The Tribune

Doing business with the Chinese is not proving beneficial for Bahamians. Carey Leonard points to Grand Bahama’s plight as clear evidence . . .

THE recent reports of the Memories Hotel closure debacle is a stark reminder of the financial pain suffered by Bahamians in doing business with Chinese-based companies like Hutchison, which was broken into CK Hutchison Holdings (Ports) and Cheung Kong Property (land) in 2015.

Experience of the last 20 years or more has provided strong evidence to suggest that investment in the Bahamas by Chinese-based companies is not compatible with the advancement of the Bahamian people.

The Memories closure is the end to what has to be a good example of the difference of how western-oriented companies react to crises such as Hurricane Matthew versus how Chinese companies react to them.

Hutchison has immense responsibilities for the community of Grand Bahama and its 60,000 residents. Hutchison’s actions, or rather its complete failure to react at all, after Hurricane Matthew, shows that the Hong Kong management is either totally incompetent or has been negligent.

They are in charge of the Grand Bahama International Airport (GBIA) which is not just vital, it is a critically vital lifeline for the island after such events as a major hurricane. Now, it is not as if Hutchison does not have a clear understanding of how a hurricane can affect the GBIA. After all, Hutchison has had to deal with the airport and runway flooding and hurricane damage of Floyd in 1999, Frances and Jeanne in 2004, Wilma in 2005 and Sandy in 2012.

They know what systems are likely to be affected. Hutchison’s Chinese management had no less than five hurricanes and 17 years to prepare for Hurricane Matthew.

Yet, GBIA was unable to open the day after the storm and night flights were not facilitated for two months. Bahamian families suffered as a result.

All sorts of excuses were given locally such as the Grand Bahama Power Company had not prioritised getting power to the airport. What a lame excuse for not being prepared. How dare they try to deflect their own failure to adequately prepare for hurricanes on the company that performed magnificently in restoring power to Bahamians in a remarkably short space of time?

GB Power’s public relations department must be congratulated for keeping us, the Bahamian public, so well informed on the power restoration progress. Hutchison could learn a lot from the Canadian-owned GB Power on what is expected of a company that has a vital public responsibility.

Within days, GB Power had brought in to Grand Bahama 100 vehicles and 200 persons to assist with the restoration of power. GB Power hired, temporarily, many Bahamians to assist the many foreign teams brought in from Florida, Carolina and Nova Scotia. Many Bahamians got badly needed employment as a result.

Surely the power lines to the lights on the runway are underground, surely they are water proof? Even if the lights get damaged, surely Hutchison must have a spare set? Surely they must have a plan for running temporary lighting if the main line is damaged as well as the power? Power or lack of lights can’t possibly have been a reason. In any event, Bahamian families suffered unnecessarily as a result.

Hutchison could easily have rented a containerised generator or generators for the airport. Other companies did. Indeed, Grand Bahama Shipyard had a ship come on the Thursday after Matthew. GB Shipyard had experienced Hurricanes Frances, Jeanne, Wilma and Sandy. Unlike Hutchison, GB Shipyard’s management, knowing what damage hurricanes could do, had a plan and they executed it. Unlike Hutchison, GB Shipyard had planned for the possibility that it may be weeks before GB Power could provide power to them. Prior to the storm they had imported sufficient generating capacity to conduct their business.

Like Hutchison, GB Shipyard is a major employer on Grand Bahama. Unlike Hutchison, GB Shipyard got a good portion of its workforce back to work, first on a clean-up and then doing what they were trained for, repairing ships.

Ask anyone, now or formerly (I say formerly because there were some layoffs after Matthew) and other than those in management, at Freeport Container Port as to how quickly everyone was put back to work. Ask them what reasons were given right after the storm. Ask them about the power supply to power the cranes and why Bahamians were unable to go back to work.

Bahamian families suffered and continue to suffer as a result of Hutchison’s failure to have a viable plan.

You will note that whenever the name Hutchison is mentioned, the topic of power keeps coming up. Note that other companies, like GB Shipyard, either already had a back-up system in place or imported power on a temporary basis. It is understood that GB Shipyard had two or three generators, each in its own container, which if necessary could all run together in parallel to provide enough electricity.

