Query

Please provide an overview of corruption and anti-corruption in Antigua and Barbuda, Barbados, Dominica, Guyana, Jamaica, St Lucia, and Trinidad and Tobago. In addition, please provide an overview of money laundering and natural resource governance.

Background: Democratic consolidation in the Commonwealth Caribbean

The Commonwealth Caribbean countries of Antigua and Barbuda, Barbados, Dominica, Guyana, Jamaica, St Lucia, and Trinidad and Tobago obtained independence from the United Kingdom in the 1960s. Upon independence, the political systems of these English-speaking commonwealth countries took on aspects of UK governance systems. (Girvan 2015). This has been seen in the region as part of an “independence pact” in which the fundamental features of the soon-to-be-independent states’ constitutions were “...supplied by the Colonial Office” (Girvan 2015:98).

Traditionally, political elites in power have been keen to implement political concepts from the UK and, in contrast to many other former colonies, there has been the political will to maintain close relations with the rest of the commonwealth (Girvan 2015). The colonial legacy in the Caribbean Commonwealth states has had significant impact on institutional architecture after independence. Over the years, the Crown Colonies in the Caribbean earned the rights to more local representation and more oversight mechanisms of executive powers (Lodge et al. 2015). At the same time, the degree to which civil service norms in the Caribbean primarily served local populations was restricted by the practice of colonial “trusteeship” (Lodge et al. 2015). Indeed, this legacy cast a shadow over civil service practice in the Caribbean post-independence era (Lodge et al. 2015). To some extent, civil administration during the colonial era was characterised by the needs of London over the need to develop a strong local bureaucracy in the Caribbean nations (Lodge et al 2015). At the same time, however, exported civil service norms created the conditions for independent public servants who conducted their work free from the interference of local politicians (a public service bargain) (Lodge et al 2015). After independence, this arrangement was subject to criticism from the new national political elites. These post-colonial elites saw public servants in the administration as representatives of the former colonial power’s interests and argued that the Caribbean nations needed their own civil service norms (ibid). Nonetheless, colonial-era public service bargains persisted, producing a range of positive and negative effects (see Lodge et al 2015). Perhaps chief among the positive ones is less corruption in a civil administration that has generally treated changing governments equally (Lodge et al 2015).

Colonial legacy notwithstanding, the Commonwealth Caribbean states have a consistent record of respecting basic civil liberties and democratic norms (Freedom House 2019). Even though the process may have been imperfect, the countries in question have managed the transition to independence and beyond with consolidated democratic institutions. According to Freedom House’s Freedom in the World (an index measuring civil liberties, political rights and the rule of law) (2019) the countries assessed in this paper score between 75 and 96 (out of 100), with Barbados, Dominica and St Lucia enjoying civil liberties and freedoms similar to those in Northern Europe. With a score of 75, 78 and 82 Guyana, Jamaica and Trinidad and Tobago are the three most flawed (though still robust) democracies in the region.

Yet, in spite of the relative success with which these countries have generally transitioned from colonial political economies to consolidated democracies, none are without their governance and corruption challenges (Barrow-Gilles 2011). This is evident from the World Bank’s Government Effectiveness Indicator58ce82ad0e4a (World Bank 2017) (measured on -2.5 [worst] to 2.5 [best] scale) which shows that the countries assessed in this paper perform somewhat more modestly. The highest performing country in the region is Barbados with a score of 0.8, followed by Jamaica (0.5), St. Lucia (0.3), Trinidad and Tobago (0.3), Antigua and Barbuda (0), Dominica and Guyana (both -0.3).

Similarly, on the World Bank’s Control of Corruption index (also measured on a -2,5 to 2,5 scale), Barbados is again the best performer with a score of 1.4, followed by Dominica (0.7), St Lucia (0.6), Antigua and Barbuda (0.2), Jamaica (-0.2), Trinidad and Tobago (-0.4) and Guyana (-0.5).

In relation to the generally good scores on the Freedom in the World Index, these numbers suggest that there is room for improvement in controlling corruption. While the Commonwealth Caribbean countries are still coming to grips with countering and preventing corruption in their countries, the region is subject to increasing pressure from locally based and transnational crime (Insight Crime 2018; Wallace 2017). There are also the spill over effects from the crisis in Venezuela, continuing uncertainty and high levels of cocaine production in nearby Colombia (Insight Crime 2018). Corruption and organised crime exist in a mutually reinforcing relationship, and, unless addressed, there is a significant risk that the region will experience higher levels of corruption (Wallace 2017).

Another issue which raises the stakes in attempts to counter corruption in the region is the discovery of natural resources. In Guyana, in particular, oil discoveries may lead to a massive expansion in state revenue, increasing the risks associated with corruption. Mismanagement of and corruption related to revenues stemming from the extractive industries have had detrimental effects on numerous state institutions around the world (Ross 1999; Acemoğlu 2005), including on Guyana’s neighbour, Venezuela. Continuing to counter corruption and implementing preventive anti-corruption reforms is key to strengthening resilience to these pressures.

Corruption and anti-corruption frameworks

Antigua and Barbuda

Extent of corruption

The Corruptions Perception Index (CPI) does not cover Antigua and Barbuda. However, on the World Banks Worldwide Governance Indicators Antigua and Barbuda scored 0.28 (on a -2.5 to 2.5 scale) on control of corruption; 0.0 on governmenteffectiveness and 0.4 on rule of law. This indicates that Antigua and Barbuda performs slightly worse than the region’s other micro-states, St. Lucia, Dominica, Bahamas and Barbados, though slightly better than the larger states covered in this paper such as Jamaica, Trinidad and Tobago and Guyana.

