The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas is in danger of being “perceived as a little Caribbean banana republic” due to excessive government secrecy and a failure to enforce the law, an outspoken QC fears.

Fred Smith, Save the Bays’ legal director, told Tribune Business that the US State Department’s recent denunciation of the Bahamas’ failure to enforce anti-corruption measures threatened to drive legitimate investors away.

With investor perceptions of a jurisdiction’s reputation a key factor in the global competition for capital, Mr Smith said the Bahamas’ on-ground reality was a bigger issue than critical international reports.

“I am, as a Bahamian citizen, ashamed that the Bahamas should be the subject of such international condemnation after 40 years as an independent nation,” he told Tribune Business of the US human rights report.

“Over the decades, Parliament has passed some very good legislation, including the law that requires disclosure by politicians of their assets, and the anti-corruption laws.”

Mr Smith argued that where the Bahamas fell down, though, was in execution/implementation, and the enforcement of all laws on the statute book.

Using the Planning and Subdivisions Act (PSA) as an example, he added: “The PSA provided for transparency and consultation.

“Yet the executive branch of government, under both the FNM, but more so the PLP, has not only failed to enforce the laws passed by Parliament, but has created even more opaqueness, secrecy and what I can only describe as subversive, non-statutory bodies, that support the criticisms the Bahamas is receiving.

“The US is our closest democratic neighbour, and to be branded corrupt, non-transparent and non-democratic is a slap in the face of the current administration.”

The concerns voiced in the latest US State Department report largely echo what was contained in its ‘Investment Climate’ reports on the Bahamas for the past two years. Both those documents expressed similar concerns about public sector contract tender/bidding processes, and the associated lack of transparency.

However, the human rights report’s language is much stronger. It said: “The law provides criminal penalties for corruption by officials. However, the Government did not implement the law effectively, and officials engaged in corrupt practices with impunity. There were frequent reports of government corruption during the year.

“The procurement process was particularly susceptible to corruption, as it is opaque, contains no requirement to engage in open public tenders, and does not allow award decisions to be reviewed.”

Mr Smith said the Bahamas’ failures and weaknesses were not only coming under scrutiny from the US State Department, but “other international transparency watchdogs”.

He warned that the situation would “translate into greater difficulties” for the Bahamas when it sought grant, and other forms of, financing from development banks and international lending institutions.

“It will cause the Bahamas to be perceived as nothing more than a little Caribbean banana republic,” Mr Smith told Tribune Business.

“Legitimate investors flock away from corrupt, non-transparent, secretive and politically motivated jurisdictions. Perceived as a nice little pirate nation, we will continue to attract illegitimate investment.”

The Callenders & Co attorney added that successive governments had “spoken with forked tongue” ever since the first Hubert Ingraham-led administration had promised ‘government in the sunshine’ in 1992.

Despite frequent promises of improved transparency and a Freedom of Information Act, the latter of which now appears to be belatedly moving forward, Mr Smith said actions had spoken louder than words.

“Our MPs have not been held accountable under the Public Disclosures Act,” he added. “The Planning and Subdivisions Act, which governs transparent development, has not been implemented properly and is regularly breached.

“Members of Cabinet ignore Supreme Court Orders, and now Fred Mitchell and Jerome Fitzgerald threaten more breaches of a citizen’s right to privacy.

“What the Government is doing, instead of showing respect for the rule of law, is behaving more and more like a little capricious dictatorship that is answerable to no one, even international norms.”

While the Bahamas may have been able to escape the consequences of such behaviour in the past, Mr Smith said the evolution of the Internet and global communications meant it could no longer do so.

“The Bahamas can no longer exist in a vacuum as a little group of islands,” he explained. “The eyes of the world are watching us as we promote ourselves as a legitimate international financial centre (IFC), as a legitimate place for real estate development, as a place where homeowners are secure and cannot be hounded out at the whim of a minister, where the environment is respected and protected.

“The reality is that, in almost every respect, our Government is not only breaking the laws passed by Parliament, but enabling investors, developers and others to secretly ignore the law and operate with impunity.

“This is astonishing for a small nation like the Bahamas.