Virgin Islanders, ladies and gentlemen, as your Governor I wanted to speak to you today about an important issue.
But before doing so, I also wanted to mention that as many of you will know; last week I had an audience with Her Majesty the Queen at Buckingham Palace. Her Majesty was pleased to receive the gift of salt from Salt Island prepared by Calvin “Jandy” Smith and Lethelma Thomas. Her Majesty takes a keen interest in all her Overseas Territories and it was an opportunity to recall the Islanders’ willingness to help others that so impressed Queen Victoria, a tradition that continues today through the many Virgin Islands groups such as the Rotary Clubs, Lions, Family Support Network, Visar and many others.
Her Majesty asked me to pass on her greetings to all her subjects, whether they be residents, or visitors in the Virgin Islands.
The main issue I wanted to speak to you, the people of the Virgin Islands, about today is the recommendation from the Public Accounts Committee of the House of Assembly that the Governor appoint a Commission of Enquiry into the Port Development Project to build an extension to our existing cruise ship pier and terminal.
I know that many of you have taken a keen interest in the subject and I have followed the comments in the many talk shows and online media.
Firstly however, perhaps I should set out the context to the role of the Governor in these matters. I am sometimes asked “What side is the Governor on?"
As I explained in my inauguration speech back in August, “The Governor is appointed by Her Majesty. However, as the Oath of due Execution of Office makes clear I am also your Governor.”
The role and task of the Governor is to strike the balance between the views of Her Majesty’s Government in the United Kingdom, those of the Government of the Virgin Islands, your elected representatives and the aspirations of the people of the Virgin Islands.”
The recommendation for a Commission of Enquiry was originally put to my predecessor Governor McCleary and it was he who requested the report by the Auditor General, which was published in October 2013.
It is important to recognize that the Auditor General’s report, upon which the Public Accounts Committee’s report itself is based, covers only a part of the Cruise Ship Pier project. The papers I have been shown show that there were a series of attempts to launch this project. Neither the Auditor General’s nor the Public Accounts Committee’s reports deal with the final and successful tender, which met the terms of the Financial Protocols, and which led to construction being taken forward.
In considering the recommendation of the Public Accounts Committee, I have read both the Committee’s report and the reports of the Auditor General into the Port Development Project and into a number of other major infrastructure development projects, because it is quite clear that the problems that have arisen over the cruise ship pier extension are not isolated problems.
By their nature, as I know from personal experience, the execution of these types of development projects, whether for the pier and terminal, the Greenhouses, the Sea Cow’s Bay Harbour Development, or the recently opened Peebles Hospital, are complex, take time and thus frequently span more than one administration.
I have also taken advice from experts, both in the region and from the United Kingdom. This advice has taken much longer than I would have liked. While the delay may have been frustrating to the ladies and gentlemen of the media and to online bloggers, I believe that most Virgin Islanders would prefer that the work was done thoroughly.
The initial report from a study into our tendering and procurement procedures by the Caribbean Development Bank commissioned by the Premier with the agreement of Governor McCleary was not available to me until the end of December. A second report by an independent consultant, commissioned by my Office to ensure that the CDB’s recommendations fully addressed the detailed concerns and issues raised by the Public Accounts Committee and the Auditor General was completed last week. Both reports will be made publicly available.
Although there is further work to do, by both the Caribbean Development Bank and the independent consultant, I now have enough information and expert advice to give a considered response to the Public Account Committee’s recommendation.
I have commented before that Virgin Islanders have many reasons to be proud of their democratic tradition and to be grateful to their leaders for guiding the Territory through a period of huge economic, social and political change over the past 40 years. Unlike many other Territories in the region, the Virgin Islands have not found themselves in a position where the Governor has had to take back the powers, which were devolved to your elected representatives.
The core challenge that is common to all these development projects is on the one hand the desire of political leaders to press forward with the development of this Territory and on the other hand the need to balance that desire with the requirement to be accountable to the electorate and to ensure that public money is spent wisely.
In the case of each of the projects mentioned above, where the Auditor General has been asked to investigate, I find that political leaders have been motivated by a desire to develop the Virgin Islands economy and infrastructure of the Territory, to provide the services that a modern society needs and new opportunities for business. It is for example clear, that there has been a common view across political parties that the Virgin Islands needed a new hospital and a new Cruise Ship Terminal. And it appears to me that as citizens of any democratic society, this is the sort of vision we expect from our political leaders.
But clearly, difficulties have arisen over the way these projects have been taken forward. All too often Ministers (in both the current and previous administrations) have allowed their desire to achieve rapid progress and demonstrate results to obscure the need to ensure that the teams charged with delivering the project have followed the procedures set out to ensure value for money and transparency.
Frustration with public service procedures is to an extent understandable. The Caribbean Development Bank’s report recognises that some of these procedures are out-dated and overly bureaucratic. The Auditor General’s reports recognise that capacity and expertise shortfalls have caused Minsters to seek expensive private sector advice.