Of particular concern in Antigua and Barbuda is the country’s citizenship by investment (occasionally referred to as golden passport) programme (e.g. US State Department 2019). Antigua and Barbuda’s Citizen by Investment Unit is responsible for adequate screening of individuals seeking citizenship in return for investment. The scheme is among those on the high risk lists provided by the OECD (available at GAN 2018) with concerns over the screening process. For example, in 2018, an Indian billionaire wanted by Indian authorities for a large-scale fraud scheme in India, was admitted through Antigua and Barbuda’s citizenship by investment scheme (Investment Migration Insider 2018).

Corruption cases

Besides those related to the citizenship by investment scheme, Antigua and Barbuda has seen a few corruption scandals involving high-ranking officials in recent years.

In 2015, John Ashe, an Antiguan UN diplomat and a former president of the general assembly, was arrested in New York on charges of corruption. Ashe stands accused of receiving over US$1 million in bribes during his time at the UN in return for favours, particularly from a Chinese businessman (The Guardian 2015).

In 2009, Antigua was centre stage to the Stanford International Bank of Antigua US$7 billion fraud scandal (BBC 2012). The scandal involved multiple high-ranking officials, but to date none have been prosecuted (Freedom House 2018).

Anti-corruption framework

The legal anti-corruption framework of Antigua and Barbuda contains many of the necessary provisions but also a number of flaws outlined below.

One of the key pieces of legislation in Antigua and Barbuda is the Integrity in Public Life Act (2004). The act established a code of conduct for civil servants and the Integrity Commission as one of the principal anti-corruption institutions in Antigua and Barbuda. The law requires all public officials to declare all their assets to the Integrity Commission. The commission is also mandated to investigate and present charges of corruption (Integrity in Public Life Act 2004).

However, according to the Organization of American States, the Integrity Commission lacks the resources to undertake investigations into alleged acts of corruption and cannot guarantee anonymity and security for whistleblowers (Antigua Observer 2019). Out of eight corruption cases involving people in public office, the commission has not completed any investigations (Antigua Observer 2019).

Besides the Integrity in Public Life Act, the Prevention of Corruption Act (2004) criminalises the giving and receiving of bribes. It contains a number of provisions for punishing acts of corruption.

The Freedom of Information Act (2004) gives citizens the right to access official documents, with the exception of confidential reports. It also facilitates mechanisms through which documents can be obtained under the supervision of an information officer.

Bahamas

Extent of corruption

In 2018, the Bahamas scored 65 (out of 100) on the CPI, ranking it the 29th least corrupt country in the world. This is a slight deterioration from previous years, but still among the best in the region.

In a recent survey, 54% of respondents in Bahamas said they believed levels of corruption had risen in the past year (Campbell 2018), while 10% of Bahamians claim to have paid a bribe to a public service provider within the last year. The vast amount of these cases go unreported (Campbell 2018). Bahamians expressed particular concern over police corruption, with 28% believing that most or all police officers are corrupt (Campbell 2018).

Aside from high rates of bribery, Bahamians tend to express mistrust in rules of political campaign finance; 76% of respondents in the aforementioned survey agree that wealth has a disproportionate influence on politics, and that rich individuals can shape government policies to maintain their interests (Campbell 2018).

Bahamas still shows a high vulnerability to corruption, mainly due to a lack of institutional architecture and stagnating anti-corruption reform efforts. Transparency and integrity were particular themes of the current government’s campaign during the 2017 general election. In spite of this, the government has mostly failed in its promise to deliver on a number of promises to improve the legal anti-corruption framework (Hartnell 2019).

Anti-corruption framework

One of the key anti-corruption laws in the Bahamas is the Public Disclosure Act (1976), requiring legislators and officials to annually disclose their assets to the Public Disclosure Commission. A common criticism is that the act has never been truly enforced (see Citizens for a Better Bahamas 2018) and that the commission has often delayed or put off its work for opaque reasons (including, in 2017, a mould infestation in the commission’s offices, see Turnquest 2017). For a number of years, many legislators have failed to disclose their assets (without consequences). By 2019, most MPs have filed the necessary information (Turnquest 2019).

Another key legislation for anti-corruption efforts in Bahamas is the Freedom of Information Act (2017). The act provides the public with a right of access to records and information in the custody of public authorities. In April 2018, the attorney general announced that, the act would finally be implemented (The Nassau Guardian 2018), likely by May 2020 (Jones 2019b).

The Integrity Commission Bill, which was presented to parliament in 2017, could strengthen the legal and institutional framework to counter and prevent corruption. If implemented, the bill could provide the Bahamas with an independent body to investigate corruption allegations and take steps to prevent corruption – something which is currently lacking in the Bahamas. The bill also includes a code of conduct for civil servants and elected officials. Passing the bill could potentially provide whistleblowers with increased protection (Organization for Responsible Governance 2019).

The Ombudsman Bill (2017) will, if implemented, establish a Bahamian ombudsman’s office.

Even if these bills are adequately implemented, however, the Bahamas lacks political campaign finance regulations. The incumbent government has promised to introduce legislation to reform campaign finance. In January, the attorney general announced that preparations were ongoing to draft legislation (Jones 2019).

