Statutory boards in the territory are supposed to function independently, but many fall far short of that ideal because of political interference and inadequate appointment practices, a cording to the Commission of Inquiry report.
After the Virgin Islands Party came to power in 2019, the Cabinet sought to revoke the appointment of all statutory board members and form new boards that would fall in line with the party’s “aggressive” agenda.
But Commissioner of Inquiry Sir Gary Hickinbottom found that the course taken to remove experienced board members — unlawfully, in at least one case — gave rise to suspicion that “undisclosed motives” were involved.
“As in other areas of government which the COI has looked at, the executive government appears to take the view that it can treat statutory boards as it wishes,” Sir Gary wrote. “In my view, it is imperative that that interference ceases, and steps are taken to protect statutory boards as important, autonomous arms of government.”
Appointments
Boards fall under ministries, and ministers have the power under statutory guidelines to appoint members.
But Sir Gary found that ministers typically use a problematical “informal process” to make appointments based on personal relationships rather than aptitude, expertise or experience.
“The lack of any openness, transparency or rigour in the ‘informal process’ of recruitment to statutory boards, adopted in respect of all appointments to statutory boards until very recently, is only too clear,” the report stated. “Not only is this extremely poor governance but, as a result, some candidates — including good candidates and sometimes, of course, the best candidate — will inevitably not even have the opportunity of being considered.”
According to testimony heard during the COI, board candidates are typically provided by the permanent secretary of the presiding ministry, a desk officer, or a minister.
Positions are not usually advertised, and few boards have written policies covering the recruitment, selection and appointment of members, Sir Gary noted.
“Further, there are no written criteria by which potential candidates are assessed to see if they are of good character and a fit and proper person,” his report stated.
Once a list is finalised, the minister decides who will be nominated to the board. Nominees are contacted and asked if they are willing to serve. Then they’re asked to state whether they have any conflicts of interests and to provide a resume.
There is no requirement to complete a formal check into convictions or criminal history of nominees, the report stated.
“Rather, convictions being common knowledge in such a small community, it is considered likely that one of those involved in the appointment process will know of any convictions,” according to the report.
Permanent secretaries then send draft memorandums to the financial secretary and the attorney general for input on financial and legal implications. Those papers are approved by the minister, and a final list is sent to the Cabinet, where elected officials vote to accept or refuse nominees.
Stalled reforms
“It was only in May 2020, that the governor, who was well aware of the existing practice, suggested a ‘shift to a more transparent process’ for critical leadership posts such as the chairmen of boards,” Sir Gary wrote. “It is notable that even then the governor did not ex- tend his recommendation to the appointment of ordinary board members.”
A new policy for appointing and reappointing statutory board members was drafted by the Premier’s Office in April 2021, about three months after the COI launched, according to the COI report.
The policy stated that the public would be given one month’s notice of the end of any statutory board member’s tenure in order to give interested residents an opportunity to apply for positions.
Also under the proposed policy, no member would be allowed to serve more than two terms, and applicants would be vetted by a committee.
Sir Gary, however, found that the initiative didn’t progress beyond the Premier’s Office.
Political interference
The commissioner also noted that political interference with statutory boards posed a major challenge to good governance.
As examples, he cited the cruise pier project and the Wickhams Cay Development Authority, but he wrote that the most “striking evidence” of political interference was the 2019 policy adopted by Mr. Fahie’s VIP government of revoking the membership of all statutory boards “with a view to reconstituting those boards later with individuals committed to their policy programme.”
In explaining the policy, Sir Gary referred to a paper presented to Cabinet on March 27, 2019, which stated, “It is common practice that some or all current board membership is dissolved and new members appointed” with each new government.
The paper continued, “The manifesto of the new government administration calls for innovative, forward and progressive ideas, initiatives and action from each government ministry, department and agency during this recovery period. For those initiatives that must be implemented through a statutory body, the same principles for innovative, forward and progressive initiatives and action will be required.”
At the time, however, then-Attorney General Baba Aziz outlined concerns with the policy of replacing all board members.
“Before Cabinet takes a decision to remove a board director of a statutory board, Cabinet must satisfy itself that it not only has the power to do so as per the respective statutes establishing the boards but that in removing the directors en masse that this will not easily be construed by any arbiter as acting/behaving unreasonable,” Mr. Aziz warned in a March 2019 memorandum. “To act otherwise in these circumstances may expose government to claims of unreasonable dismissals, which in turn could result in huge financial liabilities being attached to government.”
Sir Gary said that the AG clearly indicated that if Cabinet pursued its planned policy, it needed a good reason to do so.
Agreement
According to Cabinet meeting minutes from March 27, 2019, then-Deputy Premier Dr. Natalio “Sowande” Wheatley and Transportation, Works and Utilities Minister Kye Rymer supported government’s policy to revoke the membership of all board members.
Dr. Wheatley said he was willing to be exposed to certain levels of risk when weighing the potential for boards to “interfere with the government’s mandate,” the minutes noted. Then-Natural Resources, Labour and Immigration Minister Vincent Wheatley and then-Health and Social Development Minister Carvin Malone echoed the same sentiments in the HOA at the time, the COI report stated.
