THERE WAS NO OFFER TO AUDIT GUYSUCO!

May 28, 2011 Features / Columnists, Peeping Tom

---

The sugar packaging plant was never intended as a gold, silver or bronze bullet for the sugar industry. In fairness to the government and to the sugar corporation, they never at any time indicated that the packaging plant would solve the woes of the sugar industry. The packaging plant was always one of many measures aimed at reforming the industry. Another was the Skeldon Sugar Factory. These form part of an integrated plan to reform the sugar industry but no one project by itself can be said, or has it ever been so claimed, represented a silver bullet for the sugar industry. Anyone is free to make the point and to hammer it home too, that the packaging plant does not represent the key to the turnaround of the sugar industry. Anyone is free to argue that the plant does not constitute a silver bullet for the industry. But if in the course of making that point, reference is also made to the fact that a packaging facility with greater capacity was constructed for less in another country, then it is possible for someone to infer that the only relevance of that point is to indicate that perhaps more could have been achieved for less. What other inferences can be drawn from making that point? As it turns out the sugar corporation has explained that the overall cost of the factory included some adaptive works to the sugar factory that feeds into the packaging plant. The sugar corporation has gone further and indicated that it is willing to open its books for an audit of this project. The sugar corporation never made the offer for an independent audit of the entire sugar corporation. It made an offer in respect to the packaging plant so as to demonstrate how the overall project cost was arrived at and how this money was expended. For anyone to interpret this offer as an invitation to conduct an audit of the entire sugar company is stretching the offer a bit too far. There is no way that the sugar corporation is going to allow any independent person to have a look at its accounts. It would be unethical. The sugar corporation is not a cake shop. It has to operate on the basis of professional accounting standards and ethics and there cannot be expected to simply allow any Tom, Dick or Harry to come and carry out their own independent audit. The sugar company has its own statutory auditors. It also does business with a number of firms and companies and therefore to allow any Tom, Dick and Harry to have a look at its books, outside of a professional auditing arrangement, is unethical. If this ever happens, the business partners of the sugar corporation would be outraged because it would mean that important confidential business matters would be exposed to those with whom the sugar corporation does not have a legal auditing arrangement. The sugar company has not extended such an invitation and those who believe that there is such an invitation have misinterpreted what the offer is. The offer is for an examination of the costing of the packaging plant. This project was funded by the European Union and therefore would have been subject to the standards demanded by that body. It is possible, but not likely, that the EU could have overlooked things in relation to the cost of this factory. But that would be a costly mistake for a major body such as the European Union to make. In the course of monitoring this project, the EU would have had their own specialists examine the various estimates relating to the cost of the factory and would have done some amount of comparative analysis before giving their no-objection. So not for one moment must the public believe that the sugar corporation has total freedom in deciding on the cost of this project and how the money was spent. International donors do not operate like this. The project was also internationally advertised and while this is not a safeguard against inflated costs, it does make the process competitive which the international donors feel is one of the better ways to ensure that the process is fair and transparent. The offer to open the project to scrutiny is however not a special concession by the sugar corporation. International organizations, such as the European Union, are committed to transparency and openness. Their rules demand that they publish details of their projects. As such, they cannot be averse to offering a breakdown of the final project costs. The final report of the project document would in fact provide these details and these are normally available for public scrutiny. The IDB and the World Bank makes these reports publicly available online. And one can be sure that if information surfaces that provides a basis for suspicion that there was malfeasance or corruption involved in the execution of any aspect of the project, even though it is completed, the EU is going to launch a full scale investigation.

---

---