Overall, the success of Bahamian anti-corruption efforts will rely heavily on the ability of government and legislators to follow through on key legislations and implement them.

Barbados

Extent of corruption

Overall levels of corruption in Barbados are not very high. Barbados has a score of 65 on the Transparency International CPI, making it the 25th lowest in terms of perceptions of corruption globally. This indicates that Barbados is also among the best performers in the region when it comes to countering corruption.

However, Barbados has fallen in the CPI, and recent years have shown that it is far from immune to corruption (Madden 2019). Civil society organisations (such as the TI partner Integrity Group Barbados) and some politicians have therefore called for the country’s legal gaps to be closed.

Corruption cases

Problems with corruption in Barbados include a number of cases of irregular public procurement practices (Alleyne 2018). In one case, a construction contract worth equivalent of US$14 million – significantly below its real estimated value – was awarded without a public tender (Alleyne 2018).

In another scandal, Donville Inniss, the former minister of industry was charged in the US with laundering bribe money (US Department of Justice 2018). Inniss allegedly took US$36,000 in bribes to secure contracts for a Barbadian private insurance company and laundered the money through an American dental care firm (US Department of Justice 2018).

These scandals, some argue, are symptomatic of a more widespread issue of businesses and officials engaging in bribery (Madden 2019). The attorney general of Barbados, for instance, has reported that he regularly receives “private confessions” from individuals in the private sector, but that there are very few formal reports of bribery (Madden 2019).

Anti-corruption framework

For many years, the 1929 Prevention of Corruption Act was the primary anti-corruption law in the country. Since 2012, a law under the same name has been in the awaiting parliament approval. The 2012 Prevention of Corruption Act is modelled on the UN Convention against Corruption, and includes a more preventive approach to anti-corruption than its predecessor. By 2019, the updated act was still not implemented (Barbados Today 2019). Critics argue that a lack of political will has played a role in the delays (see Alleyne 2017).

In 2018, the government tabled the Integrity in Public Life Bill in Parliament. If adopted, the bill will establish a commission responsible for assessing the asset declarations of high-ranking officials and examine potential conflicts of interests. The commission will have powers to investigate and eventually arrest public officials on charges of corruption (Integrity Group Barbados 2019b). In addition, the bill makes some critical changes to Barbados’s anti-corruption framework. These include provisions for whistleblower protection and clarified definitions of what qualifies as corruption (Integrity Group Barbados 2019b). At the time of writing, the bill has still to be signed into law (Integrity Group Barbados 2019b).

There is not enough data available to further assess the efficiency of Barbados’s anti-corruption framework.

Dominica

Extent of corruption

With a score of 57 (out of 100) on the CPI, Dominica ranks the world’s 45th least corrupt country in terms of perceived corruption.

As a transhipment point for narcotics, Dominica is affected by the international narcotics market, and the laundering of drug money made outside of Dominica is a major concern (US State Department 2019). For this reason, Dominica is on the list of countries to be considered of “primary concern” by the US State Department’s Bureau of International Narcotics and Law Enforcement Affairs (2019). The presence of an unknown (but high) number of offshore financial institutions with no published beneficial ownership heightens this risk (US State Department’s Bureau of International Narcotics and Law Enforcement Affairs 2019).

For reasons explained below, Dominica’s citizenship for investment programme is also a risk factor for the country (ibid).

Integrity risks in citizenship by investment programmes

In 2014, an Iranian businessman, Ali Reza Monfared, became a citizen of Dominica through the country’s golden passport scheme and was appointed the rank of ambassador. Dominican officials claim that all the necessary background checks were in place prior to awarding Monfared with citizenship and ambassador rank. In Iran, meanwhile, Monfared was wanted for participating in the embezzlement of US$2.8 billion (Dominica Sun 2017). In 2017, the Iranians managed to get Monfared extradited (Al Arabiya 2017).

Monfared is not the only foreign-born person to be suspected of having bought diplomatic ranks in Dominica; a number of Dominica’s diplomats bought their position under the country’s citizenship for investment programme (Dominica News 2017).

Anti-corruption framework

The most important Dominican corruption related law is the Integrity in Public Office Act (2003). The act established the Integrity Commission as the body responsible for receiving declarations of assets from officials of high rank. The act was amended in 2015 and was mostly a reorganisation of the composition of the commission.

Unlike its neighbours, Dominica does not have a law to guarantee access to information (Freedom House 2018).

Guyana

Extent of corruption

Guyana ranks 93 out of 180 on the 2018 CPI, with a score of 37. The two largest political parties have traditionally followed ethno-racial lines (the People’s Progressive Party being Indo-Guyanese and the People’s National Congress being Afro-Guyanese). Various ministries and government bodies reflect this fragmentation, and accusations of ethnic favouritism, both in staffing and in policies, are common (Ellis 2018). The relatively high levels of corruption in Guyana should be understood in this context (Ellis 2018).

Following the discovery of millions of barrels worth of oil reserves, Guyana’s extractive industries are expected to boom in the coming years (Cohen 2018). With less than 1 million inhabitants and expected revenue from these new discoveries standing at around US$25 billion annually, the Guyanese state budget is likely to expand a great deal (Natural Resource Governance Institute 2018). Such a boom will put pressure on Guyana’s institutional capacity. In January, Guyana’s parliament passed legislation to set up a sovereign wealth fund, which is an important step towards ensuring more transparent resource governance (Guyana Times 2019).

