Category: Politics

STO owed MVR 1.45 billion in overdue bills from state institutions, government companies

A large portion of the national budget had been “managed through the cash flow” of the State Trading Organisation (STO), the Auditor General’s Office has said, revealing the state-owned enterprise is owed MVR 1.45 billion (US$94 million) in overdue bills from government companies and state institutions.

In his professional opinion (Dhivehi) on the proposed 2013 budget submitted to parliament’s Budget Review Committee and made public this week, Auditor General Niyaz Ibrahim stated that the “state’s cash flow was being managed through STO”.

“This shows that state expenditure is managed outside of the state budget, that this is an ‘off balance sheet’ finance arrangement and that the actual deficit will be much higher than stated in the state budget,” the Auditor General’s report to parliament stated.

The Auditor General stated that the practice was “worrying” and recommended changes to current treasury management “to put an end to depending on a government-owned company to manage the state’s cash flow.”

STO is a public company with an 81.6 percent stake owned by the government. The company was set up in 1964 to import and supply staple foodstuffs and fuel at controlled prices.

In its report to parliament, the Auditor General’s Office revealed that STO was owed MVR 398 million (US$25.8 million) in overdue payments from state institutions and government companies for goods released on credit.

Of the outstanding amount for items purchased on credit, the Finance Ministry owed MVR 388.1 million (US$25.1 million), according to the findings.

In addition, the Male’ Health Corporation (MHC) owes MVR99.4 million (US$6.4 million), Gan Airport Company owes MVR 61.8 million (US$4 million), Southern Utilities Ltd owes MVR 75.6 million (US$4.9 million), the State Electricity Company (STELCO) owes MVR 53 million (US$3.4 million) and the Works Corporation owes MVR 10.1 million (US$654,993).

Moreover, Fuel Supply Maldives, a subsidiary of STO, was owed MVR 186.2 million (US$12 million) for oil released on credit, mainly from government utility companies, the report added.

As a consequence, STO was owed a total of MVR 1.45 billion (US$94 million) in overdue bills, including outstanding bills worth MVR 289 million (US$18 million) from 2011 and MVR 8.2 million (US$531,776) from 2010 and earlier.

A total of MVR 1.15 billion (US$74 million) is owed to STO from overdue bills in 2012, according to a statement shared by the Finance Ministry showing STO’s receivables.

The government’s health insurance company ‘Aasandha’ meanwhile owed STO MVR 18 million (US$1.1 million) in overdue bills, the report noted.

The figures also showed that state institutions and government companies were “heavily dependent on STO’s working capital” to function.

“And as a result of not receiving millions of rufiyaa owed to STO from the state, STO has not paid any dividends to the Ministry of Finance and Treasury since 2009,” the Auditor General revealed.

In November 2011, the government sold five plots of land measuring 87,155.2 square feet to STO for MVR 522.9 million (US$33.9 million) and deducted the amount from monies owed to STO.

“This was carried out by the Ministry of Finance and Treasury following deliberations by the cabinet and based on the advice of the cabinet,” the Auditor General noted.

The Auditor General contended that the sale was in violation of amendments brought to the Public Finance Act in 2010, which stipulated that state assets and property must be sold in accordance with a law passed by parliament.

The plots were sold to STO in the absence of a law governing the sale of state properties.

“Therefore, we note that it is important to further investigate how this transpired and that the Ministry of Finance and Treasury’s plans to settle payments owed to STO from the government must be clarified before the budget is passed,” the Auditor General recommended.

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UK Foreign Office to “pressure” Maldives over tackling police abuse allegations: The Guardian

UK Parliamentary Under Secretary of State at the Foreign and Commonwealth Office (FCO) Alistair Burt is expected to “pressure” the Maldives government to tackle alleged abuses conducted by police during a visit to the country next month.

The UK-based Guardian newspaper reported today that Burt would be asking the government of President Dr Mohamed Waheed Hassan about efforts being undertaken to tackle “serious and persistent abuses” alleged to have been carried out by police – claims backed in reports on the country by a number of international NGOs.

These alleged abuses are reported to include: “attacks on opposition MPs, torture and mass detentions of democracy activists,” according to the paper.

President’s Office Media Secretary Masood Imad and Home Minister Dr Mohamed Jameel Ahmed were not responding to calls from Minivan News at the time of press concerning the upcoming UK FCO visit.

However, the government and police authorities in the Maldives have previously questioned findings by a number of international NGOs, accusing their individual authors of acting with bias in favour of former President Nasheed and the opposition Maldivian Democratic Party (MDP).

Police probe

Reports of Burt’s visit follow The Guardian reporting earlier this week that senior UK government figures were set to be questioned by politicians over the role of a Scottish police college in training Maldivian officers accused of perpetrating human rights abuses.

Police authorities in the Maldives contacted by Minivan News yesterday played down the abuse allegations raised by a number of NGOs such as Amnesty International, questioning possible bias in the data gathered in their reports.

