Procurement (Amendment) bill 2013 – Bill no. 17/20134034 19 Dec, 2013
Mr. Ali: Thank you very much, Mr. Speaker. I am pleased to be given this privilege to speak on a very important national issue that confronts us as a people and as a country. The issue of public procurement touches on every facet of transparency, accountability and way in which we carry out public business and public transactions. Indeed the issue of public procurement is not a static one. It is one that has evolved over the years, globally, where rules are constantly amended and changed based on differentiated situations and circumstances. Prior to 1992, indeed, there was widespread criticism in the public procumbent process; criticism leading to the non-existence of a system or a system that was clouded in secrecy, criticisms that ranged from racial discrimination to widespread corruption and to open lawlessness in the execution of the functions of the executive in relation to issues relating to procurement, accountability and financial transactions. Those criticisms are the criticisms of the mischief we sought to correct over the number of years after 1992. As a matter of fact Guyana is indeed the first CARICOM member state to undertake comprehensive procurement reform by amending its constitution in 2003. The reforms were based on the United Nations’ Trade Act. The reforms were based on UNCITRAL model law. It was not based in isolation of the best practice and standards that obtain internationally. It was founded in international law, international trade law.
The Hon. Member, Mr. Greenidge, pointed to the clause that was unanimously inserted on that day. We are not denying the fact that this clause was inserted but what we are saying is that the clause flies in the face of constitutional provision and constitutional provision must be superior and what we are seeking to do is to correct something that all of us overlooked on that day and we all have a responsibility to make that correction today. The Hon. Member said in his presentation that in the existing system there is no process for review. This is far from the factual position of the present system. The present system provides as follows:
“Where a supplier or contractor is dissatisfied, he is entitled to a review by:
1. The procuring entity within five days following the publication of the award
2. An independent authority where the protest is not reviewed by the procuring entity [an independent authority]
3. Under Article 212, A (a) 1 (h) of the Constitution the Public Procurement Commission is empowered to investigate complaints from suppliers, contractors, public entities.”
That is the last here. So to say that there exists at this moment no system or process of review is misleading the nation and misleading our people and we must correct that. In addition to this, the Hon. Member said that there are a lot of papers out there pointing to our system not being transparent. I believe that this is a smokescreen because he has not pointed to a single report or a single document to demonstrate this point that he has made and I will point out for him the hundreds upon hundreds of ‘no-objections’ received from the Government of Guyana from international financial institutions in the awarding of contracts; ‘no-objections’ from international institutions would mean that all the steps, the process and the awarding of the contract was done to the standards of that institution and international best practices. Let us look to the point the Hon. Member made that the Minister of Finance appoints a 15 member board. That is what the Hon. Member said, but let us look at the laws of Guyana. This is problem we have. We have half-baked points, points that are not developed or developed only to the political wonders of the Opposition. This is what the law says in Section 16.3:
“The members of the National Procurement Board to be appointed by the Minister shall comprise:
1. Not more than five persons from the Public Service
2. Not more than three persons from the Private Sector after consultation with the representative organisations.”
“...After consultation with the representative organisations.” The Hon. Member went on to say that the Minister directs the board and the Minister exercises full control over the board. Let us see what the law says:
“The National Board shall be responsible for exercising jurisdiction over tenders, the value of which exceed such an amount prescribed by regulation...”
The board will exercise jurisdiction, not the Minister. The board will appoint, not the Minister.
“...the board will appoint a pool of evaluators for such period as may be determined.”
Not the Minister. This argument that the Minister has this exclusive power, this overriding power, this dictatorial power is one that holds no merit.
Mr. Speaker, let me further say that I can understand where the Member is coming from. I can understand because there is still the unanswered criticism of the Guyana Telephone and Telegraph Company (GT&T) privatisation deal, the Demerara Timbers, the Linden Mining Enterprise. These are still... [Lt. Col. (Ret’d) Harmon: Your turn is coming.] We are open. Every single transaction is audited.
The other issue is that the Hon. Member is saying that the Government does not want to give the Procurement Commission. Let me make it categorically clear that we are ready for the Procurement Commission but we are not ready to give up our fiduciary oversight role that has been given to us by the electorate of this country. We have a fiduciary responsibility that was given to us by the electorate of this country and this Government is not willing to give up that responsibility that the people have given to us. Blow hot, blow cold, we have a responsibility and we are going to execute that responsibility in keeping with the Constitution of the Cooperative Republic of Guyana.