Corruption cases

Some of the block awards (the right to exploit an area) have already come under scrutiny due to potential corruption. The States Assets Recovery

Agency of Guyana is currently investigating claims that corrupt practices were central to explaining how three awards were given to ExxonMobil and one to Tullow Oil (Energy News Bulletin 2019).

Anti-corruption framework.

The Integrity Commission Act assented in 1997 established Guyana’s Integrity Commission. The commission is responsible for receiving and assessing the asset disclosures of holders of public office. The act also establishes a code of conduct and provides the Integrity Commission with the provisions to undertake investigations into potential breaches of the code.

The Access to Information Act (2011) established channels to obtain access to information and documents from public authorities. It has, however, been criticised for containing provisions that allow officials to deny access without adequate explanations (Freedom House 2018b).

Another key piece of legislation, the States Assets Recovery Act (2017), established the State Assets Recovery Agency (SARA) as the autonomous agency mandated to recover assets obtained through illegal or corrupt means.

Guyana’s legal framework for countering and preventing corruption thus generally follows regional standards and blueprints.

In a key step to prevent Guyana falling into a resource-trap-like scenario, the country became a candidate country to the Extractive Industries Transparency Initiative in October 2017. As part of the initiative, Guyana currently follows a work-plan with three objectives: i) compile accurate information; ii) disseminate information widely to facilitate stakeholder consultations; and iii) promote timely reconciliation of information (EITI Guyana Working Plan 2019).

Jamaica

Extent of corruption

With a score of 44 out of 100 Jamaica ranks as 70 out 180 countries assessed on the CPI. Corruption in Jamaica is a widespread issue impacting multiple institutions (Freedom House 2018). On the Global Corruption Barometer (2017), 68% of Jamaicans thought that corruption had increased, and 21% had paid a bribe in the last 12 months when accessing a basic service; 43% of the population thinks the government is doing badly at countering corruption (whereas 42% think it is doing well).

A particular concern in Jamaica are the ties between organised crime groups and politicians. Gangs have been known to give favours to individual politicians, influencing the votes of those living within their territories to secure votes (Freedom House 2018).

Corruption within the police is another worrying feature of corruption in Jamaica. Police officers have been involved in various corruption and organised crime scandals, including drug trafficking (MOCA 2019). Bribery rates are also highest for the police (Global Corruption Barometer 2017).

Corruption cases

In recent years, Jamaica has seen a number of major corruption scandals. ln 2018, the minister of science, energy and technology, Andrew Wheatley was fired over extensive mismanagement, breaches of procurement rules, irregular spending and allegations of cronyism in the state-owned oil company PetroJam (DigJamaica 2018a). Some of this benefited the company National Energy Solution Ltd. which was an important part of Wheatley’s portfolio (ibid). There are also allegations that donations as part of PetroJam’s corporate social responsibility programme benefited political constituents of the incumbent government (see DigJamaica 2018a and DigJamaica 2018b).

In March 2019, the minister of education, youth and information was sacked amid allegations of misuse of public funds (RJR news 2019). The allegations came as the auditor general was investigating how the ministry awarded contracts. The investigation is still ongoing, but at least four laws appear to have been breached during the minister’s tenure (RJR news 2019).

Anti-corruption framework

The Corruption Prevention Act (2000) is one of the main laws criminalising corruption in Jamaica, containing provisions for punishing bribery and other acts of corruption. It established a Commission for Corruption Prevention tasked with receiving asset declarations from high-level civil servants and mandated to undertake investigations when suspecting corruption. The act formed the foundation of the enhanced Integrity Commission Act of 2017. This act establishes the Integrity Commission as Jamaica’s principal anti-corruption agency and enhances the mandates of the Corruption Prevention Commission. The Integrity Commission will thus seek to be a more “robust” anti-corruption agency. The agency will have some enhanced powers, compared to its predecessor (CAPRI 2017).

The Access to Information Law (2004) guarantees the public’s right to access upon request state documents that are not critical to national security.

In spite of a legal and institutional framework that is mostly adequate, application of their anti-corruption frameworks are largely not so. Severe resource constraints often impede the capacities to investigate and charge corrupt individuals (CAPRI 2017). Another key issue is a lack of political will in Jamaica to counter corruption (CAPRI 2017). As a result, Jamaica has seen a low number of corruption prosecutions (CAPRI 2017).

St Lucia

Extent of corruption

With a score of 55 out of 100, St Lucia ranks 50 out of a 180 countries on the CPI. One frequently raised concern is St. Lucia’s citizenship for investment programme. A citizenship request takes approximately 90 days to process (Transparency International 2018). This has earned criticism from Transparency International and Global Witness (2017), who argue that such schemes provide safe havens for corrupt individuals fleeing prosecutions in their home countries.

St Lucian authorities have faced some allegations of having too lax vetting procedures; the country is therefore featured on the OECD blacklist (see GAN 2018). In 2018, six individuals who had obtained St Lucian passports through the country’s citizenship for investment scheme had their citizenships cancelled. The cause for cancellation appears to be the involvement in acts that would cause harm on St Lucia’s reputation (St Lucia News 2018).