Just last month, the circumstances behind the arrests of then Jumhoree Party (JP) MP Abdulla Jabir and Maldivian Democratic Party (MDP) MP Hamid Abdul Ghafoor for their alleged possession of alcohol had been labelled “very worrying” by delegates from the Inter-Parliamentary Union (IPU).

The comments were made following a a three-day mission to the Maldives over alleged human rights abuses.

Philippine Senator Francis Pangilinan from IPU’s Committee on Human Rights of Parliamentarians said at the time that circumstances surrounding the arrests of Jabir – now an MDP MP – and Ghafoor were concerning and that the delegation found it “difficult” to believe it was not politically-motivated.

Both Jabir and Ghafoor – along with eight others – were arrested on the island of Hodaidhoo in Haa Dhaal Atoll for the alleged possession of alcohol and drugs.

The arrests were made days prior to a vote on whether or not a no confidence motion against President Mohamed Waheed could be voted with a secret ballot.

Transfer of power

Since February’s controversial transfer of power that saw former President Mohamed Nasheed resigning from office follow a mutiny by sections of the country’s police and military – a decision he claimed was made under duress – several NGOs have published reports addressing concerns about police conduct in the Maldives.

Minivan News observed violent clashes between police officers and anti-government protesters directly following the change of government. On February 8, Minivan News journalists witnessed Specialist Operations (SO) officers specifically target certain MDP activists by chasing and beating them.

Anti-government protests have continued on and off throughout 2012 resulting in both local and international media coverage of alleged police brutality, attacks by protesters on police and reporters, numerous arrests and the occasional, almost playful stand-off.

Amidst this backdrop, several NGOs have released reports into alleged rights abuses conducted by police.  These reports include findings by the International Federation for Human Rights (FIDH) entitled “From Sunrise to Sunset: Maldives backtracking on democracy” and an Amnesty International publication entitled: “The Other side of Paradise: A Human Rights Crisis in the Maldives”.

FIDH noted in its findings that the government of President Waheed stood accused of a wide range of human right violations, including violent harassment of street protesters, torture and harassment of pro-opposition media as well as legal and physical harassment of the opposition.

“Practices to silence political dissent that had disappeared in the course of Nasheed’s presidency, have once again become prevalent under Mohamed Waheed’s presidency,” said FIDH at the time.

Meanwhile, Amnesty International’s report recommended that the Maldivian government “ensure prompt, independent, impartial and effective investigations into allegations of violence by officials.”

The NGO also called for the de-politicisation of the police, reform of the judiciary and enhanced training of security forces to meet with international standards of conduct.

Amnesty said that several of its human rights recommendations were reflected in the Commonwealth-backed Commission of National Inquiry’s (CNI) report which was released on August 30. The report concluded that President Waheed’s government had come to power legitimately and that there no evidence of any mutiny by the police and military.

Following the report’s publication, two international advisors to the Commission of National Inquiry (CNI) – Judicial Advisor Sir Bruce Robertson and Legal Advisor Professor John Packer – criticised what they believed was an “alarming level” of street demonstrating.

“Some would want to call [this] an example of the rights of freedom of expression and assembly. In reality it is rather more bully-boy tactics involving actual and threatened intimidation by a violent mob,” they stated at the time. “This perpetual behaviour is sapping public life and hindering the Maldives’ development as a modern democracy.”

However, the CNI’s findings did nonetheless highlight the need for institutional reform within the country focusing on areas such as law enforcement and the judiciary.

Earlier this month, the Commonwealth announced it would be working with the Maldivian government to push ahead with strengthening and reforming “key public institutions” – issues raised in the CNI report.  The Commonwealth also said that it was reiterating calls for “inclusive and credible” presidential elections to be held next year.

Report “bias”

Following the publication of Amnesty’s report in September, Home Minister Dr Mohamed Jameel Ahmed criticised Amnesty International for failing to seek comment from the government, accusing it of publishing a one-sided report.

Similar criticisms of the NGO were made by Commissioner of Police Abdulla Riyaz back in April.  He expressed disappointed with what he perceived had been Amnesty’s failure to ask the police for its comments before releasing a report based on its findings.

“I don’t see that there has been any investigations done, none of our officers was questioned, interviewed – neither by them nor by the Police Integrity Commission (PIC), nor by the Human Rights Commission (HRCM). I don’t think that’s fair,” said Riyaz.

Amnesty International had previously denied it has taken sides compiling its report on the Maldives.

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Parliament to vote on whether to halt Nexbis border control project

Parliament’s Finance Committee is to put the controversial issue of the Nexbis border control system (BCS) before parliament to vote on whether to halt use of the project.

The MVR500 million (US$39 million) project finally moved ahead this year after a series high-profile court battles and delays that led Malaysia-based Nexbis to last year threaten legal action against the Maldivian government should it incur losses for the work already done on the project.

However, the Malaysia-based mobile security provider has come under scrutiny by political parties who claim that the project is detrimental to the state, while the Anti-Corruption Committee (ACC) has continuously alleged of corruption in the bidding process.

Nexbis has continued to dismiss accusations of corruption within its deal with the Maldives government.

