So much hangs on how the PDM Government reacts
leader of the Opposition Hon. Donaldson Romeo
Governor Davis and Martin Dawson
Premier, Hon. (Don)aldson Romeo confirmed in a brief interview with TMR Editor that upon his Government’s initial findings, faced with ‘fires’ and emergencies upon taking office following General Elections in September last year, he acted immediately and collaborated with the UK Department for International Development (DFID) in halting or suspending operations/works (not the functioning) carried on by the Montserrat Development Corporation (MDC).
The Premier said that the eventual decision was made even more urgent following reports (audits) that showed that the MDC was operating in shambles where little or nothing seemed to have been conducted in a proper manner, negating the goals of the MDC as the engine of growth for Montserrat.
The MDC was created since 2007 and financed by DFID, (initially 2007 – 2010) with a goal to establish a viable and effective development corporation that would allow Montserrat to achieve economic, social and environmental sustainability, through the effective promotion and co‐ordination of public and private sector development activities. Two additional no cost extensions were approved between 2010 and 2012 – Due to delays in implementation of phase 1 of the Little Bay town master plan and infrastructure works.
Following a Sustainable Growth Plan (SGP) for Montserrat, a Memorandum of Understanding (MoU) and a well put together Business Case. (There was the infamous Charrette of October 2011) Montserrat was set on a path to achieve financial independence by 2020. (see: http://www.themontserratreporter.com/montserrat-holds-high-level-charrette/.)
Much has taken place since December 2011 and TMR has been reporting from early as things started to go wrong. By May 2013, we reported already “…would find a Premier not in the mood to discuss issues relating to procurement procedures…” see: “Premier misfires on procurement” at: http://www.themontserratreporter.com/premier-misfires-on-procurement-gom-loses-appeal-in-court/ . And immediately following: “Opposition leader Romeo questions MDC procurement practises” at: http://www.themontserratreporter.com/opposition-leader-romeo-questions-mdc-procurement-practises/.
Our reports continued resulting in a shutdown in communication against the media, particularly TMR. Our complaints went unnoticed as it seemed to be in keeping with the government strategy from top to bottom. The MDC communicated nothing to and with no one, in the face of DFID observing, noting and requesting that information be provided to the public. For this and other reasons TMR suggested the firing of CEO Browne who was appointed in June 2013, now as it appears ignoring corporate bylaws.
This present position of suspension confirms a report by MNIAlive.com that, “In response to concerns raised about the Montserrat Development Corporation, the Government of Montserrat and DFID have taken a number of steps including replacing the MDC board and suspending the DFID programme while a fundamental review of the Corporation’s work takes place.”
In that report it also quoted a DFID spokesman as saying, “Given the nature of DFID’s support for the MDC – covering operating costs including staff salaries – it is expected that DFID will honour non-discretionary payments, but all programme work should be paused and no new work initiated.”
Premier Romeo reported that his Government is to report to DFID towards the end of this month its plans and suggestions to move forward. He agreed that he thought nothing was wrong with the structure as set out in the Business Case but, in the face of how things have progressed there was a need to “go and come again.”
Responding to the accusation that he has not yet reported on his plans to take forward his promise to move Montserrat forward, the Premier admitted that he was overwhelmed by the problems they have had to deal with on coming into office. He said he will be reporting to the people in due course as the government has been and currently under pressure in preparing for budget talks with DFID which was due to begin next week. “That”, he said, “created serious challenges…”
Meantime amidst public speculations, that especially as highlighted coming out of reports on procurement and other matters dealing with projects and the whole MDC, the eventual shut down of MDC, there is the belief that if the previous administration was re-elected, Montserrat would have been shut down and HMG take direct control.
It was reported that “A series of concerns have been raised with DFID regarding the adequacy and effectiveness of procurement systems and controls within the Government of Montserrat (GoM). Specifically, these have been raised and considered in:
- A review of procurement systems by the Financial Secretary’s office within the GoM.
