Transparency International: “Insufficient integrity in the business sector”

POSTED: 08/6/15 6:56 PM


St. Maarten – “In practice there is insufficient integrity in the business sector,” Transparency International writes in its National Integrity System Assessment it released earlier this week.

The reports’ business chapter notes that the legal framework for doing business in St. Maarten is “in general favorable” though it adds at the same time a contradiction: “In practice, lengthy procedures might hamper the establishment of new businesses.” The independence of private businesses is “to a large extent ensured by law,” according to the report, but “examples of undue influence have occurred and are being investigated.”

The business sector is not involved in anti-corruption policies and there is no relationship with civil society in fighting corruption, the report states.

The report contains a remarkable revelation: registering businesses at the Chamber of Commerce “is not required by law.”

In the past, the Chamber of Commerce established that it has 7,000 registered companies, but that there are only 4,000 companies with (fiscal) crib-numbers. The companies without such a number, former Chamber-president Glen Carty once said, “are not paying taxes.”

While the legal framework for doing business is “business-friendly,” the practice is another story, respondents told TI. “Procedures are time consuming and lengthy and without any transparency on reasons of delay.”

It is common for companies having to wait between six months to a year before they receive the necessary documents. “Some experts in the business sector argue this is a result of the inefficiency of organizations involved in the registration process and of bureaucracy,” the report states. Licenses have to be renewed every year.

Respondents have also – rather euphemistically – labeled the permit process as vulnerable: “It is easier for local entrepreneurs to obtain documents than it is for foreigners.”

The reaction from the business sector to the bureaucracy is predictable. “Some businesses will start operations without their license. As a consequence the state receives less income.”

The large number of non-local entrepreneurs also makes many businesses seasonal. They operate during the high season and disappear when that season ends. “In that manner they make use of the inertness of the registration process,” the TI-report notes.

There are no provisions in place that require bidders for public contracts to have ethics programs such as anti-corruption agreements or business principles and corresponding compliance mechanisms,” the report states. “Corporate codes of conduct and other aspects of corporate responsibility hardly exist within companies. Some of the larger companies may have a professional compliance officer, although this is not very common in St. Maarten.”

There are no whistleblower policies in place in the private sector, nor is there a blacklist of companies that have been involved in corruption. The only exception is the Central Bank; it publishes an international list of companies that sponsor terrorism.

The report furthermore states that there are no specific lobbying groups for anti-corruption. However, the St. Maarten Hospitality and Trade Association SHTA devoted its June 2013 general assembly to the theme of corruption and transparency. Alma Rocio Balcazar of the Transparency International chapter in Colombia addressed this meeting. Under its president Emil Lee, now an advisor to the Democratic Party, the SHTA was the most vocal organization on the island in the fight against corruption and in favor of transparency.

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