The vote has been scheduled after Parliament’s Finance Committee earlier this month also revealed that the Maldivian government had agreed to waive taxes for Nexbis.  The committee noted in a letter sent to President Dr Mohamed Waheed Hassan that there was a potential financial burden facing the state due to the BCS deal agreed with Nexbis.

Despite the allegations, the border control system is currently active at Ibrahim Nasir International Airport (INIA) after a Supreme Court ruling in early September favouring Nexbis ended almost two years of efforts by the ACC to block the project.

Speaking about the BSC project, Majlis Finance Committee member Ahmed Hamza said today he believed parliament would halt the project as “most members” were of the impression the contract is not financially beneficial to the country.

“The nature of the contract means that both the government and Maldivian people will suffer heavily from a financial point of view,” Hamza told Minivan News today.

In September, the ACC informed the committee that the deal would cost the Maldives MVR 2.5 billion (US$162 million) in potential lost revenue over the lifetime of the contract.

A member of Parliament’s Finance Committee member told local media yesterday (December 18) that the project is “laden with corruption allegations” and could have been carried out at a much lesser cost.

When asked if there was a sufficient system to take over from Nexbis, Hamza revealed today that there was a “worry” within the immigration department that their own system will not be sufficient.

Furthermore, Hamza stated that there is a “possibility” that human trafficking could increase should the Nexbis contract be cancelled, and to combat this parliament will need to provide a “sufficient solution to deal with these problems”.

Under the ‘build operate and transfer’ (BOT) agreement with Nexbis, the government is obliged to pay Nexbis US$2 for every foreign passenger processed and US$15 for every work permit for the 20 year lifespan of the contract. Nexbis remains responsible for the upgrading, servicing and administration of the system.

Former Immigration Controller Abdulla Shahid has expressed concern earlier this year over both the cost and necessity of the project, calculating that with continued growth in tourist numbers, Nexbis would be earning US$200 million in revenue over the 20 year lifespan of the agreement.

At five percent, royalties to the government would come to US$10 million, Shahid said, when there was little reason for the government not to be earning the revenue itself by operating a system given by a donor country.

“The option was there to establish the system for free,” stated ACC President Hassan Luthfee, revealing that the US government had offered a free system in 2009.

“Even the Indian government had offered to do it for free. On the other hand this could have been done for MVR2.3-2.5 million. So we can’t believe that this should be done at such a high cost,” Luthfee told the committee.

Minivan News today contacted Immigration Controller Dr Mohamed Ali over the developments regarding the BCS agreement with Nexbis.

“I am not aware of any recent decisions from the parliament over this matter,” Dr Ali claimed, before declining to comment further.

Back in July, Dr Ali claimed that with the Maldives having signed up to conventions pledging to try and more effectively combat Transnational Organised Crime like human trafficking, new systems were needed to help meet these aims.

“From our own experience, we have found people being trafficked back into the country even after they have previously been deported,” he claimed at the time. ”A system like this should put a stop to that.”

Minivan News was also awaiting a response from Nexbis at the time of press.

Nexbis has previously claimed that allegations of corruption in its deal with the government was “politically motivated” and had “wrought irreparable damage to its reputation and brand name.”

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Parliamentary reaction mixed as Majlis committee cuts MVR2.4billion from state budget

Opposition and government-aligned parties have given mixed reactions to a decision by Parliament’s Budget Review Committee to enact an almost 15 percent reduction to state expenditure proposed for 2013.

The government-aligned Dhivehi Rayyithunge Party (DRP) has claimed that cutting the budget to MVR 14.5 billion from a proposed MVR 16.9 billion would impact the provision of government services and functioning of independent institutions at a vital time.

The DRP added nonetheless that it has yet to make a decision on supporting the cuts when the reviewed budget is put to a vote on the Majlis floor.

The opposition Maldivian Democratic Party (MDP) meanwhile contended that the cuts would be made to “unnecessary” recurrent expenditure, such as transportations costs for 30-strong government delegations on overseas trips, as well as over MVR 400 million in office furniture and stationary.

While also hitting out at the “lousy” promises made by President Dr Mohamed Waheed Hassan for allegedly unrealistic development projects, the former ruling party also stressed that existing wage bills were not expected to be affected by the proposed cuts.

The comments were made after parliament’s cross-party Budget Review Committee yesterday announced that it had trimmed the proposed annual budget budget to MVR 14.5 billion from the previous figure of MVR 16.9 billion.

The committee opted to make cuts to the budget based on recommendations from both the International Monetary Fund (IMF) and Maldives Monetary Authority (MMA) Governor Fazeel Najeeb to ensure more manageable expenditure next year.

A recent mission from the International Monetary Fund (IMF) had urged the government to implement a raft of measures to raise revenues, advising that strengthening government finances was “the most pressing macroeconomic priority for the Maldives.”

Some senior finance figures within the country have confirmed to Minivan News under condition of anonymity that the reductions made by the budget committee were an “encouraging” development in trying to manage state expenditure and that the proposals were likely to receive Majlis support.

However, DRP Deputy Leader and MP Dr Abdullah Mausoom has said that despite the party’s own concerns, it would wait for the government to decide whether it could function during 2013 with a reduced budget of MVR14.5 billion, before deciding whether to back the changes.

