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Vanuatu Ombudsman's Reports |
REPUBLIC OF VANUATU
OFFICE OF THE OMBUDSMAN
PUBLIC REPORT
ON THE
IMPROPER ISSUING OF DUTY EXEMPTION BY HON. WILLIE JIMMY
AND CUSTOMS DEPARTMENT
23 September 1998
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PREAMBLE
'... Why dost thou show me iniquity, and cause me to behold grievance? The law is slacked, and judgment doth never go forth: for the
wicked doth compass about the righteous; therefore wrong judgment proceedeth...'
Habakkuk ch. 1 v 3 and 4.
SUMMARY
In Vanuatu, the Vienna Convention and the Consular Relations Act covering consular relations divides consular officers into two categories: career consular officers and honorary consular officers. Both groups are entitled to duty exemption on varying articles for official use. Often this interpretation can be misread or ignored as this report outlines.
In January 1996, the Honorary Consul for Spain, Mr George Dubois, applied to the then Minister of Finance, Mr Willie Jimmy, for duty exemption on an official vehicle. Mr Jimmy approved his application under the provisions of the Vienna Convention. The Department of Foreign Affairs has no record of any advice given to Mr Jimmy, though Mr Jimmy says he sought this advice.
The Director of Department of Customs, Mr John Simbolo, maintains that the approval was proper, even though the law has been pointed out to him.
As a result of these actions, the Government of Vanuatu has lost an amount of VT 1,026,612.
The Ombudsman finds that Mr Jimmy had no right to authorise duty exemption and the Director of Customs, Mr Simbolo had no right to grant it. Apart from that, as a leader, Mr Jimmy did not have the interests of Ni-Vanuatu and of the country as a priority and breached the Leadership Code in recklessly granting the duty exemption.
The Ombudsman makes several recommendations which include that the exercise of ministerial discretion in granting duty exemption be eliminated, that the Director General of Finance consider instituting disciplinary proceedings against Mr Simbolo on the basis of negligence in losing VT 1,026,612, that a list of persons entitled to duty exemption be compiled and maintained by the Minister of Finance for use by the Ministry and Department of Customs. Another recommendation is that the Director of Customs familiarise himself and his staff with all relevant legislation, particularly laws covering consuls and honorary consuls.
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TABLE OF CONTENTS
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1. JURISDICTION
1.1 Under the Constitution and the Ombudsman Act, I have jurisdiction to inquire into the conduct of government and related bodies, which includes the conduct of the Minister of Finance, and the Customs Department. I also have jurisdiction to inquire into defects in law or administrative practices and possible breaches of the Leadership Code. Mr Willie Jimmy, as Minister of Finance was a leader under the Constitution and/or the Ombudsman Act at the time of these events.
1.2 Please note that the Ombudsman Act continues to apply to this case as if it had not been repealed (in accordance with s. 11 of the Interpretation Act [CAP 132]), since the investigation began while the Act was in effect.
2. PURPOSE, SCOPE OF INVESTIGATION AND METHODS USED
2.1 The scope of this investigation is to
(a) ascertain the relevant facts with respect to the issuing of duty exemption to an official vehicle for an honorary consul
(b) to determine whether the conduct of Mr Jimmy and the Customs Department in approving and issuing the request for duty exemption was proper; and
(c) to ascertain whether Mr Jimmy breached the Leadership Code.
2.2 The purpose of this report is to present my findings as required by Article 63 of the Constitution and Section 24 of the Ombudsman Act.
2.3 The Office acquires relevant information and documentation by informal request, summons, correspondence, personal interviews and research.
3. OUTLINE OF EVENTS
3.1 Mr George Dubois is the Honorary Consul for Spain and resides in Vanuatu. On 12 January 1996 Mr Dubois wrote to then Minister for Finance, Hon. Willie Jimmy seeking duty exemption on a vehicle intended for official purposes. The letter of application is attached as Appendix A.
3.2 On 23 January 1996, Mr Jimmy confirmed with Mr Dubois by letter that he was approving his application under the provisions of the Vienna Convention. This vehicle was to be imported free of both import duty and service tax and registered with diplomatic plates number CD-ESP-01. Mr Jimmy’s letter of approval is attached as Appendix B.
3.3 Mr Jimmy states in his letter of approval of duty exemption that he had sought protocol advice from the Department of Foreign Affairs before making his decision. Mr Jean Sese, the then Director of The Foreign Affairs Department has stated that the Department has no record of this advice and he does not recall giving any. Mr Sese has also confirmed that honorary consuls are not eligible to be exempt from customs duties on official vehicles. Mr Sese's letter to the Ombudsman is attached as Appendix C.
3.4 On 2 February 1996, Customs Officer, Touasi Taiwia signed the bottom of Mr Jimmy’s approval letter, endorsing duty exemption under X.65. Mr John Simbolo, Director of Customs Department, confirmed by letter to the Ombudsman that the Customs Department endorsed Mr Jimmy's approval under X.65 of the Customs Tariff and that the exact amount of duty exemption for Mr Dubois’ car was VT 1,026,612. On the other hand, the amount of the assessed market value of the car was VT 3,100,000. See Appendices B, D and G.
