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Giving generously but carefully

Introduction
It is the time of the year when requests for donations to business houses – including from my own experience, professional firms – increase from a trickle to a deluge. There is something about Christmas that makes most of us guilty if we turn down a request for a donation, not only from the more prominent charities but service organisations, churches and other groups. Unfortunately, there is no study or other information on the success of these efforts, the main purposes of which are to feed groups of disadvantaged children in poor communities, throw a party for senior citizens and make monetary donations to needy persons. To think that by one’s refusal some needy person will be deprived of a meal or the cheer which the opportunity to participate in an annual party brings is probably not only difficult, but conscience troubling.

Studies abroad have thrown up some interesting and some counter-intuitive findings that are themselves worthy of further analysis. For example, studies show that as a proportion of income, poorer households actually give more to charity: the poorest 10 per cent of households give 3 per cent of their income to charity, compared with the richest 10 per cent which give only 1 per cent of their income. Of course in dollar value, the 1% will far exceed the 3%. They also show that the level of donations rises with the proportion of females in the household, but the presence of children makes no significant difference. This would indicate that women are more generous and empathetic than their male counterparts, even though women on the whole earn or own far less than men.

Surprisingly, those not in work are likely to give significantly more than those in employment — by 20 per cent (conditional on their total spending). There is no significant difference between the employed and the self-employed. Compared with the wage-earner, the effect of being self-employed is to reduce the probability of giving by 11 percentage points, while being out of work reduces it by 7 percentage points. Both these effects are significant.

Political donations
Unfortunately in Guyana where even government information is hard to come by and where our institutions of higher learning are themselves short of resources, it is hardly surprising that there are no studies undertaken of this important measure of a caring and giving society. And perhaps arguably the most substantial form of donation in dollar terms but of questionable social value is that made by businesses to political parties. In that case both the donor and the recipient have an interest in secrecy and the labyrinthine path from donor to recipient would make a good case study for money laundering.

And we are only too aware that for businesses, political donations are an investment in protection money or for future favours, hence the reason for donations of varying sums to the political parties, often based on an assessment of their prospects of winning. And for many businesses with their non-political donations, their picture in the newspapers making the donation to some sport or charitable organisation is good business with column inches of picture and accompanying report being much less than the cost of a paid advertisement.

Charitable donations
Now let us return to genuine, charitable giving. Questions that arise are how much to give, the vehicle for giving and what other considerations should apply. For individuals the cost of giving is much more expensive than it is for businesses. Individuals get no tax relief for any donations whether to national organisations, charities or under deeds of covenant, with the latter opportunity having been taken away when other allowances such as mortgage interest, insurance premiums and family allowances were taken away. Not that it was always easy to make donations even under deeds of covenant, and one recalls the case of Peter D’Aguiar v the Commissioner of Inland Revenue where the Commissioner disallowed a payment of $4,200 per year covenanted by Mr D’Aguiar to the Citizens’ Advice and Aid Service (CAAS). That was before Guyana had abolished appeals to the Privy Council to which Mr D’Aguiar unsuccessfully appealed. The Privy Council held that the CAAS was not a charitable organisation and disallowed the deduction. And we think Mr Sattaur is tough!

There are three separate statutory provisions governing donations, two in the Income Tax Act and one in the Corporation Tax Act, but they all only apply to companies. Under section 35 of the Income Tax Act donations of money or property to the government for public purposes or to or to any prescribed institution or organisation of a national or international character in Guyana or elsewhere are deductible. There are only about eight such organisations which have been prescribed, the most recent being the Cheddi Jagan Research Centre. And under section 75 which is generally regarded as the Deed of Covenant section, the deed must be for a period exceeding two years and to “any ecclesiastical, charitable or educational institution, organisation or endowment of a public character within Guyana, or elsewhere as may be approved by the Minister for the purposes of section 7(e) of the Corporation Tax.” All section 7 (e) of the Corporation Tax Act does is exempt from the tax any such income.

The problem and uncertainty is that section 75 does not specifically require the approval to be publicised by way of an Order or notification while 7 (e) of the Corporation Tax Act requires the approval of the President, again without a requirement for publication. This certainly needs tidying up.

Charity laws
Even if we ignore these technicalities, we have the practical question as to who deserves our donations. Some form of charity laws were promised since 1991 when the Companies Act was passed, but we still have no such laws in Guyana. The word ‘charity’ is often used and confused with ‘not-for-profit,’ these being employed incorrectly and interchangeably. There are some charitable institutions that are in fact created by statute, such as the Guyana Red Cross and the Chest Society, which derive their existence and status from statute. Then there may be some churches that are given statutory recognition and authority to hold property, while the Boy Scouts Association Act seeks to “further and protect the activities and interests of the Boy Scouts Association of Guyana.”

Apart from this form which is done by parliament, a charity may incorporate itself under the Companies Act or the Friendly Societies Act, which place them under some form of regulatory control and hopefully give rise to some level of corporate governance. But does this really happen? All of these organisations, year after year, raise money from the public and no doubt many of them do excellent work, but that can hardly justify the complete absence of some form of public reporting and accountability. Some of them operate as self-perpetuating oligarchs that feel no compunction or obligation to report to the public or to those from whom they raise money. Compare this with a company that would find itself in trouble and in breach of the Securities Industry Act if it was to try to raise money from the public without observing the strictures of the law.

