The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The US State Department yesterday accused the Government of “stalling full implementation of anti-corruption legislation that would promote transparency and good governance” such as the Freedom of Information Act.

The Biden administration, in its newly-released 2023 ‘investment climate statement’ on The Bahamas, also reiterated prior concerns that laws and regulations to combat graft have been “inconsistently applied” and that “more robust enforcement” is necessary to prevent conflicts of interest in the bidding on, and awarding of, government contracts.

However, the most significant new concern is the assertion that the roll-out of proposed anti-corruption measures such as campaign finance reform, plus legislation that would create bodies such as an Integrity Commission and an Ombudsman, are being delayed. A Bill to create the latter was recently tabled in the House of Assembly and issued for public consultation.

“The PLP administration confirmed its intention to amend several good governance laws. While efforts have been made in some areas, the Government has stalled full implementation of anti-corruption legislation that would accelerate efforts to enhance transparency and accountability,” the US State Department report stated.

“The Bahamas lacks an Office of the Ombudsman and has not fully enacted its Freedom of Information Act. Legislation to support an Integrity Commission and campaign [finance] reform have also been delayed. An independent Information Commissioner, supported by technical and administrative staff, was appointed in mid-2021, but the office is not fully operational.”

The Freedom of Information Act was passed in 2017, some six years ago, and the US State Department added: “The campaign finance system remains largely unregulated with few safeguards against quid pro quo donations, leaving a vulnerability for corruption and foreign influence.”

The Davis administration will likely dispute much of the US State Department’s assertions and point the finger back at Washington. However, the concerns align with those raised earlier this year by governance watchdog, the Organisation for Responsible Governance (ORG), which argued that the Government’s promises of greater transparency and accountability are not matched by financial allocations in the 2023-2024 Budget to provide anti-corruption bodies with the required resources.

The funding allocation for the Freedom of Information Unit remained flat at $140,000 for the upcoming 2023-2024 fiscal year. And, while the Public Disclosures Commission received an increase, it was just $60,000 to take its total level of funding from $20,000 to $80,000. There also appeared to be no Budget allocation for an ombudsman’s office in the 2023-2024 fiscal year despite legislation to create the post being tabled in Parliament recently.

ORG, in a statement, said: “ORG notes that the level of allocation does not seem to align with the key policy outcomes outlined in the Government’s ‘Blueprint for Change’ manifesto. Of particular concern is the proposed funding for the Freedom of Information Act (FOIA) unit, which remains stagnant at $140,000.

“Despite promises made over the past two years to bring FOIA into effect in ten government agencies, the unit acknowledges that they are currently underfunded to fulfill their mandate of granting citizens access to government-held information as established by the FOIA passed seven years ago.”

The US State Department, meanwhile, noted there were no sanctions or penalties imposed on MPs, senators and public officials who failed to meet the 2022 deadline for filing their annual financial disclosures. “The Public Disclosure Act requires senior public officials, including senators and members of Parliament, to declare their assets, income and liabilities annually,” its report said.

“In 2022, the Government gave extensions to all who were late to comply. The Government did not publish a summary of individual declarations, and there was no independent verification of the information submitted.” The US State Department also appeared sceptical that the new Public Procurement Act will achieve the promised improvements and objectives.

“In March 2023, the Government repealed and replaced the Public Procurement Act 2021, arguing that the previous legislation produced unintended public policy consequences. The Government contends that the new Public Procurement Act 2023 will overhaul the administration of government contracts and improve transparency and accountability,” it added.

Turning to The Bahamas’ broader battle against corruption, the US State Department said: “Bahamian laws provide criminal penalties for corruption, and the Government generally implemented the law effectively when applied. However, laws to combat corruption by public officials have been inconsistently applied.

“The Bahamas would benefit from a more robust enforcement of rules to prevent conflicts of interest related to government contracts. The country grapples with reports of corruption, including allegations that contracts have been directed to political supporters, isolated reports of officials accepting small-scale ‘bribes of convenience’ and favourable treatment given to wealthy or politically connected individuals.....

“There are no specific protections for NGOs (non-profit groups) involved in investigating corruption. US firms have identified corruption as an obstacle to foreign direct investment (FDI), and have reported perceived corruption in government procurement and in the FDI approvals process.”

Despite the FTX crypto currency exchange’s implosion in late 2022, the US State Department said The Bahamas is still continuing to attract interest from digital assets firms despite ongoing concerns over the country’s business processes and ease of doing business.

“Positive aspects of The Bahamas’ investment climate include political stability, a parliamentary democracy, an English-speaking labour force, a profitable financial services infrastructure, established rule of law, general respect for contracts, an independent judiciary and strong consumer purchasing power,” the report said.

“Negative aspects include a lack of transparency in government procurement, labour shortages in certain sectors, high labour costs, a bureaucratic and inefficient investment approvals process, a lengthy legal disputes resolution process, Internet connectivity issues on smaller islands, and energy costs four times higher than in the US. The high cost of electricity is driven by antiquated generation systems and inefficient diesel power plants....”

And, turning to The Bahamas’ fiscal woes, the US State Department added: “The Bahamas has leaned on international financial institutions for loans and has rejected offers from foreign governments to prop up its economy. Although the country has lowered its debt service obligations over the last two years, international financial institutions have voiced concern about The Bahamas’ reluctance to impose more progressive taxes to address its 80 percent debt-to-GDP ratio and to support economic development and social initiatives.”