The CCJ’s consequential orders on the vote of no confidence in the Government and in the appointment of a GECOM Chairman

India may be blocking the Big Four (KPMG, Deloitte, Ernst & Young and PwC) from rendering audit services to clients in that country because of several major scandals involving entities for which they are the external auditors. These include political influence used by the Gupta family in South Africa to, among others, win lucrative contracts estimated at US$4.4 billion with the country’s rail and port company; allegations of misappropriation of more than US$4 billion involving a former Malaysian Prime Minister relating to the defunct State Development Fund 1MDB using mainly shell companies and layered transactions; Carrilion, one of the largest construction companies in the UK suddenly becoming bankrupt without prior warning signals from the auditors; and ‘gross failure in corporate governance, several conflicts of interest and even undue personal enrichment of some key personnel’ involving the Mumbai-based Infrastructure Leasing & Financial Services (IL&FS) resulting in the company defaulting in loan repayment. (https://www. moneylife.in/article/ilfs-scandal-sfio-uncovers-grave-irregularities-on-corporate-governance-and-financial-parameters-says-report/55831.html)

In the UK, for a second year in a row, all the major auditing firms failed to meet the quality requirements set by the Financial Reporting Council (FRC), including the Big Four, Grant Thornton, BDO and Mazars. They did not achieve the 90 percent target for the audits to be considered good or required limited improvement. According to the FRC, only 75 percent of the sample of audits of UK’s 350 top listed companies met the target overall, ‘as accountants failed to challenge information clients gave to them’ (https://uk.reuters.com/article/uk-britain-accounts-regulator/uk-watchdog-says-all-top-accountants-fail-audit-quality-test-idUKKCN1U42QN)

The above scandals raise the important questions about the presence of the auditors; whether due care was exercised in the conduct of the audits in question; and whether adequate risk assessments were carried out to provide reasonable assurance about the detection of transactions and events that pose a significant risks to the operations of the entities involved and to the achievement of their objectives.

On 24 June 2019, the Caribbean Court of Justice (CCJ) heard submissions regarding the consequential orders to be issued to give effect to its rulings on the validity of the vote of no confidence in the Government and on the appointment of the Chairman of the Guyana Elections Commission (GECOM). However, the court was told that the two parties involved – the Government and the Opposition – had been unable to reach an agreement on the way forward. The CCJ then requested that written submissions be made by 1 July 2019 after which it would issue its consequential orders on 12 July 2019.

Government’s proposals

The Attorney General presented two proposals for the CCJ to consider. The first was for an order to be issued for Members of Parliament (MPs) to return to the National Assembly to pass a resolution to extend the time to hold elections, thereby paving the way for the President to dissolve Parliament and fix a date for the polls. If, for any reason, the resolution is not passed, the President, after consultation with the GECOM, shall dissolve Parliament and fix a date for the elections in accordance with Articles 70(2) and 61.

The second proposal was for orders to be issued for (i) the registration of persons through  “house to house” visits as provided for under section 3(1) of the Elections Law (Amendment) Act of 2000;  and (ii) for elections to be held on the National Register of Registrants/Central Register as updated by the “house to house visits” pursuant to Sections 2 and 3 of the National Registration Act as amended by the National Registration (Amendment) Act No 31 of 2007; and (iii) for the Government, including the President, Prime Minister, Ministers and Cabinet to remain in office until a President is sworn in after elections have been held.

Opposition proposals

The Opposition’s proposals were for the CCJ to issue orders that: (i) general elections be held within three months of 18 June 2019 and for the President to appoint a date for such; (ii) the President and the Opposition Leader agree to a list of six candidates for GECOM Chairman in a week from 12 July; (iii) the President appoints a chairman within three days of the provision of such a list; and (iv) the official list of electors be used at the said elections pursuant to Order No. 15 of 2018 with qualifying date of 31st October 2018.

In relation to the appointment of GECOM Chairman, the CCJ had considered that the most sensible approach was, before a list is submitted, for the Leader of the Opposition and the President to communicate with each other in good faith, and perhaps even meet to discuss eligible candidates for the position of Chairman. The CCJ further stated that the Constitution anticipates that the Leader of the Opposition and the President ‘conduct themselves in a reasonable and responsible manner, eschew partisanship and seek the best interests of the Republic and the Guyanese people’. 