This state of affairs may be due to ignorance on the part of some, and in the case of others because of their conviction of the genuineness and the nobility of their cause that any question or challenge about accountability and governance would seem out of place and Dickensianly mean. But not only should this be mandatory and in the public interest but it is in the organisation’s interest as well. I am certain that donors would feel confident and may even be tempted to give more to an organisation that shows a healthy respect for accountability and for the donors.

Making the decision
So whom should you give your money to? Based on the recommendations of the American Institute of Philanthropy and the amount of money you propose donating you should consider the following:

1. Know who you are giving your donations to. Never give to a charity you know nothing about. Request written literature and a copy of the charity’s latest annual report. If a charity is unable or unwilling to provide you with the information you request, you may want to think twice about giving to it. Honest charities typically encourage your interest and respond to your questions.

2. Ask how much of your donation goes for general administration and fundraising expenses and how much is left for the programme services you want to support. Is your donation going to pay salaries and other administrative expenses or is the bulk of it to be applied to the programme that you wish to support. Most highly efficient charities are able to spend 75% or more on programmes. Keep in mind that newer groups and those that are working on less popular issues may find it necessary to spend a greater percentage on fundraising and administrative costs than well-established, popular groups.

3. Some charities and not-for-profit organisations engage in high pressure fund-raising strategies. You help the organisation when you ask them questions. Ask whether they have a bank account, whether officers are paid or volunteers, do they have annual meetings that are open to the press, and do they have audited financial statements. If the answer to any of these is ‘no’ you might seriously wish to consider whether you would support that charity.

4. Do not accept what they tell you about tax-deductibility. Remember that deductibility is based on meeting the strict criteria of section 35 of the Income Tax Act. Check with your accountant or your attorney if your donation is more than small change.

5. Bear in mind there is only so much you may be able to give. So choose wisely and with the best information at your disposal. But once you are satisfied that the charity is worthwhile, give generously if you can. There are many good charities that need your help to operate valuable programmes and provide needed services. When you give wisely, you will be giving more effectively.

Next week we look at the LCDS and the Norway money

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Confusion at the Deeds Registry

Introduction
During the past week Mr Leon Rockliffe, attorney-at-law, has written two letters on developments affecting the Deeds Registry, arguably the most important depository of business information in Guyana, the regulator for businesses and companies, and the authority for a number of critical functions regarding real property. In that sense its vital importance to property rights, the registration of businesses, the incorporation and registration of companies, and the repository of corporate documents cannot be overstated.

The Deeds Registry derives its ‘modern’ origin to 1919 and the act “to regulate the Office of the Registrar of Deeds, and to amend the law relating to the execution and registration of Transports and Mortgages and other Deeds.” Space does not permit the reproduction of the several duties and functions of the Registry, all of which remain, but now fall under a Deeds Registry Authority, a new corporate entity but without supervisory oversight.

In 1999 the government passed an act piloted by the current Attorney General Mr Charles Ramson, setting up a Deeds Registry Authority the functions of which are set out in section 4 of the act as –

(a) the functions assigned to the Registrar and to the Registry under –

i the Deeds Registry Act;
ii the Companies Act 1991;
iii the Business Names (Registration Act);
iv the Powers of Attorney Act;
v the Bills of Sale Act;
vi the Trademarks Act;
vii the Patents and Designs Act;
viii the Civil Law of Guyana Act;
ix the Land Registry Act; and
x any other written law or other legal document.

Retroactivity
As is clear, these are not insignificant matters and suggest that Mr Ramson, Attorney General and Minister of Legal Affairs should have treated the act with more seriousness. The (Deeds Registry) Act had been lying idle for the better part of ten years since like the Amerindian Act, it required an Order to bring it into force. Recently, the same Attorney General signed Order 31 of 2010 published in the Official Gazette of Saturday, November 13, 2010, purporting to bring the act into force from October 1, 2010, approximately six weeks earlier. That publication was the cause of the two letters by Mr Rockliffe who correctly pointed out that there were a number of steps to be taken before the act could be brought into force.

This was a grave oversight by Mr Ramson who would be expected to be familiar with the contents of the 1999 act. The Order is clearly out of place and instead of adding clarity, we have confusion reminiscent of the bringing into effect the 1991 Companies Act on May 25, 1995 without informing the Registrar of Companies. In the case of the Deeds Registry Act the staff in the Registry have not only been kept in the dark but have been unable to exercise their employment rights under the act.

Recall and review
Mr Rockliffe raises some further issues. Despite the creation of an authority there are no directors and it would seem that the Registrar who becomes the Chief Executive Officer would report direct to the Minister! There is an advisory board consisting of the Chief Justice which creates a patent potential conflict of interest, the Solicitor General, a position that has been effectively abolished more that 12 years ago and the State Solicitor, a post which ceased to exist for close to seven years.

With all these problems, it would be hard to find any person who would not ask that the Order be recalled and the act amended to make it more sensible and practical.

The Deeds Registry needs major inputs to enable it to function properly and effectively. Some lawyers relate horror stories of improprieties, inadequate staff and consequently poor service. It is true that there have been some improvements recently and some of the staff make exceptional efforts in still challenging circumstances. But something is wrong when New Guyana Limited, the publicly owned but PPP controlled publishers of the Mirror, a recipient of government advertisements can operate for close to twenty years without submitting an annual return.