- An independent assurance audit delivered by RSM Tenon (now Baker Tilly LLP) (May 2013).
- A criminal investigation undertaken by the Royal Montserrat Police Service, supported by DFID’s IAD Counter Fraud Section (April 2014).
Following these reviews further concerns were raised regarding GoM procurement practice and then came ‘The July 2014 Fraud Investigation Review.’
We reported earlier that the Business Case highlighted, “A Fiduciary Risk Assessment (FRA) of GoM financial systems and processes was concluded in early 2011 and a first Annual Statement of Progress completed against the FRA in February 2012.” It said: “These revealed that the overall fiduciary risk is substantial and that the corruption risk is moderate.”
The note in the review which said, “Our work was limited in scope as we were unable to obtain a full comprehensive list of all GoM procurements since 1 April 2013 despite requests for this information before, during and after the investigation,” is calling for even more investigations.
The proposal after the conclusion: “The level of risk to which DFID funding is exposed through GoM procurement systems, as currently designed and operated, is significant and unacceptable. It reports weaknesses from Governance, Strategy, Departmental tender committees (DTC), Government of Montserrat internal audit, Control environment, Conflicts of interest, Evaluations, Tenders, Audit trail, Segregation of duties, Due diligence, Contract management, Fraud risk, resulting in:- “the weaknesses identified at each stage of the procurement process indicating that the main fraud risks are, nepotism, collusion, bid rigging, and the payment of bribes and kickbacks.
Following are flashbacks on how it all happened and why…
MDC fall exposes many
Governor says he wasn’t duped, what about the DFID rep
When Governor Adrian Davis said this at his February 4, 2015 press conference: “…MDC did not come up in cabinet in the last year and a half really at all, apart from in terms of very detailed questions of ownership of land at little bay, there was some discussions about procurement procedures…” He must certainly have been aware that a Business of Cabinet 2013 Report somewhat confirmed what he said, only in relation to lands.
The Cabinet Secretary’s report said: “The 2013 report made reference only, “to the build out of the Little Bay Town, based on the approved Master Plan. Updates were received on the state of play of the Carrs’ Bay Port Development.” Noteworthy it said, was the progress in resolving the occupation of the land at the entrance of Little Bay, considered over a period of time.
In the first half of 2014, the CabSec (Cabinet Secretariat) reported Cabinet endorsed the Little Bay Land Tenure Policy & Divestment Strategy for the Little Bay & Carr’s Bay Master Plan.
The Governor’s response was in part to a question regarding the latter part above, but in general was responding to the question as to whether he now feels duped by the former Administration in matters pertaining to MDC.
The rest his response to that was: “…but otherwise it (MDC) didn’t really come up, so I don’t feel duped particularly but I feel that we’ve got new information which is now being acted upon.”
The press was reiterating its concern of the lack of communication with it and the Montserrat public in general by the MDC, and its apparent failure from the seeming failure and reports of wrong doing. There was no hesitation to remind the Governor that we had been raising questions time and time again to him and the former DFID rep about that matter and in particular questions about procurement and processes (also in other matters).
The Governor took cover by repeating his own stance on communicating with the people. “If it’s really the case that the MDC have not been proactive with pushing out information, then I agree from my own personal stance as you know that, that’s not satisfactory because there’s not much point in doing things if you don’t tell people what you’re doing and why you’re doing it, any that includes everybody not just the press, so I entirely agree that if they have not been doing it, they ought to do it.” He must be familiar with the several times that DFID in various reports has mentioned the lack of and need for the MDC to communicate with the people, if for nothing else as they put it in the most recent annual review of July, 2014, coming out the same time with the Fraud Investigation report.
Then he said finally surprising everyone, “MDC did not come up in cabinet in the last year and a half really at all, apart from in terms of very detailed questions of ownership of land at little bay, there was some discussions about procurement procedures but otherwise it didn’t really come up…”
Is the Governor by that statement really saying that he was kept out of the many decisions which should have been made at Cabinet, where they were supposed to ratify and approve actions by the MDC board? Would the appointment of CEO Browne meet the scrutiny of lawful procedures, as would be the case with many other decisions?
