Paradise lost among Maldives dodgy land deals

Paradise lost among Maldives dodgy land deals

Should tourists run for cover as a storm of corruption allegations sweeps across the Maldives?

An ethical cloud has been cast over the blue skies and white sand beaches of the Maldives, as the idyllic tropical holiday destination is ensnared in a scandal that saw more than 50 islands and submerged coral lagoons leased out to tourism developers in no-bid deals. At least US$79 million from the lease fees was embezzled into private bank accounts. The scandal implicates local businessmen, international hotel operators, and even leads all the way to the door of outgoing President Abdulla Yameen.

The allegations of high-level corruption arrived just before the Maldives held presidential elections, on September 23. Early ballot counts indicate that President Yameen lost power to the opposition candidate by a margin of 16.7 per cent. Voting on Sunday took place amidst claims of harassment of opposition parties and with some election observers and international journalists denied entry to the country.

Just days before the election, investigative journalists at the Organized Crime and Corruption Reporting Project (OCCRP) used leaked cell phone and email data from former Vice President and Tourism Minister Ahmed Adeeb (now imprisoned on charges including corruption and terrorism), public documents, and internal government records, to discover which hotels are implicated in the scandal.

Irresponsible Tourism

The scam saw dozens of Maldivian islands and lagoons leased to property developers in deals that sidestepped a requirement, then in the country’s tourism law, that leases be given out via a public bidding process. Investors negotiated leases directly with the then-tourism minister, Adeeb, but then signed leases with and paid money to the Maldives Marketing and Public Relations Corporation (MMPRC), a state company that had no legally mandated role in leasing out islands. The money was then diverted from the MMPRC to private bank accounts.

The islands and lagoons handed out via the scheme ended up with local and international tourism developers - many of whom are part of, or connected to, the country’s elite.

Many of these spectacular sites have since been developed into resorts. Maldivian tourism giants such as Crown & Champa, Universal Resorts, and Sun Siyam have built resorts under their own house brands. International chains, such as Sri Lanka’s Aitken Spence, Britain’s Soneva, and Germany’s Robinson (part of TUI Group) have done the same.

Other large international brands were not involved in obtaining the leases, but have since lent their names to resorts that are either planned, under construction, or already operational on the islands. These include US-based hotel chains such as Waldorf Astoria Hotels & Resorts (part of Hilton Worldwide) and Westin Hotels & Resorts (part of Marriott International), and Spain’s Meliá Hotels International.

The question for the international hoteliers is largely an ethical and moral one about the legitimacy of profiting from a hotel operating on land acquired through corrupt payments that undermined national laws.

These high-profile hotel chains had an obligation to check that the contracts for which they paid millions of dollars were legal and ethical, according to the former Maldivian auditor general. “International tourism operators need to do due diligence before they get involved in these deals,” said Niyaz Ibrahim to the OCCRP journalists from his location outside of the Maldives, which he fled in 2016 after receiving death threats.

The concept of Responsible Tourism starts by identifying local issues and then taking responsibility for addressing those that can be influenced through tourism. Corruption is one such issue, and Transparency International questions how much due diligence the hotels did when they transferred their millions without participating in a normal, public tendering process. The independence of the decision-making authority is key to reducing corruption in the awarding process of island leases.

Now almost $80 million is missing from the public coffers – and the public can rightly ask for compensation and accountability for the theft of their money. What will these big resort owners say?

Singapore billionaire implicated in apparent gifts for president and tourism minister

Singapore hotel magnate Mr Ong Beng Seng, and others in the public company he heads, Hotel Properties Limited, appear to have given both then-Tourism Minister Adeeb and President Yameen gifts of hotel accommodation at a time when the company was seeking Maldivian islands. It is an open question whether Ong’s dealing in the Maldives will be investigated in Singapore, and equally unclear whether Singaporean authorities could also prosecute Adeeb and Yameen. Transparency International found Singapore had little or no enforcement against foreign bribery in the period of 2014 to 2017.

Outgoing President Yameen has denied any involvement in misappropriating money paid for island leases.

Despite this, OCCRP investigative journalists found evidence the president intervened in at least 24 cases to grant the necessary permissions for islands and lagoons to be leased via the MMPRC. They also found evidence showing he was directly involved in correspondence over at least one deal.

Now that President Yameen appears to be losing the immunity that came with the office of president, will he face the same fate as his alleged accomplice, former Vice President Adeeb?

Image: Unsplash / Ibrahim Rifath 

For any press enquiries please contact press@transparency.org

Latest

Support Transparency International

Austria’s Strache affair and the undue influence toolkit

A week ago, German newspapers published evidence of the former Vice-Chancellor of Austria and a colleague apparently negotiating corrupt deals with the purported niece of a Russian oligarch close to President Vladimir Putin. The scandal illustrates the tools and methods used by those who wish to enrich themselves from public funds and advance private interests over the public good.

Why corruption matters in the EU elections

What voters should know as they head to the polls.

Four ways the G20 can take the lead on anti-corruption

The globalisation of world trade and finance has been accompanied by an internationalisation of corruption. The G20 Anti-Corruption Working Group therefore has the potential to be a very important partner in the fight for a more just world.

Venezuela: Se necesitan instituciones sólidas para abordar la delincuencia organizada

La corrupción en las más altas esferas del Gobierno venezolano ha causado inestabilidad social y económica extrema y ha debilitado a las instituciones estatales que deberían proteger a la ciudadanía. Las redes de delincuencia organizada actúan con impunidad en todo el país.

Venezuela: Strong institutions needed to address organised crime

Corruption in the top echelons of the Venezuelan government has led to extreme instability and weak state institutions, and allows organised crime networks to act with impunity all across the country.

The trillion dollar question: the IMF and anti-corruption one year on

The International Monetary Fund (IMF) has made public commitments and adopted a new framework to address corruption - we check how the IMF is progressing with this one year later.

Three years after the Panama Papers: progress on horizon

The explosive Pulitzer Prize-winning global media project known as the "Panama Papers" turned three years old, and there are many reasons to celebrate.

Social Media

Follow us on Social Media