Different strokes
NICIL, the government controlled company to which moneys due to be paid into the Consolidated Fund are diverted and spent illegally and without regard for accountability has similarly been allowed to exist without filing returns. Compare this with say, the Linden Legal Aid Centre incorporated in 2007 and struck off the register of companies earlier this year for non-filing. It was subsequently restored after filing the statutorily required documents.

Linden Legal Aid was not alone, but is among close to 200 companies that were struck off the register of companies in 2010. The reluctance or failure of the Deeds Registry to act against NICIL and the New Guyana Company Limited at least requires an explanation for the uneven treatment which gives the appearance of discrimination, something forbidden in our constitution.

Conclusion
What is the point of having property rights guaranteed under the constitution if the records are so inadequately kept as to risk the loss of ownership and to encourage improprieties? This column has also pointed out the need to review and amend the Companies Act 1991 which has remained untouched for nearly twenty years. It is hard to believe that our learned Attorney General would not be aware of some of the inadequacies of the nine specific acts administered by the Deeds Registry, their need for updating, and the making of new and revised regulations. Such deficiencies go to the rule of law, property rights and a modern business infrastructure. If he is aware and chooses to do nothing, then we have a bigger problem than a poorly issued Order 31.

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The new constitution of Kenya: An analysis

Introduction
The disputed Kenyan Presidential elections of 2007 sparked horrendous clashes among supporters of the incumbent President Mwai Kibaki and his losing challenger Raila Odinga. With the blood and death of over one thousand persons on their hands, the imminence of a civil war and the prospect of an apocalyptic future, the country’s political leaders, with support from the continent spearheaded by former UN Secretary General Kofi Anan, decided that a new constitutional model was the only way to save the society and address the unequal distribution of opportunity and resources in their society.

Two years later, Kenyans now have just such a Constitution. One does not need to be a cynic to recognise that the Constitution of a country is only as good as its impact on the lives of its citizens. If this new Constitution works, the future for Kenya is assured and the dancing in the streets that followed the overwhelming popular vote for its existence would be vindicated.

Criticisms and comparisons
There are two criticisms of the Kenya Constitution that I think have considerable validity. The first is that it may overreach, that it may be too advanced for the objective circumstances of a country only now trying to rid itself of a colonial structure, riddled with ethnic, religious and tribal differences, still bearing the scars of a civil war that almost tore it asunder four decades ago. In one sense the constitution may be too perfect for fallible humans. This criticism has merit. I was even told that the chief fault is that it may be too good. That is a fault that many might like to possess.

The second and some may even say more serious criticism is the substantial powers of the presidency that are not unlike those in Guyana’s 1980 Constitution. Like in Guyana, the President is both the Head of State and Government. He chairs Cabinet meetings and directs and co-ordinates the functions of ministries and government, exercising executive authority of the country with the assistance of the Deputy President and Cabinet Secretaries. He is also the Commander-in-Chief of the Kenya Defence Forces and confers national honours.

Unlike the case of the 1980 Guyana Constitution however, Kenya’s has a number of countervailing measures that are designed to prevent the kind of abuse that is all too common in Guyana. Devolution of power and their separation at the national and regional levels, including national and county governments, a bi-cameral legislature, and clear rules on revenue sharing, are expressly spelt out in the Kenya Consti-tution.

Ministerial overload
While the Kenyan President chooses his Cabinet Secretaries – our equivalent to Ministers – that Constitution sets a minimum (14) and maximum (22) number of ministers. In Guyana, with 0.5% of Nigeria’s population, we have more ministers than that.

Their Constitution also provides for simple rules for the removal of anyone of those persons in the event of misconduct. It is unlikely therefore that our gun-toting minister, or the one implicated in buying and supplying spy equipment to a drug dealer, or some of those engaged in what seem clear cases of misfeasance in public office, could have remained ministers under the Kenya Constitution.

Just last month, Kenya has witnessed the sacking of its higher education minister from the Cabinet following a Constitutional Court ruling on a six-year-old corruption case accusing the minister of illegally selling land to a state corporation. By contrast, in Guyana, the more likely scenario is for state lands to be sold illegally to members of the Cabinet and those in the political elite.

The Kenya legislature cannot pass legislation like the president’s benefits bill which excludes Jagdeo and all other presidents in Guyana from the payment of taxes. Nor could there be a situation where Acts of Parliament are held up by the President, to be assented to as and when he feels like.

Insights and ideas
So as we in Guyana seek institutional solutions to our endemic problems, Kenya’s 2010 Constitution offers some interesting and innovative insights and ideas. It is a model for the devolution of power, for respect for citizens, for preservation of the rule of law and for the development of each region in the country.

It is an audacious document, repealing and replacing the entire former Constitution and containing two hundred and sixty-four Articles and six Schedules. Article 10 sets out the national values and the principles for governance that include national unity, sharing and devolution of power, the rule of law, democracy and participation of the people; human dignity, equity, social justice, inclusiveness, equality, human rights, nondiscrimination, protection of the marginalized, good governance, integrity, transparency, accountability and sustainable development.