MDC may conduct their own procurement but only with the consent of the main board and they must follow the same rules. “Follow the same rules”, the problem.
Posted on 22 May 2015.
The sense of it all – are they all acting out ignorance?
Where is the Government of Montserrat in addressing the fall out of their role in the obvious mishandling of the economic affairs of Montserrat? How much do they understand the economic pains of the people of the island?
Department For International Development (DFID) on the ground representative Martin Dawson in Montserrat, while denying that the Task Force report which recommended the closure and winding up of the Montserrat Development Corporation (MDC) was a predestined outcome, admitted that the closure was in train even before the October DFID audit report which still remains secret.
The well placed pundits do say that it is well known that hardly anything which was not an issue during a political campaign can be counted upon to become policy by the winning party. Just recently one detractor sought to remind that the People’s Democratic Party (PDM) had said during the campaign thay they would shut down the MDC when (if) they won the elections.
But Martin Dawson the DFID head in Montserrat, seeks to contradict the suggestion that the shut down of the MDC was a foregone conclusion long before the recommendations made by him and what we will call ‘ill-advised and misinformed – inappropriately chosen few.
We suggested to both he and Governor Davis at the May 22, 2015 press conference that new arrangement the new monies that MDC had been spending which began in September 2013, whereby DFID had the right to suspend funds, delay funds, etc (see previous outline of those in last week’s editorial and previous issues) invoked the MDC shut-down last October.
“Not so against the M.O.U or with the M.O.U. in mind I think the issues that were raised by the concerns that the new government raise on M.D.C. and DFID subsequent internal audit report,” he said, referring to the October Audit report which we accuse as still being held as secret.
He acknowledged that it did set things in motion as he explained about the eventual review by the task force, suggesting that in fact began with the new Governments concern over MDC.
“Well those are the issues that the task force had looked at within the governance arrangements and policies and procedures within the M.D.C. So on the basis of that sort of chronology of the order of how events took place with government concerns, DFID’s internal audit, and decision made in December by DFID to suspend funding that was how it was done.
Elsewhere the Governor had stated that the decision to change the board came before the decision Dawson refers to in December. The Governor had also indicated that the Government had made the board change almost immediately after taking office, probably following the concerns Dawson refers to.
Dawson then suggests that it is after the decision to have the task force got to work the decision to close was made. “…and (then)we had then formed the task force now to look at the specific issues the government asked us to, on the basis of the other two bits of work to then look at it in more detail that the recommendation was then made to close.
Dawson then agreed as the following was put to him. “It would be correct to say that you were following the arrangements in that the context of that arrangement (Sep 2013 MOU) where if they (DFID) observe certain things, they suspend funding etc. etc. and eventually the government in discussion with the government because it was either the government or DFID who could do this, the government would then have a discussion with DFID and that basically is what brought the task force into being!”
“Yes,” he said, “the government after we had done the internal auditing process; then the government obviously raised initial concerns. The government said we’d like to look at this, can you look at this more closely and we formed a task force to do that and they said would you like to participate and I said yes.”
When we pressed for some knowledge about the October audit report, Martin offered: “Well I’ll identify the areas I’d just been talking around, governance and policies, and procedures, value for money. That was what was a big factor; that the governor also mentioned those are the areas highlighted of weaknesses and concerns and that’s sort of what the task force looked at.”
With the following in mind from our front page of January 23, it was obvious the full truth was not forthcoming or the Governor’s memory is failing as he claims he always read TMR.
Premier the Hon. (Don)aldson Romeo has confirmed in a brief interview with TMR Editor that upon his Government’s initial findings, faced with ‘fi res’ and emergencies upon taking office following General Elections in September last year, he acted immediately and collaborated with the UK Department for International Development (DFID) in halting or suspending operations/works (not the functioning) carried on by the Montserrat Development Corporation (MDC).
