Last week, the Minister of Home Affairs stated that: the ‘biggest immediate ongoing problem’ of the Guyana Police Force is allegations of corruption in procurement; and he has an obligation to make sure that ‘there is an accounting for the people’s sweat, wealth and labour which comes to us for the operations and administration of the Guyana Police Force’. The Minister further stated that the Public Procurement Commission, Auditor General, Accountant General and Integrity Commission would have to ‘fall in line in relation to cleaning up and tidying up this problem’. He asserted that ‘[i]f monies go to places where they should not go, it means there is massive collusion and corruption. That’s the only explanation for it’.
The Auditor General’s reports over the years are replete with allegations of corrupt behavour in the Police Force, Guyana Defence Force and several other Ministries, Departments and Regions. For example, the 2003 report stated that there were also numerous breaches in the Tender Board Regulations at the Ministry of Home Affairs (Police), especially contract splitting to avoid adjudication by the Central Tender Board. This practice has resulted in irregularities in excess of $50 million in the purchase of items of uniform which could not be traced as having been received.
Allegations of conflict of interest continue to dominate the news in recent weeks. This time it involves a member of the Public Procurement Commission (PPC) who is paid over G$1 million every month in salary and other benefits to protect the country’s interest as it relates to public procurement. At the same time and until recently, this individual was also providing consulting services to ExxonMobil in the form of ‘advice on Government Affairs and political matters’.
We need to remind ourselves every so often what conflict of interest is all about. It is about situations where a public official’s decisions are influenced by his or her personal interest. A conflict of interest has the potential to undermine 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 of a risk that secondary interests may influence decisions, 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.
Article 212W of the Constitution requires the PPC to ‘monitor public procurement and the procedure therefor in order to ensure that the procurement of goods, services and execution of works are conducted in a fair, equitable, transparent, competitive and cost- effective manner…’. The Commission is to act independently, display impartiality, and discharge its duties fairly. Its responsibilities include investigating complaints from suppliers and contractors as well as cases of irregularities and mismanagement and recommending remedial action.
Considering the PPC’s watchdog and investigative role in the award of contracts by Ministries, Departments and Regions, including the involvement of the National Procurement and Tender Administration Board (NPTAB) and Cabinet in relation to contracts valued in excess of G$15 million, the Government is invariably on the receiving end of the Commission’s work. In the circumstances, it is not difficult to consider that the independence and impartiality of any member of the Commission are likely to be seriously impaired if that member displays open alignment or association with the ruling party.
The concerned individual is not only a nominee of the Government on the Commission but is also a staunch defender of the Petroleum Sharing Agreement (PSA) between Exxon Mobil’s subsidiaries and the Government of Guyana as well as of the Administration’s actions in relation to its dealings with ExxonMobil, among others. It is public knowledge that the Agreement is overwhelming weighted in favour of the US oil giant, especially in terms of royalty, profit sharing, ring fencing and taxation. The Government has so far refused to renegotiate the contract to secure better terms for the country, although it had promised to do so while in Opposition.
Considering the level of emoluments and other conditions of services payable to members of the PPC, one would expect them to be in the full-time employment of the Commission, and no outside employment should be permitted, especially in areas that may pose a conflict of interest. In a recent letter to the editor of one of the local newspapers, former Mayor of Georgetown, Yubraj Narine, stated that several other public officials, including Ministers of the Government, are doing the same either directly or indirectly in the provision of goods and services to ExxonMobil.
The Constitution provides for the appointment of members of the PPC based on a recommendation of the Public Accounts Committee (PAC) and approved by at least two-thirds of the elected members of the National Assembly. They are to have expertise and experience in procurement, legal, financial and administrative matters. Of the current membership of the Commission, only one member – Berkley Wickham – has procurement experience, having held the chairpersonship of the NPTAB for five years under the previous Administration.
For the two appointments of Commissioners made so far since the PPC was activated after a 15-year hiatus, the PAC took the least line of resistance by agreeing to the two major political parties submitting the names of persons to sit on the Commission – three from the ruling party and two from the Opposition. This has resulted in appointments being made without due consideration for the application of the merit-based system (such as public advertisement, shortlisting, and interviewing) to identify individuals with the requisite professional and technical backgrounds. Indeed, the PAC has abdicated its responsibility for ensuring that the best candidates are selected for membership of the Commission, as is the intention of the 2001 constitutional amendment. Is there any wonder that the impact of the work of the PPC is yet to be felt, especially at a time when corruption and mismanagement of public funds appear to be the order of the day as they relate to the award of contracts for infrastructure development works?
In today’s article, we discuss how other countries and international organizations are dealing with the issue of conflicts of interest and unethical conduct.
Canada’s Conflict of Interest Act
Canada’s Conflict of Interest Act establishes conflict of interest and post-employment rules for public office holders. It specifically states that a public office holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person’s private interests. Public office holders and their family members are prohibited from accepting gifts or other benefits that may be viewed as influencing decision-making by such office holders in the exercise of their public functions. An important aspect of the Act is the appointment of a Conflict Interest and Ethics Commissioner to oversee its provisions. The Commissioner reports to the Legislature.