Article 11 on culture requires Parliament to enact legislation that ensures receipt by communities of compensation or royalties for the promotion and use of cultures and cultural heritage and recognises and protects ownership of indigenous seeds and plants, their genetic and diverse characteristics and their use by the communities of Kenya.

Bill of Rights
Chapter 4 contains forty-one Articles and includes a Bill of Rights that guarantees enjoyment of the rights and fundamental freedoms for every person, binds all state organs, provides for implementation of rights and fundamental freedoms, and for the enforcement of those rights and freedoms. In respect of these rights and freedoms, the locus standi rule does not apply and any person can bring an action on his own behalf, or on that of another person, as a member of, or in the interest of, a group, or, in the public interest.

The Constitution guarantees twenty-six specific rights and makes it a fundamental responsibility of the State and every organ of the State, to observe, respect, protect, promote and fulfill the rights and fundamental freedoms set out in the Bill of Rights.

In addition to the usual rights to life, liberty and association, the Constitution guarantees such rights as privacy, consumer rights and access to information held by the State; the freedom and independence of the press; the right to a clean and healthy environment; economic and social rights including to social security provided by the State; the use and enjoyment of one’s own language and culture; the right to marry a person of the opposite sex based on the free consent of the parties; equal rights at the time of, during and on dissolution of the marriage; and administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. If a right or fundamental freedom of any person has been, or is likely to be, adversely affected by administrative action, that person has the right to be provided with written reasons for the action.

Special people
The Constitution also has special rights for children who for example may only be detained as a last resort; for persons with disabilities being provided with access to all places, public transport and information (Braille is specifically mentioned); and for youth. The State is also obliged to provide for minorities and marginalized groups to be represented in governance and to provide access to employment and special opportunities in educational and economic fields.

The Constitution requires the government to provide measures for older persons to fully participate in the affairs of society; to pursue their personal development; to live in dignity and respect, free from abuse and to receive reasonable care and assistance from their family and the State. With respect to the environment, the State is required to maintain a tree cover of at least ten per-cent of the country’s land area and the right to a clean and healthy environment is protected under Article 42 and is justiciable under Article 70 without having to demonstrate actual loss or injury.

Article 48 provides that an arrested person must be brought before a court no later than twenty-four hours after being arrested; imposes on the State guaranteed access to justice for all persons and, where a fee applies, for it to be reasonable so as not to impede access to justice. No right or fundamental freedom in the Bill of Rights shall be limited in any way, except by law. Any provision in legislation limiting a right or fundamental freedom must specifically express the intention to, and the nature and extent of the limitation, and must be clear and specific about the right or freedom to be limited and the nature and extent of that limitation. In no case, can any law limit a right or fundamental freedom so far as to derogate from its core or essential content.

Non-citizens may hold land only on the basis of leasehold tenure, and any such lease, however granted, shall not exceed ninety-nine years. On pain of disciplinary action, an officer of the State is duty-bound, in public and official life, to avoid any conflict between personal interests and public or official duties that compromise that official’s public or official interest in favour of a personal interest; or demeans the office held by that officer.

Elections
Responsibility for elections vests in an Independent Electoral and Boundaries Commission which is responsible for ensuring continuous registration across the country. Any person who is not a member of a registered political party is eligible to stand as an independent candidate for elections which are held on the second Tuesday in August every five years.

Political parties must be registered, must have a democratically elected governing body, must subscribe to, and observe, the Code of Conduct for political parties, must have their accounts audited and are subject to restrictions on the use of public resources that promote their political interests.

General election of members of Parliament is to be held on the second Tuesday in August in every fifth year. The electorate of a constituency may recall their Member of Parliament before the end of the term of the relevant House of Parliament.

The legislature
Kenya has a bi-cameral legislature with the Senate representing the counties and their governments and determining the allocation of national revenue among them. There is a guaranteed minimum number of women members of the National Assembly (47) all of whom are elected, and the Senate (16), who are nominated by the political parties. There is also guaranteed representation of two youths and two persons with disabilities in the Senate.

All sittings of Parliament and those of its Committees must be in public, the members of which are guaranteed participation and involvement in the legislative and other business of Parliament and its Committees. Persons have a right to petition Parliament to consider any matter within its authority, including enacting, amending or repealing any legislation. The procedures for accessing and giving effect to this right are to be enshrined in legislation which must be passed within two years following introduction of the new Constitution.

The President has fourteen days to assent to a Bill or refer it back to Parliament for reconsideration. If the President does not assent to a Bill, or otherwise deal with it in accordance with the Constitution, the Bill is taken to have been assented to.

The Executive
The Executive is made up of the President, the Deputy President and the Cabinet, the composition of which the Constitution requires to reflect the regional and ethnic diversity of the people of Kenya.

A person who owes allegiance to a foreign state may not be elected President of Kenya. The powers and functions of the President are not dissimilar to those of the Guyana President, but in Kenya the holder of this office has other obligations that include addressing Parliament at least once every year; reporting annually to the nation; and publishing in the Gazette, all measures taken and all progress achieved in the realisation of the national values; and submitting a report for debate to the National Assembly on the progress made in fulfilling the Republic’s international obligations. During the term of office, which is limited to two terms, the President enjoys immunity from criminal and civil proceedings.