The Premier said that the eventual decision was made even more urgent following reports (audits) that showed that the MDC was operating in shambles where little or nothing seemed to have been conducted in a proper manner, negating the goals of the MDC as the engine of growth for Montserrat.
I again put it to Dawson that the report was a sham and reported the expected outcome. “Wasn’t it a foregone conclusion that the MDC would have been shut down?” I asked.
The Governor evading the question to some extent responded. “It produced four recommendations one of which was for the M.D.C. to be shut down. That was the preferred recommendation of the task force but it was up to the government and the Cabinet to decide whether they agreed with the recommendations – they were recommendations. And sorry those recommendations were set out in the Executive Summary which were made available.”
(The Executive Summary) “Which told the people of Montserrat nothing,” I responded, noting that having gone through the report, “I do not know how we could come to that conclusion to shut down.”
“Do you think Martin that what you guys reported in here (the report) support the actions that you all have taken, the eventual action?”
Dawson: responded, “Yes I do, I think that’s why we made the recommendation that we did. I mean and I’ve also highlighted in previous press conferences you know I think some of the the difficulties that the MDC face really from the start from its creation and many of the other issues and opportunities, we had to address some of the concerns over the last years that have been taken and I think the recommendation to actually stop it and start again and create something that should be created properly was the right way to do it.”
He added, “I think you could you can do as much sort of tinkering and probably make improvements as you like and that wasn’t,” (suggesting that there were recommendations before to modify the MDC operations). “You know they tried that in the past and they weren’t adopted for whatever reason so I think it’s better to just stop and start again anew.”
That I argued told us that there was nothing wrong with the MDC, as I reacted. “And believe you me, you have just told me exactly what I’m saying/ You know there’s not a thing wrong with M.D.C., nothing was wrong with M.D.C. even in your report, your report speaks to that not a thing was really wrong with M.D.C.”
It was pointed out to them. “People were doing things wrong in MDC, which is really what I’m getting up with the governor. People are doing things wrong not following the rules that’s what your report spoke about. I mean throughout is what it addressed.”
I accused and reemphasised further, “That’s why it wasn’t made public, I mean throughout it’s what it addressed.”
Governor Davis then repeated that erroneous view point which we saw only as an attempt at pure ignorance rather than serious fact. “I mean one of the issues which made it seem sensible to close down and restart was this absence of proper legislation and it wasn’t established in a proper way,” he said.
Then he added a consideration which was kept in the distance for the 10 years the MDC had been in the making. “As it turns out and that’s what we’re going to be doing in particular in the next few months to actually establish it as a statutory body formally or some other kind of vehicle.”
The DFID country rep then closed with the following: “The M.D.C. was set up under the Companies Act would with Bylaws. It should have been set up under the M.D.C. Act of 2008 with its own legislation, setting out very clearly what the organization could and should do and that wasn’t done.”
We believe it is safe to note as confirmed by legal authority there is no such Act in Montserrat as an ‘MDC Act of 2008’ as mentioned on more than one occasion now by these gentlemen.
It is then we once again told the Governor that the MDC was set up within the laws of the country, that he clearly did not know what he was talking about, having suggested earlier that they should bring their legal advisors to explain, what it is they are trying to tell the people of Montserrat.
MDC Chaos – Termination of staff
In subsequent actions from a press release dated April 2, 2015, all staff of the Montserrat Development Corporation (MDC) received ‘determined’ or termination letters by April 30, 2015 from Attorney at Law David S. Brandt acting on behalf of the Chief Executive Officer.
“Over the next six to eight weeks, the operations of the MDC will be wound up,” the release had said, advising also, “This means that all staff will have to be retrenched but will be paid gratuity in accordance with the terms of their contracts.”
Then on May 1, 2015, a release that sounded like the previous: “The Government of Montserrat (GoM) took a decision on April 2nd to close the Montserrat Development Corporation (MDC) after the findings of the Task Force, which looked at operations and governance arrangements. This was immediately communicated to the Board and the staff of the MDC who were informed before the decision was made public. The Department for International Development (DFID) also indicated that its financial support to the MDC would cease at the end of May 2015.”
