Turks and Caicos Islands: Government Response to the Committee's Seventh Report of Session 2009-10 - Foreign Affairs Committee Contents


UK Government assistance to tackle corruption and maintain standards of good governance in Overseas Territories

The primary measures for ensuring good governance are set out in the Constitutions, local laws and institutions of the Overseas Territories, all of which are overseen by the Governor.

Constitutions and local laws

Good Governance has been a key element in the modernisation of the Territory constitutions over the past decade. Each new Overseas Territory constitution is the result of negotiations between the UK Government and the representatives of each Territory, the circumstances, speed of development and needs of which are different. The provisions of each constitution are not identical, although there are many similarities.

During the latest round of constitutional negotiations launched in 1999, the UK Government ensured that relevant checks and balances were included, taking into account the size and structure of the Territory.

Governors support and encourage Territory governments to pass legislation giving effect to any new elements of their constitutions.


The FCO is responsible for coordinating the UK Government's work to promote good governance in the Overseas Territories. This includes ensuring the transparency of decisions by the executive and legislature, in line with rules and regulations, and the accountability of government to the public and the legislature. It is relevant in all areas of government e.g. provision of services, award of contracts, allocation of benefits; and in the financial sector in particular.

The Government works to ensure that government institutions and the legislatures in the Overseas Territories, as well as the private sector and civil society organisations, are accountable to the public and, where appropriate, to their institutional stakeholders.

Role of the Governor

Governors have an important role to play to encourage accountability and to bolster the wider civil society. They are alert to the possibility of situations involving corruption and poor governance occurring in their Territories. Governors in the Caribbean Overseas Territories also closely monitor events which could impact on good governance of the Overseas Territories across the region. When they receive information or allegations of wrong doing, or when they have reason to suspect wrongdoing, they are expected to take appropriate action immediately.

Overseas Territories Specialist Advisers and FCO support

The FCO funds a number of advisers in the Overseas Territories who support Governors on a range of issues. On matters related to corruption and good governance in particular, Governors in the Caribbean Overseas Territories can turn to the regional Law Enforcement Adviser and the Prison Reform Co-ordinator (both based in Miami), and the Overseas Territories Financial Services Adviser (based in Barbados). Territories in the South Atlantic have their own Law Enforcement and Prisons Advisers. Guidance and support is also available from the FCO as necessary.

The FCO has been monitoring the Territories' fiscal performance closely and has provided technical assistance where a need has been identified. In partnership with territory governments, the FCO undertakes regular economic analysis visits to the territories of Anguilla, British Virgin Islands, Cayman Islands and the Turks and Caicos Islands, accompanied by experts in public financial management. Each visit report identifies key risks and provides recommendations on how fiscal performance could be improved. The engagement of UK Government officials and experts in this work has been substantially increased to address the impact of the global recession on Territory economies and public finances.

Overseas Territories Programme Fund

The FCO makes available finance from its Overseas Territories Programme Fund (OTPF) to help promote good governance in the Overseas Territories. A number of Territories have been supported through the funding of good governance projects. These have included:


For the last two years the OTPF has part-funded the salary of the head of the Financial Investigation Unit (FIU) of the Royal Anguilla Police Service (RAPF). The ex-Royal Canadian Mounted Police officer has strengthened the investigative capacity of the RAPF. The Government of Anguilla are keen to continue this work themselves and are looking to use seized assets from investigations to fund a strengthened FIU.


An OTPF project successfully delivered coaching and training to Ascension Island Councillors in February 2010. The bespoke course included sections on the principles of good governance, ethics and standards in public service, and the role of Councillors.


OTPF funding has been used to strengthen the investigative capability of the Royal Virgin Islands Police Force (RVIPF), through the delivery in 2009 of a training and mentoring programme on Covert Human Intelligence Sources. OTPF has also funded a two-year secondment to the RVIPF, from 2008-2010, of a Police Management Services Adviser, helping the RVIPF devise and implement a strategic plan.


In 2009, the Governor's Office devised an OTPF project in partnership with the Cayman Islands Civil Service College to reinforce the principles and competencies associated with good governance. The good governance course was targeted at statutory authorities and crown corporations, and is now mandatory for all Chief Officers. In 2010, OTPF supported a sponsored visit to the UK by members of the Royal Cayman Islands Police Force and prosecution lawyers to facilitate the introduction of their Proceeds of Crime Law.


