by Bennette Roach
(view from Cultural Centre) out to Carrs Bay
The MDC eventual collapse can have serious mark on this Government as it moves forward trying to tackle the effects from the past few years and the past 20 years.
Following the signing of the Memorandum of Understanding (MOU) of May 1, 2012 and of that date, there was a Mid-Term Review as mandated which took place between October 15-22, 2012, the report coming out in November.
Like in many of the such UK documents it begins with the acknowledgements and lists the participants of the team who visited. There were four persons on the DFID team which included the resident Dr. Kato Kimbugwe.
In the acknowledgements the team took time to mention that, “The Premier (RT Meade) sat through all the meetings,” commenting, “This shows real engagement at the highest level in the reform process.”
The Premier took the team to see sand-mining and geothermal sites and led a visit to Plymouth. This gave the team important insights into the challenges and opportunities facing Montserrat. “We are grateful for his time,” they concluded.
That was six months after the MOU was signed. The document continued with some ‘Key Messages’ , beginning;
GoM has taken the MoU seriously and has demonstrated strong commitment to the review process.
Dr. Kato Kimbugwe
Good progress has been made in meeting most of the milestones set for September.
Particular successes can be recorded in the following areas:-
– Reducing customs clearance times (milestone 5)
– On-line visa applications (milestone 11)
– A wide range of access analysis (milestones 18-23)
Performance has not been so strong in the following areas:-
– Tax reform (milestone 13)
– Access co-ordination functions (milestone 27)
– Review of GoM regulatory functions (milestone 30)
It then stated –
Ivan Browne
UKG and GoM should intensify their joint work on access to consider: how to address the vulnerability of Montserrat’s immediate access arrangements; and whether addressing it can be separated from the medium / long term issues about the port and breakwater.
(Note: some concern about the port and break water)
MDC should start to develop alternative approaches to Little Bay development, considering various options and scenarios for levels of private sector interest in Little Bay.
This calls for strong co-ordination with port plans and other options being developed for Carr’s Bay.
(Note: the port mentioned again, but concerns also surfacing about the (ambitious) master plan)
GoM should review current Terms of Reference and membership of the Energy Committee. Any changes should be communicated clearly. (Note: By this time the Energy Committee had been side-lined and non-functioning – but was obviously seen as relevant and important – it has not been reinstated yet)
GoM should ensure that its communication efforts continue to focus on the practical impact of MoU reforms, and that it reaches out more effectively to the small business sector.
The Review Team has suggested improvements in co-ordination, monitoring and reporting.
GoM should consider how the JMC (Joint Ministerial Council) in December can help with MoU implementation.
(Note: all of these considered to be very important, but up to July last year, many remained unattended)
St. Helena Government (SHG) has recently implemented a very complex set of policy reforms – a condition of UK Ministerial agreement to build an airport.
John Ryan
Whilst recognising the very obvious differences in context, the Review Team encourages GoM to contact SHG to learn lessons from SHG’s own experience in this area.
(Note: We were to hear about this many more times and particularly attention drawn to it in 2014 with the Budget Aide Memoire)
Every item here has played a part in the eventual closure of the MDC which was created with the mandate to deal with all of these and more in conjunction with the GoM when it received fresh blood following the Business Case addressing HMG support to carry the SGP (Strategic Growth Plan) forward.
In that Review, it reminded, “GoM needs to demonstrate that significant progress has been made in implementing the various reforms as a precondition for unlocking UK public funding or key infrastructure projects such as Little Bay Town, Carr’s Bay Port and air and sea access to Montserrat. The MoU also required that credible private sector interest in investing in the Master Plan, including funds for a hotel, yachting marina, residential and other facilities, are demonstrated.
In an MNIAlive.com presentation the editor published: “Glaring Questions In Rebuttal Presented by Former Heads of The Montserrat Development Corporation.
view out to Piper’s Pond
It noted, “In this statement the MDC’ asked the following question; “What went wrong between October 2014 and November 2014 when the board was summarily dismissed? Clearly a political move and the Task Force review is simply a hatchet job to tarnish the reputation of the corporation to provide the excuse for closure to honour a campaign promise.”
