) in 2014. Under the authority of the Commissioner of Police, the Unit works closely with the Financial Intelligence Unit (FIU) set up under the AML/CFT Act. It is in fact the investigative arm of the FIU. However, since its establishment, there has been no evidence of successful prosecution involving public officials alleged to have been involved in financial crimes. According to an article by Ralph Ramkarran dated 21 February 2016, SOCU had 858 pending cases on hand as at this date The independence of SOCU from the Executive has been called into question on several occasions.
Guyana has since 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.
Establishment of the now disbanded State Assets Recovery Agency in 2017.
The State Assets Recovery Agency (SARA) Act was passed in the Assembly on 13 April 2017 and assented to by the President on 4 May 2017 with the aim of recovering unlawfully acquired state assets from public officers, past and present, through civil proceedings. This is in accordance with Chapter 5 of the UNCAC that deals with freezing, seizure, and confiscation of proceeds of crime or property, including income from such property. Specifically, parties to the Convention are take such measures to permit its competent authorities to freeze or seize property based on an order issued by a court or competent authority, if there are sufficient grounds for doing so.
The Act sought to combat unlawful conduct and corrupt practices in relation to property and other assets owned by the State, or in which the State has an interest. Prior to this, SARA was operating as a unit under the Office of the President. The key functions of SARA are:
(a) To investigate into whether property or interest in property constitutes State property obtained through the unlawful conduct of a public official or other person.
(b) To trace and identify property, whether situated in Guyana or in a foreign country or territory, suspected to be State property obtained from the unlawful conduct of a public official or other person.
(c) To take appropriate measures, consistent with the Act to deprive or deny any person of property believed to be State property, as may be appropriate.
(d) To institute and conduct proceedings in the Court for the recovery or protection of State property, or for the freezing of proceeds of corrupt or unlawful conduct or related offences, or the payment of compensation and disciplinary measures in relation to State property.
(e) To raise public awareness on the dangers of corruption and enlist public support in combatting corruption and other crimes, especially in relation to public offices and State property.
There were severe criticisms of the Act. However, instead of addressing these criticisms and making appropriate amendments, it is regrettable that, upon the change in Administration in 2020, SARA was disbanded, thereby leaving a significant gap in the fight against corruption.
Establishment of Guyana’s EITI in 2017
In October 2017, Guyana was admitted to the membership of Extractive Industry Transparency Initiative (EITI). The first three annual reports highlighted significant deficiencies and instances of non-compliance with the requirements of the EITI Standard. These have led the Independent Administrator to conclude that he was unable to determine that all significant contributions made by extractive entity to the revenues of Guyana were included in the report.
Due to the delay in the compilation and publication of the 2020 report, Guyana was suspended from membership of the EITI. This was because of disagreements between the newly appointed National Coordinator (a close associate of the ruling party without the relevant background) and certain members of the Multi-Stakeholder Group over the terms of reference for the Independent Administrator responsible for compiling the report. The report has since been published in July 2023. As a result, Guyana’s membership to that body was restored.
In his 2019 report, the Administrator made it clear that continued inaction on some of the recommendations previously made: (i) stymies progress in meeting the requirements of the EITI Standard; (ii) impedes preventative actions to correct and address discrepancies between declarations by government agencies and the extractive entities; (iii) adversely affects the data quality and comprehensiveness of the disclosures, which may reduce the public’s confidence in the report’s data; and (iv) compromises the fundamental purpose of EITI open data as a tool for government to improve policy making and sector management. However, in his 2020 report, the Independent Administrator concluded that the significant revenues declared by reporting entities and included in this report were subject to independent audits that have been performed in accordance with international standards. This was despite the fact the findings in the 2020 report were similar to those of the earlier reports.
Apart for the requirement for annual reporting, EITI implementing countries must undergo a quality assurance mechanism, called Validation, at least every three years to assess progress towards meeting the EITI Standard and in promoting dialogue and learning at the country level. Three broad areas were considered – stakeholder engagement, transparency, and outcomes and impact – with Guyana scoring 60.0, 53.5, and 42.0, respectively in its first validation. The EITI Board expressed concern, especially over the low score on the outcomes and impact component. It attributed Guyana’s performance to ‘an ad hoc approach to outreach and dissemination, failure to follow-up on EITI recommendations to deliver reforms and insufficient attention to the annual review of outcomes and impact’. The next Validation is due in April 2024. The Board has warned that the failure to take the necessary corrective actions in the 20 areas identified may result in temporary suspension.
The 2021 report was issued in December 2023 and will be the subject of our next article.
Protected Disclosures Act 2018
A key provision of the IACAC relates to creating, maintaining, and strengthening the system to protect public servants and private citizens who in good faith report acts of corruption to the relevant authorities. However, it took 22 years for legislation to be passed to give effect to this important provision that is so vitally necessary in the fight against corruption.
Guyana’s Protected Disclosures Act 2018 was eventually passed in the Assembly on 18 January 2018 and assented to by the President on 12 February 2018. The disappointment, however, is that six years on, this important piece of legislation aimed at assisting in the fight against mismanagement, corruption, and unethical behaviour, is yet to be operationised via an order from the Minister of Legal Affairs.
Natural Resource Fund Act 2021
The Natural Resource Fund (NRF) Act was passed in the Assembly on 29 December 2021. The following day, the President assented to the Bill while the Minister of Finance signed the commencement Order the next day to bring the Act into operation. The main issue of contention is the repealing of the predecessor legislation of 2019 and replacing it with what many believe to be a lesser form of legislation that removes several safeguards against the abuse over the oil revenues accruing to the nation.
Most of the contents were extracted from the predecessor legislation of 2019. Notable changes include: (i) the establishment of a Board of Directors to replace the role of the Minister as regards the overall management of the Fund and the corresponding restriction in the role of the Public Accountability and Oversight Committee; and (ii) the removal of the requirement to have a Macroeconomic Committee to advise on the maximum Economically Sustainable Amount that can been withdrawn from the Fund, taking into account macroeconomic variables and other factors and replacing it with the First Schedule outlining the maximum amounts that can be withdrawn annually.
The Schedule has been revised via the Fiscal Enactments (Amendment) Act 2024 which was passed in the Assembly on 2 February 2024 and assented to by the President on 6 February 2024. The new rule provides for the following withdrawal in respect of deposits made into the NRF in the immediately preceding fiscal year: (i) 100 percent of the first US$ billion; (ii) 95 percent of the second US$ billion; (iii) 85 percent of the third US$ billion; (iv) 50 percent of the fourth US$ billion; and (v) 10 percent of the excess of the first US$5 billion.
The amendment also includes the lifting of the ceiling for external borrowings from G$900 billion to G$1.5 trillion; and for domestic borrowing, from G$750 billion to G$1.5 trillion.
