Minister backs legal action for breaches at Nutrition Products

MINISTER of Education, Youth and Information Fayval Williams has indicated that legal action could be taken against anyone found involved in the messy affairs at Nutrition Products Limited (NPL) which, based on a report from Auditor General Pamela Monroe Ellis, could have cost Jamaican taxpayers millions of dollars.

Responding to the report that was tabled in Parliament on Tuesday, Williams told a post-Cabinet media briefing yesterday that, “as a minister and as a ministry, we stand ready to support any further investigations and pledge the full support of the ministry in that regard. Let the chips fall where they may”.

According to Williams, her ministry has taken note of the serious issues that were outlined in the auditor general’s performance audit titled ‘Nutrition Products Limited Governance and Resource Management’.

“Let me say, without a shadow of a doubt, that the findings demonstrate serious breaches of the Government’s Public Bodies Management and Accountability Act and that, on reading the report, it may require further investigations by other constituted authorities empowered to take legal action based on their findings,” said Williams as she pointed out that the report covered the period 2015 to 2021, before she was appointed to lead the ministry.

“You will note that a new board was put in place in December of 2020,” said Williams, who was given the portfolio responsibility after the Jamaica Labour Party’s election victory in 2020.

“The issue that the auditor general raised in terms of the former board chair being chairman of the Procurements and Contracts Committee was brought to the attention of the new board chair as being an action that was not in keeping with good governance.

“The issue of an external secretary being paid from April 2017 to January 2021 $7.4 million to take minutes at the board meetings that was flagged by the new board chair, and it was an activity that was discontinued in the first month of the new board,” said Williams as she highlighted one of the damning findings of the auditor general.

Other disturbing finds by the auditor general included the fact that NPL paid $143 million to companies and individuals connected to its board members and management staff to provide transportation, repairs and maintenance, sanitation, and other services.

“We consider a connected party as an individual or entity closely associated, whether directly or indirectly, to NPL’s directors or anyone discharging managerial responsibilities. Related party transactions are not prohibited by law, but the nature of these transactions is likely to create potential conflicts of interest,” said Monroe Ellis.

“In one such instance, NPL paid a distribution company $69.6 million between November 2010 and January 2021 to provide transportation and haulage services. Our investigation revealed that the registered owner of three trucks used by the distribution company was an investment company [of] which the former board chairman is a director and shareholder,” pointed out Monroe Ellis.

The auditor general said the probe also identified cases in which NPL ignored the procurement rules of fairness, transparency, accountability and competition, and bypassed the procurement process altogether, demonstrating that it did not embrace good procurement practices.

The report also noted that NPL engaged a consultant to assist with a proposed reorganisation and undertake similar functions assigned to its human resource manager, who did not possess the academic qualification for the job.

“NPL paid the consultant $3.3 million for the period February 2019 to July 2020. We were unable to ascertain how NPL justified the engagement of the consultant to undertake a proposed reorganisation, given the 2018 Cabinet decision to pursue the divestment of NPL and subsequent reduction in NPL operational outputs and underutilisation of staff,” said Monroe Ellis.

On that matter, Williams told the media briefing yesterday that she had taken a submission to Cabinet in June to get it to ratify a decision that was taken in June of 2018 for the divestment or privatisation of NPL.

“Cabinet gave approval for the establishment of an enterprise team for the divestment or privatisation of Nutrition Products Limited and for the Development Bank of Jamaica as transaction managers to execute the divestment or privatisation… in collaboration with the NPL,” said Williams.

She added the Government supports the findings of the auditor aeneral’s report in NPL “and sees it as a powerful tool for the reform of not just NPL but as a guide to the proper management of entities that call on the national budget and spend taxpayers’ money”.