Watchdogs need teeth for conflicts

Sweeping legal changes are required to weed out the appearance of favouritism and corruption on public boards, two standards watchdogs have warned. 

At the moment, there is no open and independent vetting process for appointments to statutory boards and authorities. And there are no enforceable regulations to prevent businessmen with significant conflicts of interest from serving. 

The statutory boards are citizen committees that oversee public institutions like the airports, electricity regulator and trade and business licensing. 

Both the Cayman Islands Airports Authority board and the National Roads Authority board have been given qualified opinions on recent financial statements by the auditor general, partly because of the failure of senior staff or board directors to fully disclose their relevant business interests. And concern 
has been raised that the current selection process for boards lacks the transparency to prevent the appearance of political favouritism or the checks and balances to prevent potential abuses of power.  

Karin Thompson, chairwoman of the Commission for Standards in Public Life, said conflicts of interest should be stamped out by a proper vetting procedure at the appointment stage. But she said her commission was a “toothless bulldog” because politicians had yet to provide it with the legal framework to do its job properly. 

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“My personal view is that, even in an island of this size, I can see no reason why in appointing members to a board, if there is the merest hint of a potential conflict it would be best not to appoint that person,” she said. 

Ms Thompson said her commission had the remit to police the boards but needed legislative changes to allow it to do that. She said she was disappointed that, more than three years after it was established, the commission had not been provided with the legislation it needed. 

A bill, including requirements for public officials to register their business interests and face sanctions if they fail to comply, has been deferred three times by Cabinet and will not go to the Legislative Assembly this session. 

Ms Thompson said she is prepared to go through the United Kingdom to get the legislation passed if the territory’s government continues to drag its feet.  

Police Commissioner David Baines, also the chairman of the anti-corruption commission, said the ethics of the issue were simple: Anyone who had significant contracts with an entity should not serve on the board that oversees it. He said there was a pressing need for legal changes to ensure the perception of corruption did not exist. 

“Anyone who has got a key business interest that is fundamental to the way that airport works or the electricity board works should not be there in the first place …,” he said. “The degree to which it is happening at the moment is because some of the specific legislation that was required to underpin the constitution (of the Commission for Standards in Public Life) wasn’t enacted.” 

He said police and the anti-corruption commission had the power to deal with instances of blatant law-breaking, but legal changes were needed to address activity which may be unethical but not illegal.  

He said he believes there is some resistance to those legal changes. 

“There is a silent minority who recognise the implications of what having a transparent oversight in government will mean, which is that they will be exposed because they have operated outside of that control and oversight, been able to appoint who they wanted, seek personal and professional benefit from being a member of a board and abused their position.” 

Ms Thompson said her commission was unable to perform its functions effectively without the legislation, which should have been brought in almost immediately after it was formed. The law would empower the commission to keep a register of interest for specified groups of public officials and set out sanctions for failure to comply.  

Existing legislation compels members of the Legislative Assembly to register their interests with the Speaker of the House, but the constitution of the commission envisions a wider register including people who serve on public bodies or statutory boards. 

“In order to fulfil its constitutional mandate the commission is seeking legislation which not only deals with the appointment and responsibilities of board members but requires public officials, as defined under the 2009 Constitution Order (so as to include all persons who serve on a public body, board, etc.) to complete and submit a declaration of interests form at the time of their appointment.  

“The prescribed form should show an awareness of the requirement to disclose current or future conflicts of interest and be held accountable in instances of a breach. 

“In the meantime, the commission will be taking an in-depth look at the whole issue surrounding the appointment of members to statutory boards and authorities with focus being placed on how conflicts of interest, both real and perceived, can be avoided.” 

Mr. Baines said a defined and open selection process would be better for everyone. He said if the perception of a conflict or abuse of power remained, then an open selection process and transparent behaviour, including publishing minutes of meetings, would either “identify abuse or stem the perception of abuse.” 

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