Following a meeting of the two leaders, the Opposition Leader submitted a list of eleven names for the President to consider. These names were extracted from the three lists that were previously submitted to and rejected by the President. One would have thought that a completely new list would have been prepared incorporating any suggestions the President might have made during their meeting and well as the names of persons from the previous lists that are likely to be acceptable by the President. Regrettably, this was not the case, as the latest list from the Opposition Leader remained contaminated with the names of some persons who in the past have shown political alignment or preference, and/or are closely associated leadership of the opposition party. This is against the spirit of what the CCJ had suggested.

In what appears to be a tit for tat reaction, the President submitted to the Opposition Leader a similar list containing the names of eight persons, some of whom are closely associated with the ruling party and were either former MPs or Ministers of the Government. The list also includes the name of Justice (Ret’d.) Patterson who the President had unilaterally appointed as GECOM Chairman and who resigned following the CCJ ruling that his appointment was in breach of the Constitution. The CCJ’s suggestion did not anticipate the President submitting a list of the names of persons to the Opposition Leader for inclusion in the final list to be submitted to him (the President). Rather, through the process of dialogue prior to the Opposition Leader making a formal submission, the President was also free to suggest names.

These two lists were referred to representatives of both parties for consideration. However, after several hours of meeting involving high-level officials from both sides, no agreement was reached on a final list of the names persons to be submitted to the President for consideration.

CCJ’s consequential orders

Last Friday, the CCJ issued its consequential orders to give effect to its rulings on the validity of the vote of no confidence in the Government; and on the appointment of GECOM Chairman. It will be recalled that the CCJ held that the 21 December 2018 vote of no confidence was validly passed in the Assembly and that the appointment of Justice (Ret’d.) James Patterson as chairman of GECOM was unconstitutional.

In relation to the former, the CCJ stated that that Article 106 of the Constitution provides the necessary guidance on the way forward. This requires the Cabinet including the President to resign. However, the Government shall remain in office, and elections are to be held within three months or such longer period as the National Assembly may determine by the votes of least two-thirds of all elected members of the Assembly. The CCJ made it clear that it is not the role of the court to fix a date for elections, and that Article 106 should be followed. It expressed the view that, ‘it is expected that the Government will continue as a caretaker for the affairs of the county but that in light of its caretaker role it should be restrained in the use of its legal authority’. 

As regards the appointment of GECOM Chairman, the CCJ noted that Justice Patterson has since resigned and therefore it is no longer necessary for a consequential order to be issued. However, it expressed the view that the appointment process of a new Chairman should be embarked upon with ‘the utmost urgency’ in light of its decision in the no-confidence motion case which has triggered the need for fresh general elections.

Government’s reaction

The Government has indicated that it accepts the CCJ’s final ruling on the two matters and on the interim status of the Government; it would exercise restraint in the exercise of its legal authority; and would limit its activities to the routine management of the country. However, it is insisting that the Cabinet remains in place in order for the Government to provide public services, a position for which opinion is divided, especially considering that the Assembly had already approved the 2019 budget which is currently being executed in conformity with the Fiscal Management and Accountability Act and the relevant sections of the Constitution.

On the question of holding elections within three months, the Government is insisting that GECOM has to advise the President on its readiness to do so. In this regard, it has expressed confidence that the appointment of a new Chairman, which is an important step in the process, would take place within the next few days. It has also emphasized the need for the elections to be seen to be credible, which in its view is ‘dependent on, in part, the integrity of the Official List of Electors’.

Opposition’s reaction

Following last Friday’s final pronouncements by the CCJ, the Opposition Leader wrote to the President offering to meet over the weekend to discuss the appointment of the Chairman of GECOM. Although it was reported that a response was received, up to the time of writing a decision has not been made when such a meeting would take place. Meanwhile, the Opposition continues to insist that it would not support a resolution to extend the date for holding the elections, contending that the Government has not been acting in good faith following the 21 December 2018 no confidence vote.

Conclusion

It has been seven months since no confidence vote was passed in the Assembly. Against the advice of key stakeholders including the international community, the Government has gone full circle in its attempts to challenge the Speaker’s ruling and to have it overturned through judicial intervention. We are now back to the evening of 21 December 2018.

The enormous amount of resources, time and energy expended to mount the challenge could have been avoided and should be considered a significant waste of public resources. They could have been beneficially used otherwise towards the management of the affairs of the State. This is not to mention the unnecessary tensions that have been created in the Guyanese society as well as their polarizing effects.

We eagerly await the appointment of a new GECOM Chairman in the coming days.