Through the OTPF and Government House in Stanley, we have encouraged and supported the Falkland Islands Public Accounts Committee and a Complaints Commissioner Bill. These will allow the Falklands to examine and report on all public accounts and improve the transparency of their Government.

OTPF funding has also enabled the drafting of a raft of legislation which will improve the good governance of the islands including: (i) A Mental Health Bill, to reflect modern best practice in mental health and ensure the law is in line with new Constitutional provisions; (ii) A Statistics Bill, to support the production of national accounts; (iii) Public health legislation to give effect to international health requirements. The constitution also provides for a complaints commissioner to be appointed when necessary.


As part of a cross-Overseas Territory OTPF public sector reform project delivered by the National School of Government, a consultant visited Tristan da Cunha to conduct a review of the public sector. He produced a set of recommendations to increase the performance of the public sector on the island and strengthen good governance. The UK Government is working with the Tristan da Cunha Government to refine and implement these recommendations.


Since the suspension of parts of the Constitution in August 2009, the OTPF has funded a number of advisers including a Good Governance Adviser. The Good Governance Adviser supported the initial work to set up an Integrity Commission which has had three meetings and collected declaration of asset forms from senior public servants. The Adviser has also carried out a review of the Attorney General's chambers, highlighting a number of areas where strengthening and further development was required, and overseeing the move to new more secure premises.

OTPF has also been used to fund a Crown Land Adviser who has recently completed work on a Crown Land policy designed to help to bring transparency, accountability and responsibility to the process of allocating Crown Land. In addition, OTPF funds were used to fund the start-up costs of the Special Investigation and Prosecution Team.

Part of the terms of reference of the Constitutional and Electoral Reform Adviser (funded by OTPF) is to consider provisions for ensuring transparency, accountability and integrity in public life, and those that should be anchored in the Constitution to return financial stability and sustainable good governance to the territory.

Cross-territory projects


The National School of Government (NSG) carried out a Scoping Study of the Overseas Territories during the period October 2008 to June 2009 which was funded by the OTPF. This looked specifically at how the governments of the Overseas Territories deliver services, the management of their public finances, and their accountability and audit mechanisms. Amongst the NSG's recommendations were: that leadership development at senior levels within the public services of the Overseas Territories should be made a priority, and that performance management be developed and strengthened. They also recognised that scrutiny functions suffered from a lack of capacity and needed strengthening. The recommendations of this study are now being implemented.

Support from Other Government Departments


Montserrat, St Helena and Pitcairn

DFID supports comprehensive programmes of public sector reform in Montserrat and St Helena. Their immediate focus is to improve the Governments' performance management systems in order to strengthen effectiveness and accountability across the public sector. In Montserrat the programme included specific support for development of a Code of Ethics.

In collaboration with partner Governments, DFID also undertakes periodic fiduciary risk assessments of the public financial management systems of Montserrat, St Helena and Pitcairn. The Montserrat public sector reform programme specifically includes a public financial management component which is being designed to respond to key areas of concern identified in its Fiduciary Risk Assessment.

Turks and Caicos Islands

DFID have funded a number of advisers in the area of public financial management, including a Chief Financial Officer who is responsible for all financial decisions and is focused on reviewing and revising revenue and expenditure plans taking the necessary decisions to ensure the TCI Government's future financial sustainability; and overseeing a programme of public financial management reform to ensure that the TCI Government has the capacity for good governance, management and control of the Islands' finances into the future. A DFID-funded Public Sector Reform Adviser is due to arrive in TCI in December. DFID has also funded Transparency International to carry out a National Integrity System (NIS) assessment in TCI.

The MOD has supplied an officer to fill the role of Chief Auditor.

UN Convention Against Corruption and the OECD Anti-Bribery Convention

Governors regularly remind OT Governments of the importance we attach to them meeting the highest of international standards. We therefore want the Overseas Territories with a financial services industry to have the OECD Anti-Bribery Convention and the UN Convention Against Corruption (UNCAC) extended to them. To assist the Territories to determine whether they were compliant with the provisions of both Conventions, DFID funded a team of legal consultants to conduct a legislative audit. The results of these assessments have been passed to the Overseas Territories' Governments.