Both of the independent reviews that the Premier and I have commissioned recommend that the current Virgins Islands’ procedures for procurement and tendering are in urgent need of revision.
Procurement and tendering in small island communities are more of a challenge than for countries with large populations. In particular, there is the need to ensure that we develop local capacity while recognising that local companies will struggle to achieve economies of scale and are likely to be more expensive than outside expatriate contractors. Consequently, value for money is not the only criterion that governments have to consider. There needs to be a balance between developing local business and choosing the cheapest tender.
The Caribbean Development Bank’s report makes thirteen separate recommendations to strengthen the existing procedures to bring them into line with best practice in other island economies. The independent expert consultant confirms these recommendations and both agree on the need for the Virgin Islands to enact a stand-alone Public Procurement Act similar to what exists in Bermuda and the Turks and Caicos Islands.
If the expert advice is that we need to modernize the procedures for procurement and tendering for our large-scale infrastructure projects, it is equally clear from the reports of the Auditor General and Public Accounts Committee that transparency of government decision-making and accountability also need attention.
In some cases existing powers are adequate, but have not been used. For example, it is surprising that the Public Accounts Committee in producing its report on the Cruise Ship Terminal did not make fuller use of its power under existing Standing Orders 80 (3) and 81 to call serving Minsters to give evidence (as is indeed the standard practice of the Public Accounts Committee of the UK Parliament) choosing instead in large part to seek witness testimony from those who had previously been involved in the project, rather than the Minister and public officers currently involved. Witness statements by those no longer actively involved in a project are of questionable value and cannot be judged to offer an accurate view on what was currently happening; indeed in many cases such statements amount to speculation.
More generally, to someone who has worked on the Overseas Territories for a number of years and served as Governor of the Falklands before coming to the Virgin Islands, it is noticeable that we have slipped behind in adopting modern principles of Open Government.
In the Speech from the Throne last November, I announced the intention of the current government to introduce a Freedom of Information Act and work on this has begun. Three Territories already have this Act and another is following with legislation shortly.
A Freedom of Information Act is certainly a step in the right direction and complements the role which already exists in the form of Questions in the House of Assembly, or the powers of the Public Accounts Committee to ensure the transparency of decision making. However, it perhaps needs to be said that obtaining information under a Freedom of Information Act can be a slow process and is by its nature reactive.
Two territories, including our closest neighbour Anguilla, have already taken further steps to improve transparency of decision making by providing the public with regular reports on discussion in Cabinet.
Five Territories have opened the Register of Members Interests to the public, as is also the case for the United Kingdom Parliament. This is an important mechanism in helping to dispel any suspicion that Ministers have been involved in decisions where they might have a personal interest, or stand to benefit.
There is nothing unusual about political leaders in small communities having close links with business. Even in much larger communities such as the United States political leaders often emerge from the leaders of successful business. But it is very important that those links are known and that when decisions are taken no political leader gains personal benefit or shows favouritism to former or current business contacts.
Both the Auditor General’s and the Public Accounts Committee’s reports raise concerns about decision maker’s relationship with commercial entities. Concerns, whether justified or not, and rumour are the inevitable result of a lack of transparency.
I have made clear to both the Premier and the Leader of the Opposition that I would strongly encourage the Virgin Islands to adopt all three measures above as soon as possible in order to continue our tradition of being an Overseas Territory with one of the most effective democratic processes.
In conclusion, having considered in detail the Public Accounts Committee’s report, the reports of the Auditor General, the previous correspondence of my predecessor Governor McCleary and having taken account of the studies by the Caribbean Development Bank and the independent consultant, I see no useful purpose in commissioning a further Enquiry into the Port Development Project, or any of the other infrastructure projects mentioned above.
The Public Accounts Committee’s and the Auditor General’s reports clearly set out some of the problems that have occurred under successive administrations. The Caribbean Development Bank’s thirteen recommendations and the independent consultant’s report identify some of the action required to remedy these problems. I have explained what I as your Governor see as the three additional important steps needed to increase accountability and transparency. I hope that the elected leaders of the Territory, both Government and Opposition, will take forward these recommendations and action the necessary steps.
As your Governor, one of my responsibilities is to ensure good governance. The Governor is not on one side, or the other, but has to take account of the interest of the Territory as a whole. It is therefore inappropriate for any political party to seek to use the Office of the Governor to gain political advantage or to pursue a party’s political agenda.
We now have a brand new hospital, and within a matter of days we will have the first cruise ship alongside the new pier – both of which are the result of successive governments’ efforts and they are developments of which we should be proud. However, we must be better at managing such projects and we must be more transparent in the way decisions are made. This is what I believe Virgin Islanders have the right to expect.
Thank you for your attention.