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Government 27 Jul, 2020 Follow News


Ezzard Miller, MLA

Sue Winspear, Auditor General

The future of the Cayman Islands agency charged with regulating the jurisdiction’s water, electricity, fuel and telecommunications sectors hangs in the balance. But that balance doesn’t oscillate between whether Ofreg (The Utility Regulation and Competition Office) is scrapped or continues to operate.

It’s more a matter of how OfReg - or something like it - functions.

The point is if OfReg did not exist it would need to be invented; such is the importance of an agency of its kind to fulfil this mandate in Cayman.

It’s critical what OfReg states on its own website as its statement of mission:

“While many of the functions previously carried out by the ICTA (Information and Communications Technology Authority) and ERA (the Electricity Regulatory Authority) will continue as usual, in addition, OfReg is endowed with strengthened competition and consumer protection powers, as well as a duty to promote innovation in the sectors for which it has responsibility.

OfReg was also preceded by the Petroleum Inspectorate, which hitherto had been a Department of the Government of the Cayman Islands.”

Across four days in July, the extent to which OfReg has been fulfilling its remit was subjected to forensic scrutiny by the Cayman Islands Public Accounts Committee.

That followed an equally clinical and generally critical review of OfReg by the Office of the Auditor General (OAG) on which the PAC sitting - more of an inquiry - was conducted.

OfReg did not go into or emerge smelling of roses, however with the shortcomings exposed of both the regular and the sectors, and significantly the companies, it regulates (or is required to), the future can only be better.

While the PAC’s report in awaited, it’s clear that OfReg needs the proverbial ‘roots and branches’ overhaul if the agency is ever going to live up to its mandate.

The evidence from the agency’s executive ranged from the contrite; with OfReg admitting to its own serious administrative shortcomings, to the extremely combative; where the PAC had to order that accusations of inaccuracies levelled against the OAG over its report be struck from the record.

But in the defence of OfReg, one could argue that from the outset, the way it was set up (as detailed in the OAG report, the first since OfReg was set up in 2017), it was designed to fail or at best be impotent.

Plagued by inadequate funding streams, an inability to raise adequate funds in regulatory fees, and its own staffing and resource inadequacies, these almost crippling challenges position OfReg as less a supervisor and more subservient to the very sectors - powerful, influential and well-resourced company and industries - that it’s charged with regulating.

Cayman is a veritable gold mine for these companies and has proven attractively so over the years.

And while service has been delivered, it’s the consumer who has paid the price; literally and figuratively.

The expert testimony given by company executives who appeared before the PAC gave an insight into the workings of the sectors in Cayman and the global industry in which they operate.

The bottom-line, whether it comes via fuel, electricity, telecoms or water lines tends to get prioritised over consumer lines of concern over price and service, industry expertise and slick public relations notwithstanding.

It might not be stretching it to suggest that OfReg is hardly equipped to (and resourced), despite its mission statement and the laws which underpin its existence, to go head-to-head with these giants of industry that operate in Cayman providing a full range of services across energy, fuel, water and telecoms.

The PAC report is anxiously awaited.

Its recommendations, coupled with the clinical probe carried out by the OAG with its series of recommendation, should provide the basis for the future of OfReg, effecting a better balance - and distance - between the regulator and the regulated.

It’s clear that OfReg needs to be better resourced across the board - and across its own board - to be the gatekeeper that it needs to be for the Cayman consumer.

Unless that’s done, it will continue to be a paper tiger...and even more paper than tiger.

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