The Cabinet has power of objection or no objection. [Interruption] I will point to it ‘Mr. Lawyer’. I will point to it for you. Now we must not mix up this role of objection or no objection. It is not synonymous with the awarding of a contract, a fact clearly established in the Procurement Act 2003 which, according to Section 54.4, says “The Cabinet is not authorised to award a tender to suppliers or contractors”. It is very clear. “The Cabinet is not authorised to award a contract to contractors or supplies.” The power granted to the Cabinet under the Procurement Act is merely limited to review of the procurement procedures followed by the procuring entity in recommending a contract; a review, not an award role, a review role. Cabinet’s power to issue objection or no objection does not collide with or impair or undermine any of the functions of the Public Procurement Commission as set out in 212 A (a) of the Constitution. Let me quote Section 212 A (a) of the Constitution:
“The power of Cabinet to issue objection or no objection merely affords another layer of oversight by the Government which has a fiduciary responsibility to perform.”
There is it, Mr. Ramjattan. Do you want to argue against this provision of the Constitution? Do we want to wish away this provision of the Constitution? Do we want to sit here and believe, and appear to believe, that this provision does not exist? We cannot implement the provision of the Constitution in a willy-nilly manner, in a selective manner; in a manner that we think suits our political aim and objectives. The Constitution is there as the guiding light, the guiding principle, the guiding framework, through which we must manage the country and the resources that we have.
The Constitution of Guyana specifies the functions and responsibility of the Public Procurement Commission. I heard some of the Members arguing, in the public domain, that somehow or the other the Public Procurement Commission would be empowered to ensure that the contracts are awarded in a particular way. As a matter of fact, in the heckling session, Mr. Ramjattan said that he wants to remove the power from the Government. I do not know if Mr. Ramjattan believes that this power, the power that does not exist,... I do not know if he wants to say that the Public Procurement Commission would have the power to award the contract. [Mr. Ramjattan: Why not?] I will tell you “why not”.
The Constitution of Guyana specifies the functions and responsibilities of the Public Procurement Commission. None of the 13 functions and responsibilities listed under 212AA empowers the People’s Progressive Party Civic (PPP/C) to award or approve or grants a no objection to contract. It is not only can the Public Procurement Commission not award but there is also no power to grant a no objection. Where is this oversight layer that the Constitution talks about? Where is the oversight layer?
The Constitution provision does not take away the right of Cabinet, under Section 54 of the Procurement Act, to grant a no objection to contract neither does it grant the right to the Public Procurement Commission. It follows, therefore, that there is absolutely no contradiction in Cabinet retaining its main no objection power in the awards of contract upon the establishment of the Public Procurement Commission.
The oversight role afforded to the Government, under the Procurement Act 2003 is not unique to Guyana. In fact, the procurement legislation in many advance and regional economies provide the Government with greater latitude for influencing the award of contract in the procurement process. I wish to turn to Singapore. We always say, in this Parliament, that we should look for best practices, international standards and international benchmarks.
Let us look at what Singapore has. In Singapore the Minister has much wide power in public procurement, according to the Government Procurement Act, chapter 120, under section 6(1). It states: “The Minister may make regulations to govern procurement subject to the Act.” Further section 6(2) (c) empowers the Minister to make regulations governing the procedure for the award of a procurement contract and the procedure following such award.
Here, in Singapore, the latitude extended to the executive through the Minister is not only oversight latitude but one that empowers him to make regulations governing the procedure for the award of a procurement contract and the procedure following such award. Such power to regulate procedures could clearly lead to situation of influence. However, in contrast, the Procurement Act 2003 of Guyana empowers the Minister of Finance, under section 61, to merely advise the National Board or the Procurement Commission for the administration of the Procurement Act.
Look at the vastness, the superiority, of our Act in relation to Singapore’s.
The State Procurement Act 2004 of South Australia makes provision for the establishment of a State Procurement Board. Section 21 provides that the Minister may give direction to the State Procurement Board. Under section 21 (2) such direction may require the board to take into account a particular Government policy or a particular principle or matter. Moreover, the board is mandated under section 4 not only to listen to the Minister but to comply with any direction given to it by the Minister. [Dr. Singh: We do not want that.] We do not want this at all.