The articled followed by listing a response taken from the Task Force (TF) report and the July 2014 (called unofficial by Martin Dawson, DFID’s resident rep) to most of the achievements touted by the MDC top management prior to December 2014.
MNIAlive asserts – It Was All Concocted?
In effect the MDC’s former management in their statement seem to be making the claim that the corporation was ordered closed due to politics, and nothing but that.
There is something plausible in that premise that points to a refusal to accept that the issues with the MDC were noted by Dfid themselves, via their own Audit, which prompted all projects to be halted with the Task Force ultimately implemented to review the Corporation’s remit before moving forward.
We now urge our online readers to see the article at www.MNIAlive.com.
There is hardly anything of significance that has not been a failure at the functioning of the MDC. One after another, the TF came down on the Chairman (collaborating with the then Premier) and CEO. (Remembering that at one time the Chairman was called an Executive Chairman where he acted as CEO at the same time. That was criticised by us and indeed by the TF. It was unfortunate that this new Government showed their own shortsightedness when they too hired an Executive Chairman after they fired the previous board, installing a new one.
SomeTask Force findings:
“There were, however, concerns with regards to some of MDC’s procurement practices and private sector development activities, the environmental impact on the Little Bay development and, most importantly, MDC’s communication/engagement with the public.
Although proactive and efficient, it has been validated through multiple beneficiary feedback that the MDC is lacking in the effective implementation of a communication strategy. It is vital that the broader public is constantly made aware of the decisions being taken and the impacts to the natural and economic environments. Increasing public awareness about the active role that the MDC plays in Montserrat’s development and economic growth will provide reassurance that MDC is fulfilling its mandate and enhance the organisation’s legitimacy.
The above taken from – The 2014 unofficial Review really so described or designated when the owners of the Report realised that the upbeat ‘Summary of overall progress’ did not match the rest of the document; just like some of the TF Review does not match its Key Findings
Poor Financial management was a theme throughout the report. Procurement was featured as they reported: “…the chairman maintained that MDC should not have to comply with GoM procurement rules…”; with the Chairman running the show, “it appears the board was not cognisant of the fact that it was highly irregular to ‘loan’ Government funds from their operating budget for their capital projects.”
The CEO’s management style in colloquial terms ‘sucked’, but even after reporting many of his poor style and behaviour towards staff who regarded him as bombastic and unapproachable, he was still paid a gratuity for ‘successfully satisfactorily completing his contract.
Following the October audit report which no doubt was the catalyst that spurred the events to date, the risks skyrocketed. “There is always a risk of funds not being used as intended, but in the case of MDC this is considered to be low. Both GoM and DFID (through the Resident Representative) have a seat on the MDC Board who review all MDC reporting and in particular MDC Management accounts. These accounts are reviewed on a monthly basis and highlight actual expenditure against agreed budget lines as well as detailing next quarter projections and forecasts.” (Later report shows this to be a contradictory statement…)
Task Force: “MDC’s budgetary controls were poor”. There was no structured system for remedying variances through over-spends and although the Accountant highlighted them to the CEO, nothing was done.” (He sanctioned the misappropriations)
“MDC despite being subject to the Public Financial Management Act and the Public Financial Management Procurement regulations, failed to comply.” (This was pointed out since early 2013 and is the crux of the misappropriations and ‘financial’ irregularities. The question of intent should be determined by the court if necessary and the penalty be weighed accordingly.)
“There is no evidence that the projects implemented were selected as a result of an evaluation of various business proposals. Therefore, the likelihood of an acceptable rate of return if at all, is limited.”
“…There was some move to write to GoM to seek exemption, to which they were not eligible, there is no evidence that the MDC’s procurement proceedings as drafted were approved by the Public Procurement Board.
“There were, however, concerns with regards to some of MDC’s procurement practices and private sector development activities, the environmental impact on the Little Bay development and, most importantly, MDC’s communication/engagement with the public.
“The MDC responded that it has always adhered to proper procurement and tender procedures. The key issue is to strike a right balance between obtaining value for money in procurement processes whilst enabling local private sector involvement and development,” they said.
