Scrap Metal Unit audit…Inspectors, others paid over $43M to do little

Jun 02, 2016 News

-CH&PA’s Finance Director, Taslim Baksh, collected two salaries

A special investigative report ordered by the Granger administration into the Scrap Metal Unit has found

Former CH&PA’s Finance Director, Taslim Baksh

poor monitoring of the trade, especially when it came to understanding how containers were packed for export.
The report, prepared by Ram and McRae, and released last week by the Ministry of Finance, noted that this happened despite the hiring of a number of seasoned, ex-law enforcement workers.
Shortly after the David Granger administration took office in May last year, there were concerns expressed over the operations of the unit which had been removed, under the Government of the People’s Progressive Party/Civic (PPP/C), from the Office of the Prime Minister to the Ministry of Tourism, Industry and Commerce. The trade has been suspended.
In early 2012, via a Cabinet decision, it was then placed under Central Housing and Planning Authority (CH&PA), which fell under former Housing Minister, Irfaan Ali.
Ali gave the unit’s operation under the authority of his right man at CH&PA, Director of Finance, Taslim Baksh.
The discovery of almost $200M sitting in a Republic Bank account also raised questions after it was discovered that monies had been transferred from the Bank of Guyana.
Monies were used to buy a pickup without any approval of the then Cabinet of Ministers with even a questionable case of payment to an advertising firm, Impressions, for Mashramani when the unit was not participating in the event. There were other payments for drinks ($500,000) for Minister Ali and $300,000 for a social event.
According to the report, contrary to laid down procedures, there were instances where containers were packed in yards not legally approved.

No Inspections

Former Housing Minister, Irfaan Ali

“We also noted that there is no inspection by any engineer attached to the unit.”
The investigations found that the movement of scrap metal from collection yards to licensed ones was not being observed as is required.
During the period of operation, 2011-2015, the unit made monthly payments to Inspectors, Enforcement Officers, Administrator and Drivers totaling $43.1M without any deduction of PAYE and NIS contributions.
It is the obligation of the employer to deduct and remit the taxes and NIS contributions payable, the report said.
“The act itself does not specify a subject Minister and it is therefore within the power of the President, acting through the Cabinet, to assign it (the unit) to a particular Minister.”
The Minister has powers to prohibit all old metal, or any specified kind or description of old metal, from being shipped or otherwise exported from Guyana for a specific period of time not exceeding one year, if the Minister considers it necessary or expedient in the interest of preventing or curbing any illegal activity.
According to the report, the function of the Scrap Metal Unit is not explained in any legislation. Rather, auditors received an unsigned, undated copy of a document outlining the functions of the unit.
These include conducting daily inspection on scrap metal yards to ensure they are licensed and properly secured; the identification of illegal materials and making notes of shipping containers that may be present at the location at the time of inspection.
The inspectors were also expected to, along with the Guyana Police Force and officials from Guyana Metal Recyclers Association, conduct investigations into vandalism, theft of scrap metal and verifying the type of metal being exported.
Auditors found that inspectors were only partially observing the loading process of scrap metal into containers to ensure that there no illegal materials or substance are stuffed into containers for export.

There was very little monitoring of scrap metal yards by inspectors.

As a matter of fact, the team from the unit only does spot checks on the containers and metal being loaded into the containers and does not monitor the movement of scrap metal from collection yards to licensed yards.
According to the report, there were 12 persons listed as employed by the unit.

Two Salaries
While the Administrator was Baksh, and who collected over $3.1M between 2011 and 2015, there was a Chief Scrap Metal Inspector- Muneshwar Singh.
It would mean that Baksh collected two salaries- one from the Scrap Metal Unit and the other from CH&PA.
The other Scrap Metal Inspectors were Solomon Merai; Andre Ian Wills; Quadir Khan and Mitchel Schwiers.
The drivers/enforcers were Ravindra Teekaram; Gladwin Stuart and Dharmendra Lackan.
The other workers, described as Enforcement Officers were Rajput Narine, Richard Baldie and Wayne Adams.
According to the report, Solomon Merai is the former Assistant Commissioner of the Guyana Police Force who retired December 31, 2011.
Rajput Narine was named as a former bodyguard of Anil Nandlall, Attorney General in the PPP/C Administration 2011 – 2014. He was fingered during the investigations into the killing of activist, Courtney Crum-Ewing.
In its conclusions and recommendations, the report by Ram and McRae noted that there was far too much uncertainty surrounding the trade while the law governing it is severely outdated.
“There appears no consistent policy towards the trade with the Government opening and closing the trade at will.”
The report questioned the decision by the PPP/C administration to transfer the scrap metal trade to CH&PA.
“In our opinion there is a high probability of revenue leakage but because of the inadequate reporting, any estimate is merely speculative.”
There also appeared to be a total lack of coordination between and among the four agencies involved- the Guyana Police Force, the Ministry of Business, the Scrap Metal Unit and the Guyana Revenue Authority.
“The law and the trade need to be completely revamped after consultation with key stakeholders. However, the Government needs to put interim measures in place as the trade is at a standstill while export is temporarily banned.”