St Louis Gate, FATF & ICAC

Editorial

Readers will recall that what is today known as the St Louis Gate scandal came to light following the issue of a public communiqué by the African Development Bank (ADB), dated 8 June 2020, that is 16 months back, wherein its Office of Integrity and Anti-Corruption concluded that Burmeister & Wain Scandinavian Contractor (BWSC) had financially rewarded members of the Mauritian administration and others, for providing access to confidential tender-related information and resulting in BWSC winning in 2015 the Rs 4.3 billion contract for the CEB’s St Louis power plant redevelopment project.

This is a matter of shame for the country, especially coming as it did in the wake of the decision of the European Commission to place Mauritius on the list of countries with strategic anti-money laundering deficiencies. Readers will also recall the embarrassment endured by ICAC, which had started an investigation into this matter, following the ADB’s refusal to pass on to it copy of its report on the St-Louis investigation, and redirected the ICAC to BWSC, which was also in possession of a copy of its investigation report. The ADB’s position vis-à-vis the ICAC’s request for information and its refusal must have surely been taken note of by the EU.

Given the seriousness of this case involving a powerful local energy parastatal body and an international funding agency like the ADB and its implications for the country both nationally and globally, the least that one could have expected was for ICAC to expedite its investigation into the matter. True, some officials, intermediaries and representatives of a PADCO, the company involved with the Danish firm BWSC, and whose employees would have allegedly bribed Mauritian officials, have been charged. True also that in light of the summary report which was made available to the Prime Minister by the ADB’s Integrity Oversight Committee in relation to the CEB-BWSC tender dealings, wherein Ivan Collendavelloo and others have been named, the latter lost his job of Deputy Prime Minister. But many questions however remain unanswered as regards the CEB- BWSC tender.

Now former Energy minister and presently energy consultant Prof Kasenally has been arrested by ICAC this week, with the former’s name having been retrieved from a server and who would have allegedly made available confidential information relating to the CEB tender that would have helped Burmeister & Wain Scandinavian Contractor tailor its winning offer for the St Louis power plant redevelopment project against monetary reward. Prof Kasenally has, as to be expected, pleaded his innocence which he is expected to substantiate when the matter comes to court. But he also linked his arrest to the ongoing FATF’s inquiry into the Mauritius jurisdiction’s strategic anti-money laundering deficiencies, stating that he is just a “collateral damage” in an inquiry that is being accelerated through pressure to respond to the FATF onsite money-laundering audit conducted a fortnight ago.

All this does not bode well for the country’s reputation at a global level, especially in light of the European Commission’s decision to place Mauritius on the list of high-risk jurisdictions. And also, at a time when funding agencies will be scrutinising our response to what appears to be a clear-cut case of corruption involving a “conspiracy” to thwart the public procurement process and in particular by resorting to a convenient emergency procurement umbrella. The long time that our investigative agency has taken to go to the bottom of this matter and the fact that no actual trial has even started after more than 16 months, does not speak well for the country’s commitment to handle white collar crime independently of political proximity.

It bears repeating our earlier query of whether it had been the right thing to assign ICAC to conduct the inquiry into this matter given its unenviable track record in investigating cases involving people in or close to power. The absence of even a regular briefing on high-profile or highly mediatised scandals contributes to the aura of omerta, susceptible to whip up suspicious motivations and an atmosphere of impunity for high public officials and their political masters. The only alternative it seems would have been a fully independent Commission of Enquiry with broad terms of reference and credible assessors, but that approach, again, has its own shortcomings. And we know the underlying political dimensions to grand Commissions of Enquiry (former President Gurib-Fakim, Britam, Betamax. Souillac hospital deaths…) or lesser Fact-Finding Committees, that all seem designed to provide material for punching-ball politicking.

The sad truth is that unless international organisations of weight man the whip in the oversight of fraudulent, corrupt, money-laundering activities, it is far too convenient for government to be content with the desultory level of control which our regulatory and investigative institutions enjoy, basking, as it were, in the certainty that they will not be taken to task in our local setup. Whether the FATF/ESAAMLAG audit has provided a stinging prod or a wake-up call we may never know, but what is certain is that further delays in the painful extraction from the notorious grey and black list of the IMF/FATF and the EU would be most unwelcome at a time when the country wants to project itself as a clean and safe destination for travel and business.

* Published in print edition on 24 September 2021