There is evidence that funds weren’t used for the purpose they were intended, particularly the MDC operating budget. Indeed the ferry terminal (which they boasted about) a capital project, was constructed using MDC operational funds. There are limited expenditure and purchasing controls in place. (And these there are those who claim there were no financial irregularities! so should GoM and DFID and the people of Montserrat, say “well done?”)
That 2012 MOU outlined a number of conditions that had to be met before UK investments were approved. After the first few months or the first year – it all went out the door. GoM undertook to radically transform the business environment so that Montserrat would become more attractive for private investment. What really has become of all that? The failure to work the MDC for the good of Montserrat!
The CEO has been found wanting
In that July 2014 review there is this repetitive point about the poor communication by the MDC, which received much criticism by TMR, it being repeatedly requested to be undertaken by DFID, but which the Chairman and in particular the CEO found unnecessary.
“Although proactive and efficient, it has been validated through multiple beneficiary feedback that the MDC is lacking in the effective implementation of a communication strategy.
“It is vital that the broader public is constantly made aware of the decisions being taken and the impacts to the natural and economic environments. Increasing public awareness about the active role that the MDC plays in Montserrat’s development and economic growth will provide reassurance that MDC is fulfilling its mandate and enhance the organisation’s legitimacy. Alongside success stories, it is also important to communicate delays and drawbacks as they are realized. Failure to do this may reduce any confidence the public may have in MDC’s ability to deliver. In fact the MDC Board was recently presented with a programme of communication and engagement that will be followed over the coming months. It stipulates the following measures to be taken to improve public relations:
“More frequent use of press releases with follow up as and when necessary, with effect from July 21, 2014
“Publication of newsletter to be distributed island wide. (note: The first issue is expected early August. (Note never happened because there was a lie that a strategy was soon to be in place. That strategy was merely offered but no acceptance or agreement was even indicated. “A half lie is a whole lie.”) The release sent to TMR was the first from the CEO. There was a second re the China trip, which questioningly took place smack during the elections.
“Interviews with relevant persons outlining progress, reporting upon return from overseas visits, or explaining personal benefits of receiving MDC assistance.”
Poor Financial management was a theme throughout the report. Procurement was featured as they reported: “…the chairman maintained that MDC should not have to comply with GoM procurement rules…”; with the Chairman running the show, “it appears the board was not cognisant of the fact that it was highly irregular to ‘loan’ Government funds from their operating budget for their capital projects.”
Specifically, The CEO’s management style in colloquial terms ‘sucked’, but even after reporting many of his poor style and behaviour towards staff who regarded him as bombastic and unapproachable, he was still paid a gratuity for ‘successfully satisfactorily completing his contract. No doubt he received his full pay also for completing his failed Investment manager contract.
It is shown in the Summary Report that Enterprise Development was one of the main functions in the mandate of the MDC. Here are two paragraphs of the report as to the dismal performances of both chairman and CEO
There appears to be no operational plans developed by any of the Directors of the Divisions. Strategic decisions seem to have been made by the Chairman, reportedly in consultation with the former Premier. Despite the fact that on occasions Director’s might have had a different view, decisions in the main went unchallenged by the CEO or other Board Members.
Management of MDC was not done strategically, the focus was operational and projects appear to be ad hoc, with no structured approach or sufficient rationale for some of the key activities being undertaken.
“It was reported that Directors were permitted to authorize their own payments tor travel expenses and Purchase of items on behalf of the company with their personal credit cards. Directors were then allowed to approve their own invoices to be reimbursed. The CEO refuted that this was occurring, particularly concerning purchases but evidence to the contrary was seen by the Task Force.
The Accountant recommended to the CEO that a corporate credit card be obtained for these purposes to avoid poor internal controls. However, this was rejected. The CEO advised that on consulting the Board the Chairman had advised that the forms required to obtain\ne credit card required “too much information” about the company. (The CEO was a banking expert!?)
Regarding the functioning of the CEO: “…best practice dictates that there ought to be a clear separation of duties between the chair and the CEO even where the chair is acting as Executive chair and therefore it is one individual, such separation should be maintained. Moreover, the Chair and CEO should not act as a single individual. i.e. The CEO simply agreeing with all that the chair recommends or vice versa. Neither should there be de facto political control of the organization through the chair, Board or CEO.
