Government defends China Harbour

Premier McKeeva Bush

On Friday, 8 June the government issued a statement defending China Harbour Engineering Company (CHEC), the company it has chosen to develop cruise berthing facilities in the Cayman Islands.

The statement was issued in the wake of local media reports that CHEC was on a list of companies barred by the World Bank from doing business with that international institution.

The government said that it found no evidence that CHEC committed any misconduct or illegal acts that resulted in sanctions by the World Bank.

“Our research found that China Communications Construction Company (CCCC) and all its subsidiaries were debarred from World Bank-funded projects as a result of CCCC becoming the designated successor to China Road and Bridge Corporation (CRBC),” read a statement from Premier McKeeva Bush.

“Our understanding is that this action is a follow-on from a 2002 project in which CRBC was involved. CCCC was deemed by the World Bank as “designated successor” under new World Bank rules that prescribed that successor organisations would be subject to the same sanctions applied against the original firm.

A press release on the World Bank website dated 29 July2011 noted that, “this action is based on recent changes in the World Bank sanctions system to clarify that successor organisations – through purchase or reorganisation – will be subject to the same sanctions applied to the original firm.”

The matter was picked by local media, prompting the government’s response.

“It is evident that CHEC is far removed from any wrongdoing that resulted in the original sanctions placed on CRBC by the World Bank. The far reaching effect of the World Bank debarment of CRBC only relates to CHEC because it is a subsidiary of CCCC, which inherited the debarment from its predecessor. Neither CHEC nor its parent company CCCC has been sanctioned by the World Bank for fraud or any other misconduct actually committed by those companies.

“In view of these findings, CIG does not see cause to believe that CHEC is legally or morally responsible for the actions which led to the original debarment of China Road and Bridge Corporation by the World Bank. There is therefore no indication that valid grounds exist for discontinuing our dealings with CHEC.

“Given the many years of discussing and negotiating the port project, this government believes that CHEC offers the best value for money to the Cayman Islands — namely because CHEC is the only company to offer the islands terms that would enable us to attain realistic value for the leveraging of our assets.

“The Cayman Islands Government remains vigilant and will only conduct business with companies that can pass the closest scrutiny. CIG has conducted and will continue to conduct appropriate due diligence before any binding final agreements are signed,” read the press statement.