3.5 In Mr Jimmy's response to the Ombudsman on 3 July 1997, (Appendix E) he indicates that:
(a) Vanuatu does not have, nor is he aware of any guidelines respecting immunities and privileges for Honorary Consuls;
(b) he is aware of the Vienna Convention;
(c) since there are no rules of procedures, he 'may have thought he has his general powers under the act to grant such duty exemption to Mr. Dubois, which may be wrong'.
3.6 In Mr Simbolo's response to the Ombudsman in April 1998, Mr Simbolo states that if an error is committed in approving duty exemption, then payment is usually sought. However, Mr Simbolo believes that the exemption for Mr Dubois was properly given pursuant to the Vienna Convention and the Customs Tariff.
4. RESPONSES TO THE PRELIMINARY REPORT
4.1 The preliminary report in this matter was issued on 2 June 1998 in accordance with Article 62(4) of the Constitution and Section 16(4) of the Ombudsman Act, which requires that the person or body complained of be given an opportunity to reply to the complaints made against them.
4.2 Responses were received from Mr Simbolo, Mr Jimmy and Ms Taiwia. Mr Simbolo and Mr Jimmy did not dispute the findings set out in our preliminary report. Ms Taiwia continues to state that Mr Jimmy’s approval was verbally discussed between the Director of Customs, Deputy Director of Customs and herself and that they had initially refused to act on the matter. However, later the approval was processed (See Appendix F).
4.3 It is worth noting that Ms Taiwia’s statement is contradictory to item 3.6 of this report which states that Mr Simbolo assumed that the exemption was legitimate.
5. RELEVANT LAWS
THE IMPORT DUTIES (CONSOLIDATION) ACT [CAP. 91] (THE 'CUSTOMS TARIFF')
5.1 Section 6 under X.65 of the Customs Tariff (which is Schedule 3 of the Act) provides import duty exemption for:
Any goods admissible free of duty or tax by virtue of an international convention or agreement signed by the Government of the Republic of Vanuatu, which are intended for the use of a diplomatic, consular or any other approved organisation or mission, or for entitled persons employed by them:
provided that a signed copy of the convention or agreement shall be lodged with the Minister of Finance, together with a list of persons entitled to privileges under such convention or agreement;
and further provided that the Director shall impose such conditions as he may consider necessary in any particular case.
THE VIENNA CONVENTION ON CONSULAR RELATIONS AND
THE CONSULAR RELATIONS ACT [CAP. 200]
5.2 The Vienna Convention is an international convention on consular relations signed by member states of the United Nations in 1963. Article 1 of the Convention divides consular officers into two categories: career consular officers, to which Chapter II applies, and honorary consular officers, to which Chapter III applies. The privileges set out in Chapter II for career consular officers include, in Article 50, duty and tax exemptions for articles for the official use of the consular post. The regime established by Chapter III for honorary consular officers does not incorporate Article 50. Instead, Article 62 deals explicitly with 'Exemption from customs duties' for Honorary Consuls:
The receiving State shall, in accordance with such laws and regulations as it may adopt, permit entry of, and grant exemption from all customs duties, taxes, and related charges other than charges for storage, cartage and similar services on the following articles, provided that they are for the official use of a consular post headed by an honorary consular officer: coats-of-arms, flags, signboards, seals and stamps, books, official printed matter, office furniture, office equipment and similar articles supplied by or at the instance of the sending State to the consular post.
No other items imported by Honorary Consuls, such as vehicles, are exempt from duties and taxes under the Vienna Convention.
5.3 The Consular Relations Act gives effect to the Vienna Convention. Section 2(5) states that Articles 50 and 62, amongst others, 'shall be construed as granting any privilege or immunity which they require to be granted.'
THE PUBLIC SERVICE ACT [CAP 129] AND THE PUBLIC SERVICE STAFF MANUAL
5.4 Section 11 (c) of the Public Service Act outlines disciplinary offences and disciplinary proceedings with respect to public servants. In particular, a disciplinary offence is committed if an officer
is negligent, careless, indolent, inefficient, or incompetent in the discharge of his duties
5.5 Section 10.2 of the Public Service Staff Manual provides that the Heads of Departments are to ensure that proper written Departmental Instructions are issued, to protect the public interest and assist the efficient conduct of business. A Head of Department is held personally responsible for any loss of public money 'which has occurred because of, or has been materially assisted by, the absence of, or inadequacy of, Departmental Instructions'.
THE CONSTITUTION
5.6 Art 67 defines a Leader as follows:
For the purposes of this Chapter, a leader means the President of the Republic, the Prime Minister and other Ministers, members of Parliament, and such public servants, officers of Government agencies and other officers as may be prescribed by law.
