Blind spot

Jamaica’s procurement system has come under scrutiny after it was revealed that public entities are not required to identify the true owners of companies before awarding contracts. This issue came to light during the controversy surrounding the purchase of a $31-million neurosurgical drill for a public hospital.

At the centre of the matter is the concept of beneficial ownership, which aims to identify the natural person who ultimately owns or controls a company. International organisations like the World Bank consider transparency around beneficial ownership crucial in fighting money laundering, terrorism financing, tax evasion, and corruption, especially in public procurement, a sector prone to abuse.

In Jamaica, the issue has gained attention following concerns raised by Dr Alfred Dawes, the opposition spokesman on health. He questioned the cost of the drill and whether proper checks were made to determine who ultimately controlled the company that supplied it – Medical Technologies Limited (MediTech). The company was awarded the contract in 2024 to supply the drill to the Bustamante Hospital for Children.

Both MediTech and the South East Regional Health Authority (SERHA), which oversees the hospital, have strongly rejected any suggestion of impropriety, with SERHA insisting that the procurement process followed the law.

Dawes also publicly pointed out Kingston Central member of parliament and attorney-at-law Donovan Williams as having a connection to MediTech.

But Williams, who is a member of the ruling Jamaica Labour Party, rejected any suggestion that he holds a beneficial interest in the company.

“While my name is reflected as one of the shareholders in the company, … I do not now, nor have I ever owned a beneficial interest,” he said in a May 20 statement, which triggered The Sunday Gleaner’s broader examination of the procurement system.

Williams clarified that in 2009, he was named trustee of shares amid a legal dispute, which was resolved in 2022. Documents, he said, have been prepared to facilitate the shares being passed to the beneficial owner and remove his name from the Companies Office of Jamaica (COJ) records.

Sunday Gleaner questions submitted to Williams and Medical Technologies on June 11 remain unanswered.

SERHA said it had no requirement for beneficial ownership information in its tender and such a determination “falls outside its mandate”, according to a May 28 response.

It added: “The ownership structure of companies is not a criterion in the evaluation or awarding of contracts. ... Our sole and unwavering focus is to serve the people of Jamaica by securing critical medical equipment promptly ... .”

Jamaica’s procurement regime is anchored by the 2015 Public Procurement Act (PPA), which is chiefly presided over by the Public Procurement Commission (PPC) and the Office of Public Procurement Policy.

Procuring entities are not required to know the beneficial owner of companies before contracts are awarded, the PPC confirmed in a June 3 response to Sunday Gleaner questions. But in pointing out that Section 42 of the procurement law empowers procuring bodies to exclude entities engaged in corruption or conflicts of interest, the PPC acknowledged that: “Information regarding the beneficial ownership of a bidder may assist in the determination required by Section 42 of the act.”

Conflicts of interest

Critics argue that without knowing who truly owns or controls a bidding company, it could be difficult to enforce exclusions for conflicts of interest or corruption.

The PPC believes the information should be known before contracts are awarded, and said it “would support such a policy”.

The Financial Investigations Division (FID), which investigates financial crimes, voiced similar concerns.

“While not all financial crime investigations require beneficial ownership information, its absence presents a challenge in cases where it is needed,” the FID said in June 25 responses to The Sunday Gleaner. “The lack of this requirement complicates – it does not prevent – the FID’s ability to trace illicit financial flows, identify conflicts of interest, or uncover connections between public officials and entities benefitting from Government of Jamaica contracts.”

The agency warned that despite improvements in procurement transparency, “existing measures still fall short of fully addressing vulnerabilities within the procurement and investigative frameworks”.

“The absence of a statutory requirement for procuring entities to obtain and verify beneficial ownership information during the procurement process weakens efforts to detect and prevent conflicts of interest, procurement fraud, and corruption. It may also impair the FID’s ability to perform effective due diligence in public contracting cases,” it said.

The Integrity Commission, Jamaica’s primary anti-corruption watchdog that polices contract awards, supports including beneficial ownership checks in the procurement process. “This is a necessary part of the due diligence process around conflict of interest,” it told The Sunday Gleaner on June 13.

However, it does not believe Jamaica’s regime lacks a requirement for such disclosures in procurement.

“The commission is not of the view that there is the absence of such a legal requirement. There are a number of provisions that directly or broadly address this issue,” it said.

It pointed to several sections of the Public Procurement Act, including Section 42, which the PPC highlighted could benefit from mandatory disclosure of beneficial ownership information. The IC also said Section 14(5) of the Corruption Prevention Act, which deals with illicit enrichment, is “broadly applicable”; as well as the constitutional provision that requires parliamentarians to get an exemption if companies they are connected to seek state contracts.

Like the FID, the Integrity Commission said it has faced challenges in some procurement-related investigations due to the absence of such information, though it noted that the establishment of the COJ’s Beneficial Ownership Register has impacted its work “positively”. The register, however, is not fully accessible to the public.