Once appropriate legislation is in place, Overseas Territory Governments can request the extension of the Conventions. It is not UK practice to compel the Overseas Territories to accept the extension of instruments such as this, as their implementation requires cooperation from the Overseas Territory authorities. UNCAC has been extended to the British Virgin Islands. In July 2010, the Cayman Islands sought the extension of the OECD Anti-Bribery Convention. Gibraltar is preparing legislation to enable UNCAC and the OECD Anti-Bribery Convention to be extended to them. Anguilla, Bermuda, Montserrat and the Turks and Caicos Islands, are considering the recommendations in their assessment reports.

The FCO, DFID, and BIS will continue to encourage, and work with, the Territories to ensure that they are soon in a position to request the extension of both Conventions.


The Attorney General's Office has provided advice and support to Overseas Territories' Attorneys General on a range of good governance issues. The UK Attorney General chairs the annual conference of Territory Attorneys General. This group plays a key role in underpinning good governance in the Territories.


Regulation of the financial sector in the Overseas Territories

The UK Government remains committed to promoting greater transparency and cooperation in global regulation and expects the Overseas Territories to comply fully with international norms on the exchange of information. All financial centres, whether onshore or offshore, should match up to the highest standards of financial regulation and provide effective cooperation with international counterparts; this promotes greater confidence in the jurisdiction and will help ensure the long-term viability of the Overseas Territories' finance sector.

HM Treasury funded the Foot Review in 2009 to identify the opportunities and challenges generated for British offshore financial centres by turmoil in the financial markets and the subsequent impact on the world economy. Overseas Territories Directorate in the FCO and the Overseas Territories Financial Services Adviser are active in supporting the Territories implement the findings of the Review.

Review of Overseas Territories Strategy

The current review of the UK Government's overall strategy towards the Overseas Territories will identify further measures for promoting good governance and preventing corruption.

Letter to the Chair of the Committee from Henry Bellingham MP, Parliamentary Under-Secretary of State, Foreign and Commonwealth Office


The FAC has maintained a close interest in the Overseas Territories and in the Turks and Caicos Islands (TCI) in particular, culminating in its report of 31 March. I welcome this interest, and I hope it will continue as the Government develops a more dynamic relationship with the Territories.

Since my appointment as Minister for the Overseas Territories, and together with DFID colleagues, we have been giving careful consideration to the issues raised in the FAC's report, and to the UK's intervention in TCI. This joint FCO/DFID process is continuing, but I hope to be able to give the FAC a detailed response when the House reconvenes after the summer break.

In the meantime, I wanted to let you know that DFID has agreed to provide the TCI Government with a £10 million loan, to be released in three tranches over the next three months. This will allow the TCI Government to pay public sector salaries and to meet other urgent commitments. I enclose a copy of Andrew Mitchell's Written Ministerial Statement to this effect.[2]

I hope that we will be able to share more with you in September.

1 July 2010

Letter to the Chair of the Committee from Henry Bellingham MP, Parliamentary Under-Secretary of State, Foreign and Commonwealth Office


Further to my letter of 1 July 2010, I am writing to bring you up to date with the steps we are taking to respond to the situation in the Turks and Caicos Islands (TCI).

Following our meeting about TCI in June, Alan Duncan, the Minister of State for International Development and I held the first Ministerial Steering Group meeting on TCI on 15 September to discuss further the UK Government's future strategy towards the territory.

In the light of what was discussed at that meeting, and following the Governor's consultations with members of the Advisory Council and Consultative Forum (and taking account of concerns expressed by the previous FAC), I have decided that elections should be postponed to allow time for essential work to continue and for reforms to be embedded. I will be announcing this on Monday next week during my trip to TCI.

You will recall that on 1 July the Secretary of State for International Development issued a Written Ministerial Statement about the provision of a temporary package of financial support. Work to put this package in place is currently underway. In the meantime, the newly appointed Chief Financial Officer will arrive in TCI next week.

I will let you have an update following my visit to TCI and Anguilla and I hope that we will be able to provide a full response to the FAC's report when the House reconvenes.

17 September 2010

2   Not printed. See HC Deb, 1 July 2010, Col 49WS Back

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Prepared 29 November 2010