Ministers are designated as Cabinet Secretaries of which there can be no less than fourteen (14) or more than twenty-two (22). Any member of the National Assembly supported by a quarter of all members can propose a motion requiring the President to dismiss a Cabinet Secretary. If the motion is supported by one third of the members of the Assembly, the Assembly must appoint a Select Committee to investigate the matter and report back to the Assembly in ten days. If a majority votes for removal, the President is required to dismiss that person.

Cabinet Secretaries are required to attend before a Committee of the National Assembly when required to do so by the Committee and to answer any questions pertaining to any matter for which they have ministerial responsibility.

Judiciary
A judge shall retire from office on attaining the age of seventy years, but may elect to retire at any time after attaining the age of sixty-five years. The Chief Justice holds office for a maximum of ten years or until retirement, whichever is the earlier. A Judiciary Fund, administered by the Chief Registrar of the Judiciary and funded out of the Consolidated Fund, is to be used for administrative expenses of the Judiciary and such other purposes as may be necessary for the discharge of the Judiciary’s functions.

For adherents of Islam, there is a Kadhis’ court with jurisdiction to determine questions of Muslim law relating to personal status, marriage, divorce or inheritance. The Constitution also provides for the devolution of power including county governments, and the equitable sharing of national and local resources throughout Kenya. The stated objective of devolution is the decentralisation of State organs, their functions and service and enhancing checks and balances and the separation of powers. Every county is headed by an elected governor and has a county assembly and a county executive committee.

Devolution of Power
The Fourth Schedule sets out the respective functions of the national government and the county governments. Some of these functions are strictly separated, such as foreign affairs, international trade, immigration and citizenship, tertiary education, monetary policy, and the courts which are functions reserved for the national government. Functions reserved for the counties include county health services, county transport, and county planning and development while some overlap and may be exercised at both national and county levels. These include culture, sport and the control of pollution.

Revenue raised nationally is to be shared equitably among the national and county governments.

County governments may be given additional allocations from the national government’s share of the revenue, either conditionally or unconditionally. Criteria for equitable sharing are set out in Article 203 but the amount allocated to county governments must not be less than 15% of the national revenues of the preceding year.

Article 204 provides for an Equalisation Fund into which is paid one half of one per-cent of all revenue collected by the national government each year. The Equalisation Fund is to be used by the national government only for the purpose of providing basic services such as health, water, roads and electricity to marginalised areas. Parliament may only pass Bills that appropriate funds from the Equalisation Fund on the recommendations of the Commission on Revenue Allocation that must obtain approval by the Controller of Budget for all withdrawals from the Fund.

At the national level there is a Consolidated Fund and for all counties there is a Revenue Fund.

Into these funds are placed all revenues and from which payments must be approved by the respective legislative assembly. Only the national government may impose income taxes; value added taxes; excise taxes as well as customs and other duties on the import and export of goods.

A county may impose property rates; entertainment taxes; and any other taxes authorised or imposed by an Act of Parliament. Both the national and county governments may impose charges for services.

Finance and taxation
A waiver of any tax or licensing fee may only be granted if authorised by law. A public record of each waiver must be maintained along with the reason for the waiver. Each waiver must be reported to the Auditor-General. Article 210 specifically states that there can be no law excluding the President and judges as officers of the State as excluded from the payment of income tax. In Guyana, the official emoluments of the President, the Chancellor of the Judiciary, the Chief Justice and the Auditor General are exempt from income tax.

There are detailed provisions regulating the preparation and timing of national and county budgets and contingencies and audits. The report of the Auditor General has to be submitted to the Parliament or the County Assembly within six months of the end of every year and must be considered and debated within three months. The Constitution provides for a Salaries and Remuneration Commission to set and regularly review the remuneration and benefits of all officers of the State and advise the national and county governments on the remuneration and benefits of all other public officers.

Constitutional Commissions
A member of a Commission, or the holder of an independent office, other than an ex officio member, is appointed for a single term of six years and is not eligible for re-appointment, and unless ex officio or part-time, such any officer may not hold any other office or employment for profit, whether public or private.

Some of the Commissions provided for in the Constitution are:
● Commission on the Implementation of the Constitution set up to monitor, facilitate and oversee the development of legislation and administrative procedures required to implement the Constitution. That body is required to co-ordinate with the Attorney – General and the Kenya Law Reform Commission in preparing, for tabling in Parliament, the legislation required to implement this Constitution; and to report regularly to the Constitutional Implementation Oversight Committee on the progress and impediments in the implementation of this Constitution;

● A Human Rights and Equality Commission whose functions include investigation into the conduct in state affairs, or any act or omission in public administration in any sphere of government, that is alleged or suspected to be prejudicial or improper or to result in any impropriety or prejudice as well as to receive complaints about the abuse of power, unfair treatment, manifest injustice or unlawful, oppressive, unfair or unresponsive official conduct;

● A Land Commission to manage public land on behalf of the national and county Governments and to recommend a national land policy to the national government;

● An independent Ethics and Anti-corruption Commission to deal with the conduct and financial probity of officers of the State whose activities are in any case restricted by dictates of the Constitution; and,

● A Commission on Revenue Allocation to make recommendations concerning the basis for the equitable sharing of revenue raised by the national government between the national and county governments; and among the county governments.