“We need to know whether the government thinks it can manage to function with this MVR 14.5 billion. If it can then we would have no problem,” he told Minivan News today.

Mausoom said that considering the cross-party composition of the Budget Review Committee that approved the cuts, support for the amendments in the People’s Majlis could prove likely.

“Debatable: Chucking 15 percent of Maldives budget is a deliberate attempt by MDP and PPM [government-aligned Progressive Party of Maldives] to ‘choke’ government and institutions in 2013,” Dr Mausoom tweeted yesterday.

Mausoom contended today that the “drastic” nature of the proposed reductions had raised concerns about whether funding would be distributed “fairly and equally”, as well as having a detrimental impact on the running of the state.

“It is a shame that such drastic reductions have been made. We have had a very different year [in 2012] to other years with the change of government. With 2013 set to be a presidential election year should the budget be squeezed as a result of political rivalry,” he stated.

Mausoom said that of noticeable concern was how the budget cuts may potentially impact the work of independent institutions that he said would be increasingly vital over the course of a contentious general election next year. He added that a wide number of independent institutions in the country had already gone on record to address concerns about how the present budget would impact on their operations.

According to Mausoom, the MVR 16.9 billion budget presented to the Majlis by Finance Minister Abdullah Jihad earlier this month was already providing the “bare minimum” of funding needed to operate the state.

“There is a risk that when you cut into flesh you will go too far and touch bone. This nearly 15 percent reduction will impact services and independent institutions, we have to hear from government if it can manage with such finances,” he said.

With the budget amended by the committee now awaiting parliamentary approval, Mausoom added that the party had already been in general support of proposed measures to raise revenue.

State salaries

Amongst legislation considered by parliament ahead of approving the budget for 2013 has been the passing of a bill on state wage policy that will create a National Pay Commission tasked with determining salaries and allowances for the public sector.

In July, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

However, in the same month the Finance Ministry decided to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totalling MVR 443.7 million (US$28.8 million), were to be paid back in monthly instalments starting in July.

The original budget proposal also included salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, some MPs this month estimated that the state wage bill would shoot up by 37 percent.

When questioned on the government’s decision to reimburse civil servants and increase military expenditure for the current budget, Dr Mausoom said it was important for the country to prioritise rule of law in the country and respect the role police and military played in society.

He claimed that the biggest challenge on the budget was in fact dealing with what he claimed was years economic mismanagement, particularly during the administration of former President Mohamed Nasheed and the Maldivian Democratic Party (MDP) over the last three years.

Mausoom added that Nasheed government’s attitude towards privatisation had not helped with state expenditure, accusing the previous administration of staffing private corporations with political appointees to give the false impression the state had trimmed civil service employment.

In light of this alleged financial mismanagement by the former government, Mausoom argued that while there was a need to further streamline state expenditure under the present government, such cuts should be made gradually rather than the drastic cuts he believed had been proposed by the Budget Review Committee.

However, MDP MP for Nolhivaram and fellow review committee member Mohamed ‘Colonel’ Nasheed said that the cuts would be made largely by reducing “unnecessary recurrent expenditures” within the budget.  As such, no civil service wages are expected to be touched by the cuts, he added.

Nasheed claimed that the committee had looked at specific areas of the budget where “fat” could be cut from state expenditure without directly impacting services.

“What we proposed was that there could be reductions to internal and external transport [for government employees],” he claimed. “We have big delegations going abroad at present. What we have called for is a 50 percent reduction of transport costs. It is not necessary to send 30 people abroad on trip. Five people could go for example.”

Another area Nasheed claimed cuts could be more easily made was in the purchase of new office furniture that could reduce spending by some MVR 451 million in line with the costs of supplies like stationary and paper. He claimed such expenses could be reduced through more effective online governance.

Cuts were also said to have to be made in the proposed provision of specific services to islands around the country, which Nasheed claimed had never been viable considering the current economic challenges facing the Maldives.

“The president has made many lousy promises on his tours of islands for developments that cannot be granted. We cannot work from a fantasy budget,”

Finance Minister Jihad, Economic Development Minister Ahmed Mohamed and head of the Parliamentary Financial Committee Ahmed Nazim were not responding to calls from Minivan News at the time of press.

Budget criticism

When delivered to the People’s Majlis earlier this month, the state budget for 2013 presented by Finance Minister Jihad came under heavy criticism from both opposition and government-aligned parties over the course of a 16-hour budget debate.

MP Ibrahim Mohamed Solih ‘Ibu’, MDP Parliamentary Group Leader contended at the time that the proposed budget could not be salvaged or improved through amendments.

Meanwhile, MP Abdulla Yameen, Parliamentary Group Leader of the Progressive Party of Maldives (PPM), said that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.  Yameen was not today responding to calls.

While the debate over the budget regularly came to a halt due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies. These projects included developments such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.

Earlier this month, State Minister for Environment and Energy Abdul Matheen Mohamed moved to play down reports that his department had slammed the proposed state budget for neglecting the “fundamental rights” of Maldivians, claiming there had been a “misunderstanding” with local media.