Mr. Wheatley also told the COI during a hearing that his administration came in “with a transformative aggressive agenda, and we felt the best thing to do is to find persons who align with our ambitions,” according to the report.
“His evidence came to the conclusion that, while statutory boards would be autonomous in terms of function, members should be appointed not only on competence but also on whether they would carry out a government’s mandate, by which he meant that government’s political agenda,” the report stated.
Climate Change Trust Fund
As another example of political interference, the COI report discussed the Climate Change Trust Fund board, which was dismantled in April 2019 despite elected officials knowing they didn’t legally have the power to make the move, Sir Gary found.
“There can be little doubt that [Mr. Fahie], and the Cabinet following him, wished to have ‘his own’ men and women appointed to the CCTF board. He has made his discontent known as to the position of the CCTF fund being independent of executive government,” Sir Gary wrote. “The approach to the removal of the CCTF board members raises deep concerns about the lengths to which the executive will go to manipulate the membership of statutory boards.”
Since the CCTF board seeks funding from international climate change bodies, good governance and independence are required under its enabling legislation, the COI report stated.
The CCTF Act states that a board member can be removed if they’re found guilty of misconduct, if they fail to attend four consecutive meetings, if they fail to declare a conflict of interest, or if they act in a way that is detrimental to the trust.
Transferred
The board was transferred from the NRLI Ministry to the Premier’s Office after the 2019 election, at which point there were six appointed members who had been sitting since June 2017. Mr. Fahie, then the premier, wrote to each member of the board inviting voluntary resignations by April 2019.
But the board did not resign, in part because members were concerned that their collective expertise would be lost and the board’s independence would be compromised, chairman Edward Childs said during a COI hearing.
Mr. Childs added that a mass resignation would adversely affect the board’s ability to raise money internationally, and he noted that there were no legal grounds for removing the members.
Mr. Childs wrote Mr. Fahie on April 17, 2019 requesting a meeting, according to testimony outlined in the COI report. But he said no response came.
Meanwhile, Mr. Aziz warned about the negative legal implications of disbanding the board without cause, but Mr. Fahie proceeded anyway.
“On the evidence, it is clear that (and I find that), on the attorney general’s advice, the premier accepted that he and Cabinet appreciated the decision to revoke would be unlawful, but they proceeded with it anyway, keeping their fingers crossed that nobody challenged it by way of judicial review,” the commissioner wrote.
Cabinet update
Mr. Childs said he learned of the board members’ removal when a Cabinet update was published on April 23, 2019.
Shortly thereafter, Premier’s Office Deputy Secretary Elvia Smith-Maduro drafted a paper seeking to amend the CCTF Act to give Cabinet discretionary powers to revoke the appointment of any member of the CCTF board. The paper was approved by the premier and sent to the Cabinet in May 2019.
During a COI hearing, Mr. Fahie denied that this attempted amendment was a knee-jerk reaction, claiming instead that it was intended to “energise and re-energise” the board.
Mr. Aziz also warned against the amendment during a May 15, 2019 Cabinet meeting, where he was recorded stating that the CCTF wasn’t a government fund and that the move may “breach the principles of the rule of law,” according to Sir Gary.
The Cabinet paper was deferred for two weeks, but there was no further reference to it, the commissioner wrote.
No CCTF board since 2019
Sir Gary’s report also found that there had been no functioning CCTF board since April 24, 2019.
“During the COI hearings on this topic and until very recently, the government website still recorded that the CCTF board comprised the original appointees, with Mr. Childs as its chair, although all have been removed and not replaced,” Sir Gary wrote. “The board has not existed for almost three years. The fund has since lain idle. Any momentum that the board had in obtaining international funding — or, indeed, any funding at all — has been lost.”
‘Other governance issues’
The COI report also noted other governance issues affecting boards. Many boards, it stated, lack adequate policies to optimise their financial and operational performance.
Moreover, a 2019 auditor general report found that some boards had never undergone an audit review and others were three or more years behind.
The BVI Ports Authority, for instance, was last audited in 2013, the BVI Airport Authority in 2012, according to the 2019 report.
The audit also noted that grants to statutory boards ac- counted for 23 percent of the government’s recurrent expenditure, totaling $67.5 million.
Additionally, the auditor expressed concerns that the government guaranteed loans on behalf of boards with a liability standing at $79.9 million.
Recommendations
Looking ahead, the commissioner recommended a review of all statutory boards for the purpose of finding out how far behind they are in submitting timely financial reports and audits; to what extent they are applying practices of good governance such as conflict-of-interest and political-interference policies; and to what extent they follow due-diligence policies.
Sir Gary said the review should be carried out by a senior public officer within six months, and that the officer should identify what steps need to be taken to remedy any deficiencies.
Recommended statute
He also recommended an overriding statute for all boards that would address the appointment and removal of board members.
Establishing a Statutory Boards Commission with members of civic society should also be considered, he added.
Additionally, he recommended that the governor consider whether it’s necessary to revoke any appointments made to statutory boards since 2019 to enable a more open and transparent system.