The Constitution provides for members of the public to be represented on several of the commissions while the following commissions and independent offices have the power to summon persons including public officials in any of their investigations:

(a) the National Human Rights and Equality Commission;
(b) the Judicial Service Commission;
(c) the National Land Commission; and
(d) the Auditor-General

Unlike Guyana there is no Office of the Ombudsman or Public Procurement Commission. However, in respect of procurement the Article 227 of the Constitution of Kenya requires the enactment of an Act of Parliament that prescribes the framework within which policies relating to procurement and asset disposal shall be implemented.

Giving effect to the Constitution
Apart from resolutions of Parliament or referenda, as appropriate, the Constitution provides for citizens to propose amendments to the Constitution by a popular initiative signed by at least one million registered voters. But it is Article 258 that I find very attractive, giving every person who claims that the Constitution has been contravened or is threatened with contravention, the right to institute court proceedings. In other words, the locus standi rule which requires a person bringing an action to show a direct interest in the matter, does not apply and any citizen can institute such a suit to enforce the Constitution whether or not it affects that citizen.

The Fifth Schedule sets out the time within which the various provisions of the Constitution are to be implemented. The Schedule requires that the necessary legislative measures must be enacted within one year to four years. In the case of any provision not specifically identified in the Schedule, the legislative time limit for these to be addressed is five years.

If Parliament fails to enact any legislation as required by the Constitution within the specified time, any person may petition the High Court for a declaratory order. The order is transmitted to Parliament and the Attorney-General directing them to take steps to ensure that the required legislation is enacted within the period specified in the order.

While the commission which reviewed the 1980 Constitution after the contentious 1997 elections may have had several of the ideas now enshrined in the Kenya Constitution, the opposition parliamentary parties that constituted the Commission and the members of civil society and the public which made submissions, obviously failed to anticipate the extent to which the PPP/C would have frustrated progressive changes to the 1980 Constitution or even to implement the recommendations coming out of that exercise.

Conclusion
President Barack Obama whose father hails from Kenya welcomed that country’s new constitution as an important step that sets “a positive example for all of Africa and the world.” It is an example from which we in Guyana can certainly benefit.

But as the ruling PPP/C and President Jagdeo have strengthened their hold on the country, its institutions and its purses, they have shown no interest in any constitutional reform. As a result, they have also failed to implement several important provisions in the existing constitution such as the appointment of an Ombudsman and the Public Procurement Commission, allocation of revenues to the regions, the proper use of the Consolidated Fund and the integrity of the financial system.

As a result, instead of enjoying a modem, progressive constitution, Guyana, in many key areas, is actually worse off. That we seem to have neither an appetite nor a willingness to address our constitutional backwardness may explain several of the fundamental defects that stifle the country’s development.

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Advice by the Clico liquidator for continued payment of premiums is legally questionable

In Business Page of October 3rd, 2010 I expressed the hope that those who were entrusted with powers and duties for the liquidation of Clico would ensure full compliance with the laws. For the several hundreds of persons who have so far received their cheques, the law and its processes are not important. But spare a thought for all the others who are in limbo, uncertain of their fate and funds and getting information from Mr. Lawrence Williams, the Court-appointed liquidator, that conflicts with commitments given by President Jagdeo. Let us remember that those in limbo include the NIS which is owed about six billion dollars by Clico and for which one way or the other we the taxpayers will have to bear the cost.

So far the liquidation has gone according to the script written by the President, a script that sets out a process and scheme of preference not consistent with the law. During the time, I have received many complaints and copies of correspondence and policies from persons who were told that because their policies did not have any cash surrender value they have nothing to get. There is merit in that. But what I find most uninformed, irrational and unlawful is what appears to be a circular-type letter sent by Mr. Williams to one policy holder earlier this month.

In the letter Mr. Williams identified eight types of policies sold by the company and encouraged the holders of those policies “to continue payment of premiums to avoid losing contracted benefits.” Whatever might be his intentions – and I know him well enough to know that these are well-meaning – what he is trying to do is legally questionable, unnecessary and unlikely to benefit policyholders.

The principal duty of the liquidator is to call in the assets and ascertain and pay off the liabilities of the entity. He can only carry on any business with the approval of the court.

Of the eight types of policies at least two are not susceptible to cash surrender value so his advice to pay premiums on those is ill-conceived. It would be silly for the holder of one of these policies to put further money into Clico. Find another insurance company and get another policy.

And for those policies that are so susceptible, there is no reason why any negotiations for the sale of a portfolio of policies to another insurance company – the rationale for his “encouragement” – cannot include policies that have already earned cash surrender value and those that have not. Why is he encouraging people to gamble on whether or not the belated efforts will succeed? Insurance is about covering risks, not taking a gamble.

But once again the Office of the Commissioner of Insurance that should be looking after the interest of the policy-holders and advising on technical issues has allowed itself to become a bystander.

The acting Commissioner Ms. Tracy Gibson now has taken up office at Clico, apparently appointed by Mr. Williams, along with Mr. Maurice Solomon, to carry out the liquidation on his behalf. Might I add that under section 375 of the Companies Act, Mr. Williams needed the permission of the court to make those appointments.