Environment Ministry Permanent Secretary Ahmed Saleem was quoted by the Sun Online news agency at the time as claiming that some 15 projects proposed by his department had been excluded from the budget. These projects were said to deal with issues including waste management, as well as supplying water and sewerage systems to more islands around the Maldives.

However, Matheen claimed that Saleem’s reported comments had been the result of a “misunderstanding” by its author.  He alleged that the journalist had focused on a few points of a long meeting with the committee.

Consolidation

Speaking to Minivan News earlier this week, Jihad reiterated that in trying to balance state spending with providing national developments, the government favoured a policy of population consolidation – relocating certain island populations to larger administrative areas.

He added that a strong focus had also been provided to amending revenue raising measures, while also trying to cut spending at government offices.

The Finance Ministry issued a circular at the beginning of the month to all government offices and state institutions with instructions to implement cost-cutting measures during the final month of the year that included cancelling all overseas trips.

However, Jihad maintained that the circular was not a long-term financial strategy, but rather a traditional measure imposed by the government during December.

“At the end of the year some offices have a habit of spending lavishly,” he said. “This is just a regular measure at this time of year to curb costs.”

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Senior UK politicians to be quizzed over Scottish Police College’s training of Maldives officers

Senior UK government figures including Foreign Secretary William Hague are to be quizzed by politicians over the role of a Scottish police college in training Maldivian officers accused of perpetrating human rights abuses in the country.

Following an investigation carried out by UK-based newspaper The Guardian, politicians at Westminster and the Scottish Parliament of Holyrood are to press government ministers on the Scottish Police College’s role in training Maldivian officers.

The Guardian has reported that the MPS stands accused of using “torture and sexual assault against detainees and acting against democracy activists and journalists” after the controversial transfer of power that occurred on February 7 this year.

Police authorities in the Maldives have played down the abuse allegations raised by a number of NGOs such as Amnesty International, questioning possible bias in the data gathered in their reports. The MPS has also said that the allegations of abuse did not reflect the international scope of training provided to officers in the country.

The UK-based newspaper’s investigation reported that at least 77 senior Maldives police officers and commanders – including the Commissioner of Police Abdulla Riyaz – had been trained by the Scottish Police College, located in Fife.

Amnesty International, former senior Maldives officials and opposition activists said they had deep concerns about the UK’s links with the MPS after officers were accused of breaching human rights, the Guardian reported.

The Scottish Police College, which is reportedly earning significant sums of money through working with MPS officers, has an ongoing contract to train Maldives police officers on a diploma course for junior ranks and middle and senior rank officers.

Speaking to the Guardian, the MPS said that it took its obligations seriously, and that reforms recommended by British advisers, as well as consultants from Canada and Australia, were being implemented by the MPS.

MPS spokesman Superintendent Abdul Mannan told the Guardian: “On one hand calling for MPS to be more efficient in dealing with officers’ misconduct and violation of human rights, and on the other calling to suspend all the assistance MPS receives to achieve this, contradicts their [critics] known intention and their actions.”

Commissioner of Police Abdulla Riyaz was not responding to calls from Minivan News at the time of press.

Police Spokesman Hassan Haneef told Minivan News today that there was no link between the training local police officers received in Scotland and the allegations of abuses carried out by some of its officers.

“Our training is in accordance to regulation supplied from other countries all over the world, including the UK, Canada and Australia,” said Haneef.

The UK Foreign Office has meanwhile defended the UK’s record in the Maldives, but spoke of concern over the surge in violence since the ousting of Nasheed in February.

“We have serious concerns about allegations of police brutality in Maldives, especially in February 2012,” a Foreign Office spokeswoman told the Guardian.

“We have privately and publicly urged the Maldivian government to fully investigate all allegations and ensure perpetrators are brought to justice. We have also called on all parties to ensure institutional reforms are put in place to consolidate democracy and further protect human rights in Maldives.

Farah Faizal, the former Maldives high commissioner to the UK, told the Guardian that close links between British police and the MPS had to be urgently reviewed.

“What I can categorically say is that [the training] doesn’t appear to be working,” she told the paper. “If you see the brutality which is going on in Maldives and the impunity with what’s happening, if these people are being trained by the Scottish police, it’s a waste of taxpayers’ money. It’s unacceptable.”

In November a three-man delegation from the Inter-Parliamentary Union (IPU) expressed concern over the failure to punish the police officers who used “excessive force” against MPs earlier this year.

Philippine Senator Francis Pangilinan from IPU’s Committee on Human Rights of Parliamentarians, speaking to members of the press, revealed: “The delegation is deeply concerned that the police officers who used excessive force against the members of parliament earlier this year have not yet been punished, and that Members of Parliament appear to remain subject to intimidation.

“The delegation points out that in several of the cases in the use of excessive police force, there is clear video evidence available which should have enabled the authorities to take effective and swift action. The delegation therefore calls on authorities to do everything possible to expedite their efforts to a successful conclusion,” Pangilinan said.

