A new bill for the revival of the Development Finance Corporation (DFC) was debated and passed in the Senate this afternoon after debate from its various members. The second order of business at today’s Sitting of the Senate was the approval of the appointment of a new Supreme Court Justice, Oswell Legall, of Guyana.
The Senate gave its stamp of approval for both, but most of the day’s proceedings focused on how the new DFC Act would ensure that the travails of the institution’s past are not repeated by what the Leader of Government Business, Doug Singh, representative of the ruling United Democratic Party (UDP), called the “3rd generation DFC,” undergoing its second phase of reform since 1972, when Singh said it was first restructured to undertake foreign borrowing.
Several important concerns were raised about the new bill, chief among them being the absence of a mechanism in the bill to institute penalties when board or staff members of the DFC violate the law. This was pointed out by Senator Godwin Hulse, who represents the private sector, and Singh agreed that at some stage, penalties should be embedded in the Act.
People’s United Party (PUP) Senator Hector Silva, Sr., also agreed with this point, and he additionally raised the question of having a PUP on the board of the revived corporation, which he described as DFC “Lazarus”. (When this point was first raised in the House on Friday, Prime Minister Dean Barrow said that this could not be considered because the whole idea is to depoliticize the DFC.)
Senator for the church community, Henry Gordon, underscored the need to put constraints in the law to ensure that the past happenings of the DFC are not repeated.
In wrapping up the debate, Senator Singh said that a number of distinctions need to be drawn between the old DFC and the new DFC.
Firstly, he pointed out that whereas the authorized share capital of the old DFC was $30 million, the new law allows for the share capital to be increased to $100 million – which, he said, would put the DFC in a better position to qualify for new subsidized loans.
He also pointed to the make-up of the old board, versus the new board. The existing DFC, he said, has 7 board members: 3 ex-officio members, who are chief executive officers of the Ministries of Education, Agriculture, and Economic Development; and a representative of the Ministry of Finance, with the chair being hand-picked by the Minister. The new DFC, however, would be made up of the same 3 ex-officio members, an appointee of the Prime Minister and Minister of Finance, and 5 from the private sector.
On Friday, when the DFC Bill of 2008 was debated in the House, Prime Minister Barrow had identified those 5 organizations as the Belize Chamber of Commerce and Industry, the Belize Bar Association, the Belize Institute of Chartered Public Accountants, the Association of Tertiary Level Institutions of Belize, and the Belize Credit Union League.
During this morning’s debate, Senator Hulse had urged the institution of proper checks and balances to avoid a repetition of the travesties of the past, but Singh said that he disagreed that the members of the new board would be that “influence-able”.
Other points of interest he raised with regards to the new DFC are that any borrowing by the DFC greater than $5 million or any consolidated debt greater that that amount would, under the new law, have to go to the National Assembly for approval. Also, loans greater than $1.5 million will have to be disclosed to the public.
The DFC, he said, will add a Code of Conduct, which will include penalties for infractions.
The valid concerns raised in the debate notwithstanding, the Senate approved by majority vote the DFC Bill, with no amendments.
The Government has indicated its intention to pass the new DFC law in time for the upcoming sitting of the board of the Caribbean Development Bank, which is to provide $25 million in seed money for the DFC’s resurrection.
Apart from approving the DFC Bill, Senators also agreed to the appointment of Mr. Legall, by Governor-General Sir Colville Young, with effect as of February 1, 2009. Legall is the latest addition to the bench of the Supreme Court of Belize.