“The commission would support any measure that prevents corruption and enhances transparency and good governance,” the IC added, when asked if it would support legislative changes to mandate beneficial ownership checks in the procurement process.

Although current laws, including Section 42 of the Procurement Act and disclosure obligations on parliamentarians, offer some oversight, there remains no direct legal requirement to submit beneficial ownership information as part of public procurement vetting, and there is no requirement for the procuring entity to check that information.

The regime does include opportunities for state agencies to make checks, which is through the Beneficial Ownership Register that followed reforms in 2017. There was tightening in 2023 when Parliament amended the Companies Act to strengthen the country’s systems in line with recommendations from the Financial Action Task Force (FATF), the body that sets global standards on anti-money laundering.

The changes empower the COJ to verify ownership data and extend beneficial ownership reporting requirements to non-profits, and were crucial to Jamaica’s 2024 removal from a grey list that invited serious economic, financial, and reputational consequences.

FATF told The Sunday Glean er that it was “unable to take a view” on the interpretation and application of its standards by an individual jurisdiction and its procurement system outside of formal assessments. Jamaica is scheduled for assessment in June 2027 by the Caribbean Financial Action Task Force, an associate body of FATF.

“The procurement process itself is not subject to FATF Recommendations. Nevertheless, the FATF appreciates the high importance of accurate and up-to-date beneficial ownership information in the context of public procurement and anti-corruption,” the watchdog said.

In 2022, the FATF modified its recommendations to require countries to ensure that public authorities have access to beneficial ownership information of legal persons in the course of public procurement.

Absence of a legal requirement

In the absence of a legal requirement, the extent to which Jamaican state entities access BO information when awarding contracts is not clear, and so too is the general compliance of local companies in declaring their beneficial ownership with the COJ.

The COJ indicated on June 20 that it will be responding to Sunday Gleaner questions submitted on June 6 about compliance. On Friday, the COJ said it submitted the responses to its parent ministry, the Ministry of Industry, Investment and Commerce, for review. It requested that the ministry be given four business days, after which the responses will be shared.

In a May 23 public notice published in The Sunday Gleaner on June 15, the Companies Office revealed that 216 entities were facing potential dissolution for failing to file required annual beneficial ownership returns.

“At the expiration of three (3) months from the date of this notice, the names of the companies mentioned in the schedule hereto will ... be struck off the register of companies and will be dissolved, unless cause is shown to the contrary,” the notice read.

The gap in the procurement law is “a major oversight” that should be addressed in the first 100 days of the new administration following the general election expected by September, argued Jeanette Calder, executive director of the Jamaica Accountability Meter Portal, an anti-corruption lobby.

She contends that the lack of a requirement is a vulnerability that can allow individuals to mask their involvement in the award of public contracts.

“Transparency in procurement is not just about how contracts are awarded, it’s about knowing who profits from them,” Calder said. “Until we know who really owns the companies getting state contracts, accountability will always be an illusion.”

She added: “If we even get to the long-promised stage of debarring contractors, it would be nigh impossible to detect if that owner is bidding again through a different entity.”

Anticipating that some people might argue that requiring disclosure could make the process too burdensome, Calder said this argument would not be sound.

“The information to be provided for the beneficial owner is currently asked to be provided in the Act… If this is too much to ask, the country probably should not be doing business with such a company,” she said.

Questions were submitted on June 23 to Finance Minister Fayval Williams about whether the Government considers the lack of a procurement disclosure rule a weakness in the anti-corruption framework. Her ministry acknowledged the queries, but there has been no response so far.

Beneficial ownership requirements in procurement are standards in many countries. In Chile, for example, legal entities must disclose their ultimate beneficial owners and administrators to be registered as new suppliers, while existing registered entities are required to provide the information before their bids are advanced.

Just last year, the Philippines enacted the New Government Procurement Act, which moved its requirements from optional checks to a mandatory, transparent regime that obliges bidders to disclose their beneficial owners. That is then fed into a publicly accessible registry.

A common reason for the transition is to improve transparency. According to the World Bank, beneficial ownership is often overlooked, even when government agencies have strict guidelines when using public funds to build roads, schools, and hospitals.

Noting that public procurement makes up 10-25 per cent of global public spending, World Bank experts in a 2025 publication said a lack of key beneficial ownership information could result in illicit financial activities that they point out had already cost developing countries from the Caribbean and other regions over US$416 billion in tax losses.

The total value of contracts awarded in Jamaica is substantial and covers basic supplies to massive infrastructure works in healthcare and education, among other vital areas.

Some 286,245 contracts with a total value of $1.9 trillion were awarded by public entities between May 2006 and October 2024, the Integrity Commission reported last year.

jovan.johnson@gleanerjm.com