Monday, December 18, 2017

Spotlighting the OPV facts


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It is a fact that win, lose or draw, the country would have been handed TT$1.38 billion by the Offshore Patrol Vessel (OPV) supplier BAE Systems (BAE). This is what the Attorney General told Parliament on February 8, as he answered OPV questions posed by the Leader of the Opposition. This disclosure is one of five facts which the Government failed to highlight as they celebrated "success" in the OPV arbitration.

The first fact is that since 2009 the People's Partnership Government's main party, the UNC, has left a serious claim of corruption hovering over this OPV procurement, and implicitly the local and British governments which supported the government-to-government contractual arrangements. In October 2010, speaking on a private motion relating to the cancellation of the OPV contract, Opposition Leader Keith Rowley disclosed a 2009 letter that then UNC Senator Wade Mark, had written to the UK's Serious Fraud Office. In the letter, Mark noted his version of the events surrounding the OPV tender, and made this point: "Being fully cognisant that statistics reveal that the defense sector represents one of the top three sectors noted for bribery and corruption in the world and accounts for approximately 50 per cent of all corrupt transactions globally, it is against this background that I see it as both my civic and parliamentary duty to report the apparent irregularities and impropriety surrounding the transaction for the acquisition of three offshore patrol vessels."

In 2009, Senator Mark's conclusion on the UNC's comparison of the two OPV bids was that, "Despite the manifestly glaring disparity in price, VTI was awarded the contract by the Government of the Republic of Trinidad and Tobago." With the UNC in Government, this issue of price and supplier resurfaced after the termination of the OPV contracts, this time from the Government's National Security adviser and the Prime Minister. The two questions which remain are whether this still unsubstantiated allegation of "irregularities" and "impropriety" created difficulties for the country in the arbitration proceedings and the relationship with the British government, and whether the UNC intends to withdraw these allegations from the Hansard, it having become part of the record with Dr Rowley's reading of Mr Mark's letter in October 2010.

The second fact is that the Government has offered at least five different reasons for terminating the OPV contract. In his contribution to the October 2010 private motion, Dr Rowley recalled that the National Security Adviser had said after the contract cancellation that BAE did not have the "specifications" to supply the OPVs for which the Government contracted.

In the days following the disclosure of the termination, the PM offered a few possible reasons: first, "the OPVs could not assist the country in the fight against crime"; then, that the Government, "was also not in a position to fund the vessels", and third that, "money could utilised in ensuring law enforcement officers are adequately compensated for their services".

The question is whether the varying reasons offered by Government officials, including the previously expressed "irregularities" and impropriety, weakened the country's position in the arbitration, the AG having said in February 2012 that the claim against BAE had only two aspects, delay and defects.

The third fact is this question of delay. The OPV contract had a liquidated damages clause which capped a claim for delay at 22,000 pounds sterling for each day's delay. The previous government has said that in April 2010 it agreed with BAE to settle the matter of delay, with BAE providing the country with approximately TT$100 million in additional equipment, training and maintenance. If that is a fact, then the Government should disclose the basis of its claim for delay against BAE and advise whether the April 2010 agreement reached with BAE was one of the reasons why the Government decided it could not risk a decision in the arbitration. It would seem unlikely that the claim for delay could be successful if it was already settled, and would offer a reason for the Government's capitulation on that part of its claim.

The fourth fact lies in the impetus for settlement of the arbitration. In the AG's words months before the settlement announcement, "because the vessels have been sold by BAE, BAE is obliged to pay over the purchase price of 133 million pounds sterling to the Government. Even if the Government is unsuccessful, they (BAE) would have to offset the cost of what they have sold it for".

So, consistent with what I said last week, speaking in Parliament on February 8, in answer to questions on the arbitration, the AG noted that the country's claim was for the 143 million pounds sterling which the country paid to BAE, and additional costs that the Government incurred in the course of the contract. The AG then said that even if the Government lost the arbitration it would still be handed the money paid by Brazil to BAE for the three OPVs. So, in the AG's own words nine months before, the Government has come away with the money it would have been entitled to anyway, win, lose or draw, and, in fact, comes away with less than it has expended on the aborted deal.

The fifth and final fact is that midway through its term in Government, the People's Partnership has already disgraced the anti-narcotics and national security intelligence set-up with its aborted choice of leader; its State of Emergency yielded no "big fish"; its Financial Investigations Unit and implementation of anti-money laundering measures have yielded no prosecutions; and its cancellation of the OPVs has left the maritime risk high.

And we are only midway through this term.

Clarence Rambharat is an

attorney and a university lecturer