Cox: ‘Change Is Not Pending, Change Has Come’

Mr. Speaker, today I rise to introduce for the Second Reading the Bill entitled “Good Governance Act 2012”.

Mr. Speaker, Good Governance is not just about passing legislation, it is about changing a culture, a culture that in many cases has existed for decades. I use decades with deliberate effect as notwithstanding what may be asserted to impugn the integrity of this Government.

In fact Mr. Speaker, Honourable Members may recall that in 2005, the former Auditor General Mr. Larry Dennis had reported that one third of his unaddressed recommendations referred to annual reports from 1998 and prior. He noted and I quote: “Most recommendations stem from observed failures to comply with legislation, poor accountability, and absent or inadequate management processes and accounting controls.”

The Auditor General has been equally critical of this Government. However, we refuse to rely on the excuse that “they did it” as a recipe for inaction. We have continued to raise the bar and to use our best efforts to improve our accountability and governance framework. So good governance is a work in progress.

Where there is a continuing and real need then amendments will be made. That helps to ensure the legislation is dynamic and relevant. As Dr. Martin Luther King: “The time is always right to do the right thing”

Mr. Speaker, Honourable Members may recall that I have stated publicly on a number of occasions that the Good Governance Act 2011 was only the first phase in the tabling of measures to enhance Good Governance and I would be tabling the second phase in this Parliamentary session.

To quote Neale Donald Walsch: “Keep moving. Don’t stop. But don’t rush; Don’t race around. Sure and steady gets you there every time”. Mr. Speaker, we are phasing this legislation to ensure that we achieve the highest standard of good governance and that we keep pace with international standards.

However legislation is not the only tenet that must be updated. Our approach to Good Governance is multi-pronged. We are currently updating the Ministerial Code of Conduct; Financial Instructions; the Civil Service Code of Conduct; the Procurement Code of Practice to ensure that Good Governance is applied consistently in all of the documents that govern conduct in the public service.

We are applying these rules right across the public sector to all public authorities, and at all levels, to ensure that all public servants and elected officials are aware of the rules that they must adhere to.

Many will applaud this and say that it should reach back in time. Perhaps so, but if such could be done, the retroactive clause would have to reach back many, many decades and generations into the last century and then some.

Clearly, it would be false to say that in the past persons in the public sector have not been held to account. There is a scale of increasing sanctions under Financial Instructions (including surcharge and dismissal) and these have been applied and continue to be applied where there is evidence of wrong doing

There have been public prosecutions prior to the Curtis and Burrows cases, and in an instance not so long ago, a civil action for asset recovery was launched in local courts. (the Harrison Isaac case).

A number of instances of financial malfeasance end in resignations when officers are confronted with the facts of their wrong doing. This has been a deliberate set of actions taken in recognition that protection of the public purse is a core function of Government.

Change is not just pending – change has come and the Government is determined to make a difference in its operating procedures. Regrettably, such controls cannot, and throughout history have not, prevented dishonesty nor cured dishonest individuals. Indeed, Bermuda has witnessed a bevy of different cases of dishonesty in retail, banking, within families and even with fiduciaries including lawyers and persons in positions of trust.

The internal control regime has changed and now there are criminal offences created under the Public Treasury (Administration and Payments) Act for failures to heed financial codes of practice in Government.

Going forward the sanctions for serious lapses in adherence to internal controls have been increased and censures will occur in the public eye when serious lapses are detected and there is a conviction in the Courts.”

Mr. Speaker, there are those who assert that changes are made because of the lapses raised during this Government’s tenure. This is not true. These are changes that should have been addressed decades ago. The Ministerial interest disclosure is one such change.

Though, in the past, when Bermuda was run like Bermuda Inc. it went unquestioned that public service in the Parliament was so one could benefit one’s private business enterprises. It was not that long ago that prior administrations were seen to benefit directly, to a considerable degree, from Government contracts, whether from leased premises or supply of goods and services. Who you knew gave you benefits.

Mr. Speaker, this was typical of the two Bermudas – the Bermuda for the haves, and the Bermuda for the have-nots which is where Mr. and Mrs. Everyman Bermuda reside. This Government’s focus is to promote fairness and to provide opportunities for Bermudians. This Government stands up for Bermudians.

In fact, contracts are now spread more evenly amongst a number of businesses. This was the impetus behind the Construction Incubator initiative. Clearly this was also the thinking behind the Office of Project Management and Procurement. This Government is institutionalising fair dealing

Mr. Speaker, this Bill introduces legislation to provide a remedy to Ministers who may have a conflict of interest relating to applications and appeals that they may be required to consider; provides additional protection for whistle blowers; amends the Public Treasury (Administration and Payments) Act 1969; the Audit Act 1990; the Internal Audit Act 2010 and the Employment Act 2000.

Mr. Speaker, you may ask what are we doing to improve our governance framework? Sure and steady progress does not always make the news. Good news, too often, is not considered newsworthy. However Clive S. Lewis states: “Integrity is doing the right thing, even when no one is watching.”

