Cleaning Up The Mess

Governments are judged by the people not by an exaggerated and abhorrent daily use of the national TV as an instrument of propaganda but by their deeds

 Every year the report of the Director of Audit catalogues a tale of wanton squander and dilapidation of scarce public funds, of maladministration and a lack of rigorous stewardship of the affairs of the State. The galling fact of the past decades remains that whatever government is in place, no serious remedial actions are taken to tidy and tighten government administration and the financial management of ministries, state institutions and the public Exchequer.

To crown it all, the Director of Audit highlights in his 2016 report that 96 of the 106 parastatal bodies and state institutions he had examined had not submitted their accounts last year. It is common knowledge that the annual accounts of parastatal bodies and state institutions lag behind and are very often submitted with considerable delay. This has surreptitiously become the established norm. How can there be accountability without having up to date accounts as is the general practice in well administered institutions or companies?

Such a culture removes the onus of accountability from those in charge of these state institutions and bodies. No wonder that each annual Audit Report is a more scathing indictment of government’s numerous administrative shortcomings and the resulting significant waste of public funds.

Why should state of the art equipment bought at considerable costs to the Public Exchequer either stay idle or lie broken down through misuse? Why do stocks of medicine bought at great expense remain unused beyond their expiry date? Why are corrective policy decisions not taken to significantly reduce billions of Rupees spent in overtime?

Each Audit report depicts a distressing picture of unchecked waste of scarce public funds despite a context of an average budget deficit of -3.91% of GDP during the 2003-2016 period. Government interference, a poor system of checks and balances and a lax oversight of public finances have spawned a culture of licence with public funds. A truly competent government teamed up with an efficient public service top brass would have put an end to the enduring administrative mess highlighted in every annual Audit Report. It is basically the collective responsibility of government, the top executives, managers and employees of the public sector to assure as citizens imbued with a high civic sense, the highest standards of efficiency to eliminate every form of waste in a country having limited resources.

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Unfulfilled commitment

Government has lamentably failed the workers and the cane planting community

 The 2016 Audit Report also flags the fact that as at last year, Government had received a mere 722 arpents of the 2000 arpents the MSPA had committed to cede to Government in 2007. These were to be used for food crop production and the social needs of the Empowerment Programme. The report highlights that the delay in honouring the commitment made to the State had a negative impact on food crop production which has declined by 14% between 2012 and 2015. In contrast thousands of acres of cane lands have been converted into real estate developments and are being used to implement smart city projects in various prime locations of the country by the various sugar groups behind most of the projects.

Similarly, the Government-MSPA 2007 deal to provide 35% shareholding to planters and workers of the sugar cane industry in the diverse ventures of the sugar cane industry cluster such as electricity producing power plants and distilleries, etc., using the planters’ share of sugar cane by-products as feedstock is yet to be translated into reality, a decade later. The object was to ensure that the planters and workers can also benefit as the corporate sector from revenue streams from the diverse ventures in the sugar cane cluster to shore up their falling sugar revenue or make good their losses from sugar.

Iniquitous situation

This iniquitous situation and the long delay in the implementation of the agreed 35% shareholding in the various sugar cane cluster industries have taken a heavy toll. With falling sugar prices against a backdrop of rising costs and the absence of the safety net of fair supplementary revenues from the various ventures of the sugar cane cluster, a substantial number of cane planters have been forced to exit from the sugar cane sector. This process has been hastened by the fact that the payment obtained by the cane planters for by-products used in the sugar cane cluster has been paltry.

The evidence is telling. From a total of 24,181 in 2007, the total number of planters cultivating up to 9.99 hectares (24.69 acres) of cane land has dropped to 21,356 in 2009, at the end of the Sugar Protocol and to 18,680 in 2011 before collapsing to 14,807 in 2014. Some 13,500 are still battling through the 2016 crop in a context of low revenue not matching rising costs. Thus, in the space of nine years, some 10,680 cane planters or a substantial 44% of those in activity in 2007 have, despite all the government tom-tomming about safeguarding the future of the cane planters, exited from sugar cane production. They were unable to cover their costs from falling sugar prices after decades of dedicated commitment and service to the sugar industry from pre-independence days. The bulk of the 10,680 cane planters who left the sugar sector are small cane planters owning up to 1.99 hectares (4.92 acres) of cane land.

In parallel, the number of workers meant to benefit from the 35% shareholding has also been significantly reduced by some 7,000 workers who opted for the various Voluntary Retirement schemes.