One recalls Prime Minister Justin Trudeau being found guilty of violating the Act during his family vacation in Jamaica in 2016 where he accepted hospitality from a friend, the Agha Khan. He stayed on Khan’s private island in the Bahamas, used Khan’s private helicopter to get there and held private meetings about the Agha Khan endowment fund. According to the Conflict of Interest and Ethics Commissioner, the Prime Minister failed to protect himself from a potential conflict of interest situation. The Prime Minister acknowledged that he had made a mistake by accepting hospitality from the Agha Khan. While on vacation, the Prime Minister travels on government aircraft for security reasons but is required to reimburse the equivalent of a commercial airline ticket for himself and his family.
In March 2019 and April 2020, Canada’s International Trade Minister Mary Ng apologized after the Commissioner found that she placed herself in a conflict of interest through her involvement in a decision by her office to award contracts to a friend’s company. The contracts were signed on behalf of the Minister.
The UK principle-based approach
Unlike Canada and the USA, the UK takes a ‘principles-based approach’ to conflicts of interest. It uses codes of conduct to define behavioural and ethical standards. Civil servants are expected to act with “integrity” and board members are expected to declare and record conflicts of interest. The National Audit Office (NAO) defines a conflict of interest as:
A set of circumstances that creates the risk that an individual’s ability to apply judgment, or act in one role is, or could be, impaired or influenced by a secondary interest. It can occur in any situation where an individual or organization (private or government) can exploit a professional or official role for personal or other benefit. The perception of competing interests, impaired judgment or undue influence can also be a conflict of interest.
The NAO acknowledges that seeking to eliminate conflicts of interest presents significant challenges. However, for public bodies it is essential for public trust and confidence to be maintained and for perceived conflict of interest to be considered as opposed to actual conflict of interest that may exist. To win such trust and confidence, public office holders must act with integrity and must be seen to be doing so. When a conflict of interest is uncovered, it can lead to ‘organisational reputational damage, bring decision-making into disrepute and could result in a legal challenge. For the individual, some conflicts can result in criminal action, for example fraud, bribery or corruption through abuse of position’. (See: Managing conflicts of interest and keeping public trust – NAO insight)
The United Nations Ethics Office
The United Nations has an Ethics Office that promotes an ethical organizational culture based on its core values of integrity, professionalism and respect for diversity. It also has a Code of Ethics for UN Personnel which includes independence, loyalty, impartiality, integrity, accountability and respect for human rights. The Office assists the Secretary-General in ensuring that all staff members perform their functions consistent with the highest standards of integrity as required by the Charter of the United Nations. According to the UN:
The [Ethics Office] is a resource for those who seek advice before engaging in an activity, to avoid and manage conflicts of interest. By providing clear and action-oriented advice, the office helps staff carry out their jobs professionally and fairly, and manage their private lives in a way that does not interfere with their official duties. All staff are expected to cooperate with the Ethics Office and provide access to records and documents when they are requested.
The Ethics Office provides in the following areas: (i) confidential ethics advice; (ii) ethics awareness and training; (iii) protection against retaliation, (iv) financial disclosure, and (v) coherence of ethical standards across the UN family.
The IDB Code of Ethics and Professional Conduct
The Inter-American Development Bank (IDB) addresses conflicts of interest via its Code of Ethics and Professional Conduct that is based on the Bank’s core values of integrity, loyalty, equality, inclusion, impartiality and discretion. The Code is essential for building trust among staff members and consultants. Executive Directors have their own Code of Conduct. The Bank also has in place a whistleblower policy that ensures the protection of whistleblowers as well as those who cooperate with investigations.
According to the Code, conflicts of interest has some of the most common types of ethical risk issues that the Bank is likely to face. It has the following to say on the subject:
A conflict of interest is a situation that creates a conflict between our personal interests and the interests of the Bank or its clients. Such scenarios undermine our commitment to our Code and our duties as international civil servants. We all share the responsibility for keeping our organization free of the harm that can arise from real or perceived conflicts of interest.
To help achieve this end, all of us must avoid any situation involving a conflict (or the appearance of a conflict) between our personal interests and our responsibilities towards the Bank. Whenever a potential conflict arises, personal interests must yield to the best interests of the Bank. An apparent conflict of interest may be as serious as a real one.
World Bank Procurement Guidance
The World Bank’s Policy on conflicts of interest is reflected in its publication titled “Procurement Guidance: Conflict of Interest” with the by-line “Conflict of Interest: How to identify and manage conflicts of interest in Evaluation Committees”. The Guidance sets out the vision, key principles and policy requirements governing procurement financed by the Bank. In this regard, the Bank requires that all parties involved in the procurement process not have a conflict of interest, unless such a conflict has been resolved in a manner acceptable to the Bank. The Guidance defines integrity as follows:
The principle of integrity refers to the use of funds, resources, assets, and authority according to the intended purposes and in a manner that is well informed, aligned with the public interest, and aligned with broader principles of good governance. The Bank therefore requires that all parties involved in a Bank-financed Procurement Process observe the highest standard of ethics during the Procurement Process and refrain from fraud and corruption
The Guidance further states the role of the Evaluation Committee in procurement decision-making processes, specifically in relation to Evaluation Committees is to objectively evaluate bids/proposals and to identify and recommend the most advantageous bid/proposal. A conflict of interest arises where an Evaluation Committee member has some other interest that could materially interfere with his/her duty to act impartially in the evaluation process. It is for this reason that each member has an obligation to disclose any conflict of interest before participating in the evaluation. A conflict of interest affects, or can be perceived to affect, a person’s independence, objectivity or impartiality. It occurs when an individual is subject to two coexisting interests that are in direct conflict with each other.