Corruption cases

Besides risks associated with its citizenship for investment programme, St Lucia has experienced a couple of scandals, exposing some level of corruption among the small island state’s politicians (Alphonse 2018). A criminal investigation is currently ongoing against Guy Joseph, a former minister, and Antonio Assenza, an American-Venezuelan businessman. The case involves bribery in the tendering for the redevelopment of the Hewanorra International Airport in Saint Lucia in 2009. Allegedly, Joseph took bribes in return for awarding contracts to Assenza’s firm (Alphonse 2018).

Anti-corruption framework

The Integrity in Public Life Act (2004) is St Lucia’s most important anti-corruption legislation. The act established the Integrity Commission which receives and assesses asset declarations from public servants. Public servants who fail to deliver their declarations on time can be fined US$50,000 or serve up to five years in prison.

The Public Procurement and Asset Disposal Act (2015) strengthens the public procurement procedures in key respects, providing guarantees that tendering processes are open. It also provides mechanisms to ensure that the government agents who procure do not have conflicts of interests.

St Lucia’s Freedom of Information Act (2009) guarantees access to information upon request. Request can only be denied in cases of national security.

Trinidad and Tobago

Extent of corruption

Trinidad and Tobago (T&T) has a CPI score of 41 and ranks 78 out of 180. This makes Trinidad and Tobago the country in the English-speaking Caribbean with the second-highest levels of perceived corruption, after Guyana.

According to the Global Corruption Barometer, 60% of Trinbagonians do not think that the government is doing a good job countering corruption. However, bribery rates are relatively low by regional standards. Only 6% of Trinbagonians reported to have paid bribes in the GCB (2017).

Organised crime and a high murder rate is among T&T’s big challenges. Scholars and analysts have widely expressed concerns that organised criminal interests are starting to exercise increased power and affect the configurations of governance on T&T (see Wallace 2015 and 2017). Gangs, in particular, have been able to tap into, and occasionally take control over, public works projects funded by the Trinbagonian Sovereign Wealth Fund (Gagne 2017). Fight over control of community development contracts between gangs have been known to drive some of the surge of violence in Trinidad and Tobago (Gagne 2017).

Trinbagonians find the police to be the most corrupt institution in the society (Global Corruption Barometer 2017).

Corruption cases

Apart from corruption in the police forces, Trinidad and Tobago has experienced a number of corruption cases involving high-ranking politicians. Most recently, Marlene McDonald, an MP, was arrested on corruption and money laundering charges (Loop News 2019). Earlier in 2019, a former attorney general and a senator were charged with breaching the Prevention of Corruption Act over fraud with legal fees (Ghouralal 2019).

In the last decade, there have been around 10 cases of abuse of office by Trinbagonian ministers, though most involve minor cases of abuse (see the T&T Guardian 2019). The most famous is the role of Trinidad and Tobago in the global FIFA scandal a number of years ago, in which Jack Warner, a security minister in T&T, played a central role (McMahon 2018). Warner is suspected to be involved in bribery, money laundering and fraud (McMahon 2018).

Anti-corruption framework

The Prevention of Corruption Act (1987) forms the basis of Trinbagonian anti-corruption legislation. It criminalises corruption, sets out definitions and penalties. It was amended in 2001 to establish better protection mechanisms for whistleblowers and establish a commission to investigate corruption allegations.

The primary anti-corruption institution in T&T, the Integrity Commission, was established with the Integrity in Public Life Act (2010). The commission receives and investigates complaints of corruption and allegations of officials in breach of T&T’s anti-corruption laws. The Integrity Commission enjoys political support across the political spectrum, though its funding fluctuates (Drayton 2015)

Two other important laws are the Freedom of Information Act and the Civil Asset Recovery and Management and Unexplained Wealth Bill. The Freedom of Information Act (1999) seeks to create transparency in government by providing the public with access to public documents. The Civil Asset Recovery and Management and Unexplained Wealth Bill (2019) was recently passed. They will be instrumental in recovering or forfeiting unexplained or illegally obtained assets from organised criminal groupings. The Transparency Institute of Trinidad and Tobago (the local Transparency International partner) has commended the bill as a “major step in the right direction” (TTI 2019).

Regional cooperation

The principal regional initiative against corruption is the Inter-American Convention against Corruption (IACC). The IACC has been signed by all 34 members of the Organization of American States (OAS). All signatories have therefore declared their intention to adopt a set of agreed-upon steps to prevent and counter corruption, including passing laws that provide provisions and establish the bodies capable of doing so.

The OAS has established a Follow-Up Mechanism for the Implementation of the Inter-American Convention against Corruption (known by its abbreviation MESICIC). MESICIC coordinates review rounds and releases assessments and recommendations for its member states. It also provides states with guidance on how to design and/or implement specific laws.

The MESICIC has a committee of experts responsible for reviewing the implementation of the IACC. The committee meets twice a year and typically reviews following a visit that includes consultations with various stakeholders (including civil society).

Currently, the MESICIC country implementation reports are available for Guyana, Trinidad and Tobago, Antigua and Barbuda and Jamaica at the MESICIC Country Report page.

In addition to IACC, most countries assessed in this profile (the exception being Barbados) have signed and ratified the UN Convention against Corruption. As such they have promised to undertake measures to prevent and combat corruption as well as to participate in international cooperation with this aim. UNCAC calls signatories to establish specialised anti-corruption bodies as well as to ensure transparency in politics, elections, public administration. All countries except Barbados are also subject to the Implementation Review Mechanism and are currently in the second review cycle, launched in 2015.