By failing to urgently implement the 2007 agreement to provide 35% shareholding to planters and workers of the sugar cane industry in the diverse ventures of the sugar cane industry cluster, government has lamentably failed the workers and the cane planting community. Unless urgent actions are taken to implement the 35% shareholding agreement forthwith, the government will be disparagingly remembered for having ignominiously presided over the slow demise of the sugar cane planting community.

With the exit of some 10, 680 cane planters from the sugar industry since 2007, the industry’s present physiognomy has changed materially. Apart from a dwindling number of 13,500 cane planters owning up to 9.99 hectares, the industry comprises some 74 large planters owning between 10 to 99.99 hectares, about 31 large estates with land holdings of more than 100 hectares of cane land and four millers. Whatever policy decisions are taken by government in favour of the sugar sector such as putting up import duties to artificially hike the price of sugar on the domestic market at the expense of local consumers or imposing a mandatory use of ethanol in cars therefore principally benefit the corporate sector and the large planters. These contentious decisions further widen inequality.

Parity of treatment

Despite the rhetoric to safeguard the interests of the small sugar planters, government seems more preoccupied with framing policies in favour of the mandatory use of ethanol in cars or allowing more production of electricity from highly polluting coal instead of reducing, in the context of the COP21 undertakings, our high dependence on coal, the top source of carbon dioxide (CO2) emissions and the primary cause of global warming and air pollution in the world.

Furthermore, the government measures such as the molasses price mechanism or the sugar cane sustainability fund in respect of the payment for bagasse are skewed against the interests of the cane planter. The questionable practice of nominating persons who do not even own an iota of cane land to represent sugar planters on institutions of the sugar industry is equally flabbergasting and insidiously undermines the interests of cane planters.

It is therefore vital that there is a parity of treatment to ensure the survival of the dwindling planting community by implementing the long delayed undertaking to provide 35% shareholding to planters and workers of the sugar cane industry in the various viable and remunerative cane cluster industries of the future forthwith through a new investment vehicle. The SIT model has not worked. The sugar cane planters and workers should therefore be allowed to redeem their SIT shares and if they so wish be allowed to consolidate them in the new investment vehicle. Beyond paying lip service to the immense contribution of the workers and planters to the sugar industry, this shareholding should above all provide, after generations of diligent commitment to the sugar industry, a remunerative legacy for the future to the sugar cane planters and employees, who are historical partners of the sugar industry, which has been the backbone of the economy for so long.

Debt of gratitude

We must remember that the country owes a tremendous debt of gratitude to the downtrodden workers of the sugar industry and the sugar planters as the independence of the country was won through their arduous battles for their rights against difficult odds and their unstinted commitment to the cause of freedom. History will be the impartial and stern judge of events if urgent action is not taken to honour this long overdue commitment forthwith.

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 The case of Alvaro Sobrinho: Legitimate interrogations

 Why on earth should the front bench of government continue to meddle tooth and nail in the case of Alvaro Sobrinho when the mounting evidence above all dictates prudence and caution to stay clear of wanton risks?

 Despite the presence of a mentor, will the government persist in carrying on with such a quarrelsome mode of governance? The contentious stance of government begs so many questions. Why on earth should the front bench of government continue to meddle tooth and nail in the case of Alvaro Sobrinho when the mounting evidence above all dictates prudence and caution to stay clear of wanton risks? What’s the point of being on the defensive when the government should have unswervingly upheld the integrity of the financial services sector and resolutely backed the process of due diligence and investigation in the light of fresh information transpiring from the market? Shouldn’t the interests of the country remain paramount in all circumstances?

As a fundamental principle of prudence and common sense to preserve the standing of the financial services sector as a jurisdiction of repute, shouldn’t the regulators, the government and the country keep away from dealing with anyone mired in controversy? Why was the office of the President involved in applying in 31 instances for access to the airport VIP lounges from the PMO for Alvaro Sobrinho?

No one, let alone a very wealthy investor, should escape the test of objective and rigorous scrutiny by the regulators. Let the message that no one embroiled in controversy is welcome to operate in our jurisdiction showcase the high benchmarks and standards applied therein.

Governments are judged by the people not by an exaggerated and abhorrent daily use of the national TV as an instrument of propaganda but by their deeds. The mess in so many areas has first to be cleaned up. Misguided policies have to be urgently corrected. The art of Government is to be quietly efficient and to avoid futile controversies. It is about diligently building block by block and putting people and in particular the common man at the centre of policy making. It is also about humbly recognizing one’s personal limitations and owning up to and learning from one’s mistakes. Is it all too much to ask from the political class?

Tags:Alvaro Sobrinho, Director of Audit’s Report, Empowerment Programme, Government-MSPA 2007 Deal, Mauritius Sugar Industry, Mrinal Roy, Sugar Protocol, Voluntary Retirement Scheme