Unlawful action and poor supervision have played no small part in the substantial losses the country, its taxpayers and policyholders have suffered from the Clico fallout. Even if the Office of the Commissioner of Insurance makes the doubtful assumption that its obligations with respect to Clico ended with the appointment of a liquidator, the office holder should not abandon policy holders and become associated with actions that can bring the Office into question.

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A tribute to Winston Murray – in his own words

Introduction
Business Page joins in paying tribute to Winston Murray, economist, attorney-at-law and politician who offered this country a unique blend of experience, expertise, capacity for research, hard work and patience, all reinforced by unusual humility, integrity and respect for others. He was proud of his roots in the Essequibo island of Leguan, the place and community where he was born, but which our political system did not allow him meaningfully to represent; committed too to the PNCR which he served with distinction for several decades, but which rejected him when it most needed him; a firm believer in the virtues of a healthy, informed and honest debate, outside and inside a parliament in which he excelled over and above all others of his time, a parliament that is poorer for his passing; a patriot in the most noble sense of the word, putting country above self and personal considerations.

No word is sufficiently adequate or praise generous enough to describe Mr Murray the man, the servant of the public and this son of Guyana. The word ‘void’ at the national level cannot convey the space created by him during forty years of dedication, or the experience and expertise gained in vocations and professions ranging from the primary school teacher, the diplomat, public and political servant, economist and attorney-at-law. Inadequate too is the word ‘loss’ at the level of the party to which he committed his entire career, serving it steadfastly even as its appeal became tarnished by mis-steps and non-steps and its leadership pool haemorrhaged from dissatisfaction within the ranks.

Today’s tribute to Murray is one mainly in his own words, drawn from Hansard, the official record of the debates in the National Assembly. I go back only to 2007, the year in which Dr Ashni Singh, a technocratic Finance Minister presented his first national budget. I chose that year because Murray saw in Dr Singh the prospects and possibilities of a new culture and a combination of competence and integrity in the financial management of the country’s affairs.

Even when he soon came to question his initial opinion of and optimism about Dr Singh, his disappointment was expressed in the best tradition of parliamentary courtesies. So on February 9, 2007, on Dr Singh’s first budget presentation, this is what Murray had to say of him:

“I wish to congratulate the Honourable Minister of Finance, Dr Ashni Singh, on the occasion of his inaugural presentation of the National Budget. This Minister has shown a refreshing approach to openness, and in fact, prior to my coming here today, drew my attention to certain small discrepancies, which are really printer’s errors, and I thought that, even though small, the fact that he should call to mention them was not an insignificant occurrence, and I hope that that same spirit will be a hallmark of his tenure as Minister of Finance.”

On his reservations about sugar’s contribution to the economy and GuySuCo’s turnaround plan
“Sugar was supposed to be the flagship within the traditional sectors, but the present position shows that for the last years, the industry has been making significant losses and is projected to continue to do so until at least 2012, when it is projected to return to marginal profitability. This is the position notwithstanding the fact that Government has taken over significant debts from GuySuCo and notwithstanding the bragging of about $2 billion worth of cost reduction in 2009. This industry is being significantly subsidised by the Guyanese taxpayer. A massive investment to over US$160 million is expected to ramp up sugar production ultimately to 450,000 tonnes per annum. The issue is that at what cost of production and, therefore, how competitively?

“The state of the Skeldon factory and the availability of the 1.2 million tonnes of cane necessary to feed it are also causes for concern. We are assured in the turnaround plan that the canes will be available. The question is: How soon? Until then, the Skeldon factory will continue to operate below capacity, thereby negatively affecting the cost of production and possibly the technical functioning and efficiency of the factory.”

On budget size and oppressive taxes
“I could not leave the 2010 framework without reference to and comments on the statement that Guyana’s largest budget ever, requires the introduction of no new taxes. Given what I have said earlier about tax yield and tax burden, the issue is not ‘no new taxes,’ but rather doing something to lift the oppressive burden of taxation on the citizenry. That is what we have to do. And with that connection we call for the return of the VAT windfall to the people through a reduction. And we call for a reintroduction of a graduated progressive rate of income tax.”

On accountability, Clico, the Lotto Funds and integrity
“With respect to the Economic Services Committee, I have to highlight the unresponsiveness of the Minster of Finance to invitations to him to come to that Committee to update us on matters relating to C.L.I.C.O. There was a resolution passed in this National Assembly for this Committee to follow up on such matters. We have written him at least twice and he has not had the courtesy to even grant us the favour of an acknowledgement.

“Equally grave, if not more so, is the failure of the Minister of Finance himself, a highly trained professional, to observe some principles of financial governance. He continues to allow the Lotto Funds to be placed into a separate bank account instead of being put into the Consolidated Fund. He continued to allow the sale of public assets to be put into a separate bank account instead of finding its way into the Consolidated Fund. And now under the LCDS he is talking about putting money through G.R.I.F. (Guyana REDD Investment Fund), but nowhere in the scheme of things is there contemplation for bringing this money into the Consolidated Fund which is where it belongs to be supervised by this Parliament on behalf of the people of Guyana.”

