By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A Freeport-based QC yesterday accused the Grand Bahama Port Authority (GBPA) of “complete abdication” of its regulatory and developmental obligations as a result of its agreement with the Government.
Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the Memorandum of Understanding (MoU) signed by the GBPA and its affiliate companies represented “a wholesale betrayal of Freeport by the Port Authority”.
Mr Smith was particularly exercised by the MoU clause that commits the GBPA to ensuring its regulatory and quasi-governmental powers are ‘harmonised’ with national laws and government policies/regulations.
The MoU’s clause 1.18 appears to involve a significant devolution of these powers, given that the ‘harmonisation’ is supposed to occur via “existing independent regulators” such as the Utilities Regulation and Competition Authority (URCA), or “reserved powers vested” in the two directors the Government now has the right to nominate to the GBPA Board.
The MoU does not explain what these “reserve powers” are or how they will function, and the Prime Minister avoided any mention of them during his House of Assembly address on Monday.
While this indicates that substantial work remains to be done to give all the MoU commitments their full effect, especially in law, clause 1.18 gives an insight into just how much oversight and control the Government will now exercise over Freeport’s governance.
Addressing this directly, Mr Smith said of clause 1.18: “That goes completely contrary to the Shangri-La judgment I obtained against the Port Authority in 1982, in which the Supreme Court held the Port Authority could not delegate, formally or informally, its licensing process to central government.
“It looks like this MoU is a complete abdication and abandonment by the Port Authority of their regulatory and development functions.”
He continued: “I’m shocked at this wholesale betrayal of Freeport by the Port Authority. As a licensee, I am going to try and do everything in my power to preserve the property under Article 27 that belongs to licensees under the Hawksbill Creek Agreement.”
Mr Smith previously told Tribune Business that the MoU amounted to an attempt to circumvent, and illegally amend, the Hawksbill Creek Agreement. He argued that its signing also breached the condition that any amendment to the latter Agreement requires the approval of at least 80 per cent of GBPA licensees.
The MoU, though, appears to commit the Government to improving the ‘ease of doing business’ in Freeport, especially where Immigration, labour and business permits/approvals are concerned.
The Government is to take “further measures to expedite the processing of applications for permanent residence status and work permits to enhance Grand Bahama’s attractiveness to international investors and homeowners”.
And it has also undertaken to “implement policies to improve the efficiencies of granting approvals from the National Economic Council/Bahamas Investment Authority and other governmental agencies”, so that businesses gain the necessary approvals to operate in Freeport within 21 days of the application being submitted - so long as all legal conditions are met.
These commitments also seemingly buttress the GBPA’s commitments to work with the Government on creating a “world-class investment promotional entity” to attract capital to Grand Bahama, and create a ‘one-stop shop’ for investors.
Mr Smith, though, argued that the wide-ranging MoU commitments, and the Government’s enhanced involvement in Freeport’ governance and investment climate, threaten “complication upon complication”.
“This is a recipe for confusion in Freeport,” he added. “The MoU is fodder for protracted litigation between the Port Authority, licensees, the Government, Grand Bahama Development Company (DEVCO) and Hutchison.
“It is rife with internal inconsistencies, mixes apples and oranges between Grand Bahama and Freeport, and has not been thought through.”
Mr Smith suggested that the MoU appeared to have been drawn up in a hurry, and suggested its April 26 signing date was a deliberate attempt to seal the deal between the Government and GBPA prior to Justice Indra Charles’ May 9 judgment.
That ruling, on a case brought by Mr Smith and his fellow Callenders & Co attorney, Carey Leonard, “quashed” all decisions and recommendations flowing from the report by the Government-appointed Hawksbill Creek Agreement Review Committee.
Given that the MoU’s contents resemble most of the Committee’s recommendations, it is clear the Government relied heavily on the report to develop its objectives and negotiating strategy for Freeport.
Justice Charles had found that the committee’s consultation process was “fundamentally flawed” and “procedurally unfair”, given that it had failed to make publicly available the earlier McKinsey report to those stakeholders it met with.
However, the Government was able to go ahead with its MoU unveiling after the Attorney General’s Office obtained a ‘stay’ of Justice Charles’ judgment until it could be appealed.
Arguing that the Government never disclosed the MoU talks when obtaining the stay, Mr Smith told Tribune Business: “This further evidences it [the MoU] was a rush before judgment.
“It is terrifying to me as a licensee that the Government should have put so much pressure on the GBPA that they buckled while waiting for a judgment in a case that was pivotal to Freeport’s future.
“This is simply astounding, and a commercial betrayal of the licensees by the Port Authority. The MoU’s execution before a Supreme Court judgment makes a mockery of the rule of law. It is a slap in the face of the Supreme Court.”
Mr Smith said the GBPA might have “liability potential in damages” for licensees as a result of its MoU “abandonment exercise”.
Comments
birdiestrachan 7 years, 10 months ago
The out spoken QC who never has anything good to say about the Bahamas is very upset. Because he wants to run and ruin the Bahamas..
The_Oracle 7 years, 10 months ago
The Port Authority shareholders never had the stomach for a fight, coming from a background of appeasement and payouts to the Government in Nassau and Freeport. When they were so cheap to buy, they did. A spineless cowardly exit really. A sad end to an entity with the greatest potential for the whole country.
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