Regional risks and trends

Organised crime and drug trafficking

With its large maritime borders and a strategic location connecting the world’s largest suppliers of cocaine and other drugs to the world’s largest consumer nations to the north, the Caribbean sea is an ideal trafficking route (Insight Crime 2018). In the 1970s and 1980s, the Caribbean was used as an alternative smuggling route to those in Central America (Wallace 2017). In the following decades, Central America increasingly took over, and by 2010 just 10% of cocaine seizures headed for the US were in the Caribbean (Insight Crime 2018).

However, pressure from transnational organised crime in the Caribbean has been increasing in the last decade as increased instability has pushed for alternatives to Central America, and as the near-collapse of Venezuela has made the country a hub for a number of criminal activities, the Caribbean region again has come to house some of the primary transit routes for illicit flows of drugs and people (Insight Crime 2018). The Dominican Republic is the principal transit hub for these flows, and is usually the last destination before the US or Europe. The routes to the Dominican Republic from Venezuela typically go through the territories of Trinidad and Tobago, Barbados, St. Lucia, Dominica as well as a number of other small island states in the Caribbean sea (Insight Crime 2018).

The substantial influence of organised crime in the region is concerning given the growing evidence that high levels of transnational criminal activity drive corruption and state fragility (Burcher 2017). Organised criminal interests, for instance, may attempt state capture. This has been known to happen in some of the countries in the region not covered in this profile, notably the Dominican Republic, where organised criminal groups wield increasing influence over the state, with the result that they can often operate with impunity (Collado 2019).

Indeed, none of the states under assessment in this paper experience this level of criminality and impunity for criminals. Nevertheless, the distinct geographic features of the region – long coastlines and large maritime borders – enable the trafficking of drugs and people (Insight Crime 2018). However, corruption may very well play a role in enabling trafficking through the Caribbean. In Barbados, for instance, corruption among border officials has been identified by the country’s police as an impediment to capturing the large inflow of illegal guns (Joseph 2019).

Alongside the growth in illicit flows of drugs and people, the Caribbean region have seen steadily rising homicide rates over the last decade (Niles 2018). In Trinidad and Tobago, the links between corruption and gang violence are somewhat murky, but nonetheless present (Ellis 2017). Individual politicians had ties with- and interacted with gang leaders who often guise themselves as community leaders (ibid). These community leaders have often received government construction contracts funded by the redistribution programmes of the Trinbagonian Sovereign Wealth Fund such as the Unemployment Relief Fund (URF) (Ellis 2017; Vice News 2014;Townsend 2009). In the past the government has also led negotiations between gangs (ISSAT 2015). However, while the ties between gangs and officials in government are still believed to exist, they have weakened in recent years (ibid).

In Jamaica, the links between political corruption and crime have a long history (see, for instance, Harriot 2008), and the politics of the so-called garrison communities is one of the manifestations of the nexus. Garrison communities are areas controlled by gangs and have been so for decades. Often the “dons” of these communities have been active in politico-criminal patron-client networks. In return for securing the political dominance of their patrons, criminal gangs have maintained the right to run what are essentially mini states in the garrison communities (Edmonds 2016). In 2018, in response to rising gang violence, Jamaica had to use the military to patrol the streets in so-called zones of special operations. The operations have been seen by analysts as happening in the context of, and as an attempt to reverse, Jamaica’s politics of garrison communities (Albaladejo 2018).

Meanwhile, in Guyana, the lines between what constitutes gangs and what constitutes para-military organisations have at times been blurry, with different criminal groups having links to political parties, particularly the two main parties (International Security Sector Advisory Team 2015).

Competition over rents generated from various illicit flows of drugs and people have also driven high crime and homicide rates to some extent. On St. Lucia, security officials have noted that the island is experiencing the “fallout of transnational crime” (McDowell 2018). The minister for security has stated that he believes around 75% of St Lucian homicides are drug-related (McDowell 2018). It is an important transit point for drugs (and likely people), and the same has been argued for Jamaica (Freedom House 2018: Jamaica). Drug trafficking organisations have also established a foothold in Guyana and are believed to have developed connections to individuals in the government and in the security sector (International Security Sector Advisory Team 2015). There is evidence in both Trinidad and in Guyana that Venezuelan crime groups have inserted themselves into the local criminal ecosystem and seek to obtain increased control of trafficking routes (Insight Crime 2019a).

Corruption, particularly among border and security officials hinders the capacity of states in the region to efficiently respond to their territory being used for illicit trafficking purposes. The International Security Sector Advisory Team (ISSAT) notes that, though security sector corruption is by no means endemic in states such as Antigua and Barbuda, St. Lucia, Dominica and Barbados, corruption nonetheless persists in a way that generally impedes the efficiency of the state in countering illicit networks (ISSAT 2015). The US State Department (2019b: 195) likewise states that a lack of capacity in key institutions as well as corruption among officials enables Jamaica’s status as a significant hub for transporting cocaine from Colombia to the United States.

Thus, good governance and institutional integrity are essential components for an efficient response and to withstand the pressures from transnational and locally based organised crime. In the absence of efficient responses there is a risk that transnational criminal organisations gain a stronger foothold in the region and build ties to state security personnel, state administrators and politicians.