In Jamaica and Belize, there exists a well developed Public Procurement System. The Cabinet is responsible for setting the national policy for public procurement and directives that govern the procurement process. The Cabinet also approves the contract. [Dr. Singh: Say that again.] The Cabinet also approves the contract. [Dr. Singh: Where is that?] It is in Belize and Jamaica. In these jurisdictions there is the office of the Contractor General. What and who is the office of the Contractor General? [Mr. B. Williams: What are its functions?] I can list all for you. [Mr. B. Williams: Read it.] In St. Kitts and the Nevis the Minister of Finance is empowered by the Finance Act to regulate procurement. The Ministry of Finance issues financial regulations in relation to the procurement of goods and services.
[Mr. Greenidge: When was the last time [inaudible] reference?] The reference was made to Canada. The Executive Council of Ontario informally, and more commonly the Cabinet of Ontario, plays an important role in the Government of Ontario in accordance with the Westminster system. A council of Ministers of the Crown, chaired by the premier of Ontario, the Executive Council, always makes up the Members of the Legislative Assembly of Ontario, advises the Lieutenant Governor of Ontario on how to exercise the executive functions of the Ontario Crown. The members of the council are appointed by the Lieutenant Governor on the advice of his or her premier. Though the lieutenant Governor does not generally attend council meetings, directives – this is the point of interest – issued by the viceroy and on advice of his or her Ministers are set to be ordered by the Governor in Council.
Let us look at the European Bank. Let us look at rule 3.3.1 of the European Bank and this is what that rule states.
“The client shall submit to the bank a report containing the results of the tender evaluation and its recommendation for the award of the contract. The bank will review the findings and recommendations as the final step in establishing the eligibility of the contract for bank financing.”
Even the European Bank understands the importance of this oversight responsibility. It understands the responsibility because it is the bank’s finances, it is the bank’s regulations and the bank is ensuring that it holds that no objection role in the award of the contract.
Let us look at rule 2.6.
“The bank may agree with the borrower to expand or reduce a shortlist, however, once the bank has issued a no objection to a shortlist the borrower shall not add or delete names without the bank’s approval.”
The power enshrined in the no objection clause of this bank is even far wider than what the Cabinet has because if it has a no objection to contract it cannot change the recommendation. The Cabinet can merely send back that recommendation to the National Procurement and Tender Administration Board (NPTAB) with its reasons, outlining its position but has no power or jurisdiction to change the recommendation of the National Procurement and Tender Administration Board.
The Caribbean Development Bank (CDB), rule 1.1 (3):
“CDB does not finance expenditure for goods, works and services which have not been procured in the accordance with the agreed provision in the financing agreement and as further elaborated in the procurement plan. CDB will declare a misprocurement and it is a policy of CDB to cancel the portion of CDB financing allocated to the goods, works and services that is being misprocured.
CDB may, in addition, exercise other remedies provided for under the financing agreement even after the contract is awarded and after obtaining a no objection.”
The CDB’s role is even expanded after the issuing of an objection or no objection. Of course, the Hon. Member cannot understand what this has to do with what we are debating because the Member does not want to take in to account what are the international best practices and standards governing procurement, because it does not suit them.
The mere fact that these international agencies understand that they must maintain a role in offering an objection or no objection tells us that the oversight responsibility cannot be taken away from an entity that has the responsibility to ensure the proper implementation of the project.
In this case it is the Government which has the responsibility of ensuring the implementation of projects, policies and programmes. That oversight responsibility cannot be taken away from the Government in ensuring that its policies, its plans and its programmes are implemented in an effective, efficient, transparent and accountable way.
It is clear that there exists the need for an oversight responsibility. There exists a role of the executive in the procurement of goods and services. We are saying that that role must not be the role to a war; it must not be the role dictate; it must not be the role to direct, but, merely, we are saying that role must be one that allows oversight of the process and allowing the Government to fulfil its fiduciary responsibility to the electorate of this country.
In closing, I would say that I support, completely, the amendment by the Minister of Finance.
Thank you very much. [Applause]
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