Four CARICOM bodies eyed for closure or overhaul
Published:Sunday | July 9, 2023 | 12:16 AMJovan Johnson - Senior Staff Reporter
Consultants appear set to propose that four CARICOM institutions, including the CARICOM Development Fund (CDF) and one dealing with aviation safety, be closed or reconstructed.
It is the first major indication of what may end up in the highly anticipated final report on the 16 institutions being reviewed by Baastel Canada, the international consulting firm working with LPD Hall & Associates. The project initially involved 17 institutions.
Regional leaders have been pushing a review since at least 2002 as a key effort to make the bloc of 15 countries more responsive to regional needs.
The 18-month Canada-funded review, which started in December 2021, is expected to answer questions on the financial solvency of the entities and whether they are fit for purpose, effective in delivering services, and if the region will be harmed by the closure of any institution. More than J$160 million has been budgeted for the exercise.
The final report is due to be presented to CARICOM leaders for approval by December, according to a CARICOM Secretariat update provided to heads of government at their annual summit last week in Trinidad and Tobago. A third progress report that will feed into the final document was submitted on June 9.
That latest progress report breaks down the 16 institutions into three groups – those being recommended for retention and merging; entities to be reconstructed; and institutions to be closed and their functions redistributed to other entities. The latter two groups account for 28 employees in total.
The CDF, which provides financial and technical assistance to disadvantaged countries, and the CARICOM Competition Commission (CCC), which regulates cross-border business conduct, are the two institutions being eyed for reconstruction, according to the report obtained by The Sunday Gleaner.
The consultants argue that the CCC’s mandate is “relevant”, but it “cannot effectively perform its functions in the current environment and is, therefore, ineffective.
“Only a CCC-type organisation is capable of regulating cross-border anti-competitive conduct, which is fundamental to the success of the CSME (CARICOM Single Market and Economy). Retaining scaled-down CCC maintains key plank of CSME,” the report said.
The CCC was established in 2008 and up to 2021, investigated six cases.
A key preliminary proposal is for the CCC to be changed from a “larger, standing body, to small, nimble skeletal body with access to additional staff as needed”.
The situation with the CDF appears troubled by far more political considerations, given its role in providing loans to poor CARICOM countries.
The consultants say the fund’s mandate “remains relevant”, but “for many reasons, [it] has not been effective in implementing its mandate”.
“Its financial operating model is potentially flawed and vulnerable to global financial market conditions. The resources within the CDF can be more effectively operationalised through the CDB (Caribbean Development Bank),” they wrote.
The fund has been viewed as operating with sufficient capital adequacy as up to 2022, investments accounted for about 74 per cent of its assets, and loans, 18 per cent.
The recommendation for the fund’s operations to be absorbed into the CDB has floated around CARICOM since inception in 2007, but has been routinely resisted. Key funders the European Union and Australia raised questions about the matter in 2011.
The fund is currently seeking a new leader after Dr Wendel Samuel’s tenure as board chairman ended on July 5.
The CARICOM institutions being contemplated for closure are the Caribbean Centre for Development Administration (CARICAD), which was established to help member states modernise their public sectors, and the Caribbean Aviation Safety and Security Oversight System (CASSOS).
Baastel-LPD anticipate “minimal impact” to the region if CARICAD is closed, noting that it has “achieved much of its original mandate of public sector reform”. Up to 2022, there has been no audited financial statements since 2018.
“Many member states (MS) have either public sector reform/modernisation units or programmes that are making progress. Training can be undertaken by MS organisations such as MIND and public service training institutes,” it said, referring to the Jamaican state organisation that upskills public servants.
Regarding CASSOS, the recommendation at this time is for its training and auditing activities to be transferred to the original Association of Civil Aviation Authorities.
“No harm would come to the region if closed,” said Baastel-LPD, who noted that it has the highest percentage (80) of arrears owed by governments among the institutions reviewed.
They said: “CASSOS has never been resourced by the MS to fulfil its mandate and is currently operating a skeleton staff of one person. CASSOS does not have the resources to effect its mandate.”
Nari Williams-Singh, chairman of CASSOS, which is based in Jamaica, said he could not speak on the matter at this time.
“CASSOS has participated in the consultation process regarding the review of CARICOM organisations. CASSOS is unaware of any final report on this matter and, therefore, cannot comment,” said Williams-Singh, who is also the director general at the Jamaica Civil Aviation Authority.
The other 12 institutions have been earmarked for retention and merging, with options being considered for mergers.
The category includes the Caribbean Public Health Agency (CARPHA); Caribbean Community Climate Change Centre (CCCC); Caribbean Examinations Council (CXC); CARICOM Implementation Agency for Crime and Security (IMPACS) and the Caribbean Disaster Emergency Management Agency (CDEMA).
It also includes the Caribbean Institute for Metrology and Hydrology (CIMH); Caribbean Agricultural Health and Food Safety Agency (CAHFSA); Caribbean Agricultural Research and Development Institute (CARDI); Caribbean Meteorological Organisation (CMO); Caribbean Regional Fisheries Mechanism (CRFM); Caribbean Telecommunications Union (CTU) and the CARICOM Regional Organisation for Standards and Quality (CROSQ).
One of the options is to merge CARDI and CRFM; CAHFSA with CROSQ; and CCCC, CDEMA, CIMH and CMO.
The final report is expected to include costing for the options and an implementation plan covering 19 overarching recommendations which touch on issues such as governance, shared corporate services and gender mainstreaming.
Consultations have been held with six CARICOM states, including Jamaica.
The review has not been without controversy.
In early 2022, the consultants reported that, with the exception of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) and the CXC, all the institutions were participating fully in the review.
The energy centre and CXC reportedly told the consultants that they required clarity from their governing boards about their participation. By May 2022, the issues were sorted, but later on, CCREEE dropped out of the project.
The Canadian government, through the Department of Foreign Affairs, Trade and Development, also raised concerns about potential conflicts of interest involving the consultants doing the review of institutions for which they were doing separate work.
At the time, Baastel and its affiliates were engaged in projects with CARPHA and CDEMA. The energy centre had raised similar concerns.
Baastel Canada, which is doing the review work, said it was legally different and distinct from Baastel Belgium, which was doing work with CARPHA.
“Baastel further undertook to separate staff (no overlapping staff) and ensure insulation of information and communication between the personnel on either project. This information was shared with the PSC (project steering committee), which determined that these measures were sufficient to remedy the conflict issue,” said a May 2022 CARICOM document obtained by The Sunday Gleaner.
Requests for responses on the conflict of interests concerns to Canada, CARICOM, Baastel, and PSC chairman Ambassador Armstrong Alexis were not returned up to press time.