The release said further: “In winding up a company, there are a number of steps that must be taken according to the Companies Act. They include the engagement of Auditors to complete the auditing of all outstanding accounts to the end date of May 31, 2015, the appointment of a liquidator to deal with the assets, and the publication of the resolutions in the Official Gazette.
“The MDC also retained the services of Brandt and Associates to handle all of the many legal issues, including the termination of all staff Members of the MDC. Termination letters were delivered to Directors on April 29, 2015 and to all other staff on April 30, 2015. Each staff will be remunerated according to the terms of their contracts and where there are none, according to the Labour Code. All staff will receive their remuneration for the month of May 2015.”
It would appear however, according to qualified legal opinion, that not all of the decisions by the MDC Shareholder (Cabinet) met what was reported in the release or followed the Labour Code that it referred to.
TMR’s investigation into the terminations, notes:
When the final letters were issued by 4.15 p.m. on Thursday last week advising that with effect of that date and in accordance with their contract their employment was terminated, a scramble ensued. Officials from the Premier’s office on instruction met with select terminated members to inform of efforts to subsume them into or back into the public service.
But, very senior staff members who had received emails of their ‘determined’ contracts were this week reportedly seeking legal advice. The Director of Infrastructure Sean McLaughlin had previously considered legal labour proceedings for constructive dismissal, while Anita Nightingale who was becoming well known for her heavy strides of forging the tourism face onwards, Director of Trade and Investment Promotion Ayiesha de Coteau-Sammy, they complained that while they had ‘heard’ of the impending closure of the MDC, they had never been formally informed.
“For reasons unknown,” they said, they had never been invited to meetings where the information was passed on to the staff.
More than one legal mind has noted that the statement, “that during this week the necessary steps to finalize the closure were taken including immediate termination of staff contracts”; no reason stated in the termination letters; the absence of keeping within the Labour Code Act; the terminations and all that follow leave the MDC open to serious litigation which staff members can successfully initiate.
Just before press time TMR learnt that terminated staff members have issued final checks, while preparations were being made to issue month to month contracts to some staff members .
Fallout from MDC Shutdown
Little Bay – (bottom left -Davy HIll)
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 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’. It began;
GoM has taken the MoU seriously and has demonstrated strong commitment
to the review process.
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 –
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 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.
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
for 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.”
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 if not all 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 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 spured 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.”
“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.
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 wonting
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.”
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.
Nothing sinister at MDC – Governor Davis
By Bennette Roach
Responding to questions from the press on the reported concerns on procurement at the MDC which was the subject of extensive comment in a DFID Audit report and previous court actions and believed to have contributed to the shutdown at MDC, the Governor said when pressed, “if there is criticism about procurement, it’s because of inadequate training and inadequate understanding of the rules rather than anything more sinister.” adding, “That’s my particular assessment but in any case if that is the case we need to try and address it.”
Governor Davis was reminded about the court cases and about the procurement irregularities raised prior to now as far back as early 2013, suggesting there had been wrongdoings. He countered saying, “…such a litigious society would ever go ahead on the basis of anecdote rather than evidence and we have had procurement studies which have discovered what seems to be rather idiosyncratic processes and procedures, …where maybe people haven’t followed the rules but there is no specific evidence of wrong doing or benefit to people as a result of it.”
Seeking to clarify and strengthening his argument his position on the issue, he concluded, clearly not willing to accept that when there is alleged bid rigging, bribery and kickbacks, that these are criminal behaviours. “But wrong doing is a pejorative term which implies that people are doing it for personal gain. I think you’ll find that most of the court cases are about lack of adherence to processes which have been partly because of ..well for all sorts of reasons but it doesn’t seem to be for personal gain.”
CEO on Administrative Leave
Meanwhile DFID local representative Martin Dawson confirmed that the substantive CEO Ivan Browne “is on six weeks administrative leave and will be available to the task force as required.”
