The United Kingdom government’s aid to the Virgin Islands will not come without conditions, according to paperwork obtained by the Beacon.
In a three-page document titled “High Level Framework for UK Support to BVI Hurricane Recovery,” the UK appears to request a raft of good governance and financial planning measures to ensure that its £300 million loan guarantee and £10 million grant are used wisely.
The loan guarantee means the UK will assume the VI’s recovery-related debt obligations should the territory default.
The apparent stipulations include a UK-funded “public expenditure and financial accountability assessment” designed to map out reforms of the public sector; the immediate establishment of an independent recovery agency; the appointment of a permanent auditor general by April; and mandated membership in the multi-state Caribbean Catastrophe Risk Insurance Facility.
Arliene Penn, government’s communications director, confirmed the existence of such a document and said it is “meant for the government of the Virgin Islands to review and respond to the minister for overseas territories.”
Asked about Premier Dr. Orlando Smith’s thoughts on the document and the government’s anticipated timeline to respond to the UK, Ms. Penn restated what she said before.
Financial Secretary Glenroy Forbes saw the document and said he did not believe any of the requirements are “unduly onerous.”
The financial secretary added that he believes the stipulations are not final, but instead “intended to encourage a discussion.”
Many of the UK’s stipulations indicate British government officials want a significant level of oversight throughout the VI’s recovery process.
The conditions require the establishment of an independent recovery agency — something also laid out in the VI government’s recovery plan draft — that will not only handle loans guaranteed by the UK government, but all recovery-related investments.
The UK wants Governor Gus Jaspert — after consultation with the premier — to appoint the agency’s board chair and the chief officer of the secretariat.
The British also want an additional UK representative on the agency board, and they want all of the agency’s funds to be managed in an account that is separate from government’s and overseen by the chair.
The document also states that all governance, membership and voting arrangements for the agency must be approved by the UK.
Additionally, it mandates that there will be “no new non-guaranteed debt for reconstruction agency without prior UK government approval.”
The VI would also be required to provide the Crown with monthly updates on government cash flow positions and quarterly updates on recovery projects.
A number of the stipulations seemed designed to increase the transparency of the VI government’s operations.
The UK is requesting that government bring the audits on public accounts up to date — the last publicised government audit report was from 2011 — as required by section 109 of the 2007 VI Constitution, which mandates annual audits.
That will require hiring a permanent auditor general, which the document indicates needs to happen by April 1.
Phil Sharman, the previous auditor general, started working in August but left his job after Hurricane Irma. He had filled a post that had been vacant since late 2015.
The UK also wants government to implement a number of other long-promised transparency measures like the registry of members’ interests and freedom-of-information legislation.
Such measures have been supported by former Governor John Duncan, opposition party members and members of the media, and promised in multiple National Democratic Party agendas outlined in previous Speeches from the Throne.
In the months after Hurricane Irma, government documents and interviews with officials revealed that most government buildings were uninsured, with the exception of the Central Administration Building.
It also became evident that the territory did not participate in an insurance programme utilised by many of its neighbours across the region.
Sixteen countries and territories in the Caribbean are part of a multi-country risk pool called the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company.
The CCRIF SPC — established at the urging of the Caribbean Community in the wake of mass regional destruction from Hurricane Ivan in 2004 — aims to provide fast cash to disaster-battered jurisdictions.
After hurricanes Irma and Maria, for example, the facility distributed more than $20 million to Dominica; more than $15 million to the Turks and Caicos Islands; nearly $6.8 million to Antigua and Barbuda; and more than $6.6 million to Anguilla, all within the month of September.
The UK wants to require the VI to sign up for the CCRIF, as well as exploring “further disaster risk insurance products, especially for key public infrastructure.”
According to the VI’s draft recovery plan, government expects a total of $56.7 million from insurance payouts. In November, however, Dr. Smith (R-at large) noted that preliminary damage estimates to central government-owned buildings alone exceeded $100 million.
The only central government building with insurance was the CAB, which has protection up to $32 million.
At a “stakeholder consultation meeting” last week, Brodrick Penn, the chairman of the Disaster Recovery Coordination Committee, said that “elements of” the BVI Electricity Corporation, the H. Lavity Stoutt Community College, and the BVI Ports Authority also had insurance.
This article originally appeared in the Jan. 18, 2018 print edition.