The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

High-end homeowners in southwestern New Providence were yesterday said to be preparing their own legal action for “negligence and nuisance” over BEC’s Clifton pollution, which has resulted in actual economic damage and loss.

Fred Smith QC, the Callenders & Co attorney and partner, said home and real estate owners in the area were in the process of forming their own non-governmental organisation (NGO) to sue the Bahamas Electricity Corporation (BEC) and the Government over the damage inflicted upon their assets and interests.

Emphasising that this action was separate from the Judicial Review challenge launched by Save the Bays, the environmental activist group, Mr Smith said they were also planning to challenge the commercial aspects of BEC’s fuel usage.

Pledging that “a new day is dawning on environmental law” in the Bahamas, the well-known QC told Tribune Business that he would represent the group in bringing its case against the Government.

“I represent a group of homeowners and landowners in south-western New Providence who are creating an organisation to sue BEC and the Government for creating damages from a nuisance, and the pollution from the oil,” Mr Smith told Tribune Business.

While the Save the Bays action was focused on the alleged failure of Cabinet ministers, BEC and government regulators to perform their legal duties in dealing with the Clifton Pier power plant’s pollution, Mr Smith said of his latest clients: “This is a plain and simple action for nuisance and negligence, resulting in actual economic loss to homeowners and residents in the area.

“The NGO also plans to challenge the basis upon which oil is purchased; the basis of contracts which purchase oil for BEC from FOCOL, and the failure of the Government.”

While BISX-listed FOCOL Holdings is the local Shell operator and dealer, BEC’s fuel is typically sourced from Curacao and purchased from Shell Western in Barbados. It is unclear what role FOCOL has in the process, if any.

Mr Smith, meanwhile, said the Government had “failed to disclose to the public the extent of the dangers” stemming from the oil pollution at Clifton Pier, so that they could take their own protection measures. Oil and its components are toxic, and can cause cancers.

“Talking is not good enough any more,” Mr Smith told Tribune Business, in a reference to the Government’s repeated promises to stop, and clean up, the pollution at Clifton.

“A new day is dawning on environmental law.”

Mr Smith declined to name his clients, and who is involved in forming the NGO, but southwestern New Providence is home to numerous high-end luxury communities and developments, plus businesses.

Among those affected by Clifton pollution in the past have been the Albany development and its clients, particularly its marina, and the likes of Stuart Cove’s diving operation.

It is not known whether they are involved, but there are likely plenty of homeowners and investors with deep-enough pockets to finance Mr Smith and any legal action.

His latest legal threat represents another headache for the Government and BEC on a number of fronts, not least the planned reforms to the latter and the wider energy sector.

Tribune Business revealed on Monday how BEC’s environmental liabilities have promoted major revisions to the proposed management contract with PowerSecure, the preferred operator for Bahamas Power & Light (BPL), BEC’s new operating subsidiary.

Sources with knowledge of the contract talks, speaking on condition of anonymity, said there was a divide between the two sides over dealing with BEC’s legacy pollution issues.

These obligations, and PowerSecure’s role in tackling them, were said by contacts to be a key reason why the BPL management contract has yet to be finalised.

One source, requesting anonymity because they were not authorised to speak to the media, said the Government and BPL Board wants PowerSecure to complete environmental studies of all BEC sites within six months of assuming managerial responsibility.

They added that this was an aggressive timeline, based on the number of sites - and amount of data - that had to be collected.

BEC’s legacy environmental liabilities had already come to the fore via the Save the Bays action.

An affidavit sworn by Sam Duncombe, a Save the Bays director, in support of the Judicial Review application highlighted the vast discrepancy between the $20 million being allocated to deal with BEC’s environmental liabilities and previous estimates of remediation costs.

Deputy Prime Minister Philip Davis told the House of Assembly that a maximum $20 million would be assigned to deal with BEC’s legacy issues from the proceeds of the planned $600 million Rate Reduction Bond (RRB) issue.

Yet Mrs Duncombe recalled that Simon Townend, managing director of KPMG’s corporate finance arm in the Caribbean, gave a November 2013 interview to Tribune Business in which he said BEC’s environmental liabilities could exceed $100 million.

That sum is more than five times’ higher than the Government’s $20 million cap, and what makes the estimate more significant is that Mr Townend is a key adviser to the Christie administration on its BEC and energy reform process.