Buckeye, PharmaChem and other non-Chinese companies were all in full-scale recovery mode the very next morning after the storm had passed. Buckeye even supplied portable generators to many of their staff.

I will only say that the operation of Freeport Harbour, for which Hutchison is also responsible, left much to be desired as a result of Hutchison’s incompetence or negligence as many complained of a lack of sufficient power and lighting which forced daylight operation only when night operation was desperately needed. Woefully insufficient lighting posed challenges for night time operations and increased security risks.

There is absolutely no excuse for Hutchison not having everything in place to deal with the aftermath of Hurricane Matthew. They had 17 years and five earlier hurricanes to educate them on what was required.

What is emerging here is a different approach to management and an approach to running a business between the Chinese firm of Hutchison and the rest of the large international companies.

The story was the same for the hotel industry.

Even though they had suffered damage, Pelican Bay Hotel continued to operate. Castaways Resort & Suites suffered major roof damage, for all to see, and yet they continued, as best they could to operate. Hutchison’s Grand Lucayan/Our Lucaya .. it too suffered damage but, unlike everyone else, they shut down and all but a very small part of the hotel is still closed some four months later and most of the staff have been laid off.

Hundreds of Bahamian families are suffering as a result.

The last event, of Memories closing, is a direct result of Hutchison’s actions. It is rare for companies, such as the operators of Memories, to make comments as they have about Hutchison. It is clear that they have been frustrated at every turn and Hutchison has asked for more than the market, in this case Memories, could bear; with the result that it too is closed.

Bahamians, once again find themselves out of work as a result of decisions taken by a Chinese-owned company.

When hotels like the Grand Lucayan/Our Lucaya/Memories are closed, it not only causes the loss of a thousand jobs but also many hundreds more as there are less taxi rides required, less food and supplies to be imported, less shopping by tourists evidenced by the closing of a jewellery store in the Port Lucaya Market Place, and less tours taken. All this impacts Bahamian employment and Bahamian families are suffering as a result.

What is clear is that, once again, Hutchison’s way of doing business is very different from everyone else.

I submit that it is not just Hutchison - but take a good look at what has occurred at Baha Mar and what little action has occurred at The Pointe since it was completed.

It would seem that the Chinese approach to business does not include the welfare of the community or its people within which the Chinese companies operate. Quite simply put, it would appear that the Chinese do not care about the community, they don’t care about Bahamians. It is clear that Chinese investment may look good in the short term but is disastrous to the entire Bahamian economy, and Bahamian employment in particular.

Hutchison was no doubt insured at the Grand Lucayan/Our Lucaya. They have no idea how to operate a hotel in a tourist area, they have proved this to the world in the 17 years they have operated the Grand Lucayan/Our Lucaya hotel. They couldn’t make money, even when the world economy was good.

Perhaps they have business disruption insurance and have been able to pocket more money by having their properties shut down than if they had them open.

But no matter: whichever way you look at it, the Bahamian family suffers as a result.

For over 20 years Hutchison has been unable or unwilling to see how control of the airport, harbour, hotel and development company should be used together to promote and stimulate the Grand Bahama economy for everyone’s benefit. There are synergies between these companies that most can only dream of. The potential to make a profit is phenomenal. Hutchison’s corporate structure is not flexible and nor is their senior management.

It would appear that Hutchison’s sole intention has been to buy up as much as possible and sit on it, even if they put everyone out of work. It may very well be that Hutchison is not out to hurt Bahamians, it is just that Bahamians are not even visible to them.

We are used to American and other foreign companies who have been active in donating time and money into the communities in which they operate. Over the years we have seen and continue to see the benefit of such investments.

However, we need to give serious consideration to see if we want or wish to allow any further investment by Chinese companies.

So far it would appear that the Chinese way of doing business inflicts serious damage to the economy of the Bahamas overall and causes much suffering and hardship to Bahamian families.

To be continued on March 27

• Carey Leonard is a commercial attorney in the chambers of Callenders & Co, Freeport.