A Spokesperson from Scottish Police College at Fife told Minivan News that it would not be reviewing its training procedures, but would be taking guidance from the High Commission on whether its existing agreement with the MPS would continue.

“We are continuing conversations with the High Commission on the matter,” the spokesperson said.

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Parliament passes bill on state wage policy to create Pay Commission

Parliament yesterday passed a bill on the state wage policy to create a National Pay Commission tasked with determining salaries and allowances for the public sector.

The wage policy legislation was passed with 46 votes in favour, two against and two absentions. The bill was submitted by Independent MP for Haa Dhaal Kulhudhufushi Mohamed ‘Kutti’ Nasheed and sent to committee for further review on March 30, 2011.

If ratified, a five-member National Pay Commission will be instituted within 60 days with part-time members appointed by the president for a five-year term.

The commission would be chaired by the Finance Minister and would determine salaries and allowances for state employees and authorise pay raises.

The commission would also formulate standards and rules for determining the state’s pay scale or appropriate salaries based on qualifications and nature of employment.

The bill stipulates that the commission must consider the cost of living, inflation and the consumer price index in determining wages.

Moreover, salaries should incentivise government employees to work in islands with small populations.

The commission would also have to consider the state’s resources, public debt and social justice in approving salaries and allowances.

Once the law comes into force, articles in the Human Rights Commission Act, Civil Service Commission Act, Defence Forces Act, Police Act, Elections Commission Act, Prosecutor General’s Act, Anti-Corruption Commission Act, Judicial Service Commission Act, Broadcasting Act, Customs Act and the Civil Aviation Authority Act that allows the institutions to determine wages for officials and staff would be abolished.

IMF recommendation

At a press conference held upon conclusion of a visit by an International Monetary Fund (IMF) mission last month, head of the mission Koshy Mathai stressed the importance of instituting a Pay Commission to streamline the pay structure for government employees.

“We have a lot of independent institutions in this country and they are all on different pay scales,” he observed.

“There’s no harmonisation within the public service. There are radically different pay scales. And that has problems in terms of incentivising staff to belong to one institution versus the other. And it also implies a lot of cost for the government. So establishing a Pay Commission that can set up a rational system of compensation for the entire public service seems like a priority.”

According to a report by the World Bank in May 2010 which identified the dramatic growth of the public sector wage bill as the origin of the Maldives’ ongoing fiscal imbalances, increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, which was “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

“Between 2004 and 2009, the average monthly salary of a government sector worker increased from MVR 3,223 (US$250) to MVR 11, 136 (US$866),” explained a UNDP paper on achieving debt sustainability in the Maldives published in December 2010.

Former President Maumoon Abdul Gayoom responded to growing calls for democratisation with “a substantial fiscal stimulus programme” of increased government spending, “much of which was not related to post-tsunami reconstruction efforts.”

“This strategy led to a large increase in the number of civil servants from around 26,000 in 2004 to around 34,000 by 2008 or 11 percent of the total population. Thus the government simultaneously increased the number of public sector workers as well as their salaries,” the paper noted.

Consequently, recurrent expenditure – wage bill and administrative costs – exceeded 82 percent of total government spending in 2010.

However, the new government’s efforts to enforce pay cuts of up to 20 percent and downsize the civil service – which employs a third of the country’s workforce – were met with “a severe political backlash from parliament,” the UNDP paper observed.

Recurrent expenditure

Presenting the 2013 budget to parliament earlier this month, Finance Minister Abdulla Jihad noted that of the proposed MVR 16.9 billion (US$1 billion) of government spending, more than 70 percent was recurrent expenditure.

“As in other years, the highest portion of recurrent expenditure is expenditure on [salaries and allowances for government] employees,” Jihad explained. “That is 48 percent of total recurrent expenditure.”

During the budget debate in parliament, Majority Leader MP Ibrahim Mohamed Solih ‘Ibu’ criticised Finance Minister Jihad for failing to mention budgeted salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, Ibu explained that the wage bill would shoot up by 37 percent.

Echoing the concerns of the parliamentary group leader, Maldivian Democratic Party (MDP) MP Eva Abdulla revealed that MVR 6 million (US$ 389105) was added to the budget of the Maldives National Defence Force (MNDF) following the controversial transfer of presidential power on February 7.

Since the MDP government was ousted in the wake of a police mutiny on February 7, Eva said that the police and army have hired 250 and 350 new staff respectively.

Consequently, the institutions spent more than MVR 75 million (US$4.8 million) in addition to the approved budgets for 2012, she claimed.

The proposed budget of MVR 930.9 million (US$60.3 million) for defence expenditure in 2013 was meanwhile 14 percent higher than 2012.

Eva observed that the increase in the government’s wage bill of 37 percent was approximately MVR1.7 billion (US$110 million), which was also the amount allocated for harbour construction in the 2013 budget.

These funds should instead be spent for “harbours, education, sewerage and housing,” she argued.

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Government considering seeking compensation from GMR: Attorney General Azima Shukoor

Attorney General (AG) Azima Shukoor has said the Maldives government could opt to seek compensation from infrastructure group GMR after it decided to void the India-based company’s concession agreement to develop Ibrahim Nasir International Airport (INIA), according to local media.