END
Procurement burdens Government
Galloway Group succeeds in court challenge of Government bad procurement habits
By Bennette Roach
During the past month this the High Court has handed down judgments which have come in against the Government in one form or another with all of them impinging on issues that have been brought to the attention of former Governor Adrian Davis.
In our lead story we featured where the prison officials (who come directly under the Governor’s authority) have been told that they have been breaching prisoners’ rights.
Then a couple weeks ago Justice Albert Redhead handed down a judgment in which he was severely critical expressing surprise often in the judgment, stating, “The law must be complied even if it has significant consequences for the administration.”
Justice Redhead found in the case, Galloway Group vs The Minister of Communications, Works and Labour, The Attorney General and The Public Procurement Board: “In my opinion to say that the Procurement Regulations were not strictly adhered to is to overstate the situation because in my view, there was absolutely no adherence to the Procurement Regulations.”
It would not be unfair to accuse the former Governor of encouraging, what he simplified as ‘NOT’ being wrong doing but mistakes. The lack of adherence to the Procurement Regulations was a topic which had been drawn over and over to the Governor at press conferences and in the press; a topic which featured in the fall of the Montserrat Development Corporation (MDC).
It was in April 2012, we informed in a headline subhead “the Ministry of Communication & Works under scrutiny” The Honourable Financial Secretary (F.S.), John Skerritt, said the “new procurement regulations are much tougher than what currently exists”, while providing for more transparency and accountability by accounting officers. (http://www.themontserratreporter.com/government-reviewing-procurement-practices/)
1.1 At the Governor’s press conferences we were soon to be questioning both the Governor and DFID rep Kimbugwe about information and misgivings as to how the new Procurement rules were being abused. By May 2013 in a rare press conference former Premier Meade landed in a headline, ‘Premier misfires on procurement – GoM loses appeal in Court’. The then Premier was responding to the press about procurement issues. By that time of course the news of the Galloway case in the air. (w) The Government has taken that matter to the Privy Council
In October 2012 the Government of Montserrat (GOM) entered into a contract with Iceland Drilling Company to provide drilling services for geothermal exploration in the Weeks’ area, Montserrat.
Mr. Jean Kelsick for the Claimants, assisted by Mr. McGregor; Miss Jamiel Greenaway and Mrs. Jemmotte-Rodney with her represented the defendants in the matter before the court which resulted in a sizable sum awarded in damages, costs and other relief. The Galloway Group sought judicial review which derived from the procurement of a dredging contract of the Plymouth harbor on Montserrat, in connection with and preparation for the geothermal drilling exploration which began in 2013.
The Claimants contended that the period for the preparation of tenders were exemplarily short. On the December 18, 2012 the Claimant s submitted a tender in response to an advertised contract on the GoM website . There were only two bidders for the dredging of the Plymouth harbor, the Claimant and Wall Trading Ltd (Wall) The Claimants’ bid was for $3,960,000.00 while Wall’s bid was for $470,000.00 on the December 28, 2012, the Department cancelled both bids. Then subsequently on the January 7, 2013, the first Defendant granted the contract to Wall to dredge the Plymouth Jetty.
On that background, the Claimants sought the following orders and were successful on all or most of them. A declaration that the original procurement was:
Unlawful and irrational and/or unfair and/or in breach of the Claimants’ legitimate expectations;
(ii) In contravention of the Procurement Regulations;
(iii) In breach of the Defendants’ Statutory duties
(b) A declaration that the defendant manifestly erred in identifying Wall as the lowest priced tender in terms of the original procurement exercise.