Money laundering

Money laundering is a regional concern, and each of these Caribbean countries experience money laundering in various ways. Trinidad and Tobago and the Bahamas, in particular, have notable deficiencies in their anti-money laundering and terrorist financing (AML-TF) regimes and are both featured on the Financial Action Task Force list of high risk and monitored jurisdictions (the list of 15 countries with significant AML-TF deficiencies). In addition, the European Commission (IP/19/781) has released a list of countries that it suggests should be listed as high-risk jurisdictions due to AML-TF deficiencies. These include the same two states in the Caribbean region. The Commission and the European External Action Service have also published a longer list of other high-risk countries to be assessed in more depth (see EU 2018). It includes Antigua and Barbuda; Barbados; Dominica; Jamaica and Guyana.

Another key list is the Basel Institute of Governance’s AML-TF Index that ranks countries from highest to lowest risk. The index features Jamaica in 30th place, Guyana in 35th, T&T at 64, St Lucia at 89 and Dominica as 101 (Basel Institute on Governance 2019).

In these countries, narcotics are believed to be the primary funds subject to laundering, but human trafficking may be a growing source as well (US Department of State 2019).

In the economies where the informal, cash-based sector is large, (such as in Jamaica where the informal sector is estimated to account for 40% of GDP), criminals enjoy rich opportunities for money laundering (Freckleton 2019). Criminals have been known to physically smuggle cash into Jamaica to exploit this opportunity (ibid) and tend to establish their presence in the majority of the cash-intensive industries (ibid).

In Guyana, vulnerable sectors include banking, real estate, currency exchanges, precious metal exchanges and various cash-based businesses (US Department of State 2019).

In Antigua and Barbuda, St Lucia and Dominica (online) gambling and a sizeable offshore sector (without disclosed beneficial owners) provides some of the greatest money laundering opportunities (US Department of State 2019). The chief concern, however, are the citizen by investment programmes (CIP) in these countries. Through a donation (or investment) ranging from US$100,000 to US$200,000 an individual can buy citizenship in these countries. Bringing in an estimated US$2 billion annually (Hares 2018), CIPs have proven to be a solid source of revenue for many small island states in the Caribbean. Incentives to maximise investments through the CIPs, however, may be at odds with the need to undertake in-depth assessments of the investors seeking citizenship. Indeed, the states in question tend to apply different screening processes, with some, such as Dominica and St. Lucia, being criticised for having no interviews with applicants (US State Department 2019).

The vast majority of applicants through the CIPs is believed to be individuals from the Middle East and the Commonwealth of Independent States, some of which might have been involved in corruption or criminality (US State Department 2019). It is not surprising therefore, that there are widely expressed concerns that CIPs are used for not only evading prosecution but for money laundering (USState Department 2019; see also The Caribbean Current 2015).

Another key regional issue is the risk of money laundering in the free trade zones (FTZs). FTZs are by nature exposed to various risks due to their often unique (and sometimes opaque) regulatory systems that can be exploited by criminal or terrorist organisations (see FATF 2010). This may also be an issue in the Caribbean, which houses a number of FTZs.

All the countries assessed in this paper are members of the Caribbean Financial Action Task Force (CFATF), the regional-style FATF organisation. The CFATF has worked to implement regional standards and advocated for strengthened AML-TF regimes across the region.

Jamaica has taken a number of steps to strengthen its AML-TF efforts, such as strengthening its fFnancial IntelligenceUnit, the Financial Investigations Division. In spite of this, Jamaica still has some weaknesses in its AML-TF regime, including an understaffed judiciary. Corruption too has a major role to play as the nexus between politics and crime is believed to weaken the political will to support high-profile money laundering cases. Politicians, public officials and business operators often act as the facilitators for laundering operations (Freckleton 2019).

Trinidad and Tobago has made headway in strengthening its compliance with CFATF’s standards and has improved upon a number of deficiencies identified in the 2015 mutual evaluation report. In general, therefore, T&T’s AML regime has improved significantly in recent years (FATF 2019), with measures to strengthen the FIU and granting access to beneficial ownership information (US Department of State 2019).

Guyana is likely one of the countries in the region with the most strategic deficiencies in its AML-TF regime. In the past, failure to pass legislation needed for adhering to global standards have led to the country’s blacklisting in the CFATF (CFATF 2018). Since then, Guyana has made significant progress, and political will has picked up, but vulnerabilities are still present in a vast number of sectors where regulations are not adequate (EU 2018; US Department of State 2019). In 2019, Guyana’s FIU referred 21 cases to the police (EU 2018; US Department of State 2019).

Dominica, St. Lucia and Antigua and Barbuda and Barbados have all achieved some progress in their AML-TF regimes in recent years (US State Department 2019), even if their golden passport schemes remain a systematic ML-TF risk.

Natural Resources governance

Countries that are rich in natural resources often experience a set of challenges. Corrupt natural resource-rich countries tend to be less democratic, less economically diversified and more fragile and prone to conflict (Ross 2014). These risks, however, can be averted, and countries can harvest the benefits of resources. Institutional arrangements that ensure good oversight of revenue collection and spending is key to managing these risks and ensuring that resources foster prosperity (Acemoğlu & Robinson 2012).

Trinidad and Tobago

In Trinidad and Tobago, natural resources make up almost 80% of total exports, contributes 32.1% to GDP, 30% of government revenue and to 3.4% of employment (EITI 2019a). Gas is the primary natural resource and the production of gas has risen from around 50 million cubic metres in 2011 to over 400 in 2016 (EITI 2019a). Revenues, however, have not followed this growth in the extractive sector. From 2011 to 2016, government revenue actually fell (EITI 2019a). Companies operating in T&T’s extractive sector are subject to the taxation regime set out in the Petroleum Taxes Act (EITI 2019a).