GMR last week confirmed that it was seeking an estimated US$800 million in compensation in order to recover what it has claimed are investment and earnings after the government “wrongfully” terminated its contract.

In a press conference held yesterday (December 17), the attorney general maintained the government’s belief that the agreement with GMR to develop INIA was illegal.  She added that the government therefore intended to seek compensation for damages it “might” have incurred during the process of entering into the contract with GMR, local newspaper Haveeru reported.  The contract was signed during the administration of former President Mohamed Nasheed.

Highlighting the pending arbitration process in Singapore Court between the government and GMR, Shukoor said that efforts were being made to appoint arbitrators for the hearings. She added that the government and Maldives Airports Company Limited (MACL) had appointed a “member” of Singapore National University as their arbitrator.

Similarly, GMR will also be given a 30-day period to appoint an arbitrator on its behalf.

Shukoor suggested during the yesterday’s press conference that it may take a period of one year until the due procedures were completed before a decision was made in the courts.

“It will take about two months time to appoint the panel to overhear the arbitration case. After that, parties will exchange documents and affidavits and respond to it and only after that a proper hearing on the matter will be held and might take up a period of one year,” she suggested.

Indian media reported last week that GMR had sent a letter to the Finance Ministry stating that it would seek compensation worth US$800 million.  Shukoor denied such a communication had been sent, adding that she did not believe such a demand could even be made.

“We terminated the agreement on the grounds of void ab initio (void from the outset) , therefore we will begin the negotiation on the position that the government of Maldives do not require to pay back anything,” Shukoor explained.

However, she admitted that owing to the size of GMR’s investment, there remained a possibility that government might have to pay some amount that would be determined through the arbitration process.

“Even if we do require paying back as compensation, it would be based on the decisions reached during the arbitration process. If it is settled out of court, then it would be based on legal arguments raised by the parties to the contract,” she added.

Shukoor has also claimed that even before INIA was handed over to GMR, no asset valuation was carried out – a decision expected to cause problems for the government. She also said that it has not been yet decided how the asset valuation would be carried out or how the amount that the government might seek in compensation from GMR would be calculated.

Even with the arbitration process now proceeding, Shukoor told local media that if the government believed additional compensation was required, it would seek the additional amount through the same courts.

“A lot of work is being carried at the moment. However, we have not yet calculated the amount we might have to pay or the amount that had been invested and even the amount we expect to seek,” she explained.

GMR demands US$800 million in compensation

GMR is seeking US$800 million in compensation following the termination of its US$511 million concession agreement signed under the former government back in 2010.

The Indian infrastructure giant has said that the proposed US$800 million claim was based on its “provisional estimates” and that the company had also taken into account the Maldives’ ability to cover such payments if compensation was awarded by the Singaporean courts overseeing arbitration.

GMR’s chief Financial Officer (CFO) Sidharath Kapur previously told Minivan News that the sum was a “preliminary estimate” based on a number of factors including investments made by the company, debt equity and loss of profits as a result of the contract termination.

He also added that on last Tuesday (December 11) the company had communicated with Maldives Ministry of Finance by sending an official letter outlining its concerns that the contract had been “wrongfully” terminated without respect for the agreed procedures.

Meanwhile according to Finance Minister Abdulla Jihad, no mechanism is currently budgeted should the Maldives face a multi-million US dollar bill for evicting GMR, but stressed it was not for the company to decide on any eventual payment.

He also played down fears that any potential fine could prove perilous for the country’s economy, as well as attempts to reduce the spiralling budget deficit, stating that any possible fines would be set by the Singaporean arbitration court hearing the dispute.

“We will deal with the matter when we know the amount of compensation to be paid,” he said at the time. “GMR cannot decide, it will be down to the court [hearing the arbitration].”

The INIA concession agreement

In 2010, the government of Maldives through its Finance Ministry, MACL and GMR-MAHB entered into a concession agreement with INIA whereby the Malaysian-Indian consortium were to develop and operate the airport for a period of 25 years.

According to the concession agreement a “project company” under the name GMR International Airport Limited (GMIAL) was to carry out the development project.

However, a lengthy dispute between the new government of President Dr  Mohamed Waheed Hassan and the GMR Group led to the eviction of the agreement.

On November 27, President Mohamed Waheed’s cabinet declared the agreement void, and gave the company a seven day ultimatum to leave the country.

Shukoor at the time stated the government reached the decision after considering “technical, financial and economic” issues surrounding the agreement.

She also claimed the government had obtained legal advice from “lawyers in both the UK and Singapore as well as prominent local lawyers – all who are in favour of the government’s legal grounds to terminate the contract.”

The INIA was handed over to the government on December 8, in an invitation-only press conference; Finance Minister Jihad presented the official handover documents to MACL Managing Director Mohamed Ibrahim, and said that the Maldives would pay whatever compensation was required “however difficult”.

With arbitration proceedings underway in Singapore over the contested airport development charge (ADC), GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.