On strengthening Caricom
“I believe we need a more dynamic and functionally relevant framework for the furtherance of the goals of CARICOM. For example, I believe that the Secretariat should have a strong project development arm that seeks to use available data, and make and support project proposals to strengthen regional capacity. It could also be involved, if only as an observer, in relevant discussions between and among Member States in the formulation or execution of projects. The institution cries out for being streamlined and possibly being restructured. It is no accident, I wish to observe, Sir, that the Heads of important international agencies are generally not permitted to serve more than two terms, normally a period of ten years.”

On limitations of politicians and the usefulness and role of experts
“Politicians see the electoral cycle as the framework of their operations, and so their eyes are set [on the year when elections will come]; and the measures that they will take will not necessarily address the longer term economic problems that the country faces, but are likely to be guided by the imperatives of an election victory… I say therefore to the Hon Minister of Finance and to the Government more generally that they should heed their own advice and agree to the setting up of a group of experts, who can independently analyse where we are, where we are likely to go and propose measures for dealing with what is likely to be a most difficult situation.”

On the airstrips at Leguan and Wakenaam
“It did not escape my attention, for example that in 2008, the sum of’ $108 million was earmarked for airstrips at Leguan and Wakenaam along with rehabilitation of the airstrip at Baramita. Obviously, the projects for the airstrips at Leguan and Wakenaam did not materialise, as they are therefore repeated for 2009… I think it is a sick joke to propose such a project when the citizens of Leguan are more concerned about proper and adequate number of beds at the cottage hospital; when they are more concerned about the availability of drugs and other medicines at the facility; when they are more concerned about the reliability and timeliness of the ferry service and about better drainage and irrigation facilities.”

On further evidence for corruption
After recounting several cases of the illegal purchase of drugs, impropriety in the regions and drawing attention to Guyana’s low ranking on the Transparency International Corruption Perception Index, he offered to the Speaker of the Assembly, “Sir, but perchance they want more evidence, I advise them go to the project site where projects are being implemented; and go to the villages across Guyana and talk to the people, and you will get all the evidence you need, to know that corruption is endemic in this country.”

On VAT and revenue-neutrality
“Throughout the Debate on the VAT Bill in 2005, all the major Government Speakers and the Ministers in particular, emphasized the revenue neutrality of the tax. We were assured that the solemn intention of the Government was to collect the same amount of money as would be foregone by the taxes that would be scrapped. A regime of Excise Taxes was also going to be introduced on so-called sin and luxury goods with the intention of maintaining the pre-VAT prices on those goods. Thus, the tax of these goods VAT plus Excise Taxes would result in pre-VAT levels of revenue being collected and that overall the collection of VAT plus Excise Taxes would be revenue neutral.”

On contract employees
“The Government has included a category in the Estimates known as ‘contract employees’ and we have again on numerous occasions requested that the information on ‘contract employees’ should be fully set out at the back of the Estimates. Do you know for the traditional Public Servants there are appendices O through S, which state the category in which each Public Servant falls, and in another Table gives you the salary scale applicable for those positions? And that is all we are asking for in the interest of transparency that these Contract Officers who many people see as replacing; that is why you do not want to put the authorized staff in the Estimates.

They are replacing the traditional Public Servants more and more but there is no transparency of their method of appointment or of levels of salary they are paid. We call upon you to explain to this National Assembly during this Debate, why it is not possible for you to include this as an appendix to the Estimates the framework in which contract employees are employed in the various agencies and the levels of their remuneration.”

On making belief and missing the truth
“In January 2010, the Hon. Minister of Finance brought a request for supplementary provision for, among other agencies, the Ministry of Housing and Water in the sum of $5.6 billion of which $4 billion was for housing development. I cannot avoid commenting on this because, to me, it represents a brazen act of illegality which should not go without being mentioned and pursued.

“We were making believe here that we were appropriating $5.6 billion to the Ministry of Housing and Water. It is clear that the Hon. Minister of Housing and Water, with prodding from and acquiescence of the Minister of Finance, missed the mark of truth in this Hon. House when in response to my question as to how much of the $4 billion had already been released he said ….”

And later when the question surfaced in the Committee of Supply and with the Housing Minister still reluctant to come clean, Mr Murray lamented, “I note that the Hon. Minister is not budging and is not answering any of these questions, could I ask whether he has become deaf all of a sudden because I want to know. This National Assembly needs to know. Is there a deliberate act on the part of the Minister to withhold information from the general public about his compliance with the Constitution, compliance with the law and about his observation of a proper budgetary process? Is that his intention?”

Sense of humour
On Irfaan Ali, Minister of Housing and Water: “Please I want it to be noted that I am not saying that Minister Ali is rubbish, I am saying that what he said is rubbish.”

“And I want to suggest that in naming this Budget under the title Staying the Course I would not like to stay on this course. That is the first point. I did not recommend it.”

“This year will be another year of trying to find a reasonable job, or of trying to get a visa to leave for ‘Region 11’ or of joining the ranks of the unemployed. This must be a sad state of affairs after seventeen years of P.P.P. /C. rule, but then, I suppose, it could be blamed on the twenty-eight years of the P.N.C.”

And after a scathing critique of the 2009 Estimates and Budget Speech, challenging the other side with the irresistibility of truth, the force of logic, the mastery of detail and the display of oratorical skills, he ended with the following words: “I therefore apologise for any inconvenience that may have been caused in the course of this presentation.”

A true gentleman is a rare being.