(c) A declaration that the first defendant’s decision on or about the January 7, 2013 to enter directly into a contract with Wall was:-
(i) Unlawful and/or irrational and/or unfair or in breach of the Claimants’ Legitimate expectations; (ii) In contravention of the Procurement Regulations; and (iii) In breach of the Defendants’ Statutory duties
(d) Damages
(e) Cost
(f) Such other relief as the Court deems appropriate
At the trial the defense tried to take away the culpability of the Minister suggesting that the claimants came against the wrong parties, forcing the invoking from the judge, “I ask the Question, is not Public Works Department the same as Communication and works, for which the First Defendant is the Minister? – Unfortunately, for Learned Counsel to make such submission shows a lack of appreciation that in such situation, ultimate responsibility rests with the Minister.”
The judge also brought Cabinet into the seat of responsibility, and adjudicated, “Mr. Kelsick in his written submission argues that the cabinet direction authorized. ‘The Financial Secretary supported by the Permanent Secretary Communications and Works and the Director of Public Works to negotiate with the relevant specialized contractors. Cabinets decision was implemented jointly by Ron Beardsley as Director and Phillip Chambers as Permanent Secretary. The First Defendant as the Minister of their department is responsible and liable for their actions.’ In my view there cannot be any argument against that view.”
Implicating Cabinet again at Section 35: “In my considered opinion, The Cabinet would have no legal basis for making such an order, especially if it was meant to abrogate the Procurement Regulation, as it seems the case following the subsequent action of the first Defendant.”
TMR has complained about the Government’s lack of due diligence in carrying out projects. In this judgement the judge mentions flaws suggesting improper advertising practices. “In this instant case the Defendants initially properly proceeded by way of the public Procurement Procedure in spite of some flaws and irregularities contained therein, such as advertising,” he says.
In that judgment the veteran Judge remarked, again incriminating Cabinet referring to Mr. Kelsick’s contention. ‘…given that the Cabinet decision was only issued on 3rd January 2013, it is clear that negotiations with Wall must have taken place prior to the Cabinet direction being issued…that is Significant because on the Claimants hypothesis that the Cabinet direction was not granted prior to 9 a.m. on 3rd January 2013, negotiations outside any recognized procurement exercise under the procurement Regulations and prior to Cabinet direction being issued.
Judge Redhead said: “In my opinion, Mr. Kelsick’s reasoning cannot be faulted in light of the fact that there is evidence that Cabinet does not sit before 9:00 a.m. That is what prompted me to remark above that the dealings with Wall seemed to have been clandestine.”
In another place the Judge reacting to the corruptible nature of the defendants’ claim that their action was necessary because of the urgency, said: “…that does not give any justification to the Defendants to deal with Wall alone and in what appears to be in a clandestine manner.”
The Judge could not understand why the Permanent Secretary involved at the time of the unsavory actions, still in the GoM’s employ, was not called to give evidence in the matter leaving another PS to give evidence in a situation she was unfamiliar. “There is a troubling issue for me in this case i.e. the absence of Philip Chambers as a witness or any evidence from him in this case,” he said.
He continued: “Philip Chambers was at the relevant time the Permanent Secretary in the Ministry of Communications, Works and Labour. In my view he played a pivotal role in the award of the contract with Wall, yet there is no affidavit evidence from him to explain why or the reasoning behind the granting of the contract to Wall.”
The ministry of Communications and Works actions were deemed clearly in breach of the Public Finance Management and Accountability Procurement Regulations 2012 section 7 as amended. The court ruled that urgency could not justify the government’s failure to comply with procurement…”the failure to invite tenders from both Wall and the Claimants was entirely unjustifiable and a breach of the most basic requirements of natural justice and procedural and substantive fairness,” the judge ruled in favour of the Galloway group.
In his judgment the judge following the grant of the declarations, ruled: “There will be judgment for the Claimants against the Defendants in the sum of $85,294.77 ($66,032.27 for the loss of profit, and $19,262.50 for incurred expenses) and Costs $15,000.00. A total of $100,294.77.
in his judgment the court awarded $66,032.27 to the Galloway group for the loss of profit, $19,262.50 as the sum for the incurring expenses and cost amounting to $15,000.00 for a grand total of $100,294.77.
pics jetty in Plymouth with ship alongside – maybe Kirnon and Reuben