On December 6, a day prior to its eviction, the government successfully appealed the injunction in the Supreme Court of Singapore. Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

That verdict, effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”, he said at the time.

A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.

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Police ask PG to press charges against motorists involved in Gasim’s death: no mention of police involvement

Police submitted a case to the Prosecutor General’s office on December, asking it to press charges against the motorist and the passenger on the speeding motorcycle involved in the death of bystander Abdulla Gasim Ibrahim on August 17.

In a press release issued on December 15, police stated that the persons alleged to have caused the death of Gasim were 21 year-old Ahmed Nadhee Saleem, of NooruhSabah on Gemanafushi in Gaafu Dhaalu Atoll and an unnamed 17 year-old boy.

Although previous police accounts stated that the two persons had been speeding on a motorcycle after stealing a mobile phone from an expatriate, the latest press release adds that the motorcycle being driven by the two was also stolen property.

The statement reads: “The request to press charges against these two persons has been sent to the Prosecutor General with relation to the events of August 17, at a time of which day these persons stole a motorcycle parked in front of Twilight Rivery in Henveiru ward, drove it at very fast speeds, stole a Nokia mobile phone from an expatriate who was standing near what was formerly known as the Bond Street shop, ignored orders from police at the scene to stop, and continued speeding despite attempts by police officers to stop them, resulting in a collision with a parked motorcycle on Orchid Magu near the Justice Building, causing severe injury and the ensuing death of the motorist on the parked motorcycle.”

The statement makes no mention of the police officer who was shown in leaked CCTV footage of the incident to have struck the fleeing suspects with his baton, causing them to collide with Gasim.

Police cover-up

The leaked video of the incident, which has been making rounds on social media since the beginning of December, shows a policeman stepping in front of the speeding motorcycle and hitting the motorcyclist on the head with a baton.

The victim’s family has also previously written to the Police Integrity Commission alleging that there was police involvement in the death of Gasim, describing the event as was later publicly seen in the leaked video. The family has said that it has so far not received any official response from the commission.

Despite the video evidence, police are now pressing charges against the cyclist and the passenger, while no mention of police involvement which led to the death was mentioned in the press statement.

Police Media Official Sub-Inspector Hassan Haneef was not responding to calls at the time of press.

Minivan News also tried contacting PIC President Abdulla Waheed, whose phone was switched off at the time of press.

PIC Director General Fathimath Sarira stated that the commission would be able to comment on the matter on Thursday, and that they had no comment for the time being.

On December 3, Sarira had confirmed that the commission was looking into the allegations of police involvement in the incident, stating that the ‘investigations are nearing conclusion’.

Meanwhile, the Maldivian Democratic Party (MDP) has submitted a motion to parliament, requesting the Committee on Oversight of the Executive review the case.

Prosecutor General Ahmed Muizzu was unable to speak to Minivan News today.

Human Rights Commission of the Maldives (HRCM) President Mariyam Azra was also not responding to calls, while HRCM Vice President Ahmed Tholal and member Jeehan Mahmood had their phones switched off.

Warning: Some viewers may find the following footage disturbing

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ACC to investigate alleged violations of public finance law by Prosecutor General’s Office

Parliament today approved a decision by the Finance Committee to instruct the Anti-Corruption Commission (ACC) to investigate alleged violations of public finance law by the Prosecutor General’s Office (PGO).

The decision was made in a report (Dhivehi) forwarded by the Finance Committee after studying violations of the Public Finance Act and regulations under the law flagged in the PGO audit report for 2010.

Reviewing audit reports and recommending measures to be taken by the relevant authorities is part of the mandate of the public accounts oversight committee.

The Finance Committee decision was approved with 51 votes in favour and two abstentions.

The audit report found that the PG office spent a total of MVR 145,596 (US$9,706) in violation of the Public Finance Act.

Among the cases uncovered in the audit that the ACC was asked to investigate, the PGO was found to have spent MVR 40,745 (US$2640) in additional expenses for interior design after moving to its new offices, without an agreement on price and quality of the work as required by section 8.21 of the public finance regulations.

Moreover, the PGO spent MVR 45,938 (US$3000) on an official dinner to participants of an e-crime conference participants in June 2010 without a publicly-announced bidding process.

The Finance Committee decided to send both cases to the ACC for investigation and inform the PGO to take measures to remedy the matters identified in the audit report.

The committee also decided that the Prosecutor General had breached article 17 and 20 of the constitution on non-discrimination and equality before the law as the office has prosecuted cases where the public finance regulations were similarly violated.

After the committee report was passed at today’s sitting, some MPs contended that Prosecutor General Ahmed Muizz would have to be removed from his post due to the decision.

However, Deputy Speaker Ahmed Nazim – also chair of the Finance Committee – said that Muizz would not be dismissed as the process specified in the constitution had to be followed to remove appointed officials at independent institutions.

Meanwhile, in a press release last week, the PGO said it would “always welcome” investigations by other state institutions into alleged violations of the constitution and laws by the office.

The PGO’s statement also assured that the office would provide “full cooperation” for the investigation.

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