When operators in Trinidad and Tobago want to obtain concessions, they sign an agreement with the government called a production sharing contract. This sets out various terms and conditions for extraction and exploration, including the taxes that the company has to pay (EITI 2019a). Apart from a model contract that contains general conditions, the production sharing contracts are not publicly available and cannot be obtained through the mechanisms provided by the access to information laws of T&T (EITI 2019a). Apart from this shortcoming, the regulation of T&T’s resource sector seems to be satisfactory, and the Natural Resource Governance Institute (2019) commends the regulatory quality and accountability of the governance of the Trinbagonian resource sector.

T&T participates in the EITI, and has made a number of reforms in the recent years. These include a public register that discloses beneficial ownership of companies engaged in the extractive industries (EITI 2019a) and publicly available data on revenues from the extractive industries (see TTEITI 2019).

Revenues from the extractive industries in T&T either enter directly into the national budget (or the Ministry of Finance) or into the national sovereign wealth fund (SWF), the Heritage and Stabilization Fund (EITI 2019a). To ensure the efficiency of spending and avoid mismanagement, this fund is subject to regular audits by the auditor general. The IMF (2018) notes that, in general, the fund has a “sound governance structure” (IMF 2018:10) and that it has also disclosed its activities to the public to a satisfactory degree (IMF 2018:10). The Natural Resource Governance Institute largely concurs, giving the fund a score of 74 out of 100 (making it the 8th best managed SWF out of the 34 assessed). Likewise, the EITI marks the progress of T&T as “satisfactory”.

Major or endemic corruption in T&T’s SWF or extractive industries more generally is therefore not evident, and overall natural resources in the country are well governed. As mentioned previously, there is allegorical evidence of a link between gang violence, corruption and public projects funded by revenue collected by the Heritage and Stabilization Fund (see Vice News 2014). These issues, however, are not directly related to the management of the SWF or the institutional arrangements surrounding resource governance in general.

Guyana

As elsewhere on the South American continent, politics and resources in Guyana have a history dating back to colonial times, with gold mining and forestry being significant sectors prior to the current oil discoveries (Canterbury 2016). Canterbury (2016) argues that, as the Guyanese state privatised public enterprises, individuals with corrupt and criminal ties obtained some dominance in the industry. Between 2000 and 2015, he argues, the Guyanese state was subject to attempts at state capture and developed predatory, kleptocratic and criminal characteristics. Though the portfolio of economic activities was diversified to cover other natural resources, the control of state elites (in their private capacities) over the small-scale gold sector was central to this political economy (Canterbury 2016).

In recent years, however, major political changes have occurred, not least with the 2015 elections. Indeed, the government of Guyana has signalled its intention to establish a more transparent extractive industries (Government of Guyana 2018). This follows major oil discoveries and projections that Guyana may become one of the highest per-capita oil-exporting countries in the world by the mid-2020s (Natural Resource Governance Institute 2018). Some estimate that the GDP of Guyana could triple in less than a decade (Mills 2018). Revenues in a massively expanded state budget could be used to invest in social and economic infrastructure or to fuel corruption, create a Dutch disease type scenario and potentially fuel dormant tensions in Guyana.

Acutely aware of these risks, the government of Guyana has launched plans for establishing an SWF. The plans set out in a green paper (Government of Guyana 2018) have been commended by experts and advocates for being mostly aligned with the global standards for accountability and transparency, but some improvements can also be made (Bauer et al. 2018). Particularly positive is the fact that the Guyanese government will publish revenues and expenditures from its SWF on a regular basis (Bauer et al. 2018).

Civil society organisations have worked to ensure a common platform and agenda to put pressure for governance reforms in the oil sector (Stabroek News 2018).

Guyana applied to join the EITI in 2010 and joined the initiative seven years later. Upon joining, the multi-stakeholder group has adopted a roadmap for publishing beneficial ownership of companies operating in the extractive industries. The majority of objectives on the roadmap have been completed, and the remaining objectives are set to be achieved by spring 2020 (see Guyana EITI 2019). The Guyanese EITI website also publishes contracts with a number of large oil exploration companies. Guyana is yet to be assessed against the EITI 2016 Standard.

Not all recent developments are positive, however. The production sharing agreements signed in 2019 by the government of Guyana and ExxonMobil has recently come under critical investigation due to a number of oddities over provisions in their Production Sharing Agreements (Wilburg 2019). For instance, there seem to be some confusion over how income taxes will be paid and how royalties will scale as production ramps up (ibid). There have also been a number of irregularities in block awards, such as when four companies with no exploration track record were awarded exploration contracts (Wilburg 2019b). Indeed, there have been accusations that the individuals received block awards prior to even having formed companies (ibid).

The stakes are high, and the coming years will be a make-or-break moment for Guyana. The discovery of vast amounts of oil puts significant pressure on Guyana to improve governance and reduce corruption risks. Some scholars point out that it is not a given that Guyana can build the capacity and oversight mechanisms needed to avoid a resource curse scenario (e.g. Seefeldt 2019). For instance, establishing a sovereign wealth fund (a critical step) is one thing but exercising regulatory oversight to avoid overspending (official growth projections in oil-producing countries have a tendency to be too high) and ensuring that the national SWF works at an arm’s length from political interests (avoiding vote buying) are critical (Seefeldt 2019).