Fighting Corruption In The Cayman Islands

Corruption has been identified as one of the most important problems facing the world today. 1 It is a world-wide problem that became an increasing concern in the early 1990s. Since then, addressing corruption has become increasingly urgent. Corruption exists across the public and private sectors; the International Monetary Fund (IMF) estimates that bribery alone siphons between US$1.5 trillion and US$2 trillion annually from the global economy (two per cent of global GDP). 2 Corruption has a significant negative effect on human and economic development, as it hinders economic growth, results in lost tax revenues, and contributes to sustained poverty. It can also erode public trust and confidence in governments and can stifle progress and innovation.
Given the extent of corruption, major development and capacity building institutions including the IMF, United Nations, the Organization for Economic Co-operation and Development, Transparency International and the World Bank have been encouraging and supporting countries across the world to do more to strengthen their governance, accountability and transparency arrangements with the aim of eliminating corruption.
The Cayman Islands is not immune to corruption. Since 2011, there have been around 13 high-profile cases of fraud and corruption involving public servants; over the last two years, nine cases of alleged fraud and corruption in the public sector have been reported and are being investigated. Widespread corruption creates a significant reputational risk for the Cayman Islands if government is seen to be ineffective in tackling fraud and corruption.
Since 2007, consecutive governments have introduced measures aimed at combatting fraud and corruption, including passing legislation, setting up anti-corruption bodies and strengthening government policies and procedures. However, actions have not yet been extended across the wider public sector; and it is not yet clear how effective the framework is at preventing corruption.
This audit focuses on the institutional framework for fighting corruption at the national level and within the infrastructure sector, with emphasis on the three planning entities: the Cayman Islands Government’s Department of Planning, Central Planning Authority (CPA) and Development Control Board (DCB). We selected this sector because it is integral to the country’s development and economic prosperity and because there are significant numbers of major infrastructure developments (both public
1 2013 World Independent Network/Gallup International annual survey covering 65 countries.
2 IMF Staff Discussion Note – Corruption: Costs and Mitigating Strategies, International Monetary Fund, May 2016
Fighting Corruption in the Cayman Islands and private sector) currently underway in the Cayman Islands. We have also previously recommended that the National Development Plan be updated to provide a strategic approach to infrastructure in the Cayman Islands.3 
The objective of the audit was to assess the effectiveness of the mechanisms for preventing corruption at the national level and within the infrastructure sector. Specifically, we attempted to answer the following audit questions:
• How well-designed is the national framework to prevent corruption?
• How effective is the national framework in preventing corruption at the national level?
• How well-equipped is the infrastructure sector to prevent corruption?
The Government has made progress in developing a national framework for countering corruption. This includes enacting a range of legislation, the main component being the Anti-Corruption Law. However, some of the legislation has only recently come into force, and some has yet to come into force.