Tue | Sep 25, 2018

CCJ Trust Fund solid

Published:Thursday | January 22, 2015 | 12:00 AM

Daraine Luton, Senior Staff Reporter

THE Caribbean Court of Justice (CCJ) Trust Fund has a healthy balance, the latest audited report shows.

The balance of the fund as at December 31, 2012 was US$93.7 million and increased to US$100.4 million as at the end of the financial year 2013, its annual report for 2013 shows.

Further, Prime Minister Portia Simpson Miller told Parliament on Tuesday that the trust fund "remains intact to adequately cover the future costs of the court".

"There was a total fund balance of US$100.4 million at December 31, 2014, the prime minister said.

A trust fund was established by the CARICOM states signing the agreement, who together invested US$100 million into the fund, from which US$12 million would be used to run the court for its first two years. The remaining US$88 million would be invested, the returns from which would finance the court in perpetuity.

Contributing to the debate on three bills seeking to make the CCJ Jamaica's final appellate court, Delroy Chuck, a former justice minister and opposition member of parliament, expressed what he called "great concern" for the sustainability of the court because of funding issues.

"We need to know the present status of the fund. If, indeed, the capital is eroding and steadily declining, it won't be long before Caribbean governments are required to fund the court directly or to top up the trust fund," Chuck said.

He added: "The prime minister has a duty to bring this Parliament up to date on the status of the trust fund during her closing. In fact, before the vote on these three bills is taken, in three months or so, the audited account of the trust fund should be presented in this Parliament."

Meanwhile, the latest annual report of the trust fund indicates that the increase in the market value reflected a net annual return of 12.2 per cent for 2013, bringing the annualised and cumulative net returns since inception in April 2005 to 5.4 per cent per annum and 56.4 per cent, respectively.

During the financial year to December 31, 2013, the trust fund disbursed US$5.7 million to cover the funding requests of the court and the commission. The trust fund also received from the court, a return of funds previously disbursed, in the sum of US$1.3 million, which primarily represented a repayment of pension monies previously invested with a third party. This brought the net amount disbursed for the year to the court and the commission to US$4.3 million.

Chartered accountant Dennis Chung said that the trust fund appears to be in a strong position.

"They have had a significant capital contribution, which seems to be the contributions from various governments, and have a net fund balance of US$100 million," Chung said.

He also noted that the trust fund is generating a net surplus, based on the investment income, which is interest but primarily the improvement in the value of their investments, which is US$94 million.

"The investments consist mostly of equities ($51 million) and various investment funds. This means, therefore, that the performance of the capital is very dependent on the investment manager, as poor performance of the investments could have a negative effect," Chung said.

He said that on the face of it, the capital seems adequate and "I am sure they would have prudent investment guidelines".