The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian Contractors Association's (BCA) president says findings that almost half of firms seeking construction permits are asked, or expect, to pay a bribe are "accurate" amid a "grease the wheels" culture.

Leonard Sands told Tribune Business that such corruption was frequently the product of an inefficient, cumbersome system where persons frequently offered and/or made under-the-table payments to officials to expedite permits and approvals that were being held-up without explanation or for no obvious, valid reason.

Speaking after the Inter-American Development Bank (IDB), in its newly-released 2024-2028 country strategy for The Bahamas, revealed survey findings showing some 49 percent of firms applying for construction permits either parted with, or expected to make, “an informal gift or payment” to obtain the approval, he hinted that such practices are long-standing as there is "no shock and awe" in the figures.

Pointing out that "hundreds of jobs" and millions of dollars in investment were often at stake when permits were delayed, Mr Sands told this newspaper of the IDB survey findings: "I would stand by that and say that's accurate.

"What I'd like to say further is there seems to be a large area of room for there to be suggestive assistance to expedite or ensure permits happen with a client or architect's submissions. What I mean by that is there are many instances when a drawing is held up.

"The architect, engineer or contractor makes inquiries as to why the drawing is held up or the permit is held up. No valid reason is given. You want to move things along because you're under a deadline or need to get a stage payment, so you grease the wheel."

Mr Sands said "frustrations" with the permitting system, and an inability to obtain answers as to why permit applications were not moving, frequently created the motivation for payments to public officials in a bid to expedite the process and jump ahead of other submissions.

"What's interesting to me is that as long as we've known this is a practice that happens, and in almost every government department it's not obvious; not a explicit as a bribe," the BCA president said. "The process seems to take longer than it needs to, and it frustrates users engaged in the system repeatedly.

"Then they make inquiries about how to move this thing along, and that's where these instances occur. These building permits represent millions of dollars in investment and hundreds of jobs in some cases, and they don't move quickly. A small project, dealing with a home mortgage, cannot get a permit and you don't get a reason why. It cannot move along. It's all the frustration."

Similarly, Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that the IDB findings show The Bahamas needs to develop "a culture more focused on transparency and efficiency instead of going around the system".

Describing the percentages as "high", and slightly surprising, he added that the survey highlights the enduring nature of a "pay to play" mindset where companies and individuals feel the need to "pay your way through a process" because the system is either non-transparent or fails to process applications in a timely manner.

"That's a pretty high number," Mr Aubry told this newspaper of the IDB findings. "What we've seen in prior reports, some of them done by Transparency International or even the most recent study we did with the United Nations Development Programme (UNDP) looking at small businesses in Grand Bahama and Abaco following Dorian, the number that came up has been about 20 percent.

"That number was used as a benchmark for folks who were approached for, and asked for, a bribe." Mr Aubry, though, said it was important to differentiate between perception and reality in hinting that many of the respondents applying in the affirmative to the IDB survey may have anticipated the need to, rather than actually, pay a bribe.

However, he quickly acknowledged of the findings: "It also highlights the power of perception, and the kind of space we still need to grow to get past the spectre and impact of corruption and perception of corruption.

"This situation highlights the things that need to be in place. There needs to be an easy, safe space to report these incidents and we need to ensure our culture is more focused on transparency and efficiency instead of going around the system. What we have had in the past is this culture of a 'pay to play' mindset because the current system doesn't respond in time."

Mr Aubry, echoing Mr Sands, said persons sought to "pay your way through the system" to expedite permits and approvals rather than play by the rules. He added that other surveys had ranked The Bahamas as "the highest in the region for paying a bribe before being asked", which showed "there was a perception: 'This is the way of doing things'."

The ORG chief said the continued digitisation of government services, and placing permitting and approval processes online, had to be "a top priority". He added: "The more we can put these mechanisms online, there's less opportunity for individuals to insert themselves into the mix and ask for tips and lunch money."

And, while all systems and processes throughout the world are vulnerable to corruption and graft, Mr Aubry added: "We have to keep this diligence, reinforce what we do well and the laws that are working well.

"Where we see potential concerns like this, we have to make sure there is a space where people can report these issues, they will be taken seriously, these concerns will not be used against them, and they will be vetted properly in an independent way."

Mr Sands, meanwhile, said many contractors, developers and others in the development/built space have developed mechanisms and tactics to cope with graft that exists in the system. "This is what we have known for years. This is blase, blase," he added of the IDB survey findings.

"We have already calculated for it and have developed mitigation mechanisms to address this. It is what it is. No developer in this country and who has been operating here doesn't know how to get things done. There's no shock and awe here. We're not no new kids on the block. We know exactly what it is."

The IDB, in its just-published country strategy, said: “The quality and enforcement of regulations represent obstacles to conducting business. Bahamian firms participating in the IFPG (Innovation Firm Performance Gender) survey reported on average that obtaining a construction-related permit took them 56 days, an operating licence, 21 days, and an import licence, 16 days.

“When asked if an informal gift or payment in exchange for the permit was expected or requested, for operating licences only 8 percent responded ‘“yes’. However, in the case of construction permits and import licences, 49 percent and 56 percent of surveyed firms, respectively, reported such payments being expected/requested.” These results have never publicly been disclosed before.