Mr. Speaker, much work is currently underway to tighten up our control and governance framework. In particular, the Internal Audit Department has been extremely busy performing audits and producing reports. These reports will be acted on. You will know, Mr. Speaker, that the section 13 (2) of the Internal Audit Act 2010, provides that internal audit reports can only be disclosed internally or, where necessary, shared with the Auditor General.

One of the mandates of the newly installed Performance and Service Delivery Unit in the Cabinet Office is to review the Internal Audit reports and follow up with the relevant Permanent Secretary and Department Head as may be necessary.

The establishment of the new unit was one of the recommendations of the National School of Government in its February 2011 Report to me as Premier. The goal was to strengthen the ‘centre of Government’ by providing capacity to assure efficient delivery of services, continuing improvements in the quality of government services, and enhanced compliance.

I spoke of the recommendations in the debate of the 2011-12 National Budget. That unit is now in place and is operational.

Permanent Secretaries and Department Heads will remain accountable for the action steps required by the Internal Audit reports.

However, where progress is not being made quickly enough, the Performance and Service Delivery Unit of the Cabinet Office will engage to assist the relevant Department to implement any recommendations made by the Internal Audit Department.

Mr. Speaker, procurement and capital projects often incur the highest risk of waste and inefficiency. Accordingly, the Office of Project Management and Procurement have been charged to have oversight of all procurement, including those in quangos to ensure consistency in the standards applied by public authorities.

In the near future, there will be mandatory training for all accounting and purchasing officers to ensure that they understand the rules of engagement given the legislative changes. Public servants are gatekeepers for good governance and the protection of public assets. It is their job to know the rules and procedures.

Therefore, once the training has been completed and all relevant documents placed at their disposal for continued reference, they will have the safeguards to discharge their responsibilities with assurance and confidence. The standard of zero tolerance to breaches of compliance will be applied with rigor. There will be no basis for any claim that “I did not know or I did not understand the rules and the changes in the law.

Mr. Speaker, you will recall that I indicated that the Office of Project Management and Procurement [OPMP] will be developing a website where they eventually will be able to publish tenders. This will provide greater access and opportunities to interested persons.

The website will allow business persons to register so that they are automatically notified of requests for tender in the categories where they may be eligible to submit a proposal. The OPMP is also partnering with the Bermuda Economic Development Corporation to assist businesses to navigate through the process of submitting tenders.

Mr. Speaker, we are also using a new evaluation process which is designed to reduce the bias towards the larger firms and provide more opportunity to smaller companies, specifically those whose staff are mainly Bermudian. In the past, evaluations were geared to awarding contracts based on cost, which comprised 70% of the weighting. The new evaluation is weighted, as follows:

• 50% weighting to the bidder’s qualifications and experience to meet the requirements of the job; having the resources and ability to deliver the requirements of the tender on time; have positive references that can attest to the quality of their work; and a good track record in health and safety. Suppliers bidding for a government contract for the first time will not be penalised for failing to score in the experience category. Instead referees will be used to build up a picture of competence and new businesses will be awarded an average points score so they have the ability to prove themselves;
• 30% weighting to the tender price; their stable financial position and are not in arrears in the payment of employment tax, social insurance and health insurance;
• 20% weighting to the number of the Bermudian staff and their programmes to training and development of Bermudians. Extra points are given to any supplier who has successfully completed the Construction Incubator programme – and we encourage all small businesses to take part in this.

Mr. Speaker as we focus on this Good Governance Bill, let us examine its underlying principles in some detail.

The Framework

Through the Good Governance Act the Government of Bermuda is bringing forth specific measures to help strengthen accountability and increase transparency and oversight in government operations. The Government is legislating its commitment to fairness, openness and transparency in the procurement process.

There is the inclusion of integrity provisions in all government contracts (anti-collusion provisions).There is a Procurement Director to review procurement practices on an ongoing basis.

In carrying out its programs and providing services to Bermudians, the Government of Bermuda is a significant purchaser of goods and services in the country. It is therefore important that the bidding process for government contracts be seen as fair, open and transparent.

The Act includes an overarching statement of principles about procurement that commits the Government to promoting the fairness, openness and transparency of the bidding process.

It will require that action be taken to preclude collusion in the procurement process. The Director of Procurement is charged with reviewing procurement practices across government on an ongoing basis to ensure fairness and transparency, and to make recommendations for improvements.

Bermudians have said to us that they want us to take increased measures to improve how we do business. They want Government to be accountable. Today we continue our efforts to honour this people’s directive by a renewal of our commitment by way of social contract with the people and by:

• requiring that those who hold positions of public trust be held to certain standards;
• providing real protection for whistle-blowers who show great courage in coming forward to do what is right.
• continuing to strengthen the capacity and independence of those public officers such as the Office of the Internal Auditor and the Office of the Auditor General, the Office of the Ombudsman, which hold the Government to account; and
• increasing the transparency within public bodies, including municipal bodies.

Just this week, we saw comments from former XL CEO Brian O’Hara. He states what we all know-companies choose to do businesses in jurisdictions that have a solid reputation. That is the tipping point for companies-a sound regulatory framework and a credible reputation.