5.7 The appropriate provision is Art 66 regarding the conduct of leaders:
(1) Any person defined as a leader in Article 67 has a duty to conduct himself in such a way, both in his public and private life, so as not to----
(c) allow his integrity to be called into question; or
(d) endanger or diminish respect for and confidence in the integrity of the Government of the Republic of Vanuatu
6. FINDINGS
6.1 Finding 1: CUSTOMS DEPARTMENT AND MR JIMMY’S GRANTING OF DUTY EXEMPTION WAS CONTRARY TO LAW
6.1.1 The effect of the Customs Tariff, the Consular Relations Act and the Vienna Convention is clear: Honorary Consuls are not entitled to duty exemptions for vehicles for official use. Only those items listed in Article 62 of the Convention can be admitted duty free to Honorary Consuls under X.65 of the Customs Tariff. This list does not include vehicles or any personal items. The Customs Department and the then Minister of Finance, Mr Willie Jimmy authorized duty exemption in violation of the law.
6.1.2 Both Mr Jimmy and Mr Simbolo failed to assess fully whether Honorary Consuls are permitted exemption from import duties and service taxes on official vehicles. Both men failed to familiarize themselves with the relevant law (in particular the Vienna Convention), or to seek advice and assistance from the Department of Foreign Affairs and/or the Attorney General. A list of persons entitled to privileges was not used, despite the requirement in X.65. Mr Simbolo as Director of the Customs Department failed to perform his duties in making sure that accurate departmental instructions were issued in relation to X.65 exemptions. As a result, his officer Ms Taiwia did not receive adequate instructions to know that the approval should not have been endorsed.
6.2 Finding 2: CONDUCT OF MR JIMMY IN RECKLESSLY AND ILLEGALLY APPROVING THE DUTY EXEMPTION WAS A BREACH OF THE LEADERSHIP CODE
6.2.1 Mr Jimmy said in his approval letter that he sought protocol advice from the Department of Foreign Affairs, yet refused to answer the Ombudsman's questions with respect to any advice sought and received in this matter. The Department of Foreign Affairs denies having provided any advice to Mr Jimmy in this matter. I find that Mr Jimmy fabricated information to support his approval.
6.2.2 In his July 1997 response to the Ombudsman’s Office, while still in the position of Minister of Finance, Mr Jimmy showed a blatant disregard for his responsibility to determine and act in accordance with the law. He states that he is not aware of any laws governing the privileges of Honorary Consuls, yet refers to the Vienna Convention which sets out those very privileges! Mr Jimmy suggests that he may have had 'general powers under the act', but does not refer to a particular Act nor any authorizing section, and also states that this view 'may be wrong'. He displays a complete lack of respect for the law which he has sworn to uphold, as well as a lack of concern for the unwarranted loss of government revenue.
6.2.3 In these ways, I find that Mr Jimmy's integrity has been called into question. I also find that Mr Jimmy's attitude and actions, in recklessly ignoring the direction of an international convention with the force of law in Vanuatu, have endangered respect for the Government of Vanuatu. Mr Jimmy has thus violated Articles 66(1)(c) and (d) of the Leadership Code of the Constitution.
6.3 Finding 3: MR JIMMY HAS BEEN IMPLICATED IN SEVERAL OTHER REPORTS PUBLISHED BY THIS OFFICE INCLUDING THE FOLLOWING:
Recommendations which the Ombudsman made include Mr Jimmy
7. RECOMMENDATIONS
7.1 Recommendation 1: The exercise of Ministerial discretion in granting duty exemption be eliminated
7.2 Recommendation 2: In order to avoid such mistakes in future, the Minister of Finance must maintain a list of persons entitled to duty exemption under international conventions or agreements, as required by X.65 of the Customs Tariff. He should seek the assistance of the Department of Foreign Affairs in compiling this list and keeping it current. Customs Officers should have access to this list as well as a list of items exempt from duty for consuls and honorary consuls.
7.3 Recommendation 3: The Director of Customs Department familiarise himself and his staff with all relevant legislation (particularly the Consular Relations Act and the privileges for consuls and honorary consuls), and ensure that correct departmental instructions are issued and followed.
7.4 Recommendation 4: That the Minister of Finance or the Director General of Finance issue a warning or consider other disciplinary action against Mr Simbolo in accordance with Chapter 10.1 (c) and 10.5 of the Public Service rules for negligence in contributing to the lost duty amounting to VT 1,026,612.
8. CONCLUSION
8.1 In accordance with Article 63(2) of the Constitution and Section 22 of the Ombudsman Act, the Ombudsman requests the Prime Minister and his Director General, the Minister of Finance, the Leader of the Opposition, the Director General of Finance, and the Director of Customs Department to consider these recommendations and to put them into effect.
8.2 The Office of the Ombudsman must be notified within twenty-one (21) days of the date of this report outlining the decision and steps proposed to implement the recommendations.
Dated this 24th day of September 1998
Marie-Noëlle FERRIEUX PATTERSON
OMBUDSMAN OF THE REPUBLIC OF VANUATU
9. INDEX OF APPENDICES
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