Reputation brings financial benefit to countries- make no mistake. Reputation is key to governments.

Mr. Speaker, we are introducing a solid piece of legislation with a clear plan of action. It is about making everyone more accountable- from the Premier to parliamentarians, from public-sector employees to all Bermudians and businesses and public authorities that receive government funding.

Bermudians expect no less. Accountability is the cornerstone on which Bermuda’s system of responsible government rests.

This is the assurance to Parliament and Bermudians that the Government of Bermuda is using public resources efficiently and effectively and that it answers for its actions.

When you have a culture of accountability, roles and responsibilities are clear. No surprises, no ambushes- no gotcha mentality. There is certainty as to the rules of engagement. People know what is expected of them and are prepared to be accountable. Also there are consequences in cases where rules are knowingly broken.

A high degree of transparency makes government more accountable and is key to contributing to Bermudians’ trust and confidence. This brings issues of accountability, transparency and integrity to the forefront of public discussion and debate. The debate is healthy so long as it does not get bogged down in scurrilous and harmful supposition and malicious innuendo, libel and slander. Too often, we prefer a good story rather than to focus on the facts.

This legislation builds on existing legal and procedural practice. It also sets out a roadmap for more accountable, open and ethical government. Even more importantly the Government has made sure that this legislation strikes an appropriate balance between oversight and flexibility.

In crafting this framework, it uses both legislative and non-legislative measures. Action has been taken to see to it that the changes proposed do not discourage individuals and organisations from doing business with government. Measures have been taken to simplify and streamline rules so that government functions more efficiently. This is no small undertaking.

Mr. Speaker, specifically, this Bill is intended to achieve the following:

• Provide an option for a Minister to recuse themselves. Where a Minister considers that they have a conflict with an application, they can advise the Premier of a conflict and request another Minister to make a decision. Currently there is no such provision available to Ministers to allow them to excuse themselves from hearing an appeal where they may have a conflict of interest.
• The Bill extends “whistle blower protection” to persons that are not covered currently in the Employment Act by creating an offence of terminating a contract with or withholding payment to a “whistle blower” due under a contract. This would include vendors, contractors or employees not currently covered in the Employment Act;
• The Bill exempts the Financial Intelligence Agency [FIA] from the list of persons to whom a whistle blower can make a protected disclosure. The FIA’s legislation does not provide for them to act on information obtained directly from whistle blowers;
• The Bill creates an offence of collusion whereby parties, seek to improperly exert influence in order to obtain a contract.
• The Bill increases the time limit in Public Treasury (Administration and Payments) Act 1969; the Audit Act 1990; and the Internal Audit Act 2010, to provide that a prosecution for an offence under either Act, be brought within three years. This overrides Section 452 of the Criminal Code (time limits for commencement of proceedings for summary offences) which provides that summary offences must be brought within six months and no more than a maximum of twelve months.

Mr. Speaker, the principle of Good Governance is a goal that is shared by jurisdictions worldwide. I would commend for the reading of Honourable Members’ a report that has recently been released by Transparency International entitled: “Money, Politics, Power: Corruption Risks in Europe”. This report is an assessment of governance in countries within the European Union.

It does not stop there. In April 2012, the US Assistant Secretary of Commerce addressed the Organisation for Security and Cooperation in Europe [OSCE] to provide a review of the work being done by the United States and to discuss the OSCE’s role in enhancing Good Governance and Transparency as a core element in promoting economic development.

Mr. Speaker, all progressive governments are focusing on making the same strides as this Government did in establishing the Office of the Ombudsman; the Internal Audit Department. In addition, we introduced the Public Access to Information legislation, anti-money laundering and proceeds of crime legislation.

We also established the Financial Intelligence Agency and introduced the Open Budget process; as well as the other measures of good governance. These measures open government to Bermudians and for Bermudians.

Mr. Speaker, the Good Governance Bill is about strengthening accountability and integrity and the systems within government and other public authorities. It is also about reassuring Bermudians that the Government of Bermuda is working in their best interests.

This Act will do the following:-

It will change the way politics and business works in Bermuda.

It will not be who you know that counts but what you bring to the table, as a provider of services whether to businesses, public and municipal authorities or government. The reforms will bolster the integrity of the democratic process and raise the bar on ethical conduct. The enhanced framework will put the focus on the public interest at the heart of government decision-making.

It will enhance Parliament’s role.

The strengthened accountability framework provides parliamentarians are in a better position to hold public and municipal authorities, including government to account on behalf of Bermudians. The US Government under its legislation is said to be bringing an action against a large US corporate entity- for corruption.

It will make Government more open.

Procurement rules are going to be more transparent without inhibiting access to government contracts. The aim is to expand the opportunity for businesses and individuals in providing goods and services. The people through expanded website access will be better informed as to what is being tendered and will also be able to be assisted in how to properly submit tenders. Government is there to serve.

Mr. Speaker, I now move that the Bill entitled the “Good Governance Bill 2012” be read for the second time.

Read More About